FIRST DIVISION

[G.R. No. 165849. December 10, 2007.]

GILBERT
G. GUY, petitioner, vs.
THE COURT OF APPEALS (8TH
DIVISION),
NORTHERN ISLANDS CO., INCORPORATED,
SIMNY G. GUY, GERALDINE G. GUY, GLADYS G.
YAO, and EMILIA TABUGADIR, respondents.
SANDOVAL-GUTIERREZ, J p:
Before us are five (5) consolidated cases which stemmed from Civil
Case No. 04-109444 filed with the Regional Trial Court (RTC),
Branch 24, Manila, subsequently re-raffled to Branch 46 1 and
eventually to Branch 25. 2
The instant controversies arose from a family dispute. Gilbert Guy is
the son of Francisco and Simny Guy. Geraldine, Gladys and Grace
are his sisters. The family feud involves the ownership and
control of 20,160 shares of stock of Northern Islands Co., Inc.
(Northern Islands) engaged in the manufacture, distribution, and
sales of various home appliances bearing the "3-D" trademark.
Simny and her daughters Geraldine, Gladys and Grace, as well as
Northern Islands and Emilia Tabugadir, have been impleaded as
respondents in the above-entitled cases. Northern Islands is a
family-owned corporation organized in 1957 by spouses Francisco
and respondent Simny Guy. In November 1986, they incorporated
Lincoln Continental Development Corporation, Inc. (Lincoln
Continental)
as
a
holding
company of the
50%
shares of stock of Northern Islands in trust for their three (3)
daughters, respondents Geraldine, Gladys and Grace. Sometime in
December 1986, upon instruction of spouses Guy, Atty. Andres
Gatmaitan, president of Lincoln Continental, indorsed in blank Stock
Certificate No. 132 (covering 8,400 shares) and Stock Certificate
No. 133 (covering 11,760 shares) and delivered them to Simny.
In 1984, spouses Guy found that their son Gilbert has been
disposing of the assets of their corporations without authority. In
order to protect the assets ofNorthern Islands, Simny surrendered
Stock Certificate Nos. 132 and 133 to Emilia Tabugadir, an
officer of Northern Islands. The 20,160 shares covered by the two

Stock Certificates were then registered in the names of respondent

sisters, thus enabling them to assume an active role in the
management of Northern Islands.
On January 27, 2004, during a special meeting of the
stockholders of Northern Islands, Simny was elected President;
Grace as Vice-President for Finance; Geraldine as Corporate
Treasurer; and Gladys as Corporate Secretary. Gilbert retained his
position as Executive Vice President. This development started the
warfare between Gilbert and his sisters. ACcTDS
On March 18, 2004, Lincoln Continental filed with the RTC, Branch
24,
Manila
a
Complaint
for
Annulment of the
Transfer of Shares of Stock against respondents, docketed as Civil
Case No. 04-109444. The complaint basically alleges that Lincoln
Continental owns 20,160 shares of stock of Northern Islands; and
that respondents, in order to oust Gilbert from the
management of Northern Islands, falsely transferred the said
shares of stock in respondent sisters' names. Lincoln Continental
then
prayed
for
an
award of damages
and
that
the
management of Northern Islands be restored to Gilbert. Lincoln also
prayed for the issuance of a temporary restraining order (TRO) and
a writ of preliminary mandatory injunction to prohibit respondents
from exercising any right ofownership over the shares.
On June 16, 2004, Lincoln Continental filed a Motion to Inhibit the
Presiding
Judge of Branch
24,
RTC,
Manila
on
the
ground of partiality. In an Order dated June 22, 2004, the presiding
judge granted the motion and inhibited himself from further
hearing Civil Case No. 04-109444. It was then re-raffled to Branch
46of the same court.
On July 12, 2004, Branch 46 set the continuation of the hearing on
Lincoln Continentals application for a TRO.
On July 13, 2004, respondents filed with the Court of Appeals a
Petition for Certiorari and Mandamus, docketed as CA-G.R. SP No.
85069, raffled off to the Tenth Division. Respondents alleged that
the presiding judge of Branch 24, in issuing the Order dated June
22, 2004 inhibiting himself from further hearing Civil Case No. 04109444, and the presiding judge of Branch 46, in issuing the Order
dated July 12, 2004 setting the continuation of hearing on Lincoln
Continental's application for a TRO, acted with grave
abuse of discretion tantamount to lack or excess of jurisdiction.

Meanwhile, on July 15, 2004, the trial court issued the TRO prayed
for by Lincoln Continental directing respondents to restore to
Gilbert the shares of stock under controversy. In the same Order,
the trial court set the hearing of Lincoln Continental's application
for a writ of preliminary injunction on July 19, 20, and 22, 2004.
On July 16, 2004, the Court of Appeals (Tenth Division) issued a TRO
enjoining Branch 46, RTC, Manila from enforcing, maintaining, or
giving effect to its Orderof July 12, 2004 setting the
hearing of Lincoln Continental's application for a TRO.
Despite the TRO, the trial court proceeded to hear Lincoln
Continental's application for a writ of preliminary injunction. This
prompted respondents to file in the same CA-G.R. SP No. 85069 a
Supplemental
Petition
for Certiorari,
Prohibition,
and Mandamus seeking
to
set
aside
the
Orders of the
trial court setting the hearing and actually hearing Lincoln
Continental's application for a writ of preliminary injunction. They
prayed for a TRO and a writ of preliminary injunction to enjoin the
trial court (Branch 46) from further hearing Civil Case No. 04109444.
On
September
17,
the Court of Appeals (Tenth
expired.

2004,
the
TRO
issued
by
Division) in CA-G.R. SP No. 85069

On September 20, 2004, Gilbert filed a Motion for Leave to

Intervene and Motion to Admit Complaint-in-Intervention in Civil
Case No. 04-109444. In its Order dated October 4, 2004, the
trial court granted the motions. DCESaI
Meantime, on October 13, 2004, the trial court issued the
writ of preliminary mandatory injunction prayed for by Lincoln
Continental in Civil Case No. 04-109444.
On October 20, 2004, the Court of Appeals (Tenth Division) denied
respondents'
application
for
injunctive
relief
since
the
trial court had already issued a writof preliminary injunction in
favor of Lincoln Continental. Consequently, on October 22, 2004,
respondents filed with the Tenth Division a Motion to Withdraw
Petition and Supplemental Petition in CA-G.R. SP No. 85069.
On October 26, 2004, respondents filed a new Petition
for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
87104, raffled off to the Eighth Division. They prayed that the TRO
and writ of preliminary injunction issued by the RTC, Branch 46,
Manila be nullified and that an injunctive relief be issued restoring
to them the management of Northern Islands. They alleged that

Gilbert has been dissipating the assets of the corporation for his
personal gain.
On October 28, 2004, the Court of Appeals Eighth Division issued a
TRO enjoining the implementation of the writ of preliminary
injunction dated October 13, 2004 issued by the trial court in Civil
Case No. 04-109444; and directing Lincoln Continental to turn over
the assets and records of Northern Islands to respondents.
On
November
2,
2004,
respondents
filed
with
the
appellate court (Eighth Division) an Urgent Omnibus Motion praying
for the issuance of a break-open Order to implement its TRO.
On November 4, 2004, the Eighth Division issued a Resolution
granting respondents' motion. Pursuant to this Resolution,
respondents entered the Northern Islands premises at No. 3
Mercury Avenue, Libis, Quezon City.
On November 18, 2004, Gilbert filed with this Court a petition
for certiorari, docketed as G.R. No. 165849, alleging that
the Court of Appeals (Eighth Division), in granting an injunctive
relief in favor of respondents, committed grave abuse of discretion
tantamount to lack or in excess of jurisdiction. The petition also
alleges that respondents resorted to forum shopping.
Meanwhile, on December 16, 2004, Smartnet Philippines, Inc.
(Smartnet) filed with the Metropolitan Trial Court (MeTC), Branch
35, Quezon City a complaint for forcible entry against respondents,
docketed as Civil Case No. 35-33937. The complaint alleges that in
entering the Northern Islands premises, respondents took
possession of the area being occupied by Smartnet and barred its
officers and employees from occupying the same.
Likewise on December 16, 2004, Ignacio and Ignacio Law Offices
also filed with Branch 37, same court, a complaint for forcible entry
against respondents, docketed as Civil Case No. 34106. It alleges
that respondents forcibly occupied its office space when they took
over the premises of Northern Islands.
On December 22, 2004, the Eighth Division issued the
writ of preliminary injunction prayed for by respondents in CA-G.R.
SP No. 87104. DISHEA
Subsequently, the presiding judge of the RTC, Branch 46, Manila
retired. Civil Case No. 04-109444 was then re-raffled to Branch 25.
On January 20, 2005, respondents filed with the Eighth
Division of the
appellate court a
Supplemental
Petition
for Certiorari with Urgent Motion for a Writ ofPreliminary Injunction

to Include Supervening Events. Named as additional respondents

were 3-D Industries, Judge Celso D. Lavia, Presiding Judge, RTC,
Branch 71, Pasig City and Sheriff Cresencio Rabello, Jr. This
supplemental petition alleges that Gilbert, in an attempt to
circumvent the injunctive writ issued by the Eighth Division of the
appellate court, filed with the RTC, Branch 71, Pasig City a
complaint for replevin on behalf of 3-D Industries, to enable it to
take possession of the assets and records of Northern Islands. The
complaint was docketed as Civil Case No. 70220. On January 18,
2005, the RTC issued the writof replevin in favor of 3-D Industries.

On April 15, 2005, respondents filed with the Eighth Division a

Second Supplemental Petition for Certiorari and Prohibition with
Urgent Motion for the Issuance of an Expanded Writ of Preliminary
Injunction. Impleaded therein as additional respondents were
Ignacio and Ignacio Law Offices, Smartnet, Judge Maria Theresa De
Guzman, Presiding Judge, MeTC, Branch 35, Quezon City, Judge
Augustus C. Diaz, Presiding Judge, MeTC, Branch 37, Quezon City,
Sun Fire Trading Incorporated, Zolt Corporation, Cellprime
Distribution Corporation, Goodgold Realty and Development
Corporation, John Does and John Doe Corporations. Respondents
alleged in the main that the new corporations impleaded are alter
egos of Gilbert; and that the filing of the forcible entry cases with
the MeTC was intended to thwart the execution of the
writ of preliminary injunction dated December 22, 2004 issued by
the Court of Appeals (Eighth Division) in CA-G.R. SP No. 87104.
On April 26, 2005, the Eighth Division issued a Resolution admitting
respondents' new pleading. On August 19, 2005, the Eighth Division
(now Seventh Division) rendered its Decision in CA-G.R. SP No.
87104, the dispositive portion of which reads:
WHEREFORE, premises considered, the petition is
hereby GRANTED and the October 13, 2004 Order
and the October 13, 2004 Writ of Preliminary
Mandatory Injunction issued by Branch 46 of the
Regional Trial Court of Manila are hereby REVERSED
and SET ASIDE. The December 17, 2004 Order and
Writ of Preliminary
Injunction
issued
by
this Court of Appeals are hereby MADE PERMANENT
against all respondents herein.
SO ORDERED.
Meanwhile, in a Decision 3 dated September 19, 2005, the RTC,
Branch 25, Manila dismissed the complaint filed by Lincoln

Continental and the complaint-in-intervention of Gilbert in Civil

Case No. 04-109444, thus:
WHEREFORE,
in
view of the
foregoing,
the
Complaint and the Complaint-in-Intervention are
hereby DISMISSED. Plaintiff and plaintiff-intervenor
are hereby ordered to jointly and severally pay
defendants the following:
(a) Moral
damages
in
the
amount of Php2,000,000.00 each for
defendants
Simny Guy,
Geraldine Guy, Grace Guy-Cheu and
Gladys Yao;
(b) Moral
damages
in
the
amount of Php200,000.00
for
defendant Emilia Tabugadir; cTIESa
(c) Exemplary
damages
in
the
amount of Php2,000,000.00 each for
defendants
Simny Guy,
Geraldine Guy, Grace Guy-Cheu, and
Gladys Yao;
(d) Exemplary
damages
in
amount of Php200,000.00
defendant Emilia Tabugadir;

the
for

(e) Attorney's
fees
in
the
amount of Php2,000.000.00; and
(f) Costs of suit.
SO ORDERED.
The trial court held that Civil Case No. 04-109444 is a baseless and
an unwarranted suit among family members; that based on the
evidence, Gilbert was only entrusted to hold the disputed
shares of stock in his name for the benefit of the other family
members; and that it was only when Gilbert started to
disposeof the assets of the family's corporations without their
knowledge that respondent sisters caused the registration of the
shares in their respective names.
Both Lincoln Continental and Gilbert timely appealed the RTC
Decision to the Court of Appeals, docketed therein as CA-G.R. CV
No. 85937.

On September 15, 2005, 3-D Industries, Inc. filed a petition

for certiorari, prohibition, and mandamus with this Court assailing
the Decision of the Court ofAppeals in CA-G.R. SP No. 87104 setting
aside the writ of preliminary injunction issued by the RTC, Branch
46. The petition was docketed as G.R. No. 169462 and raffled off to
the Third Division of this Court.
On October 3, 2005, the Third Division of this Court issued a
Resolution 4 dismissing the petition of 3-D Industries in G.R. No.
169462. 3-D Industries timely filed its motion for reconsideration
but this was denied by this Court in its Resolution 5 dated
December 14, 2005.
Meanwhile, on October 10, 2005, Gilbert, petitioner in G.R. No.
165849 for certiorari, filed with this Court a Supplemental Petition
for Certiorari, Prohibition, and Mandamus with Urgent Application
for a Writ of Preliminary Mandatory Injunction challenging the
Decision of the Court of Appeals (Seventh Division), dated August
19, 2005, in CA-G.R. SP No. 87104. This Decision set aside the
Order dated October 13, 2004 of the RTC, Branch 46 granting the
writ ofpreliminary injunction in favor of Lincoln Continental.
On November 8, 2005, Ignacio and Ignacio Law Offices and
Smartnet filed with this Court their petitions for certiorari, docketed
as G.R. Nos. 170185 and 170186, respectively.
On February 27, 2006, Lincoln Continental filed with this Court a
petition
for
review
on certiorari challenging
the
Decision of the Court of Appeals (Seventh Division) in CA-G.R. CV
No. 85937, docketed as G.R. No. 171066.
On March 20, 2006, we ordered the consolidation of G.R. No.
171066 with G.R. Nos. 165849, 170185, and 170186.
In the meantime, in a Decision dated November 27, 2006 in CA-G.R.
CV No. 85937, the Court of Appeals (Special Second Division)
affirmed the Decision in Civil Case No. 04-109444 of the RTC
(Branch 25) dismissing Lincoln Continental's complaint and Gilbert's
complaint-in-intervention, thus: cSaADC
WHEREFORE, the appeals are dismissed and the
assailed decision AFFIRMED with modifications that
plaintiff and plaintiff-intervenor are ordered to pay
each of the
defendants-appellees
Simny Guy,
Geraldine Guy, Grace Guy-Cheu and Gladys Yao
moral
damages of P500,000.00,
exemplary
damages ofP100,000.00
and
attorney's
fees of P500,000.00.

SO ORDERED.
Lincoln Continental and Gilbert filed their respective motions for
reconsideration, but they were denied in a Resolution promulgated
on February 12, 2007.
Lincoln Continental then filed with this Court a petition for review
on certiorari assailing the Decision of the Court of Appeals (Former
Special Second Division) in CA-G.R. CV No. 85937. This petition was
docketed as G.R. No. 176650 and raffled off to the Third
Division of this Court.
In our Resolution dated June 6, 2007, we ordered G.R. No. 176650
consolidated with G.R. Nos. 165849, 170185, 170186, and 171066.
THE ISSUES
In G.R. Nos. 165849 and 171066, petitioners Gilbert and Lincoln
Continental raise the following issues: (1) whether respondents are
guilty of forum shopping; and (2) whether they are entitled to the
injunctive relief granted in CA-G.R. SP No. 87104.
In G.R. Nos. 170185 and 170186, the pivotal issue is whether
the Court of Appeals committed
grave
abuse of discretion
amounting to lack or excess ofjurisdiction in ruling that petitioners
Ignacio and Ignacio Law Offices and Smartnet are also covered by
its Resolution granting the writ of preliminary injunction in
favor of respondents.
In G.R.
No.
176650,
the
core
issue
is
whether
the Court of Appeals (Special Second Division) erred in affirming
the Decision of the RTC, Branch 25, Manila dated September 19,
2005 dismissing the complaint of Lincoln Continental and the
complaint-in-intervention of Gilbert in Civil Case No. 04-109444.
THE COURT'S RULING
A. G.R. Nos. 165849 and 171066
On the question of forum shopping, petitioners Gilbert and Lincoln
Continental contend that the acts of respondents in filing a petition
for certiorari andmandamus in CA-G.R.
SP
No.
85069
and
withdrawing the same and their subsequent filing of a petition
for certiorari in CA-G.R. SP No. 87104 constitute forum shopping;
that respondents withdrew their petition in CA-G.R. SP No. 85069
after the Tenth Division issued a Resolution dated October 20, 2004
denying their application for a writ of preliminary injunction; that
they then filed an identical petition in CA-G.R. SP No. 87104 seeking
the same relief alleged in their petition in CA-G.R. SP No. 85069;
and that by taking cognizance of the petition in CA-G.R. SP No.

87104, instead of dismissing it outright on the groundof forum

shopping,
the Court of Appeals committed
grave
abuse of discretion
tantamount
to
lack
or
excess of jurisdiction. cTAaDC
A party is guilty of forum shopping when he repetitively
avails of several
judicial
remedies
in
different
courts,
simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances,
and all raising substantially the same issues either pending in, or
already resolved adversely by some other court. 6 It is prohibited
by Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended, which provides:
SECTION 5. Certification against forum shopping.
The plaintiff or principal party shall certify under
oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously
filed therewith: (a) that he has not theretofore
commenced any action or filed any other claim
involving the same issues in any court, tribunal, or
quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is
pending therein; (b) if there is such other pending
action or claim, a complete statement of the
present status thereof; and (c) if he should
thereafter learn that the same or similar action has
been filed or is pending, he shall report that fact
within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has
been filed.
Failure to comply with the foregoing requirements
shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be
cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion
and hearing. The submission of a false certification
or non-compliance with any of the undertakings
therein shall constitute indirect contempt of court,
without
prejudice
to
the
corresponding
administrative and criminal actions. If the
acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same
shall be ground for summary dismissal with

prejudice and shall constitute direct contempt, as

well as a cause for administrative sanctions.
Forum shopping is condemned because it unnecessarily burdens
our courts with heavy caseloads, unduly taxes the manpower and
financial resources of the judiciary and trifles with and mocks
judicial
processes,
thereby
affecting
the
efficient
administration of justice. 7 The primary evil sought to be proscribed
by the prohibition against forum shopping is, however, the
possibility of conflicting decisions being rendered by the different
courts and/or administrative agencies upon the same issues. 8

Forum shopping may only exist where the elements of litis

pendentia are present or where a final judgment in one case will
amount to res judicata in the other. 9 Litis pendentia as a ground
for dismissing a civil action is that situation wherein another action
is pending between the same parties for the same cause of action,
such that the second action is unnecessary and vexatious. The
elements of litis pendentia are as follows: (a) identity of parties, or
at least such as representing the same interest in both actions; (b)
identity of rights asserted and the relief prayed for, the relief being
founded on the same facts; and (c) the identity of the two cases
such that judgment in one, regardless of which party is successful,
would amount to res judicata in the other. 10 From the foregoing, it
is clear that sans litis pendentia or res judicata, there can be no
forum shopping.
While the first element of litis pendentia identity of parties is
present in both CA-G.R. SP No. 85069 and CA-G.R. SP No. 87104,
however, the second element, does not exist. The petitioners in CAG.R. SP No. 85069 prayed that the following Orders be set aside:
(1) the Order of inhibition dated June 22, 2004
issued by the presiding judge of the
RTC of Manila, Branch 24; and aTCADc
(2) the Order dated July 12, 2004 issued by Branch
46
setting
Gilbert's
application
for
preliminary injunction for hearing.
In their petition in CA-G.R. SP No. 87104, respondents prayed for
the annulment of the writ of preliminary injunction issued by the
RTC, Branch 46 after the expiration of the TRO issued by the Tenth
Division of the Court of Appeals. Evidently, this relief is not identical
with the relief sought by respondents in CA-G.R. SP No. 85069.
Clearly,
the
second
element of litis
pendentia
the

identity of reliefs sought is lacking in the two petitions filed by

respondents with the appellate court. Thus, we rule that no grave
abuse of discretion amounting to lack or excess of jurisdiction may
be attributed to the Court of Appeals (Eighth Division) for giving
due course to respondents' petition in CA-G.R. SP No. 87104.
On the second issue, Section 3, Rule 58 of the 1997 Rules of Civil
Procedure, as amended provides:
SECTION 3. Grounds for issuance of preliminary
injunction. A preliminary injunction may be
granted when it is established:
(a) That the applicant is entitled to the relief
demanded, and the whole or
part of such
relief
consists
in
restraining
the
commission
or
continuance of the act or
acts
complained of, or in requiring the
performance of an act or acts, either
for a limited period or perpetually;
(b) That the commission, continuance, or
non-performance of the act or
acts
complained of during the litigation
would probably work injustice to the
applicant; or
(c) That a party, court, agency, or a person
is
doing,
threatening,
or
is
attempting to do, or is procuring or
suffering to be done, some act or
acts probably in violation of the
rights of the applicant respecting the
subject of the action or proceeding,
and tending to render the judgment
ineffectual.
For a party to be entitled to an injunctive writ, he must show that
there exists a right to be protected and that the acts against which
the injunction is directed are violative of this right. 11 In granting
the respondents' application for injunctive relief and making the
injunction permanent, the Court of Appeals (Seventh Division)
found that they have shown their clear and established right to the
disputed 20,160 shares of stock because: (1) they have physical
possession ofthe two stock certificates equivalent to the said
number of shares;
(2)
Lincoln
Continental
is
a
mere
trustee of the Guy family; and (3) respondents constitute a

majority of the
board of directors of Northern
Islands,
and
accordingly have management and control of the company at the
inception of Civil Case No. 94-109444. The appellate court then
ruled that the trial court committed grave abuse of discretion in
issuing a writ of preliminary mandatory injunction in favorof Guy.
The writ actually reduced the membership of Northern Islands
board to just one member Gilbert Guy. Moreover, he failed to
establish by clear and convincing evidence his ownership of the
shares of stock in question. The Court of Appeals then held there
was an urgent necessity to issue an injunctive writ in order to
prevent serious damage to the rights of respondents and Northern
Islands.
We
thus
find
no
reason
to
depart
from
the
findings of the Court of Appeals. Indeed, we cannot discern any
taint of grave abuse of discretion on its part in issuing the assailed
writ of preliminary
injunction
and
making
the
injunction
permanent. DHCSTa

B. G.R. Nos. 170185 & 170186

Ignacio and Ignacio Law Offices and Smartnet, petitioners, claim
that the Court of Appeals never acquired jurisdiction over their
respective persons as they were not served with summons, either
by the MeTC or by the appellate court in CA-G.R. SP No. 87104.
Thus, they submit that the Court of Appeals committed grave
abuse of discretion amounting to lack or excess of jurisdiction when
it included them in the coverage of its injunctive writ.
Jurisdiction is the power or capacity given by the law to a court or
tribunal
to
entertain,
hear,
and
determine
certain
controversies. 12 Jurisdiction over the subject matter of a case is
conferred by law.
Section 9
provides:

(1) of Batas

Pambansa

Blg.

129, 13 as

amended,

SEC. 9. Jurisdiction. The Court of Appeals shall

exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas
corpus,
and quo
warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction.

Rule 46 of the 1997 Rules of Civil Procedure,

as amended, governs all cases originally filed
with the Court of Appeals. The following
provisions ofthe Rule state:
SEC. 2. To what actions applicable. This Rule
shall apply to original actions for certiorari,
prohibition, mandamus and quo warranto.
Except as otherwise provided, the actions for
annulment of judgment shall be governed by Rule
47, for certiorari, prohibition, and mandamus by
Rule 65, and for quo warranto by Rule 66.
xxx xxx xxx
SEC. 4. Jurisdiction over person of respondent, how
acquired. The court shall acquire jurisdiction
over the person of the respondent by the service
on him of its order or resolution indicating its initial
action on the petition or by his voluntary
submission to such jurisdiction.
SEC. 5. Action by the court. The court may
dismiss the petition outright with specific reasons
for such dismissal or require the respondent to file
a comment on the same within ten (10) days from
notice. Only pleadings required by the court shall
be allowed. All other pleadings and papers may be
filed only with leave of court.
It is thus clear that in cases covered by Rule 46,
the Court of Appeals acquires jurisdiction over the persons of the
respondents by the service upon them of its order or resolution
indicating its initial action on the petitions or by their voluntary
submission to such jurisdiction. 14 The reason for this is that, aside
from the fact that no summons or other coercive process is served
on respondents, their response to the petitions will depend on the
initial action of the courtthereon. Under Section 5, the court may
dismiss the petitions outright, hence, no reaction is expected from
respondents and under the policy adopted by Rule 46, they are not
deemed to have been brought within the court's jurisdiction until
after service on them of the dismissal order or resolution. 15
Records show that on April 27, 2005, petitioners in these two
forcible
entry
cases,
were
served
copies of the
Resolution of the Court of Appeals (Seventh Division) dated April
26, 2005 in CA-G.R. SP No. 87104. 16 The Resolution states: SEcAIC

Private respondents SMARTNET PHILIPPINES,

INC., IGNACIO & IGNACIO LAW OFFICE,
SUNFIRE TRADING, INC., ZOLT CORPORATION,
CELLPRIME DISTRIBUTION CORPO., GOODGOLD
REALTY & DEVELOPMENT CORP., are hereby
DIRECTED to file CONSOLIDATED COMMENT on the
original
Petition
forCertiorari,
the
First
Supplemental Petition for Certiorari, and the
Second Supplemental Petition for Certiorari (not a
Motion to Dismiss) within ten (10) days from
receipt of a copy of the original, first and second
Petitions for Certiorari. 17
Pursuant to Rule 46, the Court of Appeals validly acquired
jurisdiction over the persons of Ignacio and Ignacio Law Offices and
Smartnet upon being served with the above Resolution.
But neither of the parties bothered to file the required comment.
Their allegation that they have been deprived of due process is
definitely without merit. We have consistently held that when a
party was afforded an opportunity to participate in the proceedings
but failed to do so, he cannot complain of deprivationof due
process for by such failure, he is deemed to have waived or
forfeited his right to be heard without violating the constitutional
guarantee. 18
On the question of whether the Court of Appeals could amend its
Resolution directing the issuance of a writ of preliminary injunction
so as to include petitioners, suffice to state that having acquired
jurisdiction over their persons, the appellate court could do so
pursuant to Section 5 (g), Rule 135 of the Revised Rules of Court,
thus: aCSTDc
SEC.
5. Inherent
powers of courts.
Every court shall have power:

xxx xxx xxx

(g) To amend and control its process and orders so
as to make them conformable to law and justice.
In Villanueva v. CFI of Oriental Mindoro 19 and Eternal Gardens
Memorial Parks Corp. v. Intermediate Appellate Court, 20 we held
that under this Rule, a courthas inherent power to amend its
judgment so as to make it conformable to the law applicable,
provided that said judgment has not yet acquired finality, as in
these cases.

C. G.R. No. 176650

The fundamental issue is who owns the disputed shares of stock in
Northern Islands.
We remind petitioner Lincoln Continental that what it filed with
this Court is a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended. It is a rule in this
jurisdiction that in petitions for review under Rule 45, only
questions or errors of law may be raised. 21 There is a
question of law when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts, or when
the issue does not call for an examination of the probative
value of the evidence presented. There is a question of fact when
the doubt arises as to the truth or falsehood offacts or when there
is a need to calibrate the whole evidence considering mainly the
credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other
and to the whole, and the probability of the situation. 22 Obviously,
the issue raised by the instant petition for review on certiorari,
involves
a
factual
matter,
hence,
is
outside
the
domain of this Court. However, in the interest of justice and in
order to settle this controversy once and for all, a ruling from
this Court is imperative.
One thing is clear. It was established before the trial court,
affirmed by the Court of Appeals, that Lincoln Continental
held the disputed shares ofstock of Northern Islands merely
in trust for the Guy sisters. In fact, the evidence proffered by
Lincoln Continental itself supports this conclusion. It bears
emphasis that this factual finding by the trial court was affirmed by
the Court of Appeals, being supported by evidence, and is,
therefore, final and conclusive upon this Court.

the same to the obligation of dealing with the property for the
benefit of another person." 24
Both Lincoln Continental and Gilbert claim that the latter holds
legal title to the shares in question. But record shows that there
is no evidence that the stock certificates representing the
contested shares are in respondents' possession. Significantly,
there is no proof to support his allegation that the transferof the
shares of stock to respondent sisters is fraudulent. As aptly held by
the Court of Appeals, fraud is never presumed but must be
established by clear and convincing evidence. 25 Gilbert failed to
discharge this burden. We agree with the Court of Appeals that
respondent sisters own the shares of stock, Gilbert being their mere
trustee. Verily, we find no reversible error in the challenged
Decision of the Court of Appeals (Special Second Division) in CAG.R. CV No. 85937. HCDAac
WHEREFORE, we DISMISS the petitions in G.R. Nos. 165849,
170185, 170186 and 176650; and DENY the petitions in G.R. Nos.
171066
and
176650.
The
Resolutions of the Court of Appeals (Eighth Division), dated October
28, 2004 and November 4, 2004, as well as the Decision dated
October 10, 2005 of theCourt of Appeals (Seventh Division) in CAG.R. SP No. 87104 are AFFIRMED. We likewise AFFIRM IN TOTO the
Decision of the Court of Appeals (Special Second Division), dated
November 27, 2006 in CA-G.R. CV No. 85937. Costs against
petitioners.
SO ORDERED.
Puno, C.J., Ynares-Santiago, * Corona and Azcuna, JJ., concur.
||| (Guy v. Court of Appeals, G.R. No. 165849, 170185, 170186,
171066, 176650, [December 10, 2007], 564 PHIL 540-565)

Article 1440 of the Civil Code provides that:

ART. 1440. A person who establishes a trust is
called the trustor; one in whom confidence is
reposed
as
regards
property
for
the
benefit of another person is known as the trustee;
and the person for whose benefit the trust has
been created is referred to as the beneficiary.
In the early case of Gayondato v. Treasurer of the Philippine
Islands, 23 this Court defines trust, in its technical sense, as "a
right of property, real or personal, held by one party for the
benefit of another." Differently stated, a trust is "a fiduciary
relationship with respect to property, subjecting the person holding

THIRD DIVISION
[G.R. No. 125755. February 24, 2003.]
PEDRO MOLINA, petitioner-appellant, vs.
HON. COURT OF APPEALS and
SPOUSES
MARGARITO
M.
FLORES
and
NERISA
HERRERA,respondents-appellee.

Jose M. Resus for petitioner.

Manuelito C. Diosomito for private respondents.
SYNOPSIS
On
April
23,
1984,
petitioner,
co-owner of a
parcel of land in Naic, Cavite, covered by TCT No. T-44010,
executed a Deed of Sale conveying his share in the said
property to his sister Felisa. More than four years after the sale,
petitioner, upon the request of his sister, executed another
Deed of Absolute Sale in lieu of the first, covering the same
share in favor of Felisa's son, herein private respondent
Margarito Flores and the latter's wife. On September 5, 1990,
petitioner filed an action for reformation of instrument and/or
annulment of document and title with reconveyance and
damages before the Regional TrialCourt of Cavite, alleging that
the Deed of Absolute Sale in favor of respondent spouses did
not express the true will and intention of the parties. The
trialcourt favorably ruled for the petitioner. On appeal,
the Court of Appeals reversed the decision of the trial court and
dismissed petitioner's complaint. Hence, this petition. CSDTac
In denying the petition, the Court found that the parties
to the Deed were fully aware of its contents and meaning, and
that there were no acts done or events that occurred prior to,
simultaneous to, or after the execution of the Deed that would
indicate the intention of any of the parties to have been
otherwise than to sell the property to respondent spouses. It
held that the alleged inadequacy of the price harped upon by
petitioner does not by itself support the conclusion that the
property was not at all sold or that the contract was one of loan.
Petitioner failed to present proof that the value of the property
at the time the Deed was executed in 1988 is considerably
higher than the purchase price stated in the deed.
The Court further
held
that
petitioner's
continued
receipt of rentals due on the property from its current lessee
was a gesture of generosity, kinship and leniency from his
relatives, he being jobless and without visible means of support.
SYLLABUS
1. CIVIL LAW; SALES; EXTINGUISHMENT OF SALE; CONVENTIONAL
REDEMPTION; EQUITABLE MORTGAGE, DEFINED. An equitable
mortgage is defined as one which, although lacking in some
formality, or form or words, or other requisites demanded by a

statute, nevertheless reveals the intention of the parties to charge

real property as security for a debt, and contains nothing
impossible or contrary to law. The intention of the parties to an
agreement is shown not necessarily by the terminology used
therein but by all the surrounding circumstances, such as the
relative situation of the parties at the time, the attitude, acts,
conduct, declarations of the parties, the negotiations between them
leading to the deed, and generally, all pertinent facts having a
tendency to fix and determine the real nature of their design and
understanding.
2. ID.; ID.; ID.; ID.; PRESUMPTION OF AN EQUITABLE MORTGAGE;
REQUISITES; CASE AT BAR. For the presumption of an equitable
mortgage to arise under Art. 1602, two (2) requisites must concur:
(a) that the parties entered into a contract denominated as a
contract of sale, and (b) that their intention was to secure an
existing debt by way of a mortgage. In the case at bar, the second
requisite is conspicuously absent. That the alleged loan was
received in installments of P1,000.00 per month for ten months or a
total of P10,000.00 in fact indicates that the transaction was not
one of a loan but of sale on installment.
3. ID.; ID.; ID.; INADEQUACY OF THE PRICE DOES NOT BY ITSELF
SUPPORT THE CONCLUSION THAT THE CONTRACT WAS ONE OF A
LOAN. The alleged inadequacy of the price harped upon by
petitioner does not by itself support the conclusion that the
property was not at all sold or that the contract was oneof a loan. In
any event, no proof was presented to show that the value of the 92
sq.m. property located in Naic, Cavite was, at the time the Deed
was executed in 1988, considerably higher than the therein stated
purchase price P8,000.00.
4. ID.; ID.; ID.; NON-PAYMENT OF THE ENTIRE PURCHASE PRICE
DOES NOT BY ITSELF BAR THE TRANSFER OF OWNERSHIP OR
POSSESSION OF THE PROPERTY, MUCH LESS DISSOLVE THE
CONTRACT OF SALE. Petitioner argues, nevertheless, that
assuming arguendo that a contract of sale was entered into, it was
not consummated as the entire purchase price was not paid.
Assuming that to be so albeit, by the Deed in question
petitioner acknowledged receipt of the P8,000.00 purchase price, it
does not by itself bar the transfer of the ownership or
possession of the property, much less dissolve the contractof sale.
The contract remains but the payment of the price is a resolutory
condition, and the remedy of the seller is to exact fulfillment or, in
case of a substantial breach, to rescind the contract under Article
1191 of the Civil Code. EAIaHD

5. ID.; ID.; TRANSACTION BETWEEN THE PARTIES WAS

NOT ONE OF A LOAN BUT OF A SALE ON INSTALLMENT IN CASE
AT BAR. That petitioner, prior to the execution of the
impugned Deed, signed receipts identically denominated as
"Kasunduan" under which he acknowledged receiving
sums ofmoney as payment for his property, which receipts were
worded in the vernacular and could not have been mistaken or
misunderstood for anything else other than as evidence of the
sale of his property, seals the case against him. It confirms
this Court's earlier observation that the transaction indicated
was one of sale on installment. Additionally, petitioner affixed
his signature on the Deed after its contents were sufficiently
explained to him in the vernacular, which was witnessed by two
other persons of legal age and duly acknowledged before a
notary
public.
Ironically,
petitioner's
own
witness,
NemecioMolina, who was likewise a witness to the
execution of the
Deed,
belied
his
claim of having
no
knowledge of the contents of the subject instrument when he
took the witness stand: . . . . Another witness to the document,
Atty. Edwina Mendoza, testified that prior to the execution of the
Deed, the parties thereto approached her "to tell [her] that
sometime in the future, they will have to execute a
deed of conveyance because they are entering to (sic) this
kind of transaction," adding that when petitioner was informed
that he would actually be selling his property, the latter readily
acceded. In fine, this Courtfinds that the parties to the Deed
were fully aware of its contents and meaning, and that there
were no acts done or events that occurred prior to,
simultaneous to, or after the execution of the Deed that would
indicate the intention of any of the parties to have been
otherwise than to sell the property to respondent spouses.

