FIRST DIVISION

[G.R. No. 149634. July 6, 2004]

LORETA TORRES, MARILYN TANGTANG, ARMELA FIGURACION,

RAQUEL BERNARTE, ESTRELLA TITO, RHEA ELLORDA,
ROSITA FUENTES, ANITA LAPORRE, JOCELYN RIN, MATODIA
DEREPAS,
FELICISIMA
ALEGRE,
LEA
MARTILLANA,
EVANGELINE RAFON, ALICIA EMPILLO, AMY TORRES, EDNA
JIMENEZ, EVELYN DOLOM, HAMILI UYVICO, CRISELINA
ANQUILO, NILDA ALCAIDE, ROSARIO MABANA, ESTELA
MANGUBAT, ROSIE BALDOVE, CARMELITA RUIZ and LUCILA
JUSTARES, petitioners,
vs. SPECIALIZED
PACKAGING
DEVELOPMENT CORPORATION and/or ALFREDO GAO
(President) and PETER CHUA (General Manager); EUSEBIO
CAMACHO GENERAL SERVICES and/or EUSEBIO CAMACHO
(President/General Manager); MPL SERVICES and/or MIGUELITO
LAURIANO (President/General Manager), respondents.
DECISION
PANGANIBAN, J.:

The Court may give due course to a petition, even if the accompanying certificate
against forum shopping has not been signed by all the petitioners, provided it is shown
that, as in this case, there is a justifiable cause for such failure; and the outright
dismissal of the petition would seriously impair the orderly administration of justice. In
the interest of substantial justice, strict observance of procedural rules may be
dispensed with for compelling reasons.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to
nullify the January 15, 2001 and the August 28, 2001 Resolutions of the Court of
Appeals (CA) in CA-GR SP No. 62530. The first Resolution disposed as follows:
[1]

[2]

[3]

ACCORDINGLY, and to strictly enforce the aforesaid circulars to attain their

objectives (Carrara Marble Phil., Inc. vs. Court of Appeals, G.R. No. 127059, January
22, 1997; Far Eastern Shipping Co. vs. Court of Appeals, 297 SCRA 30), the Court

[r]esolved to DISMISS the petition for a defective or insufficient verification and

certification thereof.
[4]

The second assailed Resolution, on the other hand, denied petitioners Motion for
Reconsideration.
The Antecedents
Petitioners claim to be employees of the Specialized Packaging Development
Corporation (SPDC), a business entity engaged in the repackaging of cosmetic
products. In three separate Complaints, they charged SPDC and alleged labor
recruiters Eusebio Camacho General Services (ECGS) and MPL Services with illegal
dismissal; and with nonpayment of overtime, premium and 13 th month pays, and night
differential.
The cases were later consolidated and assigned to Labor Arbiter (LA) Salimathar
Nambi. On June 30, 1995, the LA issued his Decision in favor of petitioners, because
SPDC and MPL Services had failed to submit their position papers on or before the
deadline. SPDC was ordered to reinstate all petitioners to their former positions and to
pay them back wages, premium pay for holidays and rest days, service incentive leave
pay and 13th month pay.
The LAs Decision was appealed by SPDC to the National Labor Relations
Commission (NLRC), which set aside the ruling and ordered the case remanded to LA
Nambi for further proceedings.
The case was then set again for hearings. Respondents SPDC and ECGS
submitted their position papers five months after the case had been considered
submitted for decision.
On December 14, 1999, LA Nambi issued a second Decision finding petitioners
employment to have been illegally terminated by SPDC. The NLRC, however, again
reversed and set aside this new Decision on June 9, 2000.
On January 29, 2001, petitioners appealed to the CA.
Ruling of the CA
The Petition was dismissed by the CA, which found the verification and the
certification against forum shopping to be either defective or insufficient. It justified its
ruling thus:

x x x [I]t appears that there are twenty-five (25) principal parties-petitioners who were
former workers of private respondent Corporation and complainants in NLRC NCR
Case Nos. 00-04-03325-94, 00-05-03727-94 and 00-05-03971-94 as a result of their

being laid-off from employment. Perusing the verification and certification[,]

however, it also appears that it was executed and signed by only two (2) petitioners,
namely, Evelyn Dolom and Criselina Anquilo, among the said twenty-five (25)
principal petitioners. The duty to verify and certify under oath is strictly addressed to
all the twenty-five (25) principal petitioners. To allow only two (2) of them to execute
the required verification and certification, without the proper authorization of the
others, would render Revised Circular No. 28-91 and Administrative Circular No. 0494 (now Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure) inutile in avoiding the
practice of non-forum shopping because the other principal petitioners, who did not
execute and sign the same, much less execute the proper power of attorney, would not
be bound by the certification executed by only two (2) of them. Any one of the
twenty-three (23) remaining principal petitioners may just obtain the services of
another lawyer to institute practically the same case in a different for[um].
[5]

Denying petitioners Motion for Reconsideration, the appellate court pointed out that
disregarding the rules could not be rationalized by invoking a liberal construction
thereof. Furthermore, it found no satisfactory explanation why the 25 principal
petitioners, who resided in different provinces, had not executed a special power of
attorney in favor of either of the two petitioners or their counsel.
Hence, this Petition.

[6]

Issues
Petitioners submit the following issues for our consideration:
A.

Whether or not petitioners are employees of the Respondent Specialized Packaging

Development Corporation (SPDC).
B.

Whether or not petitioners were illegally dismissed by Respondent SPDC.

C.

Whether or not petitioners are entitled to their money claims.

The Courts Ruling

[7]

The Petition is meritorious.

Preliminary Issue:
Propriety of the Petition
At the outset we note that the present Petition is anchored on Rule 45, and that it
assails the two CA Resolutions dismissing petitioners earlier Petition for Certiorari. In
accordance with Section 1 of Rule 45, the herein Petition alleges reversible errors
based on the supposedly defective verification and certification against forum shopping.
[8]

The above-quoted issues raised in the Memorandum of petitioners, however, were

not the same ones raised in the Petition. Because these three substantive issues were
sprung by the former only in their own Memorandum, respondents were not able to
traverse these directly in their Comment or Memorandum. Hence, save for
perfunctory references to the NLRC Decision, the latter were not given the opportunity
to defend themselves on these questions.
[9]

[10]

Elementary due process -- which means giving the opposite party the opportunity to
be heard, and the assailed court to consider every argument presented -- bars this
Court from taking up these three issues in this Decision, even if doing so would speed
up the final resolution of the case. Basic is the rule that issues not presented below
cannot for the first time be taken up on appeal.
[11]

[12]

Review of NLRC Decisions

The proper procedure for seeking a review of the final dispositions of the NLRC was
laid down in 1998 in St. Martin Funeral Homes v. NLRC. That case heralded two very
important rules: 1) decisions and final resolutions of the NLRC may be reviewed only via
a special civil action for certiorari under Rule 65 of the Rules of Court; and 2) such
petition must be filed with the CA in strict observance of the doctrine of the hierarchy of
courts.
[13]

Thus, after St. Martin became final, special civil actions challenging NLRC rulings
have been referred by this Court to the CA for proper disposition. Exceptions to this rule
were those instances when -- prior to the finality of St. Martin -- both parties had already
filed their respective memoranda with this Court, and it then opted to take final
cognizance of the case. Under AM No. 99-2-01-SC, however, all new cases
erroneously filed with this Court after June 1, 1999, were dismissed forthwith.
[14]

Main Issue:
Propriety of the CAs Dismissal of the Petition

In their present Petition, petitioners plead a liberal construction of the rules. They
argue that the verification and the certification against forum shopping executed by only
two of the 25 petitioners have already satisfied the requirements under Sections 4 and
5 of Rule 7. On the other hand, the CA ruled that all 25 petitioners should have signed
the verification and the certification of non-forum shopping. We clarify.
[15]

[16]

Actually, two separate rules are involved in the present controversy one, on
verification; and the other, on the certification against forum shopping.
Two Signatures Sufficient
for Verification
The verification requirement is provided under Section 4 of Rule 7 of the Rules of
Court, as follows:

SEC. 4. Verification. Except when otherwise specifically required by law or rule,

pleadings need not be under oath, verified or accompanied by affidavit.
[17]

A pleading is verified by an affidavit that the affiant has read the pleading and that
the allegations therein are true and correct of his knowledge and belief.
A pleading required to be verified which contains a verification based on information
and belief, or upon knowledge, information and belief, or lacks a proper verification,
shall be treated as an unsigned pleading. (Italics supplied)
The purpose of requiring a verification is to secure an assurance that the allegations
of the petition have been made in good faith; or are true and correct, not merely
speculative. This requirement is simply a condition affecting the form of pleadings, and
noncompliance therewith does not necessarily render it fatally defective. Indeed,
verification is only a formal, not a jurisdictional, requirement.
[18]

[19]

[20]

In the present case, the problem is not the lack of a verification, but the adequacy of
one executed by only two of the 25 petitioners. These two signatories are
unquestionably real parties in interest, who undoubtedly have sufficient knowledge and
belief to swear to the truth of the allegations in the Petition. This verification is enough
assurance that the matters alleged therein have been made in good faith or are true and
correct, not merely speculative. The requirement of verification has thus been
substantially complied with.
Certification Against Forum Shopping
Substantially Complied With

For petitions for certiorari, on the other hand, a certification against forum shopping
is required under Section 3 of Rule 46 of the Rules of Court, as follows:
[21]

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. xxx
xxxxxxxxx
The petitioner shall also submit together with the petition a sworn certification that he
has not theretofore commenced any other action involving the same issues in the
Supreme Court, the Court of Appeals or different divisions thereof, or any other
tribunal or agency; if there is such other action or proceeding, he must state the status
of the same; and if he should thereafter learn that a similar action or proceeding has
been filed or is pending before the Supreme Court, the Court of Appeals, or different
divisions thereof, or any other tribunal or agency, he undertakes to promptly inform
the aforesaid courts and other tribunal or agency thereof within five (5) days
therefrom.
xxxxxxxxx
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition.
The certification requirement is rooted in the principle that a party-litigant shall not
be allowed to pursue simultaneous remedies in different fora, as this practice is
detrimental to an orderly judicial procedure. The lack of a certification against forum
shopping, unlike that of verification, is generally not cured by its submission after the
filing of the petition.
[22]

[23]

The submission of a certificate against forum shopping is thus deemed obligatory,

though not jurisdictional. (Jurisdiction over the subject or nature of the action is
conferred by law.) Not being jurisdictional, the requirement has been relaxed under
justifiable circumstances under the rule of substantial compliance.
[24]

[25]

In fact, the Court has allowed the belated filing of the certification against forum
shopping because of compelling reasons. In Uy v. Land Bank, it even reinstated a
petition it had already dismissed for lack of verification and certification against forum
shopping, after petitioner had justified the reinstatement. Similarly, in Roadway Express
v. CA, the Court considered as substantial compliance the filing of the certification 14
days prior to the dismissal of the petition.
[26]

[27]

[28]

The rule of substantial compliance has likewise been availed of with respect to the
contents of the certification. Gabionza v. Court of Appeals accepted, as sufficient
compliance therewith, petitioners certification to the effect that there is no similar petition
[with] the same subject matter previously filed, pending, withdrawn or dismissed in the
Supreme Court, in this Honorable Court [of Appeals] or different divisions thereof, or any
[29]

other tribunal or agency. It stressed that while Circular 28-91 required strict
compliance, it did not thereby prevent substantial compliance under justifiable
circumstances.
[30]

[31]

[32]

In the present case, petitioners aver that the signatures of only two of them suffice
as substantial compliance with the attestation requirement for a certificate against forum
shopping. In effect, they are asking this Court to disregard a defect in their Petition.
[33]

In previous rulings, we have held that a certificate against forum shopping should be
signed by all the petitioners, because a lone signatory cannot be presumed to have
personal knowledge of the matters required to be stated in the attestation. The ruling
is not without exception, however. In Spouses Ortiz v. Court of Appeals and similar
rulings, the following has always been pointed out:
[34]

[35]

x x x. The attestation contained in the certification on non-forum shopping requires

personal knowledge by the party who executed the same. To merit the Courts
consideration, petitioners here must show reasonable cause for failure to personally
sign the certification. The petitioners must convince the court that the outright
dismissal of the petition would defeat the administration of justice. x x x (Italics
supplied)
Petitioners need only show, therefore, that there was reasonable cause for the
failure of some of them to sign the certification against forum shopping, and that the
outright dismissal of the Petition would defeat the administration of justice.
We find their reasons meritorious. First, as pointed out in the Motion for
Reconsideration filed with the CA, the case dragged for an undeniably long time,
because its remand to the labor arbiter forced many of the petitioners to go back to the
provinces to await the final outcome, while those who remained in Metro Manila were
forced out of temporary quarters every so often. Under these circumstances, it was
extremely difficult to secure all the required signatures.
[36]

Second, it is safe to assume that the matters alleged in the certificate against forum
shopping have been complied with by the non-signing petitioners. Twenty-one of the
petitioners executed in favor of their counsel, a Natatanging Gawad ng Kapangyarihan,
which gives him authority to represent them in all matters connected with the case. As
it has not been revoked or superseded, the possibility of any of them filing another
action or claim through another counsel is effectively foreclosed.
[37]

Third, the apparent merits of the substantive aspects of the case, as in Uy, should
be deemed as a special circumstance or compelling reason for allowing the Petition.
Pertinent thereto, the Court notes that the conflicting findings of the NLRC and of the
labor arbiter -- who ruled twice in favor of petitioners -- provide ample justification for the
CAs review of the merits. The outright dismissal of the Petition was therefore prejudicial
to the substantial rights of the parties.
Indeed, rules of procedure are established to secure substantial justice. Being
instruments for the speedy and efficient administration of justice, they must be used to
[38]

achieve such end, not to derail it. Technical requirements may thus be dispensed with
in meritorious appeals.
[39]

[40]

It has been our consistent holding that the ends of justice are better served when
cases are determined on the merits -- after all parties are given full opportunity to
ventilate their causes and defenses -- rather than on technicality or some procedural
imperfections.
[41]

Consequently, the case should be remanded to the CA for a proper determination of

the substantive issues. Time-honored is the principle that when the law entrusts the
review of factual and substantive issues to a lower court or to a quasi-judicial tribunal,
that court or agency must be given the opportunity to pass upon those issues. Only
thereafter may the parties resort to this Court.
[42]

[43]

WHEREFORE, this Petition is GRANTED. The assailed Resolutions of the Court of

Appeals are SET ASIDE, and the case is remanded to the CA for a proper
determination of the substantive issues. No costs.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
PEOPLE OF THE PHILIPPINES,
Plaintiff/Appellee,

G.R. No. 170569

Present:

- versus -

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
REYES, and
BRION, JJ.

NORBERTO MATEO Y DIZON,

Promulgated:
Accused/Appellant.
September 30, 2008
x----------------------------------------------------------x

DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is an appeal from the Decision [1]dated September 30, 2005 of the Court
of Appeals (CA) affirming with modification the Decision[2] of the Regional Trial Court
(RTC), PasigCity, Branch 160, finding appellant guilty of rape and sentencing him
to reclusion perpetua.
In a Complaint dated November 2, 1995, AAA,[3] assisted by her father, BBB, charged
Norberto Mateo (appellant) with rape by means of force and intimidation. The Assistant
City Prosecutor certified that it was filed with the prior authority of the City Prosecutor.[4]
The accusatory portion of the Complaint reads:
That on or about the 29th day of October 1995, in the City of Mandaluyong,
Philippines, a place within the Jurisdiction of this Honorable Court, the abovenamed accused with lewd design and by means of force and intimidation,
did, then and there willfully, unlawfully and feloniously have carnal knowledge
with the undersigned against her will and consent.
Contrary to law.[5]

Upon arraignment, appellant, duly assisted by his counsel, pleaded not guilty to the offense
charged. After trial the RTC rendered its decision dated August 29, 1997,
[6]
the dispositive portion of which reads as follows:
WHEREFORE, foregoing considered [sic], the court finds accused
NORBERTO MATEO Y DIZON GUILTY beyond reasonable doubt of the
crime of rape and hereby sentences said accused to a penalty of
reclusion perpertua and to indemnify the offended party the amount
of P50,000.00 and to pay the costs.[7]

Appellant initially appealed to this Court. Conformably with People v. Mateo,[8] the Court
transferred the case to the CA.

On September 30, 2005, the CA issued its assailed decision, the dispositive portion of
which reads:
WHEREFORE, the assailed decision of the Regional Trial Court of Pasig City,
Branch 160 finding accused Norberto Mateo y Dizon GUILTY beyond
reasonable doubt of the crime of rape and imposing upon him the penalty of
reclusion perpetua is hereby AFFIRMED with the MODIFICATION that
accused is further ordered to indemnify the complainant in the amount
of P50,000.00 as moral damages.[9]

The records of the case were elevated to this Court in view of the notice of appeal
filed by appellant.
By Resolution[10] dated February 1, 2006, this Court required the parties to file their
supplemental briefs if they so desired within thirty days from notice. Counsel for appellant
filed a Manifestation in lieu of a supplemental brief adopting the appellant's brief filed on
January 26, 1999 as his supplemental brief. The Office of the Solicitor
General (OSG) filed its supplemental brief.
Appellant raises the following assignment of errors:
I
THE COURT A QUO GRAVELY ERRED IN FINDING THAT THE GUILT
OF THE ACCUSED-APPELLANT FOR THE CRIME CHARGED HAS
BEEN PROVEN BEYOND REASONABLE DOUBT.
II
THE COURT A QUO GRAVELY ERRED IN FINDING THAT THE
COMPLAINANT IS A MENTAL RETARDATE. [11]

The appeal lacks merit.

The facts of the case:
The evidence for the prosecution established that AAA only finished grade one and does
not know how to read and write except her name. On October 29, 1995, at around 1:00
p.m., AAA, then 16 years old, was at the house of her Ate Nimfa, located at Welfareville
Compound, Mandaluyong City, when appellant arrived at the said house and drank gin.

[12]

After a while, appellant approached AAA and pulled her [13] towards a grassy place
which was three to four meters away.[14] When they reached the grassy place, appellant
removed AAA's shirt, shorts and panties and his own short pants.[15] Appellant laid AAA
on the ground, went on top of her and while holding her breast inserted his penis into her
vagina.[16] While doing this, appellant told AAA not to report or he would kill her.[17]
Zenaida Torno, a bantay bayan volunteer, who was then cooking at the outpost
of Mandaluyong City, saw
children
at
the
monument
near the Jose Fabella Memorial School looking at the direction of the swimming pool and
shouting indecent words.[18] Torno then went to the place and saw appellant pumping on
top of AAA. Torno asked him to stop but he still continued withwhat he was doing to
AAA.[19] Torno then asked the help of a man who was gathering grass at that time and the
man boxed appellant and held him away from AAA.[20] Torno then reported the incident to
the authorities and brought the appellant and AAA to the barangay hall.[21]
Dr. Reyes conducted his examination of AAA on October 29, 1995 and prepared his
report[22] as Living Case No. MG-95-1275, thus:
Findings
xxxx
PHYSICAL INJURIES
Abrasions; linear, reddish, smallest is 4.0 cms and biggest is
10.0 cms. covering an area of 27.0 cms x 20.0 cms, back; 3.0 cms., thigh,
middle 3rd antero-medial aspect left.
GENITAL EXAMINATIONS:
x x x Hymen, moderately tall with deep fresh hymenal laceration at 6:00
o'clock position corresponding to a face of a watch, which bleeds on slight
pressure.
CONCLUSIONS:
1.

The above-described extragenital physical injuries were noted on the

body of the subject at the time of examination.
2.
Deep, fresh hymenal laceration, present.[23]

Dr. Reyes testified that AAA could have been laid on a rough surface as shown by the
multiple linear abrasions found at her back and the anterum medial aspect of her thigh;
[24]
that she had been sexually penetrated possibly with the use of force and violence;[25] that
he noticed that AAA was suffering from some form of mental retardation as she was not
responding to his question like a 17-year old[26] girl should, compelling him to refer her to
a neuro-psychiatrist for examination;[27] that based on the result forwarded to him, AAA
had a mental age of 5 years and 8 months with an IQ of 38.[28]
Appellant denied raping AAA. He testified that on October 29, 1995 at about 10:00
o'clock a.m., he and AAA met at the house of his Aunt Nimfa.[29] They talked to each other
regarding their relationship as AAA was his girlfriend. He told AAA that they better move
to another place because they might be reprimanded by her mother.[30] They proceeded
to Fabella School and talked in front of the school. While they were conversing, a woman
shouted at them.[31] They approached the said woman and the latter asked what they were
doing, to which appellant replied that they were merely talking with each other.[32] Not
contented with his answer, they forcibly brought them to the barangay hall where the two
were detained for more than an hour until AAA's parents arrived.[33] AAA was immediately
brought out of the detention cell while appellant was investigated further.[34]
Nelia Marquez, co-occupant of the house where appellant temporarily resided,
corroborated appellant's testimony regarding his relationship with AAA. She testified that
she frequently saw the two talking to each other. She even asked AAA whether they had a
relationship to which AAA simply nodded her head.[35]
In convicting appellant, the RTC said that the issue hinged not only on the
complainant's version but more importantly on the conduct of the complainant observed by
the court in the course of the trial. The RTC observed that AAA appeared to be mentally
deficient and behaved like a child when she answered even direct questions; that she did
not remember her birthday and the exact place where appellant had sexually abused her
except to say on a grassy land or damuhan and near a high monument when asked in what
municipality; thus, it was not difficult to understand that when appellant pulled her to a
grassy place, she did not shout or ask for help. The RTC found AAA's testimony to
be credible and sincere. Coupled with the findings of the medico legal expert and the fact
that appellant had sexual intercourse with AAA as testified to by Torno who actually saw
the incident, the RTC found appellant guilty of the crime of rape beyond reasonable doubt.

On appeal, appellant contends that the testimony of alleged eyewitness Torno appeared to
be too weak to overcome the constitutional presumption of innocence in favor of appellant;
that Torno'stestimony that while AAA was being raped, there were more than 15 children
watching her and appellant; that said children were uttering indecent words as if
suggesting what sexual position the two should perform, giving the impression that what
transpired between the two was a voluntary take sexual intercourse between two
consenting adults; that Torno was scandalized by what she saw at that time, as she even
testified that she brought the two to the barangay hall, as they were doing a wrong
thing. Appellant pointed out that in AAA's testimony she said that there were people
around when appellant went on top of her and yet she did not ask help from them; that to
inject an element of fear, AAA testified that appellant would kill her, however, no deadly
weapon was used by appellant in threatening her; that the records are bereft of any sign of
struggle; and that the linear abrasions found on AAA's body could have been caused by
sharp grass and the rough surface where the two lay, which was even admitted by
the medico legal officer.
Appellant pointed out that the RTC erred in admitting as evidence the psychological
examination conducted on AAA, as it was never testified to by the doctors who examined
her, but was only identified by the medico legal officer who had no expertise on the
subject matter.
The CA found unpersuasive appellant's assault on Torno's credibility because judicial
notice was taken of the fact that the rape scene is not always secluded or isolated, as it can
be committed in places where people congregrate; that complainant's failure to struggle or
to offer adequate resistance against appellant is of no moment, as physical resistance need
not be established in rape when intimidation was exercised upon the victim and she
submitted herself to the rapist's lust out of fear for her life and personal safety. The CA
found satisfactory the explanation advanced by AAA that she was threatened with death
which rendered her unable to scream or ask for help; that such threat or intimidation
produced a reasonable fear in her mind that it would be carried out if she resisted the
desires of appellant; that there was force when appellant pulled her to a grassy place, and
there was intimidation when he threatened to kill her if she would report the
incident; thus, the fact that no deadly weapon was used by appellant in making the threat
had no bearing. The CA further found that the medical findings of Dr. Reyes also
corroborated AAA's claim that she had been sexually molested by appellant.

While the CA ruled that the result of AAA's mental examination should not be admitted by
the trial court, since the neuro-psychiatrist who examined AAA was never presented in
court,notwithstanding that no timely objection was raised during trial, the CA declared that
AAA suffered some mental deficiency which was neither disputed nor challenged by
appellant as he even admitted that AAA's mental capacity was very low; that the
RTC judge had also observed AAA's mental retardation, as he mentioned it in his decision
which sufficed even in the absence of an expert opinion on the matter.
The CA did not give credence to appellant's claim that he and AAA were sweethearts and
the sexual act was consensual; that except for appellant's own declaration, he did not
present anything to prove their alleged love relationship and was unable to prove that
carnal knowledge between him and AAA was consensual. Thus, the CA affirmed
appellant's conviction and also awarded to the victim the amount of P50,000.00 as moral
damages.
It has often been said, to the point of being repetitive, that when the credibility of the
witness is in issue, the trial court's assessment is accorded great weight unless it is shown
that it has overlooked a certain fact or circumstance of weight which the lower court may
have overlooked, misunderstood or misappreciated and which, if properly considered,
would alter the results of the case.[36] The RTC has the unique advantage of monitoring and
observing at close range the demeanor, deportment and conduct of the witnesses as they
regale the trial court with their testimonies.[37] In this case, the RTC found AAA's testimony
credible and sincere and gave it full probative weight. We find no cogent reason to
overturn the CAs affirmance of such finding.
Article 335[38] of the Revised Penal Code as amended by Section 11 of Republic Act No.
7659[39] was the law applicable at the time of the rape. It provides:
Art. 335. When and how rape is committed. Rape is committed by
having carnal knowledge of a woman under any of the following circumstances.
1.
By using force or intimidation;
2.
When the woman is deprived of reason or otherwise unconscious; and
3.
When the woman is under 12 years of age or is demented.
xxxx

The gravamen of rape is carnal knowledge of a woman against her will or without
her consent.[40]
In this case, the prosecution was able to establish the fact that appellant had carnal
knowledge of AAA against her will or without her consent, thus:
Q. When he was on top of you, what did he do if any with your private parts?
A. He inserted his private part to my vagina.
Q. How long was his private part inserted to your private part?
A. 8.30.
Q. How many minutes that his private party was inserted to your private part?
A. Alas dose po.
Q. Was it for a short time or for a long time?
A. Matagal po.
Q. When his private part was inside your private part, what was the movement
of the body of Norberto.
A. -Atty. Pio
Leading your honor.
COURT:
What was he doing after inserting his private part, what did he do?
A. He held my breast.
Prosecutor Borlas:
Q. How about the buttocks, what were the movements being made by him?
A. He was grinding his buttocks.
Q. And while he was on top of you what if any did he tell you?
A. Not to report him.
Q. What was your reaction to what he said?
A. Papatayin daw ako.
Q. What did you think he will do if you will report the incident?
A. He will kill me.

Q. So, after he got up on top of you what else transpired?

A. No more.[41]
Torno corroborated AAA's testimony on the carnal knowledge as she actually saw
appellant pumping on top of AAA. Also, the medico-legal officer testified and presented
his undisputed findings of the presence of a deep, fresh hymenal laceration which further
established that AAA had been sexually penetrated. When the victim's testimony of her
violation is corroborated by the physical evidence of penetration, there is sufficient
foundation for concluding that there was carnal knowledge.[42]

Appellant's attack on Torno's credibility by claiming that Torno's testimony showed that
she was only scandalized by what she saw AAA and appellant were doing in the open and
which in her opinion was wrong would not detract from the fact that Torno actually saw
appellant having carnal knowledge of AAA.
The prosecution was able to establish that force and intimidation were employed by
appellant to perpetuate the offense charged.
As the CA correctly found, appellant pulled AAA from the house of her Ate Nimfa and
brought her to a grassy place. Notably, AAA was only 16 years old then while appellant
was already 21, a construction worker. Moreover, while appellant was on top of AAA, he
told the latter not to report his act as she would be killed. AAA's perception that bodily
harm might be inflicted on her by appellant while she was being raped made her
vulnerable to appellant's intimidation, which was sufficient for AAA to submit to
appellant's desires.
Appellant's claim that AAA testified that there were people around when the rape incident
took place and yet AAA did not ask help from them is not persuasive. The people seen by
AAA during the rape incident were the children who were positioned at the monument
which was a few meters away from the grassy land where AAA and appellant were at that
time,[43] and who were even shouting indecent words. She was not able to shout because
she was scared.[44] AAA's failure to shout for help does not vitiate the credibility of her
account that she was raped. To reiterate, AAA was only 16 years old at the time of the rape
and inexperienced in the ways of the world.

Appellant's claim that the records do not show any sign or presence of struggle is
irrelevant. Physical resistance is not an essential element of the felony, and need not be
established when intimidation is exercised upon the victim and the latter submits herself,
against her will, to the rapist's embrace because of fear for her life and personal safety.[45] It
is enough that the malefactor intimidated the complainant into submission. Failure to shout
or offer tenacious resistance did not make voluntary the complainant's submission to the
criminal acts of the accused.[46]Furthermore, not every victim of rape can be expected to act
with reason or in conformity with the usual expectations of everyone. [47] The workings of a
human mind placed under emotional stress are unpredictable; people react
differently. Some may shout, some may faint, while others may be shocked into
insensibility.[48] Also, the inequality of their physical strength made any resistance on
AAA's part futile.[49]
Moreover, the fact that there was no weapon used by the accused does not rule out force in
the rape committed.[50] It is a settled rule that the force contemplated by law in the
commission of rape is relative, depending on the age, size and strength of the parties. [51] It
is not necessary that the force and intimidation employed in accomplishing it be so great
and of such character as could not be resisted; it is only necessary that the force or
intimidation be sufficient to consummate the purpose which the accused had in mind.[52]
Intimidation, more subjective than not, is peculiarly addressed to the mind of the
person against whom it may be employed, and its presence is basically incapable of being
tested by any hard and fast rule.[53] Intimidation is normally best viewed in the light of the
perception and judgment of the victim at the time and occasion of the crime.[54] AAA was
threatened that she would be killed, which created a fear in her mind which caused her to
submit to appellant's bestial lust.
AAA, a minor, cannot be expected to react under such circumstances like a mature
woman. Because of her immaturity, she can be easily intimidated, subdued, and terrified
by a strong man like appellant.[55] Minor victims like AAA are easily intimidated and
browbeaten into silence even by the mildest threat on their lives.[56]
During the trial, the prosecution presented evidence tending to show that AAA was a
mental retardate. It is settled that sexual intercourse with a woman who is a mental
retardate constitutes statutory rape, which does not require proof that the accused used
force or intimidation in having carnal knowledge of the victim for conviction.[57] However,

this fact was not alleged in the complaint filed in this case and therefore cannot be the basis
for conviction.[58]
In any event, the prosecution presented adequate evidence which showed that the
appellant used force and intimidation in committing the crime of rape, and which the RTC
relied upon in convicting appellant. The absence of evidence of any improper motive on
the part of AAA to testify as principal witness of the prosecution strongly tends to sustain
the conclusion that no such improper motive existed at the time she testified and her
testimony is worthy of full faith and credit.[59]
Article 335 of the Revised Penal Code as amended by Section 11 of R.A. No. 7659
provides the penalty of reclusion perpetua for the carnal knowledge of a woman procured
through force or intimidation and without any other attendant circumstance. Thus, the RTC
correctly imposed the penalty of reclusion perpetua.
With respect to the civil liability of appellant, we find that the CA correctly affirmed
the RTC's award to the offended party in the amount of P50,000.00 as civil indemnity, as
well as the CA's additional award of P50,000.00 as moral damages even without need of
further proof, considering that AAA sustained mental, physical and psychological
suffering.[60]
WHEREFORE, the Decision dated September 30, 2005 of the Court of Appeals
is AFFIRMED.
SO ORDERED.

[G.R. No. UDK-13384. October 18, 2004]

PEOPLE vs. BUNALADI
SECOND DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated OCT 18 2004.
G.R. No. UDK-13384 (The People of the Philippines vs. Rodolfo Bunaladi.)