Petitioner Pedro Molina and his siblings Felisa, Felix and

Tomas Molina were co-owners of a parcel of land in Naic, Cavite
registered in their names under TCT No. T-44010 of the
Registry of Deeds of Cavite. 3
On April 23, 1984, petitioner, by Deed of Absolute Sale, 4 conveyed
to his sister Felisa his share in the co-owned property. The sale was
not, however, registered.
The siblings subsequently entered into an agreement wherein they
partitioned the property as follows:
Lot No. 98-A-1 with an area of 92 square m. for
FELIX MOLINA;
Lot No. 98-A-2 with an area of 92 square m. for
PEDRO MOLINA;
Lot No. 98-A-3 with an area of 92 square m. for
FELISA MOLINA;
Lot No. 98-A-4 with an area of 92 square m. for
TOMAS MOLINA;
Lot No. 98-A-5 with an area of 43 square m. as the
RIGHT OF WAY; 5
More than four years after petitioner executed the Deed of Sale
conveying his share of the property to his sister Felisa or on June
13, 1988, upon the requestof Felisa, he executed another
Deed of Absolute Sale 6 in lieu of the first covering the same share
in favor of Felisa's son private respondent Margarito Flores and his
wife
private
respondent
Nerisa
Herrera.
The
pertinent
provisions of the second Deed are reproduced hereunder:
xxx xxx xxx

DECISION

CARPIO MORALES, J p:
His motion for reconsideration having been denied, petitioner
brought the present petition for review on certiorari to set aside the
decision of April 30, 1996of the Court of Appeals 1 in CA-G.R. CV
No. 46107 which reversed the April 4, 1994 decision of the Regional
Trial Court of Cavite, Branch 15 2 in Civil Case No. NC-325 in
favor of petitioner.

That the Vendor is the absolute owner in fee

simple of a 1/4 portion of a parcel of land, situated
in the Poblacion, Naic, Cavite, Philippines, known as
and more specifically described as follows:
xxx xxx xxx
That for and in consideration of the sum of EIGHT
THOUSAND PESOS ONLY (P8,000.00) Philippine
Currency, receipt of which
in
full
is
hereby
acknowledged by the Vendor from the Vendee, the
Vendor hereby sells, transfers and conveys and by
these presents have (sic) sold, transferred and

conveyed unto the above named Vendee, her (sic)

heirs and assigns the (1/4) square meters (sic)
portion of the above described parcel of land, free
from
all
kinds of liens
and
encumbrances
whatsoever. (Italics supplied).

THE DEED OF SALE DO (sic) NOT EXPRESS

THE TRUE INTENT AND AGREEMENT OF THE
PARTIES;

xxx xxx xxx

TCT No. T-170585 7 in the name of respondent spouses covering
petitioner's share in the co-owned property was accordingly issued.
On September 5, 1990, petitioner filed an action for
reformation of instrument and/or annulment of document and title
with
reconveyance
and
damages
before
the
Regional
Trial Court of Cavite, alleging that the Deed of Absolute Sale in
favor of respondent spouses does not express the true will and
intentionof the parties.
Respondent
spouses
maintained
that
their
acquisition of petitioner's share was valid, legal and binding. 8
After trial, finding for petitioner, the trial court ordered
annulment of the Deed of Absolute Sale, disposing as follows:

Wherefore, this Court finds merit

complaint and hereby orders:

in

the

plaintiff's

1. The
annulment of the
contract,
Absolute
Deed of Sale dated June 13, 1988 among and
between the plaintiff and the defendants which is
null and void;
2. The
cancellation of TCT
No.
170585 of the
Register of Deeds of Cavite
Province
at
Trece
Martires City; and
3. The defendants to pay
attorney's fees of P5,000.00.

plaintiff

reasonable

Plus costs of suit.

SO ORDERED. 9
Upon recourse to the Court of Appeals, the trial court's decision was
reversed and the complaint of petitioner was dismissed, hence the
present petition anchored on the following assigned errors:
I. RESPONDENT COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN NOT HOLDING THAT

II. RESPONDENT COURT OF APPEALS COMMITTED

REVERSIBLE ERROR IN NOT FINDING THE
TRANSACTION TO BE AN EQUITABLE
MORTGAGE AND NOT A DEED OF SALE AND
THEREFORE TRANSCENDS THE CORRECT
APPLICATION OF ART. 1602 OF THE CIVIL
CODE;
III. RESPONDENT COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN NOT HOLDING THAT
THE
ALLEGED
SALE
WAS
NOT
A
CONSUMATED (sic) CONTRACT OF SALE;
IV. RESPONDENT COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN NOT FINDING THAT
THE PETITIONER WAS DEFRAUDED BY
FELISA MOLINA IN SIGNING THE SIMULATED
AND FICTITIOUS DEED OF SALE." 10
Petitioner contends that he signed the Deed of Absolute Sale
through the misrepresentations of his sister Felisa who made him
believe that what he was signing was only a receipt evidencing his
indebtedness to her 11 which, by his own admission, he had
incurred on several occasions; that Felisa took advantage of his
lack of sufficient education and knowledge of English to defraud
him into selling his property; and that parol evidence should be
admitted to prove the real nature of the transaction which he
claims was one of an equitable mortgage.
Petitioner calls attention to the consideration given for his property,
P8,000.00, which he claims is inadequate, and to his regular
receipt of rentals being paid by the lessee of the premises, one
Erlinda
de
Guzman
which
circumstances
are
allegedly
badges of equitable mortgage. Thus he cites Articles 1602 and
1604of the Civil Code which provide:
Art. 1602. The contract shall be presumed to be an
equitable mortgage, in any of the following cases:
(1) When the price of a sale with
repurchase is unusually inadequate;

right

to

(2) When the vendor remains in possession as

lessee or otherwise;

(3) When upon or after the expiration of the right to

repurchase another instrument extending the
period of redemption or granting a new period is
executed;

Q: In

(4) When the purchaser retains for himself a

part of the purchase price;

Q: How much?

(5) When the vendor binds himself to pay the taxes

on the thing sold;

Q: Do you have any copy of that agreement of your

loan?

(6) In any other case where it may be fairly inferred

that the real intention of the parties is that the
transaction shall secure the payment of a debt or
the performance of any other obligation.

A: None, sir.

In any of the foregoing cases, any money, fruits, or

other benefit to be received by the vendee as rent
or otherwise shall be considered as interest which
shall be subject to usury laws (Emphasis supplied).
Art. 1604. The provisions of Article 1602 shall also
apply to a contract purporting to be an absolute
sale.

connection with that issue, do you

remember how much you owed your sister?

A: Yes, your Honor.

A: Ten thousand (P10,000.00) pesos, your Honor.

Q: How did you receive that amount of money?

A: Little by little,
buwan), sir.
Q: And

sir. Month

how
long
amount of ten
pesos?

by month (buwan

did
you
thousand

receive
that
(P10,000.00)

A: Ten months. Every month, I was allowed to

received sic P1,000.00.

In issue then is whether the parties intended the Deed of Absolute

Sale in favor of respondent to be an equitable mortgage.

Q: You did not put up any collateral to your loan?

Did you?

An equitable mortgage is defined as one which, although lacking in

some formality, or form or words, or other requisites demanded by
a statute, nevertheless reveals the intention of the parties to
charge real property as security for a debt, and contains nothing
impossible or contrary to law. 12

A: None, your Honor. (Italics supplied). 15

The intention of the parties to an agreement is shown not

necessarily by the terminology used therein but by all the
surrounding circumstances, such as the relative situation of the
parties at the time, the attitude, acts, conduct, declarations of the
parties, the negotiations between them leading to the deed, and
generally, all pertinent facts having a tendency to fix and
determine the real nature of their design and understanding. 13
For the presumption of an equitable mortgage to arise under Art.
1602, two (2) requisites must concur: (a) that the parties entered
into a contract denominated as a contract of sale, and (b) that their
intention was to secure an existing debt by way of a mortgage. 14
In the case at bar, the second requisite is conspicuously absent.
Consider the following testimony of petitioner himself:

That the alleged loan was received in installments of P1,000.00 per

month for ten months or a total of P10,000.00 in fact indicates that
the transaction was not one of a loan but of sale on installment.
The alleged inadequacy of the price harped upon by petitioner does
not by itself support the conclusion that the property was not at all
sold or that the contract was one of a loan. 16
In any event, no proof was presented to show that the value of the
92 sq. m. property located in Naic, Cavite was, at the time the Deed
was executed in 1988,considerably higher than the therein stated
purchase price P8,000.00.
As for petitioner's continued receipt of rentals due on the property
from its current lessee this Court finds the same as did the
appellate court, to be a gesture of generosity, kinship and leniency
from his relatives, he being jobless and without visible
means of support. 17
Petitioner argues, nevertheless, that assuming arguendo that a
contract of sale was entered into, it was not consummated as the

entire purchase price was not paid. 18 Assuming that to be so

albeit, by the Deed in question petitioner acknowledged
receipt of the P8,000.00 purchase price, it does not by itself bar the
transfer of the ownership or possession of the property, much less
dissolve the contract of sale. 19 The contract remains but the
payment of the price is a resolutory condition, and the
remedy of the seller is to exact fulfillment or, in case of a
substantial breach, to rescind the contract under Article 1191 of the
Civil Code 20 which provides:
Art. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent
upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may
also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed,
unless there be just cause authorizing the
fixing of a period.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the
Mortgage Law.
That petitioner, prior to the execution of the impugned Deed,
signed receipts identically denominated as "Kasunduan" under
which he acknowledged receiving sums of money as payment for
his property, which receipts were worded in the vernacular and
could not have been mistaken or misunderstood for anything else
other than as evidence of the sale of his property, seals the case
against him. It confirms this Court's earlier observation that the
transaction indicated was one of sale on installment. Thus
each of the receipts Kasunduan 21 provides:
Ako si PEDRO MOLINA, balo, may sapat na gulang,
Pilipino, naninirahan sa Naik, Kabite, ay tumanggap
ng halagang one thousand (P1,000) sa aking
kapatid na si FELISA S. MOLINA bilang tanda na
ipinagbibili ko sa kanya ang aking kaparte sa
lupang minana naming sa aming mga magulang,
nakilala bilang Lote Numero 98-A na may titulo

Numero T-44010 na nasa Kalye ZAMORA NAIK,

KABITE, . . .
Additionally, petitioner affixed his signature on the Deed after its
contents were sufficiently explained to him in the vernacular, which
was witnessed by two other persons of legal age and duly
acknowledged before a notary public. Ironically, petitioner's own
witness, Nemecio Molina, who was likewise a witness to the
execution of the
Deed,
belied
his
claim of having
no
knowledge of the contents of the subject instrument when he took
the witness stand:
Q: Now, before the said document was signed by
the parties, do you know what was done by
the Notary Public, Mariano Villanueva?
A: Yes, sir.
Q: What was done by Notary Public Mariano
Villanueva before the parties signed the
document?
A: He read the document to Pedro Molina.
Q: In what vernacular did Atty. Villanueva use the
reading of the
document,
Tagalog
or
English?
A: In English, your Honor.
Q: You mean to say that Notary Public Mariano
Villanueva was reading the contents of the
sale of the document which is in English?
A: Yes, sir.
Q: And that is all what (sic) Atty. Villanueva did
before he required the parties to sign?
A: He

told her secretary to translate

Tagalog. 22 (Emphasis supplied).

it

in

More. Another witness to the document, Atty. Edwina Mendoza,

testified that prior to the execution of the Deed, the parties thereto
approached her "to tell [her] that sometime in the future, they will
have to execute a deed of conveyance because they are entering
to (sic) this kind of transaction," 23 adding that when petitioner
was informed that he would actually be selling his property, the
latter readily acceded. 24

In fine, this Court finds that the parties to the Deed were fully
aware of its contents and meaning, and that there were no acts
done or events that occurred prior to, simultaneous to, or after the
execution of the
Deed
that
would
indicate
the
intention of any of the parties to have been otherwise than to sell
the property to respondent spouses.
WHEREFORE,
the
Petition
is
hereby
DENIED.
The
Decision of the Court of Appeals in CA-G.R. CV No. 46107 dated
April 30, 1996 is hereby AFFIRMED.
SO ORDERED.
Puno, Panganiban and Sandoval-Gutierrez, JJ., concur.
Corona, J., is on leave.
||| (Molina v. Court of Appeals, G.R. No. 125755, [February 24,
2003], 446 PHIL 133-145)

SECOND DIVISION
[G.R. No. 146267. February 17, 2003.]
NYK INTERNATIONAL KNITWEAR
CORPORATION PHILIPPINES and/or CATHY
NG, petitioners, vs. NATIONAL LABOR RELATION
SCOMMISSION and
VIRGINIA
M.
PUBLICO, respondents.
Eufemio Law Offices for petitioners.
Carlo A. Domingo for private respondents.
SYNOPSIS
Private respondent Publico was sewer of petitioner corporation. On
May 7, 1997, Publico went home early despite refusal of petitioner
because she was not feeling well. The next day, she notified
petitioner that she was still recovering from her sickness. On May 9,

1997, however, Publico was refused entry for work and later
informed of her dismissal. The Labor Arbiter and the NLRC both
ruled the dismissal illegal. A special civil action for certiorari was
then filed in the Court of Appeals by petitioner, but the same was
dismissed outright because it was not accompanied by a certified
true copy of the assailed NLRC decision, but by a certified xerox
copy of the assailed NLRC decision. DcCHTa
The disputed document although stamped as "certified true copy"
is not an authenticated original of such certified true copy, but only
a xerox copy thereof. Hence, no error may be ascribed to the Court
of Appeals for dismissing the petition outright pursuant to Adm.
Circular No. 3-96. At any rate, the Court found no grave abuse of
discretion committed by the NLRC in its assailed decision.
SYLLABUS
1. REMEDIAL
LAW;
SPECIAL
CIVIL
ACTIONS;
PETITION
FOR CERTIORARI; MUST BE ACCOMPANIED BY CERTIFIED TRUE
COPY OF JUDGMENT OR ORDER SUBJECT THEREOF. Section 1 of
Rule 65, 1997 Rules of Civil Procedure, requires that the petition
shall be accompanied by a certified true copy of the judgment or
order subject thereof, together with copies of all pleadings and
documents relevant and pertinent thereto. The precursor of the
Revised Rules of Civil Procedure, Administrative Circular No. 3-96,
which took effect on June 1, 1996, instructs us what a "certified true
copy" is: 1. . . . The "certified true copy" thereof shall be such other
copy furnished to a party at his instance or in his behalf, duly
authenticated by the authorized officers or representatives of the
issuing entity as hereinbefore specified. . . 3. The certified true
copy must further comply with all the regulations therefor of the
issuing entity and it is the authenticated original of such certified
true copy, and not a mere xerox copy thereof, which shall be
utilized as an annex to the petition or other initiatory pleadings. . . .
Applying the preceding guidepost in the present case, the disputed
document although stamped as "certified true copy" is not an
authenticated original of such certified true copy, but only
a xerox copy thereof, in contravention of paragraph 3 of the abovequoted guidelines. Hence, no error may be ascribed to the Court of
Appeals in dismissing the petition for certiorari outright pursuant to
paragraph 5 of Administrative Circular No. 3-96, which provides: 5.
It shall be the duty and responsibility of the party using the
documents required by Paragraph (3) of Circular No. 1-88 to verify
and ensure compliance with all the requirements therefor as
detailed in the preceding paragraphs. Failure to do so shall result in

the rejection of such annexes and the dismissal of the case.

Subsequent compliance shall not warrant any reconsideration
unless the court is fully satisfied that the non-compliance was not
in any way attributable to the party, despite due diligence on his
part, and that there are highly justifiable and compelling reasons
for the court to make such other disposition as it may deem just
and equitable. Petitioners are hereby reminded that the right to file
a special civil action of certiorari is neither a natural right nor a part
of due process. A writ of certiorari is a prerogative writ, never
demandable as a matter of right, never issued except in the
exercise of judicial discretion. Hence, he who seeks a writ
of certiorari must apply for it only in the manner and strictly in
accordance with the provisions of the law and the Rules.
2. ID.; EVIDENCE; FINDINGS OF THE NLRC, RESPECTED.
Petitioners raise factual questions which are improper in a petition
for review on certiorari. Findings of facts of the NLRC, particularly in
a case where the NLRC and the Labor Arbiter are in agreement, are
deemed binding and conclusive upon this Court. Both bodies being
deemed to have acquired expertise in matters within their
jurisdictions, when sufficiently supported by evidence on record,
are accorded respect if not finality, and are considered binding on
this Court. As long as their decisions are devoid of any unfairness or
arbitrariness in the process of their deduction from the evidence
proffered by the parties, all that is left is for the Court to stamp its
affirmation and declare its finality.
3. LABOR LAW AND SOCIAL LEGISLATION; TERMINATION OF
EMPLOYMENT; ILLEGAL DISMISSAL; SOLIDARY LIABILITY OF
CORPORATION AND ITS OFFICERS. Anent petitioners' assertion
that they cannot be solidarily liable in this case as there was no
malice or bad faith on their part has no leg to stand on. What the
Court finds apropos is our disquisition in A.C. Ransom Labor UnionCCLU v. NLRC, which held that since a corporation is an artificial
person, it must have an officer who can be presumed to be the
employer, being the "person acting in the interest of the employer."
In other words the corporation, in the technical sense only, is the
employer. In a subsequent case, we ordered the corporate officers
of the employer corporation to pay jointly and solidarily the private
respondents' monetary award. More recently, a corporation and its
president were directed by this Court to jointly and severally
reinstate the illegally dismissed employees to their former positions
and to pay the monetary awards. In this case Cathy Ng, admittedly,
is the manager of NYK. Conformably with our ruling in A. C.
Ransom, she falls within the meaning of an "employer" as
contemplated by the Labor Code, who may be held jointly and
severally liable for the obligations of the corporation to its

dismissed employees. Pursuant to prevailing jurisprudence, Cathy

Ng, in her capacity as manager and responsible officer of NYK,
cannot be exonerated from her joint and several liability in the
payment of monetary award to private respondent. TEHIaA

DECISION

QUISUMBING, J p:
In this petition for review, petitioners NYK International Knitwear
Corporation Philippines (henceforth NYK, for brevity) and its
manager, Cathy Ng, assail the resolution 1 dated September 15,
2000 of the Court of Appeals in CA-G.R. SP No. 60542, which
dismissed their petition for certiorari for non-compliance with
Section 1, Rule 65 of the 1997 Rules of Civil Procedure. Also
assailed is the appellate court's resolution 2 of December 5, 2000,
which denied the motion for reconsideration.
The facts, as gleaned from the findings of the Labor Arbiter as
affirmed by the National Labor Relations Commission (NLRC), show
that:
On February 8, 1995, herein petitioner NYK hired respondent
Virginia Publico as a sewer. Under the terms and conditions of her
employment, Publico was paid on a piece-rate basis, but required to
work from 8:00 A.M. to 12:00 midnight. On the average, she earned
P185.00 daily.
At about 10:00 P.M. of May 7, 1997, Publico requested that she be
allowed to leave the work place early, as she was not feeling well
due to a bout of influenza. Permission was refused but nonetheless,
Publico went home.
The following day, Publico called up her employer and notified
management that she was still recovering from her ailment.
On May 9, 1997, Publico reported for work. To her mortification and
surprise, however, the security guard prevented her from entering
the NYK premises, allegedly on management's order. She begged to
be allowed inside, but the guard remained adamant. It was only
when Publico declared that she would just complete the unfinished
work she had left on May 7 that the guard let her in.

Once inside the factory, Publico requested to see the owner, one
Stephen Ng. Her request was declined. She was instead asked to
come back the following day.
On May 10, 1997, Publico returned to NYK as instructed. After
waiting for three and half (3 1/2) hours, she was finally able to see
Stephen Ng. When she inquired why she was barred from reporting
for work, Mr. Ng told her she was dismissed due to her refusal to
render overtime service.
Aggrieved, private respondent filed a complaint for illegal dismissal
against petitioner corporation and its manager, petitioner Cathy Ng,
docketed as NLRCNCR Case No. 00-06-03925-97.
Before the Labor Arbiter, petitioners predictably had a different
version of the story. Allegedly, they took the pains to verify why
Publico did not report for work on May 7, 1997 and found out that
her husband did not allow her to work at night. As night work is a
must in their line of business, particularly when there are rush
orders, petitioners claimed that given Publico's failure to render
overtime work, they were left with no other recourse but to fire
her. cSIACD
On March 19, 1998, the Labor Arbiter held Publico's dismissal to be
illegal, disposing as follows:
WHEREFORE, the respondents are hereby ordered
to reinstate the complainant to her former position
with full backwages from the date her salary was
withheld until she is actually reinstated, which
amounted to P50,168.30 . . . The respondents are,
likewise,
assessed
the
sum
of P5,016.83
representing 10% of the amount awarded as
attorney's fees. The rest of the claims are
dismissed for lack of merit.
SO ORDERED. 3
On appeal, the NLRC, in a resolution 4 dated May 17, 2000,
affirmed the decision of the Labor Arbiter in toto.
In due time, petitioners impugned the NLRC decision by way of a
special civil action of certiorari filed before the Court of Appeals,
docketed as CA-G.R. SP No. 60542. Petitioners ascribed grave
abuse of discretion amounting to lack or excess of jurisdiction to
public respondent NLRC for affirming the ruling of theLabor Arbiter.

In its resolution of September 15, 2000, the appellate court

dismissed the petition outright. The Court of Appeals pointed out
that there was non-compliance with Section 1 of Rule 65 of the
1997 Rules of Civil Procedure as the petition was merely
accompanied
by
a
certified
xerox
copy
of
the
assailed NLRC decision, instead of a certified true copy thereof as
required by the Rules of Court. 5 Furthermore, petitioners failed to
attach the other pleadings and documents pertinent and material
to their petition, such as the parties' position papers, their evidence
and the motion for reconsideration in contravention of the said
rule. 6
Petitioners duly moved for reconsideration, explaining that they had
requested for a certified true copy of the NLRC's decision but since
the original NLRCdecision was printed on onionskin was not legible,
the NLRC itself photocopied the resolution and certified it
afterwards. As proof of payment of petitioners' request for a
certified true copy of the NLRC decision, petitioners attached a
copy of the official receipts issued by the NLRC, which described
the nature of the entry as "CERT. TRUE COPY." 7 Petitioners,
likewise, appended in their motion copies of pertinent pleadings
and documents not previously attached in their petition. cSaATC
On December 5, 2000, the appellate court denied petitioners'
motion for reconsideration. 8
Hence this petition for review.
Before us, petitioners submit the following issues for our resolution:
I
WHETHER OR NOT THE COURT OF APPEALS
SHOULD HAVE GIVEN DUE COURSE TO THE
PETITION FOR CERTIORARI.
II
WHETHER OR NOT THERE EXISTS EVIDENCE ON
RECORD TO WARRANT THE RULING THAT
COMPLAINANT WAS ILLEGALLY DISMISSED, AND
COROLLARY THERETO, WHETHER OR NOT THERE IS
LEGAL JUSTIFICATION TO AWARD BACKWAGES AND
ORDER REINSTATEMENT.
III
WHETHER OR NOT THERE WAS GRAVE ABUSE OF
DISCRETION ON THE PART OF THE PUBLIC

RESPONDENT NLRC SO AS TO JUSTIFY A REVERSAL

OF ITS RESOLUTIONS DATED MAY 17, 2000 AND
JUNE 30, 2000. 9
Only two issues need resolution, one having to do with adjective
law and the other with substantial law, namely:
(1) Did the Court of Appeals commit a reversible error in dismissing
CA-G.R. SP No. 60542 on purely technical grounds, i.e., that the
attached copy of theNLRC decision is a mere photocopy of the
original decision; and
(2) Did the Court of Appeals err in refusing to rule on the
correctness of the NLRC's findings that private respondent was
illegally dismissed?
On the first issue, petitioners, contend that they have substantially
complied with the requirements of Section 1, Rule 65, hence, in the
interests of justice and equity, the Court of Appeals should have
given due course to their special civil action for certiorari.
Private respondent, on the other hand, maintains that petitioners'
wanton disregard of the Rule warrant the outright dismissal of their
petition. She adds that the present petition raises factual issues
that the Court cannot pass upon at the first instance.
Section 1 of Rule 65, 10 1997 Rules of Civil Procedure, requires that
the petition shall be accompanied by a certified true copy of the
judgment or order subject thereof, together with copies of all
pleadings and documents relevant and pertinent thereto. The
precursor of the Revised Rules of Civil Procedure,Administrative
Circular No. 3-96, which took effect on June 1, 1996, instructs us
what a "certified true copy" is:
1. . . . The "certified true copy" thereof shall
be such other copy furnished to a party at his
instance or in his behalf, duly authenticated
by the authorized officers or representatives
of the issuing entity as hereinbefore
specified.
xxx xxx xxx
3. The certified true copy must further comply
with all the regulations therefor of the
issuing entity and it is the authenticated
original of such certified true copy, and not a
mere xerox copy hereof, which shall be

utilized as an annex to the petition or other

initiatory pleading.(Emphasis supplied.)
xxx xxx xxx
Applying the preceding guidepost in the present case, the disputed
document although stamped as "certified true copy" is not an
authenticated original of such certified true copy, but only
a xerox copy thereof, in contravention of paragraph 3 of the abovequoted guidelines. Hence, no error may be ascribed to the Court of
Appeals in dismissing the petition for certiorari outright pursuant to
paragraph 5 of Administrative Circular No. 3-96, which provides:
5. It shall be the duty and responsibility of the party
using the documents required by Paragraph (3) of
Circular No. 1-88 to verify and ensure compliance
with all the requirements therefor as detailed in the
preceding paragraphs. Failure to do so shall
result in the rejection of such annexes and
the dismissal of the case. Subsequent
compliance
shall
not
warrant
any
reconsideration unless the court is fully
satisfied that the non-compliance was not in
any way attributable to the party, despite
due diligence on his part, and that there are
highly justifiable and compelling reasons for
the court to make such other disposition as it
may deem just and equitable. (Emphasis
supplied.)
The members of this Court are not unmindful that in exceptional
cases and for compelling reasons, we have disregarded similar
procedural defects in order to correct a patent injustice made.
However, petitioners here have not shown any compelling reason
for us to relax the rule. Petitioners are hereby reminded that the
right to file a special civil action of certiorari is neither a natural
right nor a part of due process. A writ of certiorari is a prerogative
writ, never demandable as a matter of right, never issued except in
the exercise of judicial discretion. 11 Hence, he who seeks a writ
of certiorari must apply for it only in the manner and strictly in
accordance with the provisions of the law and the Rules. cADEIa
To avoid further delay in resolving the present controversy, we now
come to the second issue. Petitioners contend that private
respondent's refusal to render night work is tantamount to
abandonment of duties which constitutes a just ground for
termination of service. They aver that the Labor Arbiter gravely
erred in awarding backwages to private respondent, as there was

no illegal dismissal. Petitioners allege that management did not

terminate her services, but in fact asked her to return to work
during the preliminary conferences. Hence, it would be the height
of injustice to award backwages for work, which was never
rendered through private respondent's own choice. Petitioners add
that they cannot be held solidarily liable in this case as there was
neither malice nor bad faith.
Petitioners' arguments fail to persuade us. Petitioners raise factual
questions which are improper in a petition for review on certiorari.
Findings of facts of theNLRC, particularly in a case where
the NLRC and the Labor Arbiter are in agreement, are deemed
binding and conclusive upon this Court. 12
Hence, petitioners' bare allegations of abandonment cannot stand
the unswerving conclusion by both quasi-judicial agencies below
that private respondent was unlawfully dismissed. We find no
reason to deviate from the consistent findings of the Labor Arbiter
and the NLRC that there was no basis to find that Virginia
abandoned her work. Indeed, factual findings of the NLRC affirming
those of the Labor Arbiter, both bodies being deemed to have
acquired expertise in matters within their jurisdictions, when
sufficiently supported by evidence on record, are accorded respect
if not finality, and are considered binding on this Court. 13 As long
as their decisions are devoid of any unfairness or arbitrariness in
the process of their deduction from the evidence proffered by the
parties, all that is left is for the Court to stamp its affirmation and
declare its finality. No reversible error may thus be laid at the door
of the Court of Appeals when it refused to rule that
the NLRC committed a grave abuse of discretion amounting to want
or excess of jurisdiction in holding that private respondent was
illegally dismissed.
Anent petitioners' assertion that they cannot be solidarily liable in
this case as there was no malice or bad faith on their part has no
leg to stand on. What the Court finds apropos is our disquisition
in A.C. Ransom Labor Union-CCLU v. NLRC, 14 which held that
since a corporation is an artificial person, it must have an officer
who can be presumed to be the employer, being the "person acting
in the interest of the employer." In other words the corporation, in
the technical sense only, is the employer. In a subsequent case, we
ordered the corporate officers of the employer corporation to pay
jointly and solidarily the private respondents' monetary
award. 15 More recently, a corporation and its president were
directed by this Court to jointly and severally reinstate the illegally
dismissed employees to their former positions and to pay the
monetary awards. 16

In this case Cathy Ng, admittedly, is the manager of NYK.

Conformably with our ruling in A. C. Ransom, she falls within the
meaning
of
an
"employer"
as
contemplated
by
the Labor Code, 17 who may be held jointly and severally liable for
the obligations of the corporation to its dismissed employees.
Pursuant to prevailing jurisprudence, Cathy Ng, in her capacity as
manager and responsible officer of NYK, cannot be exonerated from
her joint and several liability in the payment of monetary award to
private respondent.
WHEREFORE, the instant petition is DENIED. The assailed
resolutions of the Court of Appeals dated September 15, 2000 and
December 5, 2000, are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Bellosillo, Mendoza, Austria-Martinez and Callejo, Sr., JJ., concur.

THIRD DIVISION
[G.R. No. 143377. February 20, 2001.]
SHIPSIDE INCORPORATED, petitioner, vs.
THE
HON. COURT OF APPEALS [Special
Former
Twelfth
Division],
HON.
REGIONAL
TRIAL COURT, BRANCH 26 (San Fernando City,
La
Union)
&
The
REPUBLIC OF THE
PHILIPPINES, respondents.
Laogan Baeza & Llantino Law Offices for petitioner.
Solicitor General for respondents.
SYNOPSIS
Lots No. 1 and 4, covered by Original Certificate of Title No. 0-381
in the name of Rafael Galvez, were sold by the latter to Filipina
Mamaril, Cleopatra Llana, Regina Bustos, and Erlinda Balatbat. On

August 16, 1960, Mamaril, et al. sold the same lots to Lepanto
Consolidated Mining Company and the latter in turn conveyed the
property to Shipside Incorporated, herein petitioner, on October 28,
1963, resulting in the issuance of new Transfer Certificate of Title
No. T-57 10. Unknown to Lepanto Consolidated Mining Company,
OCT No. 0-381 was already declared null and void and was ordered
cancelled by the then Court ofFirst Instance of La Union, in its order
dated February 1, 1963. The decision of the CFI became final and
executory on October 23, 1973. On April 21, 1999, the Office of the
Solicitor General, after being notified that the aforesaid order
remained unexecuted despite the writ of execution issued by the
trial court, filed a complaint for revival of judgment and
cancellation of titles
before
the
Regional
Trial Court of San
Fernando, La Union. Petitioner Shipside, Inc. moved to dismiss the
complaint, alleging, among others that the respondent Republic
was not the real party-in-interest and that the cause of action was
already barred by prescription. The trial court denied petitioner's
motion to dismiss and its motion for reconsideration was likewise
turned
down.
Petitioner
elevated
the
matter
to
the Court of Appeals through petition for certiorari and prohibition.
The appeal court denied the petition as well as the motion for
reconsideration.
Hence, the instant petition.
The Supreme Court granted the petition.
An action for revival of judgment must be brought within ten years
from the time said judgment becomes final. In the present case, the
action for revival ofjudgment was instituted only in 1999, or more
than twenty-five (25) years after the judgment had become final.
Hence, the action is barred by extinctive prescription.
While it is true that prescription does not run against the State, the
same may not be invoked by the government in this case since it
was no longer interested in the subject matter. While Camp Wallace
may have belonged to the government at the time Rafael Galvez's
title was ordered cancelled in Land Registration Case No. N-361, the
same no longer holds true today. Section 2 of Proclamation No. 216,
issued on July 27, 1993 provided for the transfer of all areas
covered by Wallace Air Station to the BCDA. With the
transfer of Camp Wallace to the BCDA, the government no longer
has a right or interest to protect. Consequently, the Republic was
not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same
being applicable only in cases where the government is a party in
interest. Being the owner of the areas covered by Camp Wallace, it

was the BCDA, not the Government, which stood to be benefited if

the land covered by TCT No. T-5710 issued in the name of petitioner
was cancelled.
SYLLABUS
1. COMMERCIAL LAW; CORPORATION CODE;CORPORATE POWERS;
POWER TO SUE AND BE SUED IS LODGED WITH THE
BOARD OF DIRECTORS; PHYSICALACT OF CORPORATION MAY BE
PERFORMED BY DULY AUTHORIZED NATURAL PERSONS. A
corporation, such as petitioner, has no power except those
expressly conferred on it by the Corporation Code and those that
are implied or incidental to its existence. In turn, a corporation
exercises said powers through its board of directors and /or its duly
authorized officers and agents. Thus, it has been observed that the
power of a corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate powers
(Premium Marble Resources, Inc. v. CA, 264 SCRA 11 [1996]). In
turn, physical acts of the corporation, like the signing of documents,
can be performed only by natural persons duly authorized for the
purpose by corporate by-laws or by a specific act of the
board of directors.
2. REMEDIAL LAW; CIVIL PROCEDURE; VERIFICATION REQUIREMENT
DOES NOT RENDER PLEADING FATALLY DEFECTIVE. The Court has
consistently held that the requirement regarding verification of a
pleading is formal, not jurisdictional (Uy v. Land Bank, G.R. No.
136100, July 24, 2000). Such requirement is simply a condition
affecting the form of the pleading, noncompliance with which does
not necessarily render the pleading fatally defective. Verification is
simply intended to secure an assurance that the allegations in the
pleading are true and correct and not the product of the
imagination or a matter ofspeculation, and that the pleading is filed
in good faith. The court may order the correction of the pleading if
verification is lacking or act on the pleading although it is not
verified, if the attending circumstances are such that strict
compliance with the rules may be dispensed with in order that the
ends of justice may thereby be served.
3. ID.; ID.; ID.; LACK OF CERTIFICATION AGAINST NON-FORUM
SHOPPING NOT CURABLE BY SUBMISSION THEREOF AFTER
FILING OF PETITION; A CERTIFICATION AGAINST FORUM SHOPPING
SIGNED BY A PERSON ON BEHALF OF THE CORPORATION MUST BE
ACCOMPANIED BY PROOF THAT THE SIGNATORY IS AUTHORIZED TO
FILE THE PETITION. The lack of certification against forum

shopping is generally not curable by the submission thereof after

the filing of the petition. Section 5, Rule 45 of the 1997
Rules of Civil Procedure provides that the failure of the petitioner to
submit the required documents that should accompany the
petition, including the certification against forum shopping, shall be
sufficient ground for the dismissal thereof. The same rule applies to
certifications against forum shopping signed by a person on
behalf of a corporation which are unaccompanied by proof that said
signatory is authorized to file a petition on behalf of the
corporation.
4. ID.; ID.; ID.; CERTIFICATION AGAINST NON-FORUM SHOPPING;
NON-COMPLIANCE WITH THE REQUIREMENT, WHEN MAY BE
EXCUSED; CASE AT BAR. In certain exceptional circumstances,
however,
the Court has
allowed
the
belated
filing of the
certification. In Loyola v. Court of Appeals, et. al. (245 SCRA 477
[1995]), the Court considered the filing of the certification one day
after the filing of an election protest as substantial compliance with
the requirement. InRoadway Express, Inc. v. Court of Appeals, et.
al. (264 SCRA 696 [1996]), the Court allowed the filing of the
certification 14 days before the dismissal of the petition. In Uy v.
Land Bank, supra, the Court had dismissed Uy's petition for
lack of verification and certification against non-forum shopping.
However, it subsequently reinstated the petition after Uy submitted
a motion to admit certification and non-forum shopping
certification. In all these cases, there were special circumstances or
compelling reasons that justified the relaxation of the rule requiring
verification and certification on non-forum shopping. In the instant
case, the merits of petitioner's case should be considered special
circumstances or compelling reasons that justify tempering the
requirement in regard to the certificate of nonforum shopping.
Moreover, in Loyola, Roadway, and Uy, the Court excused noncompliance with the requirement as to the certificate of non-forum
shopping. With more reason should we allow the instant petition
since petitioner herein did submit a certification on non forum
shopping, failing only to show proof that the signatory was
authorized to do so. That petitioner subsequently submitted a
secretary's certificate attesting that Balbin was authorized to file an
action on behalf of petitioner likewise mitigates this oversight.
5. ID.; ID.; ID.; REQUIREMENT IS MANDATORY BUT MUST NOT BE
USED TO DEFEAT ITS PURPOSE; TECHNICAL RULES SHOULD BE
USED TO PROMOTE JUSTICE. It must also be kept in mind that
while the requirement of the certificate of non-forum shopping is
mandatory, nonetheless the requirements must not be interpreted
too literally and thus defeat the objective of preventing the
undesirable practice of forum shopping (Bernardo v. NLRC, 255

SCRA 108[19961). Lastly, technical rules of procedure should be

used to promote, not frustrate justice. While the swift
unclogging of court dockets
is
a
laudable
objective,
the
granting of substantial justice is an even more urgent ideal.
6. ID.; ID.; JUDGMENT; ACTION FOR REVIVAL OF JUDGMENT;
PERSPECTIVE PERIOD. The action instituted by the Solicitor
General in the trial court is one for revival of judgment which is
governed by Article 11.44(3) of the Civil Code and Section 6, Rule
39 of the 1997 Rules on Civil Procedure. Article 1144(3) provides
that an action upon a judgment "must be brought within 10 years
from the time the right of action accrues." On the other hand,
Section 6, Rule 39 provides that a final and executory judgment or
order may be executed on motion within five (5) years from the
date of its entry, but that after the lapse ofsuch time, and before it
is barred by the statute of limitations, a judgment may be enforced
by action. Taking these two provisions into consideration, it is plain
that an action for revival of judgment must be brought within ten
years from the time said judgment becomes final.
7. ID.; ID.; ID.; ID.; ALREADY BARRED BY EXTINCTIVE PRESCRIPTION
IN CASE AT BAR. From the records of this case, it is clear that the
judgment sought to be revived became final on October 23, 1973.
On the other hand, the action for revival of judgment was instituted
only in 1999, or more than twenty-five (25) years after the
judgment had become final. Hence, the action is barred by
extinctive prescription considering that such an action can be
instituted only within ten (10) years from the time the
cause of action accrues.