Accused Rodolfo Bunaladi was charged with the crime of rape before the Regional Trial Court (RTC) of
Malolos, Bulacan, Branch 13. The trial court rendered its Decision on 5 May 2004, convicting the accused
and imposing upon him the penalty of death by lethal injection.
Accused timely filed a Motion for Reconsideration assailing the factual findings of the trial court, and at the
same time praying that in the event the judgment of conviction is not set aside, the penalty of death be not
imposed in view of the age of the accused who was more than seventy (70) years old at the time of
rendition, of the trial court's judgment.
Pursuant to Article 47 of the Revised Penal Code, the trial court, in its Order dated 2 June 2004, partly
reconsidered its decision and lowered the penalty from death to reclusion perpetua. In the same Order, the
trial court also directed the transmittal of the records of the case to this Court "for automatic review."
The instant case deserves to be dismissed.
Section 3(d), Rule 122 of the Revised Rules of Criminal Procedure provides that no notice of appeal is
necessary in cases where the death penalty is imposed by the Regional Trial Court and that the same shall
be automatically reviewed by the Supreme Court as provided in Section 10 thereof.[1] In this case, however,
the penalty imposed by the trial court after reconsidering its decision is reclusionperpetua. Under Section
3(c) of Rule 122, an appeal to the Supreme Court in cases where the penalty imposed by the Regional Trial
Court is reclusion perpetua is duly interposed by filing a notice of appeal.
cralaw

A review of the records of the case shows that no notice of appeal was filed by the accused. Hence, the
Court has not acquired jurisdiction over the case. Accordingly, the instant case is hereby ordered
DISMISSED.
Very truly yours,
LUDICHI YASAY-NUNAG
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Asst. Clerk of Court

Endnotes:
See, however, the case of People v. Mateo, G.R. Nos. 147678-87, promulgated on 7 July 2004,
mandating a review by the Court of Appeals of all criminal cases in which the penalty of death, reclusion
perpetua or life imprisonment is imposed before the case is elevated to this Court.
[1]

cralaw

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-23770

February 18, 1926

MAGIN RIOSA, plaintiff-appellant,

vs.
PABLO ROCHA, MARCELINA CASAS, MARIA CORRAL and CONSOLACION R. DE
CALLEJA, defendants-appellees.
Domingo Imperial for appellant
Mariano Locsin for appellees.
AVANCEA, C.J.:
Maria Corral was united in marriage with the deceased Mariano Riosa, it being her first and only
marriage and during which time she bore him three children named Santiago, Jose and Severina.
The latter died during infancy and the other two survived their father, Mariano Riosa. Santiago Riosa,
no deceased, married Francisca Villanueva, who bore him two children named Magin and
Consolacion Riosa. Jose Riosa, also deceased, married Marcelina Casas and they had one child
who died before the father, the latter therefore leaving no issue. Mariano Riosa left a will dividing his
property between his two children, Santiago and Jose Riosa, giving the latter the eleven parcels of
land described in the complaint. Upon the death of Jose Riosa he left a will in which he named his
wife, Marcelina Casas, as his only heir.
On May 16, 1917, the will of Jose Riosa was filed for probate. Notwithstanding the fact that
Marcelina Casas was the only heir named in the will, on account of the preterition of Maria Corral
who, being the mother of Jose Riosa, was his legitimate heir, I Marcelina Casas and Maria Corral, on
the same date of the filing of the will for probate, entered into a contract by which they divided
between themselves the property left by Jose Riosa, the eleven parcels of land described in the
complaint being assigned to Maria Corral.
On October 26, 1920, Maria Corral sold parcels Nos. 1, 2, 3, 4, 5, 6, 10 and 11 to Marcelina Casas
for the sum of P20,000 in a public instrument which was recorded in the registry of deeds on
November 6, 1920. On November 3, 1920, Marcelina Casas sold these eight parcels of land to
Pablo Rocha for the sum of P60,000 in a public document which was recorded in the registry of
deeds on November 6, 1920. On September 24, 1921, Pablo Rocha returned parcels No. 1, 2, 3, 4,
and 6 to Maria Corral stating in the deed executed for the purpose that these parcels of land had
been erroneously included in the sale made by Maria Corral to Marcelina Casas.
The Court of first Instance denied the probate of the will of Jose Riosa, but on appeal this court
reversed the decision of the lower court and allowed the will to probate. 1 The legal proceedings for
the probate of the will and the settlement of the testate estate of Jose Riosa were followed; and, at
the time of the partition, Maria Corral and Marcelina Casas submitted to the court the contract of
extrajudicial partition which they had entered into on May 16, 1917, and which was approved by the
court, by order of November 12, 1920, as though it had been made within the said testamentary
proceedings.
From the foregoing is appears that the eleven parcels of land described in the complaint were
acquired by Jose Riosa, by lucrative title, from his father Mariano Riosa and that after the death of
Jose Riosa, by operation of law, they passed to his mother Maria Corral. By virtue of article 811 of
the Civil Code these eleven parcels of land are reservable property. It results, furthermore, that
parcels 1, 2, 3, 4, 5, 6, 7, 8 and 9 still belong in fee simple to Maria Corral, and that parcels 10 and
11 were successively sold by Maria Corral to Marcelina Casas and by the latter to Pablo Rocha.

Lastly, it appears that Magin and Consolacion Riosa are the nearest relatives within the third degree
of the line from which this property came.
This action was brought by Magin Riosa, for whom the property should have been reserved, against
Maria Corral, whose duty it was to reserve it, and against Marcelina Casas and Pablo Rocha as
purchasers of parcels 10 and 11. Consolacion Riosa de Calleja who was also bound to make the
reservation was included as a defendant as she refused to join as plaintiff.
The complaint prays that the property therein described be declared reservable property and that the
plaintiffs Jose and Consolacion Riosa be declared reservees; that this reservation be noted in the
registry of deeds; that the sale of parcels 10 and 11 to Marcelina Casas and Pablo Rocha be
declared valid only in so far as it saves the right of reservation in favor of the plaintiff Magin Riosa
and of the defendant Consolacion Riosa, and that this right of reservation be also noted on the
deeds of sale executed in favor of Marcelina Casas and Pablo Rocha; that Maria Corral, Marcelina
Casas and Pablo Rocha give a bond of P50,000, with good and sufficient sureties, in favor of the
reservees as surety for the conservation and maintenance of the improvements existing on the said
reservable property. The dispositive part of the court's decision reads as follows:
For the foregoing reasons it is held:
1. That the eleven parcels of land described in paragraph 6 of the complaint have the
character of reservable property; 2. That the defendant Maria Corral, being compelled to
make the reservation, must reserve them in favor of the plaintiff Magin Riosa and the
defendant Consolacion Riosa de Calleja in case that either of these should survive her; 3.
That Magin Riosa and Consolacion Riosa de Calleja have the right, in case that Maria Corral
should die before them, to receive the said parcels or their equivalent.
In virtue whereof, the defendant Maria Corral is ordered: 1. To acknowledge the right of
Magin Riosa and Consolacion Riosa de Calleja to the reservation of the said parcels of lands
described in the complaint, which she shall expressly record in the registration of said lands
in the office of the register of deeds of this province; 2. To insure the delivery of said parcels
of lands, or their equivalent, to Magin Riosa and Consolacion Riosa de Calleja, should either
of them survive her, either by a mortgage thereon or by a bond in the amount of P30,000,
without express pronouncement as to costs.
The other defendants are absolved from the complaint.
Inasmuch as the reservation from its inception imposes obligations upon the reservor
(reservista) and creates rights in favor of the reservation (reservatarios) it is of the utmost
importance to determine the time when the land acquired the character of reservable property.
It will be remembered that on May 16, 1917, Maria Corral and Marcelina Casas entered into a
contract of extrajudicial partition of the property left by Jose Riosa, in which they assigned to Maria
Corral, as her legitime, the parcels of land here in question, and at the same time petitioned for the
probate of the will of Jose Riosa and instituted the testamentary proceeding. In support of the legality
of the extrajudicial partition between Maria Corral and Marcelina Casas the provision of section 596
of the Code of Civil Procedure is invoked, which authorizes the heirs of a person dying without a will
to make a partition without the intervention of the courts whenever the heirs are all of age and the
deceased has left no debts. But this legal provisions refers expressly to intestate estates and, of
course, excludes testate estates like the one now before us.

When the deceased has left a will the partition of his property must be made in accordance
therewith. According to section 625 of the same Code no will can pass property until it is probated.
And even after being probated it cannot pass any property if its provisions impair the legitime fixed
by law in favor of certain heirs. Therefore, the probate of the will and the validity of the testamentary
provisions must be passed upon by the court.
For the reasons stated, and without making any express finding as to the efficacy of the extrajudicial
partition made by Maria Corral and Marcelina Casas, we hold that for the purposes of the
reservation and the rights and obligations arising thereunder in connection with the favored relatives,
the property cannot be considered as having passed to Maria Corral but from the date when the said
partition was approved by the court, that is, on November 12, 1920. In the case of Pavia vs. De la
Rosa (8 Phil., 70), this court laid down the same doctrine in the following language:
The provisions of Act No. 190 (Code of Civil Procedure) have annulled the provisions of
article 1003 and others of the Civil Code with regard to the pure or simple acceptance of the
inheritance of a deceased person or that made with benefit of inventory and the
consequences thereof.
xxx

xxx

xxx

The heir legally succeeds the deceased from whom he derives his right and title, but only
after the liquidation of the estate, the payment of the debts of same, and the adjudication of
the residue of the estate of the deceased, and in the meantime the only person in charge by
law to attend to all claims against the estate of the deceased debtor is the executor or
administrator appointed by a competent court.
As has been indicated, parcels 10 and 11 described in the complaint were first sold by Maria Corral
to Marcelina Casas who later sold them to Pablo Rocha. In this appeal it is urged that Marcelina
Casas and Pablo Rocha, who were absolved by the court below, be ordered to acknowledge the
reservation as to parcels 10 and 11, acquired by them, and to have the said reservation noted on
their titles. This argument, of course, is useless as to Marcelina Casas for the reason that she
transferred all her rights to Pablo Rocha.
It has been held by jurisprudence that the provisions of the law referred to in article 868 tending to
assure the efficacy of the reservation by the surviving spouse are applicable to the reservation
known as "reserva troncal," referred to in article 811, which is the reservation now under
consideration.
In accordance with article 977, Maria Corral, reservor, is obliged to have the reservation noted in the
registry of deeds in accordance with the provisions of the Mortgage Law which fixes the period of
ninety days for accomplishing it (article 199, in relation with article 191, of the Mortgage Law).
According to article 203 of the General Regulation for the application of the Mortgage Law, this time
must be computed from the acceptance of the inheritance. But as this portion of the Civil Code,
regarding the acceptance of the inheritance, has been repealed, the time, as has been indicated,
must be computed from the adjudication of the property by the court to the heirs, in line with the
decision of this court hereinabove quoted. After the expiration of this period the reservees may
demand compliance with this obligation.
If Maria Corral had not transferred parcels 10 and 11 to another there would be no doubt that she
could be compelled to cause the reservable character of this property to be noted in the registry of
deeds. This land having been sold to Marcelina Casas who, in turn, sold it to Pablo Rocha the
question arises whether the latter can be compelled to have this reservation noted on his title. This

acquisition by Pablo Rocha took place when it was the duty of Maria Corral to make the notation of
the reservation in the registry and at the time when the reservees had no right to compel Maria
Corral to make such notation, because this acquisition was made before the expiration of the period
of ninety days from November 12, 1920, the date of the adjudication by the court, after which the
right of the reservees to commence an action for the fulfillment of the obligation arose. But the land
first passed to Marcelina Casas and later to Pablo Rocha together with the obligation that the law
imposes upon Maria Corral. They could not have acquired a better title than that held by Maria
Corral and if the latter's title was limited by the reservation and the obligation to note it in the registry
of deeds, this same limitation is attached to the right acquired by Marcelina Casas and Pablo Rocha.
In the transmission of reservable property the law imposes the reservation as a resolutory condition
for the benefit of the reservees (article 975, Civil Code). The fact that the resolvable character of the
property was not recorded in the registry of deed at the time that it was acquired by Marcelina Casas
and Pablo Rocha cannot affect the right of the reservees, for the reason that the transfers were
made at the time when it was the obligation of the reservor to note only such reservation and the
reservees did not them have any right to compel her to fulfill such an obligation.
Marcelina Casas, as well as Pablo Rocha, Knew of the reservable character of the property when
they bought it. They had knowledge of the provisions of the last will and testament of Mariano Riosa
by virtue of which these parcels were transferred to Jose Riosa. Pablo Rocha was one of the
legatees in the will. Marcelina Casas was the one who entered into the contract of partition with
Maria Corral, whereby these parcels were adjudicated to the latter, as a legitimate heir of Jose
Riosa. Pablo Rocha was the very person who drafted the contracts of sale of these parcels of land
by Maria Corral to Marcelina Casas and by the latter to himself. These facts, together with the
relationship existing between Maria Corral and Marcelina Casas and Pablo Rocha, the former a
daughter-in-law and the latter a nephew of Maria Corral, amply support the conclusion that both of
them knew that these parcels of land had been inherited by Maria Corral, as her legitime from her
son Jose Riosa who had inherited them, by will, from his father Mariano Riosa, and were reservable
property. Wherefore, the duty of Maria Corral of recording the reservable character of lots 10 and 11
has been transferred to Pablo Rocha and the reservees have an action against him to compel him to
comply with this obligation.
The appellant also claims that the obligation imposed upon Maria Corral of insuring the return of
these parcels of land, or their value, to the reservees by means of a mortgage or a bond in the
amount of P30,000, also applies to Pablo Rocha. The law does not require that the reservor give this
security, the recording of the reservation in the registry of deeds being sufficient (art. 977 of the Civil
Code). There is no ground for this requirement inasmuch as, the notation once is made, the property
will answer for the efficacy of the reservation. This security for the value of the property is required
by law (art. 978, paragraph 4, of the Civil Code) in the case of a reservation by the surviving spouse
when the property has been sold before acquiring the reservable character (art 968 of the Civil
Code), but is not applicable to reservation known as reserva troncal (art 811 of the Civil Code). In the
case of Dizon and Dizon vs. Galang (page 601, ante), this court held that:
* * * As already intimated, the provisions of the law tending to give efficacy to a reservation
by the widowed spouse mentioned in article 968 are applicable to the reserva
troncal provided for in article 811. But as these two reservations vary in some respects, these
rules may be applied to the reserva troncal only in so far as the latter is similar to a
reservation by the widowed spouse. In the reserva troncal the property goes to the reservor
as reservable property and it remains so until the reservation takes place or is extinguished.
In a reservation by the widowed spouse there are two distinct stages, one when the property
goes to the widower without being reservable, and the other when the widower contracts a
second marriage, whereupon the property, which theretofore has been in his possession free

of any encumbrance, becomes reservable. These two stages also affect differently the
transfer that may be made of the property. If the property is sold during the first stage, before
becoming reservable, it is absolutely free and is transferred to the purchaser unencumbered.
But if the sale is made during the second stage, that is, when the duty to reserve has arisen,
the property goes to the purchaser subject to the reservation, without prejudice to the
provisions of the Mortgage Law. This is the reason why the law provides that should the
property be sold before it becomes reservable, or before the widower contracts another
marriage, he will be compelled to secure the value of the property by a mortgage upon
contracting a new marriage, so that the reservation may not lose its efficacy and that the
rights of those for whom the reservation is made may be assured. This mortgage is not
required by law when the sale is made after the reservation will follow the property, without
prejudice to the contrary provisions of the Mortgage Law and the rights of innocent
purchasers, there being no need to secure the value of the property since it is liable for the
efficacy of the reservation by a widowed spouse to secure the value of the property sold by
the widower, before becoming reservable are not applicable to the reserva troncal where the
property goes to the ascendant already reservable in character. A sale in the case of reserva
troncal might be analogous to a sale made by the widower after contacting a second
marriage in the case of a reservation by the widowed spouse.
Since Maria Corral did not appeal, we cannot modify the appealed judgment in so far as it is
unfavorable to her. As she has been ordered to record in the registry the reservable character of the
other parcels of land, the subject of this action, the questions raised by the appellant as to her are
decided.
The judgment appealed from is modified and Pablo Rocha is ordered to record in the registry of
deeds the reservable character of parcels 10 11, the subject of this complaint, without special
pronouncement as to costs. So ordered.
Street Malcolm, Villamor, Strand, Johns, Romualdez and Villa-Real, JJ., concur.

Footnotes
1

In re will Riosa, 39 Phil., 23.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-46934 April 15, 1988

ALFREDO CUYOS y TULOR, petitioner,

vs.
HON. NICOLAS P. GARCIA, Presiding Judge, Municipal Court, San Fernando, Pampanga and
THE PEOPLE OF THE PHILIPPINES, respondents.
De la Cruz, De Loso and Sison Law Offices for petitioner.
The Solicitor General for respondents.
RESOLUTION

FELICIANO, J.:
Petitioner Alfredo Cuyos, in this Petition for certiorari with Prayer for Preliminary Injunction seeks to
set aside the Order dated 9 September 1977 issued by respondent Municipal Court Judge Nicolas P.
Garcia in Criminal Case No. 77-1848 (entitled " People of the Philippines, plaintiff vs. Alfredo Cuyos
y Tulor, accused") denying petitioner's Motion to Transfer said case to the then Court of First
Instance of Pampanga for trial on the merits.
Petitioner was charged before the Municipal Court of San Fernando, Pampanga, with homicide with
multiple serious physical injuries and damage to property, through reckless imprudence. Petitioner
was driver of a cargo truck which had collided with a Volkswagen automobile in a vehicular accident
which resulted in the death of one (1) person and physical injuries to four (4) other people. The
Amended Complaint against petitioner read as follows:
That on or about the 9th day of June 1977, at about 6:10 P.M., at the MacArthur
Highway, barrio San Isidro, San Fernando, Pampanga, Philippines, and within the
jurisdiction of this Honorable Court, the said accused, being then the driver and
person in charge of a truck bearing plate No. V 139 T Filipinos 1977, willfully and
unlawfully drive and operate the same in a negligent, imprudent and careless
manner, and without due regard to traffic laws, rules and regulations, and without
taking the necessary precaution to prevent accident to person and damage to
property, causing by such negligence, imprudence and carelessness, the said truck
driven and operated by him bumped and hit a Volkswagen car bearing plate no. E
604 Filipinos 1977, then driven by Antonio M. Concepcion, as a result of which one of
the occupants of the said car, Victoriana Miranda Concepcion died in the said
accident, and the other occupants namely: Antonio Concepcion, Rhinna Lin Capili,
Renee Ann Capili and Lourdes Concepcion sustained serious physical injuries, and
the said car suffered damages in the amount of P18,000.00, belonging to Antonio
Concepcion, to the damage and prejudice of the offended parties.
Petitioner entered a plea of not guilty at his arraignment. After arraignment, respondent Judge set
the case for trial on 12,14 and 16 September 1977.

Before trial could commence, however, petitioner filed on 6 September 1977 a " Motion to Remand
the Case to the Court of First Instance for Trial" , alleging lack of jurisdiction over the case on the
part of the Municipal Court. Petitioner's argument was that the amended criminal complaint alleged
that the Volkswagen car involved in the accident had suffered damages amounting to P18,000.00,
and that under paragraph 3, Article 365 of the Revised Penal Code, the crime with which he was
charged would carry a fine in an amount ranging from the amount of the damage to three (3) times
the value of the damage alleged (i.e. 3 x P18,000.00 or P54,000.00). Petitioner urged in his Motion
that because under Section 87 (e) of the Judiciary Act of 1948 as amended (Republic Act No. 296 as
amended), the respondent Municipal Court of the Provincial Capital of Pampanga, had jurisdiction
only over offenses punishable by a fine not exceeding P6,000.00, the case had to be transferred to
the Court of First Instance. On the same date, petitioner filed an Urgent Motion to Postpone the trial
of the case relying on the same grounds set out in his Motion to Transfer the Case to the Court of
First Instance.
After a joint hearing of the two (2) Motions filed by petitioner, the respondent Municipal judge issued
an order dated 9 September 1977 denying the Motion to transfer the Case to the Court of First
Instance and set the trial of the case for 5 October 1977. A verbal Motion for Reconsideration by
petitioner was denied.
Hence the present Petition for Certiorari, assailing the jurisdiction of the respondent court to try the
criminal case against petitioner on the merits.
By a Resolution dated 26 September 1977, this Court issued a Temporary Restraining Order
enjoining the respondent Municipal Court from proceeding with Criminal Case No. 77-1848.
The sole issue raised in this Petition is whether or not the respondent Municipal Court of San
Fernando, Pampanga has jurisdiction to try the criminal case against petitioner.
The Solicitor General, in his Comment dated 27 October 1977, agreed with and adopted the position
taken by petitioner that respondent Municipal Court has no jurisdiction to try Criminal Case No. 771848. The Court agrees with the Solicitor General.
Criminal Case No. 77-1848 involves a complex crime of homicide, multiple serious physical injuries
and damage to property, resulting from reckless imprudence. Under Article 48 of the Revised Penal
Code, in a prosecution for a complex crime constituted by two (2) or more grave or less grave
felonies, the penalty for the most serious crime is to be imposed, the same to be applied in its
maximum period. In the present case, one might, as respondent Municipal Judge did, look only at
the acts which constitute the offenses comprising the complex crime here involved. One is likely to
do so through eyes which are culturally conditioned and so is likely to assume, as did respondent
Municipal Judge, that the most serious offense of which petitioner is accused is homicide through
reckless imprudence. Under paragraph 2, Article 365 of the Revised Penal Code, the penalty
imposable upon petitioner, should he be found guilty of homicide through reckless imprudence,
would be prision correccional in its medium and maximum periods.
Art. 365. Imprudence and negligence.

xxx xxx xxx

The provisions contained in this Article shall not be applicable:
xxx xxx xxx
(2) When, by imprudence or negligence and with violation of the automobile law, the
death of a person shall be caused, in which case the defendants shall be punished
by prision correccional in its medium and maximum periods.
xxx xxx xxx
At the time of the filing of the criminal complaint against petitioner before the Municipal Court of San
Fernando, Pampanga, such Municipal Court in the capital of the Province of Pampanga had
jurisdiction to impose a penalty of imprisonment not exceeding six (6) years or a fine not exceeding
P6,000. 00 or both. The applicable provision was the fourth paragraph of Article 87 (c) of Republic
Act No. 296 as amended which provided as follows:
xxx xxx xxx
Municipal judges in the capitals of provinces and sub-provinces and judges of city
courts shall have like jurisdiction as the Court of First Instance to try parties charged
with an offense committed within their respective jurisdictions, in which the penalty
provided by law does not exceed prision correccional or imprisonment for not more
than six years or fine not exceeding six thousand pesos or both, and in the absence
of the district judge, shall have like jurisdiction within the province as the Court of
First Instance to hear applications for bail.
xxx xxx xxx
(Emphasis supplied)
Thus, if the basic assumption made earlier as to the relative gravity of homicide through reckless
imprudence and damage to property through reckless imprudence were correct, the respondent
Municipal Judge would have to be vested with jurisdiction over the criminal charges against
petitioner.
As a technical legal proposition, however, the relative seriousness of offenses is determined by the
seriousness of the penalties attached by the law to the several offenses. It was noted earlier that the
imposable penalty in case of homicide through reckless imprudence is prision correccional in its
medium and maximum periods, i.e., a correctional penalty in the scale of penalties set up in Article
25 of the Revised Penal Code. Upon the other hand, the penalty for damage to property through
reckless imprudence is provided for in the third paragraph of Article 365 of the Revised Penal Code
which reads as follows:

When the execution of the Act covered by this Article shall have only resulted in
damage to the property of another, the offender shall be punished by a fine ranging
from an amount equal to the value of paid damages to three-times such value, but
which shall in no case be less than P25.00. (Emphasis supplied)
Under Article 26 of the same Code, a fine may be an afflictive penalty (i.e., if it exceeds P6,000.00)
or a correctional penalty (i.e., if it is P200.00 or more but does not exceed P6,000.00). The offense
so penalized with a fine may be a grave felony (i.e. if the imposable fine is afflictive in nature) or
a less grave felony (i.e., if the imposable fine is merely correctional). 1 In the instant case, the
maximum fine which may be imposed upon petitioner is P54,000.00 (3 x P18,000.00), obviously an
afflictive penalty and hence, in the scheme of the Revised Penal Code, more serious than the penalty
imposable for homicide through reckless imprudence.
In complex crimes, it is not uncommon that one constitutive offense carries with it an afflictive
penalty while the other or other constitutive offenses carry with them only a correctional or even a
light penalty. Jurisdiction over the whole complex crime must logically be lodged with the trial court
having jurisdiction to impose the maximum and most serious penalty imposable on an offense
forming part of the complex crime. A complex crime must be prosecuted integrally, as it were,
and not split into its component offenses and the latter made the subject of multiple informations
possibly brought in different courts. This is the thrust of our case law on the matter.
In Angeles, etc., et al, v. Jose, et al., 2 the Court had occasion to deal with a criminal information against
one Domingo Mejia before the Court of First Instance of Manila, charging him with the crime of damage to
property in the sum of P654.22 and with less serious physical injuries through reckless
imprudence, committed, in one single act. There, the respondent Court of First Instance dismissed the
criminal information upon the ground that the penalty prescribed by Article 365 of the Revised Penal Code
was only arresto mayor in its minimum and medium periods which was within the exclusive jurisdiction of
the Municipal Court. The prosecution then invited attention to the fact that the fine which could be
imposed by the respondent court on account of the damage to property through reckless imprudence was
a sum ranging from P654.22 to P1,962.66 (P654.22 x 3) which amount was beyond the jurisdiction of a
Municipal Court to impose as fine. In setting aside the order of dismissal by the respondent Court of First
Instance and remanding the case to the trial court further proceedings, the Supreme Court said:
[The third paragraph of Article 365 of the Revised Penal Code] simply means that if
there is only damage to property the amount fixed therein shall be imposed, but if
there are also physical injuries there, should be an additional penalty for the
latter. The information cannot be split into two; one for the physical injuries, and
another for the damage to property, for both the injuries and the damage committed
were caused by one single act of the defendant and constitute what may be called a
complex crime of physical injuries and damage to property. It is clear that the fine
fixed by law in this case is beyond the jurisdiction of the municipal court and within
that of the court of first instance. 3(Emphasis supplied)
Thus, in Angeles, we held that the jurisdiction of the Court to take cognizance of the case must be
determined, not by the penalty for the physical injuries charged but by the fine imposable for the
damage to property resulting from reckless imprudence. Damage to property through reckless
imprudence need not be a lighter offense than less serious physical injuries through reckless

imprudence. Because the maximum fine (P1,962.66) imposable upon the accused in
the Angeles case was beyond the jurisdiction of the Municipal Court of Manila to impose, the
criminal case fell within the jurisdiction of the respondent Court of First Instance of Manila.
People v. Villanueva 4 followed the rule set out in Angeles. In Villanueva, the accused was charged
before the Justice of Peace Court of Batangas, Batangas with the crime of serious and less serious
physical injuries, with damage to property in the amount of P2,636.00, through reckless imprudence. The
Justice of Peace Court subsequently declared itself without jurisdiction to try the case and forwarded the
same to the Court of First Instance. The latter court then declared itself similarly without jurisdiction over
the complex crime charged in the information, upon the ground that the penalty for the graver offense of
physical injuries through reckless imprudence was only arresto mayor in its, maximum and medium
periods which penalty, even if applied in its maximum degree (in view of the complex -nature of the
crime), would remain within the jurisdiction of the Justice of Peace Court. Upon appeal by the
prosecution, the Court, speaking through Mr. Justice J.B.L. Reyes, held that the Court of First Instance
had jurisdiction over the complex crime there involved:
We find the appeal well taken, for this case comes squarely under the rule laid down
by us in Angeles, et al. v. ,rose, et al. [96 Phil. 151 (1954)],, wherein we held that.
xxx xxx xxx
Consider that it is the court of first instance that would undoubtedly have jurisdiction if
the only offense that resulted from appellant's imprudence were the damage to
property in the amount of P2,636.00, it would be absurd to hold that for the graver
offense of serious and less serious physical injuries combined with damage to
property through reckless imprudence, jurisdiction would lie in the justice of the
peace court. The presumption is against absurdity, and it is the duty of the courts to
interpret the law in such a way as to avoid absurd results. Our system of
apportionment of criminal jurisdictions among the various trial courts proceeds on the
basic theory that crimes cognizable by the Courts of First Instance are more serious
than those triable injustice of the peace or municipal courts.
Moreover, we cannot discard the possibility that the prosecution may not be able to
prove all the supposed offenses constituting the complex crime charge. Were we to
hold that it is the justice of the Peace court that has jurisdiction in this case, if later
the prosecution should fail to prove the physical injuries aspect of the case and
establish only the damage to property in the amount of P2,636.00, the inferior court
would find itself without jurisdiction to impose the fine for the damage to property
committed, since such fine can not be less than the amount of the damage. Again, it
is to avoid this further absurdity that we must hold that the jurisdiction lies in the court
of first instance in this case. 5
The applicable rule on the allocation of jurisdiction between an inferior court on the one hand and the
Regional Trial Court on the other, in respect of complex crimes involving reckless imprudence
resulting in homicide or physical injuries and damage to property, was summarized by Mr. Justice
Barrera in People v. Malabanan: 6

It is true that, following the ruling of this Court in the case of Lapuz v. Court of
Appeals, G.R. No. L-6382, March 30,1954 (40 O.G. 18 supp.), in imposing the
corresponding penalty, to the quasi-offense of reckless imprudence resulting in
physical injuries and damage to property, Article 48 of the Revised Penal Code
should be applied. However, there may be cases, as the one at bar, where the
imposable penalty for the physical injuries charged would come within the jurisdiction
of the municipal or justice of the peace court while the fine, for the damage to
property, would fall on the Court of First Instance. As the information cannot be split
into two, one for damages and another for the physical injuries, the jurisdiction of the
court to take cognizance of the case must be determined not by the corresponding
penalty for the physical injuries charged but by the fine imposable for the damage to
property resulting from the reckless imprudence. 7 (Emphasis supplied)
It remains only to point out that under B.P. Blg. 129, the law presently in effect, we would have to
reach the same result: i.e., that the criminal case against petitioner falls within the jurisdiction of the
Regional Trial Court. Under Section 32 (2) of B.P. Blg. 129, Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts have:
(2) Exclusive original jurisdiction over all offenses punishable with imprisonment of
not exceeding four (4) years and two (2) months, or a fine of not more than four
thousand pesos, or both such fine and imprisonment, regardless of other imposable
accessory or other penalties, including the civil liability arising from such offenses or
predicated thereon, irrespective of kind, nature, value, or amount thereof Provided,
however, That in offenses involving damage to property through criminal negligence
they should have exclusive original jurisdiction where the imposable fine does not
exceed twenty thousand pesos. (Emphasis supplied)
Since the maximum fine imposable in the present case is P54,000.00, and the maximum
imprisonment imposable (for the homicide through reckless imprudence) is six (6) years, clearly, the
criminal charge involved falls outside the jurisdiction of the Municipal Trial Court and consequently
within the jurisdiction of the Regional Trial Court of San Fernando, Pampanga.
WHEREFORE, the Order of the respondent Municipal Court of 9 September 1977 is hereby SET
ASIDE as null and void and the Temporary Restraining Order issued by this Court on 26 September
1977 is hereby made PERMANENT. Because the proceedings before the respondent Municipal
Court are null and void, the Provincial Fiscal of Pampanga will have to file a new information against
petitioner in the Regional Trial Court, San Fernando, Pampanga. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION
G.R. No. 179878

December 24, 2008

NEGROS ORIENTAL PLANTERS ASSOCIATION, INC. (NOPA), petitioner,

vs.
HON. PRESIDING JUDGE OF RTC-NEGROS OCCIDENTAL, BRANCH 52, BACOLOD CITY, and
ANICETO MANOJO CAMPOS, respondents.
DECISION
CHICO-NAZARIO, J.:
Whats sauce for the goose is sauce for the gander.
This is a Petition for Review on Certiorari seeking the reversal of the Resolutions1 of the Court of
Appeals dated 23 May 2007 and 16 August 2007, respectively, in CA-G.R. SP No. 02651 outrightly
dismissing the Petition for Certiorari filed by petitioner Negros Oriental Planters Association, Inc.
(NOPA) against private respondent Aniceto Manojo Campos (Campos).
On 17 March 1999, Campos filed a Complaint for Breach of Contract with Damages, docketed as
Civil Case No. 99-10773, against NOPA before the Regional Trial Court (RTC) of Negros Occidental,
Bacolod City. According to the Complaint, Campos and NOPA entered into two separate contracts
denominated as Molasses Sales Agreement. Campos allegedly paid the consideration of the
Molasses Sales Agreement in full, but was only able to receive a partial delivery of the molasses
because of a disagreement as to the quality of the products being delivered.
On 17 August 2005, more than six years after NOPA filed its Answer, NOPA filed a Motion to Dismiss
on the ground of an alleged failure of Campos to file the correct filing fee. According to NOPA,
Campos deliberately concealed in his Complaint the exact amount of actual damages by opting to
estimate the value of the unwithdrawn molasses in order to escape the payment of the proper docket
fees.
On 30 June 2006, the RTC issued an Order denying the Motion to Dismiss. NOPA received this
Order on 17 July 2006.
On 1 August 2006, NOPA filed a Motion for Reconsideration of the 30 June 2006 Order. On 5
January 2007, the RTC issued an Order denying NOPAs Motion for Reconsideration.
On 2 April 2007, NOPA filed a Petition for Certiorari before the Court of Appeals assailing the Orders
of the RTC dated 30 June 2006 and 5 January 2007.
On 23 May 2007, the Court of Appeals issued the first assailed Resolution dismissing the Petition
for Certiorari on the following grounds:

1. Failure of the Petitioner to state in its Verification that the allegations in the petition are
"based on authentic records", in violation of Section 4, Rule 7, of the 1997 Rules of Civil
Procedure, as amended by A.M. No. 00-2-10-SC (May 1, 2000), which provides:
" x x x - A pleading is verified by an affidavit that the affiant has read the pleading
and that the allegations therein are true and correct of his personal knowledge
or based on authentic records.
A pleading required to be verified which contains a verification based on "information
and belief," or lacks a proper verification, shall be treated as an unsigned pleading."
2. Failure of the petitioner to append to the petition relevant pleadings and documents, which
would aid in the resolution of the instant petition, in violation of Section 1, Rule 65 of the
Rules of Court, such as:
a. Ex-parte Motion to Set the Case for Pre-Trial dated July 27, 1999;
b. Notice of Pre-Trial;
c. Motion for Leave to File Third Party Complaint;
d. Orders dated July 31, 2000, March 20 2001, November 17, 2004, and May 17,
2005, respectively;
e. Motion to Suspend the Proceedings dated August 10, 2003;
f. Motion to Dismiss for Failure to Prosecute; and
g. Motion for Reconsideration to the Order dated May 12, 2005.
Section 1, Rule 65 of the Rules of Court, provides:
"When any tribunal, board or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as law and justice
may require.
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and
pertinent thereto, and a sworn certification of non-forum shopping as provided in
the paragraph of section 3, Rule 46."

3. Failure of petitioners counsel to indicate in the petition his current IBP Official Receipt
Number, in violation of Bar Matter No. 1132 and/or A.M. No. 287, which reads as follows:
"The Court resolved, upon recommendation of the Office of the Bar Confidant, to
GRANT the request of the Board of Governors of the Integrated Bar of the
Philippines and the Sanguniang Panlalawigan of Ilocos Norte to require all lawyers to
indicate their Roll of Attorneys Number in all papers or pleadings submitted to the
various judicial or quasi-judicial bodies in addition to the requirement of indicating the
current Professional Tax Receipt (PTR) and the IBP Official Receipt or Lifetime
Member Number."2
On 22 June 2007, NOPA filed a Motion for Reconsideration of the above Resolution, attaching
thereto an Amended Petition for Certiorari in compliance with the requirements of the Court of
Appeals deemed to have been violated by NOPA. The Court of Appeals denied the said Motion in
the second assailed Resolution dated 16 August 2007.
Hence, this Petition for Review on Certiorari, where NOPA raises the following issue and arguments:
ISSUE
WHETHER OR NOT THE PUBLIC RESPONDENT CA COMMITTED REVERSIBLE ERROR
WHEN IT RULED THAT THERE WAS NO SUBSTANTIAL COMPLIANCE WITH THE
PROCEDURAL REQUIREMENTS WHEN PETITIONER FAILED TO ALLEGE IN ITS
VERIFICATION THAT THE ALLEGATIONS THEREIN ARE TRUE AND CORRECT OF HIS
PERSONAL KNOWLEDGE OR BASED ON AUTHENTIC RECORDS AND FAILURE TO
ATTACH THE NECESSARY DOCUMENTS ON ITS PLEADINGS AS REQUIRED BY
SECTION 1, RULE 65 OF THE 1997 RULES OF CIVIL PROCEDURE.3
ARGUMENTS
1. The requirement that a pleading be verified is merely formal and not jurisdictional. The
court may give due course to an unverified pleading where the material facts alleged are a
matter of record and the questions raised are mainly of law such as in a petition for
certiorari.4
2. Petitioner had attached to its Petition for Certiorari clearly legible and duplicate original or
a certified true copy of the judgment or final order or resolution of the court a quo and the
requisite number of plain copies thereof and such material portions of the record as would
support the petition.5
3. Substantial compliance of the rules, which was further supplied by the petitioners
subsequent full compliance demonstrates its good faith to abide by the procedural
requirements.6
4. The resolution of the important jurisdictional issue raised by the petitioner before the
PUBLIC RESPONDENT CA would justify a relaxation of the rules.7

The original Verification in the original Petition for Certiorari filed by NOPA states as follows:
1. That I am the President and Chairman of the Board of Directors of Negros Oriental
Planters Association, Inc. (NOPA), the petitioner in this case, a domestic corporation duly
organized under Philippine Laws, with principal place of business at Central Bais, Bais City,
Philippines; that I am duly authorized by the Board of NOPA (Secretarys Certificate attached
as Annex "A") to cause the preparation of the foregoing petition; and that I hereby affirm and
confirm that all the allegations contained herein are true and correct to my own knowledge
and belief;8
NOPA claims that this Court has in several cases allowed pleadings with a Verification that contains
the allegation "to the best of my knowledge" and the allegation "are true and correct," without the
words "of his own knowledge," citing Decano v. Edu,9 and Quimpo v. De la Victoria.10 NOPA claims
that the allegations in these cases constitute substantial compliance with the Rules of Court, and
should likewise apply to the case at bar.
NOPA is mistaken. NOPA cited cases promulgated before 1 May 2000, when Section 4 of Rule 7
was amended by A.M. No. 00-2-10. Before the amendment, said Section 4 stated:
SEC. 4. Verification.Except when otherwise specifically required by law or rule, pleadings
need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his knowledge and belief.
As amended, said Section 4 now states:
SEC. 4. Verification.Except when otherwise specifically required by law or rule, pleadings
need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his personal knowledge or based on
authentic records.
Clearly, the amendment was introduced in order to make the verification requirement stricter, such
that the party cannot now merely state under oath that he believes the statements made in the
pleading. He cannot even merely state under oath that he has knowledge that such statements are
true and correct. His knowledge must be specifically alleged under oath to be either personal
knowledge or at least based on authentic records.
Unlike, however, the requirement for a Certification against Forum Shopping in Section 5, wherein
failure to comply with the requirements is not curable by amendment of the complaint or other
initiatory pleading,11 Section 4 of Rule 7, as amended, states that the effect of the failure to properly
verify a pleading is that the pleading shall be treated as unsigned:

A pleading required to be verified which contains a verification based on "information

and belief," or upon "knowledge, information and belief," or lacks a proper
verification, shall be treated as an unsigned pleading.
Unsigned pleadings are discussed in the immediately preceding section of Rule 7:
SEC. 3. Signature and address. x x x.
xxxx
An unsigned pleading produces no legal effect. However, the court may, in its discretion,
allow such deficiency to be remedied if it shall appear that the same was due to mere
inadvertence and not intended for delay. Counsel who deliberately files an unsigned
pleading, or signs a pleading in violation of this Rule, or alleges scandalous or indecent
matter therein, or fails to promptly report to the court a change of his address, shall be
subject to appropriate disciplinary action. (5a)
A pleading, therefore, wherein the Verification is merely based on the partys knowledge and
belief produces no legal effect, subject to the discretion of the court to allow the deficiency to
be remedied. In the case at bar, the Court of Appeals, in the exercise of this discretion, refused to
allow the deficiency in the Verification to be remedied, by denying NOPAs Motion for
Reconsideration with attached Amended Petition for Certiorari.
May an appellate court reverse the exercise of discretion by a lower court? The old case of Lino
Luna v. Arcenas12 states that it can, but only in exceptional cases when there is grave abuse of this
discretion or adverse effect on the substantial rights of a litigant:
Discretionary power is generally exercised by trial judges in furtherance of the convenience
of the courts and the litigants, the expedition of business, and in the decision of interlocutory
matters on conflicting facts where one tribunal could not easily prescribe to another the
appropriate rule of procedure.
The general rule, therefore, and indeed one of the fundamental principles of appellate
procedure is that decisions of a trial court which "lie in discretion" will not be reviewed
on appeal, whether the case be civil or criminal at law or in equity.
We have seen that where such rulings have to do with minor matters, not affecting the
substantial rights of the parties, the prohibition of review in appellate proceedings is made
absolute by the express terms of the statute; but it would be a monstrous travesty on
justice to declare that where the exercise of discretionary power by an inferior court
affects adversely the substantial legal rights of a litigant, it is not subject to review on
appeal in any case wherein a clear and affirmative showing is made of an abuse of
discretion, or of a total lack of its exercise, or of conduct amounting to an abuse of
discretion, such as its improper exercise under a misapprehension of the law applicable to
the facts upon which the ruling is based.

In its very nature, the discretionary control conferred upon the trial judge over the
proceedings had before him implies the absence of any hard-and-fast rule by which it is to
be exercised, and in accordance with which it may be reviewed. But the discretion
conferred upon the courts is not a willful, arbitrary, capricious and uncontrolled
discretion. It is a sound, judicial discretion which should always be exercised with due
regard to the rights of the parties and the demands of equity and justice. As was said in
the case of The Styria vs. Morgan (186 U. S., 1, 9): "The establishment of a clearly defined
rule of action would be the end of discretion, and yet discretion should not be a word for
arbitrary will or inconsiderate action." So in the case of Goodwin vs. Prime (92 Me., 355), it
was said that "discretion implies that in the absence of positive law or fixed rule the judge is
to decide by his view of expediency or by the demands of equity and justice."
There being no "positive law or fixed rule" to guide the judge in the court below in such
cases, there is no "positive law or fixed rule" to guide a court of appeal in reviewing his action
in the premises, and such courts will not therefore attempt to control the exercise of
discretion by the court below unless it plainly appears that there was "inconsiderate action"
or the exercise of mere "arbitrary will," or in other words that his action in the premises
amounted to "an abuse of discretion." But the right of an appellate court to review judicial
acts which lie in the discretion of inferior courts may properly be invoked upon a showing of a
strong and clear case of abuse of power to the prejudice of the appellant, or that the ruling
objected to rested on an erroneous principle of law not vested in discretion. 13
The case at bar demonstrates a situation in which there is no effect on the substantial rights of a
litigant. NOPAs Petition for Certiorari is seeking the reversal of the Orders of the RTC denying
NOPAs Motion to Dismiss on the ground of failure to pay the proper docket fees. The alleged
deficiency in the payment of docket fees by Campos, if there is any, would not inure to the benefit of
NOPA.
There is therefore no substantive right that will be prejudiced by the Court of Appeals exercise of
discretion in the case at bar. While the payment of docket fees is jurisdictional, it is nevertheless
unmistakably also a technicality. Ironically, in seeking the leniency of this Court on the basis of
substantial justice, NOPA is ultimately praying for a Writ of Certiorari enjoining the action for breach
of contract from being decided on the merits. Whats sauce for the goose is sauce for the gander. A
party cannot expect its opponent to comply with the technical rules of procedure while, at the same
time, hoping for the relaxation of the technicalities in its favor.
There was therefore no grave abuse of discretion on the part of the Court of Appeals warranting this
Courts reversal of the exercise of discretion by the former. However, even if we decide to brush
aside the lapses in technicalities on the part of NOPA in its Petition for Certiorari, we nevertheless
find that such Petition would still fail.
NOPA seeks in its Petition for Certiorari for the application of this Courts ruling in Manchester
Development Corporation v. Court of Appeals,14 wherein we ruled that the court acquires jurisdiction
over any case only upon payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket
fee based on the amount sought in the amended pleading.

In denying15 NOPAs Motion to Dismiss, the RTC cited Sun Insurance Office, Ltd. (SIOL) v.
Asuncion,16 wherein we modified our ruling in Manchester and decreed that where the initiatory
pleading is not accompanied by the payment of the docket fee, the court may allow payment of the
fee within a reasonable period of time, but in no case beyond the applicable prescriptive or
reglementary period. The aforesaid ruling was made on the justification that, unlike in Manchester,
the private respondent in Sun Insurance Office, Ltd. (SIOL) demonstrated his willingness to abide by
the rules by paying the additional docket fees required. NOPA claims that Sun is not applicable to
the case at bar, since Campos deliberately concealed his claim for damages in the prayer.
In United Overseas Bank (formerly Westmont Bank) v. Ros,17 we discussed how Manchester was not
applicable to said case in view of the lack of deliberate intent to defraud manifested in the latter:
This Court wonders how the petitioner could possibly arrive at the conclusion that the private
respondent was moved by fraudulent intent in omitting the amount of damages claimed in its
Second Amended Complaint, thus placing itself on the same footing as the complainant
in Manchester, when it is clear that the factual milieu of the instant case is far from that
of Manchester.
First, the complainant in Manchester paid the docket fee only in the amount
of P410.00, notwithstanding its claim for damages in the amount of P78,750,000.00,
while in the present case, the private respondent paid P42,000.00 as docket fees upon
filing of the original complaint.
Second, complainant's counsel in Manchester claimed, in the body of the complaint,
damages in the amount of P78,750.00 but omitted the same in its prayer in order to evade
the payment of docket fees. Such fraud-defining circumstance is absent in the instant
petition.
Finally, when the court took cognizance of the issue of non-payment of docket fees
in Manchester, the complainant therein filed an amended complaint, this time omitting
all mention of the amount of damages being claimed in the body of the complaint; and
when directed by the court to specify the amount of damages in such amended
complaint, it reduced the same from P78,750,000.00 to P10,000,000.00, obviously to
avoid payment of the required docket fee. Again, this patent fraudulent scheme is wanting
in the case at bar.
This Court is not inclined to adopt the petitioner's piecemeal construction of our rulings
in Manchester and Sun Insurance. Its attempt to strip the said landmark cases of one or two
lines and use them to bolster its arguments and clothe its position with jurisprudential
blessing must be struck down by this Court.
All told, the rule is clear and simple. In case where the party does not deliberately intend
to defraud the court in payment of docket fees, and manifests its willingness to abide
by the rules by paying additional docket fees when required by the court, the liberal
doctrine enunciated in Sun Insurance and not the strict regulations set
in Manchester will apply.

In the case at bar, Campos filed an amount of P54,898.50 as docket fee, based on the amounts
of P10,000,000.00 representing the value of unwithdrawn molasses, P100,00.00 as storage
fee, P200,00.00 as moral damages, P100,000.00 as exemplary damages and P500,000.00 as
attorneys fees. The total amount considered in computing the docket fee was P10,900,000.00.
NOPA alleges that Campos deliberately omitted a claim for unrealized profit of P100,000.00 and an
excess amount of storage fee in the amount of P502,875.98 in its prayer and, hence, the amount
that should have been considered in the payment of docket fees is P11,502,875.98. The amount
allegedly deliberately omitted was therefore only P602,875.98 out of P11,502,875.98, or merely
5.2% of said alleged total. Camposs pleadings furthermore evince his willingness to abide by the
rules by paying the additional docket fees when required by the Court.
Since the circumstances of this case clearly show that there was no deliberate intent to defraud the
Court in the payment of docket fees, the case of Sun should be applied, and the Motion to Dismiss
by NOPA should be denied.
WHEREFORE, the Resolutions of the Court of Appeals dated 23 May 2007 and 16 August 2007,
respectively, in CA-G.R. SP No. 02651, outrightly dismissing the Petition for Certiorari filed by
petitioner Negros Oriental Planters Association, Inc. against private respondent Aniceto Manojo
Campos, are AFFIRMED. No costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 179895

December 18, 2008

FERDINAND S. TOPACIO, petitioner,

vs.
ASSOCIATE JUSTICE OF THE SANDIGANBAYAN GREGORY SANTOS ONG and THE OFFICE
OF THE SOLICITOR GENERAL, respondents.
DECISION
CARPIO MORALES, J.:
Ferdinand Topacio (petitioner) via the present petition for certiorari and prohibition seeks, in the
main, to prevent Justice Gregory Ong (Ong) from further exercising the powers, duties and
responsibilities of a Sandiganbayan Associate Justice.

It will be recalled that in Kilosbayan Foundation v. Ermita,1 the Court, by Decision of July 3, 2007,
enjoined Ong "from accepting an appointment to the position of Associate Justice of the Supreme
Court or assuming the position and discharging the functions of that office, until he shall have
successfully completed all necessary steps, through the appropriate adversarial proceedings in
court, to show that he is a natural-born Filipino citizen and correct the records of his birth and
citizenship."2
On July 9, 2007, Ong immediately filed with the Regional Trial Court (RTC) of Pasig City a Petition
for the "amendment/ correction/ supplementation or annotation of an entry in [his] Certificate of
Birth," docketed as S.P. Proc No. 11767-SJ, "Gregory Santos Ong v. The Civil Registrar of San
Juan, Metro Manila, et al."3
Meanwhile, petitioner, by verified Letter-Request/Complaint4 of September 5, 2007, implored
respondent Office of the Solicitor General (OSG) to initiate post-haste a quo warranto proceeding
against Ong in the latters capacity as an incumbent Associate Justice of the Sandiganbayan.
Invoking paragraph 1, Section 7, Article VIII of the Constitution 5 in conjunction with the Courts
Decision in Kilosbayan Foundation v. Ermita,6 petitioner points out that natural-born citizenship is
also a qualification for appointment as member of the Sandiganbayan and that Ong has failed to
meet the citizenship requirement from the time of his appointment as such in October 1998.
The OSG, by letter of September 25, 2007, informed petitioner that it "cannot favorably act on [his]
request for the filing of a quo warranto petition until the [RTC] case shall have been terminated with
finality."7 Petitioner assails this position of the OSG as being tainted with grave abuse of discretion,
aside from Ongs continuous discharge of judicial functions.
Hence, this petition, positing that:
IN OCTOBER OF 1998, RESPONDENT WAS NOT DULY-QUALIFIED UNDER THE FIRST
SENTENCE OF PARAGRAPH 1, SECTION 7, OF THE 1987 CONSTITUTION, TO BE
APPOINTED AN ASSOCIATE JUSTICE OF THE SANDIGANBAYAN, MERELY ON THE
STRENGTH OF AN IDENTIFICATION CERTIFICATE ISSUED BY THE BUREAU OF
IMMIGRATION AND A 1ST INDORSEMENT DATED 22 MAY 1997 ISSUED BY THE
SECRETARY OF JUSTICE, BECAUSE, AS OF OCTOBER 1998, RESPONDETS BIRTH
CERTIFICATE INDICATED THAT RESPONDENT IS A CHINESE CITIZEN AND BECAUSE,
AS OF OCTOBER 1998, THE RECORDS OF THIS HONORABLE COURT DECLARED
THAT RESPONDENT IS A NATURALIZED FILIPINO CITIZEN.8 (Underscoring supplie
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 179895

December 18, 2008

FERDINAND S. TOPACIO, petitioner,

vs.
ASSOCIATE JUSTICE OF THE SANDIGANBAYAN GREGORY SANTOS ONG and THE OFFICE
OF THE SOLICITOR GENERAL, respondents.
DECISION
CARPIO MORALES, J.:
Ferdinand Topacio (petitioner) via the present petition for certiorari and prohibition seeks, in the
main, to prevent Justice Gregory Ong (Ong) from further exercising the powers, duties and
responsibilities of a Sandiganbayan Associate Justice.
It will be recalled that in Kilosbayan Foundation v. Ermita,1 the Court, by Decision of July 3, 2007,
enjoined Ong "from accepting an appointment to the position of Associate Justice of the Supreme
Court or assuming the position and discharging the functions of that office, until he shall have
successfully completed all necessary steps, through the appropriate adversarial proceedings in
court, to show that he is a natural-born Filipino citizen and correct the records of his birth and
citizenship."2
On July 9, 2007, Ong immediately filed with the Regional Trial Court (RTC) of Pasig City a Petition
for the "amendment/ correction/ supplementation or annotation of an entry in [his] Certificate of
Birth," docketed as S.P. Proc No. 11767-SJ, "Gregory Santos Ong v. The Civil Registrar of San
Juan, Metro Manila, et al."3
Meanwhile, petitioner, by verified Letter-Request/Complaint4 of September 5, 2007, implored
respondent Office of the Solicitor General (OSG) to initiate post-haste a quo warranto proceeding
against Ong in the latters capacity as an incumbent Associate Justice of the Sandiganbayan.
Invoking paragraph 1, Section 7, Article VIII of the Constitution 5 in conjunction with the Courts
Decision in Kilosbayan Foundation v. Ermita,6 petitioner points out that natural-born citizenship is
also a qualification for appointment as member of the Sandiganbayan and that Ong has failed to
meet the citizenship requirement from the time of his appointment as such in October 1998.
The OSG, by letter of September 25, 2007, informed petitioner that it "cannot favorably act on [his]
request for the filing of a quo warranto petition until the [RTC] case shall have been terminated with
finality."7 Petitioner assails this position of the OSG as being tainted with grave abuse of discretion,
aside from Ongs continuous discharge of judicial functions.
Hence, this petition, positing that:
IN OCTOBER OF 1998, RESPONDENT WAS NOT DULY-QUALIFIED UNDER THE FIRST
SENTENCE OF PARAGRAPH 1, SECTION 7, OF THE 1987 CONSTITUTION, TO BE
APPOINTED AN ASSOCIATE JUSTICE OF THE SANDIGANBAYAN, MERELY ON THE
STRENGTH OF AN IDENTIFICATION CERTIFICATE ISSUED BY THE BUREAU OF
IMMIGRATION AND A 1ST INDORSEMENT DATED 22 MAY 1997 ISSUED BY THE
SECRETARY OF JUSTICE, BECAUSE, AS OF OCTOBER 1998, RESPONDETS BIRTH

CERTIFICATE INDICATED THAT RESPONDENT IS A CHINESE CITIZEN AND BECAUSE,

AS OF OCTOBER 1998, THE RECORDS OF THIS HONORABLE COURT DECLARED
THAT RESPONDENT IS A NATURALIZED FILIPINO CITIZEN.8 (Underscoring supplied)
Petitioner thus contends that Ong should immediately desist from holding the position of Associate
Justice of the Sandiganbayan since he is disqualified on the basis of citizenship, whether gauged
from his birth certificate which indicates him to be a Chinese citizen or against his bar records
bearing out his status as a naturalized Filipino citizen, as declared in Kilosbayan Foundation v.
Ermita.
Ong, on the other hand, states that Kilosbayan Foundation v. Ermita did not annul or declare null his
appointment as Justice of the Supreme Court, but merely enjoined him from accepting his
appointment, and that there is no definitive pronouncement therein that he is not a natural-born
Filipino. He informs that he, nonetheless, voluntarily relinquished the appointment to the Supreme
Court out of judicial statesmanship.9
By Manifestation and Motion to Dismiss of January 3, 2008, Ong informs that the RTC, by Decision
of October 24, 2007, already granted his petition and recognized him as a natural-born citizen. The
Decision having, to him, become final,10he caused the corresponding annotation thereof on his
Certificate of Birth.11
Invoking the curative provisions of the 1987 Constitution, Ong explains that his status as a naturalborn citizen inheres from birth and the legal effect of such recognition retroacts to the time of his
birth.
Ong thus concludes that in view of the RTC decision, there is no more legal or factual basis for the
present petition, or at the very least this petition must await the final disposition of the RTC case
which to him involves a prejudicial issue.
The parties to the present petition have exchanged pleadings 12 that mirror the issues in the pending
petitions for certiorari in G.R. No. 180543, "Kilosbayan Foundation, et al. v. Leoncio M. Janolo, Jr., et
al," filed with this Court and in CA-G.R. SP No. 102318, "Ferdinand S. Topacio v. Leoncio M. Janolo,
Jr., et al.,"13 filed with the appellate court, both of which assail, inter alia, the RTC October 24, 2007
Decision.
First, on the objection concerning the verification of the petition.
The OSG alleges that the petition is defectively verified, being based on petitioners "personal
knowledge and belief and/or authentic records," and having been "acknowledged" before a notary
public who happens to be petitioners father, contrary to the Rules of Court 14 and the Rules on
Notarial Practice of 2004,15 respectively.
This technicality deserves scant consideration where the question at issue, as in this case, is one
purely of law and there is no need of delving into the veracity of the allegations in the petition, which
are not disputed at all by respondents.16

One factual allegation extant from the petition is the exchange of written communications between
petitioner and the OSG, the truthfulness of which the latter does not challenge. Moreover, petitioner
also verifies such correspondence on the basis of the thereto attached letters, the authenticity of
which he warranted in the same verification-affidavit. Other allegations in the petition are verifiable in
a similar fashion, while the rest are posed as citations of law.
The purpose of verification is simply to secure an assurance that the allegations of the petition or
complaint have been made in good faith; or are true and correct, not merely speculative. This
requirement is simply a condition affecting the form of pleadings, and non-compliance therewith
does not necessarily render it fatally defective. Indeed, verification is only a formal, not a
jurisdictional requirement.17
In the same vein, the Court brushes aside the defect, insofar as the petition is concerned, of a
notarial act performed by one who is disqualified by reason of consanguinity, without prejudice to
any administrative complaint that may be filed against the notary public.
Certiorari with respect to the OSG
On the issue of whether the OSG committed grave abuse of discretion in deferring the filing of a
petition for quo warranto, the Court rules in the negative.
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law.18
The Court appreciates no abuse of discretion, much less, a grave one, on the part of the OSG in
deferring action on the filing of a quo warranto case until after the RTC case has been terminated
with finality. A decision is not deemed tainted with grave abuse of discretion simply because the
affected party disagrees with it.19
The Solicitor General is the counsel of the government, its agencies and instrumentalities, and its
officials or agents. In the discharge of its task, the Solicitor General must see to it that the best
interest of the government is upheld within the limits set by law.20
The pertinent rules of Rule 66 on quo warranto provide:
SECTION 1. Action by Government against individuals. An action for the usurpation of a
public office, position or franchise may be commenced by a verified petition brought in the
name of the Republic of the Philippines against:
(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public
office, position or franchise;

(b) A public officer who does or suffers an act which, by the provision of law,
constitutes a ground for the forfeiture of his office; or
(c) An association which acts as a corporation within the Philippines without being
legally incorporated or without lawful authority so to act.
SEC. 2. When Solicitor General or public prosecutor must commence action. The Solicitor
General or a public prosecutor, when directed by the President of the Philippines, or when
upon complaint or otherwise he has good reason to believe that any case specified in the
preceding section can be established by proof, must commence such action.
SEC. 3. When Solicitor General or public prosecutor may commence action with permission
of court. The Solicitor General or a public prosecutor may, with the permission of the court
in which the action is to be commenced, bring such an action at the request and upon the
relation of another person; but in such case the officer bringing it may first require an
indemnity for the expenses and costs of the action in an amount approved by and to be
deposited in the court by the person at whose request and upon whose relation the same is
brought. (Italics and emphasis in the original)
In the exercise of sound discretion, the Solicitor General may suspend or turn down the institution of
an action for quo warranto where there are just and valid reasons.21 Thus, in Gonzales v.
Chavez,22 the Court ruled:
Like the Attorney-General of the United States who has absolute discretion in choosing
whether to prosecute or not to prosecute or to abandon a prosecution already started, our
own Solicitor General may even dismiss, abandon, discontinue or compromise suits either
with or without stipulation with the other party. Abandonment of a case, however, does not
mean that the Solicitor General may just drop it without any legal and valid reasons, for the
discretion given him is not unlimited. Its exercise must be, not only within the parameters get
by law but with the best interest of the State as the ultimate goal. 23
Upon receipt of a case certified to him, the Solicitor General exercises his discretion in the
management of the case. He may start the prosecution of the case by filing the appropriate action in
court or he may opt not to file the case at all. He may do everything within his legal authority but
always conformably with the national interest and the policy of the government on the matter at
hand.24
It appears that after studying the case, the Solicitor General saw the folly of re-litigating the same
issue of Ongs citizenship in the quo warranto case simultaneously with the RTC case, not to
mention the consequent risk of forum-shopping. In any event, the OSG did not totally write finis to
the issue as it merely advised petitioner to await the outcome of the RTC case.
Certiorari and Prohibition with respect to Ong
By petitioners admission, what is at issue is Ongs title to the office of Associate Justice of
Sandiganbayan.25 He claims to have been constrained to file the present petition after the OSG

refused to heed his request to institute a suit for quo warranto. Averring that Ong is disqualified to be
a member of any lower collegiate court, petitioner specifically prays that, after appropriate
proceedings, the Court
. . . issue the writs of certiorari and prohibition against Respondent Ong, ordering
Respondent Ong to cease and desist from further exercising the powers, duties, and
responsibilities of a Justice of the Sandiganbayan due to violation of the first sentence of
paragraph 1, Section 7, of the 1987 Constitution; . . . issue the writs of certiorari and
prohibition against Respondent Ong and declare that he was disqualified from being
appointed to the post of Associate Justice of the Sandiganbayan in October of 1998,
considering that, as of October of 1998, the birth certificate of Respondent Ong declared that
he is a Chinese citizen, while even the records of this Honorable Court, as of October of
1998, declared that Respondent Ong is a naturalized Filipino; x x x26
While denominated as a petition for certiorari and prohibition, the petition partakes of the nature of
a quo warranto proceeding with respect to Ong, for it effectively seeks to declare null and void his
appointment as an Associate Justice of the Sandiganbayan for being unconstitutional. While the
petition professes to be one for certiorari and prohibition, petitioner even adverts to a "quo warranto"
aspect of the petition.27
Being a collateral attack on a public officers title, the present petition for certiorari and prohibition
must be dismissed.
The title to a public office may not be contested except directly, by quo warranto proceedings; and it
cannot be assailed collaterally,28 even through mandamus29 or a motion to annul or set aside
order.30 In Nacionalista Party v. De Vera,31 the Court ruled that prohibition does not lie to inquire into
the validity of the appointment of a public officer.
x x x [T]he writ of prohibition, even when directed against persons acting as judges or other
judicial officers, cannot be treated as a substitute for quo warranto or be rightfully called upon
to perform any of the functions of the writ. If there is a court, judge or officer de facto, the title
to the office and the right to act cannot be questioned by prohibition. If an intruder takes
possession of a judicial office, the person dispossessed cannot obtain relief through a writ of
prohibition commanding the alleged intruder to cease from performing judicial acts, since in
its very nature prohibition is an improper remedy by which to determine the title to an office. 32
Even if the Court treats the case as one for quo warranto, the petition is, just the same, dismissible.
A quo warranto proceeding is the proper legal remedy to determine the right or title to the contested
public office and to oust the holder from its enjoyment. 33 It is brought against the person who is
alleged to have usurped, intruded into, or unlawfully held or exercised the public office, 34 and may be
commenced by the Solicitor General or a public prosecutor, as the case may be, or by any person
claiming to be entitled to the public office or position usurped or unlawfully held or exercised by
another.35