8. ID.; ID.; ACTIONS; PRESCRIPTION DOES NOT RUN AGAINST THE

STATE; RULE MAY NOT BE INVOKED WHERE GOVERNMENT IS NO
LONGER INTERESTED IN SUBJECT MATTER OF THE CASE. While it
is true that prescription does not run against the State, the same
may not be invoked by the government in this case since it is no
longer interested in the subject matter. While Camp Wallace may
have belonged to the government at the time Rafael Galvez's title
was ordered cancelled in Land Registration Case No. N-361, the
same no longer holds true today.
9. ID.; ID.; ID.; ID.; RULE DOES NOT APPLY TO ARTIFICIAL BODIES
CREATED
BY
THE
STATE
FOR
SPECIAL
PURPOSE;
CLAIM OF IMPRESCRIPTIBILITY CANNOT BE RAISED BY BCDA IN
CASE AT BAR. The rule that prescription does not run against the
State does not apply to corporations or artificial bodies created by
the State for special purposes, it being said that when the

title of the Republic has been divested, its grantees, although

artificial bodies of its own creation, are in the same category as
ordinary persons (Kingston v. LeHigh Valley Coal Co., 241 Pa 469).
By raising the claim of imprescriptibility, a claim which cannot be
raised by the BCDA, the Government not only assists the BCDA, as
it did in E. B. Marcha, it even supplants the latter, a course of action
proscribed by said case. Moreover, to recognize the Government as
a proper party to sue in this case would set a bad precedent as it
would allow the Republic to prosecute, on behalf of governmentowned or controlled corporations, causes of action which have
already prescribed, on the pretext that the Government is the real
party in interest against whom prescription does not run, said
corporations having been created merely as agents for the
realization of government programs.
10. ID.; ID.; ID.; ID.; DEFENSE OF IMPRESCRIPTIBILITY MAY BE
RAISED BY THE GOVERNMENT ONLY IN CASES WHERE IT IS A REAL
PARTY IN INTEREST; REAL PARTY IN INTEREST, EXPLAINED. With
the transfer of Camp Wallace to the BCDA, the government no
longer has a right or interest to protect. Consequently, the Republic
is not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same
being applicable only in cases where the government is a party in
interest. Under Section 2 of Rule 3 of the 1997 Rules of Civil
Procedure, "every action must be prosecuted or defended in the
name of the real party in interest. "To qualify a person to be a real
party in interest in whose name an action must be prosecuted, he
must appear to be the present real owner of the right sought to be
enforced (Pioneer Insurance v. CA, 175 SCRA 668 [1989]). 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. And by real interest is meant a present substantial interest, as
distinguished from a mere expectancy, or a future, contingent,
subordinate or consequential interest (Ibonilla v. Province of Cebu,
210 SCRA 526 [1992]). Being the owner of the areas covered by
Camp Wallace, it is the Bases Conversion and Development
Authority, not the Government, which stands to be benefited if the
land covered by TCT No. T-5710 issued in the name of petitioner is
cancelled.
11. ID.;
ID.;
ID.;
PARTIES;
REAL
PARTY
IN
INTEREST;
JURISDICTION OF THE COURT MAY NOT BE INVOKED BY A PARTY
WHO HAS NO INTEREST TO PROTECT; BASES CONVERSION AND
DEVELOPMENT AUTHORITY IS THE REAL PARTY IN INTEREST IN
CASE AT BAR. Having the capacity to sue or be sued, it should
thus be the BCDA which may file an action to cancel petitioner's
title, not the Republic, the former being the real party in interest.

One having no right or interest to protect cannot invoke the

jurisdiction of the court as a party plaintiff in an action (Ralla v.
Ralla, 199 SCRA 495 [1991]). A suit may be dismissed if the plaintiff
or the defendant is not a real party in interest. If the suit is not
brought in the name of the real party in interest, a motion to
dismiss may be filed, as was done by petitioner in this case, on the
ground that the complaint states no cause of action (Tanpingco v.
IAC, 207 SCRA 652 [1992]).
12. ADMINISTRATIVE LAW; ADMINISTRATIVE AGENCIES; BASES
CONVERSION AND DEVELOPMENT AUTHORITY; NOT A MERE
AGENCY OF THE GOVERNMENT. We, however, must not lose
sight of the fact that the BCDA is an entity invested with a
personality separate and distinct from the government. It may not
be amiss to state at this point that the functions of government
have been classified into governmental or constituent and
proprietary or ministrant. While public benefit and public welfare,
particularly,
the
promotion of the
economic
and
social
development of Central Luzon, may be attributable to the
operation of the BCDA, yet it is certain that the functions performed
by the BCDA are basically proprietary in nature. The
promotion ofeconomic and social development of Central Luzon, in
particular, and the country's goal for enhancement, in general, do
not make the BCDA equivalent to the Government. Other
corporations have been created by government to act as its agents
for the realization of its programs, the SSS, GSIS, NAWASA and the
NIA, to count a few, and yet, the Court has ruled that these entities,
although performing functions aimed at promoting public interest
and public welfare, are not government-function corporations
invested with governmental attributes. It may thus be said that the
BCDA is not a mere agency of the Government but a corporate
body performing proprietary functions.

DECISION

MELO, J p:
Before
the Court is
a
petition
for
certiorari
filed
by Shipside Incorporated under Rule 65 of the 1997 Rules on Civil
Procedure
against
the
resolutions of theCourt of Appeals promulgated on November 4,
1999 and May 23, 2000, which respectively, dismissed a petition for

certiorari and prohibition and thereafter denied a motion for

reconsideration.
The antecedent facts are undisputed:
On October 29, 1958, Original Certificate of Title No. 0-381 was
issued in favor of Rafael Galvez, over four parcels of land Lot 1
with 6, 571 square meters; Lot 2, with 16,777 square meters; Lot 3
with 1,583 square meters; and Lot 4, with 508 square meters.
On April 11, 1960, Lots No. 1 and 4 were conveyed by Rafael Galvez
in favor of Filipina Mamaril, Cleopatra Llana, Regina Bustos, and
Erlinda Balatbat in a deedof sale which was inscribed as Entry No.
9115 OCT No. 0-381 on August 10, 1960. Consequently, Transfer
Certificate No. T-4304 was issued in favor of the buyers covering
Lots No. 1 and 4.
Lot No. 1 is described as: SCETHa
A parcel of land (Lot 1, Plan PSU-159621, L.R. Case
No. N-361; L.R.C. Record No. N-14012, situated in
the Barrio of Poro, Municipality of San Fernando,
Province of La Union, bounded on the NE, by the
Foreshore; on the SE, by Public Land and
property of the
Benguet
Consolidated
Mining
Company; on the SW, by properties of Rafael
Galvez (US Military Reservation Camp Wallace) and
Policarpio Munar; and on the NW, by an old Barrio
Road. Beginning at a point marked "1" on plan,
being S. 74 deg. 11'W., 2670.36 from B.L.L.M. 1,
San Fernando, thence
S. 66 deg. 19'E., 134.95 m. to point 2; S. 14 deg.
57'W., 11.79 m. to point 3;
S. 12 deg. 45'W., 27.00 m. to point 4; S. 12 deg.
45'W, 6.90 m. to point 5;
N. 69 deg., 32'W., 106.00 m. to point 6; N. 52 deg.,
21'W., 36.85 m. to point 7;
N.
21
deg.
31'E.,
42.01
m.
to
the
point of beginning;
containing
an
area of SIX
THOUSAND FIVE HUNDRED AND SEVENTY-ONE
(6,571) SQUARE METERS, more or less. All points
referred to are indicated on the plan; and marked
on the ground; bearings true, date of survey,
February 4-21, 1957.

Lot No. 4 has the following technical description:

A parcel of land (Lot 4, Plan PSU-159621, L.R. Case
No. N-361 L.R.C. Record No. N-14012), situated in
the Barrio of Poro, Municipality of San Fernando, La
Union. Bounded on the SE by the property of the
Benguet Consolidated Mining Company; on the S.
by property of Pelagia Carino; and on the NW by
the
property of Rafael
Galvez
(US
Military
Reservation, Camp Wallace). Beginning at a point
marked "1" on plan, being S. deg. 24'W. 2591.69 m.
from B.L.L.M. 1, San Fernando, thence S. 12 deg.
45'W., 73.03 m. to point 2; N. 79 deg. 59'W., 13.92
m. to point 3; N. 23 deg. 26'E., 75.00 m. to the
point of beginning; containing an area of FIVE
HUNDRED AND EIGHT (508) SQUARE METERS, more
or less. All points referred to are indicated in the
plan and marked on the ground; bearings true,
date of survey, February 4-21, 1957.
On August 16, 1960, Mamaril, et al. sold Lots No. 1 and 4 to
Lepanto Consolidated Mining Company. The deed of sale covering
the aforesaid property was inscribed as Entry No. 9173 on TCT No.
T-4304. Subsequently, Transfer Certificate No. T-4314 was issued in
the
name of Lepanto
Consolidated
Mining
Company
as
owner of Lots No. 1 and 4.
On February 1, 1963, unknown to Lepanto Consolidated Mining
Company, the Court of First Instance of La Union, Second Judicial
District, issued an Order in Land Registration Case No. N-361 (LRC
Record No. N-14012) entitled "Rafael Galvez, Applicant, Eliza
Bustos, et al., Parties-In-Interest; Republic of the Philippines,
Movant" declaring OCT No. 0-381 of the Registry of Deeds for the
Province of La Union issued in the name of Rafael Galvez, null and
void, and ordered the cancellation thereof.
The Order pertinently provided:
Accordingly, with the foregoing, and without
prejudice on the rights of incidental parties
concerned herein to institute their respective
appropriate actions compatible with whatever
cause they may have, it is hereby declared and
this court so holds that both proceedings in Land
Registration Case No. N-361 and Original Certificate
No.
0-381 of the
Registry of Deeds
for
the
province of La Union issued in virtue thereof and
registered in the name of Rafael Galvez, are null

and
void;
the
Register of Deeds
for
the
Province of La Union is hereby ordered to cancel
the said original certificate and/or such other
certificates of title issued subsequent thereto
having reference to the same parcels of land;
without pronouncement as to costs.

On October 28, 1963, Lepanto Consolidated Mining Company sold

to herein petitioner Lots No. 1 and 4, with the deed being entered in
TCT NO. 4314 as entry No. 12381. Transfer Certificate of Title No. T5710 was thus issued in favor of the petitioner which starting since
then exercised proprietary rights over Lots No. 1 and 4.
In the meantime, Rafael Galvez filed his motion for reconsideration
against the order issued by the trial court declaring OCT No. 0-381
null and void. The motion was denied on January 25, 1965. On
appeal, the Court of Appeals ruled in favor of the Republic of the
Philippines in a Resolution promulgated on August 14, 1973 in CAG.R. No. 36061-R.
Thereafter, the Court of Appeals issued an Entry of Judgment,
certifying that its decision dated August 14, 1973 became final and
executory on October 23, 1973.
On April 22, 1974, the trial court in L.R.C. Case No. N-361 issued a
writ of execution of the judgment which was served on the
Register of Deeds, San Fernando, La Union on April 29, 1974.
Twenty four long years thereafter, on January 14, 1999, the
Office of the Solicitor General received a letter dated January 11,
1999 from Mr. Victor G. Floresca, Vice-President, John Hay Poro
Point Development Corporation, stating that the aforementioned
orders and decision of the trial court in L.R.C. No. N-361 have not
been executed by the Register of Deeds, San Fernando, La Union
despite receipt of the writ of execution.
On April 21, 1999, the Office of the Solicitor General filed a
complaint for revival of judgment and cancellation of titles before
the Regional Trial Court of the First Judicial Region (Branch 26, San
Fernando, La Union) docketed therein as Civil Case No. 6346
entitled, "Republic of the Philippines, Plaintiff, versus Heirsof Rafael
Galvez, represented by Teresita Tan, Reynaldo Mamaril, Elisa
Bustos, Erlinda Balatbat, Regina Bustos, Shipside Incorporated and
the Register ofDeeds of La Union, Defendants."
The evidence shows that the impleaded defendants (except the
Register of Deeds of the province of La Union) are the successors-

in-interest of Rafael Galvez (not Reynaldo Galvez as alleged by the

Solicitor General) over the property covered by OCT No. 0-381,
namely: (a) Shipside Inc. which is presently the registered owner in
fee simple of Lots No. 1 and 4 covered by TCT No. T-5710, with a
total area of 7,079 square meters; (b) Elisa Bustos, Jesusito Galvez,
and Teresita Tan who are the registered owners of Lot No. 2 of OCT
No. 0-381; and (c) Elisa Bustos, Filipina Mamaril, Regina Bustos and
Erlinda Balatbat who are the registered owners of Lot No. 3 of OCT
No. 0-381, now covered by TCT No. T-4916, with an area of 1,583
square meters.
In its complaint in Civil Case No. 6346, the Solicitor General argued
that since the trial court in LRC Case No. 361 had ruled and
declared OCT No. 0-381 to be null and void, which ruling was
subsequently affirmed by the Court of Appeals, the defendantssuccessors-in-interest of Rafael Galvez have no valid title over the
property covered by OCT No. 0-381, and the subsequent Torrens
titles issued in their names should be consequently cancelled.
On July 22, 1999, petitioner Shipside, Inc. filed its Motion to
Dismiss, based on the following grounds: (1) the complaint stated
no cause of action because only final and executory judgments may
be subject of an action for revival of judgment; (2) the plaintiff is
not the real party-in-interest because the real property covered by
the Torrens titles sought to be cancelled, allegedly part of Camp
Wallace (Wallace Air Station), were under the ownership and
administration ofthe Bases Conversion Development Authority
(BCDA) under Republic Act No. 7227; (3) plaintiff's cause of action is
barred by prescription; (4) twenty-five years having lapsed since
the
issuance of the
writ of execution,
no
action
for
revival of judgment may be instituted because under Paragraph
3 of Article 1144 ofthe Civil Code,such action may be brought only
within ten (10) years from the time the judgment had been
rendered.
An opposition to the motion to dismiss was filed by the Solicitor
General on August 23, 1999, alleging among others, that: (1) the
real party-in-interest is the Republic of the Philippines; and (2)
prescription does not run against the State.
On August 31, 1999, the trial court denied petitioner's motion to
dismiss and on October 14, 1999, its motion for reconsideration
was likewise turned down.
On October 21, 1999, petitioner instituted a petition for certiorari
and prohibition with the Court of Appeals, docketed therein as CAG.R. SP No. 55535, on the ground that the orders of the

trial court denying its motion to dismiss and its subsequent motion
for reconsideration were issued in excess of jurisdiction.
On November 4, 1999, the Court of Appeals dismissed the petition
in CA-G.R. SP No. 55535 on the ground that the verification and
certification in the petition, under the signature of Lorenzo Balbin,
Jr., was made without authority, there being no proof therein that
Balbin was authorized to institute the petition for and in behalf
and of petitioner. cATDIH
On May 23, 2000, the Court of Appeals denied petitioner's motion
for reconsideration on the grounds that: (1) a complaint filed on
behalf of a corporation can be made only if authorized by its
Board of Directors, and in the absence thereof, the petition cannot
prosper and be granted due course; and (2) petitioner was unable
to show that it had substantially complied with the rule requiring
proof of authority to institute an action or proceeding.

with the Court of Appeals, thus the latter court acted correctly in
dismissing the same; (2) the real party-in-interest in the case at bar
being the Republic of the Philippines, its claims are imprescriptible.
In order to preserve the rights of herein parties, the Court issued a
temporary restraining order on June 26, 2000 enjoining the
trial court from conducting further proceedings in Civil Case No.
6346.
The issues posited in this case are: (1) whether or not an
authorization from petitioner's Board of Directors is still required in
order for its resident manager to institute or commence a legal
action for and in behalf of the corporation; and (2) whether or not
the Republic of the Philippines can maintain the action for
revival of judgment herein.
We find for petitioner.

Hence, the instant petition.

Anent the first issue:

In support of its petition, Shipside, Inc. asseverates that:

The Court of Appeals dismissed the petition for certiorari on the

ground that Lorenzo Balbin, the resident manager for petitioner,
who was the signatory in the verification and certification on nonforum shopping, failed to show proof that he was authorized by
petitioner's board of directors to file such a petition.

1. The Honorable Court of Appeals gravely abused

its discretion in dismissing the petition when
it made a conclusive legal presumption that
Mr. Balbin had no authority to sign the
petition
despite
the
clarity of laws,
jurisprudence and Secretary's certificate to
the contrary;
2. The

Honorable Court of Appeals abused

its
discretion when it dismissed the petition, in
effect
affirming
the
grave
abuse of discretion
committed
by
the
lower court when it refused to dismiss the
1999 Complaint for Revival of a 1973
judgment, in violation of clear laws and
jurisprudence.

Petitioner likewise adopted the arguments it raised in the petition

and comment/reply it filed with the Court of Appeals, attached to its
petition as Exhibit "L" and "N", respectively.
In his Comment, the Solicitor General moved for the
dismissal of the instant petition based on the following
considerations: (1) Lorenzo Balbin, who signed for and in
behalf of petitioner in the verification and certification of non-forum
shopping portion of the petition, failed to show proof of his
authorization to institute the petition for certiorari and prohibition

A corporation, such as petitioner, has no power except those

expressly conferred on it by the Corporation Code and those that
are implied or incidental to its existence. In turn, a corporation
exercises said powers through its board of directors and/or its duly
authorized officers and agents. Thus, it has been observed that the
power of a corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate powers
(Premium Marble Resources, Inc. v. CA, 264 SCRA 11 [1996]). In
turn,
physical
acts of the
corporation,
like
the
signing of documents, can be performed only by natural persons
duly authorized for the purpose by corporate by-laws or by a
specific act of the board of directors.
It is undisputed that on October 21, 1999, the time petitioner's
Resident Manager Balbin filed the petition, there was no proof
attached thereto that Balbin was authorized to sign the verification
and
non-forum
shopping
certification
therein,
as
a
consequence of which
the
petition
was
dismissed
by
the Court ofAppeals. However, subsequent to such dismissal,
petitioner filed a motion for reconsideration, attaching to said
motion a certificate issued by its board secretary stating that on
October 11, 1999, or ten days prior to the filing of the petition,

Balbin had been authorized by petitioner's board of directors to file

said petition.
The Court has consistently held that the requirement regarding
verification of a
pleading
is
formal,
not
jurisdictional
(Uy v. LandBank, G.R. No. 136100, July 24, 2000). Such requirement
is simply a condition affecting the form of the pleading, noncompliance with which does not necessarily render the pleading
fatally defective. Verification is simply intended to secure an
assurance that the allegations in the pleading are true and correct
and not the product of the imagination or a matter of speculation,
and that the pleading is filed in good faith. The court may order the
correction of the pleading if verification is lacking or act on the
pleading although it is not verified, if the attending circumstances
are such that strict compliance with the rules may be dispensed
with in order that the ends of justice may thereby be served.

On the other hand, the lack of certification against forum shopping

is generally not curable by the submission thereof after the
filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil
Procedure provides that the failure of the petitioner to submit the
required documents that should accompany the petition, including
the certification against forum shopping, shall be sufficient ground
for the dismissal thereof. The same rule applies to certifications
against forum shopping signed by a person on behalf of a
corporation which are unaccompanied by proof that said signatory
is authorized to file a petition on behalf of the corporation.
In certain exceptional circumstances, however, the Court has
allowed
the
belated
filing of the
certification.
In Loyola v. Court of Appeals, et. al. (245 SCRA 477 [1995]),
the Court considered the filing of the certification one day after the
filing of an election protest as substantial compliance with the
requirement. InRoadway Express, Inc. v. Court of Appeals, et.
al. (264 SCRA 696 [1996]), the Court allowed the filing of the
certification 14 days before the dismissal of the petition. In Uy v.
Landbank, supra, the Court had dismissed Uy's petition for
lack of verification and certification against non-forum shopping.
However, it subsequently reinstated the petition after Uy submitted
a motion to admit certification and non-forum shopping
certification. In all these cases, there were special circumstances or
compelling reasons that justified the relaxation of the rule requiring
verification and certification on non-forum shopping.
In the instant case, the merits of petitioner's case should be
considered special circumstances or compelling reasons that justify

tempering the requirement in regard to the certificate of non-forum

shopping.
Moreover,
in Loyola,
Roadway, and Uy, the Court excused non-compliance with
the
requirement as to the certificate of non-forum shopping. With more
reason should we allow the instant petition since petitioner
herein did submit a certification on non-forum shopping, failing only
to show proof that the signatory was authorized to do so. That
petitioner subsequently submitted a secretary's certificate attesting
that Balbin was authorized to file an action on behalf of petitioner
likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the
certificate of non-forum shopping is mandatory, nonetheless the
requirements must not be interpreted too literally and thus defeat
the objective of preventing the undesirable practice of forumshopping (Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly,
technical rules of procedure should be used to promote, not
frustrate justice. While the swift unclogging of court dockets is a
laudable objective, the granting of substantial justice is an even
more urgent ideal.
Now to the second issue:
The action instituted by the Solicitor General in the trial court is one
for
revival of judgment
which
is
governed
by
Article
1144(3) of the Civil Code and Section 6, Rule 39 of the 1997 Rules
on Civil Procedure. Article 1144(3) provides that an action upon a
judgment "must be brought within 10 years from the time the
right of action accrues." On the other hand, Section 6, Rule 39
provides that a final and executory judgment or order may be
executed on motion within five (5) years from the date of its entry,
but that after the lapse of such time, and before it is barred by the
statute of limitations, a judgment may be enforced by action.
Taking these two provisions into consideration, it is plain that an
action for revival of judgment must be brought within ten years
from the time said judgment becomes final.
From the records of this case, it is clear that the judgment sought to
be revived became final on October 23, 1973. On the other hand,
the action for revival ofjudgment was instituted only in 1999, or
more than twenty-five (25) years after the judgment had become
final. Hence, the action is barred by extinctive prescription
considering that such an action can be instituted only within ten
(10) years from the time the cause of action accrues.
The Solicitor General, nonetheless, argues that the State's
cause of action in the cancellation of the land title issued to

petitioner's predecessor-in-interest is imprescriptible because it is

included in Camp Wallace, which belongs to the government.
The argument is misleading.
While it is true that prescription does not run against the State, the
same may not be invoked by the government in this case since it is
no longer interested in the subject matter. While Camp Wallace
may have belonged to the government at the time Rafael Galvez's
title was ordered cancelled in Land Registration Case No. N-361, the
same no longer holds true today.
Republic Act No. 7227, otherwise known as the Bases Conversion
and Development Act of 1992, created the Bases Conversion and
Development Authority. Section 4 pertinently provides:
SECTION 4. Purposes of the Conversion Authority.
The Conversion Authority shall have the
following purposes:
(a) To own, hold and/or administer the military
reservations of John Hay Air Station, Wallace
Air Station, O'Donnell Transmitter Station,
San Miguel Naval Communications Station,
Mt. Sta. Rita Station (Hermosa, Bataan) and
those portions of Metro Manila military
camps which may be transferred to it by the
President;
Section 2 of Proclamation No. 216, issued on July 27, 1993, also
provides:
SECTION 2. Transfer of Wallace Air Station Areas to
the Bases Conversion and Development Authority.
All areas covered by the Wallace Air Station as
embraced and defined by the 1947 Military Bases
Agreement between the Philippines and the United
States of America, as amended, excluding those
covered by Presidential Proclamations and some
25-hectare area for the radar and communication
station of the Philippine Air Force, are hereby
transferred to the Bases Conversion Development
Authority . . .
With the transfer of Camp Wallace to the BCDA, the government no
longer has a right or interest to protect. Consequently, the Republic
is not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same
being applicable only in cases where the government is a party in

interest. Under Section 2 of Rule 3 of the 1997 Rules of Civil

Procedure, "every action must be prosecuted or defended in the
nameof the real party in interest." To qualify a person to be a real
party in interest in whose name an action must be prosecuted, he
must appear to be the present real owner of the right sought to be
enforced (Pioneer Insurance v. CA, 175 SCRA 668 [1989]). 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. And by real interest is meant a present substantial interest, as
distinguished from a mere expectancy, or a future, contingent,
subordinate or consequential interest (Ibonilla v. Province of Cebu,
210 SCRA 526 [1992]). Being the owner of the areas covered by
Camp Wallace, it is the Bases Conversion and Development
Authority, not the Government, which stands to be benefited if the
land covered by TCT No. T-5710 issued in the name of petitioner is
cancelled.
Nonetheless,
it
has
been
posited
that
the
transfer of military reservations and their extensions to the
BCDA is basically for the purpose ofaccelerating the sound and
balanced
conversion of these
military
reservations
into
alternative productive uses and to enhance the benefits to be
derived from such property as a measure of promoting the
economic and social development, particularly of Central Luzon
and, in general, the country's goal for enhancement (Section
2, Republic Act No.
7227).
It
is
contended
that
the
transfer of these military reservations to the Conversion
Authority does not amount to an abdication on the part of the
Republic of its interests, but simply a recognition of the need to
create a body corporate which will act as its agent for the
realization of its program. It is consequently asserted that the
Republic remains to be the real party in interest and the
Conversion Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is an
entity invested with a personality separate and distinct from the
government. Section 3 ofRepublic Act No. 7227 reads:
SECTION 3. Creation of the Bases Conversion and
Development Authority. There is hereby created
a body corporate to be known as the Conversion
Authority
which
shall
have
the
attribute of perpetual succession and shall be
vested with the powers of a corporation.
It may not be amiss to state at this point that the
functions of government have been classified into governmental or

constituent and proprietary or ministrant. While public benefit and

public welfare, particularly, the promotion of the economic and
social development of Central Luzon, may be attributable to the
operation of the BCDA, yet it is certain that the functions performed
by the BCDA are basically proprietary in nature. The
promotion of economic and social development of Central Luzon, in
particular, and the country's goal for enhancement, in general, do
not make the BCDA equivalent to the Government. Other
corporations have been created by government to act as its agents
for the realization of its programs, the SSS, GSIS, NAWASA and the
NIA, to count a few, and yet, the Court has ruled that these entities,
although performing functions aimed at promoting public interest
and public welfare, are not government-function corporations
invested with governmental attributes. It may thus be said that the
BCDA is not a mere agency of the Government but a corporate
body performing proprietary functions.
Moreover, Section 5 of Republic Act No. 7227 provides:
SECTION 5. Powers of the Conversion Authority.
To carry out its objectives under this Act, the
Conversion Authority is hereby vested with the
following powers:

(a) To succeed in its corporate name, to sue and be

sued in such corporate name and to adopt,
alter and use a corporate seal which shall be
judicially noticed; EASCDH
Having the capacity to sue or be sued, it should thus be the BCDA
which may file an action to cancel petitioner's title, not the
Republic, the former being the real party in interest. One having no
right
or
interest
to
protect
cannot
invoke
the
jurisdiction of the court as a party plaintiff in an action
(Ralla v. Ralla, 199 SCRA 495 [1991]). A suit may be dismissed if
the plaintiff or the defendant is not a real party in interest. If the
suit is not brought in the name of the real party in interest, a
motion to dismiss may be filed, as was done by petitioner in this
case, on the ground that the complaint states no cause of action
(Tanpingco v.IAC, 207 SCRA 652 [1992]).
However, E.B. Marcha Transport Co., Inc. v. IAC (147 SCRA 276
[1987]) is cited as authority that the Republic is the proper party to
sue for the recovery ofpossession of property which at the
time of the institution of the suit was no longer held by the national

government but by the Philippine Ports Authority. InE.B. Marcha,

the Court ruled:
It can be said that in suing for the recovery of the
rentals, the Republic of the Philippines, acted as
principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred
on the latter as its agent. We may presume that, by
doing so, the Republic of the Philippines did not
intend to retain the said rentals for its own use,
considering that by its voluntary act it had
transferred the land in question to the Philippine
Ports Authority effective July 11, 1974. The
Republic of the Philippines had simply sought to
assist, not supplant, the Philippine Ports Authority,
whose title to the disputed property it continues to
recognize. We may expect then that the said
rentals, once collected by the Republic of the
Philippines, shall be turned over by it to the
Philippine Ports Authority conformably to the
purposes of P.D. No. 857.
E.B. Marcha is, however, not on all fours with the case at bar. In the
former, the Court considered the Republic a proper party to sue
since the claims of the Republic and the Philippine Ports Authority
against the petitioner therein were the same. To dismiss the
complaint in E.B. Marcha would have brought needless delay in the
settlement of the matter since the PPA would have to refile the case
on the same claim already litigated upon. Such is not the case here
since to allow the government to sue herein enables it to raise the
issue of imprescriptibility, a claim which is not available to the
BCDA. The rule that prescription does not run against the State
does not apply to corporations or artificial bodies created by the
State for special purposes, it being said that when the title of the
Republic has been divested, its grantees, although artificial
bodies of its own creation, are in the same category as ordinary
persons (Kingston v. LeHigh Valley Coal Co., 241 Pa 469). By raising
the claim of imprescriptibility, a claim which cannot be raised by
the BCDA, the Government not only assists the BCDA, as it did
in E.B. Marcha, it even supplants the latter, a course of action
proscribed by said case.
Moreover, to recognize the Government as a proper party to sue in
this case would set a bad precedent as it would allow the Republic
to prosecute, on behalfof government-owned or controlled
corporations, causes of action which have already prescribed, on
the pretext that the Government is the real party in interest against

whom prescription does not run, said corporations having been

created merely as agents for the realization of government
programs.
Parenthetically, petitioner was not a party to the original suit for
cancellation of title commenced by the Republic twenty-seven
years for which it is now being made to answer, nay, being made to
suffer financial losses.
It should also be noted that petitioner is unquestionably a buyer in
good faith and for value, having acquired the property in 1963, or 5
years after the issuance of the original certificate of title, as a third
transferee. If only not to do violence and to give some
measure of respect to the Torrens System, petitioner must be
afforded some measure of protection.
One more point.
Since the portion in dispute now forms part of the property owned
and administered by the Bases Conversion and Development
Authority, it is alienable and registerable real property.
We find it unnecessary to rule on the other matters raised by the
herein parties.
WHEREFORE, the petition is hereby granted and the orders dated
August 31, 1999 and October 4, 1999 of the Regional
Trial Court of the First National Judicial Region (Branch 26, San
Fernando, La Union) in Civil Case No. 6346 entitled "Republic of the
Philippines,
Plaintiff, versus Heirs of Rafael
Galvez,
et.
al.,
Defendants" as well as the resolutions promulgated on November
4, 1999 and May 23, 2000 by the Court of Appeals (Twelfth Division)
in CA-G.R.
SP
No.
55535
entitled
"Shipside, Inc.,
Petitioner versus Hon. Alfredo Cajigal, as Judge, RTC, San Fernando,
La Union, Branch 26, and the Republic of the Philippines,
Respondents" are hereby reversed and set aside. The complaint in
Civil Case No. 6346, Regional Trial Court, Branch 26, San Fernando
City,
La
Union
entitled
"Republic of the
Philippines,
Plaintiff, versus Heirs of Rafael Galvez, et al." is ordered dismissed,
without prejudice to the filing of an appropriate action by the Bases
Development and Conversion Authority.
SO ORDERED. cHECAS
Panganiban, Gonzaga-Reyes and Sandoval-Gutierrez, JJ., concur.
Separate Opinions

VITUG, J .:
I find no doctrinal difficulty in adhering to the draft ponencia written
by our esteemed Chairman, Mr. Justice JARM, insofar as it declares
that an action for revival of judgment is barred by extinctive
prescription, if not brought within ten (10) years from the time the
right of action accrues, pursuant to Article 1144(3) of the New Civil
Code. It appears that the judgment in the instant case has become
final on 23 October 1973 or well more than two decades prior to the
action for its revival instituted only in 1999.
With due respect, however, I still am unable to subscribe to the
idea that prescription may not be invoked by the government in
this case upon the thesis that the transfer of Camp Wallace to the
Bases Conversion Development Authority renders the Republic with
no right or interest to protect and thus unqualified under the
rules of procedure to be the real party-in-interest. While it is true
that Republic Act 7227, otherwise known as the Bases Conversion
and Development Act of 1992, authorizes the transfer of the
military reservations and their extensions to the Conversion
Authority,
the
same,
however,
is
basically
for
the
purpose of accelerating
the
sound
and
balanced
conversion of these military reservations into alternative productive
uses and to enhance the benefits to be derived from such property
as a measure of promoting the economic and social development,
particularly, of Central Luzon and, in general, the country's goal for
enhancement. 1 The transfer of these military reservations to the
Conversion Authority does not amount to an abdication on the
part of the Republic of its interests but simply a recognition of the
need to create a body corporate which will act as its agent for the
realization of its program specified in the Act. It ought to follow that
the Republic remains to be the real party-in-interest and the
Conversion Authority being merely its agent.
In
E.B.
Marcha
Transport
Co., Inc. vs.
Intermediate
Appellate Court, 2 the Court succinctly
resolved
the
issue of whether or not the Republic of the Philippines would be a
proper party to sue for the recovery of possession of property which
at the time of the institution of the suit was no longer being held by
the national government but by the Philippine Ports Authority.
The Court ruled:
"More importantly, as we see it, dismissing the
complaint on the ground that the Republic of the
Philippines is not the proper party would result in
needless delay in the settlement of this matter and
also
in
derogation of the
policy
against

multiplicity of suits. Such a decision would require

the Philippine Ports Authority to refile the very
same
complaint
already
proved
by
the
Republic of the Philippines and bring back the
parties as it were to square one.
"It can be said that in suing for the recovery of the
rentals, the Republic of the Philippines, acted as
principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred
on the latter as its agent. We may presume that, by
doing so, the Republic of the Philippines did not
intend to retain the said rentals for its own use,
considering that by its voluntary act it had
transferred the land in question to the Philippine
Ports Authority effective July 11, 1974. The
Republic of the Philippines had simply sought to
assist, not supplant, the Philippine Ports Authority,
whose title to the disputed property it continues to
recognize. We may expect then that the said
rentals, once collected by the Republic of the
Philippines, shall be turned over by it to the
Philippine Ports Authority conformably to the
purposes of P.D. No. 857."
There would seem to be no cogent reason for ignoring that
rationale specially when taken in light of the fact that the
original suit for cancellation of title ofpetitioner's predecessorin-interest was commenced by the Republic itself, and it was
only in 1992 that the subject military camp was transferred to
the Conversion Authority.
||| (Shipside Inc. v. Court of Appeals, G.R. No. 143377, [February
20, 2001], 404 PHIL 981-1004)

De Santos & Delfino for petitioner.

Dionisio A. Guzman for respondents.
SYNOPSIS
In a complaint for the recovery of a sum of money, petitioner
corporation acted as surety on the defendant's counterbond which
was posted to lift the orderof attachment secured by the plaintiff,
private respondent herein. After a judgment on compromise was
rendered in favor of the plaintiff, a writ of execution was issued
against the defendant but it was only partially satisfied as no
sufficient property of the defendant was located. Petitioner ignored
plaintiff's demand for payment of the balance of the judgment debt
and on plaintiff's motion, the lower court, after summary hearing,
ordered petitioner to pay the balance. Petitioner elevated the case
to the Court of Appeals but its appeal was dismissed. The instant
petition was then filed, petitioner contending that private
respondent's claim on the counter-bond was barred by its failure to
file a supplemental pleading before finality of the judgment to fix
the liability ofthe counter-surety.
The Supreme Court held that Section 20 of Rule 57 upon which
petitioner's contention was based was not applicable to the case at
bar. Citing the provisionsof Sections 12 and 17 of the same Rule,
the Court stated that after the judgment for the plaintiff has
become executory and the execution is returned unsatisfied, the
liability of the
bond
automatically
attaches
and,
in
case of failure of the surety to satisfy the judgment against the
defendant despite demand therefor, a writ of execution may issue
against the surety to enforce the obligation.
Decision appealed from affirmed.
SYLLABUS

FIRST DIVISION
[G.R. No. L-25921. May 27, 1975.]
VANGUARD ASSURANCE CORPORATION, petitio
ner, vs. HON. COURT OF APPEALS and
JALWINDOR
MANUFACTURING,
INC., respondents.