Nothing is more settled than the principle, which goes back to the 1905 case of Acosta v.
Flor,36 reiterated in the recent 2008 case of Feliciano v. Villasin,37 that for a quo warranto petition to
be successful, the private person suing must show a clear right to the contested office. In
fact, not even a mere preferential right to be appointed thereto can lend a modicum of legal ground
to proceed with the action.38
In the present case, petitioner presented no sufficient proof of a clear and indubitable franchise to
the office of an Associate Justice of the Sandiganbayan. He in fact concedes that he was never
entitled to assume the office of an Associate Justice of the Sandiganbayan. 39
In the instance in which the Petition for Quo Warranto is filed by an individual in his own
name, he must be able to prove that he is entitled to the controverted public office, position,
or franchise; otherwise, the holder of the same has a right to the undisturbed possession
thereof. In actions for Quo Warranto to determine title to a public office, the complaint, to be
sufficient in form, must show that the plaintiff is entitled to the office. In Garcia v. Perez, this
Court ruled that the person instituting Quo Warranto proceedings on his own behalf, under
Section 5, Rule 66 of the Rules of Court, must aver and be able to show that he is entitled to
the office in dispute. Without such averment or evidence of such right, the action may be
dismissed at any stage.40 (Emphasis in the original)
The rightful authority of a judge, in the full exercise of his public judicial functions, cannot be
questioned by any merely private suitor, or by any other, except in the form especially provided by
law.41 To uphold such action would encourage every disgruntled citizen to resort to the courts,
thereby causing incalculable mischief and hindrance to the efficient operation of the governmental
machine.42
Clearly then, it becomes entirely unwarranted at this time to pass upon the citizenship of Ong. The
Court cannot, upon the authority of the present petition, determine said question without encroaching
on and preempting the proceedings emanating from the RTC case. Even petitioner clarifies that he
is not presently seeking a resolution on Ongs citizenship, even while he acknowledges the
uncertainty of Ongs natural-born citizenship.43
The present case is different from Kilosbayan Foundation v. Ermita, given Ongs actual physical
possession and exercise of the functions of the office of an Associate Justice of the Sandiganbayan,
which is a factor that sets into motion the de facto doctrine.
Suffice it to mention that a de facto officer is one who is in possession of the office and is discharging
its duties under color of authority, and by color of authority is meant that derived from an election or
appointment, however irregular or informal, so that the incumbent is not a mere volunteer.44 If a
person appointed to an office is subsequently declared ineligible therefor, his presumably valid
appointment will give him color of title that will confer on him the status of a de facto officer.45
x x x A judge de facto assumes the exercise of a part of the prerogative of sovereignty, and
the legality of that assumption is open to the attack of the sovereign power alone.
Accordingly, it is a well-established principle, dating back from the earliest period and
repeatedly confirmed by an unbroken current of decisions, that the official acts of a de

facto judge are just as valid for all purposes as those of a de jure judge, so far as the public
or third persons who are interested therein are concerned.46
If only to protect the sanctity of dealings by the public with persons whose ostensible authority
emanates from the State, and without ruling on the conditions for the interplay of the de
facto doctrine, the Court declares that Ong may turn out to be either a de jure officer who is deemed,
in all respects, legally appointed and qualified and whose term of office has not expired, or a de
facto officer who enjoys certain rights, among which is that his title to said office may not be
contested except directly by writ of quo warranto,47 which contingencies all depend on the final
outcome of the RTC case.
With the foregoing disquisition, it becomes unnecessary to dwell on the ancillary issues raised by the
parties.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
SARI-SARI GROUP OF COMPANIES,
INC. (formerly MARIKO NOVEL
WARES, INC.),
Petitioner,
- versus -

G.R. No. 164624

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

PIGLAS KAMAO (Sari-Sari Chapter),

RONNIE S. TAMAYO, JOSE DEL
CARMEN, JOCYLENE PADUA,
VICKY BERMEO and ELIZABETH
MATUTINA,
Promulgated:
Respondents.
August 11, 2008
x----------------------------------------------------------x

DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court assailing the March 1, 2004 Decision[1] and July 22, 2004 Resolution[2] of the Court
of Appeals (CA) in CA-G.R. SP. No. 51381.
The antecedents of the case are as follows:
In December 1990, Mariko Novel Wares, Inc. (petitioner) began its retail outlet
operations under the name Sari-Sari in the basement of Robinsons Galleria
in Quezon City.[3] Among its employees were: Head Checker Ronnie Tamayo, Checker
Jose del
Carmen,
Section Heads Jocylene Padua, Vicky Bermeo, and
Elizabeth Matutina (respondents), all of whom were assigned at the Robinsons Galleria
branch.[4]
On November 30, 1993, respondents organized a union known as Piglas Kamao (SariSari Chapter). At the time of the formation, the officers of the union were respondents
Ronnie Tamayo, President; Jose del Carmen, Vice-President; and Jocelyne Padua,
Secretary.[5] Respondents claim that petitioner, through its President, Rico Ocampo,
[6]
interfered with the formation of the union.
On December 14, 1993, respondent union filed a petition for certification elections
with the Department of Labor and Employment (DOLE). On the next day, December 15,
1993, petitioner issued a policy statement pertaining to Employee Complaints/Grievance
Procedure, stating, among others, that it supports an open communication policy both
vertical and horizontal within the organization.[7]
Meanwhile, respondents were informed of the petitioners plan to close the basement level
store to give way to the opening of a Sari-Sari outlet on the third floor of Robinsons
Galleria.Respondents were supposed to be absorbed in other Sari-Sari store branches.
[8]
However, on January 9, 1994, petitioner put up an advertisement in the Manila Bulletin,
announcing its need for inventory, accounting, and sales clerks. Applicants were requested
to apply personally at the Robinsons Galleria branch.[9]

During the month of January 1994, petitioners managerial staff approached union
members to express disapproval of the union membership.[10]
On January 26, 1994, as a result of the aforementioned events, respondent union
filed an unfair labor practice case with the Labor Arbiter (LA) against the petitioner for
harassment, coercion, and interference with the workers right to self-organization.
On the next day, January 27, 1994, petitioner notified DOLE and the respondents of
the closure of the Galleria branch due to irreversible losses and non-extension of the lease
of the store premises, to be effective on February 28, 1994. Moreover, the respondents
were told that they would not be absorbed in the other branches of the petitioner because of
redundancy.[11]
On February 11, 1994, respondents Tamayo, Del Carmen, and Padua filed amended
complaints of unfair labor practice and illegal dismissal against petitioner. On March 28,
1994, respondents filed six supplemental complaints for illegal dismissal, non-payment of
premium pay for holiday and rest day for the years 1992 and 1993, and non-payment of
13th month pay for the year 1994 as well as for moral and exemplary damages.[12]
In its defense, petitioner denied that the closure of the Galleria branch was intended to
prevent the formation of the union, saying that the closure was due to consistent losses the
branch was incurring. Petitioner further alleged in its position paper submitted to the LA
that:
On rentals expenses alone it was already paying its lessor P341,760.38,
excluding other charges for the use of the Robinsons Galleria common areas,
not to mention water and electric consumption x x x. The premises being leased
by Petitioner was too large. Worse, it was located at the Park Avenue area of the
Robinsons Galleria which has the lowest shopper traffic in the Robinsons
Galleria.
When the 3-year lease of the Petitioner was about to expire, it was therefore
deemed more prudent to cease operations.[13]

Furthermore, petitioner claimed that it consistently failed to reach sales quota, forcing it to
pay penalties to Robinsons Galleria and that it was the decision of the Board of Directors to
close the branch.[14]

On April 27, 1997, the LA rendered his decision dismissing the complaint for illegal
dismissal, unfair labor practices and damages for lack of merit. However, the LA ordered
the petitioner to pay the respondents separation pay and proportionate 13th month pay.
[15]
The LA ruled that the presence of respondent union officers Tamayo, Del Carmen and
Padua in the Robinsons Galleria branch was merely coincidental and that the closure of the
branch was due to the expiration of the lease contract and the increasing expenses of
maintaining the branch.[16] The decision was appealed to the National Labor Relations
Commission (NLRC).
During the pendency of the appeal, respondents Bermeo, Matutina, and Padua separately
filed their respective manifestations and Motions to Dismiss, praying that the appeal be
dismissed as to them due to their having already executed their respective quitclaims
releasing Mariko from liability.[17]
The NLRC affirmed the decision of the LA but dismissed the claims
of Bermeo, Matutina and Padua as they had executed quitclaims. Respondents filed a
Motion for Reconsideration which was denied by the NLRC. Respondents then appealed
to the CA.
The CA ruled that petitioner failed to discharge its burden of submitting competent
proof to show the irreversible substantial losses it suffered warranting the closure of the
Galleria branch.The CA ruled:
While the notice of termination stated that the closure of the branch was
due to irreversible losses and the non-extension of the lease contract, Mariko did
not present any audited financial statements or documents to substantiate its
irreversible losses. Its mere allegation thereof is not enough. Also, that the
affected branch failed to reach the sales quota was not a factor to justify
retrenchment, since the failure of the affected branch to reach the sales quota did
not amount to a substantial loss which met the requisites of a valid
retrenchment.[18]

Anent the issue of unfair labor practice the CA ruled that such was a question of fact
that was beyond the ambit of the present recourse for certiorari.

We cannot disturb, therefore, the findings of the NLRC on the matter

which were based on substantial evidence for our task is only to determine
whether the NLRC committed grave abuse of discretion in applying the law to
the established facts. xxx. That manner of abuse did not attend the conclusion of
the NLRC that the respondents [petitioner herein] were not involved in unionbusting or anti-union activities.[19]
Lastly, the CA ruled that the release and quitclaims executed by respondents
Padua, Bermeo and Matutina did not preclude them from assailing their termination.

The dispositive part of the CA decision reads:

WHEREFORE, the PETITION FOR CERTIORARI is PARTLY GRANTED.
The resolution dated November 17, 1998 of the National Labor Relations
Commission is PRO TANTO MODIFIED, ordering respondent MARIKO
NOVEL WARES, INC., to pay all individual petitioners their
full backwages from the time of their illegal dismissal on February 28, 1994 up
to the finality of this judgment.
SO ORDERED.[20]

The CA denied petitioners motion for reconsideration.

Hence, herein petition raising the following issue:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN GRANTING RESPONDENTS PETITION FOR
CERTIORARI AND IN SETTING ASIDE THE FINDINGS OF BOTH
THE NLRC AND THE LABOR ARBITER A QUO.
Petitioner claims that:
1. The Court of Appeals committed palpable error in setting aside both the
factual findings made by both the Labor Arbiter and the NLRC that
respondents had been validly dismissed from employment on the
ground of closure.[21]
2.

The Court of Appeals committed serious error in requiring

petitioner to prove substantial losses. Dismissal on the ground of closure
does not require proof of substantial business reverses.[22]

3.

If an employer can validly cease operation even when not incurring

losses, with more reason can it close down if it is suffering from
financial reverses, as what happened in this case.[23]

4.

Article 283 of the Labor Code which permits closure or cessation of

operation of an establishment likewise governs cases of partial closure.
It was therefore serious error on the part of the Court of Appeals to
have applied the rules on retrenchment to the case at bar.[24]

5.

Assuming the Lopez Sugar Corporation case applies, the requisites

stated therein were complied with in this case.[25]

6.

The Court of Appeals seriously erred in invalidating the quitclaims

of respondents Bermeo, Matutina and Padua.[26]

7.

The Court of Appeals seriously erred in taking cognizance of the

petition insofar as the four other alleged petitioners therein were
concerned, considering only Jose Del Carmen signed and verified the
petition.[27]

As general rule, a petition for review on certiorari under Rule 45 of the

Rules of Court is limited to questions of law. However, this rule admits of
exceptions,[28] such as in this case where the findings of the LA and the NLRC vary
from the findings of the CA.
Before discussing the substantive merits of the case, we will first discuss the
procedural matters raised.
Effect of Non-Verification by All Parties
Section 1 of Rule 65[29] in relation to Section 3 of Rule 46[30] of the Rules of Court requires
that a petition for review filed with the CA should be verified and should contain a
certificate of non-forum shopping.
The purpose of requiring a verification is to secure an assurance that the allegations
of the petition have been made in good faith, or are true and correct, not merely
speculative.[31] On the other hand, the rule against forum shopping is rooted in the principle
that a party-litigant shall not be allowed to pursue simultaneous remedies in different fora,
as this practice is detrimental to orderly judicial procedure.[32]

A distinction must be made between non-compliance with the requirements for

Verification and noncompliance with those for Certification of Non-Forum Shopping. As
to Verification, non-compliance therewith does not necessarily render the pleading fatally
defective; hence, the court may order a correction 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.[33]
A pleading which is required by the Rules of Court to be verified may be given due
course even without a verification of the circumstances warranting the suspension of the
rules in the interest of justice.[34] When circumstances warrant, the court may simply order
the correction of unverified pleadings or act on them and waive strict compliance with the
rules in order that the ends of justice may thereby be served.[35] Moreover, many authorities
consider the absence of Verification a mere formal, not jurisdictional defect, the absence of
which does not of itself justify a court in refusing to allow and act on the case.[36]
In Torres v. Specialized Packing Development Corporation,[37] the problem was not
lack of Verification, but the adequacy of one executed by only two of the twenty-five
petitioners, similar to the case at bar. The Court ruled:
These two signatories are unquestionably real parties in interest, who
undoubtedly have sufficient knowledge and belief to swear to the truth of the
allegations in the Petition. This verification is enough assurance that the matters
alleged therein have been made in good faith or are true and correct, not merely
speculative. The requirement of verification has thus been substantially
complied with.[38]

Based on the foregoing, the lone Verification of respondent Jose del Carmen is
sufficient compliance with the requirements of the law.
On the other hand, the lack of a Certificate of Non-Forum Shopping, unlike that of
Verification is generally not curable by the submission thereof after the filing of the
petition.[39] The submission of a certificate against forum shopping is thus deemed
obligatory, albeit not jurisdictional.[40]

The rule on certification against forum shopping may, however, be also relaxed on
grounds of substantial compliance or special circumstances or compelling reasons.[41]
Applicable to this case is Cavile v. Heirs of Clarita Cavile.[42] Finding that the
petitioners were relatives and co-owners jointly sued over property in which they had
common interest, this Court in that case held that the signature of just one co-owner on
the Certificate of Non-Forum Shopping in the petition before the Court substantially
complied with the rule in this wise:
We find that the execution by Thomas George Cavile, Sr. in behalf of all the other
petitioners of the certificate of non-forum shopping constitutes substantial compliance with
the Rules. All the petitioners, being relatives and co-owners of the properties in dispute,
share a common interest thereon. They also share a common defense in the complaint for
partition filed by the respondents. Thus, when they filed the instant petition, they filed it as a
collective, raising only one argument to defend their rights over the properties in question.
There is sufficient basis, therefore, for Thomas George Cavili, Sr. to speak for and in behalf
of his co-petitioners that they have not filed any action or claim involving the same issues
in another court or tribunal, nor is there other pending action or claim in another court or
tribunal involving the same issues.[43]

In the case at bar, respondent Jose del Carmen shares a common interest with the
other respondents as to the resolution of the labor dispute between them and the
petitioner. They collectively sued the petitioner for illegal dismissal and unfair labor
practices and have collectively appealed the NLRC decision. Similarly, there is sufficient
basis for Jose del Carmen to speak on behalf of his co-respondents in stating that they have
not filed any action or claim involving the same issues in another court or tribunal, nor is
there any other pending action or claim in another court or tribunal involving the same
issues. Thus, even if only respondent Jose del Carmen signed the Certificate of NonForum Shopping, the rule on substantial compliance applies. The CA therefore did not
commit any error in entertaining the appeal of the respondents.
Effect of Quitclaims
Petitioner asserts that the CA erred in invalidating the quitclaims of
respondents Bermeo, Matutina and Padua on the ground that there was an absence of
showing that their execution was not voluntary;[44] and that the record was devoid of any
showing that the terms of the settlement were not fair and just.[45]
Under prevailing jurisprudence, a deed of release or quitclaim cannot bar an employee
from demanding benefits to which he is legally entitled.[46] Similarly, employees who

received their separation pay are not barred from contesting the legality of their dismissal,
and the acceptance of such benefits would not amount to estoppel.[47]
It is well-established that quitclaims and/or complete releases executed by the employees
do not estop them from pursuing their claims arising from the unfair labor practice of the
employer. The basic reason for this is that such quitclaims and/ or complete releases are
against public policy and, therefore, null and void. The acceptance of termination pay does
not divest a laborer of the right to prosecute his employer for unfair labor practice acts.[48]
As observed in Cario v. Agricultural Credit and Cooperative Financing Administration:[49]
Acceptance of those benefits would not amount to estoppel. The reason is
plain. Employer and employee, obviously, do not stand on the same
footing. The employer drove the employee to the wall. The latter must have to
get hold of money. Because, out of job, he had to face the harsh necessities of
life. He thus found himself in no position to resist money proffered. His, then, is
a case of adherence, not of choice.[50]

Review of Facts by the CA under Rule 65

As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the
CA does not assess and weigh the sufficiency of evidence upon which the LA and the
NLRC based their conclusion. The query in the proceeding before the CA is limited to the
determination of whether or not the NLRC acted without or in excess of its jurisdiction or
with grave abuse of discretion in rendering its decision. However, as an exception, the
appellate court may examine and measure the factual findings of the NLRC if the same are
not supported by substantial evidence.[51] We find this exception applicable to the case at
bar.
Main Issue : Closure or Retrenchment?
Petitioner and respondents seem to be at variance as to what the theory of the case
is. In its Memorandum, petitioner claims that evidence of substantial business reverses is
not required in terminating employees on the ground of closure. [52] On the other hand,
respondents in their Memorandum claim that evidence of substantial business reverses is
required in the termination of employees on the ground of retrenchment. [53] Thus, the

resolution of the case at bar depends on whether we consider the act of petitioner in
terminating respondents as one grounded on closure or as one grounded on retrenchment.
The initial notice of the petitioner to DOLE did not clearly state whether petitioner
was retrenching workers or simply closing its branch. Petitioner merely stated that they
were closing the Galleria branch due to irreversible losses and the non-extension of the
lease,[54] as a consequence of which the employees of the said branch were terminated.
In the position paper of the petitioner submitted to the LA, we find that the theory of
the case as far as it was concerned was that it had retrenched employees. This finding is
bolstered by the fact that the term retrenchment was used in a number of paragraphs, to
wit:
Accordingly, all the employees of the respondents Robinsons Galleria branch
were terminated/retrenched.[55]
The separation pay of the employees concerned, and whatever other benefits
they were entitled to were tendered to the retrenched employees.[56]
It would later appear that certain union officers were among those
terminated/retrenched by the respondent pursuant to the closure of its
Robinsons Galleria branch.[57]
Neither was respondent aware that there were union officers among
its retrenched employees of the Robinsons Galleria branch.[58]
x x x then the lawful and legitimate retrenchment of the employees of
the respondents Robinsons Galleria branch negates any notion of illegal
dismissal on the part of the petitioner.[59] (Emphasis supplied)

Moreover, one of the arguments raised by the petitioner in its position paper was that it had
complied with all the requirements of the Labor Code relative to retrenchment.[60] In
addition, petitioner cited Caffco International Limited v. Office of the Minister-Ministry of
Labor and Employment[61] as reference. A reading of the case will show that the issue
presented involved the legality of a retrenchment measure in order to minimize business
losses.
Later, in its Formal Offer of evidence, petitioner submitted Exhibit 5, described as
the Notice to Department of Labor and Employment, for the purpose of proving that the

employees concerned were not illegally dismissed, because the closure of the Robinsons
Galleria Branch was due to business losses which resulted in the retrenchment of
employees who could not be absorbed by the company.[62] Furthermore, petitioner
submitted Exhibit 4, described as the Affidavit of Luis Getuela, to prove that the
employees concerned were not illegally dismissed, because Mario-Novel closed down its
Robinsons Galleria branch due to business losses which resulted in the retrenchment of
employees.[63] In his affidavit, Luis Getuela made the following declaration: As a result of
its closure due to business losses, the personnel assigned thereat were retrenched.
[64]
(Emphasis supplied)
The decision of the LA, although not categorical in its pronouncement, disposed of
the issue by stating that the decision to close the Robinsons branch was a management
prerogative.However, the Court notes that the cases cited by the LA, namely: Dangan v.
National Labor Relations Commission and Catatista v. National Labor Relations
Commission, both involved cases that tackled the issue of retrenchment. Cited was the
pertinent portion of the LA decision:
The above factors lead us to conclude that the closure of the Robisons
Galleria branch was indeed prompted by the expiration of the contract of lease
and that Mariko simply saw this as an opportunity to assess its business position
in the light of the circumstances surrounding the situation. With the spiraling
cost of rental, other incidental charges coupled with its failure to achieve the
sales quota required by the lessor, it would be foolhardy for the respondents to
continue doing business under the circumstances. Well settled is the principle
that it is the prerogative of management to close its business provided it
complies with the requirements of the law. In the case at bar, if respondent
Mariko opted to cease the operations of its Robinsons Galleria branch due to the
expiration of its lease contract and on account of economic reasons, such
decision must be respected as entirely within its prerogative. Labor tribunals are
not authorized to substitute the judgment of the employer on purely business
matters. If an employer has the right to close the entire establishment
altogether and cease operations due to economic condition, the closure of a
part thereof to minimize expenses and reduce capitalization should also be
recognized (Dangan v. NLRC, 127 SCRA 706). The prerogative to continue
a business or a part thereof, belongs to the employer, even, if he is not
suffering from serious business losses (Catatista v. NLRC, 247 SCRA 46), so
long as the requirements of law are complied with. In this connection,
records reveal that a written notice was served upon the affected workers and
the Department of Labor and Employment on January 28, 1994 (Exhibit B) and

their dismissal was made effective February 28, 1994 or one month hence
Mariko tendered the amounts of one-half month salary for every year of service
or one month pay whichever is higher, to the individual complainants by way of
separation pay, but the individual complainants, except Evangeline dela Cruz
who executed a Release Waiver and Quitclaim (Annex A, respondents reply),
refused to accept the same. Clearly, therefore, respondents also complied with
the requirements of the law in affecting the dismissal of the
complainants. Respondents cannot be forced to absorb the complainants in the
other branches which are already filled up by other Mariko
employees. Otherwise, they will be over-staffed. As explained by the
respondents, redundancy will result if they are made to absorb the complainants,
as there will be surplus employees.[65] (Emphasis supplied)
xxxx
Consonant with the above, we find the termination of the services of the
individual complainants were anchored on valid grounds.
WHEREFORE, premises considered, judgment is hereby rendered dismissing
the complaint for illegal dismissal, unfair labor practice and damges for lack of
merit, but ordering the respondent MARIKO NOVEL WARES, INC. to pay
complainants Ronnie Tamayo, Jose del Carmen, Vicky Bermeo, Jocelyn Padua
ad Elizabeth Matutina the amount of SIXTY-SIX THOUSAND EIGHT
HUNDRED FOUR PESOS AND 74/100.
xxxx
Representing their separation pay and proportionate 13th month pay for the year
1994 within ten days from receipt hereof
All other issues are dismissed for lack of merit
SO ORDERED.

Thereafter, in its Opposition to Memorandum of Appeal, petitioner, contrary to its

earlier allegation that it had validly retrenched workers, raised the argument that an
employer may close or cease his business operations or undertaking even if he is not
suffering from serious business losses or financial reverses as long as he pays employees
their termination pay.[66]

Afterwards, the NLRC after re-stating the facts, ruled in this wise:
In a nutshell, the Labor Arbiter below did not commit serious error in ruling for
the complainant. Well entrenched is the rule that when the conclusion of the
Labor Arbiter are sufficiently corroborated by the evidence on record, the same
should be respected by the appellate tribunals since, he is in a better position to
assess and evaluate the credibility of the contending parties. Findings of labor
tribunals which are substantially supported by evidence and in the absence of
grave abuse of discretion are not only accorded respect but with finality.
WHEREFORE, the assailed Decision is AFFIRMED as far as
complainants Ronie Tamayo and Jose del Carmen are concerned while the
complaint of Vicky Bermeo, Jocelyne Padua and Elizabeth Matutina are
dismissed pursuant to the Receipt, Release and Quitclaim executed and signed
by them.
Accordingly, the appeal is dismissed for lack of merit.
SO ORDERED.[67]

Throughout the entire proceedings before the LA and the NLRC, respondents were
adamant that petitioner failed to present sufficient and convincing evidence of the alleged
losses to justify a retrenchment of workers.[68] It pursued the same argument in the CA,
[69]
which ruled in their favor.
After a perusal of the records of the case and pleadings submitted, we find that
petitioner had in fact retrenched workers. All the pleadings submitted to the LA by the
petitioner clearly showed that what it had in mind when it terminated the services of
respondents was that it had retrenched workers. It was only when respondents appealed the
LA decision that petitioner pursued a new theory, that is, that what was involved was a
simple closure of business which did not require proof of substantial losses. This we
cannot allow.
The Courts ruling in Nielson & Company, Inc. v. Lepanto Mining Co.,[70] is
instructive and may be applied by analogy:
We have taken note that Lepanto is advancing a new theory. We have
carefully examined the pleadings filed by Lepanto in the lower court, its
memorandum and its brief on appeal, and never did it assert the theory that it
has the right to terminate the management contract because that contract is one

of agency which it could terminate at will. While it is true that in its ninth and
tenth special affirmative defenses, in its answer in the court
below, Lepanto pleaded that it had the right to terminate the management
contract in question, that plea of its right to terminate was not based upon the
ground that the relation between Lepantoand Nielson was that of principal and
agent but upon the ground that Nielson had allegedly not complied with certain
terms of the management contract. If Lepanto had thought of considering the
management contract as one of agency it could have amended its answer by
stating exactly its position. It could have asserted its theory of agency in its
memorandum for the lower court and in its brief on appeal. This, Lepanto did
not do.[71]

When a party deliberately adopts a certain theory, and the case is tried and decided
on that theory in the court below, the party will not be permitted to change his theory on
appeal. To permit him to change his theory will be unfair to the adverse party.[72] It is the
rule, and the settled doctrine of this Court, that a party cannot change his theory on appeal;
that is, that a party cannot raise in the appellate court any question of law or of fact that was
not raised in the court below or which was not within the issue raised by the parties in their
pleadings.[73]
Having concluded that petitioner retrenched workers, we now decide as to whether
or not petitioner had complied with the requisites of retrenchment. For retrenchment to be
valid, the following requisites must be satisfied:
1.
2.

The losses expected should be substantial and not merely de minimis in

extent;
The substantial losses apprehended must be reasonably imminent;

3.

The retrenchment must be reasonably necessary and likely to effectively

prevent the expected losses; and

4.

The alleged losses, if already incurred, and the expected imminent

losses sought to be forestalled, must be proven by sufficient and
convincing evidence.[74] (Emphasis supplied)

Petitioner claimed to have suffered irreversible loss. To substantiate this, petitioner

cites the following factors: (1) that when the lease was about to expire, it was already
paying Robinsons Land Corporation almost Three Hundred Forty-One Thousand Seven

Hundred Sixty Six Pesos and Thirty-Eight Centavos (P341,766,38) in monthly rental,
excluding other charges for the use of Robinsons Galleria common areas, not to mention
water and electric consumption;[75] (2) that from the inception of its operation at the
Robinsons Galleria, the Sari-Sari branch continually suffered losses in its operations;[76] (3)
that it consistently failed to reach the sales quota assigned to it under the lease contract with
Robinsons Land Corporation such that it was even forced to pay penalties; [77] (4) that in
September 1993, when the lease contract was about to expire, its board of directors decided
to close the Robinsons outlet; (5) that Robinsons Land Corporation was not too keen on
renewing the lease contract considering it failure to reach sales quota.[78]
The CA was correct in finding that petitioner failed to discharge its duty of showing that
the dismissal of the employees was legal, to wit:
While the notice of termination stated that the closure of the branch was due to
irreversible losses and the non-extension of the lease contract, Mariko did not
present any audited financial statements or documents to substantiate its
irreversible losses. Its mere allegation thereof is not enough.
xxxx
Without competent and sufficient proof to show that irreversible losses
suffered, the legality of the dismissal of the petitioners [herein respondents]
cannot be sustained.[79]

In the case of Uichico v. National Labor Relations Commission,[80] this Court affirmed the
finding of the NLRC as to the kind of evidence needed to prove irreversible loss:
We observe that the basis of the Labor Arbiter in sustaining the argument of
financial reverses is the Statement of Profit and Losses submitted by respondent
employer. The same, however, does not bear the signature of a certified
public accountant or audited by an independent auditor. Briefly stated, it
has no evidentiary value.[81] (Emphasis supplied)
In the case at bar, as pointed out by the respondents, petitioner failed to submit its audited
financial statements to the Securities and Exchange Commission for the years 1991 and
1992.[82] Thus, other than petitioners bare allegation of irreversible loss, there is no
evidence to prove and substantiate it.

Retrenchment is a management prerogative, a means to protect and preserve the

employer's viability and ensure his survival. This Court has always respected this
prerogative during trying times, but there must be faithful compliance by management
with the substantive and procedural requirements laid down by law and jurisprudence.[83]
Petitioner having failed in discharging its burden of submitting sufficient and
convincing evidence required by law, we hold that respondents Ronnie Tamayo, Jose del
Carmen, JocylenePadua, Vicky Bermeo and Elizabeth Matutina were illegally dismissed.
An illegally dismissed employee is entitled to either (1) reinstatement, if viable, or
separation pay, if reinstatement is no longer viable; and (2) backwages.[84] In the case at bar,
since fourteen years have already lapsed since the termination of the respondents, we deem
it proper that separation pay in lieu of reinstatement be awarded. Since petitioner has
already paid respondents their separation pay, it is only liable to pay the respondents
their backwages computed from the time of their illegal dismissal up to the time of the
finality of this judgment.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated
March 31, 2004 and its Resolution dated July 2, 2004 in CA-G.R. SP No. 51381
are AFFIRMED.
Costs against petitioner.
SO ORDERED.

EN BANC

NORBERTO ALTRES, EVITA

BULINGAN,
EVANGELINE
SASTINE,
FELIPE
SASA,
LILIBETH
SILLAR,

G.R. No. 180986

Present:

RAMONITO JAYSON, JELO

TUCALO, JUAN BUCA, JR.,
JUE CHRISTINE CALAMBA,
ROMEO PACQUINGAN, JR.,
CLEO
JEAN
ANGARA,
LOVENA OYAO, RODOLFO
TRINIDAD, LEONILA SARA,
SORINA
BELDAD,
MA.
LINDA NINAL, LILIA PONCE,
JOSEFINA ONGCOY, ADELYN
BUCTUAN,
ALMA
ORBE,
MYLENE
SOLIVA,
NAZARENE
LLOREN,
ELIZABETH
MANSERAS,
DIAMOND
MOHAMAD,
MARYDELL
CADAVOS,
ELENA
DADIOS,
ALVIN
CASTRO, LILIBETH RAZO,
NORMA CEPRIA, PINIDO
BELEY, JULIUS HAGANAS,
ARTHUR CABIGON, CERILA
BALABA, LIEZEL SIMAN,
JUSTINA YUMOL, NERLITA
CALI,
JANETH
BICOY,
HENRY LACIDA, CESARIO
ADVINCULA, JR., MERLYN
RAMOS, VIRGIE TABADA,
BERNARDITA
CANGKE,
LYNIE
GUMALO,
ISABEL
ADANZA,
ERNESTO
LOBATON, RENE ARIMAS,
FE SALVACION ORBE, JULIE
QUIJANO, JUDITHO LANIT,
GILBERTO ELIMIA, MANUEL

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
REYES,
LEONARDO-DE
CASTRO, &
BRION, JJ.

Promulgated:

December 10, 2008

PADAYOGDOG,
HENRY
BESIN, ROMULO PASILANG,
BARTOLOME TAPOYAO, JR.,
RUWENA
GORRES,
MARIBETH
RONDEZ,
FERDINAND
CAORONG,
TEODOMERO
CORONEL,
ELIZABETH SAGPANG, and
JUANITA ALVIOLA,
Petitioners,

- versus -

CAMILO
G.
EMPLEO,FRANKLIN MAATA,
LIVEY
VILLAREN, RAIDES
CAGA, FRANCO BADELLES,
ERNESTO BALAT, GRACE
SAQUILABON,
MARINA
JUMALON
and
GEORGE
DACUP,

Respondents.

x-------------------------------------------------x

DECISION

CARPIO MORALES, J.:

Assailed via petition for review on certiorari are the Decision
dated February 2, 2007[1] and Order dated October 22, 2007[2] of
Branch 3 of the Regional Trial Court (RTC) of Iligan City, which
denied petitioners petition for mandamus praying for a writ
commanding the city accountant of Iligan, Camilo G. Empleo
(Empleo), or his successor in office, to issue a certification of
availability of funds in connection with their appointments, issued
by then Iligan City Mayor Franklin M. Quijano (Mayor Quijano),
which were pending approval by the Civil Service Commission
(CSC).

Sometime in July 2003, Mayor Quijano sent notices of numerous

vacant career positions in the city government to the CSC. The
city government and the CSC thereupon proceeded to publicly
announce the existence of the vacant positions. Petitioners and
other applicants submitted their applications for the different
positions where they felt qualified.

Toward the end of his term or on May 27, June 1, and June 24,
2004, Mayor Quijano issued appointments to petitioners.

In the meantime, the Sangguniang Panglungsod issued

Resolution No. 04-242[3] addressed to the CSC Iligan City Field
Office requesting a suspension of action on the processing of
appointments to all vacant positions in the plantilla of the city
government as of March 19, 2004 until the enactment of a new
budget.