1. PROVISIONAL
REMEDIES;
ATTACHMENT;
SURETY;
LIABILITY OF SURETY
ON
COUNTERBOND
NEED
NOT
BE
ADJUDICATED AT THE SAME TIME WITH THATOF PRINCIPAL
DEFENDANT BEFORE FINAL JUDGMENT. A surety in a counterbond
is not to be considered as a special intervenor in the principal case,
joining issue with the principal defendants; hence, its rights and
liabilities need not be ascertained, fixed or adjudicated at the same

time with those of the principal defendant before the

judgment, or in a supplemental pleading for that purpose.

final

2. ID.; ID.; ID.; REMEDY UNDER SECTION 20, RULE 57 AVAILABLE TO

DEFENDANT ONLY. The procedure laid down in Section 20 of Rule
57 need not be followed in a case where the plaintiff seeks from the
surety in a counterbond filed by the defendant to lift an
order of attachment previously issued. Said section refers to
recovery of damages by a party against whom attachment was
issued and the remedy provided therein is available only to the
defendant, not the plaintiff.
3. ID.; ID.; ID.; LIABILITY OF SURETY ON COUNTERBOND ATTACHES
WHEN
EXECUTION OF JUDGMENT
AGAINST
DEFENDANT
IS
RETURNED UNSATISFIED. The provisions of Sections 12 and
17 of Rule 57 apply to a case where the plaintiff seeks to recover
from the surety in counterbond. Section 12 provides that a counterbond in an attachment is executed "to secure payment of any
judgment that the attaching creditor may recover in the action;"
while Section 17 contemplates proceedings on execution after the
judgment when the liability upon the surety's bond may be
determined. The key term in Section 17 is the phrase "if the
execution be returned unsatisfied in whole or in part," in which
event the liability of the bond automatically attaches.
4. ID.; ID.; ID.; LIABILITY OF SURETY AUTOMATICALLY ATTACHES.
After the judgment for the plaintiff had become executory and the
execution is returned unsatisfied, the liability of the bond
automatically attaches, and if surety fails to satisfy the judgment
against defendant despite therefor, a writ ofexecution may issue
against the surety to enforce the obligation of the bond.
5. ID.; ID.; ID.; SURETY LIABLE EVEN IF IT DID NOT HAVE
OPPORTUNITY TO ASCERTAIN CORRECTNESS OF JUDGMENT. A
surety on a counter-bond is bound by the judgment rendered
against the principal based on a compromise entered into by the
plaintiff and defendant, or the evidence duly presented by the
parties, although the surety never consented to the compromise or
was not notified of the trial, and was not given opportunity to
ascertain the correctness of the judgment on compromise before its
finality.
6. ID.; ID.; ID.; FINDINGS OF FACT OF TRIAL AND APPELLATE
COURTS WILL NOT BE DISTURBED BY SUPREME COURT. The
Supreme Court denied the contention of surety that defendant had
fully paid the obligation sought to be enforced against the counterbond, it appearing that the trial court found, which finding was
affirmed by the Court of Appeals, that there was really no full

payment of the judgment debt; besides, the surety's evidence to

that effect is hearsay since the defendant was never presented to
testify thereon.
7. APPEAL; MANIFESTLY FRIVOLOUS APPEAL. Generally, an appeal
should not be dismissed on a ground which goes to the
merits of the case or the right of plaintiff or defendant to recover,
except when the appellate court finds the appeal to be manifestly
and palpably frivolous.

DECISION

ESGUERRA, J p:
Appeal
by
certiorari
to
review
the
decision of the Court of Appeals dismissing petitioner's appeal.
In the Court of First Instance of Manila plaintiff (now respondent)
Jalwindor Manufacturers, Inc. sued Felipe Hernandez to recover the
sum of P30,000.00. In its complaint plaintiff also prayed for a
writ of preliminary
attachment
against
the
property of the
defendant to answer for any judgment which the former may obtain
against the latter. Upon plaintiff's filing a bond in the
amount of P30,000.00
the
lower court issued
the
order of attachment against defendant Felipe Hernandez.
On May 28, 1964 Felipe Hernandez moved to dissolve or to lift the
order of attachment and put up a counterbond in the
amount of P30,000.00,
with
petitioner Vanguard Assurance Corporation acting as surety. Under
the
counterbond
Hernandez
and
the Vanguard Assurance Corporation jointly and severally bound
themselves "in the sum of P30,000.00, under the condition that in
case the plaintiff recover judgment in the action the defendant will
on demand redeliver the attached property so released to the
officer of the Court to be applied to the payment of the judgment,
or in default thereof that the defendant and surety will on demand
pay to the plaintiff the full value of the property released."
Accordingly, the lower court approved the counterbond and lifted
the writ of attachment.
After the issues had been joined the parties, duly assisted by their
respective counsel, entered into a compromise agreement whereby
Felipe Hernandez undertook and agreed to pay the plaintiff

P26,000.00 in three (3) monthly installments, the first of which

would be payable on or before October 25, 1964, the second, on or
before November 25, 1964 and the last, on or before December 25,
1964. It was also provided in the compromise agreement that the
counterbond executed by the defendant would remain in full force
and effect in favor of the plaintiff and that in case of breach by the
defendant of any
provision of the
compromise
agreement,
especially that which relates to the satisfaction of the principal
obligation, he would be amenable to the executionof the judgment
and other relief available to the plaintiff as circumstances may
warrant. The compromise agreement was submitted to the court for
approval and on October 28, 1964, the court a quo approved the
same and rendered judgment on the basis thereof.
On motion of the plaintiff due to defendant's failure to pay
accordingly, the lower court issued a writ of execution on December
22, 1964. However, no sufficient property of the defendant was
located and the writ of execution was only partially satisfied to the
extent of P5,000.00.
Plaintiff
demanded
from
theVanguard Assurance Corporation,
as
surety,
the
balance of P21,000.00 plus P652.57 representing the costs of the
suit. The demand for payment having been ignored, plaintiff filed a
motion with the lower court for an order to recover the unpaid
balance from the counterbond, pursuant to Sec. 17, Rule 57 of the
Rules of Court. The surety, answering plaintiff's motion, interposed
two special defenses, to wit: (1) that plaintiff's motion is not the
proper pleading and/or remedy to make said surety liable on its
counterbond, but by a supplemental complaint filed before the
finality of the judgment against Hernandez; and (2) that the surety
company has never become liable under its counterbond because
plaintiff was never able to attach the property of the defendant.
After a summary hearing, the lower court granted the motion and
ordered
the
surety
company
to
pay
plaintiff
the
amount of P21,000.00.
Vanguard Assurance Corporation
elevated
the
case
to
the Court of Appeals. After the perfection of the appeal and before
the parties had filed their respective briefs, appellee Jalwindor
Manufacturers, Inc. moved to dismiss the appeal, to which
appellant surety filed an opposition claiming that the motion to
dismiss could not be determined without resolving the entire case
on the merits. However, the Court of Appeals sustained the motion
in its decision promulgated on December 17, 1965, the dispositive
part of which reads as follows:
"WHEREFORE,
the
appeal
interposed
by
the Vanguard Assurance Corporation
is
hereby

dismissed for being manifestly and palpably

frivolous, and the appealed judgment is affirmed in
toto, with costs against appellant surety."
Hence, the instant petition for certiorari.
The several errors assigned in petitioner's brief may be summarized
into two major issues, to wit: (1) whether or not respondent's claim
on the counter-bond was barred by its failure to file a supplemental
pleading before finality of the judgment wherein the liability of the
counter-surety may be fixed, ascertained and adjudicated; and (2)
whether or not the Court of Appeals erred in dismissing the appeal
before the submission of the briefs and before the parties could be
heard on the merits.

Petitioner contends that a surety in a counterbond should be

considered as a special intervenor in the principal case, joining
issue with the principal defendant, wherein its rights and liabilities
should be ascertained, fixed and adjudicated at the same time with
the principal defendant before final judgment; or in a supplemental
pleading for that purpose, otherwise the surety's liability under the
bond would be barred.
The contention does not find support from the rules applicable to
the instant case. Petitioner might have in mind Section 20 of Rule
57 which outlines the procedure to be followed in a claim for
damages by the party against whom attachment was issued. This
rule provides that such damages may be awarded only upon
application and after proper hearing, and shall be included in the
judgment; and that the application must be filed before the trial or
before appeal is perfected or before the judgment becomes
executory, with due notice to the attaching creditor or his surety or
sureties, setting forth the facts showing his right to damages and
the amount thereof.
By its very terms, Section 20 of Rule 57 obviously refers to the
recovery of damages by a party against whom attachment was
issued. This remedy is available only to the defendant not the
plaintiff (Dizon vs. Valdez, G.R. No. L-23920, April 25, 1968). Rule
57 of the Rules of Court, particularly Sections 12 and 17 thereof, is
the rule applicable to the case at bar. Section 12 provides that a
counter-bond in an attachment is executed "to secure the
payment of any judgment that the attaching creditor may recover
in the action". This legal precept should be read together with
Section 17 of the same Rule, which we quote:

"When execution returned unsatisfied, recovery

had upon bond. If the execution be returned
unsatisfied in whole or in part, the surety or
sureties on any counter-bond given pursuant to the
provisions of this rule to secure the payment of the
judgment shall become charged on such counterbond, and bound to pay to the judgment creditor
upon demand, the amount due under the
judgment, which amount may be recovered from
such surety or sureties after notice and summary
hearing in the same action."
The
above-quoted
provision of the
pertinent
Rule
contemplates of proceedings on execution after judgment when
liability upon the surety's bond may be determined. The key term in
Section 17 is the phrase "if the execution be returned unsatisfied in
whole or in part." (Dizon vs. Valdez, supra). Hence, after the
judgment for the plaintiff has become executory and the execution
is returned unsatisfied, as in the instant case, the liability of the
bond automatically attaches and, in case of failure of the surety to
satisfy the judgment against the defendant despite demand
therefor, writ of execution may issue against the surety to enforce
the obligation of the bond (Tijam, et al. vs. Manila Surety and
Fidelity Co., Inc., et al., G.R. No. L-21450, April 15, 1968).
It is also contended that where the case is tried and
disposed of either on the basis of a compromise entered into by the
plaintiff and the defendant, or the evidence duly presented by the
parties, where the surety has never consented to the compromise
nor notified of the trial, the judgment rendered against the principal
based thereon cannot bind the surety unless he is given an
opportunity to ascertain the correctness of said judgment before it
becomes final, otherwise any subsequent claim against the surety
on the counterbond should be barred. It is claimed that unless this
is the rule the plaintiff and the defendant can easily connive by
means of a compromise to prejudice the surety.
The contentions are not new. In Anzures vs. Alto Surety & Insurance
Co., Inc., et al., 49 O.G. 946, this Court, thru Mr. Chief Justice
Ricardo Paras, brushed aside a similar contention in this wise:
"There is no point in the contention that the
compromise was entered into without the surety's
knowledge and consent, thus becoming as to it
essentially fraudulent. The surety is not a party to
Civil Case No. 117848 and, therefore, need not be
served with notice of the petition for judgment. As

against the conjecture of said respondent that the

parties may easily connive by means of a
compromise to prejudice it, there is also the
likelihood that the same end may be attained by
parties acting in bad faith through a simulated trial.
At any rate, it is within the power of the Surety
Company to protect itself against a risk of the
kind."
Petitioner likewise claims that the Court of Appeals erred in not
considering its defense showing full payment by defendant of the
obligation sought to be enforced against the counterbond.
On the issue of full payment by defendant of the obligation, the
trial court made the following findings:
"As it appears that defendant has not yet paid to
plaintiff the amount of P21,000.00, being the
balance of the judgment which the latter secured
against the former by virtue of their Compromise
Agreement approved by this Court on October 28,
1964, it follows that the said counterbond is still
liable for the said unpaid balance.
"The said liability may only be avoided if there is
collusion between plaintiff and defendant in
securing the said judgment to the prejudice of the
surety on the counter-bond, or if the said judgment
has already been paid by defendant. There is no
showing whatsoever of such collusion, nor was
defendant presented as a witness that he has fully
said judgment." (Record on Appeal pp. 78-79)
It must be noted that the decision of the trial court was affirmed in
toto by the Court of Appeals. In other words, the above
findings of the
trial court that
there
was
really
no
full
payment of the judgment debt was also found correct by
the Court of Appeals when it fully affirmed the decision appealed
from. Besides, the petitioner's evidence to that effect partook of the
nature of hearsay evidence, considering that the defendant was
never presented to testify thereon.
As regards the last issue, we are not prepared to say that
the Court of Appeals erred in dismissing the appeal of the petitioner
on the ground that the same was manifestly frivolous and instituted
merely for delay. On the face of the record before Us We could not
see any prospect of the decision appealed from being reversed or
modified,
in
view of the
clear
and
unequivocal

provisions of Sections
12
and
17 of Rule
57 of the
Rules of Court regarding the liability of a surety on a counter-bond
in attachment proceedings. To entertain the instant appeal by
remanding the case to the Court of Appeals for further proceedings
would entail too much time and effort which would impair the
speedy administration of justice. The instant appeal is manifestly
frivolous and completely devoid of merit. Thus:
". . . Although, as a general rule, an appeal should
not be dismissed on a ground which goes to the
merits of the case or to the right of plaintiff or
defendant to recover, yet, in exceptional instance,
an appellate court may order the dismissal when
the appeal appears to be manifestly and palpably
frivolous. And where, as in the instant case, the
dismissal has been ordered by the trial court, it will
not be disturbed in the appellate court if the latter
finds the appeal to have been interposed ostensibly
for delay. It has been held that a frivolous appeal is
one presenting no justiciable question, or one so
readily recognizable as devoid of merit on the
face of the record that there is little, if any,
prospect that it can ever succeed. The instant case
is one such instance in which the appeal is
evidently without merit, taken manifestly for delay."
(De la Cruz, et al. vs. Blanco, et al., 73 Phil. 956,
cited in Keater Huang, et al. vs. Associated Realty
Development Co., Inc., G.R. No. L-26421, October
29, 1966).
WHEREFORE, the decision appealed from is affirmed, with costs
against petitioner.
SO ORDERED.
Castro (Chairman), Teehankee, Makasiar, Muoz Palma and Martin,
JJ., concur.
||| (Vanguard Assurance Corp. v. CA, G.R. No. L-25921, [May 27,
1975], 159-A PHIL 444-451)

SECOND DIVISION

[G.R. No. 77425. June 19, 1991.]

THE ROMAN CATHOLIC ARCHBISHOP OF MANI
LA,
THE ROMAN CATHOLIC BISHOP OF IMUS,
and the SPOUSES FLORENCIO IGNAO and
SOLEDAD
C.
IGNAO, petitioners, vs. HON. COURT OF APPEAL
S,
THE
ESTATE OF DECEASED
SPOUSES
EUSEBIO DE CASTRO and MARTINA RIETA,
represented by MARINA RIETA GRANADOS
and THERESA RIETA TOLENTINO, respondents.
Severino
C.
petitioner Roman Catholic Bishop of Imus, Cavite.

Dominguez for

Dolorfino and Dominguez Law Offices for Sps. Ignao.

Joselito R. Enriquez for private respondents.
SYLLABUS
1. CIVIL LAW; DEED OF DONATION; WHEN CONTENTS THEREOF
PROVIDE FOR AUTOMATIC REVERSION OF PROPERTY DONATED IN
CASE OF VIOLATIONOF CONDITIONS SET FORTH THEREIN, JUDICIAL
ACTION FOR RESCISSION, NOT NECESSARY. The deed of donation
involved herein expressly provides for automatic reversion of the
property donated in case of violation of the condition therein, hence
a judicial declaration revoking the same is not necessary. As aptly
stated by the Court of Appeals: "By the very express provision in
the deed of donation itself that the violation of the condition
thereof would render ipso facto null and void the deed of donation,
WE are of the opinion that there would be no legal necessity
anymore to have the donation judicially declared null and void for
the reason that the very deed of donation itself declares it so. For
where (sic) it otherwise and that the donors and the donee
contemplated
acourt action
during
the
execution of the
deed of donation to have the donation judicially rescinded or
declared null and void should the condition be violated, then the
phrase reading 'would render ipso facto null and void' would not
appear in the deed of donation." In support of its aforesaid position,
respondentcourt relied on the rule that a judicial action for
rescission of a contract is not necessary where the contract
provides that it may be revoked and cancelled for
violation of any of its terms and conditions. It called attention to the

holding that there is nothing in the law that prohibits the parties
from entering into an agreement that a violation of the terms of the
contract
would
cause
its
cancellation
even
without court intervention, and that it is not always necessary for
the injured party to resort to court for rescission of the contract. It
reiterated the doctrine that a judicial action is proper only when
there
is
absence of a
special
provision
granting
the
power of cancellation.
2. ID.; ID.; ID.; DE LUNA, ET AL., v. ABRIGO, ET AL. [181 SCRA 150],
APPLICABLE IN CASE AT BAR; RATIONALE FOR THE RULE. The
validity of such a stipulation in the deed of donation providing for
the automatic reversion of the donated property to the donor upon
non-compliance of the condition was upheld in the recent
case of De Luna, et al. vs. Abrigo, et al., 181 SCRA 150 (1990). It
was held therein that said stipulation is in the nature of an
agreement granting a party the right to rescind a contract
unilaterally in case of breach, without need of going to court, and
that, upon the happening of the resolutory condition or noncompliance with the conditions of the contract, the donation is
automatically revoked without need of a judicial declaration to that
effect. While what was the subject of that case was an onerous
donation which, under Article 733 of the Civil Code is governed by
the rules on contracts, since the donation in the case at bar is also
subject to the same rules because of its provision on automatic
revocation upon the violation of a resolutory condition, from
parity of reasons said pronouncements in De Luna pertinently
apply. The rationale for the foregoing is that in contracts providing
for automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue ofan agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper.
3. ID.; ID.; ID.; GENERAL RULES ON CONTRACT AND PRESCRIPTION
SHOULD APPLY, NOT ART. 764 OF THE CODE. When a
deed of donation, as in this case, expressly provides for automatic
revocation and reversion of the property donated, the rules on
contract and the general rules on prescription should apply, and not
Article 764 of the Civil Code. Since Article 1306 of said Code
authorizes the parties to a contract to establish such stipulations,
clauses, terms and conditions not contrary to law, morals, good
customs, public order or public policy, we are of the opinion that, at
the very least, that stipulation of the parties providing for
automatic revocation of the deed of donation, without prior judicial
action for that purpose, is valid subject to the determination of the
propriety of the rescission sought. Where such propriety is

sustained,
the
decision of the court will
declaratory of the revocation, but it is not
revocatory act.

be
merely
in itself the

4. ID.;
ID.;
PROHIBITION
AGAINST
ALIENATION
FOR
AN
UNREASONABLE
LENGTH OF TIME;
CONTRARY
TO
PUBLIC
POLICY. The cause of action of private respondents is based on
the alleged breach by petitioners of the resolutory condition in the
deed of donation that the property donated should not be sold
within a period of one hundred (100) years from the
date of execution of the deed of donation. Said condition, in our
opinion, constitutes an undue restriction on the rights arising from
ownership of petitioners and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee.
Once a donation is accepted, the donee becomes the absolute
owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be
contrary to law, morals, good customs, public order and public
policy. The condition imposed in the deed of donation in the case
before us constitutes a patently unreasonable and undue restriction
on the right of the donee to dispose of the property donated, which
right is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for
an unreasonable period of time.
5. ID.; ID.; ID.; SHOULD BE DECLARED NULL AND VOID AS AN
IMPOSSIBLE CONDITION. It is significant that the provisions
therein regarding a testator also necessarily involve, in the main,
the devolution of property by gratuitous title hence, as is generally
the
case of donations,
being
an act of liberality,
the
imposition of an unreasonable period of prohibition to alienate the
property should be deemed anathema to the basic and actual
intent of either the donor or testator. For that reason, the regulatory
arm of the law is or must be interposed to prevent an unreasonable
departure from the normative policy expressed in the aforesaid
Articles 494 and 870 of the Code. In the case at bar, we hold that
the prohibition in the deed of donation against the alienation ofthe
property for an entire century, being an unreasonable emasculation
and denial of an integral attribute of ownership, should be declared
as
an
illegal
or
impossible
condition
within
the
contemplation of Article 727 of the Civil Code. Consequently, as
specifically stated in said statutory provision, such condition shall
be considered as not imposed. No reliance may accordingly be
placed on said prohibitory paragraph in the deed of donation. The
net result is that, absent said proscription, the deed of sale
supposedly
constitutive of the
cause of action
for
the

nullification of the deed of donation is not in truth violative ofthe

latter hence, for lack of cause of action, the case for private
respondents must fail.
6. SUPREME COURT; HAS AUTHORITY TO REVIEW MATTERS EVEN IF
THEY ARE NOT ASSIGNED AS ERRORS ON APPEAL; CASE AT
BAR. It will readily be noted that the provision in the
deed of donation against alienation of the land for one hundred
(100) years was the very basis for the action to nullify the
deed of donation. At the same time, it was likewise the
controverted fundament of the motion to dismiss the case a quo,
which motion was sustained by the trial court and set aside by
respondent court, both on the issue of prescription. That
ruling of respondent court interpreting said provision was assigned
as an error in the present petition. While the issue of the
validity of the same provision was not squarely raised, it is
ineluctably related to petitioner's aforesaid assignment of error
since both issues are grounded on and refer to the very same
provision. This Court is clothed with ample authority to review
matters, even if they are not assigned as errors on appeal, if it finds
that their consideration is necessary in arriving at a just
decision of the case. Thus, we have held that an unassigned error
closely related to an error properly assigned, or upon which the
determination of the question properly assigned is dependent, will
be considered by the appellate court notwithstanding the failure to
assign it as error.
7. ID.;
ID.;
FOR
THE
EXPEDITIOUS
ADMINISTRATION OF SUBSTANTIAL JUSTICE, REMAND OF THE CASE
TO THE LOWER COURT FOR FURTHER RECEPTIONOF EVIDENCE,
NOT NECESSARY. We have laid down the rule that the
remand of the
case
to
the
lower court for
further
reception of evidence is not necessary where the Court is in a
position to resolve the dispute based on the records before it. On
many occasions, the Court, in the public interest and for the
expeditious administration of justice has resolved actions on the
merits instead of remanding them to the trial court for further
proceedings, such as where the ends of justice, would not be
subserved by the remand of the case. The aforestated
considerations obtain in and apply to the present case with respect
to the matter of the validity of the resolutory condition in question.

DECISION

REGALADO, J p:
These two petitions for review on certiorari 1 seek to overturn the
decision of the Court of Appeals in CA-G.R. CV No. 05456 2 which
reversed and set aside the order of the Regional Trial Court of Imus,
Cavite dismissing Civil Case No. 095-84, as well as the order of said
respondent court denying
petitioner's
motions
for
the
reconsideration of its aforesaid decision.
On November 29, 1984, private respondents as plaintiffs, filed a
complaint for nullification of deed of donation, rescission of contract
and reconveyance ofreal property with damages against petitioners
Florencio
and
Soledad
C.
Ignao
and
the Roman Catholic Bishop of Imus,
Cavite,
together
with
the RomanCatholic Archbishop of Manila, before
the Regional
Trial Court, Branch XX, Imus, Cavite and which was docketed as
Civil Case No. 095-84 therein. 3
In their complaint, private respondents alleged that on August 23,
1930, the spouses Eusebio de Castro and Martina Rieta, now both
deceased, executed a deed of donation in favor of therein
defendant Roman Catholic Archbishop of Manila
covering
a
parcel of land (Lot No. 626, Cadastral Survey of Kawit), located at
Kawit, Cavite, containing an area of 964 square meters, more or
less. The deed of donation allegedly provides that the donee shall
not dispose or sell the property within a period of one hundred
(100) years from the execution of the deed of donation, otherwise a
violation of such condition would renderipso facto null and void the
deed of donation and the property would revert to the estate of the
donors.
It is further alleged that on or about June 30, 1980, and while still
within the prohibitive period to dispose of the property,
petitioner Roman Catholic Bishop ofImus, in whose administration
all properties within the province of Cavite owned by the
Archdiocese of Manila was allegedly transferred on April 26, 1962,
executed a deed of absolute sale of the property subject of the
donation in favor of petitioners Florencio and Soledad C. Ignao in
consideration of the sum ofP114,000.00. As a consequence of the
sale, Transfer Certificate of Title No. 115990 was issued by the
Register of Deeds of Cavite on November 15, 1980 in the
name of said petitioner spouses.
What transpired thereafter is narrated by respondent court in its
assailed decision. 4 On December 17, 1984, petitioners Florencio
Ignao and Soledad C. Ignao filed a motion to dismiss based on the
grounds that (1) herein private respondents, as plaintiffs therein,

have no legal capacity to sue; and (2) the complaint states no

cause of action.
On December 19, 1984, petitioner Roman Catholic Bishop of Imus
also filed a motion to dismiss on three (3) grounds, the first two (2)
grounds of which were identical to that of the motion to dismiss
filed by the Ignao spouses, and the third ground being that the
cause of action has prescribed.
On January 9, 1985, the Roman Catholic Archbishop of Manila
likewise filed a motion to dismiss on the ground that he is not a real
party in interest and, therefore, the complaint does not state a
cause of action against him.
After private respondents had filed their oppositions to the said
motions to dismiss and the petitioners had countered with their
respective replies, with rejoinders thereto by private respondents,
the trial court issued an order dated January 31, 1985, dismissing
the complaint on the ground that the cause ofaction has
prescribed. 5
Private
respondents
thereafter
appealed
to
the Court of Appeals raising the issues on (a) whether or not the
action for rescission of contracts (deed ofdonation and deed of sale)
has prescribed; and (b) whether or not the dismissal of the action
for rescission of contracts (deed of donation and deed of sale) on
the ground of prescription carries with it the dismissal of the main
action for reconveyance of real property. 6
On December 23, 1986, respondent Court of Appeals, holding that
the action has not yet prescribed, rendered a decision in
favor of private respondents, with the following dispositive
portion: Cdpr
"WHEREFORE, the Order of January 31, 1985
dismissing appellants' complaint is SET ASIDE and
Civil Case No. 095-84 is hereby ordered
REINSTATED and REMANDED to the lower court for
further proceedings. No costs." 7
Petitioners Ignao and the Roman Catholic Bishop of Imus then filed
their separate motions for reconsideration which were denied by
respondent Court ofAppeals in its resolution dated February 6,
1987, 8 a hence, the filing of these appeals by certiorari.
It is the contention of petitioners that the cause of action of herein
private respondents has already prescribed, invoking Article
764 of the Civil Code which provides that "(t)he donation shall be
revoked at the instance of the donor, when the donee fails to

comply with any of the conditions which the former imposed upon
the latter," and that "(t)his action shall prescribe after four years
from the non-compliance with the condition, may be transmitted to
the heirsof the donor, and may be exercised against the donee's
heirs."
We do not agree.
Although it is true that under Article 764 of the Civil Code an action
for the revocation of a donation must be brought within four (4)
years from the non-compliance of the conditions of the donation,
the same is not applicable in the case at bar. The deed of donation
involved herein expressly provides for automatic reversion of the
property donated in case of violation of the condition therein, hence
a judicial declaration revoking the same is not necessary. As aptly
stated by the Court of Appeals:
"By
the
very
express
provision
in
the
deed of donation itself that the violation of the
condition thereof would render ipso facto null and
void the deed ofdonation, WE are of the opinion
that there would be no legal necessity anymore to
have the donation judicially declared null and void
for the reason that the very deed of donation itself
declares it so. For where (sic) it otherwise and that
the
donors and the
donee
contemplated
a court action
during
the
execution of the
deed of donation to have the donation judicially
rescinded or declared null and void should the
condition be violated, then the phrase reading
'would render ipso facto null and void' would not
appear in the deed of donation." 9
In support of its aforesaid position, respondent court relied on the
rule that a judicial action for rescission of a contract is not
necessary where the contract provides that it may be revoked and
cancelled for violation of any of its terms and conditions. 10 It
called attention to the holding that there is nothing in the law that
prohibits the parties from entering into an agreement that a
violation of the terms of the contract would cause its cancellation
even without courtintervention, and that it is not always necessary
for the injured party to resort to court for rescission of the
contract. 11 It reiterated the doctrine that a judicial action is proper
only when there is absence of a special provision granting the
power of cancellation. 12
It is true that the aforesaid rules were applied to the contracts
involved therein, but we see no reason why the same should not

apply to the donation in the present case. Article 732 of the Civil
Code provides that donations inter vivos shall be governed by the
general provisions on contracts and obligations in all that is not
determined in Title III, Book III on donations. Now, said Title III does
not have an explicit provision on the matter of a donation with a
resolutory condition and which is subject to an express provision
that the same shall be considered ipso facto revoked upon the
breach of said resolutory condition imposed in the deed therefor, as
is the case of the deed presently in question. The suppletory
application of the foregoing doctrinal rulings to the present
controversy is consequently justified.
The validity of such a stipulation in the deed of donation providing
for the automatic reversion of the donated property to the donor
upon non-compliance ofthe condition was upheld in the recent
case of De Luna, et al. vs. Abrigo, et al. 13 It was held therein that
said stipulation is in the nature of an agreement granting a party
the right to rescind a contract unilaterally m case of breach,
without need of going to court, and that, upon the happening of the
resolutory condition or non-compliance with the conditions of the
contract, the donation is automatically revoked without need of a
judicial declaration to that effect. While what was the
subject of that case was an onerous donation which, under Article
733 of the Civil Code is governed by the rules on contracts, since
the donation in the case at bar is also subject to the same rules
because of its provision on automatic revocation upon the
violation of a resolutory condition, from parity of reasons said
pronouncements in De Luna pertinently apply. prcd
The rationale for the foregoing is that in contracts providing for
automatic revocation, judical intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper. 14
When a deed of donation, as in this case, expressly provides for
automatic revocation and reversion of the property donated, the
rules on contract and the general rules on prescription should
apply, and not Article 764 of the Civil Code. Since Article
1306 of said Code authorizes the parties to a contract to establish
such stipulations, clauses, terms and conditions not contrary to law,
morals, good customs, public order or public policy, we are of the
opinion that, at the very least, that stipulation of the parties
providing for automatic revocation of the deed of donation, without
prior judicial action for that purpose, is valid subject to the
determination of the propriety of the rescission sought. Where such

propriety is sustained, the decision of the court will be merely

declaratory of the revocation, but it is not in itself the
revocatory act.

On the foregoing ratiocinations, the Court of Appeals committed no

error in holding that the cause of action of herein private
respondents has not yet prescribed since an action to enforce a
written contract prescribes in ten (10) years. 15 It is our view that
Article 764 was intended to provide a judicial remedy in
case of non-fulfillment or contravention of conditions specified in
the deed of donation if and when the parties have not agreed on
the
automatic
revocation of such
donation
upon
the
occurrence of the contingency contemplated therein. That is not
the situation in the case at bar.
Nonetheless, we find that although the action filed by private
respondents may not be dismissed by reason of prescription, the
same should be dismissed on the ground that private respondents
have no cause of action against petitioners.
The cause of action of private respondents is based on the alleged
breach by petitioners of the resolutory condition in the
deed of donation that the property donated should not be sold
within a period of one hundred (100) years from the
date of execution of the deed of donation. Said condition, in our
opinion, constitutes an undue restriction on the rights arising from
ownership of petitioners and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee.
Once a donation is accepted, the donee becomes the absolute
owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be
contrary to law, morals, good customs, public order and public
policy. The condition imposed in the deed of donation in the case
before us constitutes a patently unreasonable and undue restriction
on the right of the donee to dispose of the property donated, which
right is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for
an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid
policy may be considered applicable by analogy. Under the third
paragraph of Article 494, a donor or testator may prohibit partition
for a period which shall not exceed twenty (20) years. Article 870,
on its part, declares that the dispositions of the testator declaring

all or part of the estate inalienable for more than twenty (20) years
are void. LLphil
It is significant that the provisions therein regarding a testator also
necessarily involve, in the main, the devolution of property by
gratuitous title hence, as is generally the case of donations, being
an act of liberality,
the
imposition of an
unreasonable
period of prohibition to alienate the property should be deemed
anathema to the basic and actual intent of either the donor or
testator. For that reason, the regulatory arm of the law is or must
be interposed to prevent an unreasonable departure from the
normative policy expressed in the aforesaid Articles 494 and
870 of the Code.
In the case at bar, we hold that the prohibition in the
deed of donation against the alienation of the property for an entire
century, being an unreasonable emasculation and denial of an
integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727of the
Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed. No
reliance may accordingly be placed on said prohibitory paragraph in
the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the
cause of action for the nullification of the deed of donation is not in
truth violative of the latter hence, for lack of cause of action, the
case for private respondents must fail.
It may be argued that the validity of such prohibitory provision in
the deed of donation was not specifically put in issue in the
pleadings of the parties. That may be true, but such oversight or
inaction does not prevent this Court from passing upon and
resolving the same.
It will readily be noted that the provision in the deed of donation
against alienation of the land for one hundred (100) years was the
very basis for the action to nullify the deed of donation. At the
same time, it was likewise the controverted fundament of the
motion to dismiss the case a quo, which motion was sustained by
the trial court and set aside by respondent court, both on the
issue of prescription. That ruling of respondent court interpreting
said provision was assigned as an error in the present petition.
While the issue of the validity of the same provision was not
squarely raised, it is ineluctably related to petitioner's aforesaid
assignment of error since both issues are grounded on and refer to
the very same provision. cdphil

This Court is clothed with ample authority to review matters, even if

they are not assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a just decision of the
case. 16 Thus, we have held that an unassigned error closely
related to an error properly assigned, 17 or upon which the
determination of the question properly assigned is dependent, will
be considered by the appellate court notwithstanding the failure to
assign it as error. 18
Additionally, we have laid down the rule that the remand of the
case to the lower court for further reception of evidence is not
necessary where the Court is in a position to resolve the dispute
based on the records before it. On many occasions, the Court, in
the public interest and for the expeditious administrationof justice,
has resolved actions on the merits instead of remanding them to
the trial court for further proceedings, such as where the
ends of justice, would not be subserved by the remand of the
case. 19 The aforestated considerations obtain in and apply to the
present case with respect to the matter of the validity of the
resolutory condition in question.
WHEREFORE, the judgment of respondent court is SET ASIDE and
another judgment is hereby rendered DISMISSING Civil Case No.
095-84 of the Regional Trial Court, Branch XX, Imus, Cavite.
SO ORDERED.
Melencio-Herrera and Paras, JJ., concur.
Padilla, J., took no part.
Sarmiento, J., is on leave.
||| (Roman Catholic Archbishop v. Court of Appeals, G.R. No. 77425,
77450, [June 19, 1991], 275 PHIL 332-345)

SECOND DIVISION
[G.R. No. L-30061. February 27, 1974.]
THE PEOPLE OF
THE
PHILIPPINES, plaintiffappellees, vs. JOSE JABINAL Y
CARMEN, defendant-appellant.

Solicitor
General
Felix V . Makasiar and Solicitor
M. Martinez for plaintiff-appellee.

Antonio

Pedro Panganiban y Tolentino for defendant-appellant.

DECISION

ANTONIO, J p:
Appeal from the judgment of the Municipal Court of Batangas
(provincial capital), Batangas, in Criminal Case No. 889, finding the
accused guilty of the crime of Illegal Possession of Firearm and
Ammunition and sentencing him to suffer an indeterminate penalty
ranging from one (1) year and one (1) day to two (2) years
imprisonment, with the accessories provided by law, which raises in
issue the validity of his conviction based on a retroactive
application of Our ruling in People v. Mapa. 1
The complaint filed against the accused reads:
"That on or about 9:00 o'clock, p.m., the 5th day of
September, 1964, in the poblacion, Municipality of
Batangas, Province of Batangas, Philippines, and
within the jurisdiction of this Honorable Court, the
above-named accused, a person not authorized by
law, did then and there wilfully, unlawfully and
feloniously keep in his possession, custody and
direct control a revolver Cal. .22, RG-8 German
made with one (1) live ammunition and four (4)
empty shells without first securing the necessary
permit or license to possess the same."