The Sangguniang
Panglungsod subsequently
issued
[4]
Resolution No. 04-266 which, in view of its stated policy against
midnight appointments, directed the officers of the City Human
Resource Management Office to hold in abeyance the
transmission of all appointments signed or to be signed by the
incumbent mayor in order to ascertain whether these had been
hurriedly prepared or carefully considered and whether the
matters of promotion and/or qualifications had been properly
addressed. The same Resolution enjoined all officers of the said
Office to put off the transmission of all appointments to the CSC,
therein making it clear that non-compliance therewith would be
met with administrative action.

Respondent city accountant Empleo did not thus issue a

certification as to availability of funds for the payment of salaries
and wages of petitioners, as required by Section 1(e)(ii), Rule V of
CSC Memorandum Circular No. 40, Series of 1998 reading:
xxxx
e.

LGU Appointment. Appointment in local government units for submission to the

Commission shall be accompanied, in addition to the common requirements, by the
following:

xxxx

ii. Certification by the Municipal/City Provincial Accountant/Budget Officer that

funds are available. (Emphasis and underscoring supplied)

And the other respondents did not sign petitioners position

description forms.

The
CSC
Field
Office
for
Lanao
del
Norte
and Iligan City disapproved
the
appointments
issued
to
petitioners invariably due to lack of certification of availability of
funds.

On appeal by Mayor Quijano, CSC Regional Office No. XII

in Cotabato City, by Decision of July 30, 2004,[5] dismissed the
appeal, it explaining that its function in approving appointments is
only ministerial, hence, if an appointment lacks a requirement
prescribed by the civil service law, rules and regulations, it would
disapprove it without delving into the reasons why the
requirement was not complied with.

Petitioners thus filed with the RTC of Iligan City the abovestated petition for mandamus against respondent Empleo or his
successor in office for him to issue a certification of availability of
funds for the payment of the salaries and wages of petitioners,
and for his co-respondents or their successors in office to sign the
position description forms.

As stated early on, Branch 3 of the Iligan RTC denied

petitioners petition for mandamus. It held that, among other
things, while it is the ministerial duty of the city accountant to
certify as to the availability of budgetary allotment to which
expenses and obligations may properly be charged under Section
474(b)(4) of Republic Act No. 7160,[6] otherwise known as the
Local Government Code of 1991, the city accountant cannot be
compelled to issue a certification as to availability of funds for the

payment of salaries and wages of petitioners as this ministerial

function pertains to the city treasurer. In so holding, the trial court
relied on Section 344 of the Local Government Code of 1991 the
pertinent portion of which provides:

Sec. 344. Certification and Approval of Vouchers. No

money shall be disbursed unless the local budget officer
certifies to the existence of appropriation that has been
legally made for the purpose, the local accountant has
obligated
said
appropriation,
and
the
local treasurer certifies to the availability of funds for the
purpose. x x x x (Underscoring supplied)

Petitioners filed a motion for reconsideration [7] in which they

maintained only their prayer for a writ of mandamus for
respondent Empleo or his successor in office to issue a
certification of availability of funds for the payment of their
salaries and wages. The trial court denied the motion by Order
of October 22, 2007,[8] hence, the present petition.

By Resolution of January 22, 2008, [9] this Court, without

giving due course to the petition, required respondents to
comment thereon within ten (10) days from notice, and at the
same time required petitioners to comply, within the same period,
with the relevant provisions of the 1997 Rules of Civil Procedure.

Petitioners filed a Compliance Report dated February 18,

2008[10] to which they attached 18 copies of (a) a verification and
certification, (b) an affidavit of service, and (c) photocopies of

counsels Integrated Bar of the Philippines (IBP) official receipt for

the year 2008 and his privilege tax receipt for the same year.

Respondents duly filed their Comment,[11] alleging technical

flaws in petitioners petition, to which Comment petitioners filed
their Reply[12] in compliance with the Courts Resolution dated April
1, 2008.[13]

The lone issue in the present petition is whether it is Section

474(b)(4) or Section 344 of the Local Government Code of 1991
which applies to the requirement of certification of availability of
funds under Section 1(e)(ii), Rule V of CSC Memorandum Circular
Number 40, Series of 1998. As earlier stated, the trial court ruled
that it is Section 344. Petitioners posit, however, that it is Section
474(b)(4) under which it is the ministerial duty of the
city accountant to issue the certification, and not Section 344
which pertains to the ministerial function of the city treasurer to
issue the therein stated certification.

A discussion first of the technical matters questioned by

respondents is in order.

Respondents assail as defective the verification and

certification against forum shopping attached to the petition as it
bears the signature of only 11 out of the 59 petitioners, and no
competent evidence of identity was presented by the signing
petitioners. They thus move for the dismissal of the petition,
citing Section 5, Rule 7[14] vis a vis Section 5, Rule 45[15] of the
1997 Rules of Civil Procedure and Docena v. Lapesura[16] which
held that the certification against forum shopping should be
signed by all the petitioners or plaintiffs in a case and that the

signing by only one of them is insufficient as the attestation

requires personal knowledge by the party executing the same. [17]

Petitioners, on the other hand, argue that they have a

justifiable cause for their inability to obtain the signatures of the
other petitioners as they could no longer be contacted or are no
longer interested in pursuing the case. [18] Petitioners plead
substantial compliance, citing Huntington Steel Products, Inc., et
al. v. NLRC[19] which held, among other things, that while the rule
is mandatory in nature, substantial compliance under justifiable
circumstances is enough.

Petitioners position is more in accord with recent decisions of

this Court.

In Iglesia ni Cristo v. Ponferrada,[20] the Court held:

The substantial compliance rule has been applied by

this Court in a number of cases: Cavile v. Heirs of Cavile,
where the Court sustained the validity of the certification
signed by only one of petitioners because he is a relative
of the other petitioners and co-owner of the properties in
dispute; Heirs of Agapito T. Olarte v. Office of the
President of the Philippines, where the Court allowed a
certification signed by only two petitioners because the
case involved a family home in which all the
petitioners shared
a
common
interest; Gudoy
v.
Guadalquiver, where the Court considered as valid the
certification signed by only four of the nine petitioners
because all petitioners filed as co-owners pro indiviso a
complaint against respondents for quieting of title and

damages, as such, they all have joint interest in the

undivided whole; and DAR v. Alonzo-Legasto, where the
Court sustained the certification signed by only one of the
spouses as they were sued jointly involving a property in
which they had a common interest.[21] (Italics in the
original, underscoring supplied)

Very recently, in Tan, et al. v. Ballena, et al.,

the verification and certification against forum shopping
attached to the original petition for certiorari filed with the Court
of Appeals was signed by only two out of over 100 petitioners and
the same was filed one day beyond the period allowed by the
Rules. The appellate court initially resolved to dismiss the original
petition precisely for these reasons, but on the therein petitioners
motion for reconsideration, the appellate court ordered the filing
of an amended petition in order to include all the original
complainants numbering about 240. An amended petition was
then filed in compliance with the said order, but only 180 of the
240 original complainants signed the verification and certification
against forum shopping. The Court of Appeals granted the motion
for reconsideration and resolved to reinstate the petition.
[22]

In sustaining the Court of Appeals in Tan, the Court held that

it is a far better and more prudent course of action to excuse a
technical lapse and afford the parties a review of the case to
attain the ends of justice, rather than dispose of the case on
technicality and cause grave injustice to the parties, giving a false
impression of speedy disposal of cases while actually resulting in
more delay, if not a miscarriage of justice.

The Court further discoursed in Tan:

Under justifiable circumstances, we have already

allowed the relaxation of the requirements of verification
and certification so that the ends of justice may be better
served. 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; while the purpose of the aforesaid certification
is to prohibit and penalize the evils of forum shopping.

In Torres v. Specialized Packaging Development

Corporation, we ruled that the verification requirement
had been substantially complied with despite the fact that
only two (2) out of the twenty-five (25) petitioners have
signed the petition for review and the verification. In that
case, we held that the two signatories were
unquestionably real parties-in-interest, who undoubtedly
had sufficient knowledge and belief to swear to the truth
of the allegations in the Petition.

In Ateneo de Naga University v. Manalo, we also

ruled that there was substantial compliance with the
requirement of verification when only one of the
petitioners, the President of the University, signed for and
on behalf of the institution and its officers.

Similarly, in Bases Conversion and Development

Authority v. Uy, we allowed the signature of only one of
the principal parties in the case despite the absence of a
Board Resolution which conferred upon him the authority
to represent the petitioner BCDA.

In the present case, the circumstances squarely

involve a verification that was not signed by all the
petitioners therein. Thus, we see no reason why we
should not uphold the ruling of the Court of Appeals in
reinstating the petition despite the said formal defect.

On the requirement of a certification of non-forum

shopping, the well-settled rule is that all the petitioners
must sign the certification of non-forum shopping. The
reason for this is that the persons who have signed the
certification cannot be presumed to have the personal
knowledge of the other non-signing petitioners with
respect to the filing or non-filing of any action or claim the
same as or similar to the current petition. The rule,
however, admits of an exception and that is when the
petitioners
show reasonable cause
for
failure
to
personally sign the certification. The petitioners must be
able to convince the court that the outright dismissal of
the petition would defeat the administration of justice.

In the case at bar, counsel for the respondents

disclosed that most of the respondents who were the
original complainants have since sought employment in
the
neighboring
towns
of
Bulacan,
Pampanga
and Angeles City. Only the one hundred eighty (180)
signatories were then available to sign the amended
Petition for Certiorari and the accompanying verification
and certification of non-forum shopping.[23]

In the present case, the signing of the verification by only 11

out of the 59 petitioners already sufficiently assures the Court
that the allegations in the pleading are true and correct and not
the product of the imagination or a matter of speculation; that
the pleading is filed in good faith; and that the signatories are
unquestionably real parties-in-interest who undoubtedly have
sufficient knowledge and belief to swear to the truth of the
allegations in the petition.

With respect to petitioners certification against forum

shopping, the failure of the other petitioners to sign as they could
no longer be contacted or are no longer interested in pursuing the
case need not merit the outright dismissal of the petition without
defeating the administration of justice. The non-signing
petitioners are, however, dropped as parties to the case.

In fact, even Docena[24] cited by respondents sustains

petitioners position. In that case, the certification against forum
shopping was signed by only one of the petitioning spouses. The
Court held that the certification against forum shopping should be
deemed to constitute substantial compliance with the Rules
considering, among other things, that the petitioners were
husband and wife, and that the subject property was their
residence which was alleged in their verified petition to be
conjugal.[25]

With respect to petitioners non-presentation of any

identification before the notary public at the time they swore to
their verification and certification attached to the petition, suffice
it to state that this was cured by petitioners compliance [26] with
the Courts Resolution of January 22, 2008[27] wherein they
submitted a notarized verification and certification bearing the

details of their community tax certificates. This, too, is substantial

compliance. The Court need not belabor its discretion to
authorize subsequent compliance with the Rules.

For the guidance of the bench and bar, the Court restates in
capsule form the jurisprudential pronouncements already
reflected above respecting non-compliance with the requirements
on, or submission of defective, verification and certification
against forum shopping:

1) A distinction must be made between non-compliance with

the requirement on or submission of defective verification, and
non-compliance with the requirement on or submission of
defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect

therein does not necessarily render the pleading fatally
defective. The court may order its submission or correction or act
on the pleading if the attending circumstances are such that strict
compliance with the Rule may be dispensed with in order that the
ends of justice may be served thereby.[28]

3) Verification is deemed substantially complied with when

one who has ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the verification, and
when matters alleged in the petition have been made in good
faith or are true and correct.[29]

4) As to certification against forum shopping, noncompliance therewith or a defect therein, unlike in verification, is

generally not curable by its subsequent submission or correction

thereof, unless there is a need to relax the Rule on the ground of
substantial compliance or presence of special circumstances or
compelling reasons.[30]

5) The certification against forum shopping must be signed

by all the plaintiffs or petitioners in a case; [31] otherwise, those
who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of
them in the certification against forum shopping substantially
complies with the Rule.[32]

6) Finally, the certification against forum shopping must be

executed by the party-pleader, not by his counsel. [33] If, however,
for reasonable or justifiable reasons, the party-pleader is unable
to
sign,
he
must
execute
a
Special
Power
of
[34]
Attorney
designating his counsel of record to sign on his behalf.

And now, on respondents argument that petitioners raise

questions of fact which are not proper in a petition for review on
certiorari as the same must raise only questions of law. They
entertain doubt on whether petitioners seek the payment of their
salaries, and assert that the question of whether the city
accountant can be compelled to issue a certification of availability
of funds under the circumstances herein obtaining is a factual
issue.[35]

The Court holds that indeed petitioners are raising a

question of law.

The Court had repeatedly clarified the distinction between a

question of law and a question of fact. A question of law exists
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, the truth or falsehood of facts being
admitted.[36] A question of fact, on the other hand, exists when the
doubt or difference arises as to the truth or falsehood of facts or
when the query invites calibration of the whole evidence
considering mainly the credibility of the witnesses, the existence
and relevance of specific surrounding circumstances, as well as
their relation to each other and to the whole, and the probability
of the situation.[37] When there is no dispute as to fact, the
question of whether the conclusion drawn therefrom is correct is a
question of law.[38]

In the case at bar, the issue posed for resolution does not
call for the reevaluation of the probative value of the evidence
presented, but rather the determination of which of the provisions
of the Local Government Code of 1991 applies to the Civil Service
Memorandum Circular requiring a certificate of availability of
funds relative to the approval of petitioners appointments.

AT ALL EVENTS, respondents contend that the case has

become moot and academic as the appointments of petitioners
had already been disapproved by the CSC.Petitioners maintain
otherwise, arguing that the act of respondent Empleo in not
issuing the required certification of availability of funds unduly
interfered with the power of appointment of then Mayor
Quijano; that the Sangguniang Panglungsod Resolutions relied
upon by respondent Empleo constituted legislative intervention in
the mayors power to appoint; and that the prohibition against

midnight appointments applies only to presidential appointments

as affirmed in De Rama v. Court of Appeals.[39]

The Court finds that, indeed, the case had been

rendered moot and academic by the final disapproval of
petitioners appointments by the CSC.

The mootness of the case notwithstanding, the Court

resolved to rule on its merits in order to settle the issue
once and for all, given that the contested action is one
capable of repetition[40] or susceptible of recurrence.

The pertinent portions of Sections 474(b)(4) and 344 of the

Local Government Code of 1991 provide:

Section 474. Qualifications, Powers and Duties.

xxxx

(b) The accountant shall take charge of both the accounting and internal audit
services of the local government unit concerned and shall:

xxxx

(4) certify to the availability of budgetary allotment

to which expenditures and obligations may be properly
charged. (Emphasis and underscoring supplied)
xxxx

Sec. 344. Certification and Approval of Vouchers. No

money shall be disbursed unless the local budget officer
certifies to the existence of appropriation that has been
legally made for the purpose, the local accountant has
obligated said appropriation, and the local treasurer
certifies to the availability of funds for the purpose. x x
x (Emphasis and underscoring supplied)

Petitioners propound the following distinctions between

Sections 474(b)(4) and 344 of the Local Government Code of
1991:

(1) Section 474(b)(4) speaks of certification of

availability of budgetary allotment, while Section 344
speaks of certification of availability of funds for
disbursement;

(2) Under Section 474(b)(4), before a certification is

issued, there must be an appropriation, while under
Section 344, before a certification is issued, two requisites
must concur: (a) there must be an appropriation legally
made for the purpose, and (b) the local accountant has
obligated said appropriation;

(3) Under Section 474(b)(4), there is no actual

payment involved because the certification is for the
purpose of obligating a portion of the appropriation; while
under Section 344, the certification is for the purpose of
payment after the local accountant had obligated a
portion of the appropriation;

(4) Under Section 474(b)(4), the certification is

issued if there is an appropriation, let us say, for the
salaries of appointees; while under Section 344, the
certification is issued if there is an appropriation and the
same is obligated, let us say, for the payment of salaries
of employees.[41]

Respondents do not squarely address the issue in their

Comment.

Section 344 speaks of actual disbursements of money from

the local treasury in payment of due and demandable obligations
of the local government unit. The disbursements are to be made
through the issuance, certification, and approval of vouchers. The
full text of Section 344 provides:

Sec. 344. Certification and Approval of Vouchers. No

money shall be disbursed unless the local budget officer
certifies to the existence of appropriation that has been
legally made for the purpose, the local accountant has
obligated said appropriation, and the local treasurer

certifies to the availability of funds for the

purpose. Vouchers and payrolls shall be certified to and
approved by the head of the department or office who
has administrative control of the fund concerned, as to
validity,
propriety,
and
legality
of
the
claim
involved. Except in cases of disbursements involving
regularly recurring administrative expenses such as
payrolls for regular or permanent employees, expenses
for light, water, telephone and telegraph services,
remittances to government creditor agencies such as
GSIS, SSS, LDP, DBP, National Printing Office,
Procurement Service of the DBM and others, approval of
the disbursement voucher by the local chief executive
himself shall be required whenever local funds are
disbursed.

In cases of special or trust funds, disbursements

shall be approved by the administrator of the fund.

In case of temporary absence or incapacity of the

department head or chief of office, the officer next-in-rank
shall automatically perform his function and he shall be
fully responsible therefor. (Italics and underscoring
supplied)

Voucher, in its ordinary meaning, is a document which shows

that services have been performed or expenses incurred. [42] When
used in connection with disbursement of money, it implies the
existence of an instrument that shows on what account or by
what authority a particular payment has been made, or that

services have been performed which entitle the party to whom it

is issued to payment.[43]

Section 344 of the Local Government Code of 1991 thus

applies only when there is already an obligation to pay on the part
of the local government unit, precisely because vouchers are
issued only when services have been performed or expenses
incurred.
The requirement of certification of availability of funds from
the city treasurer under Section 344 of the Local Government
Code of 1991 is for the purpose of facilitating the approval of
vouchers issued for the payment of services already rendered to,
and expenses incurred by, the local government unit.

The trial court thus erred in relying on Section 344 of the

Local Government Code of 1991 in ruling that the ministerial
function to issue a certification as to availability of funds for the
payment of the wages and salaries of petitioners pertains to
the city treasurer. For at the time material to the required
issuance of the certification, the appointments issued to
petitioners were not yet approved by the CSC, hence, there were
yet no services performed to speak of. In other words, there was
yet no due and demandable obligation of the local government to
petitioners.

Section 474, subparagraph (b)(4) of the Local Government

Code of 1991, on the other hand, requires the city accountant to
certify to the availability of budgetary allotment to which
expenditures and obligations may be properly charged.[44] By
necessary implication, it includes the duty to certify to
the availability of funds for the payment of salaries and wages of
appointees to positions in the plantilla of the local government

unit, as required under Section 1(e)(ii), Rule V of CSC

Memorandum Circular Number 40, Series of 1998, a requirement
before the CSC considers the approval of the appointments.

In fine, whenever a certification as to availability of funds is

required for purposes other than actual payment of an obligation
which requires disbursement of money, Section 474(b)(4) of the
Local Government Code of 1991 applies, and it is the ministerial
duty of the city accountant to issue the certification.

WHEREFORE, the Court declares that it is Section 474(b)(4),

not Section 344, of the Local Government Code of 1991, which
applies to the requirement of certification of availability of funds
under Section 1(e)(ii), Rule V of Civil Service Commission
Memorandum Circular Number 40, Series of 1998.

SO ORDERED.

SECOND DIVISION
UNITED PARAGON MINING G.R. No. 150959
CORPORATION,
Petitioner, Present:
PUNO, J., Chairperson,
- versus - SANDOVAL-GUTIERREZ,
CORONA,

AZCUNA, and
GARCIA, JJ.
COURT OF APPEALS, former
12th DIVISION, ATTY. MURLY
P. MENDEZ and CESARIO[1] F. Promulgated:
ERMITA,
Respondents. August 4, 2006
x-------------------------- ---------------- - - - - - - -x
DECISION

GARCIA, J.:

Assailed and sought to be set aside in this petition for review

under Rule 45 of the Rules of Court is the Decision [2] dated July 24,
2001 of the Court of Appeals (CA), as reiterated in its
Resolution[3] of November 7, 2001, dismissing the petition for
certiorari with prayer for a temporary restraining order and
preliminary injunction thereat filed by the herein petitioner in CAG.R. SP No. 44450, entitled United Paragon Mining Corporation,
represented by Feliciano M. Daniel v. Atty. Murly P. Mendez, in his
capacity as Accredited Voluntary Arbitrator, Region V, and Cesario
F. Ermita.

The facts:

Prior to the instant controversy, private respondent Cesario F.

Ermita (Cesario, for brevity) was a regular employee working as a

foreman of petitioner United Paragon Mining Corporation (UPMC,

hereafter).

On January 18, 1996, Cesario received a termination letter

bearing date January 16, 1996 and signed by UPMCs Personnel
Superintendent, Feliciano M. Daniel, informing Cesario that his
employment as foreman is terminated effective thirty days after
his receipt of the letter. As stated in the letter, the termination
was on account of Cesarios violation of company rules against
infliction of bodily injuries on a co-employee, it being alleged
therein that Cesario inflicted bodily injuries on a co-employee, a
certain Jerry Romero, as well as for unlawfully possessing a deadly
weapon, a bolo, again in violation of company rules.

As a result of the termination, the matter was brought to the

grievance machinery as mandated under the Collective
Bargaining Agreement existing at that time between UPMC and
the United Paragon Supervisors Union. Having failed to reach a
settlement thereat, the parties agreed to submit the dispute to
voluntary arbitration. Accordingly, the complaint for illegal
dismissal was referred to Voluntary Arbitrator Atty. Murly P.
Mendez of the National Conciliation and Mediation Board,
Regional Branch No. V, LegaspiCity, whereat the same was
docketed as VA Case No. RB5-657-04-002-96.
On February 28, 1997, Voluntary Arbitrator Mendez rendered a
decision[4] in Cesarios favor, stating that although the procedural
requirements in the termination of an employee had been
complied with, the termination of Cesario was unjustified because
it was arrived at through gross misapprehension of facts. Explains
the Voluntary Arbitrator:
An analysis of the tenor of the termination letter would
seem to indicate that Ceasario Ermita was separated from

service simply because his explanation was not

acceptable to the company.Stated more bluntly, Ermita
was terminated not because there was a definite finding
of fact relative to his supposed culpability, but because
his answer did not find favor with management.
xxx xxx xxx
The evidence on record partakes of the uncorroborated
statement of Jerry Romero claiming that he was assaulted
by [Cesario]. This claim has been disputed and is denied
by [Cesario] in the statement executed by him on January
2, 1996 as well as in his written explanation (Annex 6,
Respondent's Position Paper).
On this point, it can be argued that since this is a case of
one's word against another, the best that could be said of
management's evidence is that it has achieved a level at
an equi-poise with that of the Constitution. The spirit of
prevailing jurisprudence as well as a liberal interpretation
of the new Constitutional provision on labor, would
mandate that where a doubt exists, the same should be
resolved in favor of labor. The position of [Cesario]
appears to have been strengthened by the document
jointly signed by [him] and Jerry Romero, the supposed
victim of the assault charged.
This amicable settlement would serve to negate the
charge of physical injury against [Cesario] as a basis for
termination, it appearing that even [his] supposed victim,
Jerry Romero, who has been made to appear as a
complainant in the proceedings which resulted in the
termination letter, has admitted in this amicable

settlement (Annex A, Complainant's Position Paper) that

"hindi naming sinasadya yon at itong ginawa naming
sulat na ito ay siya ang magpapatunay na ayos kaming
dalawa at walang problema sa isa't isa."
This admission, that comes no less from the supposed
accuser of [Cesario], clearly establishes the fact that
whatever may have happened between them on New
Year's eve was something that neither of them willfully
and voluntarily did. Since it has been established that the
supposed scuffle between [Cesario] and Romero was
"hindi sinasadya," then it would necessarily follow that
there could not have been a willful and voluntary assault
by [Cesario] upon Romero. This situation is further
rendered more puzzling by the fact that the suspected
assailant was himself the bearer of the tell-tale marks of
injury.
xxx xxx xxx
It has been established to the satisfaction of this
Arbitrator that the bolo seen that night was used to chop
wood to be burnt in the bonfire. This statement by people
who happened to be unbiased and disinterested remains
uncontested and undisputed.
Further, the preponderance of evidence shows that it was
not [Cesario] who used said bolo, but his son.
xxx xxx xxx

On these points, it is the finding of this Arbitrator, and it is

so ruled, that Ceasario Ermita was unjustifiably
terminated.[5] (Words in brackets supplied).

On the basis of the above, the Voluntary Arbitrator, in his

aforementioned decision of February 28, 1997, ordered Cesarios
reinstatement, to wit:
WHEREFORE, judgment is hereby issued ordering
respondent United Paragon Mining Corporation to
immediately reinstate Ceasario F. Ermita to his former
position prior to the termination without loss of seniority
nor interruption of service, and to pay said Ceasario F.
Ermita his back wages, including such other fringe
benefits as he would have been entitled to, from the date
of his termination effective February 17, 1996 up to the
time of actual reinstatement. Attorney's fees are hereby
granted equivalent to 10 per cent of such monetary
award as the complainant is entitled to.
For lack of merit, all other claims for damages are hereby
dismissed.
SO ORDERED.

In time, UPMC moved for a reconsideration of the decision insofar

as it ordered Cesarios reinstatement which UPMC sought to avert
by offering separation pay instead. UPMC cites the following
against the decreed reinstatement: 1) Cesarios position has

already been filled up; and 2) reinstatement is no longer

appropriate in view of the supposed strained relations between
Cesario and UPMC.

In his Order[6] of April 22, 1997, the Voluntary Arbitrator denied the
desired reconsideration stressing that UPMCs management
misapprehended the facts when it caused Cesarios termination,
which cannot support the claim of the existence of strained
relations between him and the corporation.
Unsatisfied, UPMC, thru its Personnel Superintendent Feliciano M.
Daniel, elevated the case to the CA on a Petition for Certiorari
with Prayer for Temporary Restraining Order and Injunction,
thereat docketed as CA-G.R. SP No. 44450, asserting that the
Voluntary Arbitrator committed grave abuse of discretion,
erroneous interpretation of the law and denial of substantial
justice.
In the herein assailed Decision[7] dated July 24, 2001, the CA,
without going into the merits of the petition, dismissed the same
on the following grounds:
1) The petition for certiorari was not the proper remedy in
order to seek review or nullify decisions or final
orders issued by the Labor Arbiter;
2) The verification in the petition is ineffective and
insufficient because it was merely signed by the
company's
Personnel
Superintendent
without
alleging or showing that he is authorized for the said
purpose and that the verification was based on
knowledge and information;

3) The petitioner's ground of grave abuse of discretion,

erroneous interpretation of the law and denial of
justice are actually dwelling on the appreciation of
facts, which cannot be entertained in a petition for
certiorari.

With its motion for reconsideration having been denied by the CA

in its Resolution of November 7, 2001,[8] petitioner UPMC is now
with this Court via the present recourse, submitting for our
consideration the following questions:
I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
DISMISSING THE PETITION AFTER FINDING THAT THE
PROPER REMEDY SHOULD HAVE BEEN A PETITION FOR
REVIEW ON CERTIORARI AND NOT A PETITION FOR
CERTIORARI;
II
WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF
APPEALS ERRED IN DISMISSING THE PETITION AFTER
FINDING THAT THE VERIFICATION PORTION OF THE
PETITION WAS INEFFECTIVE AND INSUFFICIENT IN THE
ABSENCE OF ALLEGATION OR SHOWING THAT FELICIANO
DANIEL, AS PERSONNEL SUPERINTENDENT WAS DULY
AUTHORIZED TO FILE THE PETITION;
III

WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF

APPEALS ERRED IN DISMISSING THE PETITION AFTER
FINDING THAT THE PETITION LACKS MERIT BECAUSE IT
DWELLED ON THE APPRECIATION OF FACTS WHICH IS NOT
PROPER IN PETITION FOR CERTIORARI.

The recourse must have to be DENIED, no reversible error having

been committed by the CA in its challenged decision.
We start with the basic concept that a corporation, like petitioner
UPMC, 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. It
has thus been observed that the power of a corporation to sue
and be sued in any court is lodged with its board of directors that
exercises its corporate powers. 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 the
corporate by-laws or by a specific act of the board of directors. [9]
It is petitioners posture that there is no necessity for a board
resolution authorizing its Personnel Superintendent to file in its
behalf the certiorari petition in CA-G.R. SP No. 44450 because said
petition arose out of the labor dispute filed against it and its
Personnel Superintendent, Feliciano M. Daniel. It is argued that in
Cesarios complaint for illegal dismissal, Daniel was made a corespondent of the corporation. Upon this premise, UPMC argues
that Daniel has all the right to answer the complaint and to
appeal an unfavorable judgment therein, which he actually did, in
his capacity as the corporations Personnel Superintendent and as
its representative. Plodding on, petitioner contends that were the

CA to insist that Daniel could not represent the corporation, it

follows that the proceedings before the Voluntary Arbitrator could
only be binding as against Daniel because the company then
could not have been duly represented in said proceedings.
Throughout the proceedings before the Voluntary Arbitrator,
that is, from the filing of the position papers up to the filing of the
motion for reconsideration, UPMC was duly represented by its
counsel, Atty. Archimedes O. Yanto. True it is that Cesarios
complaint for illegal dismissal was filed against the corporation
and Daniel. It appears obvious to us, however, that Daniel was
merely a nominal party in that proceedings, as in fact he
was impleaded thereat in his capacity as UPMCs Personnel
Superintendent who signed the termination letter. For sure,
Cesarios complaint contains no allegation whatsoever for specific
claim or charge against Daniel in whatever capacity. As it is,
Daniel was not in anyway affected by the outcome of the illegal
dismissal case because only the corporation was made liable
therein to Cesario. Being not a real party-in-interest, Daniel has no
right to file the petition in CA-G.R. SP No. 44450 in behalf of the
corporation without any authority from its board of directors. It is
basic in law that a corporation has a legal personality entirely
separate and distinct from that of its officers and the latter cannot
act for and on its behalf without being so authorized by its
governing board.
In Premium Marble Resources, Inc. v. Court of Appeals,[10] we
made it clear that in the absence of an authority from the board
of directors, no person, not even the officers of the corporation,
can validly bind the latter:
We agree with the finding of public respondent Court of
Appeals, that in the absence of any board resolution from

its board of directors the [sic] authority to act for and in

behalf of the corporation, the present action must
necessary fail. The power of the corporation to sue and be
sued in any court is lodged with the board of directors
that exercises its corporate powers. Thus, the issue of
authority and the invalidity of plaintiff-appellants
subscription which is still pending, is a matter that is also
addressed, considering the premises, to the sound
judgment of the Securities and Exchange Commission.

Given the reality that the petition in CA-G.R. SP No. 44450 was
filed by Daniel in behalf of and in representation of petitioner
UPMC without an enabling resolution of the latters board of
directors, that petition was fatally defective, inclusive of the
verification and the certification of non-forum shopping executed
by Daniel himself.
True, ample jurisprudence exists to the effect that subsequent and
substantial compliance of a petitioner may call for the relaxation
of the rules of procedure in the interest of justice. [11] But to merit
the Court's liberal consideration, petitioner must show reasonable
cause justifying non-compliance with the rules and must convince
the Court that the outright dismissal of the petition would defeat
the administration of justice.[12] Here, petitioner has not
adequately explained its failure to have the certification against
forum shopping signed by its duly authorized officer. Instead, it
merely persisted in its thesis that it was not necessary to show
proof that its Personnel Superintendent was duly authorized to file
that petition and to sign the verification thereof and the
certification against forumshopping despite the absence of the
necessary board authorization, thereby repeating in the process
its basic submission that CA-G.R. SP No. 44450 is merely a
continuation of the proceedings before the Voluntary Arbitrator
and that its Personnel Superintendent was impleaded as one of
the respondents in Cesarios complaint for illegal dismissal.

With the view we take of this case, we deem it unnecessary

to address petitioners other grievances.

WHEREFORE, the instant petition is DENIED and

assailed CA decision and resolution are AFFIRMED.

Costs against petitioner.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

THIRD DIVISION

the

HEIRS OF SOFIA NANAMAN

LONOY, namely, MANUEL N.
LONOY, OSCAR N. LONOY,
WARREN
N.
LONOY,
EXCELINO N. LONOY, EDGAR
N. LONOY, VICTOR N. LONOY,
APOLLO N. LONOY, GEMMA
N. LONOY-SAMSON, HEIRS
OF RODOLFO N. LONOY
(ISABEL
A.
LONOY,
ISABELITA A. LONOY-YOUNG,
WINONA
A.
LONOY,
RODERICK A. LONOY, NANCY
A. LONOY-PAYNAEN, ROBERT
LONOY, ROMMEL A. LONOY,
RAFAEL A. LONOY, ZENAIDA
LONOY-OPADA, HONEYLYN A.
LONOY,
MARITES
LONOY
CABURNAY, and RODOLFO
LONOY, JR.),
HEIRS
OF
CORNELIA
NANAMAN
ADIS/ASEQUIA,
namely, HEIRS OF ELSA N.
ADIS, BRICCIO N. ADIS,
TOMAS N. ADIS, ROMY N.
ADIS, JUSTINO N. ADIS,
MERCITA N. ASEQUIA, and
TOMASITA N. ASEQUIA,
HEIRS
OF
VICENTE
NANAMAN
(LUDEM
NANAMAN, ET AL.),

G.R. No. 175049

Present:

YNARES-SANTIAGO, J.,
Chairperson,
CARPIO, *
AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
REYES, JJ.

HEIRS
OF
MANUELA
NANAMAN
AMARGA,
namely, HEIRS OF CLARITA
AMARGA-UBGUIA (VERLITO
A.
UBGUIA,
DANILO
A.
UBGUIA,
ASTERIO
A.
UBGUIA, and CARLO A.
UBGUIA),
HEIRS OF ACOLON AMARGA
(ALMIRANTE
AMARGA,
SPARTACUS
AMARGA,
MELVIN
AMARGA,
and
RODRIGO
AMARGA),
ALONSO N. AMARGA, HERDA
N. AMARGA, DELOS MIMBA
AMARGA-TOGONON,
HEIRS
OF
ASCONA
AMARGA
UBAGAN (DEMOSTHENES A.
UBAGAN, ET AL.),
HEIRS OF NICODEMO N.
AMARGA (JIMMY AMARGA,
MARIETTA
AMARGA,
BENIGNO
AMARGA,
NICODEMO AMARGA, JR.,
ALMA
AMARGA,
FELIX
AMARGA, ADOR AMARGA,
LYDIA
AMARGA,
JUDY
AMARGA, LOLOT AMARGA,
and MADONNA AMARGA),
HEIRS
OF
ATANACIO
NANAMAN
AMARGA
(GLORIOSA
A.
APOR,
NESTOR AMARGA, NORVILLA

AMARGA, GENITA AMARGA,

and GILMA AMARGA),
HEIRS OF OLIVA AMARGABADELLES
(JOSE
I.
BADELLES,
JIMBO
BADELLES,
JOHNSON
BADELLES, ALITA BADELLESJALAGAT, NINIAN BADELLES,
JONA
A.
BADELLES,
CEFERINO
A.
BADELLES,
OLIVER BADELLES, OHARA
A.
BADELLES,
MARIA
BADELLES,
SARAH
A.
BADELLES,
JEBA
A.
BADELLES, and MICHAELA
A. BADELLES), and
HEIRS OF MANSUETO N.
AMARGA (EDNA AMARGA
surviving spouse of JESSE
AMARGA,
DEA
AMARGAMAGHINAY,
and
MARLON
AMARGA),
HEIRS
OF
GENARA
NANAMAN SAKALL, namely,
AMPARO SAKALL-DURANO,
BENEDICTO
N.
SAKALL,
ISABELITA
N.
SAKALL,
FRANCISCA
SAKALL
MARQUINA,
HONORIO
N.
SAKALL, VIRGINIA SAKALL
ESTANISLAO, and NORMA N.
SAKALL,

HEIRS
OF
JULIETA
NANAMAN, namely, HEIRS
OF JAIME NANAMAN/RIVERA
(ANASTASIA
LAUGAM
NANAMAN surviving spouse,
DULSORA NANAMAN, and
GUILLERMO NANAMAN),
HEIRS
OF
PIO
NANAMAN/ROA
(WILMA
NANAMAN,
ALFREDO
NANAMAN,
DELIA
NANAMAN,
SALVADOR
NANAMAN, HEIRS OF RAUL
NANAMAN,
EVELYN
NANAMAN,
VIOLA
NANAMAN,
EDITHA
NANAMAN,
PINKY
NANAMAN, and ALEXANDER
NANAMAN),
HEIRS
OF
GREGORIO
NANAMAN/DACAMPO
(VICTOR
NANAMAN,
VICENTE
NANAMAN,
GREGORIO NANAMAN, JR.,
and VIRGIE NANAMAN), and
HEIRS
OF
ORLANDO
NANAMAN
(EMILIA
G.
NANAMAN surviving spouse,
ALEX
NANAMAN,
EMMA
NANAMAN,
HEIRS
OF
GEORGINA
NANAMAN,
GEORGE NANAMAN, RAMIL
NANAMAN, and CAROLYN

NANAMAN),
HEIRS
OF
ROSARIO
NANAMAN RUEDAS, namely,
HEIRS OF BERNARDO N.
RUEDAS
(JULIA
RUEDAS,
JONATHAN
RUEDAS,
MARLON RUEDAS, MARIVIC
RUEDAS, EDITHA RUEDAS,
and
MARGIE
RUEDASPOGOY), and HEIRS OF JOSE
FEBE NANAMAN (SOCORRO
NANAMAN, AIDA NANAMAN,
LERMA
NANAMANMORALES,
EDUARDO
NANAMAN,
JOSEFA
NANAMAN,
MARISA
NANAMAN,
ARTURO
NANAMAN, and MARYFLOR
NANAMAN),
and
ATTY.
ELPEDIO
CABASAN
as
Administrator
of
the
Intestate Estate of Gregorio
Nanaman,
Petitioners,

- versus -

SECRETARY OF AGRARIAN
REFORM,
LAND
REGISTRATION AUTHORITY,
DEPARTMENT OF AGRARIAN

Promulgated:

November 27, 2008

REFORM
ADJUDICATION
BOARD
(DARAB),
LAND
BANK OF THE PHILIPPINES,
HEIRS
OF
NECIFORO
CABALUNA,
HEIRS
OF
ABDON
MANREAL,
TRANQUILINA C. MANREAL,
TITO L. BALLER, HEIRS OF
HERCULANO C. BALORIO,
ALICIA B. MANREAL, FELIPE
D. MANREAL, SALVACION
MANREAL,
HEIRS
OF
DOMINGO N. RICO, HEIRS OF
DOMINGO V. RICO, MACARIO
VELORIA,
HEIRS
OF
CUSTODIO M. RICO, HEIRS
OF CLEMENTE M. RICO,
MARTILLANO
D.
OBESO,
HEIRS OF PABLO F. RICO,
Respondents,
CITY OF ILIGAN, HEIRS OF
JUAN NANAMAN, HEIRS OF
LIMBANIA CABILI MERCADO,
HEIRS OF MARIANO ANDRES
CABILI,
Respondents/Unwilling
CoPetitioners.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --DECISION
CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of

the Rules of Court, seeking (a) the reversal of the
Resolution[1] dated 13 July 2005 of the Twenty-Second (22nd)
Division of the Court of Appeals in CA-G.R. SP No. 00365, which
dismissed the Special Civil Action for Prohibition, Declaration of
Nullity of Emancipation Patents, Injunction with Prayer for the
Issuance of a Temporary Restraining Order; and (b) the reversal of
the Resolution[2] of the Twenty-First (21st) Division of the Court of
Appeals in CA-G.R. SP No. 00365 dated 22 September 2006,
which denied the Motion for Reconsideration of the
aforementioned Resolution.

The factual and procedural antecedents of the case are set

forth hereunder.

Action for Reversion of Title

The spouses Gregorio Nanaman (Gregorio) and Hilaria

Tabuclin (Hilaria) were the owners of a parcel of agricultural land
situated in Tambo, Iligan City, consisting of 34.7 hectares (subject
property), upon which they likewise erected their residence. Living
with them on the subject property were Virgilio Nanaman
(Virgilio), Gregorios son by another woman, and fifteen tenants.

When Gregorio died in 1945, Hilaria administered the subject

property with Virgilio. On 16 February 1954, Hilaria and Virgilio
executed a Deed of Sale[3] over the subject property in favor of
Jose C. Deleste (Deleste).

Upon Hilarias death on 15 May 1954, Juan Nanaman (Juan),

Gregorios brother, was appointed as special administrator of the
estate of the deceased spouses Gregorio and Hilaria (joint

estate). On 16 June 1956, Edilberto Noel (Noel) was appointed as

the regular administrator of the joint estate.

The subject property was included in the list of assets of the

joint estate. However, Noel could not take possession of the
subject
property
since
it
was
already
in
Delestes
possession. Thus, on 30 April 1963, Noel filed before the Court of
First Instance (CFI), Branch II, Lanao del Norte, an action against
Deleste for the reversion of title over the subject property to the
Estate, docketed as Civil Case No. 698.

Through the years, Civil Case No. 698 was heard, decided,
and appealed all the way to this Court in Noel v. Court of
Appeals. On 11 January 1995, the Court rendered its
Decision[4] in Noel, affirming the ruling of the Court of Appeals that
the subject property was the conjugal property of the late spouses
Gregorio and Hilaria, such that the latter could only sell her onehalf (1/2) share therein to Deleste. Consequently, the intestate
estate of Gregorio and Deleste were held to be the co-owners of
the subject property, each with a one-half (1/2) interest in the
same.
Operation Land Transfer Program
While Civil Case No. 698 was still pending before the CFI,
Presidential Decree No. 27[5] was issued on 21 October 1972,
which mandated that tenanted rice and corn lands be brought
under the Operation Land Transfer Program and be awarded to
farmer beneficiaries. In accordance therewith, the subject
property was placed under the Operation Land Transfer Program.

On 12 February 1984, the Department of Agrarian Reform

(DAR) issued Certificates of Land Transfer (CLTs) in the names of
herein private respondents, the tenants and actual cultivators of
the subject property. The CLTs were registered on 15 July 1986.

Subsequently, on 1 August 2001, Original Certificates of Title

(OCTs) and Emancipation Patents (EPs) were issued in favor of the
private respondents over their respective portions of the subject
property. Private respondents OCTs, EP numbers, and dates of
registration with the Register of Deeds of Iligan City are presented
in the table below:

Private Respondents

OCT/ EP Nos.

Areas
(has.)

1. Heirs of Neciforo A.
Cabaluna

OCT No. P-01 (a.f.)/

2. Heirs of Abdon P.
Manreal

OCT No. P-02 (a.f.)/

3. Tranquilina C. Manreal

OCT No. P-03(a.f.)/

1.08

21 Sept.
2001

2.5799

21 Sept 2001

1.3612

1 October
2001

.4409

1 October
2001

1.7937

1 October
2001

1.5233

1 October
2001

.9760

1 October
2001

.5502

1 October
2001

2.7850

1 October
2001

EP No. 190251

EP No. 00032029

EP No. 190253
4. Tito L. Baller

OCT No. P-04 (a.f.)/

EP No. 190254

5. Heirs of Herculano
Balorio

OCT No. P-05 (a.f.)/

6. Alicia B. Manreal

OCT No. P-06 (a.f.)/

EP No. 190255

EP No. 190256
7. Felipe D. Manreal

OCT No. P-07 (a.f.)/

EP No. 190257

8. Salvacion Manreal

OCT No. P-08 (a.f.)/

EP No. 190258

9. Heirs of Domingo N. Rico

Registratio
n Dates

OCT No. P-09 (a.f.)/

EP No. 190261

10. Macario Veloria

OCT No. P-10 (a.f.)/

.5778

1 October
2001

1.4499

1 October
2001

.7320

1 October
2001

2.0492

1 October
2001

.2608

1 October
2001

1.8036

1 October
2001[6]

EP No. 190262
11. Heirs of Custodio M.
Rico

OCT No. P-11 (a.f.)/

12. Heirs of Clemente M.

Rico

OCT No. P-12 (a.f.)/

13. Martillano D. Obeso

OCT No. P-13 (a.f.)/

EP No. 190263

EP No. 190264

EP No. 190265
14. Heirs of Pablo F. Rico

OCT No. P-14 (a.f.)/

EP No. 190266

15. Heirs of Domingo V.

Rico

OCT No. P-15 (a.f.)/

EP No. 190267

Expropriation Case
Deleste passed away sometime in 1992.

About a year earlier, in 1991, the subject property was

surveyed. The survey of a portion of the land consisting of
20.2611 hectares, designated as Lot No. 1407, was approved on 8
January 1999.

On 22 November 1999, the City of Iligan filed a complaint

with the Regional Trial Court (RTC), Branch 4, Iligan City, for the
expropriation of a 5.4686-hectare portion of Lot No. 1407,
docketed as Civil Case No. 4979. On 11 December 2000, RTC
Branch 4 issued a Decision[7] granting the expropriation. Since the
true owner of the expropriated portion could not be determined,

as the subject property had not yet been partitioned and

distributed to any of the Heirs of Gregorio and Deleste, the just
compensation for the expropriated portion of the subject property
in the amount of P27,343,000.00 was deposited with the
Development Bank of the Philippines in Iligan City, in trust for RTC
Branch 4.

Petition for Nullification of the Emancipation Patents

(Heirs of Deleste)

On 28 January 2002, the Heirs of Deleste, [8] filed with the

Department of Agrarian Reform Adjudication Board (DARAB) a
petition seeking to nullify private respondents EPs. The petition
was docketed as Reg. Case No. X-471-LN-2002.

The Provincial Agrarian Reform Adjudicator (PARAD) rendered

a Decision[9] on 21 July 2003 declaring that the EPs were null and
void in view of the pending issues of ownership and the
subsequent reclassification of the subject property into a
residential/commercial land.

On appeal, docketed as DARAB Case No. 12486, the DARAB

reversed the ruling of the PARAD in its Decision [10] dated 15 March
2004. The DARAB held, inter alia, that the EPs were valid, since it
was the Heirs of Deleste who should have informed the DAR of
the pendency of Civil Case No. 698 at the time the subject
property was placed under the coverage of the Operation Land
Transfer Program. It further found that the question of exemption
from the Operation Land Transfer Program lay within the
jurisdiction
of
the
DAR
Secretary
or
his
authorized
representative. The Heirs of Deleste filed a Motion for

Reconsideration[11] of the aforementioned Decision, but the Motion

was denied by the DARAB in its Resolution dated 8 July 2004.

The Heirs of Deleste thereafter filed a Petition for

Review[12] with the Court of Appeals, docketed as CA-G.R. SP No.
85471, challenging the Decision and Resolution in DARAB Case
No. 12486. The Petition was denied by the Court of Appeals in
a Resolution[13] dated 28 October 2004 as material portions of the
record and other supporting papers were not attached thereto, in
accordance with Section 6 of Rule 43. [14] The Motion for
Reconsideration[15] of the Heirs of Deleste was likewise denied by
the appellate court in a Resolution [16] dated 13 September 2005
for being pro forma.[17]

Petition for Prohibition

During the pendency of CA-G.R. SP No. 85471 before the
Court of Appeals, a Petition for Prohibition, Declaration of Nullity
of Emancipation Patents Issued by DAR and the Corresponding
[Original Certificates of Title] Issued by the [Land Registration
Authority], Injunction with Prayer for Temporary Restraining Order
(TRO)[18] was filed on 7 June 2005 by herein petitioners Heirs of
Sofia Nanaman Lonoy, et al. with the Court of Appeals, docketed
as CA-G.R. SP No. 00365.
Petitioners are more than one hundred twenty (120)
individuals who claim to be the descendants of Fulgencio
Nanaman, Gregorios brother, and who collectively assert their
right to a share in Gregorios estate. Arguing that they were
deprived of their inheritance by virtue of the improper issuance of
the EPs to private respondents without notice to them, petitioners
prayed that a TRO be forthwith issued, prohibiting the DAR
Secretary, the Land Registration Authority (LRA), the DARAB, the
Land Bank of the Philippines (LBP), as well as the RTC, Branch 4 of
Iligan City, from enforcing the EPs and OCTs in the names of
private
respondents
until
CA-G.R.
SP
No.
00365 was

resolved. Petitioners
further
prayed
that
judgment
be
subsequently rendered declaring the said EPs and the OCTs null
and void.

In a Resolution[19] dated 13 July 2005, the Court of Appeals

dismissed the Petition in CA-G.R. SP No. 00365 on the following
grounds:
A perusal, however, of the instant petition disclose the following
defects and/or infirmities which constrain us to dismiss the petition:

(a.) Annexes V, W, HH, LL, NN, QQ, UU and VV are not duplicate
originals or certified true copies in violation to Section 3, Rule 46 of the
Rules of Court, hence, sufficient ground for the dismissal of the
petition.

(b.) There is no explanation why personal service was not resorted to

by petitioner in serving copies of the petition to adverse parties
contrary to the provision of Section 11, Rule 13 of the Rules of Court
which provides:

Sec. 11. Priorities in modes of service and filing.

Whenever practicable, the service and filing of pleadings
and other papers shall be done personally. Except with
respect to papers emanating from the court, a resort to
other modes must be accompanied by a written
explanation why the service or filing was not done
personally. A violation of this Rule may be cause to
consider the paper as not filed.

(c.) Petitioners in the instant case are not parties to the Department of
Agrarian Reform Adjudication Board (DARAB) case whos (sic) Decision
they now seek to be nullified in this present petition for prohibition.

(d.) Although a Special Power of Attorney (SPA) was obtained in favor

of Rodolfo Lonoy who signed in the verification and certification of nonforum shopping, it can be gleaned, however, that other heirs whose
names appeared in the SPA have not signed therein. It is also apparent
that there was only one person who signed for the first four (4) heirs of
Donny Ruedas and only one person who signed in some of the heirs of
Jose Febe Nanaman in the Special Power of Attorney executed in favor
of Rodolfo Lonoy.

WHEREFORE, premises
hereby DISMISSED.

considered,

the

instant

petition

is

Petitioners filed a Motion for Reconsideration[20] of the aforequoted Resolution, but the said Motion was denied by the
appellate court in another Resolution [21] dated 22 September
2006, which reads:

After a careful evaluation of petitioners arguments vis--vis public

respondents comment, We resolve to deny the instant motion.
While litigation is not a game of technicalities, and the rules should not
be enforced strictly at the cost of substantial justice, still it does not
follow that the Rules of Court may be ignored at will and at random to
the prejudice of the orderly presentation, assessment and just
resolution of the issues. Procedural rules should not be belittled or
dismissed simply because they may have resulted in prejudice to a
partys substantial rights. Like all rules, they are required to be followed
except only for compelling reasons.
WHEREFORE, in view of the foregoing, petitioners Motion for
Reconsideration is hereby DENIED and Our July 13, 2005 Resolution is
MAINTAINED.

Aggrieved, petitioners now come to this Court via the

present Petition for Review, raising the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS ACTED CONTRARY TO LAW

AND JURISPRUDENCE OR COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HASTILY
DISMISSING THE PETITIONERS PETITION FOR PROHIBITION, ETC. IN CAG.R. SP NO. 00365 ON PURELY TECHNICAL GROUNDS SOME OF WHICH
ARE PATENTLY ERRONEOUS OR UNTRUE.

II.

IN THE EVENT THAT THE OUTRIGHT AND HASTY DISMISSAL OF CA-G.R.

SP NO. 00365 WILL BE SET ASIDE, WHETHER OR NOT THE OTHER
ISSUES SHOULD BE RESOLVED BY THIS HONORABLE COURT INSTEAD
OF REMANDING THE CASE TO THE COURT OF APPEALS.

III.

WHETHER OR NOT RESPONDENT SECRETARY OF AGRARIAN REFORM

ACTED WITHOUT JURISDICTION OR IN EXCESS OF JURISDICTION IN
PLACING THE RESIDENTIAL-COMMERCIAL LOT OF PETITIONERS UNDER
THE COVERAGE OF AGRARIAN REFORM.

IV.

WHETHER OR NOT RESPONDENTS SECRETARY OF AGRARIAN REFORM,

LRA, AND DARAB VIOLATED PETITIONERS CONSTITUTIONAL RIGHT TO
DUE PROCESS BY DEPRIVING THEM OF THEIR INHERITANCE SHARES

IN LOT 1407 WITHOUT IMPLEADING THEM AS INDISPENSABLE PARTIES

AND WITHOUT SERVICE OF SUMMONS UPON THEM.

V.

WHETHER OR NOT RESPONDENTS SECRETARY OF AGRARIAN REFORM,

LRA, AND DARAB VIOLATED SECTION 6, RA 6657 COMPREHENSIVE
AGRARIAN REFORM LAW, BY PLACING THE INDIVIDUAL INHERITANCE
SHARES OF PETITIONERS IN LOT 1407 WHEN THE SAME IS WAY BELOW
THE LANDOWNERS RETENTION LIMIT OF FIVE (5) HECTARES [OR SEVEN
(7) HECTARES UNDER PD 27].

VI.

WHETHER OR NOT PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
MAKING PRIVATE RESPONDENTS AGRARIAN REFORM BENEFICIARIES
DESPITE THE UNDISPUTABLE ABSENCE OF CONSENT, AGRICULTURAL
PRODUCTION, SHARING OF HARVESTS, AND OTHER ELEMENTS OF A
LEGITIMATE TENANCY RELATIONSHIP.

VII.

WHETHER OR NOT PUBLIC RESPONDENTS ACTED WITHOUT OR IN

EXCESS OF JURISDICTION IN REVIEWING [AND] OVERRULING JUDICIAL
DECISIONS CONSIDERING THAT THE POWER OF JUDICIAL REVIEW OVER
ACTS OF THE EXECUTIVE OR LEGISLATIVE BRANCH BELONGS TO THE
JUDICIARY AND NOT VICE VERSA.

[VIII.]

WHETHER OR NOT PUBLIC RESPONDENTS ACTED WITHOUT

JURISDICTION IN REVIEWING AND OVERRULING THE EARLIER JUDICIAL

DETERMINATION OF JUST COMPENSATION BY RTC BRANCH

4, ILIGAN CITY, RE LOT 1407 PORTION AFFECTED BY THE INTEGRATED
BUS TERMINAL [AND] BAGSAKAN MARKET.

[IX.]

WHETHER OR NOT PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
EXPROPRIATING
THROUGH AGRARIAN REFORM LAND ALREADY
JUDICIALLY EXPROPRIATED FOR THE INTEGRATED BUS TERMINAL AND
BAGSAKAN MARKET.[22]

The primary issue for resolution of this Court is whether or

not the Court of Appeals was correct in dismissing outright
petitioners Petition in CA-G.R. SP No. 00365, without considering
the merits thereof.

In its assailed Resolution dated 13 July 2005, the appellate

court dismissed CA-G.R. SP No. 00365 on several procedural
grounds, among which was petitioners failure to attach to their
Petition the duplicate originals or certified true copies of some of
their annexes, in violation of Section 3, Rule 46 of the Rules of
Court.

The Court of Appeals was mistaken in this regard.

It should be recalled that petitioners initiated before the Court of

Appeals, in its original jurisdiction, CA-G.R. SP No. 00365, a
Petition for Prohibition.
Section 3 of Rule 46 of the Rules of Court states the
requirements for a petition originally filed before the Court of
Appeals, relevant portions of which are reproduced below:
Sec. 3. Contents and filing of petition; effect of noncompliance with requirements.
xxxx
It shall be filed in seven (7) clearly legible copies together with proof
of service thereof on the respondent with the original copy intended
for the court indicated as such by the petitioner, and shall be
accompanied by a clearly legible duplicate original or certified
true copy of the judgment, order, resolution, or ruling subject thereof,
such material portions of the record as are referred to therein, and
other documents relevant or pertinent thereto. The certification shall
be accomplished by the proper clerk of court or by his duly authorized
representative, or by the proper officer of the court, tribunal, agency
or office involved or by his duly authorized representative. The other
requisite number of copies of the petition shall be accompanied by
clearly legible plain copies of all documents attached to the original.

Reference is also made to Section 2 of Rule 65 of the Rules

of Court, particularly governing petitions for prohibition, which
pertinently provides:

Sec. 2. Petition for Prohibition.

xxxx

The petition shall likewise be accompanied by a certified

true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant
and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of Section 3, Rule
46.

Section 3 of Rule 46 does not require that all supporting

papers and documents accompanying a petition be duplicate
originals or certified true copies. What it explicitly directs is that
all petitions originally filed before the Court of Appeals shall be
accompanied by a clearly legible duplicate original or certified
true copy of the judgment, order, resolution or ruling subject
thereof. Similarly, under Rule 65, governing the remedies
of certiorari, prohibition and mandamus, petitions for the same
need to be accompanied only by duplicate originals or certified
true copies of the questioned judgment, order or resolution.
[23]
Other relevant documents and pleadings attached to such
petitions may be mere machine copies thereof. [24] As to petitioners
Petition for Prohibition in CA-G.R. SP No. 00365, the attached
annexes that were not duplicate originals or certified true copies,
namely,
Annexes V,[25] W,[26] HH,[27] LL,[28] NN,[29] QQ,[30] UU[31] and
VV,[32] were mere supporting documents and pleadings referred to
in the petition and were not themselves the judgments, orders or
resolutions being challenged in said Petition. At any rate,
petitioners were able to attach certified true copies of these
annexes to their Motion for Reconsideration of the dismissal of
their Petition.

Another ground for which CA-G.R. SP No. 00365 was

dismissed by the Court of Appeals was the alleged failure by
petitioners to provide an explanation as to why the Petition

therein was served upon adverse parties by registered mail

instead of personal service, as required by Section 11, Rule
13[33] of the Rules of Court. To the contrary, petitioners provided
such an explanation,[34] except that it was incorporated into the
main body of the Petition, right before the statement of the Relief
prayed for. It was clearly stated therein that:

EXPLANATION FOR SERVICE BY MAIL

Copies of this petition were served upon respondents

SECRETARY OF AGRARIAN REFORM, LRA, DARAB, LBP, and counsels of
other respondents to save time and costs considering the number of
parties to be served and the far distance of [the] LBP Office in Cagayan
de Oro City, the DAR/DARAB offices in Diliman, Quezon City, and the
LRA office in East Ave. corner NIA Road, Diliman, Quezon City.

The Court, however, agrees with the Court of Appeals that

the failure of all the petitioners to sign the Special Power of
Attorney (SPA) in favor of Rodolfo Lonoy, authorizing him to sign
the verification and certification against forum shopping on their
behalf, was fatal to their Petition in CA-G.R. SP No. 00365.

Section 5 of Rule 7 of the Rules of Court explicitly provides:

Sec. 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 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 or claim 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 after 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.

In PET Plans, Inc. v. Court of Appeals,[35] this Court affirmed

the Court of Appeals dismissal of the petition, since the
verification and certification of non-forum shopping was signed
by the companys vice president for legal affairs/corporate
secretary without any showing that he was authorized to do so.
Indeed, ample jurisprudence exists to the effect that
subsequent and substantial compliance of a petitioner may call
for the relaxation of the rules of procedure in the interest of
justice. But to merit the Court's liberal consideration, petitioner
must show reasonable cause justifying non-compliance with the
rules and must convince the Court that the outright dismissal of

the petition would defeat the administration of justice. [36] Hence,

deviation from the requirements of verification and certification
against forum shopping may only be allowed in special
circumstances.

In the present case, petitioners failed to provide the Court

with sufficient justification for the suspension or relaxation of the
rules in their favor. In their Motion for Reconsideration of the 13
July 2005 Resolution of the Court of Appeals, petitioners merely
claimed that some of them signed for their co-petitioners, while
others were at work so that they could not sign the SPA in favor of
Rodolfo Lonoy. Needless to say, the reason is flimsy and
unsatisfactory. That other petitioners were at work does not make
it impossible to secure their signatures, only a little more
inconvenient. It is not, therefore, unreasonable for the Court to
demand in this case compliance with the requirements for proper
verification of the Petition and execution of the certificate against
shopping.

Furthermore, the Court takes note of another procedural

lapse committed by petitioners justifying the dismissal of their
Petition for Prohibition in CA-G.R. SP No. 00365, for it was the
wrong remedy for them to pursue.

According to Section 2 of Rule 65 of the Rules of Court, a

petition for prohibition may be availed of under the following
circumstances:

Sec. 2. Petition for prohibition.

When the proceedings of any tribunal, corporation, board, officer

or person, whether exercising judicial, quasi-judicial or ministerial
functions, are without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction,

and there is no appeal or any other plain, speedy, and adequate

remedy in the ordinary course of law, a person aggrieved thereby may
file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the
respondent to desist from further proceedings in the action or
matter specified therein, or otherwise granting such incidental
reliefs as law and justice may require.

Prohibition is a legal remedy, provided by the common law,

extraordinary in the sense that it is ordinarily available only when
the usual and ordinary proceedings at law or in equity are
inadequate to afford redress, prerogative in character to the
extent that it is not always demandable of right, to prevent
courts, or other tribunals, officers, or persons, from usurping or
exercising a jurisdiction with which they have not been vested by
law.[37]
The writ of prohibition, as the name imports, is one which
commands the person to whom it is directed not to do something
which, by suggestion of the relator, the court is informed he is
about to do. If the thing be already done, it is manifest the writ of
prohibition cannot undo it, for that would require an affirmative
act; and the only effect of a writ of prohibition is to suspend all
action and to prevent any further proceeding in the prohibited
direction.[38] Prohibition, as a rule, does not lie to restrain an act
that is already a fait accompli.[39] E
In this case, a close reading of the Petition for Prohibition
filed by the petitioners before the Court of Appeals in CA-G.R. SP
No. 00365 would reveal that the same is essentially more of an
action for the nullification of the allegedly invalid EPs and OCTs

issued in the names of private respondents. The writ of

prohibition is only sought by petitioners to prevent the
implementation of the EPs and OCTs. Considering that such EPs
and OCTs were issued in 2001, they had become indefeasible and
incontrovertible by the time petitioners instituted CA-G.R. SP No.
00365 in 2005, and may no longer be judicially reviewed.

Section 32 of the Property Registration Decree unequivocally

provides:

Sec. 32. Review of decree of registration; Innocent purchaser for

value.

The decree of registration shall not be reopened or revised by

reason of absence, minority, or other disability of any person
adversely affected thereby, nor by any proceeding in any court for
reversing judgments, subject, however, to the right of any person,
including the government and the branches thereof, deprived of land
or of any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the proper
Court of First Instance [now Regional Trial Court] a petition for
reopening and review of the decree of registration not later
than one year from and after the date of the entry of such
decree of registration, but in no case shall such petition be
entertained by the court where an innocent purchaser for value has
acquired the land or an interest therein, whose rights may be
prejudiced. Whenever the phrase "innocent purchaser for value" or an
equivalent phrase occurs in this Decree, it shall be deemed to include
an innocent lessee, mortgagee, or other encumbrancer for
value. Upon the expiration of said period of one year, the
decree of registration and the certificate of title issued shall
become incontrovertible. Any person aggrieved by such
decree of registration in any case may pursue his remedy by
action for damages against the applicant or any other persons
responsible for the fraud.

In Estribillo v. Department of Agrarian Reform,[40] the Court

affirmed the long-settled doctrine that certificates of title issued
in administrative proceedings are as indefeasible as certificates of
title issued in judicial proceedings. In the case at bar, the DAR had
already issued the corresponding OCTs after granting EPs to the
tenant-beneficiaries in compliance with Presidential Decree No. 27
and Section 105[41] of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree. Hence, the OCTs
issued to petitioners pursuant to their EPs have already acquired
the same protection accorded to other certificates of title issued
judicially or administratively.

A
certificate
of
title
becomes indefeasible
and
incontrovertible upon the expiration of one year from the date
of the issuance of the order for the issuance of the patent. Land
covered by such title may no longer be the subject matter of a
cadastral proceeding, nor can it be decreed to another person. [42]

Private respondents EPs were issued in their favor on 1

August 2001 and their OCTs were correspondingly issued and
subsequently registered with the Register of Deeds of Iligan City
on 21 September 2001 and 1 October 2001. Petitioners directly
went to the Court of Appeals, instead to the Regional Trial Court
as mandated by Section 32 of the Property Registration Decree,
to seek the nullification of the said EPs and OCTs and only on 7
June 2005, or almost four (4) years after the issuance and
registration thereof.Petitioners failed to vindicate their rights
within the one-year period from issuance of the certificates of title
as the law requires.

After the expiration of the one-year period, a person whose

property has been wrongly or erroneously registered in anothers
name may bring an ordinary action for reconveyance, [43] or if the
property has passed into the hands of an innocent purchaser for
value, Section 32 of the Property Registration Decree gives

petitioners only one other remedy, i.e., to file an action for

damages against those responsible for the fraudulent registration.