Indeed, the accused had appointments from the above-mentioned

officials as claimed by him. His appointment from Governor
Feliciano Leviste, dated December 10, 1962, reads:
"Reposing special trust and confidence in your civic
spirit, and trusting that you will be an effective
agent in the detection of crimes and in the
preservation of peace and order in the province of
Batangas,
especially
with
respect
to
the
suppression of trafficking in explosives, jueteng,
illegal cockfighting, cattle rustling, robbery and the
detection of unlicensed firearms, you are hereby
appointed a SECRET AGENT of the undersigned, the
appointment to take effect immediately, or as soon
as you have qualified for the position. As such
Secret Agent, your duties shall be those generally
of a peace officer and particularly to help in the
preservation of peace and order in this province
and to make reports thereon to me once or twice a
month. It should be clearly understood that any
abuse of authority on your part shall be considered
sufficient ground for the automatic cancellation of
your appointment and immediate separation from
the service. In accordance with the decision of the
Supreme Court in G.R. No. L-12088 dated
December 23, 1969, you will have the right to bear
a firearm, particularly described below, for use in
connection with the performance of your duties.
"By virtue hereof, you may qualify and enter upon
the performance of your duties by taking your oath
of office and filing the original thereof with us.
Very
truly
yours,
(Sgd.)
FELICIANO
LEVISTE
Provincial
Governor

At the arraignment on September 11, 1964, the accused entered a

plea of not guilty, after which trial was accordingly held.
The accused admitted that on September 5, 1964, he was in
possession of the revolver and the ammunition described in the
complaint, without the requisite license or permit. He, however,
claimed to be entitled to exoneration because, although he had no
license or permit, he had an appointment as Secret Agent from the
Provincial Governor of Batangas and an appointment as
Confidential Agent from the PC Provincial Commander, and the said
appointments expressly carried with them the authority to possess
and carry the firearm in question.

FIREARM AUTHORIZED TO CARRY:

Kind:
Make:
SN:
Cal: .22"

ROHM-Revolver
German
64

On March 15, 1964, the accused was also appointed by the PC

Provincial Commander of Batangas as Confidential Agent with
duties to furnish information regarding smuggling activities
wanted persons, loose firearms, subversives and other similar
subjects that night affect the peace and order condition in
Batangas province, and in connection with these duties he was
temporarily authorized to possess an ROHM revolver, Cal. .22
RG-8 SN-64, for his personal protection while in the
performance of official duties.
The accused contended before the court a quo that in view of his
above-mentioned appointments as Secret Agent and Confidential
Agent, with authority to possess the firearm subject matter of the
prosecution, he was entitled to acquittal on the basis of the
Supreme Court's decisions in People v. Macarandang 2and People v.
Lucero. 3 The trial court, while conceding that on the basis of the
evidence of record the accused had really been appointed Secret
Agent and Confidential Agent by the Provincial Governor and the PC
Provincial Commander of Batangas, respectively, with authority to
possess and carry the firearm described in the complaint,
nevertheless held the accused in its decision dated December 27,
1968, criminally liable for illegal possession of a firearm and
ammunition on the ground that the rulings of the Supreme Court in
the
cases
of Macarandang and Lucero were
reversed
and
abandoned in People v. Mapa,supra. The court considered as
mitigating circumstances the appointments of the accused as
Secret Agent and Confidential Agent.
Let
us
advert
to
Our
decisions
in People v.
Macarandang, supra, People v.
Lucero, supra,
and People v.
Mapa, supra. In Macarandang, We reversed the trial court's
judgment of conviction against the accused because it was shown
that at the time he was found to possess a certain firearm and
ammunition without license or permit, he had an appointment from
the Provincial Governor as Secret Agent to assist in the
maintenance of peace and order and in the detection of crimes,
with authority to hold and carry the said firearm and ammunition.
We there held that while it is true that the Governor has no
authority to issue any firearm license or permit, nevertheless,
section 879 of the Revised Administrative Code provides that
"peace officers" are exempted from the requirements relating to
the issuance of license to possess firearms; and Macarandang's
appointment as Secret Agent to assist in the maintenance of peace
and order and detection of crimes, sufficiently placed him in the
category of a "peace officer" equivalent even to a member of the
municipal police who under section 879 of the Revised
Administrative Code are exempted from the requirements relating

to the issuance of license to possess firearms. In Lucero, We held

that under the circumstances of the case, the granting of the
temporary use of the firearm to the accused was a necessary
means to carry out the lawful purpose of the battalion commander
and must be deemed incident to or necessarily included in the duty
and power of said military commander to effect the capture of a
Huk
leader.
In Mapa, expressly
abandoning
the
doctrine
in Macarandang, and by implication, that in Lucero, We sustained
the judgment of conviction on the following ground:
"The law is explicit that except as thereafter
specifically allowed, 'it shall be unlawful for any
person to . . . possess any firearm, detached parts
of firearms or ammunition therefor, or any
instrument or implement used or intended to be
used in the manufacture of firearms, parts of
firearms, or ammunition. (Sec. 878, as amended
by Republic Act No. 4, Revised Administrative
Code.) The next section provides that 'firearms and
ammunition regularly and lawfully issued to
officers, soldiers, sailors, or marines [of the Armed
Forces
of
the
Philippines],
the
Philippine
Constabulary, guards in the employment of the
Bureau of Prisons, municipal police, provincial
governors,
lieutenant
governors,
provincial
treasurers, municipal treasurers, municipal mayors,
and guards of provincial prisoners and jails,' are not
covered 'when such firearms are in possession of
such officials and public servants for use in the
performance of their official duties.' (Sec. 879,
Revised Administrative Code.)
'The law cannot be any clearer. No provision is
made for a secret agent. As such he is not
exempt. . . ."
It will be noted that when appellant was appointed Secret Agent by
the Provincial Government in 1962, and Confidential Agent by the
Provincial Commander in 1964, the prevailing doctrine on the
matter was that laid down by Us in People v. Macarandang (1959)
and People v. Lucero (1958). Our decision in Peoplev. Mapa
reversing the aforesaid doctrine came only in 1967. The sole
question in this appeal is: Should appellant be acquitted on the
basis of Our rulings inMacarandang and Lucero, or should his
conviction stand in view of the complete reversal of
the Macarandang and Lucero doctrine
in Mapa?
The
Solicitor

General is of the first view, and he accordingly recommends

reversal of the appealed judgment.
Decisions of this Court, although in themselves not laws, are
nevertheless evidence of what the laws mean, and this is the
reason why under Article 8 of the New Civil Code, "Judicial decisions
applying or interpreting the laws or the Constitution shall form a
part of the legal system . . ." The interpretation upon a law by this
Court constitutes, in a way, a part of the law as of the date that law
was originally passed, since this Court's construction merely
establishes the contemporaneous legislative intent that the law
thus construed intends to effectuate. The settled rule supported by
numerous authorities is a restatement of the legal maxim "legis
interpretatio legis vim obtinet" the interpretation placed upon
the written law by a competent court has the force of law. The
doctrine laid down in Lucero and Macarandang was part of the
jurisprudence, hence, of the law, of the land, at the time appellant
was found by possession of the firearm in question and when he
was arraigned by the trial court. It is true that the doctrine was
overruled in the Mapa case in 1967, but when a doctrine of this
Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively, and should not apply to parties
who had relied on the old doctrine and acted on the faith thereof.
This is especially true in the construction and application of criminal
laws, where it is necessary that the punishability of an act be
reasonably foreseen for the guidance of society.

EN BANC
[G.R. No. 180050. May 12, 2010.]
RODOLFO G. NAVARRO, VICTOR F. BERNAL,
and
RENE
O.
MEDINA, petitioners, vs.
EXECUTIVE SECRETARY EDUARDO ERMITA,
representing the President of the Philippines;
SENATE OF THE PHILIPPINES, represented by
the
SENATE
PRESIDENT;
HOUSE
OF
REPRESENTATIVES,
represented
by
the
HOUSE SPEAKER; GOVERNOR ROBERT ACE S.
BARBERS, representing the Mother Province
of Surigao del Norte; GOVERNOR GERALDINE
ECLEO VILLAROMAN, representing the new
Province of Dinagat Islands, respondents.

RESOLUTION

PERALTA, J p:
It follows, therefore, that considering that appellant was conferred
his appointments as Secret Agent and Confidential Agent and
authorized to possess a firearm pursuant to the prevailing doctrine
enunciated in Macarandang and Lucero, under which no criminal
liability would attach to his possession of said firearm in spite of the
absence of a license and permit therefor, appellant must he
absolved. Certainly, appellant may not be punished for an act
which at the time it was done was held not to be punishable.
WHEREFORE, the judgment appealed from is hereby reversed, and
appellant is acquitted, with costs de oficio.
Zaldivar, Barredo, Fernandez and Aquino, JJ ., concur.
Fernando, J ., did not take part.
||| (People v. Jabinal y Carmen, G.R. No. L-30061, [February 27,
1974], 154 PHIL 565-572)

Before us are two Motions for Reconsideration of the Decision dated

February 10, 2010 one filed by the Office of the Solicitor General
(OSG) in behalf of public respondents, and the other filed by
respondent Governor Geraldine Ecleo Villaroman, representing the
Province of Dinagat Islands. The dispositive portion of the Decision
reads:
WHEREFORE, the petition is GRANTED. Republic
Act No. 9355, otherwise known as An Act Creating
the Province of Dinagat Islands, is hereby declared
unconstitutional. The proclamation of the Province
of Dinagat Islands and the election of the officials
thereof
are
declared NULL and VOID. The
provision in Article 9 (2) of the Rules and
Regulations Implementing the Local Government
Code of 1991 stating, "The land area requirement
shall not apply where the proposed province is

composed of one (1) or

declared NULL and VOID.

more

islands,"

is

The arguments of the movants are similar. The grounds for

reconsideration of Governor Villaroman can be subsumed under the
grounds for reconsideration of the OSG, which are as follows:
I.
The Province of Dinagat Islands was created in
accordance with the provisions of the 1987
Constitution and the Local Government Code of
1991. Article 9 of the Implementing Rules and
Regulations is merely interpretative of Section 461
of the Local Government Code.
II.
The power to create a local government unit is
vested with the Legislature. The acts of the
Legislature and Executive in enacting into law RA
9355 should be respected as petitioners failed to
overcome
the
presumption
of
validity
or
constitutionality.
III.
Recent and prevailing jurisprudence considers the
operative fact doctrine as a reason for upholding
the validity and constitutionality of laws involving
the creation of a new local government unit as in
the instant case.
As regards the first ground, the movants reiterate the same
arguments in their respective Comments that aside from the
undisputed compliance with the income requirement, Republic Act
(R.A.) No. 9355, creating the Province of Dinagat Islands, has also
complied with the population and land area requirements. acAIES
The arguments are unmeritorious and have already been passed
upon by the Court in its Decision, ruling that R.A. No. 9355 is
unconstitutional, since it failed to comply with either the territorial
or population requirement contained in Section 461 of R.A. No.
7160, otherwise known as the Local Government Code of 1991.
When the Dinagat Islands was proclaimed a new province on
December
3,
2006,
it
had
an official population
of
only 106,951 based on the 2000 Census of Population conducted

by the National Statistics Office (NSO), which population is short of

the statutory requirement of 250,000 inhabitants.
Although the Provincial Government of Surigao del Norte conducted
a special census of population in Dinagat Islands in 2003, which
yielded a population count of 371,000, the result was not certified
by the NSO as required by the Local Government Code. 1 Moreover,
respondents failed to prove that with the population count of
371,000, the population of the original unit (mother Province of
Surigao del Norte) would not be reduced to less than the minimum
requirement prescribed by law at the time of the creation of the
new province. 2
Less than a year after the proclamation of the new province, the
NSO conducted the 2007 Census of Population. The NSO certified
that as of August 1, 2007, Dinagat Islands had a total population of
only 120,813, 3 which was still below the minimum requirement of
250,000 inhabitants.
Based on the foregoing, R.A. No. 9355 failed to comply with the
population requirement of 250,000 inhabitants as certified by the
NSO.
Moreover, the land area of the province failed to comply with the
statutory requirement of 2,000 square kilometers. R.A. No.
9355 specifically states that the Province of Dinagat Islands
contains an approximate land area of 802.12 square kilometers.
This was not disputed by the respondent Governor of the Province
of Dinagat Islands in her Comment. She and the other respondents
instead asserted that the province, which is composed of more than
one island, is exempted from the land area requirement based on
the provision in the Rules and Regulations Implementing the Local
Government Code of 1991 (IRR), specifically paragraph 2 of Article
9 which states that "[t]he land area requirement shall not apply
where the proposed province is composed of one (1) or more
islands." The certificate of compliance issued by the Lands
Management Bureau was also based on the exemption under
paragraph 2, Article 9 of the IRR.
However, the Court held that paragraph 2 of Article 9 of the IRR is
null and void, because the exemption is not found in Section 461 of
the Local Government Code. 4 There is no dispute that in case of
discrepancy between the basic law and the rules and regulations
implementing the said law, the basic law prevails, because the
rules and regulations cannot go beyond the terms and provisions of
the basic law. 5

The movants now argue that the correct interpretation of Section

461 of the Local Government Code is the one stated in the
Dissenting Opinion of Associate Justice Antonio Eduardo B. Nachura.
In his Dissenting Opinion, Justice Nachura agrees that R.A. No.
9355 failed to comply with the population requirement. However,
he contends that the Province of Dinagat Islands did not fail to
comply with the territorial requirement because it is composed of a
group of islands; hence, it is exempt from compliance not only with
the territorial contiguity requirement, but also with the 2,000square-kilometer land area criterion in Section 461 of the Local
Government Code, which is reproduced for easy reference:
SEC. 461. Requisites for Creation. (a) A province
may be created if it has an average annual income,
as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00)
based on 1991 constant prices and either of the
following requisites: TDEASC
(i) a contiguous territory of at least two
thousand (2,000) square kilometers, as
certified by the Lands Management Bureau;
or
(ii) a population of not less than two
hundred
fifty
thousand
(250,000)
inhabitants as certified by the National
Statistics Office:
Provided, That, the creation thereof shall not
reduce the land area, population, and
income of the original unit or units at the
time of said creation to less than the
minimum requirements prescribed herein.
(b) The
territory
need
not
be
contiguous if it comprises two (2) or
more islands or is separated by a
chartered city or cities which do not
contribute to the income of the
province.
(c) The average annual income shall include
the income accruing to the general fund,
exclusive of special funds, trust funds,
transfers, and non-recurring income. 6

Justice Nachura contends that the stipulation in paragraph (b)

qualifies not merely the word "contiguous" in paragraph (a) (i) in
the same provision, but rather the entirety of paragraph (a) (i) that
reads:
(i) a contiguous territory of at least two
thousand
(2,000)
square
kilometers, as
certified by the Lands Management Bureau[.]7
He argues that the whole paragraph on contiguity and land area in
paragraph (a) (i) above is the one being referred to in the
exemption from the territorial requirement in paragraph (b). Thus,
he contends that if the province to be created is composed of
islands, like the one in this case, then, its territory need not be
contiguous and need not have an area of at least 2,000 square
kilometers. He asserts that this is because as the law is worded,
contiguity and land area are not two distinct and separate
requirements, but they qualify each other. An exemption from one
of the two component requirements in paragraph (a) (i) allegedly
necessitates an exemption from the other component requirement,
because the non-attendance of one results in the absence of a
reason for the other component requirement to effect a
qualification.
Similarly, the OSG contends that when paragraph (b) of Section 461
of the Local Government Code provides that the "territory need not
be contiguous if it comprises two (2) or more islands," it necessarily
dispenses the 2,000-sq.-km. land area requirement, lest such
exemption would not make sense. The OSG argues that in stating
that a "territory need not be contiguous if it comprises two (2) or
more islands," the law could not have meant to define the obvious.
The land mass of two or more islands will never be contiguous as it
is covered by bodies of water. It is then but logical that the territory
of a proposed province that is composed of one or more islands
need not be contiguous or be at least 2,000 sq. kms.
The Court is not persuaded.
Section 7, Chapter 2 (entitled General Powers and Attributes of
Local Government Units) of the Local Government Code provides:
SEC. 7. Creation and Conversion. As a general
rule, the creation of a local government unit or its
conversion from one level to another level shall be
based on verifiable indicators of viability and
projected capacity to provide services, to wit:

(a) Income. It must be sufficient, based on

acceptable standards, to provide for all essential
government facilities and services and special
functions commensurate with the size of its
population, as expected of the local government
unit concerned;
(b) Population. It shall be determined as the
total number of inhabitants within the territorial
jurisdiction of the local government unit concerned;
and
(c) Land area. It must be contiguous, unless
it comprises two (2) or more islands, or is
separated by a local government unit independent
of the others; properly identified by metes and
bounds with technical descriptions; and sufficient
to provide for such basic services and
facilities to meet the requirements of its
populace.
Compliance with the foregoing indicators shall be
attested to by the Department of Finance (DOF),
the National Statistics Office (NSO), and the Lands
Management Bureau (LMB) of the Department of
Environment and Natural Resources (DENR). 8
It must be emphasized that Section 7 above, which provides for the
general rule in the creation of a local government unit, states in
paragraph
(c)
thereof
that
the
land
area
must
be
contiguous and sufficient to provide for such basic services and
facilities to meet the requirements of its populace.
Therefore, there are two requirements for land area: (1) the land
area must be contiguous; and (2) the land area must be sufficient
to provide for such basic services and facilities to meet the
requirements of its populace. A sufficient land area in the creation
of a province is at least 2,000 square kilometers, as provided by
Section 461 of the Local Government Code.
Thus, Section 461 of the Local Government Code, providing the
requisites for the creation of a province, specifically states the
requirement of "a contiguousterritory of at least two
thousand (2,000) square kilometers."
Hence, contrary to the arguments of both movants, the
requirement of a contiguous territory and the requirement of a land
area of at least 2,000 square kilometers are distinct and separate

requirements for land area under paragraph (a) (i) of Section 461
and Section 7 (c) of the Local Government Code.
However, paragraph (b) of Section 461 provides two instances of
exemption from the requirement of territorial contiguity, thus:
(b) The territory need not be contiguous if it
comprises two (2) or more islands, or is
separated by a chartered city or cities which
do not contribute to the income of the
province. 9
Contrary to the contention of the movants, the exemption above
pertains only to the requirement of territorial contiguity. It clearly
states that the requirement of territorial contiguity may be
dispensed with in the case of a province comprising two or more
islands, or is separated by a chartered city or cities which do not
contribute to the income of the province.
Nowhere in paragraph (b) is it expressly stated or may it be
implied that when a province is composed of two or more
islands, or when the territory of a province is separated by
a chartered city or cities, such province need not comply
with the land area requirement of at least 2,000 square
kilometers or the requirement in paragraph (a) (i) of
Section 461 of the Local Government Code. TIADCc
Where the law is free from ambiguity, the court may not introduce
exceptions or conditions where none is provided from
considerations of convenience, public welfare, or for any laudable
purpose; 10 neither may it engraft into the law qualifications not
contemplated, 11 nor construe its provisions by taking into account
questions of expediency, good faith, practical utility and other
similar reasons so as to relax non-compliance therewith. 12 Where
the law speaks in clear and categorical language, there is no room
for interpretation, but only for application. 13
Moreover, the OSG contends that since the power to create a local
government unit is vested with the Legislature, the acts of the
Legislature and the Executive branch in enacting into law R.A. No.
9355 should be respected as petitioners failed to overcome the
presumption of validity or constitutionality.
The contention lacks merit.
Section 10, Article X of the Constitution states:
"SEC.
10. No
province,
city,
municipality,
or barangay may be created, divided, merged,

abolished,
or
its
boundary
substantially
altered, except in accordance with the criteria
established in the local government code and
subject to approval by a majority of the votes cast
in a plebiscite in the political units directly
affected." 14
As the law-making branch of the government, indeed, it was the
Legislature that imposed the criteria for the creation of a province
as contained in Section 461 of the Local Government Code. No law
has yet been passed amending Section 461 of the Local
Government Code, so only the criteria stated therein are the bases
for the creation of a province. The Constitution clearly mandates
that the criteria in the Local Government Code must be followed in
the creation of a province; hence, any derogation of or deviation
from the criteria prescribed in the Local Government Code violates
Section 10, Article X of the Constitution.
Contrary to the contention of the movants, the evidence on record
proved that R.A. No. 9355 failed to comply with either the
population or territorial requirement prescribed in Section 461 of
the Local Government Code for the creation of the Province of
Dinagat
Islands;
hence,
the
Court
declared R.A.
No.
9355 unconstitutional.
In Farias v. The Executive Secretary, 15 the Court held:
Every statute is presumed valid. The presumption is
that the legislature intended to enact a valid,
sensible and just law and one which operates no
further than may be necessary to effectuate the
specific purpose of the law.
It is equally well-established, however, that the
courts, as guardians of the Constitution, have the
inherent authority to determine whether a statute
enacted by the legislature transcends the limit
imposed by the fundamental law. And where the
acts of the other branches of government run afoul
of the Constitution, it is the judiciary's solemn and
sacred duty to nullify the same.
Citing League of Cities of the Philippines v. Commission on
Elections, 16 the movants further contend that under the operative
fact doctrine, the constitutionality of R.A No. 9355, creating the
Province of Dinagat Islands, should be upheld.
The Court is not persuaded.

In League of Cities of the Philippines v. Commission on

Elections, the Court held that the 16 cityhood laws, whose validity
were questioned therein, were constitutional mainly because it
found that the said cityhood laws merely carried out the intent
of R.A. No. 9009, now Section 450 of the Local Government Code,
to exempt therein respondents local government units (LGUs) from
the P100 million income requirement, since the said LGUs had
pending cityhood bills long before the enactment of R.A. No. 9009.
Each one of the 16 cityhood laws contained a provision exempting
the municipality covered from the P100 million income
requirement.
In this case, R.A. No. 9355 was declared unconstitutional because
there was utter failure to comply with either the population or
territorial requirement for the creation of a province under Section
461 of the Local Government Code.
The Court, while respecting the doctrine of separation of powers,
cannot renege on its duty to determine whether the other branches
of the government have kept themselves within the limits of the
Constitution, and determine whether illegality attached to the
creation of the province in question. To abandon this duty only
because the Province of Dinagat Islands has began its existence is
to consent to the passage of a law that is violative of the provisions
of theConstitution and the Local Government Code, rendering the
law and the province created null and void. The Court cannot
tolerate such nullity to be in existence. Where the acts of other
branches of the government go beyond the limit imposed by the
Constitution, it is the sacred duty of the judiciary to nullify the
same. 17
Tan v. Comelec 18 held: aEDCAH
. . . [T]he fact that such plebiscite had been held
and a new province proclaimed and its officials
appointed, the case before Us cannot truly be
viewed
as
already
moot
and
academic.
Continuation of the existence of this newly
proclaimed province, which petitioners strongly
profess to have been illegally born, deserves to be
inquired into by this Tribunal so that, if indeed,
illegality attaches to its creation, the commission of
that error should not provide the very excuse for
perpetuation of such wrong. For this court to yield
to the respondents' urging that, as there has
been fait accompli then this Court should passively
accept and accede to the prevailing situation, is an

unacceptable suggestion. Dismissal of the instant

petition, as respondents so propose, is a
proposition fraught with mischief. Respondents'
submission will create a dangerous precedent.
Should this Court decline now to perform its duty of
interpreting and indicating what the law is and
should be, this might tempt again those who strut
about in the corridors of power to recklessly and
with ulterior motives, create, merge, divide and/or
alter the boundaries of political subdivisions, either
brazenly or stealthily, confident that this Court will
abstain from entertaining future challenges to their
acts if they manage to bring about a fait accompli.
WHEREFORE, in view of the foregoing, the Motions for
Reconsideration of the Decision dated February 10, 2010 are
hereby DENIED for lack of merit.
SO ORDERED.
Puno, C.J., Carpio, Corona, Carpio Morales, Velasco, Jr., Nachura,
Leonardo-de Castro, Brion, Bersamin, Del Castillo, Abad, Villarama,
Jr. and Mendoza, JJ.,concur.
Perez, J., see dissenting.
Separate Opinions
PEREZ, J., dissenting:
Every statute has in its favor the presumption of
constitutionality. This presumption is rooted in the
doctrine of separation of powers which enjoins
upon the three coordinate departments of the
Government a becoming courtesy for each other's
acts. The theory is that every law, being the joint
act of the Legislature and the Executive, has
passed careful scrutiny to ensure that it is in accord
with the fundamental law. This Court, however,
may declare a law, or portions thereof,
unconstitutional, where a petitioner has shown a
clear and unequivocal breach of the Constitution,
not merely a doubtful or argumentative one. In
other words, the grounds for nullity must be
beyond reasonable doubt, for to doubt is to sustain.

The spirit of the foregoing pronouncements enunciated

in Cawaling, Jr. v. Executive Secretary 1 animates this dissent
to the denial of the motion for reconsideration of the February 10,
2010 En Banc Decision handed down in the case at bench,
declaring as unconstitutional Republic Act No. 9355, as well the
provision in Article 9 (b) of the Rules and Regulations
Implementing the Local Government Code of 1991 which states
that, "The land area requirement shall not apply where the
proposed province is composed of one (1) or more islands."
The factual and procedural antecedents are not in dispute. TcSICH
A group of islands composed of the municipalities of Basilisa,
Cagdianao, Dinagat, Libjo, Loreto, San Jose and Tubajon with an
aggregate land area of 802.12 square kilometers, the Dinagat
Islands form part of the province of Surigao del Norte alongside the
Mainland, Surigao City, Siargao Island and Bucas Grande. In support
of the house bill for the creation of the Dinagat Islands as a
separate province, it appears that a special census conducted by
the province of Surigao del Norte and the National Statistics Office
(NSO) District Census Coordinator in July 2003 yielded a population
count of 371,576 inhabitants. With the certification from the Bureau
of Local Government Finance that the proposed province had an
average annual income of P82,696,433.23, the house bill for the
creation of the Province of Dinagat Islands was passed by the
Senate and House of Representatives on August 14, 2006 and
August 28, 2006, respectively.
On October 2, 2006, President Gloria Macapagal-Arroyo approved
and enacted said house bill into law as Republic Act No. 9355,
entitled, "An Act Creating the Province of Dinagat Islands." The
plebiscite conducted by the Commission on Elections (COMELEC) on
December 3, 2006 in the local government units directly affected
by the creation of the new province yielded 69,943 affirmative
votes and 63,502 negative votes. Subsequent to the proclamation
of said vote by the Plebiscite Provincial Board of Canvassers on
December 3, 2006, the President appointed a new set of provincial
officials who took their oath of office on January 26, 2007. In the
May 14, 2007 synchronized National and Local Elections, the
constituents of the new province elected a new set of provincial
officers who eventually assumed office on July 1, 2007.
Petitioners initially assailed the constitutionality of Republic Act No.
9355 in the petition for certiorari and prohibition docketed before
the Court as G.R. No. 175158. Undaunted by the dismissal of said
petition on technical grounds and the denial of their motion for
reconsideration thereof, petitioners filed the petition for certiorari to

which the case at bench traces its provenance. Reiterating the

arguments in their previous petition, petitioners maintained that
the law failed to comply with either the land area and population
requirements prescribed under the Local Government Code of
1991. In addition to the invalidation of the law as unconstitutional,
petitioners prayed for the nullification of the appointment and
election of the provincial officers of Dinagat Islands as well as the
return of its municipalities and districts to the province of Surigao
del Norte.
On February 10, 2010, a decision was rendered declaring Republic
Act No. 9355 unconstitutional for failure to comply with the land
area and population requirements under the Local Government
Code,and giving short shrift to respondents' reliance on Article 9 (b)
of the Rules and Regulations Implementingthe Local Government
Code of 1991 (IRR) to the effect that the requirement of a
contiguous territory of at least 2,000 square kilometers does not
apply when the proposed province is composed of one or more
islands. The decision invoked the case of Tan v. COMELEC 2 which
declared that the term "territory" only refers to the mass of land
area and excludes the waters over which the local government unit
exercises control. Likewise brushing aside the result of the special
census for lack of certification from the NSO, the decision also ruled
that the population requirement was not complied with, based on
the NSO 2000 Census of Population which pegged the official
population of Dinagat Islands at 106,951.
After a circumspect consideration of the arguments for and against
the validity of the creation of the Province of Dinagat Islands, I am
convinced, with all due respect, that a reconsideration of the
decision is in order.
The creation of local government units is governed by Section 10,
Article X of the Constitution which provides that, "(n)o province,
city, municipality, orbarangay may be created, divided, merged,
abolished or its boundary substantially altered except in
accordance with the criteria established in the local government
code and subject to approval by a majority of the votes cast in a
plebiscite in the political units directly affected." Correlatively,
Section 461 of theLocal Government Code prescribes the criteria for
the creation of a province in the following wise:
SEC. 461. Requisites for Creation. (a) A province
may be created if it has an average annual income,
as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00)

based on 1991 constant prices and either of the

following requisites:
(i) a contiguous territory of at least two
thousand (2,000) square kilometers
as
certified
by
the
Lands
Management Bureau; or
(ii) a

population of not less than two

hundred fifty thousand (250,000)
inhabitants as certified by the
National Statistics Office:

Provided, That, the creation thereof shall not

reduce the land area, population, and income of the
original unit or units at the time of said creation to
less than the minimum requirements prescribed
herein.
(b) The territory need not be contiguous if it
comprises two (2) or more islands or is separated
by a chartered city or cities which do not contribute
to the income of the province.
(c) The average annual income shall include the
income accruing to the general fund, exclusive of
special funds, trust funds, transfers, and nonrecurring income.
Considered the most important factor insofar as the creation of a
new province is concerned, the income requirement under the Local
Government Code has been more than four-fold complied with, as
may be gleaned from the Bureau of Local Government Finance
Certification that, based on the 1991 constant prices, the average
annual income of the Province of Dinagat Islands is P82,696,433.23.
Despite its aggregate land area of 802.12 square kilometers only,
the new province has also measured up to the territorial
requirement since, being comprised of two or more islands, it is
exempted from the contiguous 2,000 square-kilometer land mass
prescribed under Section 461 (a) [i]. Although the exemption in
paragraph (b) appears to extend only to the requirement of
contiguity, I am convinced by Mr. Justice Antonio Eduardo B.
Nachura's opinion that, from the tenor of the same provision, the
contiguity and land area requirements cannot be considered
separate and distinct from each other. As eloquently stated in his
dissent: cSEDTC

By rough analogy, the two components are like

dicephalic conjoined twins two heads are
attached to a single body. If one head is separated
from the other, then the twins die. In the same
manner, the law, by providing in paragraph (b) of
Section 461 that the territory need not be
contiguous if the same is comprised of islands,
must be interpreted as intended to exempt such
territory from the land area component of 2,000 sq.
km. Because the two component requirements are
inseparable, the elimination of contiguity from the
territorial criterion has the effect of a co-existent
eradication of the land area component. The
territory of the province of Dinagat Islands,
therefore, comprising the major islands of Dinagat
and Hibuson, and approximately 47 islets, need not
be contiguous and need not have an area of at
least 2,000 sq. km. following Section 461 of
the LGC.
It will result in superfluity, if not absurdity, if
paragraph (b) of the provision is interpreted as
referring only to the component requirement of
contiguity and not to both component requirements
of contiguity and land area. This is because
contiguity does not always mean contact by land.
Thus, insofar as islands are concerned, they are
deemed contiguous although separated by wide
spans of navigable deep waters, with the exception
of the high seas, because all lands separated by
water touch one another, in a sense, beneath the
water. The provision, then, as worded, only means
that the exemption in paragraph (b) refers to both
the components of territory, that is, contiguity and
land area, and not merely the first, standing alone.
For, indeed, why will the law still exempt the
islands from the requirement of contiguity when
they are already legally contiguous?
Compliance with the land area requirement by the Province of
Dinagat Islands is cast in even relief when gauged from the clear
and unambiguous language of the IRR which was formulated in
accordance with Section 533 of the Local Government Code, by the
Oversight Committee chaired by the Executive Secretary and
composed of representatives from the Senate, 3 the House of
Representatives, 4 the Cabinet 5 and the leagues of local
government units. 6Partaking the nature of executive construction

and, for said reason, deserving of great weight

respect, 7 Article 9 of the IRR distinctly provides as follows:
ART. 9. Provinces. (a) Requisites for creation.
A province shall not be created unless the following
requisites on income and either population or land
area are present:
(1) Income An average annual income of
not less than Twenty Million Pesos
(P20,000,000.00) for the immediately
preceding two (2) consecutive years
based on 1991 constant prices, as
certified by DOF. The average annual
income shall include the income
accruing to the general fund,
exclusive of special funds, special
accounts, transfers, and nonrecurring
income; and
(2) Population or land area Population
which shall not be less than two
hundred fifty thousand (250,000)
inhabitants, as certified by NSO; or
land area which must be contiguous
with an area of at least two thousand
(2,000)
square
kilometers,
as
certified by LMB. The territory need
not be contiguous if it comprises two
(2) or more islands or is separated by
a chartered city or cities which do
not contribute to the income of the
province. The land area requirement
shall not apply where the proposed
province is composed of one (1) or
more
islands.
The
territorial
jurisdiction of a province sought to
be
created
shall
be
properly
identified by metes and bounds.
The creation of a new province shall not reduce the
land area, population, and income of the original
LGU or LGUs at the time of said creation to less
than the prescribed minimum requirements. All
expenses incidental to the creation shall be borne
by the petitioners.

and

Alongside declaring Republic Act No. 9355 as unconstitutional for

non-compliance with the land area requirement, however,
the ponencia also declared the underscored portion of the
foregoing IRR provision null and void for going beyond the criteria
prescribed by Section 461 of the Local Government. Citing the
Court's November 18, 2008 ruling in League of Cities of the
Philippines v. COMELEC, 8 it held that "(t)he Constitution requires
that the criteria for the creation of a province, including any
exemption from such criteria, must all be written in the Local
Government Code." In case of discrepancy between the basic law
and the rules and regulations implementing the same,
the ponencia went on to state that, "the basic law prevails, because
the rules and regulations cannot go beyond the terms and
provisions of the basic law."
The League of Cities case concerned the constitutionality of sixteen
cityhood laws, each converting the municipalities covered into a
city, for non-compliance with Republic Act No. 9009 which amended
Section 450 of the Local Government Code by increasing the
income requirement from P20,000,000.00 to P100,000,000.00 for a
municipality to be converted into a component city. Initially
declared unconstitutional in the aforesaid November 18, 2008
Decision, the constitutionality of the subject cityhood laws were
eventually upheld in the December 21, 2009 Decision subsequently
rendered in the case on the ground, among others, that the Local
Government Code, despite its being the ideal repository for the
same, need not be the only vessel of all the criteria for the creation
of local government units. Taking into consideration the
circumstances under which Republic Act No. 9009 and said
cityhood laws were enacted, the Court ruled as follows:
Legislative intent is part and parcel of the law, the
controlling factor in interpreting a statute. In
construing a statute, the proper course is to start
out and follow the true intent of the Legislature and
to adopt the sense that best harmonizes with the
context and promotes in the fullest manner the
policy and objects of the legislature. In fact, any
interpretation that runs counter to the legislative
intent is unacceptable and invalid. Torres v.
Limjap could not have been more precise:
'The intent of a Statute is the Law. If a
statute is valid, it is to have effect according
to the purpose and intent of the lawmaker.
The intent is . . . the essence of the law and
the primary rule of construction is to

ascertain and give effect to that intent. The

intention of the legislature in enacting a law
is the law itself, and must be enforced when
ascertained, although it may not be
consistent with the strict letter of the
statute. Courts will not follow the letter of a
statute when it leads away from the true
intent and purpose of the legislature and to
conclusions inconsistent with the general
purpose of the act. Intent is the spirit which
gives life to a legislative enactment. In
construing statutes the proper course is to
start out and follow the true intent of the
legislature.' DcaSIH
When viewed in the light of the legislative intent underlying Section
461 of the Local Government Code, I respectfully submit that Article
9 of the IRR is not in conflict with the criteria for the creation of
provinces ensconced in said provision of the basic law. Unlike
Section 197 9 of Batas Pambansa Blg. 337, its counterpart
provision in the predecessor of the present Local Government Code,
Section 461 does not give equal premium to the income, land area
and population requirements for the creation of new provinces. This
is readily evident from the fact that, after prescribing the
P20,000,000.00 income requirement, Section 461 simply mandates
compliance with either the requirement of a contiguous territory of
2,000 square kilometers or a population of not less than 250,000.
Already quoted in Justice Nachura's dissent to the ponencia, the
following transcript of the congressional deliberations on the house
bill from which the present Local Government Code originated is
particularly enlightening regarding the legislative intent for said
new requirements, viz.:
HON. ALFELOR:
Income is mandatory. We can even have this
doubled because we thought . . .
CHAIRMAN CUENCO:
In other words, the primordial considerations here
is the economic viability of the new local
government unit, the new province?
xxx xxx xxx
HON. LAGUADA:

The reason why we are willing to increase the

income, double than the House version,
because we also believe that economic
viability is really a minimum. Land area and
population are functions really of the
viability of the area, because where you
have an income level which would be the
trigger point for economic development,
population will naturally increase because
there will be an immigration. However, if
you disallow the particular area from being
converted into a province because of
population problems in the beginning, it will
never be able to reach the point where it
could become a province simply because it
will never have the economic take off for it
to trigger off that economic development.
Now, we are saying that maybe Fourteen Million
Pesos is a floor area where it could pay for
overhead, and provide a minimum of basic
services to the population. Over and above
that, the provincial officials should be able
to trigger off economic development which
will attract new investments from the
private sector. This is now the concern of
their local officials. But if we are going to tie
the hands of the proponents, simply by
telling them, 'Sorry, you are now at 150
thousand or 200,000 thousand,' you will
never be able to become a province
because nobody wants to go to that place.
Why? Because you never have any reason
for economic viability.
xxx xxx xxx
CHAIRMAN PIMENTEL:
Okay, what about land area?
HON. LUMAUIG:
1,500 square kilometers.
HON. ANGARA:
Walang
problema
yon, that's
not
critical, 'yong land area because . . .

very

CHAIRMAN PIMENTEL:
Okay, ya, our, the Senate version is 3.5, 3,500
square meters, ah, square kilometers.
HON. LAGUADA:
Ne, Ne. A province is constituted for the purpose of
administrative efficiency and delivery of
basic services.
CHAIRMAN PIMENTEL:
Right.
HON. LAGUADA:
Actually, when you come down to it, when
government was instituted, there is only one
central government and then everybody
falls under that. But it was later on
subdivided into provinces for purposes of
administrative efficiency.
CHAIRMAN PIMENTEL:
Okay.
HON. LAGUADA:
Now,

what we're seeing now is that the

administrative efficiency is no longer there
because the land areas that we are giving to
our governors is so wide that no one man
could possibly administer all of the complex
machineries that are needed.

Secondly, when you say 'delivery of basic

services,' as pointed out by Cong. Alfelor,
there are sections of the province which
have never been visited by public officials
precisely because they don't have the time
nor the energy anymore because it is so
wide. Now, by compressing the land area
and by reducing the population requirement,
we are, in effect, trying to follow the basic
policy of why we are creating provinces,
which is to deliver basic services and to
make it more efficient in administration.

CHAIRMAN PIMENTEL:
Yeah, that's correct, but on the assumption that
the province is able to do it without being a
burden to the national government. That's
the assumption.
HON. LAGUADA:
That's why we're going into the minimum income
level. As we said, if we go on a minimum
income level, then we say, "this is the
trigger point at which this administration
can take place." HcTIDC
In exempting provinces composed of one or more islands from both
the contiguity and land area requirements, Article 9 of the IRR
cannot be considered inconsistent with the criteria under Section
461 of the Local Government Code. Far from being absolute
regarding application of the requirement of "a contiguous territory
of at least 2,000 square kilometers as certified by the Land
Management Bureau," Section 461 allows for said exemption by
providing, under paragraph (b) thereof, that "(t)he territory need
not be contiguous if (the new province) comprises two or more
islands or is separated by a chartered city or cities which do not
contribute to the income of the province." For as long as there is
compliance with the income requirement, the legislative intent is,
after all, to the effect that the land area and population
requirements may be overridden by the established economic
viability of the proposed province.
In the aforesaid December 21, 2009 Decision in the League of
Cities case, the Court sagely ruled that "(t)he legislative intent is
not at all times accurately reflected in the manner in which the
resulting law is couched. Thus, applying a verba legis or strictly
literal interpretation of a statute may render it meaningless and
lead to inconvenience, an absurd situation or injustice. To obviate
this aberration, and bearing in mind the principle that the intent or
the spirit of the law is the law itself, resort should be to the rule
that the spirit of the law controls its letter." Indeed, the forum for
examining the wisdom of the law, and enacting remedial measures,
is not this Court but the Legislature. 10 Consequently, courts will
not follow the letter of the statute when to do so would depart from
the true intent of the legislature or would otherwise yield
conclusions inconsistent with the general purpose of the act. 11
Without taking into consideration the aforesaid legislative intent,
the ponencia clearly resorted to a strict verba legis interpretation in

invalidating the portion of Article 9 of the IRR which states that,

"The land area requirement shall not apply where the proposed
province is composed of one (1) or more islands." In determining
that the Province of Dinagat Islands failed to comply with the land
area requirement, it also relied heavily on the Court's
pronouncements in Tan v. COMELEC 12 where the principal issue
was, however, the invalidity of the creation of the province of
Negros del Norte on account of the fact that the plebiscite therefor
conducted did not include the parent province of Negros Oriental.
Although the collateral issue of compliance with the land area
requirement was resolved pursuant to Section 197 of Batas
Pambansa Blg. 337 and not Section 461 of the present Local
Government Code, the ponenciafurther ruled that the requirements
under both laws are similar and that there is no reason for a change
in the definitions, usage or meaning of the terms "territory" and
"contiguous" in said laws.
As hereinbefore observed, however, Section 197 of Batas
Pambansa Blg. 337, unlike Section 461 of the Local Government
Code of 1991, gave equal premium to the income, land area and
population requirements for the creation of new provinces. Even
prescinding from the current decrease in population and land area
requirement as well as the increase in the income requirement, it
cannot, therefore, be validly argued that the requisites for the
creation of a province under both laws are similar. Given the lesser
importance accorded the land area and population under Section
461 of the present Local Government Code, I find that the propriety
of applying the restrictive interpretation of the land area
requirement in Tan v. COMELEC to the creation of the Province of
Dinagat Islands is not as cut and dried as the ponencia considered
it to be. More so, when it is borne in mind that, unlike the one
conducted for the proposed province of Negros del Norte, the
plebiscite conducted for said new province unquestionably
complied with the Constitutional requirement of inclusion of "the
political units directly affected."
In ordaining the enactment of a local government code,Section 3,
Article X of the Constitution envisioned one "which shall provide for
a more responsive and accountable local government structure
instituted through a system of decentralization." Paying attention to
this principle, Section 2 (a) of the Local Government Code of
1991 provides as follows:
Sec. 2. Declaration of Policy (a) It is hereby
declared the policy of the State that the territorial
and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable

them to attain their fullest development as selfreliant communities and make them more effective
partners in the attainment of national goals.
Towards this end, the State shall provide for a more
responsive and accountable local government
structure
instituted
through
a
system
of
decentralization whereby local government units
shall
be
given
more
powers,
authority,
responsibilities, and resources. The process of
decentralization shall proceed from the National
Government to the local government units.
To my mind, it was undoubtedly in the service of the foregoing
principles and policies that the house bill creating the Province of
Dinagat Islands was passed by Congress and enacted into law by
the President. As an organic law, Republic Act No. 9355 also
garnered the majority of the votes cast in the plebiscite conducted
not only in the municipalities constituting the newly created
province but also the parent province of Surigao del Norte. During
the May 14, 2007 synchronized National and Local Elections, the
constituents of the Province of Dinagat Islands have, in fact,
already elected their provincial officers who are about to complete
their first term of office. The foregoing considerations were unduly
brushed aside by the ponencia in one fell swoop when it
invalidatedRepublic Act No. 9355 and the exception embodied in
Article 9 of the IRR with a strict and narrow interpretation of Section
461 of the Local Government Code. CHIEDS

Footnotes
1.SEC. 7. Creation and conversion. As a general rule, the
creation of a local government unit or its conversion from
one level to another shall be based on verifiable indicators
of viability and projected capacity to provide services, to
wit:
(a) Income. It must be sufficient, based on acceptable
standards, to provide for all essential government facilities
and services and special functions commensurate with the
size of its population, as expected of the local government
unit concerned;
(b) Population. It shall be determined as the total number of
inhabitants within the territorial jurisdiction of the local
government unit concerned; and

(c) Land area. It must be contiguous, unless it comprises two

(2) or more islands, or is separated by a local government
unit independent of the others; properly identified by
metes and bounds with technical descriptions and
sufficient to provide for such basic services and facilities to
meet the requirements of its populace.
Compliance with the foregoing indicators shall be
attested to by the Department of Finance
(DOF), the National Statistics Office (NSO), and the
Lands
Management
Bureau
(LMB)
of
the
Department of Environment and Natural Resources
(DENR).
SEC. 461. Requisites for Creation. (a) A province may be
created if it has an average annual income, as certified by
the Department of Finance, of not less than Twenty million
pesos (P20,000,000.00) based on 1991 constant prices
and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square
kilometers, as certified by the Lands Management Bureau;
or
(ii) a population of not less than two hundred fifty
thousand (250,000) inhabitants as certified by the
National Statistics Office:
Provided, That, the creation thereof shall not reduce the
land area, population, and income of the original
unit or units at the time of said creation to less than
the minimum requirements prescribed herein.
(Emphasis supplied.)
2.Id.
3.Annex "AA," rollo, p. 498. (Emphasis supplied.)
4.For comparison, Sec. 461 of the Local Government Code of
1991 and Art. 9 of the Rules and Regulations
Implementing the Local Government Code of 1991 are
reproduced:
The Local Government Code

SEC. 461. Requisites for Creation. (a) A province may be

created if it has an average annual income, as certified by
the Department of Finance, of not less than Twenty million
pesos (P20,000,000.00) based on 1991 constant
prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000)
square kilometers, as certified by the Lands
Management Bureau; or

do not
contribute
to
the
income
of
the
province. The land area requirement shall not apply
where the proposed province is composed of one
(1) or more islands. The territorial jurisdiction of a
province sought to be created shall be properly identified
by metes and bounds. (Emphasis supplied.)
5.Hijo Plantation, Inc. v. Central Bank, G.R. No. L-34526, August 9,
1988, 164 SCRA 192, 199.

(ii) a population of not less than two hundred fifty thousand

(250,000) inhabitants as certified by the National Statistics
Office: Provided, That, the creation thereof shall not
reduce the land area, population, and income of the
original unit or units at the time of said creation to less
than the minimum requirements prescribed herein.

6.Emphasis supplied.

(b) The territory need not be contiguous if it comprises

two (2) or more islands or is separated by a
chartered city or cities which do not contribute to
the income of the province.

10.University of the Philippines Board of Regents v. Auditor

General, G.R. No. L-19617, October 31, 1969, 30 SCRA 5,
17.

(c) The average annual income shall include the income

accruing to the general fund, exclusive of special funds,
trust funds, transfers, and non-recurring income.
Rules
and
Regulations
Implementing the
Government Code of 1991

Local

ART. 9. Provinces. (a) Requisites for creation. A province

shall not be created unless the following requisites on
income and either population or land area are present:

7.Emphasis supplied.
8.Emphasis supplied.
9.Emphasis supplied.

11.Ramos v. Court of Appeals, G.R. No. L-53766, October 30,

1981, 108 SCRA 728.
12.Republic v. Go. Ban Lee, 111 Phil. 805 (1961).
13.Cebu Portland Cement Company v. Municipality of Naga,
Cebu, G.R. Nos. 24116-17, August 22, 1968, 24 SCRA 708,
712; Ruben E. Agpalo, Statutory Construction (1986), p.
47.
14.Emphasis supplied.

(1) Income An average annual income of not less than Twenty

Million Pesos (P20,000,000.00) for the immediately
preceding two (2) consecutive years based on 1991
constant prices, as certified by the DOF. The average
annual income shall include the income accruing to the
general fund, exclusive of special funds, special accounts,
transfers, and non-recurring income; and

15.463 Phil. 179, 197 (2003).

(2) Population or land area Population which shall not be less

than two hundred fifty thousand (250,000) inhabitants, as
certified by the National Statistics Office; or land area
which must be contiguous with an area of at least
two thousand (2,000) square kilometers, as
certified by the LMB. The territory need not be
contiguous if it comprises two (2) or more islands,
or is separated by a chartered city or cities which

1.G.R. No. 146342, October 26, 2001.

16.G.R. Nos. 176951, 177499 & 178056, December 21, 2009.

17.Farias v. The Executive Secretary, supra note 15.
18.226 Phil. 624, 637-638 (1986).
PEREZ, J.; dissenting:

2.142 SCRA 727.

3.Three Senators appointed by the Senate President, to include
the Chairman of the Committee on Local Government.
4.The Congressmen appointed by the Speaker, to include the
Chairman of the Committee on Local Government.

5.Secretary of Interior and Local Government, Secretary of

Finance, Secretary of Budget and Management.
6.One representative each from the League of Provinces, League
of Cities, League of Municipalities and Liga ng mga
Barangay.
7.Galarosa v. Valencia, 227 SCRA 728.
8.571 SCRA 263.
9.Sec. 197. Requisites for Creation. A province may be created
if it has a territory of at least three thousand five hundred
square kilometers, a population of at least five hundred
thousand pesos, an average estimated annual income, as
certified by the Ministry of Finance, of not less than ten
million pesos for the last three consecutive years, and its
creation shall not reduce the population and income of the
mother province or provinces at the time of said creation
to less than the minimum requirements under this section.
The territory need not be contiguous if it comprises two or
more islands.
The average estimated annual income shall include the income
allotted for both the general and infrastructure funds,
exclusive of trust funds, transfers and nonrecurring
income.
10.Peera v. COMELEC, G.R. No. 181613, November 25, 2009.
11.Mariano v. COMELEC, G.R. Nos. 118577 and 118627, March 7,
1995.
12.Supra.
||| (Navarro v. Ermita, G.R. No. 180050, [May 12, 2010], 634 PHIL
594-626)

EN BANC
[G.R. No. 176951. April 12, 2011.]
LEAGUE OF CITIES OF THE PHILIPPINES (LCP),
represented by LCP National President Jerry

P. Treas; CITY OF CALBAYOG, represented by

Mayor Mel Senen S. Sarmiento; and JERRY P.
TREAS,
in
his
personal
capacity
as
Taxpayer, petitioners, vs. COMMISSION ONELEC
TIONS;
MUNICIPALITY OF BAYBAY,
PROVINCE OF LEYTE; MUNICIPALITY OF BOGO,
PROVINCE OF CEBU;
MUNICIPALITY OFCATBALOGAN,
PROVINCE OF WESTERN
SAMAR;
MUNICIPALITY OF TANDAG,
PROVINCE OF SURIGAO
DEL
SUR;
MUNICIPALITY OFBORONGAN,
PROVINCE OF EASTERN
SAMAR;
AND
MUNICIPALITY OF TAYABAS,
PROVINCE OF QUEZON, respondents.
[G.R. No. 177499. April 12, 2011.]
LEAGUE OF CITIES OF THE PHILIPPINES (LCP),
represented by LCP National President Jerry
P. Treas; CITY OF CALBAYOG, represented by
Mayor Mel Senen S. Sarmiento; and JERRY P.
TREAS,
in
his
personal
capacity
as
Taxpayer, petitioners, vs. COMMISSION ONELEC
TIONS;
MUNICIPALITY OF LAMITAN,
PROVINCE OF BASILAN;
MUNICIPALITY OF TABUK,
PROVINCE OF KALINGA;
MUNICIPALITY OFBAYUGAN,
PROVINCE OF AGUSAN
DEL
SUR;
MUNICIPALITY OF BATAC,
PROVINCE OF ILOCOS
NORTE;
MUNICIPALITY OF MATI, PROVINCEOF DAVAO
ORIENTAL;
AND
MUNICIPALITY OF GUIHULNGAN,
PROVINCE OF NEGROS ORIENTAL, respondents.
[G.R. No. 178056. April 12, 2011.]
LEAGUE OF CITIES OF THE PHILIPPINES (LCP),
represented by LCP National President Jerry
P. Treas; CITY OF CALBAYOG, represented by
Mayor Mel Senen S. Sarmiento; and JERRY P.

TREAS,
in
his
personal
capacity
as
Taxpayer, petitioners, vs. COMMISSION ONELEC
TIONS;
MUNICIPALITY OF CABADBARAN,
PROVINCE OF AGUSAN
DEL
NORTE;
MUNICIPALITY OF CARCAR,
PROVINCE OF CEBU;
MUNICIPALITY OF EL
SALVADOR, PROVINCE OF MISAMIS ORIENTAL;
MUNICIPALITY OF NAGA,
CEBU;
AND
DEPARTMENT OF BUDGET
AND
MANAGEMENT, respondents.

II. THE

III. THE RESOLUTION UNDERMINES THE JUDICIAL

SYSTEM
IN
ITS
DISREGARD OF THE
PRINCIPLES OF RES
JUDICATA AND
THE
DOCTRINE OFIMMUTABILITY OF FINAL
JUDGMENTS.
IV. THE RESOLUTION ERRONEOUSLY RULED THAT
THE SIXTEEN (16) CITYHOOD BILLS DO NOT
VIOLATE ARTICLE X, SECTIONS 6 AND
10 OF THE 1987 CONSTITUTION.

RESOLUTION

V. THE SIXTEEN (16) CITYHOOD LAWS VIOLATE THE

EQUAL
PROTECTION
CLAUSE OF THE CONSTITUTION
AND THE
RIGHT OF LOCAL GOVERNMENTS TO A JUST
SHARE IN THE NATIONAL TAXES.

BERSAMIN, J p:
We consider and resolve the Ad Cautelam Motion for
Reconsideration filed by the petitioners vis--vis the Resolution
promulgated on February 15, 2011. EIAaDC
To recall, the Resolution promulgated on February 15, 2011 granted
the Motion for Reconsideration of the respondents presented
against the Resolution dated August 24, 2010, reversed the
Resolution dated August 24, 2010, and declared the 16 Cityhood
Laws Republic Acts Nos. 9389, 9390, 9391, 9392, 9393, 9394,
9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491
constitutional.
Now, the petitioners anchor their Ad Cautelam Motion for
Reconsideration upon the primordial ground that the Court could no
longer modify, alter, or amend its judgment declaring the Cityhood
Laws unconstitutional due to such judgment having long become
final and executory. They submit that the Cityhood Laws violated
Section 6 and Section 10 of Article X of the Constitution, as well as
the Equal Protection Clause.
The petitioners specifically ascribe to the Court the following errors
in its promulgation of the assailed February 15, 2011 Resolution, to
wit:
I. THE HONORABLE COURT HAS NO JURISDICTION
TO PROMULGATE THE RESOLUTION OF 15
FEBRUARY 2011 BECAUSE THERE IS NO
LONGER
ANY
ACTUAL
CASE
OR
CONTROVERSY TO SETTLE.

RESOLUTION CONTRAVENES THE 1997

RULES OF CIVIL PROCEDURE AND RELEVANT
SUPREME COURT ISSUANCES.

Ruling
Upon thorough consideration, we deny the Ad Cautelam Motion for
Reconsideration for its lack of merit.
I.
Procedural Issues
With
respect
to
the
first,
second,
and
third
assignments of errors, supra, it appears that the petitioners assail
the jurisdiction of the Court in promulgating the February 15, 2011
Resolution, claiming that the decision herein had long become final
and executory. They state that the Court thereby violated
rules ofprocedure,
and
the
principles of res
judicata and
immutability of final judgments.
The petitioners posit that the controversy on the Cityhood Laws
ended with the April 28, 2009 Resolution denying the respondents'
second motion for reconsideration vis--vis the November 18, 2008
Decision for being a prohibited pleading, and in view of the
issuance of the entry of judgment on May 21, 2009.
The Court disagrees with the petitioners.
In the April 28, 2009 Resolution, the Court ruled:
By
a
vote of 6-6,
the
Motion
for
Reconsideration of the Resolution of 31 March 2009
is DENIED for lack of merit. The motion is denied

since there is no majority that voted to overturn the

Resolution of 31 March 2009.
The Second Motion for Reconsideration of the
Decision of 18 November 2008 is DENIED for being
a prohibited pleading, and the Motion for Leave to
Admit Attached Petition in Intervention dated 20
April 2009 and the Petition in Intervention dated 20
April 2009 filed by counsel for Ludivina T. Mas, et
al. are also DENIED in view of the denial of the
second motion for reconsideration. No further
pleadings
shall
be
entertained.
Let
entry of judgment be made in due course.
Justice Presbitero J. Velasco, Jr. wrote a Dissenting
Opinion, joined by Justices Consuelo YnaresSantiago, Renato C. Corona, Minita Chico-Nazario,
Teresita Leonardo-De Castro, and Lucas P.
Bersamin. Chief Justice Reynato S. Puno and Justice
Antonio Eduardo B. Nachura took no part. Justice
Leonardo A. Quisumbing is on leave. 1
Within 15 days from receipt of the April 28, 2009 Resolution, the
respondents filed a Motion to Amend Resolution of April 28, 2009
By
Declaring
Instead
That
Respondents'
"Motion
for
Reconsideration of the Resolution of March 31, 2009" and "Motion
for Leave to File, and to Admit Attached 'Second Motion for
Reconsideration of the Decision Dated November 18, 2008' Remain
Unresolved and to Conduct Further Proceedings Thereon, arguing
therein that a determination of the issue of constitutionality of the
16 Cityhood Laws upon a motion for reconsideration by an equally
divided vote was not binding on the Court as a valid precedent,
citing the separate opinion of then Chief Justice Reynato S. Puno
in Lambino v. Commission on Elections. 2 ISADET
Thus, in its June 2, 2009 Resolution, the Court issued the following
clarification of the April 28, 2009 Resolution, viz.:
As a rule, a second motion for reconsideration is a
prohibited pleading pursuant to Section 2, Rule
52 of the Rules of Civil Procedure which provides
that: "No second motion for reconsideration of a
judgment or final resolution by the same party shall
be entertained." Thus, a decision becomes final and
executory after 15 days from receipt of the
denial of the first motion for reconsideration.

However, when a motion for leave to file and

admit a second motion for reconsideration is
granted by the Court, the Court therefore
allows the filing of the second motion for
reconsideration. In such a case, the second
motion for reconsideration is no longer a
prohibited pleading.
In the present case, the Court voted on the
second motion for reconsideration filed by
respondent cities. In effect, the Court allowed
the
filing ofthe
second
motion
for
reconsideration. Thus, the second motion for
reconsideration was no longer a prohibited
pleading. However, for lack ofthe required
number of votes to overturn the 18 November
2008 Decision and 31 March 2009 Resolution,
the Court denied the second motion for
reconsideration
in
its
28
April
2009
Resolution. 3
As the result of the aforecited clarification, the Court resolved to
expunge from the records several pleadings and documents,
including respondents' Motion to Amend Resolution of April 28,
2009 etc.
The respondents thus filed their Motion for Reconsideration of the
Resolution of June 2, 2009, asseverating that their Motion to
Amend Resolution of April 28, 2009 etc. was not another motion for
reconsideration of the November 18, 2008 Decision, because it
assailed the April 28, 2009 Resolution with respect to the tievote on the respondents' Second Motion for Reconsideration. They
pointed out that the Motion to Amend Resolution of April 28, 2009
etc. was filed onMay 14, 2009, which was within the 15-day period
from their receipt of the April 28, 2009 Resolution; thus,
the entry of judgment had been prematurely made. They reiterated
their arguments with respect to a tie-vote upon an
issue of constitutionality.
In the September 29, 2009 Resolution, 4 the Court required the
petitioners to comment on the Motion for Reconsideration of the
Resolution of June 2, 2009within 10 days from receipt.
As directed, the petitioners filed their Comment Ad Cautelam with
Motion to Expunge.

The respondents filed their Motion for Leave to File and to Admit
Attached "Reply to Petitioners' 'Comment Ad Cautelam With Motion
to Expunge'", together with the Reply.
On November 17, 2009, the Court resolved to note the
petitioners' Comment Ad Cautelam with Motion to Expunge, to
grant the respondents' Motion for Leave to File and Admit Reply to
Petitioners' Comment Ad Cautelam with Motion to Expunge, and to
note the respondents' Reply to Petitioners' Comment Ad Cautelam
with Motion to Expunge.
On December 21, 2009, the Court, resolving the Motion to Amend
Resolution of April 28, 2009 etc. and voting anew on the Second
Motion for Reconsideration in order to reach a concurrence of a
majority, promulgated its Decision granting the motion and
declaring the Cityhood Laws as constitutional, 5 disposing thus:
WHEREFORE,
respondent
LGUs'
Motion
for
Reconsideration dated June 2, 2009, their "Motion
to Amend the Resolution of April 28, 2009 by
Declaring Instead that Respondents' 'Motion for
Reconsideration of the
Resolution of March
31,
2009' and 'Motion for Leave to File and to Admit
Attached Second Motion for Reconsideration of the
Decision Dated November 18, 2008' Remain
Unresolved and to Conduct Further Proceedings,"
dated May 14, 2009, and their second Motion for
Reconsideration of the Decision dated November
18, 2008 are GRANTED. The June 2, 2009, the
March 31, 2009, and April 31, 2009 Resolutions are
REVERSED and SET ASIDE. The entry of judgment
made on May 21, 2009 must accordingly be
RECALLED.
The instant consolidated petitions and petitions-inintervention are DISMISSED. The cityhood laws,
namely Republic Act Nos. 9389, 9390, 9391, 9392,
9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409,
9434, 9435, 9436, and 9491 are declared VALID
and CONSTITUTIONAL.
SO ORDERED.
On January 5, 2010, the petitioners filed an Ad Cautelam Motion for
Reconsideration against the December 21, 2009 Decision. 6 On the
same date, the petitioners also filed a Motion to Annul
Decision of 21 December 2009. 7 ESTaHC

On January 12, 2010, the Court directed the respondents to

comment on the motions of the petitioners. 8
On February 4, 2010, petitioner-intervenors City of Santiago,
City of Legazpi, and City of Iriga filed their separate Manifestations
with
Supplemental
Ad
Cautelam
Motions
for
Reconsideration. 9 Similar
manifestations
with
supplemental
motions for reconsideration were filed by other petitionerintervenors,
specifically:
City of Cadiz on February
15,
2010; 10 City of Batangas on February
17,
2010; 11 and
City of Oroquieta on February 24, 2010. 12 The Court required the
adverse parties to comment on the motions. 13 As directed, the
respondents complied.
On August 24, 2010, the Court issued its Resolution reinstating the
November 18, 2008 Decision. 14
On September 14, 2010, the respondents timely filed a Motion for
Reconsideration of the
"Resolution"
Dated
August
24,
2010. 15 They followed this by filingon September 20, 2010
a Motion to Set "Motion for Reconsideration of the 'Resolution'
dated August 24, 2010" for Hearing. 16 On November 19, 2010, the
petitioners sent in their Opposition [To the "Motion for
Reconsideration of 'Resolution'
dated
August
24,
2010"]. 17 On November 30, 2010, 18 the Court noted, among
others, the petitioners' Opposition.
On January 18, 2011, 19 the Court denied the respondents' Motion
to Set "Motion for Reconsideration of the 'Resolution' dated August
24, 2010" for Hearing.
Thereafter, on February 15, 2011, the Court issued the Resolution
being now challenged.
It can be gleaned from the foregoing that, as the June 2, 2009
Resolution
clarified,
the
respondents' Second
Motion
for
Reconsideration was not a prohibited pleading in view of the
Court's
voting
and
acting on it
having
the
effect of allowing the Second Motion for Reconsideration; and that
when the respondents filed their Motion for Reconsideration of the
Resolution of June
2,
2009 questioning
the
expunging of their Motion to Amend Resolution of April 28, 2009
etc.(which had been filed within the 15-day period from
receipt of the April 28, 2009 Resolution), the Court opted to
act on the Motion for Reconsideration of the Resolution of June 2,
2009 by directing the adverse parties through its September 29,
2009 Resolution to comment. The same permitting effect occurred
when the Court, by its November 17, 2009 Resolution, granted the

respondents' Motion for Leave to File and Admit Reply to

Petitioners' Comment Ad Cautelam with Motion to Expunge, and
noted the attached Reply.
Moreover, by issuing the Resolutions dated September 29, 2009
and November 17, 2009, the Court: (a) rendered ineffective the tievote under the Resolutionof April 28, 2009 and the ensuing
denial of the Motion for Reconsideration of the Resolution of March
31, 2009 for lack of a majority to overturn; (b), re-opened the
Decision of November 18, 2008 for a second look under
reconsideration; and (c) lifted the directive that no further
pleadings would be entertained. The Court in fact entertained and
acted on the
respondents' Motion
for
Reconsideration of the
Resolution of June 2, 2009. Thereafter, the Court proceeded to
deliberate
anew on the
respondents' Second
Motion
for
Reconsideration and ended up with the promulgation of the
December 21, 2009 Decision (declaring the Cityhood Laws valid
and constitutional).
It is also inaccurate for the petitioners to insist that the December
21, 2009 Decision overturned the November 18, 2008
Decision on the basis of the mereReflections of the Members of the
Court. To be sure, the Reflections were the legal opinions of the
Members and formed part of the deliberations of the Court. The
reference
in
the
December
21,
2009
Decision
to
the Reflections pointed out that there was still a pending incident
after the April 28, 2009 Resolution that had been timely filed within
15 days from its receipt, 20 pursuant to Section 10, Rule 51, 21 in
relation to Section 1, Rule 52, 22 of the Rules ofCourt. Again, the
Court did act and deliberate upon this pending incident, leading to
the issuance of the December 21, 2009 Decision (declaring the
Cityhood Laws free from constitutional infirmity). It was thereafter
that the Court rendered its August 24, 2010 Resolution (reinstating
the November 18, 2008 Decision), to correct which the
respondents' Motion for Reconsideration of the "Resolution" Dated
August 24, 2010 was filed. And, finally, the Court issued its
February 15, 2011 Resolution, reversing and setting aside the
August 24, 2010 Resolution.
It is worth repeating that the actions taken herein were made by
the Court en banc strictly in accordance with the Rules of Court and
its internal procedures. There has been no irregularity attending or
tainting the proceedings.

It also relevant to state that the Court has frequently

disencumbered itself under extraordinary circumstances from the
shackles of technicality in order to render just and equitable
relief. 23
On whether the principle of immutability of judgments and bar
by res judicata apply herein, suffice it to state that the
succession of the events recounted herein indicates that the
controversy about the 16 Cityhood Laws has not yet been resolved
with
finality.
As
such,
the
operation of the
principle ofimmutability of judgments did not yet come into play.
For the same reason is an adherence to the doctrine of res
judicata not yet warranted, especially considering that the
precedential ruling for this case needed to be revisited and set with
certainty and finality. HEDSCc
II.
Substantive Issues
The petitioners reiterate their position that the Cityhood Laws
violate Section 6 and Section 10 of Article X of the Constitution, the
Equal Protection Clause, and the right of local governments to a
just share in the national taxes.
The Court differs.
Congress clearly intended that the local government units covered
by the Cityhood Laws be exempted from the coverage of R.A. No.
9009. The apprehensions of the then Senate President with respect
to
the
considerable
disparity
between
the
income
requirement of P20 million under the Local Government Code (LGC)
prior to its amendment, and the P100 million under the amendment
introduced by R.A. No. 9009 were definitively articulated in his
interpellation of Senator
Pimentel
during
the
deliberations on Senate Bill No. 2157. The then Senate President
was cognizant of the fact that there were municipalities that then
had pending conversion bills during the 11th Congress prior to the
adoption of Senate Bill No. 2157 as R.A. No. 9009, 24 including the
municipalities
covered
by
the
Cityhood
Laws.
It
is
worthy of mention that the pertinent deliberations on Senate Bill
No. 2157 occurred on October 5, 2000 while the 11th Congress was
in session, and the conversion bills were then pending in the
Senate. Thus, the responses of Senator Pimentel made it obvious
that R.A. No. 9009 would not apply to the conversion bills then
pending deliberation in the Senate during the 11th Congress.
R.A. No. 9009 took effect on June 30, 2001, when the 12th Congress
was incipient. By reason of the clear legislative intent to exempt

the municipalities covered by the conversion bills pending during

the 11th Congress, the House of Representatives adopted
Joint Resolution No. 29, entitled Joint Resolution to Exempt Certain
Municipalities Embodied in Bills Filed in Congress before June 30,
2001 from the coverage of Republic Act No. 9009. However, the
Senate failed to act on Joint Resolution No. 29. Even so, the
House of Representatives readopted Joint Resolution No. 29 as Joint
Resolution No. 1 during the 12th Congress, 25 and forwarded Joint
Resolution No. 1 to the Senate for approval. Again, the Senate
failed to approve Joint Resolution No. 1.
At
this
juncture,
it
is
worthwhile
to
consider
the
manifestation of Senator Pimentel with respect to Joint Resolution
No. 1, to wit:
MANIFESTATION OF SENATOR PIMENTEL
House Joint Resolution No. 1 seeks to exempt
certain
municipalities
seeking
conversion
into cities from the requirement that they must
have at least P100 million in income of locally
generated
revenue,
exclusive of the
internal
revenue share that they received from the central
government as required underRepublic Act No.
9009.
The procedure followed by the House is
questionable, to say the least. The House wants the
Senate
to
do
away
with
the
income
requirement of P100 million so that, en masse, the
municipalities they want exempted could now file
bills specifically converting them into cities. The
reason they want the Senate to do it first is that
Cong.
Dodo
Macias,
chair of the
House
Committee on Local Governments, I am told, will
not
entertain
any
bill
for
the
conversion ofmunicipalities into cities unless the
issue of income requirement is first hurdled. The
House leadership therefore wants to shift the
burden of exempting certain municipalities from
the income requirement to the Senate rather than
do it itself.
That is most unusual because, in effect, the House
wants the Senate to pass a blanket resolution that
would qualify the municipalities concerned for
conversion
into cities on the
matter of income
alone. Then, at a later date, the House would pass

specific
bills
converting
the
into cities. However, income is
requirement for municipalities to
There are also the requirements on
land area.

municipalities
not only the
become cities.
population and

In effect, the House wants the Senate to tackle the

qualification of the
municipalities
they
want
converted into cities piecemeal and separately, first
is the income under the joint resolution, then the
other requirements when the bills are file to
convert specific municipalities into cities. To repeat,
this is a most unusual manner of creating cities.
My respectful suggestion is for the Senate to
request the House to do what they want to do
regarding the applications of certain municipalities
to
becomecities pursuant
to
the
requirements of the Local Government Code. If the
House wants to exempt certain municipalities from
the requirements of the Local Government Code to
become cities, by all means, let them do their
thing. Specifically, they should act on specific bills
to create cities and cite the reasons why the
municipalities
concerned
are
qualified
to
become cities. Only after the House shall have
completed what they are expected to do under the
law would it be proper for the Senate to
act on specific bills creating cities. EADSIa
In other words, the House should be requested to
finish everything that needs to be done in the
matter of converting municipalities into cities and
not do it piecemeal as they are now trying to do
under the joint resolution.
In my long years in the Senate, this is the first time
that a resort to this subterfuge is being undertaken
to favor the creation of certain cities. I am not
saying that they are not qualified. All I am
saying is, if the House wants to pass and
create cities out of certain municipalities, by
all means let them do that. But they should
do it following the requirements of the Local
Government Code and, if they want to make
certain exceptions, they can also do that too.
But they should not use the Senate as a ploy

to get things done which they themselves

should do.
Incidentally,
I
have
recommended
this
mode of action verbally to some leaders of the
House. Had they followed the recommendation, for
all I know, the municipalities they had envisioned to
be covered by House Joint Resolution No. 1 would,
by now if not all, at least some have been
converted intocities. House Joint Resolution No. 1,
the House, in effect, caused the delay in the
approval in the applications for cityhood of the
municipalities concerned.
Lastly, I do not have an amendment to House Joint
Resolution No. 1. What I am suggesting is for the
Senate to request the House to follow the
procedure outlined in the Local Government
Code which has been respected all through the
years. By doing so, we uphold the rule of law and
minimize the possibilities of power play in the
approval of bills
converting
municipalities
into cities. 26
Thereafter, the conversion bills of the respondents were individually
filed in the House of Representatives, and were all unanimously and
favorably
voted
upon
by
the
Members of the
House of Representatives. 27 The bills, when forwarded to the
Senate, were likewise unanimously approved by the Senate. 28 The
acts of both Chambers of Congress show that the exemption
clauses ultimately incorporated in the Cityhood Laws are but the
express articulations of the clear legislative intent to exempt the
respondents, without exception, from the coverage of R.A. No.
9009. Thereby, R.A. No. 9009, and, by necessity, theLGC,were
amended, not by repeal but by way of the express exemptions
being embodied in the exemption clauses.

The petitioners further contend that the new income

requirement of P100 million from locally generated sources is not
arbitrary because it is not difficult to comply with; that there are
several municipalities that have already complied with the
requirement and have, in fact, been converted into cities, such as
Sta. Rosa in Laguna (R.A. No. 9264), Navotas (R.A. No. 9387) and
San Juan (R.A. No. 9388) in Metro Manila, Dasmarias in Cavite
(R.A. No. 9723), and Bian in Laguna (R.A. No. 9740); and that
several other municipalities have supposedly reached the
income of P100 million from locally generated sources, such as
Bauan in Batangas, Mabalacat in Pampanga, and Bacoor in Cavite.
The contention of the petitioners does not persuade.
As indicated in the Resolution of February 15, 2011, fifty-nine (59)
existing cities had failed as of 2006 to post an average annual
income of P100 million basedon the figures contained in the
certification dated December 5, 2008 by the Bureau of Local
Government.
The
large
number of existing cities,
virtually
50% ofthem, still unable to comply with the P100 million threshold
income five years after R.A. No. 9009 took effect renders it
fallacious and probably unwarranted for the petitioners to claim
that the P100 million income requirement is not difficult to comply
with.
In this regard, the deliberations on Senate Bill No. 2157 may prove
enlightening, thus:
Senator Osmea III.
And could the gentleman help clarify why a
municipality would want to be converted
into a city?
Senator Pimentel.
There is only one reason, Mr. President, and it is
not hidden. It is the fact that once converted
into a city, the municipality will have
roughly more than three times the share
that it would be receiving over the internal
revenue allotment than it would have if it
were to remain a municipality. So more or
less three times or more.
Senator Osmea III.