WHEREFORE, premises considered, the instant Petition for

Review is hereby DENIED. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

THIRD DIVISION
[G.R. No. 157195. April 22, 2005]

VICAR INTERNATIONAL CONSTRUCTION, INC., and CARMELITA V.

LIM, petitioners,
vs. FEB
LEASING
AND
FINANCE
CORPORATION
(now
BPI
LEASING
CORPORATION), respondent.
DECISION
PANGANIBAN, J.:

Once more, the Court stresses that procedural rules must be used to
promote, not obstruct, substantial justice. The failure to attach the Resolution
authorizing herein individual petitioner to represent herein corporate petitioner

is, under the circumstances, excusable. The immediate correction of the

defect should have been deemed sufficient compliance with the rules.
The Case
Before us is a Petition for Review on Certiorari[1] pursuant to Rule 45 of the
Rules of Court, seeking to reverse and set aside two Resolutions [2] of the
Court of Appeals (CA) dated October 23, 2002 [3] and February 7, 2003,[4] in
CA-GR SP No. 73117. The earlier Resolution reads:
The instant petition for certiorari is hereby DISMISSED for lack of proper
verification and certification against forum shopping as the same was executed by
Carmelita V. Lim, one of the petitioners, without showing any authority from
petitioner corporation to sign for and on its behalf. [5]
The second assailed Resolution denied petitioners Omnibus Motion for
Reconsideration and for Admission of the Attached Secretarys Certificate.
The Facts
This controversy originated from a Complaint[6] for unjust enrichment and
damages, filed in the Regional Trial Court of Makati by herein petitioner, Vicar
International Construction, Inc. (Vicar), against Respondent FEB Leasing and
Finance Corporation (now BPI Leasing Corporation) and the Far East Bank
and Trust Company. In turn, FEB Leasing and Finance Corporation filed a
Complaint[7] against Vicar, Carmelita Chaneco Lim and one John Doe, for a
sum of money, damages and replevin.
These Complaints stemmed from loans obtained from FEB by Vicar, a
corporation engaged in the construction business, for the purchase of certain
heavy equipment. In obtaining the loans, Deeds of Absolute Sale with a leaseback provision were executed by the parties. In those Deeds, Vicar appears to
have sold to FEB the equipment purchased with the loan proceeds and, at the
same time, leased them back.[8] For the total loan of P30,315,494, Vicar claims
to have paid FEB an aggregate amount of P19,042,908 in monthly
amortizations.

Nevertheless, FEB maintains that Vicar still had an outstanding balance of

about P22,000,000, despite the extrajudicial foreclosure of sixty-three (63)
subdivision lots. These lots, comprising an aggregate area of 20,300 square
meters in Calamba, Laguna, were used by the corporation as additional
collateral. As a consequence, the auction sale produced P17,000,000 which,
Vicar claims, should have been applied to its loans.
In the course of the second (replevin) case, the trial court issued several
Orders pertaining to the possession/custody of eight (8) units of the subject
equipment. In an Order dated August 2, 2002, the regional trial court (RTC)
quashed the property counterbond filed by Vicar and denied the latters Motion
to Dismiss the Complaint, which was grounded on forum shopping. In an
Order dated September 30, 2002, the RTC denied the corporations Motion for
Reconsideration and Motion for Voluntary Inhibition of the trial judge.
On October 3, 2002, Vicar filed a Petition for Certiorari before the Court of
Appeals, to stop the implementation of the Writ of Replevin issued against the
subject equipment.
Ruling of the Court of Appeals
The Petition was, however, instantly dismissed by the CA in its herein
assailed Resolution dated October 23, 2002, because the Verification and the
Certification against forum shopping had been executed by Petitioner
Carmelita V. Lim without any showing that she had the authority to sign for
and on behalf of petitioner-corporation.
On November 23, 2003, the day after receiving its copy of the Resolution,
Vicar filed an Omnibus Motion for Reconsideration and for Admission of the
Attached Secretarys Certificate. Nevertheless, the CA denied the Omnibus
Motion in this wise:
The belated filing by the petitioners of the Certification of their Corporate Secretary,
to the effect that petitioner Carmelita Lim has been duly authorized by petitioner
corporation to file the subject petition for certiorari, did not cure the defect of said
petition. Absent any compelling reason for petitioners failure to comply at the first

instance with the required certification, we cannot, therefore, accept their subsequent
compliance.[9]
Hence, this Petition.[10]
The Issues
Petitioners raise the following issues for our consideration:
A.
Whether compelling reasons exist which warrant the liberal construction of the
Petition for Certiorari.
B.
Whether petitioners subsequent submission of the secretarys certificate is a sufficient
compliance with the requirement of the law.
C.
Whether the policy of the law is to afford a party the fullest opportunity to establish
the merits of his case.[11]
In short, the principal issue is whether the Court of Appeals erred in
summarily dismissing the Petition for Certiorari.
The Courts Ruling
The present Petition for Review is meritorious.
Main Issue:
Propriety of Summary Dismissal
Petitioners assert that Carmelita V. Lim was duly authorized to execute, for
and on behalf of Vicar, the Verification and Certification against forum
shopping. Attached to the Petition and signed by Petitioner Lim was the

Verification/Certification, in which was explicitly stated the authorization and

affirmation, as follows:
x x x. I am likewise duly authorized to execute this Verification/Certification in behalf
of petitioner Vicar International Construction, Inc. x x x.
This statement was supported by Vicars board of directors, who
unanimously approved a Resolution dated October 2, 2002, which reads thus:
NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved, that the
Corporation be authorized to file a Petition for Certiorari before the Court of Appeals
for the purpose of annulling or setting aside the Orders dated 2 August 2002 and 30
September 2002 rendered by Branch 150 of the Regional Trial Court of Makati in
connection with Civil Case No. 02-357 entitled FEB Leasing & Finance Corporation,
Plaintiff vs. Vicar International Construction, Inc. et al., Defendants.
RESOLVED further, that the President/General Manager Carmelita V. Lim is hereby
authorized to execute and sign any and all documents necessary for filing of the
Petition for Certiorari, including the verification and certification against forum
shopping.[12]
Petitioners candidly admit that they inadvertently failed to attach the above
Resolution to their CA Petition. In preparing the Petition, their counsel
supposedly worked overnight without sleep. She wanted to file it immediately
to avoid the trial courts quashal of their counterbond and, thus, the immediate
seizure of their equipment -- their only means of livelihood.
Their counsel allegedly believed in good faith that the secretarys
Certificate was attached to the Petition. When they received a copy of the
October 23, 2002 CA Resolution on November 11, 2002, they lost no time in
filing the following day their Omnibus Motion for Reconsideration and for
Admission of the Attached Secretarys Certificate.
Petitioners submit that the foregoing circumstances constitute compelling
reasons to justify setting aside the procedural defect, pursuant to Ramos v.
Court of Appeals.[13]

Further, citing Yap v. Baldado,[14] they contend that their posthaste

submission of the secretarys Certificate, albeit after the filing of their Petition,
constitutes substantial compliance with the requirements of the law. Finally,
they aver that pursuant to the policy of the law to afford parties the fullest
opportunity to establish the merits of their case, the CA should have given due
course to their Petition.
On the other hand, Respondent FEB asserts that the CAs dismissal of the
Petition -- arising from petitioners failure to attach a duly executed verification
and certification against forum shopping -- is well within the appellate courts
authority, pursuant to Sections 3 and 5 of Rule 46 of the Revised Rules of
Civil Procedure.[15] Respondent also claims that petitioners present action
before this Court seeks to correct a perceived erroneous application by the CA
of a procedural rule that is not correctible by certiorari.
Finally, respondent alleges that the instant Petition, being based on the
ground of excusable negligence, is actually a motion for new trial. As such, the
Petition must allegedly fail, because petitioners did not execute and attach an
affidavit of merits.
The issue before us is not novel; neither are the factual circumstances that
gave rise to it.
In Shipside Incorporated v. Court of Appeals,[16] the petitioner had not
attached any proof that its resident manager was authorized to sign the
Verification and the non-forum shopping Certification, as a consequence of
which the Petition was dismissed by the Court of Appeals. Subsequent to the
dismissal, however, the petitioner filed a motion for reconsideration, to which
was already attached a Certificate issued by its board secretary who stated
that, prior to the filing of the Petition, the resident manager had been
authorized by the board of directors to file the Petition.
Citing several cases[17] excusing noncompliance with the requirement of a
certificate of non-forum shopping, the Court held that with more reason should
x x x the instant petition [be allowed,] since petitioner herein did submit a
certification on non-forum shopping, failing only to show proof that the
signatory was authorized to do so. The Court further said that the subsequent

submission of the Secretarys Certificate, attesting that the signatory to the

certification was authorized to file the action on behalf of
petitioner, mitigated the oversight.
Similarly, in General Milling Corporation v. NLRC,[18] the Court of Appeals
dismissed the Petition, which was not accompanied by any board resolution or
certification by the corporate secretary showing that the person who had
signed the Certification of Non-Forum Shopping was duly authorized to
represent the petitioner-corporation in the case. In the Motion for
Reconsideration, however, the petitioner attached a board Resolution stating
that the signatory of the Certification had been duly authorized to do so.
Under those circumstances, the Court held that there was at least
substantial compliance with, and that there was no attempt to ignore, the
prescribed procedural requirements, except that the petition was not
accompanied by a board resolution or a secretarys certificate that the person
who signed it was duly authorized by petitioner to represent it in the case.[19]
Also, in BA Savings Bank v. Sia,[20] the Court of Appeals denied due course
to a Petition for certiorari filed by BA Savings Bank. The CAs action was
grounded on the fact that the Certification on anti-forum shopping
incorporated in the Petition had been signed merely by the banks counsel, not
by a duly authorized representative, as required under Supreme Court
Circular No. 28-91. Subsequently filed by the petitioner was a Motion for
Reconsideration, to which was attached a Certificate issued by the corporate
secretary. The Certificate showed that the Resolution promulgated by the
board of directors had authorized the lawyers of petitioner to represent it in
any action or proceeding before any court, tribunal or agency; and to sign,
execute and deliver the certificate of non-forum shopping, among others.
Nevertheless, the Court of Appeals denied the Motion on the ground that
Supreme Court Revised Circular No. 28-91 requires that it is the petitioner, not
the counsel, who must certify under oath to all of the facts and undertakings
required therein.
The Court again reversed the appellate court and ruled thus:

Circular 28-91 was prescribed by the Supreme Court to prohibit and penalize the evils
of forum shopping. We see no circumvention of this rationale if the certificate was
signed by the corporations specifically authorized counsel, who had personal
knowledge of the matters required in the Circular. In Bernardo v. NLRC,[21] we
explained that a literal interpretation of the Circular should be avoided if doing so
would subvert its very rationale. Said the Court:
x x x. Indeed, while the requirement as to 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. [22]
Guided by the above pronouncements, the Court deems it proper and
justifiable to grant the present Petition. Clearly, petitioners did not deliberately
ignore SC Circular 28-91. In fact, a Verification/Certification, stating the
information required under the Circular, was attached to the Petition
for Certiorari filed before the CA. In that Verification/Certification signed by
Petitioner Lim, she attested as follows:
1. x x x I am likewise duly authorized to execute this Verification/Certification in
behalf of petitioner Vicar International Construction, Inc.
2. In my personal capacity and as a duly authorized representative of Vicar
International Construction, Inc., I caused the preparation of the foregoing Petition
for Certiorari.
xxxxxxxxx
Petitioners merely missed attaching to their Petition a concrete proof of
Lims authority from Vicar to execute the said Verification/Certification on its
behalf. The latter, however, lost no time in submitting its corporate secretarys
Certificate attesting to the fact that, indeed, Petitioner Vicars board of directors
had unanimously approved a Resolution on October 2, 2002, authorizing its
president and general manager, Carmelita V. Lim, to file the Petition and to
execute and sign x x x the verification and certification against forum
shopping.

The Certificate was submitted to the CA on the day right after it had denied
the Petition. Such swiftness of action indicates that the Resolution -authorizing Petitioner Lim to file the Petition and execute the Verification and
the Certification against forum shopping on behalf of Petitioner Vicar -- did
exist at the time the Petition was filed. Such fact also lends credence to the
assertion of petitioners that it was only due to inadvertence and oversight that
they failed to attach the Secretarys Certificate to their Petition for Certiorari.
In closing, the Court stresses once more that 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.[23] Rules of procedure are but tools designed to
facilitate, not obstruct, the attainment of justice.
WHEREFORE, the Petition is GRANTED, and the appealed Resolutions
are REVERSED and SET ASIDE. The case is REMANDED to the Court of
Appeals, which is directed to continue the proceedings in CA-GR SP No.
73117 with deliberate speed. No costs.
SO ORDERED.
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
Garcia, J., No part. Had taken part in assailed Resolutions.

SUPREME COURT FIRST DIVISION GLENIA UY, for

and in behalf of her minors,[*] REYNALDO, MARIA
ELENA (MARILEN), and CONCHITA, all surnamed UY,
Petitioners, -versus- G.R. No. L-43389 April 28,
1980
WORKMENS COMPENSATION COMMISSION and LUCY PEREZ, Respondents.
x----------------------------------------------------x D E C I S I O N MAKASIAR, J.: This a petition
for review on certiorari (pp. 1-26, rec.) of the decision of the Workmens
Compensation Commission dated February 23, 1976 in RO9-W-C-Case No. 14120
[Annexes K - K-5, pp. 58-63, rec.]. chanroblespublishingcompany It appears that
petitioners are all the children of the deceased Ki Lam Uy with his common-law wife,
Pura Primer. Glenia Uy, daughter of the deceased, being of age, filed the present

petition for and in behalf of her minor brother, Reynaldo, and minor sisters, Maria
Elena (Marilen) and Conchita, all surnamed Uy. chanroblespublishingcompany The
instant petition had its genesis at about 7:30 in the evening of September 27, 1974
when deceased Ki Lam Uy, also known as Vicente Uy, was killed by robbers at the
farm house (bodega) of private respondent Lucy Perez at Sitio Agay-ayan, Barrio
Tugbong, Kananga, Leyte. chanroblespublishingcompany On November 15, 1974,
claimants-petitioners filed a Notice and Claim for Compensation in Death Cases
before Regional Office No. 9, Department of Labor, Tacloban City, seeking to recover
death compensation benefits for the death of their father, Ki Lam Uy, from private
respondent, Lucy Perez. chanroblespublishingcompany On December 10, 1974, a
copy of the claim was sent by special delivery to private respondent, Lucy Perez, by
the Chief of the Workmens Compensation Unit, Regional Office No. 9, Department
of Labor, Tacloban City, requiring the said private respondent to submit to said
office the enclosed Workmens Compensation Form No. 3, Employers Report of
Accident or Sickness (Annex C, p. 31, rec.). chanroblespublishingcompany For
failure of private respondent to accomplish the required Employers Report, the
Acting Chief of the Workmens Compensation Unit pursuant to Section 2, Rule, 11,
Rules of the Workmens Compensation Commission, after processing the claim and
the supporting evidence submitted by claimants-petitioners, issued an Award dated
December 27, 1974, granting death compensation benefits to claimants-petitioners,
including Pura Primer, the common-law widow of the deceased, in the amount of
P6,000.00, pursuant to Section 8 (b) of the Workmens Compensation Act, as
amended, plus the sum of P200.00 as burial expenses. Private respondent, Lucy
Perez was also required to pay the additional sum of P3,000.00 under Section 4-A of
the Act, due to private respondents violation of Bureau of Labor Standards Safety
Orders Nos. 1, 6 (pars. 1 & 2) and 7, Section 56 of the Workmens Compensation
Act, as amended and for private respondents failure to secure a permit to employ
an alien pursuant to Department Order No. 2, and for violation of the Nationalization
and Retail Trade Law. Private respondent Lucy Perez was further ordered to pay to
the Workmens Compensation Fund, the sum of P91.00, pursuant to Section 55 of
the Act and likewise the sum of P450.00 as attorneys fees, pursuant to Section 31
of the same Act (Annexes D - D-1, pp. 32-33, rec.).
chanroblespublishingcompany On January 13, 1975, private respondents counsel
filed a motion for extension of time to file his motion for reconsideration alleging
inter alia that the cause of the death of the deceased was not workconnected
(Annexes E E-1, pp. 34-35, rec.) chanroblespublishingcompany On January
20, 1975, private respondent filed the motion for reconsideration from the
December 27, 1974 Award on the grounds that the respondent did not fail to
controvert the instant claim for compensation; that the Hearing Officer gravely
erred in not giving the private respondent an opportunity to present evidence to
rebut claimants claim after reception of the latters evidence ex parte and thereby
violating the constitutional mandate of due process; and that the death of the
deceased was not compensable (Annexes F F-4, pp. 36-40, rec.).
chanroblespublishingcompany On April 18, 1975, the Acting Chief of the Workmens

Compensation Unit, Regional Office No. 9, Department of Labor, Tacloban City,

issued an order granting the motion for reconsideration in view of the absence of an
opposition thereto and set the case for hearing on the merits on April 30, 1975, at
8:00 A.M. until terminated and with no postponements (Annex G, p. 41, rec.).
chanroblespublishingcompany Hence, hearings on the merits were conducted
before the above-said Acting Chief of the Workmens Compensation Unit, Regional
Office No. 9, Department of Labor, Tacloban City and/or Hearing Officer, and the
parties duly represented by their counsels of record adduced evidence in support of
their respective contentions. chanroblespublishingcompany On October 28, 1975,
after several hearings conducted by the aforesaid Hearing Officer, a decision was
rendered which states among others, that although the respondent has failed to
controvert the claim within the period provided for under Section 45 of the Act, a
hearing of the case, with notice to all the parties was conducted to determine the
compensability of the claim (Annex H, p. 42, rec.). Moreover, the dispositive
portion of said decision substantially revived the Award dated December 27, 1974
(Annex H-8, p. 50, rec.). chanroblespublishingcompany On November 12, 1975, a
motion for reconsideration was filed by private respondent, thru counsel on the
following grounds, to wit: 1) that Honorable Office [Workmens Compensation Unit
Regional Office No. 9] gravely erred in considering deceased Ki Lam Uy as
respondents employee; 2) assuming that deceased was an employee, respondent
had already complied with her obligation in accordance with the Workmens
Compensation Act [Annexes I I-5, pp. 51- 56, rec.].
chanroblespublishingcompany On November 28, 1975, an order denying said
motion for reconsideration was issued and likewise ordering the elevation of the
entire records of the case to the Workmens Compensation Commission for review
pursuant to the provisions of Section 4, Rule 19, of the Rules of the Workmens
Compensation Commission (Annex J, p. 57, rec.). chanroblespublishingcompany
On February 23, 1976, the respondent Workmens Compensation Commission
rendered a decision reversing the decision of the Hearing Officer on the ground that
the deceased, Ki Lam Uy was not an employee of private respondent, thereby
absolving herein private respondent from any liability (Annexes K K-5, pp. 5863, rec.). chanroblespublishingcompany Hence, the instant petition for review. I
Private respondent in her answer to the instant petition claims that the petition, not
being verified by the petitioners but by their counsel, is fatally defective.
chanroblespublishingcompany The claim has no merit. In the past, it has been the
constant rulings of this Court that lack of verification is merely a formal defect. In
fact, many authorities consider the absence of verification a mere formal, not
jurisdictional, defect, the absence of which does not of itself justify a court in
refusing to allow and act in the case (71 C.J.S. 744- 745). This Court declared: The
requirement regarding verification of a pleading is simply intended to secure an
assurance that what are alleged in the pleadings are true and correct and not the
product of the imagination on a matter of speculation, and that the pleading is filed
in good faith The requirement regarding verification of a pleading is a formal, not a
jurisdictional requisite. The requirement regarding verification of a pleading is

simply a condition affecting the form of pleading (Rule 7 of the Rules of Court is
entitled Formal Requirements of Pleadings, and it is under this Rule [Sec. 6] that
the requirement regarding verification is provided), the non-compliance of which
does not necessarily render the pleading fatally defective. The Court may order the
correction of the pleading if the verification is lacking, or act on the pleading
although it is not verified if the attending circumstances are such that the strict
compliance with the rule may be dispensed with in order that the ends of justice or
the law may thereby be served (Oshita vs. Republic, L-21180, March 31, 1967, 19
SCRA 700; Miller, et al. vs. The Director of Lands, et al., L-16761, Oct. 31, 1964;
Nicolas vs. Director of Lands, et al., L-19147-8, Dec. 28, 1963; The Philippine Bank
of Commerce vs. Macadaeg, et al., L-14174, Oct. 31, 1960; Tavera vs. E. Hogar
Filipino, Inc., et al., 98 Phil. 481; Malagum vs. Pablo, 46 Phil. 19).
chanroblespublishingcompany The above-quoted ruling was reiterated by this Court
through Mr. Justice Barredo in Valino vs. Muoz (L-26151, Oct. 22, 1970), which held:
chanroblespublishingcompany Assuming that the rule of verification, Sec. 6 of Rule
7, has not been strictly complied with, it has been held anyway that absence of
verification is a mere formal, not jurisdictional defect, particularly when the facts
alleged are more or less indisputable or borne clearly by the records.
chanroblespublishingcompany Furthermore, while it is true that the petition now
before Us was not verified by the claimants-petitioners, it was, however, verified by
their counsel. Herein private respondent contends that the verification by the
counsel and not by the claimants-petitioners, is fatal. WE believe otherwise. A
verification by the attorney is adequate compliance with Rule 7, Sec. 6, it being
presumed that facts by him alleged are true to his knowledge in view of the
sanctions provided in Sec. 5 of the Rules of Court (Guerra Enterprises Company, Inc.
vs. Court of First Instance of Lanao del Sur, L-28310, April 17, 1970, 32 SCRA 314
citing Arambulo vs. Perez, 78 Phil. 387; Cajefe vs. Fernandez, L-15409, Oct. 19,
1960). chanroblespublishingcompany Earlier, We held that it is only when the
person verifying is other than the attorney who signs the pleading that the affiant
must state that the allegations thereof are true of his own knowledge, but when the
complaint is signed by the attorney the latters oath couched in the usual form
subscribed and sworn to before me, etc. is substantial compliance with the Rules
of Court (Arambulo vs. Perez, 78 Phil. 387 [1947]; Emphasis supplied).
chanroblespublishingcompany II Private respondent next contends that what is
raised by the claimants-petitioners are findings of facts of the respondent
Workmens Compensation Commission which is definitely within the province of
appeal and not for certiorari. chanroblespublishingcompany This contention, in Our
opinion, is untenable. It is true that the remedy of certiorari is generally resorted to
only in cases where the remedy of appeal is unavailable. This, rule, however, is not
so rigid and strict as not to admit of any exception. This Court in a long line of
decisions laid down the ruling that certiorari is available despite the existence of the
remedy of appeal where public policy so dictate or the broader interests of justice
so require (Fernando vs. Vasquez, L- 26517, Jan. 30, 1970, 31 SCRA 294; Tirona vs.
Naawa, L-22107, Sept. 30, 1967, 21 SCRA 395; Jose vs. Zulueta, May 31, 1961, 2

SCRA 574; Pachoco vs. Tumangday, May 25, 1960, 108 Phil. 238; Pineda & Ampil
Mfg. Co. vs. Bartolome, Sept. 30, 1954, 95 Phil. 930; People vs. Zulueta, L-4017,
Aug. 30, 1951, 89 Phil. 756, 757; Maningat vs. Castillo, 75 Phil. 532; Arevalo vs.
Nepomuceno, No. 45332, Oct. 27, 1936, 63 Phil. 627; Dais vs. CFI, No. 28770, Jan.
21, 1928, 51 Phil. 396; Yu Cong Eng vs. Trinidad, 47 Phil. 385; Dimayuga vs. Fajardo,
No. 18913, April 15, 1922, 43 Phil. 304; Leung Ben vs. OBrien, No. 13602, April 6,
1918, 38 Phil. 182; Rocha vs. Crossfield, No. 3430, Aug. 7, 1906, 6 Phil. 355).
chanroblespublishingcompany In the light of the rulings laid down by this Court in
the decisions afore-cited, it is clear that dismissal of the instant petition which seeks
to enforce the provisions of the Workmens Compensation Act, as amended, a
benign legislation intended to implement the social justice guarantee mandated by
the Constitution is a foul blow to the humanitarian design of the law.
chanroblespublishingcompany III Now, the issue of whether there was employeremployee relationship between private respondent Lucy Perez and the deceased Ki
Lam Uy alias Vicente Uy. chanroblespublishingcompany In dismissing the claim of
claimants-petitioners, the respondent Workmens Compensation Commission
primarily based its decision on its findings that there was no substantial proof that
deceased Ki Lam Uy was an employee of the respondent; that at the time of the
incident, the rice mill that private respondent allegedly operates was not yet duly
registered; and that private respondents rice and corn buying and milling business
is a nationalized industry, in which employing an alien like the deceased, unless
duly authorized or allowed by appropriate authorities, is penalized by law.
chanroblespublishingcompany WE cannot agree with private respondent. The
records are replete with proof that the rice mill was established and started
operating in 1972 (p. 47, rec.) and in fact private respondent admitted that she had
four [4] employees in her rice mill (Annex O, p. 57, rec.). Private respondents
pretension of ignorance of the existence of employeremployee relationship is
indeed inconceivable considering that during the period from 1972 up to the time of
the bloody incident, she had been commuting from Ormoc City to Kanaga, Leyte, in
connection with her rice mill business. chanroblespublishingcompany It is likewise
clear from the records that private respondent committed violations of the laws and
regulations prohibiting the employment of aliens in nationalized industries and
operating a nonregistered rice mill. To afford her immunity from the application of
the Workmens Compensation Law by reason of her failure to comply with the laws
would put a premium on her illegal acts. It is axiomatic that two wrongs do not
make a right. One unlawful act does not justify another.
chanroblespublishingcompany The fact that the deceased, Ki Lam Uy, was between
the age of 65 and 68 years, does not necessarily show that private respondent
could not have employed such an old man. It has been shown by
claimantspetitioners that as early as 1968, when deceased Ki Lam Uy was only 61
years old, or possibly even before that date, the late Chua Lim, the original Chinese
owner-manager of the entire business and late husband of private respondent, Lucy
Perez, had already engaged the services of Ki Lam Uy as his overseer, machine
operator and cashier, or in short as Chua Lims utility man with a weekly salary

of P70.00 until the death of Ki Lam Uy. This stands unrebutted. It is logical to
conclude that private respondent, who is staying at Ormoc City, which is
approximately twenty-three (23) kilometers from Kananga, Leyte [Ministry of Public
Highways, Map of Northern Leyte showing road system, Scale: 1,200,000 (1967)],
continued to comply the deceased as an overseer, cashier or machine
operator, as the records reveal that the deceased had been working in private
respondents rice mill with the assistance of deceaseds son, Reynaldo, who stayed
with him at the farm house. Moreover, the friendship between the late Chua Lim
and Ki Lam Uy fortifies the fact that the former employed the latter despite the
latters age and possible violations of the law. chanroblespublishingcompany The
fact that Ki Lam Uy stayed at the farm house where he was killed by the robbers
and the act of the private respondent in defraying the total amount of P4,050.00
consisting of P3,000.00 in cash, P750.00 for the tomb and P300.00 for the priest,
confirms the recognition by private respondent of the deceaseds faithful and loyal
service to her and her late husband Chua Lim, which Ki Lam Uy rendered at the
sacrifice of his own dear life that fateful night of September 27, 1974. It is claimed
by private respondent that claimants-petitioners failed to support its claim of
employment with documentary evidence but only through oral testimonies of
witnesses. chanroblespublishingcompany WE cannot agree with private respondent
for an employee is any person in the service of another under a contract for hire,
express or implied, oral or written (Sunripe Coconut Products Co., Inc. vs. Court of
Industrial Relations & Sunripe Coconut Workers Union [CLO], L- 2009, April 30,
1949, XIV L.J. 472; citing Medermotts Case, 283 Mass. 74; Werner vs. Industrial
Comm., 212 Wis. 76; emphasis supplied). chanroblespublishingcompany Moreover,
it is true that the existence of employer-employee relationship is often difficult of
determination because it was purposely made so by employers bent on evading
liability under the Workmens Compensation and Nationalization Laws.
chanroblespublishingcompany Hence, if the object of the law is to be accomplished
with a liberal construction, the creation of the relationship should not be adjudged
strictly in accordance with technical legal rules, but rather according to the
actualities and realities of industrial or business practice (Fernandez & Quiazon,
Labor Standards & Social Legislation, 414 [1964]; Pucan & Besinga, Comments &
Annotations on the Workmens Compensation Act, as amended, 32 [1971], citing
the case of Asia Steel Corporation vs. Workmens Compensation Commission, L7636, June 27, 1955). chanroblespublishingcompany In the case at bar, records
disclosed that deceased Ki Lam Uy was employed as machine operator,
overseer or cashier of private respondent (Annex N, p. 66, rec., Annex B, p.
30, rec., Annex M, p. 65, rec.). chanroblespublishingcompany The respondent
Commission failed to give due weight to the police report of Patrolman Amador
Profetana, which identified the deceased as the overseer of Lucy Perez, the
private respondent who resides in Ormoc City. chanroblespublishingcompany
Patrolman Profetana, who investigated the killing made an initial spot report stating
among other things (t)hat at about 1900H [7:00 P.M.], 27 September 1974 an
incident took place in the house of a certain Lucy Perez at Sitio Agay-ayan, Bo.