Is it the additional funding that they will be able to

enjoy from a larger share from the internal
revenue allocations?
Senator Pimentel.
Yes, Mr. President.
Senator Osmea III.
Now, could the gentleman clarify, Mr. President,
why in the original Republic Act No. 7160,
known
as
the Local
Government
Code of 1991, such a wide gap was made
between a municipality what a
municipality would earn and a city?
Because essentially, to a person's mind,
even with this new requirement, if approved
by Congress, if a municipality is earning
P100 million and has a population of more
than 150,000 inhabitants but has less than
100 square kilometers, it would not qualify
as a city. cAEDTa
Senator Pimentel.
Yes.
Senator Osmea III.
Now would that not be quite arbitrary on the
part of the municipality?
Senator Pimentel.
In fact, Mr. President, the House version restores
the "or". So, this is a matter that we can
very well take up as a policy issue. The
chair of the committee does not say that we
should, as we know, not listen to arguments
for the restoration of the word "or" in the
population or territorial requirement.
Senator Osmea III.
Mr. President, my point is that, I agree with the
gentleman's "and", but perhaps we should
bring down the area. There are certainly
very crowded places in this country that are
less than 10,000 hectares 100 square

kilometers is 10,000 hectares. There might

only be 9,000 hectares or 8,000 hectares.
And it would be unfair if these municipalities
already earning P100,000,000 in locally
generated
funds
and
have
a
population of over 150,000 would not be
qualified because of the simple fact that the
physical area does not cover 10,000
hectares.
Senator Pimentel.
Mr. President, in fact, in Metro Manila there are any
number of municipalities. San Juan is a
specific example which, if we apply the
present requirements, would not qualify:
100
square
kilometers
and
a
population of not less than 150,000.
But my reply to that, Mr. President, is that they do
not have to become a city?
Senator Osmea III.
Because of the income.
Senator Pimentel.
But they are already earning a lot, as the
gentleman said. Otherwise, the danger
here, if we become lax in the
requirements, is the metropolis-located
local governments would have more
priority in terms of funding because
they would have more qualifications to
become a city compared to far-flung
areas in Mindanao or in the Cordilleras,
or whatever.
Therefore, I think we should not probably ease
up on the requirements. Maybe we can
restore the word "or" so that if they do not
have the 100 square kilometers of territory,
then if they qualify in terms of population
and income, that would be all right, Mr.
President.
Senator Osmea III.

Mr. President, I will not belabor the point at this

time. I know that the distinguished
gentleman
is
considering
several
amendments to the Local Government
Code. Perhaps this is something that could
be further refined at a later time, with his
permission.
So I would like to thank the gentleman for his
graciousness in answering our questions.
Senator Pimentel.
I also thank the gentleman, Mr. President. 29
The Court takes note of the fact that the municipalities cited by the
petitioners as having generated the threshold income of P100
million from local sources, including those already converted
into cities, are either in Metro Manila or in provinces close to Metro
Manila. In comparison, the municipalities covered by the Cityhood
Laws are spread out in the different provinces of the Philippines,
including the Cordillera and Mindanao regions, and are considerably
very distant from Metro Manila. This reality underscores the danger
the enactment of R.A. No. 9009 sought to prevent, i.e., that "the
metropolis-located local governments would have more priority in
terms of funding because they would have more qualifications to
become a city compared to the far-flung areas in Mindanao or in the
Cordilleras, or whatever," actually resulting from the abrupt
increase in the income requirement. Verily, this result is antithetical
to what the Constitution and LGC have nobly envisioned in
favor of countryside development and national growth. Besides,
this result should be arrested early, to avoid the unwanted divisive
effect on the entire country due to the local government units
closer to the National Capital Region being afforded easier access
to the bigger share in the national coffers than other local
government units.
There should also be no question that the local government units
covered by the Cityhood Laws belong to a class of their own. They
have proven themselves viable and capable to become
component cities of their respective provinces. They are and have
been
centers of trade
and
commerce,
points of convergenceof transportation, rich havens of agricultural,
mineral, and other natural resources, and flourishing tourism spots.
In his speech delivered on the floor of the Senate to sponsor House
Joint Resolution No. 1, Senator Lim recognized such unique
traits, 30 viz.: HEDSIc

It must be noted that except for Tandag and

Lamitan,
which
are
both
second-class
municipalities in terms of income, all the rest are
categorized by the Department of Finance as firstclass municipalities with gross income of at least
P70 million as per Commission of Audit Report for
2005. Moreover, Tandag and Lamitan, together with
Borongan, Catbalogan, and Tabuk, are all provincial
capitals.
The more recent income figures of the 12
municipalities, which would have increased further
by this time, indicate their readiness to take on the
responsibilities of cityhood.
Moreover, the municipalities under consideration
are leading localities in their respective provinces.
Borongan, Catbalogan, Tandag, Batac and Tabuk
are ranked number one in terms of income among
all the municipalities in their respective provinces;
Baybay and Bayugan are number two; Bogo and
Lamitan are number three; Carcar, number four;
and Tayabas, number seven. Not only are they
pacesetters in their respective provinces, they are
also among the frontrunners in their regions
Baybay, Bayugan and Tabuk are number two
income-earners in Regions VIII, XIII, and CAR,
respectively; Catbalogan and Batac are number
three in Regions VIII and I, respectively; Bogo,
number five in Region VII; Borongan and Carcar are
both number six in Regions VIII and VII,
respectively. This simply shows that these
municipalities are viable.
Petitioner League of Cities argues that there exists no issue with
respect to the cityhood of its member cities, considering that they
became cities in full compliance with the criteria for conversion at
the time of their creation.
The Court considers the argument too sweeping. What we pointed
out was that the previous income requirement of P20 million was
definitely not insufficient to provide the essential government
facilities,
services,
and
special
functions vis--vis the
population of a component city. We also stressed that the increased
income requirement of P100 million was not the only conclusive
indicator for any municipality to survive and remain viable as a
component city. These observations were unerringly reflected in the

respective
incomes of the
fifty-nine
(59)
members of the League of Cities that have still failed, remarkably
enough, to be compliant with the new requirement of the P100
million threshold income five years after R.A. No. 9009 became law.
Undoubtedly, the imposition of the income requirement of P100
million from local sources under R.A. No. 9009 was arbitrary. When
the sponsor of the law chose the specific figure of P100 million, no
research or empirical data buttressed the figure. Nor was there
proof that the proposal took into account the after-effects that were
likely to arise. As already mentioned, even the danger the
passage of R.A. No. 9009 sought to prevent might soon become a
reality. While the Constitution mandates that the creation of local
government units must comply with the criteria laid down in
the LGC,it cannot be justified to insist that the Constitution must
have to yield to every amendment to the LGC despite such
amendment imminently producing effects contrary to the original
thrusts of the LGC to
promote
autonomy,
decentralization,
countryside development, and the concomitant national growth.
Moreover,
if
we
were
now
to
adopt
the
stringent
interpretation of the Constitution the petitioners are espousing, we
may have to apply the same restrictive yardstick against the
recently converted cities cited by the petitioners, and find
two of them whose conversion laws have also to be struck down for
being unconstitutional. The two laws are R.A. No. 9387 31 and R.A.
No. 9388, 32 respectively converting the municipalities of San Juan
and Navotas into highly urbanized cities. A cursory reading of the
laws indicates that there is no indication of compliance with the
requirements imposed by the LGC,for, although the two local
government units concerned presumably complied with the income
requirement of P50 million under Section 452 of the LGC and the
income requirement of P100 million under the amended Section
450 of the LGC,they obviously did not meet the requirements set
forth under Section 453 of theLGC,to wit:
Section 453. Duty to Declare Highly Urbanized
Status. It shall be the duty of the President to
declare a city as highly urbanized within thirty (30)
days after it shall have met the minimum
requirements prescribed in the immediately
preceding Section, upon proper application therefor
and ratification in a plebiscite by the qualified
voters therein.
Indeed, R.A. No. 9387 and R.A. No. 9388 evidently show that the
President had not classified San Juan and Navotas as highly

urbanized cities upon proper application and ratification in a

plebiscite by the qualified voters therein. A further perusal of R.A.
No. 9387 reveals that San Juan did not qualify as a highly urbanized
city because it had a population of only 125,558, contravening the
required
minimum
population of 200,000
under
Section
452 of the LGC.Such non-qualification as a component city was
conceded
even
by
Senator
Pimentel
during
the
deliberations on Senate Bill No. 2157. ADScCE
The petitioners' contention that the Cityhood Laws violated their
right to a just share in the national taxes is not acceptable.
In this regard, it suffices to state that the share of local government
units is a matter of percentage under Section 285 of the LGC,not a
specific amount. Specifically, the share of the cities is 23%,
determined on the basis of population (50%), land area (25%), and
equal sharing (25%). This share is also dependenton the
number of existing cities,
such
that
when
the
number of cities increases, then more will divide and share the
allocation for cities. However, we have to note that the allocation
by the National Government is not a constant, and can either
increase or decrease. With every newly converted city becoming
entitled to share the allocation for cities, the percentage of internal
revenue allotment (IRA) entitlement of each city will decrease,
although the actual amount received may be more than that
received in the preceding year. That is a necessary
consequence of Section 285 and Section 286 of the LGC.
As elaborated here and in the assailed February 15, 2011
Resolution, the Cityhood Laws were not violative of the Constitution
and the LGC.The respondents are thus also entitled to their just
share in the IRA allocation for cities. They have demonstrated their
viability as component cities of their respective provinces and are
developing continuously, albeit slowly, because they had previously
to share the IRA with about 1,500 municipalities. With their
conversion into component cities, they will have to share with only
around 120 cities.
Local government units do not subsist only on locally generated
income, but also depend on the IRA to support their development.
They can spur their own developments and thereby realize their
great potential of encouraging trade and commerce in the far-flung
regions of the country. Yet their potential will effectively be stunted
if those already earning more will still receive a bigger share from
the national coffers, and if commercial activity will be more or less
concentrated only in and near Metro Manila.
III.

Conclusion
We should not ever lose sight of the fact that the 16 cities covered
by the Cityhood Laws not only had conversion bills pending during
the 11th Congress, but have also complied with the
requirements of the LGC prescribed prior to its amendment by R.A.
No. 9009. Congress undeniably gave these cities all the
considerations that justice and fair play demanded. Hence, this
Court should do no less by stamping its imprimatur to the clear and
unmistakable legislative intent and by duly recognizing the certain
collective wisdom of Congress.
WHEREFORE, the Ad Cautelam Motion for Reconsideration (of the
Decision dated 15 February 2011) is denied with finality.
SO ORDERED.
Corona, C.J., Carpio Morales, Velasco, Jr., Nachura, Leonardo-de
Castro, Brion, Peralta, Del Castillo, Villarama, Jr., Perez,
Mendoza and Sereno, JJ., concur.

as amended by Republic Act No. 9009. The proposed amendment

was intended to correct the infirmities in the Cityhood Laws as cited
by this Court in its 18 November 2008 Decision. 2
Subsequently, the Court rendered three more decisions: (1) 21
December 2009, declaring the Cityhood Laws constitutional; (2)
24 August 2010, declaring the Cityhood Laws unconstitutional;
and
(3)
15
February
2011
declaring
the
Cityhood
Laws constitutional. Clearly, there were three reversals or flipflops in this case. SCETHa
In the Resolution of 15 February 2011, the majority upheld the
constitutionality of the 16 Cityhood Laws, declaring that (1) the
Cityhood Laws do not violate Section 10, Article X of the
Constitution; and (2) the Cityhood Laws do not violate Section 6,
Article X and the equal protection clause of the Constitution.
I reiterate my unwavering position from the start that the 16
Cityhood Laws are unconstitutional.

Carpio, J., with dissenting opinion.

I.

Abad, J., with concurring opinion.

The Cityhood Laws

Government Code.

Separate Opinions
CARPIO, J., dissenting:
This Court has made history with its repeated flip-flopping 1 in this
case.
On 18 November 2008, the Court rendered a decision
declaring unconstitutional the 16 Cityhood Laws. The decision
became final after the denial of two motions for reconsideration
filed by the 16 municipalities. An Entry of Judgment was
made on 21 May 2009. The decision was executed (1) when the
Department of Budget and Management issued LBM (Local Budget
Memorandum) No. 61 on 30 June 2009, providing for the final
Internal Revenue Allotment for 2009 due to the reversion of 16
newly
created cities to
municipalities;
and
(2)
when
the Commission on Elections issued Resolution No. 8670 on 22
September 2009, directing that voters in the 16 municipalities shall
vote not as cities but as municipalities in the 10 May
2010 elections. In addition, fourteen Congressmen, having
jurisdiction over the 16 respondent municipalities, filed House Bill
6303 seeking to amend Section 450 of the Local Government Code,

are

laws

other

than the

Local

In sustaining the constitutionality of the 16 Cityhood Laws, the

majority ruled in the Resolution of 15 February 2011 that "in effect,
the Cityhood Laws amended RA No. 9009 through the exemption
clauses found therein. Since the Cityhood Laws explicitly exempted
the concerned municipalities from the amendatory RA No.
9009, such Cityhood Laws are, therefore, also amendments
to the LGC itself." In the Resolution denying petitioner's motion
for reconsideration, the majority stated that "RA 9009, and, by
necessity, the LGC,were amended, . . . by way of the express
exemptions embodied in the exemption clauses."
This is egregious error.
Nowhere in the plain language of the Cityhood Laws can this
interpretation be discerned. Neither the title nor the body of the
Cityhood Laws sustains such conclusion. Simply put, there is
absolutely nothing in the Cityhood Laws to support the majority
decision that the Cityhood Laws further amended the Local
Government Code, which exclusively embodies the essential
requirements for the creation of cities, including the conversion of a
municipality into a city.
An "amendment" refers to a change or modification to a previously
adopted law. 3 An amendatory law merely modifies a specific

provision
or
provisions of a
previously
adopted
law. 4 Indisputably, an amendatory law becomes an integral
part of the law it seeks to amend.
On the contrary, each Cityhood Law contains a uniformly worded
Separability Clause which expressly states:
Separability Clause. If, for any reason or
reasons, any part or provision of this Charter
shall
be
held unconstitutional,
invalid
or inconsistent with the Local Government
Code of 1991, the other parts or provisions hereof
which are not affected thereby shall continue to be
in full force and effect. Moreover, in cases where
this Charter is silent or unclear, the pertinent
provisions of the Local
Government
Code shall
govern,
if
so
provided
therein. 5(Emphasis
supplied)
Each Cityhood Law states that if any of its provisions
is "inconsistent with the Local Government Code," the other
consistent provisions "shall continue to be in full force and
effect." The clear and inescapable implication is that any
provision in each Cityhood Law that is "inconsistent with
the Local Government Code" has no force and effect in
short, void and ineffective. Each Cityhood Law expressly and
unequivocally
acknowledges
the
superiorityof the
Local
Government Code, and that in case of conflict, the Local
Government Code shall prevail over the Cityhood Law.
Clearly, the Cityhood Laws do not amend the Local Government
Code, and the Legislature never intended the Cityhood Laws to
amend the Local Government Code. The clear intent and express
language of the Cityhood Laws is for these laws to conform to
the Local Government Code and not the other way around.
To repeat, every Cityhood Law unmistakably provides that any
provision in the Cityhood Law that is inconsistent with the Local
Government Code is void. It follows that the Cityhood Laws cannot
be construed to authorize the creation of cities that have not met
the prevailing P100 million income requirement prescribed without
exception in the Local Government Code.
Moreover, Congress, in providing in the Separability Clause that the
Local Government Code shall prevail over the Cityhood Laws, treats
the Cityhood Laws as separate and distinct from the Local
Government Code. In other words, the Cityhood Laws do not
form integral parts of the Local Government Code but are
separate and distinct laws. There is therefore no question that

the Cityhood Laws are laws other than the Local Government
Code. As such, the Cityhood Laws cannot stipulate an exception
from the requirements for the creation of cities, prescribed in the
Local Government Code, without running afoul of the explicit
mandate of Section 10, Article X of the 1987 Constitution. aATEDS
This constitutional provision reads:
No province, city, municipality, or barangay shall be
created, divided, merged, abolished or its boundary
substantially altered, except in accordance with
the
criteria
established
in
the local
government code and subject to approval by a
majority of the votes cast in a plebiscite in the
political units directly affected. (Emphasis supplied)
The Constitution is clear. The creation of local government units
must follow the criteria established in the Local Government
Code itself and not in any other law. There is only one Local
Government Code. 6 To avoid discrimination and ensure uniformity
and equality, the Constitution expressly requires Congress to
stipulate in the Local Government Code itself all the criteria
necessary for the creation of a city, including the conversion of a
municipality into a city. Congress cannot write such criteria in any
other law, like the Cityhood Laws.
II.
The increased income requirement of P100
is neither arbitrary nor difficult to comply.

million

The majority resolution of 15 February 2011 states that "the

imposition of the P100 million average annual income requirement
for the creation ofcomponent cities was arbitrarily made." The
majority resolution further declares: ". . . there was no evidence or
empirical data, such as inflation rates, to support the
choice of this amount. The imposition of a very high income
requirement of P100
million,
increased
from
P20
million,
was simply to make it extremely difficult for municipalities
to become component cities."
This is glaring error.
In stating that there is no evidence to support the increased income
requirement, the majority is requiring the Legislature, the sole lawmaking body underthe Constitution, to provide evidence justifying
the economic rationale, like inflation rates, for the increase in
income requirement. The Legislature, in enacting RA No. 9009, is
not required by the Constitution to show the courts data like

inflation figures to support the increased income requirement.

Besides, even assuming the inflation rate is zero, this Court cannot
invalidate the increase in income requirement on such ground. A
zero inflation rate does not bar the Legislature from
increasing
the
income
requirement
to
convert
a
municipality into a city, or increasing taxes or tax rates, or
increasing capital requirements for businesses. This Court
should not venture into areas of analyses obviously beyond its
competence.
As long as the increased income requirement is not impossible to
comply, such increase is a policy determination involving the
wisdom of the law, which exclusively lies within the province of the
Legislature. When the Legislature enacts laws increasing taxes, tax
rates, or capital requirements for businesses, the Court cannot
refuse to apply such laws on the ground that there is no economic
justification for such increases. Economic, political or social
justifications for the enactment of laws go into the wisdom of the
law, outside the purview of judicial review. This Court cannot refuse
to apply the law unless the law violates a specific provision of the
Constitution. There is plainly nothing unconstitutional in increasing
the income requirement from P20 million to P100 million because
such increase does not violate any express or implied
provision of the Constitution.

enactment of the
Cityhood
Laws
by
the
same
13th
Congress. 9 Prior to this, the City of Sta. Rosa, which also met the
P100 million income requirement, was created through Republic Act
No.
9264. 10Subsequently,
the cities of Dasmarias
in
Cavite 11 and Bian in Laguna 12 were created in full compliance
with the P100 million income criterion.
Further disproving the majority's erroneous conclusion, an
additional twenty-one (21) municipalities have satisfied the P100
million
income
requirement
for
the
creation of cities. 13 Accordingly,
petitioner League of Cities has
endorsed
the
cityhood
application of these
21
municipalities. 14 These municipalities are:cHDAIS
Cabuyao and San Pedro (Laguna)
Cainta, Taytay, and Binangonan (Rizal)
Bacoor, Gen. Trias, Imus, Carmona, and Silang
(Cavite)
San Pedro (Laguna)
Pantabangan (Nueva Ecija)
Calaca, Sto. Tomas,
(Batangas)

Bauan

and

Nasugbu

The majority declares that the P100 million income requirement

under RA No. 9009 was imposed "simply to make it extremely
difficult
for
the
municipalities
to
become
component cities." In short, the majority is saying that the
Legislature, out of sheer whim or spite at municipalities, increased
the income requirement from P20 million to P100 million. Thus, the
majority applied the P20 million income requirement under the
repealed law, not the P100 million income requirement under the
prevailing law. Yet, the majority does not state that the P100 million
income requirement is unconstitutional. The majority simply refuses
to apply the prevailing law, choosing instead to apply a repealed
law. There is neither law nor logic in the majority decision.

Compliance by these municipalities with the P100 million income

requirement underscores the fact that the P100 million income
requirement is not difficult to comply at all, contrary to the baseless
and speculative conclusion in the majority decision. In short, the
majority decision is based on patently and undeniably false and
erroneous premises.

The majority's conclusion that the Legislature increased the income

requirement from P20 million to P100 million "simply to make it
difficult
for
the
municipalities
to
become
component cities" is not only unfair to the Legislature, it is also
grossly erroneous. Contrary to the majority's baseless conclusion,
the increased income requirement of P100 million is not at all
difficult to comply. As pointed out by petitioner, the cities of San
Juan 7 and Navotas, 8 which met the P100 million income
requirement, were created at the same time as the

Indisputably, right after the enactment of RA No. 9009, Congress

passed laws converting municipalities into cities using the new
P100 million income requirement. Subsequently, Congress enacted
the 16 Cityhood Laws using the old P20 million income
requirement. Thereafter, Congress again passed laws converting
additional municipalities into cities using the P100 million income
requirement. The 16 Cityhood Laws stick out like a sore thumb,
starkly showing an obvious violation of the equal protection clause.
The Cityhood Laws create distinctly privileged cities with only P20

Mauban in (Quezon)
Marilao, Sta. Maria and Norzagaray (Bulacan)
Limay (Bataan)

million annual income, discriminating against cities with P100

million
annual
income
created before
and
after the
enactment of the Cityhood Laws. This kind of discrimination is
precisely what Section 10, Article X of the Constitution seeks to
prohibit when it commands that "no . . . city . . . shall be
created . . . except in accordance with the criteria established in
the local government code."

requirement. Besides, it is totally pointless to fault the cities of San

Juan and Navotas for an unperformed duty of the President.

The majority harp on the fact that 59 existing cities had failed
as of 2006 to post an average annual income of P100 million.

In the Resolution of 15 February 2011, the majority declared that

petitioner's protest against the reduction of their just share in the
Internal Revenue Allotment "all boils down to money," criticizing
petitioners for overlooking the alleged need of respondent
municipalities to become channels of economic growth in the
countryside.

Suffice it to state that there is no Constitutional or statutory

requirement for the 59 existing cities to comply with the P100
million
income
requirement.Obviously,
these cities were
already cities prior
to
the
amendment of the Local
Government Code providing for the increased income
requirementof P100 million. In other words, at the time of their
creation, these cities have complied with the criteria prescribed
under the old Local Government Code for the creation of cities, and
thus are not required to comply with the P100 million income
requirement of the prevailing Local Government Code. It is utterly
misplaced and grossly erroneous to cite the "non-compliance" by
the
59
existing cities with
the
increased
income
requirement of P100 million to conclude that the P100 million
income requirement is arbitrary and difficult to comply.
Moreover, as stated, the majority do not find the increased income
requirement of P100 million unconstitutional or unlawful. Unless the
P100 million income requirement violates a provision of the
Constitution or a law, such requirement for the creation of a city
must be strictly complied with. Any local government unit applying
for cityhood, whether located in or outside the metropolis and
whether within the National Capital Region or not, must meet the
P100 million income requirement prescribed by the prevailing Local
Government Code. There is absolutely nothing unconstitutional or
unlawful if the P100 million income requirement is easily complied
with by local government units within or near the National Capital
Region. The majority's groundless and unfair discrimination against
these metropolis-located local government units must necessarily
fail.
Further, that San Juan and Navotas had not allegedly been
classified by the President as highly urbanized cities, pursuant to
Section 453 of the Local Government Code, does not signify that
these cities do not meet the P100 million income requirement. In
fact, the majority concedes that it is presumed that San Juan and
Navotas cities have complied with the P100 million income

III.
The reduction of the share in the Internal Revenue
Allotment
will adversely affect the cities' economic situation.

The majority gravely loses sight of the fact that "the

members of petitioner League of Cities are also in need of the same
resources, and are responsible for development imperatives that
need to be done for almost 40 million Filipinos, as compared to only
1.3 million Filipinos in the respondent municipalities." As pointed
out by petitioner, "this is just about equal to the
population of Davao City, whose residents, on a per capita basis,
receive less than half of what respondent municipalities' residents
would receive if they become cities. Stated otherwise, for every
peso that each Davaoeo receives, his counterpart in the
respondent municipality will receive more than two
pesos." IcHDCS
In addition, the majority conveniently forgets that members of the
LCP have more projects, more contractual obligations, and more
employees than respondent municipalities. If their share in the
Internal Revenue Allotment is unreasonably reduced, it is possible,
even expected, that these cities may have to lay-off workers and
abandon projects, greatly hampering, or worse paralyzing, the
delivery of much needed public services in their respective
territorial jurisdictions.
Obviously, petitioner's protest does not boil down to money. It
boils
down
to
equity
and
fairness,
rational
allocation of scarce resources, and above all, faithful
compliance with an express mandatory provision of the
Constitution. No one should put a monetary value to compliance
with an express command of the Constitution. Neither should any
one, least of all this Court, disregard a patent violation of the
Constitution just because the issue also involves monetary
recovery. To do so would expose the stability of the Constitution to
the corrosive vagaries of the marketplace.

IV.
Not
substantial
but outright violation of the Constitution.

compliance,

In his Concurring Opinion to the Resolution of 15 February 2011,

Justice Roberto A. Abad stated, "These new cities have not
altogether been exempted from the operation of the Local
Government Code covering income requirement. They have been
expressly
made
subject
to
the
lower
income
requirement ofthe old code. There remains, therefore,
substantial compliance with the provision of Section 10,
Article X of the Constitution."
This is gross error.
There is a wide disparity an P80 million difference in the
income requirement of P20 million under the old Local Government
Code and the P100 million requirement under the prevailing Local
Government Code. By any reasonable yardstick known to man
since the dawn of civilization, compliance with the old income
requirement, which is only 20% compliance with the new income
requirement under the prevailing law, cannot be deemed
"substantial compliance." It is like saying that those who obtain a
general average of 20% in the Bar Examinations are in "substantial
compliance" with the requirement for admission to the Bar where
the highest possible score is 100%.
RA No. 9009 amended the Local Government Code precisely
because the criteria in the old Local Government Code were no
longer sufficient. In short, RA No. 9009 repealed the old income
requirement of P20 million, a requirement that no longer exists in
our statute books. Compliance with the old income requirement is
compliance with a repealed, dead, and non-existent law a totally
useless, futile, and empty act. Worse, compliance with the old
requirement is an outright violation of the Constitution which
expressly commands that "no . . . city . . . shall be created . . .
except in accordance with the criteria established in
the local government code." To repeat, applying what Justice
Abad calls "the lower income requirement of the old code" is
applying a repealed, dead, and non-existent law, which is exactly
what the majority decision has done.
The
invocation
here of "substantial
compliance" of the
Constitution reminds us of what Justice Calixto Zaldivar wrote in his
dissenting opinion in Javellana v. Executive Secretary: 15 "It would
be indulging in sophistry to maintain that the voting in the citizens
assemblies amounted to a substantial compliance with the

requirements prescribed in Section 1 of Article XV of the 1935

Constitution." The same can be said in this case.
A final point. There must be strict compliance with the express
command of the Constitution that "no city . . . shall be created .
. . except in accordance with the criteria established in
the local
government
code." Substantial
compliance
is
insufficient because it will discriminate against all other cities that
were created before and after the enactment of the Cityhood
Laws in strict compliance with the criteria in the Local Government
Code,
as
amended
by RA
No.
9009.
The
conversion of municipalities into new cities means an increase in
the Internal Revenue Allotment of the former municipalities and a
corresponding decrease in the Internal Revenue Allotment of all
other existing cities. There must be strict, not only substantial,
compliance with the constitutional requirement because the
economic lifeline of existing cities may be seriously affected. Thus,
the invocation of "substantial compliance" with constitutional
requirements is clearly misplaced in this case.
V.
Conclusion
To repeat, the Constitution expressly requires Congress to stipulate
in the Local Government Code itself all the criteria necessary for
the creation of a city, including the conversion of a municipality into
a city. To avoid discrimination and ensure uniformity and equality,
such criteria cannot be embodied in any other law except the Local
Government Code. In this case, the Cityhood Laws, which are
unmistakably laws other than the Local Government Code, provide
an exemption from the increased income requirement for the
creation of cities under Section 450 of the Local Government Code,
as amended by RA No. 9009. Clearly, the Cityhood Laws contravene
the
letter
and
intent of Section
10,
Article
X of the
Constitution. ADSTCI
Moreover, by express provision in the Separability Clause of each
Cityhood Law, in case of inconsistency between the Cityhood Law
and the Local Government Code, the latter shall prevail. Thus, the
P100 million income requirement in the Local Government
Code prevails over the P20 million income requirement under the
Cityhood Laws.
Finally, this Court must be true to its sworn duty to uphold, defend,
and protect the Constitution fully and faithfully, without
"indulging in sophistry" or seeking refuge behind a patently dubious
invocation of "substantial compliance" with the Constitution.

Accordingly,
I
vote
to GRANT the
motion
reconsideration of the League of Cities of the Philippines.

for

ABAD, J., concurring:

The Court was divided in its original decision of November 18, 2008
in the case. A majority of six Justices voted to annul the laws, five
members dissented, and four took no part (6-5-4), as follows:
Majority (annul) Minority (uphold) No Part

I fully concur in the resolution that Justice Lucas Bersamin wrote for
the majority. I would want, however, to reply briefly to the charge
that the Court has been guilty of "flip-plopping" in this case. Since
the Court is a collegial body, the implication is that the
majority of its members have collectively flip-flopped in their
decisions.

1. J. Quisumbing 1. J. Corona 1. C.J. Puno

But the charge is unfair as it is baseless. The Court is not a living

person whose decisions and actions are ruled by the whim of one
mind. As a collegial body, the Court acts by consensus among its
fifteen members. And total agreement is not always attainable. This
is especially true where the political, social, or economic stakes
involved are high or affect a great number of people and the
views of the individual members are closely divided.

5. J. Velasco 5. J. De Castro leave)

The ideal is to have an early consensus among the Court's

members in any given dispute. But, given the variety of their
learning and experiences as former judges, trial lawyers,
government counsels, academicians, and administrators, that is
hardly an easy objective. Justices look at cases through different
lenses. Disagreements in their conclusions can and often happen.
Thus, they are forced to take a vote and the will of the majority
prevails.
It is when the votes among its members are closely divided as in
this case that the decision of the Court could, on a motion for
reconsideration, swing to the opposite side and, at times on a
second motion for reconsideration, revert to the original side. The
losers often malign this as flip-flopping by the Court.
This of course is a lie in the sense that it tends to picture the Court
as a silly, blundering, idiot which cannot make up its mind. The fact
is that the shifts in the Court's decisions in this case were not at all
orchestrated as the circumstances will show. They were the
product of honest disagreements.
Congress
passed
a
number of laws
converting
sixteen
municipalities into cities. The League of Cities assailed these laws
as unconstitutional on the ground that the sixteen municipalities
involved did not meet the P100 million minimum income
requirement of the Local Government Code. For their part, the
municipalities countered that their laws constituted valid legislative
amendments of such requirement.

2. J. Carpio 2. J. Azcuna 2. J. Tinga

3. J. Martinez 3. J. Nazario 3. J. Nachura
4. J. Morales 4. J. Reyes 4. J. Santiago (on

6. J. Brion
Notably, the majority won by just 1 vote. Their lead firmed up,
however, with an increase of 2 votes when the Court took up the
motion for reconsideration ofthe sixteen municipalities on March
31, 2009, thus:
Majority (annul) Minority (uphold) No Part
1. J. Quisumbing 1. J. Santiago 1. C.J. Puno
2. J. Carpio 2. J. Corona 2. J. Nachura
3. J. Martinez 3. J. Nazario
4. J. Morales 4. J. Velasco
5. J. Tinga 5. J. De Castro
6. J. Brion
7. J. Peralta
In the above, Justice Velasco opted to leave the majority, but he
was quickly replaced by J. Tinga, who decided to take part in the
second voting, and Justice Peralta, a newcomer. The minority
maintained its five votes because, although Justices Reyes and
Azcuna retired, Justice Velasco who changed side and Justice
Santiago who now took part replaced them. Chief Justice Puno and
Justice Nachura stayed out of it. The vote was 7-5-2. ITSCED
But when on April 28, 2009 the Court acted on the sixteen
municipalities' second motion for reconsideration, the vote
resulted on a tie. Thus:
Even votes (annul) Even votes (uphold) No Part
1. J. Carpio 1. J. Santiago 1. C.J. Puno

2. J. Martinez 2. J. Corona 2. J. Nachura

Majority (annul) Minority (uphold) No Part

3. J. Morales 3. J. Nazario 3. J. Quisumbing

1. J. Carpio 1. C.J. Corona 1. J. Nachura

4. J. Tinga 4. J. Velasco (on leave)

2. J. Morales 2. J. Velasco 2. J. Del Castillo

5. J. Brion 5. J. De Castro

3. J. Brion 3. J. De Castro

6. J. Peralta 6. J. Bersamin

4. J. Peralta 4. J. Bersamin

In the above, the majority lost 1 vote owing to Justice Quisumbing

going on leave. On the other hand, the minority gained 1 vote from
Justice Bersamin, a newcomer. Three took no part, resulting in a
vote of 6-6-3. The Court was divided in its interpretation of this 6-6
result. One group argued that the failure ofthe minority to muster a
majority vote had the effect of maintaining the Court's last ruling.
Some argued, however, that since the Constitution required a
majority vote for declaring laws passed by Congress
unconstitutional,
the
new
voting
restored
the
constitutionality of the subject laws.
When a re-voting took place on December 21, 2009 to clear up the
issue, the result shifted in favor of the sixteen municipalities, thus:
Majority (uphold) Minority (annul) No Part
1. J. Corona 1. J. Carpio 1. C.J. Puno
2. J. Velasco 2. J. Morales 2. J. Nachura
3. J. De Castro 3. J. Brion 3. J. Del Castillo

5. J. Villarama 5. J. Abad
6. J. Mendoza 6. J. Perez
7. J. Sereno
Notably, Justice Villarama changed his vote and joined the
rank of those who opposed the conversion of the sixteen
municipalities into cities. Two new Justices (Mendoza and Sereno)
joined the new majority of seven that voted to annul the subject
laws. On the other hand, although one of their members left for the
other side, the 6 votes of the new minority remained because a
new member, Justice Perez, joined it.
The sixteen municipalities filed a motion for reconsideration of the
new decision and voting took place on February 15, 2011. Justice
Mendoza
changed
side
and
voted
to
uphold
the
constitutionality of the laws of the sixteen municipalities, resulting
in a shift in the majority as follows:
Majority (uphold) Minority (annul) No Part

4. J. Bersamin 4. J. Peralta

1. J. Corona 1. J. Carpio 1. J. Nachura

5. J. Abad

2. J. Velasco 2. J. Morales 2. J. Del Castillo

6. J. Villarama

3. J. De Castro 3. J. Brion

In the above, two Justices, Tinga and Martinez, from the former
majority retired, leaving their group just 4 votes. On the other hand,
although two Justices, Santiago and Nazario, also retired from the
former minority, two new members, Justices Abad and Villarama,
joined their rank. Justice Del Castillo, a new member, did not take
part like the rest. The new vote was 6-4-3 (2 vacancies), with the
new majority voting to uphold the constitutionality of the laws that
converted the sixteen municipalities into cities.
But their victory was short-lived. When the Court voted on the
motion for reconsideration of the losing League of Cities on August
24, 2010, three new members, Justices Perez, Mendoza, and
Sereno, joined the Court. The majority shifted anew, thus:

4. J. Bersamin 4. J. Peralta
5. J. Abad 5. J. Villarama
6. J. Perez 6. J. Sereno
7. J. Mendoza
To recapitulate what took place in this case:
One. The Justices did not decide to change their minds on a mere
whim. The two sides filed motions for reconsideration in the case
and the Justices had no options, considering their divided views,
but perform their duties and vote on the same on the dates the
matters came up for resolution. DcTaEH

The Court is no orchestra with its members playing one tune under
the baton of a maestro. They bring with them a diversity of views,
which is what the Constitution prizes, for it is this diversity that
filters out blind or dictated conformity.
Two. Of twenty-three Justices who voted in the case at any of its
various stages, twenty Justices stood by their original positions.
They never reconsidered their views. Only three did so and
not on the same occasion, showing no wholesale change of votes at
any time.
Three. To flip-flop means to vote for one proposition at first (take
a stand), shift to the opposite proposition upon the second
vote (flip), and revert to his first position upon the third (flop). Not
one of the twenty-three Justices flipped-flopped in his vote.
Four. The three Justices who changed their votes did not do so in
one direction. Justice Velasco changed his vote from a vote to annul
to a vote to uphold; Justice Villarama from a vote to uphold to a
vote to annul; and Justice Mendoza from a vote to annul to a vote to
uphold. Not one of the three flipped-flopped since they never
changed their votes again afterwards.
Notably, no one can dispute the right of a judge, acting on a motion
for reconsideration, to change his mind regarding the case. The
rules are cognizant of the fact that human judges could err and that
it would merely be fair and right for them to correct their perceived
errors upon a motion for reconsideration. The three Justices who
changed their votes had the right to do so.
Five. Evidently, the voting was not a case of massive flip-flopping
by the Justices of the Court. Rather, it was a case of tiny shifts in
the votes, occasioned by the consistently slender margin that one
view held over the other. This reflected the nearly even
soundness of the opposing advocacies of the contending sides.
Six. It did not help that in one year alone in 2009, seven Justices
retired and were replaced by an equal number. It is such that the
resulting change in the combinations of minds produced multiple
shifts in the outcomes of the voting. No law or rule requires
succeeding Justices to adopt the views of their predecessors.
Indeed, preordained conformity is anathema to a democratic
system.
The charge of flip-flopping by the Court or its members is unfair.
||| (League of Cities of the Philippines v. Commission on Elections,
G.R. No. 176951, 177499, 178056, [April 12, 2011], 663 PHIL 496546)

THIRD DIVISION
[G.R. No. 147082. January 28, 2008.]
HEIRS OF MAURA SO, namely, YAN LAM LIM,
JIMMY
SO
LIM,
and
FERDINAND
SO
LIM, petitioners, vs. LUCILA JOMOC OBLIOSCA,
ELVIRA
JOMOC
GARDINAB,
and HEIRS OF ABUNDIA
JOMOC
BALALA,
namely,
ROSITA
BALALA
ACENAS,
EVANGELINE BALALA BAACLO, OLIVER JOMOC
BALALA,
and
PERLA
BALALA
CONDESA, respondents.

DECISION

NACHURA, J p:
This is a petition for review on certiorari of the Decision 1 of the
Court of Appeals (CA) dated October 18, 2000, and Resolution
dated
January
11,
2001,
denying
the
motion
for
reconsideration of the said decision. The assailed decision declared
that
a
petition
for
annulment of judgment
cannot
be
availed of when the petitioner had already filed an appeal under
Rule 45 of the Rules of Court.
The antecedents of the case are as follows:
Pantaleon Jomoc was the owner of a parcel of land with an
area of 496 square meters, covered by Transfer Certificate of Title
(TCT) No. T-19648, and located at Cogon District, Cagayan de Oro.
Upon his death, the property was inherited by his wife, brothers,
sisters, nephews and nieces (collectively referred to as the
Jomoc heirs). The respondents, Lucila Jomoc Obliosca and Abundia
Jomoc Balala, sisters of the deceased, and Elvira Jomoc, a niece,
were among those who inherited the property.

In February 1979, the Jomoc heirs executed a Deed of Extrajudicial

Settlement
with
Absolute
Sale of Registered
Land 2 in
favor of petitioner, Maura So, over the property for P300,000.00.
However, the three respondents and Maura So failed to affix their
signatures on this document. Moreover, the document was not
notarized.
Nonetheless,
petitioner
made
a
partial
payment of P49,000.00 thereon.
Thereafter,
petitioner
demanded
the
execution of a
final
deed of conveyance but the Jomoc heirs ignored the demand. On
February 24, 1983, petitioner filed a Complaint 3 for specific
performance against the Jomoc heirs to compel them to execute
and deliver the proper registerable deed of sale over the lot. The
Jomoc heirs, except for the respondents, were impleaded as
defendants. The case was docketed as Civil Case No. 8983.
On February 28, 1983, the Jomoc heirs executed again a
Deed of Extrajudicial Settlement with Absolute Sale of Registered
Land 4 in favor of the spouses Lim Liong Kang and Lim Pue King for
P200,000.00. The spouses Lim intervened as defendants in Civil
Case No. 8983.
On February 12, 1988, the trial court decided the case in
favor of the petitioner. On appeal, the CA affirmed the decision with
the modification that the awardof damages, attorney's fees and
expenses of litigation was deleted. The defendant heirs and the
spouses Lim filed separate petitions for review with the Supreme
Court, docketed as G.R. Nos. 92871 and 92860, which petitions
were later consolidated.
On August 2, 1991, the Court rendered a Decision 5 in these
consolidated cases upholding petitioner's better right over the
property. 6 The decision became final and executory on November
25, 1991.
On February 10, 1992, petitioner filed a motion for execution of the
said decision. The respondents opposed the motion on the ground
that
they
did
not
participate
in
the
execution of the
Deed of Extrajudicial Settlement with Absolute Sale of Registered
Land and they were not parties to the case. Despite the opposition,
the trial court granted the motion for execution. The respondents
filed a motion for reconsideration but the trial court denied the
same.

On July 22, 1992, the trial court issued an Order granting the
motion for execution and divesting all the Jomoc heirs of their titles
over the property. 7Accordingly, the Register of Deeds cancelled
the title of the Jomoc heirs and issued TCT No. T-68370 in the
name of the petitioner on July 24, 1992.
All the Jomoc heirs filed a petition for certiorari with the CA,
assailing the said order of the RTC. They alleged that herein
respondents were not parties to the case, therefore, they should
not be bound by the decision therein and be deprived of their right
over the property. On December 8, 1992, the CA dismissed the
petition, holding that respondents were bound by the said decision.
The CA ratiocinated that respondents were aware of the
pendency of the case, yet they did not intervene, and that the case
is barred by res judicata. Respondents elevated the case to this
Court through a petition for review on certiorari, which was
docketed as G.R. No. 110661. In a Resolution dated December 1,
1993, the Court denied the petition, thus:
In
the
case of Vda.
de
Jomoc v.
Court of Appeals (200 SCRA [1991]), this Court
concluded that the contract of sale between
the heirs of Pantaleon Jomoc and the private
respondent Maura So, even if not complete in form,
so long as the essential requisites of consent of the
contracting parties, object and cause ofthe
obligation
concur,
and
they
were
clearly
established to be present, is valid and effective
between the parties.
The lower court found that petitioners were
aware of the pendency of the specific performance
case brought by Maura So and we agree with the
Court ofAppeals that their failure to intervene in
said suit for the protection of their rights binds
them to the decision rendered therein.
This Court has held that a writ of execution may be
issued against a person not a party to a case where
the latter's remedy, which he did not avail of, was
to intervene in the case in question involving rights
over the same parcel of land (Lising vs. Plan, 133
SCRA 194 [1984]; Suson vs. Court of Appeals, 172
SCRA 70 [1989])
It appears that petitioner Elvira Jomoc Gadrinab
signed
a
Special
Power of Attorney
in
favor of Fellermo Jomoc to represent her in all

proceedings regarding Civil Case No. 8983. It also

appears that all the Jomoc heirs wanted to realize a
higher price by selling the same piece of land a
second time to the Lim spouses. Petitioner Lucila,
Abundia and Elvira shared the same goal, and kept
quiet while Maura So sought relief before the trial
court. The other heirssought to capitalize on
Lucila's, Abundia's and Elvira's non-participation in
the first sale to Maura So. The heirs' (all of them)
position is bereft of moral and equitable basis.
As for the issue of res judicata, we believe that the
same applies as a bar to the instant Petition. In G.R.
No. 92871 and G.R. No. 92860, this Court had
occasion to rule that herein private respondent had
the right to compel the heirs of Pantaleon Jomoc to
execute the proper public instrument so that a valid
contract of sale of registered land can be duly
registered and can bind third persons. In effect, this
Court had already determined the right of private
respondent to a proper registerable deed of sale
which petitioners seek to challenge again in this
Petition. A party cannot avoid the application of the
principle of bar by prior judgment by simply varying
the form of the action or by adopting a different
mode of presenting its case or by adding or
dropping a party (Widows and Orphans Association,
Inc. vs. Court of Appeals, 212 SCRA 360 [1992]).
ACCORDINGLY, the Court Resolved to DENY the
Petition for Review for lack of merit.
The resolution became final and executory on June 20, 1994.
It appears that, on March 12, 1992, respondents also filed a
complaint for legal redemption against petitioner with the Regional
Trial Court (RTC) of Misamis Oriental. The case was docketed as
Civil Case No. 92-135. Respondents posited therein that, since they
did not sell their shares in the property to petitioner, they remained
co-owners, who have the right to redeem the shares sold by the
other heirs. They prayed that they be allowed to exercise their right
to redeem their co-heirs' shares and that petitioner execute all
papers, documents and deeds to effectuate the right of legal
redemption.
On April 27, 1994, the RTC resolved the case in favor of the
respondents, thus:

WHEREFORE, judgment is hereby rendered on the

pleadings and evidence of the parties on record,
affidavits and other documents submitted, there
being but purely legal issues involve[d], ordering
the defendant herein, MAURA SO, to allow
the plaintiffs to exercise their substantive
right of legal
redemption of the
shares of plaintiffs'
co-heirs,
defendant Maura So,
for
the
purpose of redemption
by
the
plaintiffs,
Lucita Jomoc Obliosca, Abundia Jomoc Balala
(deceased) substituted by her children:
Rosita Balala Acenas, Evangeline Balala
Baaclo, Oliver J. Balala, and Perla Balala
Condesa; and Elvira Jomoc Gardinab, is
ordered to receive and accept the amount
tendered
by
the
plaintiffs
in
the
amount of P49,000.00
deposited
in
the
Office of the Clerk of Court of the Regional
Trial Court of Misamis Oriental at Cagayan de
Oro City, and to execute a deed ofredemption
in favor of the herein plaintiffs reconveying
to the latter the property, and to pay
Plaintiffs for attorney's fees in the reasonable
sumof P20,000.00.
Other claims and for counterclaims for monetary
damages of the parties are dismissed, with costs
against defendant.
SO ORDERED. 8
In a Resolution dated July 14, 1994, the RTC granted petitioner's
motion
for
reconsideration. 9 Respondents
moved
for
reconsideration of the said resolution. On September 7, 1994, the
RTC issued an Order 10 granting respondents' motion for
reconsideration and reinstating the April 27, 1994 Resolution.
On November 14, 1994, acting jointly on petitioner's Motion for
Reconsideration and respondents' Compliance/Motion for the
Issuance of a
Writ of Execution,
the
RTC
rendered
a
Resolution, 11 denying petitioner's motion for reconsideration and
granting respondents' motion for execution.
On December 28, 1994, petitioner, later substituted by her heirs,
filed with the CA a petition for annulment of judgment, particularly
the September 7, 1994 Order, which reinstated the RTC's April 27,
1994 and November 14, 1994 Resolutions, which denied the

petitioner's motion for reconsideration. On October 18, 2000, the

CA denied the petition, holding that the remedy of a petition for
annulment of judgment
is
no
longer
available
since
petitioner Maura So had already filed a petition for review with this
Court assailing the same orders of the trial court. 12

Apparently, on December 19, 1994, prior to the filing of the petition

for annulment of judgment with the CA, petitioner Maura So filed a
petition for review oncertiorari 13 with this Court assailing the
same RTC Order and Resolution. This case was docketed as G.R. No.
118050. In a Minute Resolution dated March 1, 1995, the Court
denied the petition for failure to sufficiently show that the
questioned judgment is tainted with grave abuse of discretion and
for being the wrong remedy. 14 On June 7, 1995, the Court likewise
denied petitioner's first motion for reconsideration, 15 and on July
27, 1998, the second motion for reconsideration. The March 1, 1995
Minute Resolution became final and executory on September 1,
1998. 16
On January 11, 2001, the CA denied petitioners' motion for
reconsideration of its
decision
denying
the
petition
for
annulment of judgment. 17 Petitioners then filed this petition for
review, raising the following issues:
I.
WHETHER
OR
NOT
THE
HONORABLE
COURT OF APPEALS COMMITTED A REVERSIBLE
ERROR IN NOT HOLDING THAT THE TRIAL COURT
ACTED WITHOUT JURISDICTION IN CIVIL CASE NO.
92-135 BECAUSE THE HONORABLE SUPREME
COURT HAD PREVIOUSLY RULED THAT THE LOT IN
QUESTION HAD BEEN SOLD TWICE BY ALL
THE HEIRS OF PANTALEON
TO MAURA SO
AND
LATER TO THE LIM SPOUSES IN G.R. NOS. 92871
AND 98860 AND G.R. NO. 110661 AND SAID FINAL
DECISIONS AND RESOLUTION CANNOT BE REVISED
AND REVERSED BY SAID TRIAL COURT.
II.
WHETHER
OR
NOT
THE
HONORABLE
COURT OF APPEALS COMMITTED A REVERSIBLE
ERROR IN HOLDING THAT THE ORIGINAL PETITION
DOCKETED AS CA-G.R. SP NO. 50059 IS BARRED BY
RES JUDICATA BECAUSE THE RESOLUTION IN G.R.

NO. 118050 DID NOT AND CANNOT REPEAL THE

FINAL AND EXECUT[ORY] DECISIONS IN G.R. NO.
92871 AND G.R. NO. 92860, AND THE FINAL AND
EXECUT[ORY] RESOLUTION IN G.R. NO. 110661, AS
THE RESOLUTION IN G.R. NO. 118050 IS NOT ON
THE MERITS, OR BY THE SUPREME COURT EN
BANC. 18
The Court resolves to grant the petition despite the prevailing
procedural
restrictions,
considering
the
peculiar
circumstances of the case, in order to avoid causing a grave
injustice to petitioners.
But before we discuss these circumstances which impel us to grant
the petition, we must acknowledge extant procedural principles.
First, annulment of judgment is a recourse equitable in character,
allowed only in exceptional cases as where there is no available or
other adequate remedy.19 Thus, it may not be invoked (1) where
the party has availed himself of the remedy of new trial, appeal,
petition for relief, or other appropriate remedy and lost; or (2)
where he has failed to avail himself of those remedies through his
own fault or negligence. 20 We, therefore, agree with the CA that
the remedy of a petition for annulment of judgment is no longer
available
to
petitioners
since
their
predecessor-ininterest, Maura So, had already availed herself of a petition for
review on certiorari under Rule 45 of the Rules of Court.
Further, none of the grounds for annulment of judgment, namely,
extrinsic fraud and lack of jurisdiction, is present in this case.
Petitioners argue that the RTC acted without jurisdiction when it
rendered the Resolution which recognized respondents' right to
redeem the property because this, in effect, amended the
Decision of the Supreme Court in G.R. Nos. 92871 and 92860, and
the Resolution in G.R. No. 110661, which sustained the sale of the
property to Maura So.
Petitioners clearly confused lack of jurisdiction with error in the
exercise of jurisdiction. Jurisdiction is not the same as the
exercise of jurisdiction.
As
distinguished
from
the
exercise of jurisdiction, jurisdiction is the authority to decide a case,
and not the decision rendered therein. Where there is jurisdiction
over the person and the subject matter, the decision on all other
questions arising in the case is but an exercise of such jurisdiction.
And the errors which the court may commit in the
exercise of jurisdiction are merely errors of judgment which are the
proper subject of an appeal. 21 The error raised by petitioners

pertains to the trial court's exercise of its jurisdiction, not its

lack of authority to decide the case. In a petition for
annulment of judgment based on lack ofjurisdiction, petitioner must
show not merely an abuse of jurisdictional discretion but an
absolute lack of authority to hear and decide the case. On this
basis, there would be no valid ground to grant the petition for
annulment of judgment.
Second, well-settled is the principle that a decision that has
acquired finality becomes immutable and unalterable, and may no
longer be modified in any respect even if the modification is meant
to correct erroneous conclusions of fact or law and whether it will
be made by the court that rendered it or by the highest court of the
land. 22 The reason for this is that litigation must end and
terminate sometime and somewhere, and it is essential to an
effective and efficient administration of justice that, once a
judgment has become final, the winning party, through a mere
subterfuge, be not deprived of the fruits of the verdict. 23
The doctrine of finality of judgment is grounded on the fundamental
principle of public policy and sound practice that, at the
risk of occasional
error,
the
judgment of courts
and
the
award of quasi-judicial agencies must become final on some
definite date fixed by law. 24 The only exceptions to the general
rule are the correction of clerical errors, the so-called nunc pro
tunc entries which cause no prejudice to any party, void judgments,
and whenever circumstances transpire after the finality of the
decision
which
render
its
execution
unjust
and
inequitable. 25 Again, none of these exceptions is present in this
case.
Notwithstanding
these
principles,
however,
the
higher
interests of justice and equity demand that we brush aside the
procedural norms. After all, rules ofprocedure are intended to
promote rather than defeat substantial justice, and should not be
applied in a very rigid and technical sense. Rules of procedure are
merely tools designed to facilitate the attainment of justice; they
are
promulgated
to
aid
the
court
in
the
effective
dispensation of justice. The Court has the inherent power and
discretion to amend, modify or reconsider a final judgment when it
is necessary to accomplish the ends of justice. 26

If the rigid application of the Rules would frustrate rather than

promote justice, it is always within the Court's power to suspend
the Rules or except a particular case from its operation. 27 The
power to suspend or even disregard rules can be so pervasive and
compelling as to alter even that which this Court itself has already
declared to be final. 28
The present case is peculiar in the sense that it involves three final
and executory judgments. The first is this Court's Decision in G.R.
Nos. 92871 and 92860 which upheld the sale of the whole property
by the Jomoc heirs, including the herein respondents, to
petitioner Maura So. The second is the Court's Resolution in G.R.
No. 110661, which sustained the order of execution of the said
decision against the herein respondents despite the fact that they
were not party-defendants in the first case. And the third is the
Court's
Minute
Resolution
in
G.R.
No.
118050
which
denied Maura So's petition for review of the RTC Decision granting
respondents' right to redeem the property.
It is the third judgment that is apparently in conflict with the two
previous judgments. It rendered final and executory the April 27,
1994
Resolution of the
RTC
which
recognized
the
right of respondents, as co-owners, to redeem the disputed land
from Maura So. To recall, the RTC premised its decision on its
finding that respondents did not actually sell their shares in the
property
to Maura So
because
they
did
not
sign
the
Deed of Extrajudicial Settlement with Absolute Sale of Registered
Land in favor of So; hence, they remained co-owners. This ruling is
patently erroneous because this Court had already pronounced in
the first two final and executory judgments (in G.R. Nos. 92871 and
92860, and G.R. No. 110661) that the whole property had already
been sold to Maura So. The RTC was barred from holding otherwise
under the doctrine of conclusiveness of judgment.
The doctrine of "conclusiveness of judgment" precludes the relitigation of a particular fact or issue already passed upon by a
court of competent jurisdiction in a former judgment, in another
action between the same parties based on a different claim or
cause of action. 29
In Collantes v. Court of Appeals, 30 the Court offered three options
to solve a case of conflicting decisions: the first is for the parties to
assert their claims anew, the second is to determine which
judgment came first, and the third is to determine which of the
judgments had been rendered by a court of last resort. In that case,
the Court applied the first option and resolved the conflicting issues
anew.

Instead of resorting to the first offered solution as in Collantes,

which would entail disregarding all the three final and executory
decisions, we find it more equitable to apply the criteria mentioned
in the second and third solutions, and thus, maintain the
finality of one of the conflicting judgments. The principal criterion
under the second option is the time when the decision was
rendered and became final and executory, such that earlier
decisions should be sustained over the current ones since final and
executory decisions vest rights in the winning party. The major
criterion under the third solution is a determination of which court
or tribunal rendered the decision. Decisions of this Court should be
accorded more respect than those made by the lower courts.
The application of these criteria points to the preservation of the
Decision of this Court in G.R. Nos. 92871 and 92860 dated August
2, 1991, and its Resolution in G.R. No. 110661 dated December 1,
1993. Both judgments were rendered long before the Minute
Resolution in G.R. No. 118050 was issued on March 1, 1995. In fact,
the August 2, 1991 Decision was executed already respondents
were divested of their title over the property and a new title, TCT
No. T-68370, was issued in the name of Maura So on July 24, 1992.
Further, while all three judgments actually reached this Court, only
the two previous judgments extensively discussed the respective
cases on the merits. The third judgment (in G.R. No. 118050) was a
Minute
Resolution,
dismissing
the
petition
for
review
on certiorari of the RTC Resolution in the legal redemption case for
failure to sufficiently show that the questioned resolution was
tainted with grave abuse ofdiscretion and for being the wrong
remedy. In a manner of speaking, therefore, the third final and
executory judgment was substantially a decision of the trial court.

Obviously, the complaint for legal redemption was deliberately filed

by the respondents with the RTC to circumvent this Court's previous
decisions sustaining the sale of the whole property to Maura So.
The Court cannot condone this ploy, even if it failed to uncover the
same when the case was erroneously elevated to it directly from
the trial court (G.R. No. 118050).

The matter is again before this Court, and this time, it behooves the
Court to set things right in order to prevent a grave injustice from
being committed against Maura So who had, for 15 years since the
first decision was executed, already considered herself to be the
owner of the property. The Court is not precluded from rectifying
errors of judgment if blind and stubborn adherence to the
doctrine of immutability of final judgments would involve the
sacrifice ofjustice for technicality.
WHEREFORE, premises considered, the petition is GRANTED. The
Decision of the Court of Appeals dated October 18, 2000, and
Resolution dated January 11, 2001, are REVERSED. The April 27,
1994 Resolution and September 7, 1994 Order of the RTC are SET
ASIDE. The complaint for legal redemption docketed as Civil Case
No. 92-135 is DISMISSED.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Corona * and Reyes, JJ., concur.
||| (Heirs of So v. Obliosca, G.R. No. 147082, [January 28, 2008],
566 PHIL 397-411)

EN BANC
[G.R. No. L-22533. February 9, 1967.]
PLACIDO
C. RAMOS and
AUGUSTO
L. RAMOS, petitioners, vs. PEPSI-COLA BOTTLI
NG
CO.
OF
THE
P.I.
and
ANDRES
BONIFACIO, respondents.
Placido B. Ramos and Renato L. Ramos for petitioners.
Trinidad & Borromeo for respondents.
SYLLABUS
1. APPEAL; CREDIBILITY OF WITNESS NOT FOR THE SUPREME
COURT TO RE- EXAMINE. This Court has consistently respected

the findings of fact of the Court of Appeals with some few

exceptions which do not obtain herein.
2. APPEAL; QUESTIONS OF LAW AND FACT DISTINGUISHED. For a
question to be one of law it must involve no examination of the
probative value of the evidence presented by the litigants or any of
them. And the distinction is well known. There is a question of law
in a given case when the doubt or difference arises as to what the
law is on a certain state of facts; there is a question of fact when
the doubt or difference arises as to the truth or falsehood of alleged
facts.
3. CIVIL LAW; DUE DILIGENCE IN THE SELECTION OF A DRIVER
ILLUSTRATED. The uncontradicted testimony of (the) personnel
manager of defendant company, was to the effect that defendant
driver was first hired as a member of the bottle crop in the
production department: that when he was hired as a driver,
defendant company had size him by looking into his background,
asking him to submit clearances, and later on, he was sent to the
pool house to take the usual driver's examination, consisting of,
first, theoretical examination and second, the practical driving
examination, all of which he had undergone, and that the
defendant company was a member of the Safety Council. In view
therefore, we are of sense that defendant company had exercised
the diligence of a good father of a family in the choice or selection
of defendant driver.
4. ID.; DUE DILIGENCE IN THE SUPERVISION OF EMPLOYEE
DISCUSSED; ARTICLE 2180 OF THE CIVIL CODE CONSTRUED.
From Article 2180, two things are apparent; (1) That when an injury
is caused by the negligence of a servant or employee there
instantly arises a presumption of law that there was negligence on
the part of the master or employer either in the selection of the
servant or employee, or in supervision over him after the selection;
or both; and (2) that the presumption is juris tantum and not juris
et de jure, and consequently may be rebutted. It follows necessarily
that if the employer shows to the satisfaction of the court that in
selection and supervision he has exercised the care and diligence of
a good father of a family, the presumption is overcome and he is
relieved from liability.
5. APPEAL; MATTERS NOT RAISED AND ARGUED IN THE LOWER
COURT CANNOT BE VENTILATED IN THE SUPREME COURT FOR THE
FIRST TIME. Appellant's other assignment of errors are likewise
outside the purview of this Court's reviewing power. Thus, the
question of whether PEPSI-COLA violated the Revised Motor
Vehicles Law and rules and regulations related thereto, not having

been raised and argued in the Court of Appeals, cannot be

ventilated herein for the first time.

DECISION

BENGZON, J.P., J p:
On June 30, 1958 Placido and Augusto Ramos sued PepsiCola Bottling Co. of the P.I. 1 and Andres Bonifacio in the Court of
First Instance of Manila as a consequence of a collision, on May 10,
1958, involving the car of Placido Ramos and a tractor-truck and
trailer of PEPSI-COLA. Said car was at the time of the collision
driven by Augusto Ramos, son and co-plaintiff of Placido. PEPSICOLA's tractor- truck was then driven by its driver and codefendant Andres Bonifacio.
After trial, the Court of First Instance rendered judgment on April
15,
1961,
finding
Bonifacio
negligent
and
declaring
that PEPSI- COLA had not sufficiently proved its having exercised
the due diligence of a good father of a family to prevent the
damage. PEPSI- COLA and Bonifacio, solidarily, were ordered to pay
the plaintiffs P2,638.50 actual damages; P2,000.00 moral damages;
P2,000.00 as exemplary damages; and, P1,000.00 attorney's fees
with costs.
Not satisfied with this decision, the defendants appealed to the
Court of Appeals.
Said Court, on January 15, 1964, affirmed the trial court's judgment
insofar as it found defendant Bonifacio negligent, but modified it by
absolving defendantPEPSI-COLA from liability, finding that, contrary
to the plaintiff's contention, PEPSI-COLA sufficiently proved due
diligence in the selection of its driver Bonifacio.
Plaintiffs thereupon appealed to Us through this petition for review
of the Court of Appeals' decision. And appellants would argue
before this Court that defendant PEPSI-COLA's evidence failed to
show that it had exercised due diligence n the selection of its driver
in question.
Said point, as stated, was resolved by the Court of Appeals
in PEPSI-COLA's favor, thus:

"The uncontradicted testimony of Juan

T. Aasco, personnel manager of defendant
company, was to the effect that defendant
driver was first hired as a member of the
bottle crop in the production department; that
when he was hired as a driver, 'we had size
[sic] him by looking into his background,
asking him to submit clearances, previous
experience, physical examination and later
on, he was sent to the pool house to take the
usual driver's examination, consisting of:
'First, theoretical examination and second, the
practical driving examination,' all of which he
had undergone, and that the defendant
company was a member of the Safety
Council. In view hereof, we are of the sense
that defendant company had exercised the
diligence of a good father of a family in the
choice or selection of defendant driver. In the
case of Campo vs. Camarote, No. L-9147
(1956), 53 O.G. 2794, cited in appellee's brief,
our Supreme Court had occasion to put it
down as a rule that 'In order that the
defendant may be considered as having
exercised all the diligence of a good father of
a family, he should have been satisfied with
the mere possession of a professional driver's
license; he should have carefully examined
the applicant for employment as to his
qualifications, his experiences and record of
service.' Defendant Company has taken all
these steps. 2
Appellants herein seek to assail the foregoing portion of the
decision under review by taking issue with the testimony of Aasco
upon which the findings of due diligence aforestated are rested.
Thus, it is now contended that Aasco, being PEPSI-COLA's
employee, is a biased and interested witness; and that his
testimony is not believable.
It is rather clear, therefore, that appellants would raise herein an
issue of fact and credibility, something as to which this Court has
consistently respected the findings of the Court of Appeals, with
some few exceptions, which do not obtain herein. 3
Stated differently, Aasco's credibility is not for this Court now to
re-examine. And said witness having been found credible by the

Court of Appeals, his testimony, as accepted by said Court, cannot

at this stage be assailed. As We said in Co Tao vs. Court of Appeals,
L-9194, April 25, 1957, assignments of error involving the credibility
of witnesses and which in effect dispute the findings of fact of the
Court of Appeals, cannot be reviewed in these proceedings. For a
question to be one of law it must involve no examination of the
probative value of the evidence presented by the litigants or any of
them. 4 And the distinction is well-known: There is a question of
law in a given case when the doubt or difference arises as to what
the law is on a certain state of facts; there is a question of fact
when the doubt or difference arises as to the truth or the falsehood
of alleged facts. 5
From all this it follows that for the purposes of this appeal, it must
be
taken
as
established
that,
as
testified
to
by
Aasco, PEPSI- COLA did in fact carefully examine the driverapplicant Bonifacio as to his qualifications, experiences and record
of service, taking all steps mentioned by the Court of Appeals in its
decision already quoted.
Such being the case, there can be no doubt that PEPSICOLA exercised the required due diligence in the selection of its
driver. As ruled by this Court in Campo vs. Camarote, 53 O.G. 2794,
2797: "In order that the defendant may be considered as having
exercised all diligence of a good father of a family, he should not be
satisfied with the mere possession of a professional driver's license;
he should have carefully examined the applicant for employment as
to his qualifications, his experience and record of service."
It should perhaps be stated that in the instant case no question is
raised as to due diligence in the supervision by PEPSI-COLA of its
driver. Article 2180 of the Civil Code provides inter alia:
". . . The owners and managers of en
establishment or enterprise are likewise
responsible for damages caused by their
employees in the service of the branches in
which the letter are employed or on the
occasion of their functions.
xxx xxx xxx
"The responsibility treated of in this
Article shall cease when the persons herein
mentioned prove that they observed all the
diligence of a good father of a family to
prevent damage."

And construing a similar provision of the old Civil Code, this

Court said in Bahia vs. Litonjua, 30 Phil. 624, 627:
"From this article two things are
apparent: (1) That when an injury is caused
by the negligence of a servant or employee
there instantly arises a presumption of law
that there was negligence on the part of the
master or employer either in the selection of
the servant or employee, or in supervision
over him after the selection, or both; and (2)
that the presumption is juris tantum and
not jure et de juris, and consequently may be
rebutted. It follows necessarily that if the
employer shows to the satisfaction of the
court that in selection and supervision he has
exercised the care and diligence of a good
father of a family, the presumption is
overcome and he is relieved from liability."

As pointed out, what appellants here contend as not duly proved

by PEPSI-COLA is only due diligence in the selection of its driver.
And, parenthetically, it is not surprising that appellants thus confine
their arguments to this aspect of due diligence, since the record
as even appellants' brief (pp. 13-17) reflects in quoting in part the
testimony of PEPSI-COLA's witness would show sufficient
evidence to establish due diligence in the supervision by PEPSICOLA of its drivers, including Bonifacio.
Appellants' other assignment of errors are likewise outside the
purview of this Courts' reviewing power. Thus, the question of
whether PEPSI-COLA violated the Revised Motor Vehicle Law. and
rules and regulations related thereto, not having been raised and
argued in the Court of Appeals, cannot be ventilated herein for the
first time. 6 And the matter of whether or not PEPSI-COLA did acts
to ratify the negligent act of its driver is a factual issue not proper
herein.
Wherefore, the decision of the Court of Appeals is hereby affirmed,
with costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,
Sanchez and Ruiz Castro, JJ., concur.
RESOLUTION ON MOTION FOR RECONSIDERATION

May 16, 1967

BENGZON, J.P., J p:
Petitioners seek a reconsideration 1 of Our decision 2 in the instant
case affirming in toto the challenged decision of the Court of
Appeals absolving respondent PEPSI-COLA from liability. In Our
decision, We refrained from passing on the merits of the question
whether PEPSI-COLA in operating the tractor-truck and trailer,
violated the Rev. Motor Vehicles Law 3 and the rules and
regulations related thereto, for the procedural reason that it did not
appear to have been raised before the Court of Appeals.
It now appears, however, that said question was raised in a motion
to reconsider filed with the Court of Appeals which resolved the
same against petitioners. Due consideration of the matter on its
merits, convinces Us that the decision of the Court of Appeals
should still be affirmed in toto.
Petitioners impute to PEPSI-COLA the violation of subpars. I and
4(d), par. (a), Sec. 27 of M.V.O. Administrative Order No. 1, dated
Sept. 1, 1951, in that at the time of the collision the trailer-truck,
which had a total weight of 30,000 k. gms., was (a) being driven at
a speed of about 30 k.p.h., or beyond the 15 k.p.h. limit set and (b)
was not equipped with a rear-vision mirror nor provided with a
helper for the driver.
The cited provisions read:
"SECTION
27.
Registration,
operation, and inspection of truck-trailer
combinations, semi-trailers, and tractors.
"(a) No trailer or semi-trailer having a
gross weight of more than 2,000 kilograms
and is not equipped with effective brakes on
at least two opposite wheels of the rear axle
and are so controlled that the brakes will act
in unison with or preceding the effective
action of the brakes of the tractor-truck shall
be registered for operation for public
highways of the Philippines; provided, that
the trailers without brakes may be registered
from year to year for operation under the
following conditions:
"1. No such trailer shall be operated at
any time at a speed, in excess of 15
kilometers per hour in conjunction with a

tractor-truck, the actual gross weight of which

is less than twice the weight of the trailer.
xxx xxx xxx
"4(d) Tractor-trucks shall be either
equipped with rear-vision mirror to enable the
driver to see vehicles approaching from the
rear or shall carry a helper who shall be so
stationed on the truck or trailer that he will
constantly have a view of the rear. He shall be
provided with means of effectively signalling
to the driver to give way to overtaking
vehicles.
"4(e) No truck and trailer combination
shall be operated at a speed greater than 30
kilometers per hours."
It will be noted that the 15 k.p.h. limit in subpar. 1, supra, refers
only to trailers or semi-trailers having a gross weight of more
than 2,000 kgms., ANDwhich are "not equipped with effective
brakes on at least two opposite wheels of the rear axle and are
so controlled that the brakes will act in unison with or preceding
the effective action of the brakes of the tractor-truck . . ." This is
the condition set in the proviso in par. (a), supra, wherein
"trailers without [such] brakes may be registered from year to
year for operation . . .", i.e., they should not "be operated at any
time at a speed in excess of 15 kilometers per hour in
conjunction with a tractor-truck . . ." But there was no finding by
the Court of Appeals that the truck-trailer here did not have
such brakes. In the absence of such fact, it is subpar. 4
(e), supra, that will apply. And petitioners admit that the trucktrailer was being driven at about 30 k.p.h.
It is a fact that driver Bonifacio was not accompanied by a helper
on the night of the collision since he was found to be driving alone.
However, there is no finding that the tractor-truck did not have a
rear-vision mirror. To be sure, the records disclose that Pat. Rodolfo
Pahate, the traffic policeman who went to the collision scene,
testified that he saw the tractor-truck there but he does not
remember if it had any rear-vision mirror. 4 This cannot prove lack
of rear- vision mirror. And the cited provision subpar. 4(d) is
complied if either of the two alternatives, i.e., having a rear-vision
mirror or a helper, is present. Stated otherwise, said provision is
violated only where there is a positive finding that the tractor-truck
did not have both rear-vision mirror and a helper for the driver.

Petitioners also charge PEPSI-COLA with having violated par. (b) of

Sec. 8-A of the Rev. Motor Vehicles Law, providing that:
"No motor vehicle operating as a
single unit shall exceed the following
dimensions:
"Over all width . . . 2.5 meters"
xxx xxx xxx
since there was an express finding that the truck-trailer was 3
meters wide. However, Sec. 9(d) of the same law, as amended,
providing that
"SEC. 9. Special permits, fees for.
The chief of the Motor Vehicles Office
with the approval of the Secretary of Public
Works and Communications shall establish
regulations and a tariff of additional fees
under which special permits may be issued in
the discretion of the Chief of the Motor
Vehicles Office or his deputies, for each of the
following special cases, and without such
special permit, no such motor vehicles shall
be operated on the public highways . . .
xxx xxx xxx
"(d) For registration or fees of a motor
vehicle exceeding the limit of permissible
dimensions specified in subsections (b) and
(c) of section eight-A hereof." (Emphasis
supplied)
xxx xxx xxx
expressly allows the registration or use of motor vehicles
exceeding the limits of permissible dimensions specified in
subsec. (b) of Sec. 8-A. So, to conclude that there was a
violation of law which indisputably constitutes negligence, at
the very least it is not enough that the width of the tractortruck exceed the limit in Sec. 8-A; in addition, it must also
appear that there was no special permit granted under Sec. 9.
Unfortunately for petitioners, that vital factual link is missing.
There was no proof much less any finding to that effect. And it
was incumbent upon petitioners-appellants to have proved lack
of such permit since the tractor-truck and the trailer
were registered. 5 Compliance with law and regularity in the

performance of official duty in this case, the issuance of

proper registration papers are presumed 6 and prevail over
mere surmises. Having charged a violation of law, the onus of
substantiating the same fell upon petitioners-appellants. Hence,
the conclusion that there was a violation of the law lacks factual
basis.
Petitioners would also have Us abandon the Bahia ruling. 7 In its
stead, We are urged to apply the Anglo-American doctrine,
of respondent
superior. We
cannot
however,
abandon
the Bahia ruling without going against the explicit mandate of the
law. A motor vehicle owner is not an absolute insurer against all
damages caused by its driver. Article 2180 of our Civil Code is very
explicit that the owner's responsibility shall cease once it proves
that it has observed the diligence of a good father of a family to
prevent damage. The Bahia case merely clarified what that
diligence consists of, namely, diligence in the selection and
supervision of the driver-employee.

Neither could We apply the respondent superior principle. Under

Article 2180 of the Civil Code, the basis of an employer's liability is
his own negligence, not that of his employees. The former is made
responsible for failing to properly and diligently select and
supervise his erring employees. We do not - and have never followed the respondent superior rule. 8 So, the American rulings
cited by petitioners, based as they are on said doctrine, are not
authoritative here.
In view of the foregoing, the motion for reconsideration is hereby
denied.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,
Sanchez and Ruiz Castro JJ., concur.
||| (Ramos v. Pepsi-Cola Bottling Co. of the Phil., G.R. No. L-22533,
[February 9, 1967], 125 PHIL 701-711)