Tugbong, Kananga, Leyte per verbal report of the rice mill caretaker thereat
received at the Police Headquarters on the same evening of 27 Sept. 1974 at
around 2030H [8:30 P.M.]. chanroblespublishingcompany A combined PC-Police
Team was sent to conduct an on-thespot investigation and it was found out that a
certain Vicente Uy (alias Ki Lam Uy), 67 years, married, Chinese citizen under ACR #
_______ and an overseer of Lucy Perez with residence at Ormoc City was killed inside
his dwelling after having been hacked several times on different parts of his body
that resulted in his immediate death [Annexes L & M Police Report, pp. 6465, rec; emphasis supplied]. A portion of the decision of the Hearing Officer, who
found the existence of employer-employee relationship between the deceased and
private respondent, is hereunder quoted: chanroblespublishingcompany The said
witness (Patrolman Amador Profetana) further testified that the deceased Ki Lam
Uy, was in charge of the management of the farm of Lucy Perez, as well as the rice
mill, the buying and selling palay, and other activities in connection with the
business of the respondent, Lucy Perez; that the respondent, Lucy Perez, was
engaged in buying palay and milling said palay in her rice mill at Bo. Tugbong,
Kananga, Leyte and selling the milled palay at Ormoc City; that because of the
activities of the deceased, he considered the deceased as an overseer of the
respondent, Lucy Perez, that he found from his investigation that the cause for
which the chinaman Ki Lam Uy alias Vicente Uy was murdered was because of the
demand of the robbers for money from him as the deceased was the one handling
the money of the respondent in buying palay, and as such he was entrusted with
the same; that he further found out that at the time of the robbery there was no
sufficient cash in the possession of the deceased and the cash he had was hardly
sufficient to buy five (5) sacks of palay, but in spite of that, the deceased Ki Lam Uy
alias Vicente Uy refused to surrender the same to the robbers as the same was in
his possession, so he was killed by the assailants (robbers). On cross-examination
by counsel for the respondent, the witness maintained the fact that the deceased
was the overseer of the respondents and not Thomas Un, who was merely caretaker
of the rice mill, that in his investigation a barrio councilor of Bo. Tugbong, Kananga,
Leyte testified before him that the bodega where the deceased was murdered
belonged to Lucy Perez (pp. 44-45, rec.; Emphasis supplied).
chanroblespublishingcompany Upon the other hand, the testimonies of Nonito On
Sanchez and Thomas Un are impaired as they are by bias. Nonito On Sanchez,
stepson of private respondent, testified that he does not know if there are
employees in the rice mill business of private respondent as he was positive that a
license for its operation was not yet secured and yet he claims to be managing the
affairs of the farm house where he stayed as early as 1972 or before the gory
incident happened and which is only about fifteen (15) meters away from the rice
mill. He also testified that deceased Ki Lam Uy was not an employee of his
stepmother [pp. 46-47, rec.]. chanroblespublishingcompany The second witness,
Thomas Un, tenant of Nonito On Sanchez, likewise testified that the deceased Ki
Lam Uy was not an employee of private respondent as there were no employees in
the farm of private respondent. He admitted that private respondent, Lucy Perez,

requested him to testify in the case and that it was he who reported the incident to
the Chief of Police of Kananga, Leyte. The investigation conducted by the police
establishing the fact of existence of employer-employee relationship between the
deceased and the private respondent should have been given probative weight by
respondent Commission than the biased testimonies of Nonito On Sanchez, stepson
of private respondent, and Thomas Un, tenant of Nonito On Sanchez.
chanroblespublishingcompany There is no quarrel as to the admissibility of said
police report as Section 1 (d), Rule 16 of the Workmens Compensation Commission
Rules specifically affirms the admissibility of reports of government agencies
covering material facts. Additionally, Section 5318.01, Labor Manual impliedly
supports the admissibility of police reports. It reads: chanroblespublishingcompany
The cooperation of the following government agencies or officials may be sought in
developing evidence to establish claims: a. The Bureau of Mines & Bureau of
Health; b. The Bureau of Customs; c. The Weather Bureau; d. Provincial, City or
Municipal Officials When appropriate, the aid of these officials may be requested
in securing copies of police reports, locating claimants or employers whereabouts,
or in making payments of compensation to claimants (Fernandez & Quiazon, Labor
Standards & Welfare Legislation 689 [1964]). x x x The findings of the Workmens
Compensation Commission that an employment relation existed was upheld as
supported by substantial evidence. In a police investigation conducted on the very
day of the accident, two workers of the petitioners declared in the course of the
investigation that the deceased was their co-worker. Considering that these
statements were made at a time when connivance was most remote, because the
question of compensation had not yet arisen, these must be accepted as truthful,
although subsequently these workers tried to repudiate their own declarations
(Fernandez & Quiason, supra, Appendix, citing the case of Jueco vs. Flores, L-19325,
Feb. 28, 1964, 10 SCRA 304, 307; Emphasis supplied). The initial spot report
(Annexes L & M) made by the police officer in the case at bar as to surrounding
circumstances of the killing of Ki Lam Uy merits belief as it was likewise made at a
time when connivance between the persons investigated was most remote and the
question of compensability under the Workmens Compensation Act was not yet in
their minds. chanroblespublishingcompany It may not be amiss to state further that
nothing appears in the record that would sufficiently overcome the presumption that
official duty had been performed. Henceforth, there being no showing that the
police officer in the present case maliciously or recklessly conducted the
investigation and prepared the police report, the police report must be given more
probative weight than the bias testimonies of private respondents witnesses. The
ruling of respondent Commission was in effect not in furtherance of the presumption
of moral sense of responsibility of police officers and the presumption of regularity
of acts of military officers contrary to Our ruling in the case of People vs. Dela Cruz
(L-1745, May 23, 1950; 5 Martin, Rules of Court 480 [1974]).
chanroblespublishingcompany While as a rule, matters of credibility and weight to
be assigned to a particular item of evidence are primarily for the Commission, the
same is true only where the findings of the Commission are supported by

substantial, credible and competent evidence. chanroblespublishingcompany IV WE

deemed it likewise significant to resolve the claim of private respondent that the
death of the deceased was not work-connected (Annexes E & E-1, pp. 34-35,
rec.) and that murder is not compensable not to mention the fact that the deceased
was murdered outside working hours [Annex F-3, p. 39, rec.].
chanroblespublishingcompany It is true that the late Ki Lam Uy was murdered
outside working hours, but this is not fatal to the claim of petitioners. It must be
pointed out that the nature of Ki Lam Uys work as an overseer requires his
presence in the farm house or bodega of private respondent even during nighttime.
Henceforth, under the so-called Bunkhouse Rule, where the employee is required
to stay in the premises or in quarters furnished by the employer, injuries sustained
therein are in the course of employment regardless of the time the same occurred.
chanroblespublishingcompany Thus, in Martha Lumber Mills, Inc. vs. Lagradante (L7599, June 27, 1956, 52 O.G. 4230), this Court said: chanroblespublishingcompany
WE cannot accept petitioners argument that the death of Felicito Lagradante did
not arise out of and in the course of his employment, having been murdered outside
of office hours. It appears that the deceased was required to live and sleep in the
quarters provided by the petitioner, and obviously by reason of the nature of his
duties as a concession guard, with the result that, although he had to observe
certain working hours, he nevertheless was compelled to stay in his quarters,
thereby in effect making himself available, regardless of time, for the protection of
the rights and interest of the petitioner in its concession.
chanroblespublishingcompany The aforecited decision is amply supported by
American authorities. Thus: chanroblespublishingcompany Closely allied to the
lodging cases is the bunkhouse doctrine. Where the employer provides the
sleeping quarters, all reasonable risks therein, whether by fire, slipping on the
floors, or otherwise are compensable as arising out of and in the course of the
employment. In short, bunkhouse injuries are compensable as incidents of the
employment (Horovitz, 3 NACCA L. J. 63-64). Special rules apply where the
employee is compelled or expected to live on the employers premises or quarters
furnished by the gang, etc. In such cases, the so-called bunkhouse rub protects the
employee against any injury sustained while he is making reasonable use of such
premises (Riesenfeld & Maxwell, 250; cited in Fernandez & Quiazon, Labor
Standards & Welfare Legislation 570-571 [1964]). V It is finally contended by private
respondent that the respondent Commissions decision was purely based upon
findings of facts and therefore cannot be the subject of the present petition. The
claim merits scant consideration for this Court is authorized to inquire into the facts
when the conclusions are not supported by substantial or credible evidence (Yutuc
vs. Republic of the Philippines, L-43270, Dec. 29, 1978, 87 SCRA 436; Mulingtapang
vs. WCC & Marcelo Steel Corporation, L-42483, Dec. 21, 1977, 80 SCRA 610, 614;
Abong vs. WCC, Nos. L-32347-53, Dec. 26, 1973, 54 SCRA 379; International Factory
vs. Vda. de Doria and WCC, No. L-13426, Sept. 30, 1960, 109 Phil. 553; PAL vs. PAL
Employees ASSOCIATION, L-8190, Oct. 31, 1958). VI Moreover, there is no question
that the claim was not seasonably controverted as correctly found by the Hearing

Officer/Acting Chief of the Workmens Compensation Unit. The records disclose that
private respondent failed to file an answer in controversion to petitioners claim for
compensation. This is patently a violation of the provisions of Section 45, paragraph
2 of the Workmens Compensation Act, as amended, which reads: In case the
employer decided to controvert the right to compensation, he shall either on or
before the fourteenth day of disability or within ten days after he has knowledge of
the alleged accident, file a notice with the Commissioner, on a form prescribed by
him, that compensation is not being paid, giving the name of the claimant, name of
the employer, date of the accident, and the reason why compensation is not being
paid. Failure on the part of the employer or the insurance carrier to comply with the
requirement shall constitute a renunciation of his right to controvert the claim
unless he submits reasonable grounds for the failure to make the necessary reports,
on the basis of which grounds the Commissioner may reinstate his right to
controvert the claim. Private respondent, in taking exception to petitioners
contention that she failed to seasonably controvert the claim, declared that the
copy of the claim was received only sometime during the first week of January 1975
or a week after the December 27, 1974 award. Nonetheless, it is inconceivable that
the death of the deceased employee on September 27, 1974, which occurred at the
farm house (bodega) of private respondent, was not known to the latter who was
engaged in buying and milling palay in her rice mill at Barrio Tugbong, Kananga,
Leyte and selling the milled rice at Ormoc City. Such failure to timely controvert the
claim results in a renunciation of respondent employers right to challenge the claim
and a waiver of all non-jurisdictional defenses (Natividad vs. WCC, et al., L-42021,
Nov. 21, 1979; Villones vs. ECC, et al., L-46200, July 30, 1979; Mesina vs. Republic,
L-43517, May 31, 1979, 90 SCRA 489; Dulay vs. WCC, et al., L-41998, April 30,
1979, 89 SCRA 659; Marasigan vs. WCC, et al., L- 43271, March 30, 1979, 89 SCRA
259; Vega vs. WCC, et al., L-43134, March 26, 1979, 89 SCRA 141). VII As
undisputedly borne out by the records, however, private respondent has advanced
payment for the burial expenses of the deceased Ki Lam Uy. Consequently, in the
interest of justice and in fairness to the private respondent, she is hereby absolved
from payment of the burial expenses. The amount of P3,000.00 paid in cash by
private respondent to the heirs of the deceased Ki Lam Uy, should be deducted from
the amount of P6,000.00 death benefits. chanroblespublishingcompany
WHEREFORE, THE DECISION OF THE RESPONDENT WORKMENS COMPENSATION
COMMISSION IS HEREBY REVERSED AND SET ASIDE, AND RESPONDENT EMPLOYER
IS HEREBY ORDERED. chanroblespublishingcompany 1. TO PAY PETITIONERSCLAIMANTS THE SUM OF THREE THOUSAND (P3,000.00) PESOS AS DEATH
BENEFITS; chanroblespublishingcompany 2. TO PAY PETITIONERS-CLAIMANTS
ATTORNEYS FEES EQUIVALENT TO 10% OF THE TOTAL AWARD;
chanroblespublishingcompany 3. TO PAY THE SUCCESSOR OF THE DEFUNCT
COMMISSION, ADMINISTRATIVE FEES; AND chanroblespublishingcompany 4. TO PAY
THE COSTS. chanroblespublishingcompany SO ORDERED.
chanroblespublishingcompany Teehankee, Fernandez, Guerrero, De Castro and
MelencioHerrera, JJ., concur. Chanrobles

THIRD DIVISION

IN-N-OUT BURGER, INC,

Petitioner,

G.R. No. 179127

Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus -

AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

SEHWANI,
INCORPORATED AND/OR
BENITAS FRITES, INC.,

Promulgated:

Respondents.
December 24, 2008
x---------------------------- --------------------x

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the

Rules of Court, seeking to reverse the Decision [1] dated 18 July
2006 rendered by the Court of Appeals in CA-G.R. SP No. 92785,
which reversed the Decision[2] dated 23 December 2005 of the
Director General of the Intellectual Property Office (IPO) in Appeal
No. 10-05-01. The Court of Appeals, in its assailed Decision,
decreed that the IPO Director of Legal Affairs and the IPO Director
General do not have jurisdiction over cases involving unfair
competition.

Petitioner IN-N-OUT BURGER, INC., a business entity

incorporated under the laws of California, United States (US) of
America, which is a signatory to the Convention of Paris on
Protection of Industrial Property and the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS). Petitioner
is engaged mainly in the restaurant business, but it has never
engaged in business in the Philippines. [3]

Respondents Sehwani, Incorporated and Benita Frites, Inc.

are corporations organized in the Philippines.[4]

On 2 June 1997, petitioner filed trademark and service mark

applications with the Bureau of Trademarks (BOT) of the IPO for
IN-N-OUT and IN-N-OUT Burger & Arrow Design. Petitioner later
found out, through the Official Action Papers issued by the IPO on
31 May 2000, that respondent Sehwani, Incorporated had already

obtained Trademark Registration for the mark IN N OUT (the

inside of the letter O formed like a star). [5] By virtue of a licensing
agreement, Benita Frites, Inc. was able to use the registered mark
of respondent Sehwani, Incorporated.

Petitioner eventually filed on 4 June 2001 before the Bureau

of Legal Affairs (BLA) of the IPO an administrative complaint
against respondents for unfair competition and cancellation of
trademark registration. Petitioner averred in its complaint that it is
the owner of the trade name IN-N-OUT and the following
trademarks: (1) IN-N-OUT; (2) IN-N-OUT Burger & Arrow Design;
and (3) IN-N-OUT Burger Logo. These trademarks are registered
with the Trademark Office of the US and in various parts of the
world, are internationally well-known, and have become
distinctive of its business and goods through its long and
exclusive commercial use.[6] Petitioner pointed out that its
internationally well-known trademarks and the mark of the
respondents are all registered for the restaurant business and are
clearly identical and confusingly similar. Petitioner claimed that
respondents are making it appear that their goods and services
are those of the petitioner, thus, misleading ordinary and
unsuspecting consumers that they are purchasing petitioners
products.[7]

Following the filing of its complaint, petitioner sent on 18

October 2000 a demand letter directing respondent Sehwani,
Incorporated to cease and desist from claiming ownership of the
mark IN-N-OUT and to voluntarily cancel its trademark
registration. In a letter-reply dated 23 October 2000, respondents
refused to accede to petitioner demand, but expressed
willingness to surrender the registration of respondent Sehwani,
Incorporated of the IN N OUT trademark for a fair and reasonable
consideration. [8]

Petitioner was able to register the mark Double Double on 4

July 2002, based on their application filed on 2 June 1997.[9] It
alleged that respondents also used this mark, as well as the menu
color scheme. Petitioners also averred that respondent Benitas
receipts bore the phrase, representing IN-N-OUT Burger. [10] It
should be noted that that although respondent Sehwahi,
Incorporated registered a mark which appeared as IN N OUT (the
inside of the letter O formed like a star), respondents used the
mark IN-N-OUT.[11]
To counter petitioners complaint, respondents filed before
the BLA-IPO an Answer with Counterclaim. Respondents asserted
therein that they had been using the mark IN N OUT in
the Philippines since 15 October 1982. On 15 November 1991,
respondent Sehwani, Incorporated filed with the then Bureau of
Patents, Trademarks and Technology Transfer (BPTTT) an
application for the registration of the mark IN N OUT (the inside of
the letter O formed like a star). Upon approval of its application, a
certificate of registration of the said mark was issued in the name
of
respondent Sehwani,
Incorporated
on 17
December
1993. On 30 August 2000, respondents Sehwani, Incorporated
and Benita Frites, Inc. entered into a Licensing Agreement,
wherein the former entitled the latter to use its registered mark,
IN N OUT. Respondents asserted that respondent Sehwani,
Incorporated, being the registered owner of the mark IN N OUT,
should be accorded the presumption of a valid registration of its
mark with the exclusive right to use the same. Respondents
argued that none of the grounds provided under the Intellectual
Property Code for the cancellation of a certificate of registration
are present in this case.Additionally, respondents maintained that
petitioner had no legal capacity to sue as it had never operated in
the Philippines.[12]

Subsequently,
the
IPO
Director
of
Legal
Affairs, Estrellita Beltran-Abelardo, rendered a Decision dated 22

December 2003,[13] in favor of petitioner. According to said

Decision, petitioner had the legal capacity to sue in
the Philippines, since its country of origin or domicile was a
member of and a signatory to the Convention of Paris on
Protection of Industrial Property. And although petitioner had
never done business in the Philippines, it was widely known in this
country through the use herein of products bearing its corporate
and trade name. Petitioners marks are internationally well-known,
given the world-wide registration of the mark IN-N-OUT, and its
numerous advertisements in various publications and in the
Internet. Moreover, the IPO had already declared in a
previous inter partes case that In-N-Out Burger and Arrow Design
was
an
internationally
well-known
mark. Given
these
circumstances, the IPO Director for Legal Affairs pronounced in
her Decision
that petitioner had the right to use
its tradename and mark IN-N-OUT in the Philippines to the
exclusion of others, including the respondents. However,
respondents used the mark IN N OUT in good faith and were not
guilty of unfair competition, since respondent Sehwani,
Incorporated did not evince any intent to ride upon petitioners
goodwill by copying the mark IN-N-OUT Burger exactly. The inside
of the letter O in the mark used by respondents formed a star. In
addition, the simple act of respondent Sehwani, Incorporated of
inquiring into the existence of a pending application for
registration of the IN-N-OUT mark was not deemed
fraudulent. The dispositive part of the Decision of the IPO Director
for Legal Affairs reads:

With the foregoing disquisition, Certificate of

Registration No. 56666 dated 17 December 1993 for the
mark IN-N-OUT (the inside of the letter O formed like a
star) issued in favor of Sehwani, Incorporated is hereby
CANCELLED. Consequently, respondents Sehwani, Inc.
and Benitas Frites are hereby ordered to permanently

cease and desist from using the mark IN-N-OUT and IN-NOUT BURGER LOGO on its goods and in its business. With
regards the mark Double-Double, considering that as
earlier discussed, the mark has been approved by this
Office for publication and that as shown by evidence,
Complainant is the owner of the said mark, Respondents
are so hereby ordered to permanently cease and desist
from using the mark Double-Double. NO COSTS. [14]

Both
parties
filed
their
respective
Motions
for
Reconsideration of the aforementioned Decision. Respondents
Motion for Reconsideration[15] and petitioners Motion for Partial
Reconsideration[16] were denied by the IPO Director for Legal
Affairs in Resolution No. 2004-18[17] dated 28 October 2004 and
Resolution No. 2005-05 dated 25 April 2005,[18] respectively.

Subsequent events would give rise to two cases before this

Court, G.R. No. 171053 and G.R. No. 179127, the case at bar.

G.R. No. 171053

On 29 October 2004, respondents received a copy of

Resolution No. 2004-18 dated 28 October 2004 denying their
Motion for Reconsideration. Thus, on 18 November 2004,
respondents filed an Appeal Memorandum with IPO Director
General Emma Francisco (Director General Francisco). However, in
an Order dated 7 December 2004, the appeal was dismissed by
the IPO Director General for being filed beyond the 15-day
reglementary period to appeal.

Respondents appealed to the Court of Appeals via a Petition

for Review under Rule 43 of the Rules of Court, filed on 20
December 2004 and docketed as CA-G.R. SP No. 88004,
challenging the dismissal of their appeal by the IPO Director
General, which effectively affirmed the Decision dated 22
December 2003 of the IPO Director for Legal Affairs ordering the
cancellation of the registration of the disputed trademark in the
name of respondent Sehwani, Incorporated and enjoining
respondents from using the same. In particular, respondents
based their Petition on the following grounds:

THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR

IN DISMISSING APPEAL NO. 14-2004-00004 ON A MERE
TECHNICALITY

THE BUREAU OF LEGAL AFFAIRS (SIC) DECISION AND

RESOLUTION (1) CANCELLING RESPONDENTS CERTIFICATE
OF REGISTRATION FOR THE MARK IN-N-OUT, AND (2)
ORDERING PETITIONERS TO PERMANENTLY CEASE AND
DESIST FROM USING THE SUBJECT MARK ON ITS GOODS
AND BUSINESS ARE CONTRARY TO LAW AND/OR IS NOT
SUPPORTED BY EVIDENCE.

Respondents thus prayed:

WHEREFORE, petitioners respectfully pray that this

Honorable Court give due course to this petition, and
thereafter order the Office of the Director General of the

Intellectual Property Office to reinstate and give due

course to [respondent]s Appeal No. 14-2004-00004.

Other reliefs, just and equitable under the premises, are

likewise prayed for.

On 21 October 2005, the Court of Appeals rendered a

Decision denying respondents Petition in CA-G.R SP No. 88004
and affirming the Order dated 7 December 2004 of the IPO
Director General. The appellate court confirmed that respondents
appeal before the IPO Director General was filed out of time and
that it was only proper to cancel the registration of the disputed
trademark in the name of respondent Sehwani, Incorporated and
to
permanently
enjoin
respondents
from
using
the
same. Effectively, the 22 December 2003 Decision of IPO Director
of Legal Affairs was likewise affirmed. On 10 November 2005,
respondents moved for the reconsideration of the said
Decision. On 16 January 2006, the Court of Appeals denied their
motion for reconsideration.

Dismayed with the outcome of their petition before the Court

of Appeals, respondents raised the matter to the Supreme Court
in a Petition for Review under Rule 45 of the Rules of Court, filed
on 30 January 2006, bearing the title Sehwani, Incorporated v. InN-Out Burger and docketed as G.R. No. 171053.[19]

This Court promulgated a Decision in G.R. No. 171053 on 15

October 2007,[20] finding that herein respondents failed to file their
Appeal Memorandum before the IPO Director General within the

period prescribed by law and, consequently, they lost their right

to appeal. The Court further affirmed the Decision dated 22
December 2003 of the IPO Director of Legal Affairs holding that
herein petitioner had the legal capacity to sue for the protection
of its trademarks, even though it was not doing business in the
Philippines, and ordering the cancellation of the registration
obtained by herein respondent Sehwani, Incorporated of the
internationally well-known marks of petitioner, and directing
respondents to stop using the said marks. Respondents filed a
Motion for Reconsideration of the Decision of this Court in G.R. No.
171053, but it was denied with finality in a Resolution dated 21
January 2008.

G.R. No. 179127

Upon the denial of its Partial Motion for Reconsideration of

the Decision dated 22 December 2003 of the IPO Director for
Legal Affairs, petitioner was able to file a timely appeal before the
IPO Director General on 27 May 2005.

During the pendency of petitioners appeal before the IPO

Director General, the Court of Appeals already rendered on 21
October 2005 its Decision dismissing respondents Petition in CAG.R. SP No. 88004.

In a Decision dated 23 December 2005, IPO Director General

Adrian Cristobal, Jr. found petitioners appeal meritorious and
modified the Decision dated 22 December 2003 of the IPO
Director of Legal Affairs. The IPO Director General declared that
respondents
were
guilty
of
unfair
competition. Despite
respondents claims that they had been using the mark since

1982, they only started constructing their restaurant sometime in

2000, after petitioner had already demanded that they desist
from claiming ownership of the mark IN-N-OUT. Moreover, the sole
distinction of the mark registered in the name of
respondent Sehwani, Incorporated, from those of the petitioner
was the star inside the letter O, a minor difference which still
deceived purchasers. Respondents were not even actually using
the star in their mark because it was allegedly difficult to
print. The IPO Director General expressed his disbelief over the
respondents reasoning for the non-use of the star symbol. The IPO
Director General also considered respondents use of petitioners
registered mark Double-Double as a sign of bad faith and an
intent to mislead the public. Thus, the IPO Director General ruled
that petitioner was entitled to an award for the actual damages it
suffered by reason of respondents acts of unfair competition,
exemplary damages, and attorneys fees. [21] The fallo of the
Decision reads:

WHEREFORE, premises considered, the [herein

respondents]
are
held
guilty
of
unfair
competition. Accordingly, Decision No. 2003-02 dated 22
December 2003 is hereby MODIFIED as follows:

[Herein Respondents] are hereby ordered to jointly

and severally pay [herein petitioner]:

1. Damages in the amount of TWO HUNDRED

TWELVE THOUSAND FIVE HUNDRED SEVENTY
FOUR AND 28/100(P212,574.28);

2. Exemplary damages in the amount of FIVE

HUNDRED THOUSAND PESOS (P500,000.00);

3. Attorneys fees and expenses of litigation in the

amount of FIVE HUNDRED THOUSAND PESOS
(P500,000.00).

All products of [herein respondents] including the

labels, signs, prints, packages, wrappers, receptacles and
materials used by them in committing unfair competition
should be without compensation of any sort be seized and
disposed of outside the channels of commerce.

Let a copy of this Decision be furnished the Director

of Bureau of Legal Affairs for appropriate action, and the
records be returned to her for proper disposition. Further,
let a copy of this Decision be furnished the
Documentation, Information and Technology Transfer
Bureau for their information and records purposes.[22]

Aggrieved, respondents were thus constrained to file on 11

January 2006 before the Court of Appeals another Petition for
Review under Rule 43 of the Rules of Court, docketed as CA-G.R.
SP No. 92785. Respondents based their second Petition before
the appellate court on the following grounds:

THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR

IN
HOLDING
PETITIONERS
LIABLE
FOR
UNFAIR

COMPETITION AND IN ORDERING THEM TO PAY DAMAGES

AND ATTORNEYS FEES TO RESPONDENTS

THE IPO DIRECTOR GENERAL COMMITTED GRAVE ERROR

IN AFFIRMING THE BUREAU OF LEGAL AFFAIRS DECISION
(1)
CANCELLING
PETITIONERS
CERTIFICATE
OF
REGISTRATION FOR THE MARK IN-N-OUT, AND (2)
ORDERING PETITIONERS TO PERMANENTLY CEASE AND
DESIST FROM USING THE SUBJECT MARK ON ITS GOODS
AND BUSINESS

Respondents assailed before the appellate court the

foregoing 23 December 2005 Decision of the IPO Director
General, alleging that their use of the disputed mark was not
tainted with fraudulent intent; hence, they should not be held
liable for damages. They argued that petitioner had never entered
into any transaction involving its goods and services in
the Philippines and, therefore, could not claim that its goods and
services had already been identified in the mind of the
public. Respondents added that the disputed mark was not wellknown. Finally, they maintained that petitioners complaint was
already barred by laches.[23]

At the end of their Petition in CA-G.R. SP No. 92785,

respondents presented the following prayer:

WHEREFORE, [respondents herein] respectfully pray that

this Honorable Court:

(a) upon the filing of this petition, issue a temporary

restraining order enjoining the IPO and [petitioner],
their agents, successors and assigns, from executing,
enforcing and implementing the IPO Director Generals
Decision dated 23 December 2005, which modified the
Decision No. 2003-02 dated 22 December 2003 of the
BLA, until further orders from this Honorable Court.

(b) after notice and hearing, enjoin the IPO and

[petitioner], their agents, successors and assigns, from
executing, enforcing and implementing the Decision
dated 23 December 2005 of the Director General of the
IPO in IPV No. 10-2001-00004 and to maintain the
status quo ante pending the resolution of the merits of
this petition; and

(c) after giving due course to this petition:

(i)

reverse and set aside the Decision dated 23

December 2005 of the Director General of the
IPO in IPV No. 10-2001-00004 finding the
[respondents] guilty of unfair competition and
awarding damages and attorneys fees to the
respondent

(ii)

in lieu thereof, affirm Decision No. 2003-02

of the BLA dated 22 December 2003 and
Resolution No. 2005-05 of the BLA dated 25
April 2005, insofar as it finds [respondents] not
guilty of unfair competition and hence not

liable to the [petitioner] for damages and

attorneys fees;

(iii)

(iv)

reverse Decision No. 2003-02 of the BLA

dated 22 December 2003, and Resolution No.
2005-05 of the BLA dated 25 April 2005,
insofar as it upheld [petitioner]s legal capacity
to sue; that [petitioner]s trademarks are wellknown; and that respondent has the exclusive
right to use the same; and

make the injunction permanent.

[Respondents] also pray for other reliefs, as may

deemed just or equitable.[24]

On 18 July 2006, the Court of Appeals promulgated a

Decision[25] in CA-G.R. SP No. 92785 reversing the Decision
dated 23 December 2005 of the IPO Director General.

The Court of Appeals, in its Decision, initially addressed

petitioners assertion that respondents had committed forum
shopping by the institution of CA-G.R. SP No. 88004 and CA-G.R.
SP No. 92785. It ruled that respondents were not guilty of forum
shopping,
distinguishing
between
the
respondents
two
Petitions. The subject of Respondents Petition in CA-G.R SP No.
88004 was the 7 December 2004 Decision of the IPO Director
General dismissing respondents appeal of the 22 December

2003 Decision of the IPO Director of Legal Affairs. Respondents

questioned therein the cancellation of the trademark registration
of respondent Sehwani, Incorporated and the order permanently
enjoining
respondents
from
using
the
disputed
trademark. Respondents Petition in CA-G.R. SP No. 92785 sought
the review of the 23 December 2005 Decision of the IPO Director
General partially modifying the 22 December 2003 Decision of the
IPO Director of Legal Affairs. Respondents raised different issues
in their second petition before the appellate court, mainly
concerning the finding of the IPO Director General that
respondents were guilty of unfair competition and the awarding of
actual and exemplary damages, as well as attorneys fees, to
petitioner.

The Court of Appeals then proceeded to resolve CA-G.R. SP

No. 92785 on jurisdictional grounds not raised by the parties. The
appellate court declared that Section 163 of the Intellectual
Property Code specifically confers upon the regular courts, and
not the BLA-IPO, sole jurisdiction to hear and decide cases
involving provisions of the Intellectual Property Code, particularly
trademarks. Consequently, the IPO Director General had no
jurisdiction to rule in its Decision dated 23 December 2005 on
supposed violations of these provisions of the Intellectual Property
Code.

In the end, the Court of Appeals decreed:

WHEREFORE,
the
Petition
is GRANTED. The
Decision dated 23 December 2005 rendered by the
Director General of the Intellectual Property Office of the
Philippines in Appeal No. 10-05-01 is REVERSED and SET
ASIDE. Insofar as they pertain to acts governed by Article

168 of R.A. 8293 and other sections enumerated in

Section 163 of the same Code, respondents claims in its
Complaint docketed as IPV No. 10-2001-00004 are
hereby DISMISSED.[26]

The Court of Appeals, in a Resolution dated 31 July 2007,

denied petitioners Motion for Reconsideration of its
aforementioned Decision.
[27]

Hence, the present

the following issues:

Petition,

where

petitioner

raises

I
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
ISSUING THE QUESTIONED DECISION DATED 18 JULY 2006
AND RESOLUTION DATED 31 JULY 2007 DECLARING THAT
THE IPO HAS NO JURISDICTION OVER ADMINISTRATIVE
COMPLAINTS FOR INTELLECTUAL PROPERTY RIGHTS
VIOLATIONS;

II

WHETHER OR NOT THE INSTANT PETITION IS FORMALLY

DEFECTIVE; AND

III

WHETHER OR NOT THE COURT OF APPEALS ERRED

IN ISSUING THE QUESTIONED DECISION DATED 18 JULY
2006 AND RESOLUTION DATED 31 JULY 2007 DECLARING
THAT SEHWANI AND BENITA ARE NOT GUILTY OF: (A)
SUBMITTING A PATENTLY FALSE CERTIFICATION OF NONFORUM SHOPPING; AND (B) FORUM SHOPPING PROPER.[28]

As previously narrated herein, on 15 October 2007, during

the pendency of the present Petition, this Court already
promulgated its Decision[29] in G.R. No. 171053 on 15 October
2007, which affirmed the IPO Director Generals dismissal of
respondents appeal for being filed beyond the reglementary
period, and left the 22 December 2003 Decision of the IPO
Director for Legal Affairs, canceling the trademark registration of
respondent Sehwani, Incorporated and enjoining respondents
from using the disputed marks.

Before discussing the merits of this case, this Court must

first rule on the procedural flaws that each party has attributed to
the other.

Formal Defects of the Petition

Respondents contend that the Verification/Certification

executed
by
Atty.
Edmund
Jason Barranda of Villaraza and Angangco,
which
petitioner

attached to the present Petition, is defective and should result in

the dismissal of the said Petition.

Respondents point out that the Secretarys Certificate

executed by Arnold M. Wensinger on 20 August 2007, stating that
petitioner
had
authorized
the
lawyers
of Villaraza and Angangco to represent it in the present Petition
and to sign the Verification and Certification against Forum
Shopping,
among
other
acts,
was
not
properly
notarized. The jurat of the aforementioned Secretarys Certificate
reads:

Subscribed and sworn to me this 20 th day of August

2007 in Irving California.

Rachel A. Blake (Sgd.)

Notary Public[30]

Respondents aver that the said Secretarys Certificate cannot

properly
authorize
Atty. Barranda to
sign
the
Verification/Certification on behalf of petitioner because the
notary public Rachel A. Blake failed to state that: (1) petitioners
Corporate Secretary, Mr. Wensinger, was known to her; (2) he was
the same person who acknowledged the instrument; and (3) he
acknowledged the same to be his free act and deed, as required
under Section 2 of Act No. 2103 and Landingin v. Republic of the
Philippines.[31]

Respondents
likewise
impugn
the
validity
of
the notarial certificate
of
Atty.
Aldrich Fitz B. Uy,
on
Atty. Barandas Verification/Certification attached to the instant
Petition, noting the absence of (1) the serial number of the
commission of the notary public; (2) the office address of the
notary public; (3) the roll of attorneys number and the IBP
membership number; and (4) a statement that the
Verification/Certification was notarized within the notary publics
territorial jurisdiction, as required under the 2004 Rules
on Notarial Practice. [32]

Section 2 of Act No. 2103 and Landingin v. Republic of the

Philippines are not applicable to the present case. The
requirements enumerated therein refer to documents which
require an acknowledgement, and not a mere jurat.

A jurat is that part of an affidavit in which the notary certifies

that before him/her, the document was subscribed and sworn to
by the executor. Ordinarily, the language of the jurat should avow
that the document was subscribed and sworn to before the notary
public. In contrast, an acknowledgment is the act of one who has
executed a deed in going before some competent officer or court
and declaring it to be his act or deed. It involves an extra step
undertaken whereby the signor actually declares to the notary
that the executor of a document has attested to the notary that
the same is his/her own free act and deed. [33] A Secretarys
Certificate, as that executed by petitioner in favor of the lawyers
of the Angangco and Villaraza law office, only requires a jurat.[34]

Even assuming that the Secretarys Certificate was flawed,

Atty. Barranda may still sign the Verification attached to the
Petition at bar. A pleading is verified by an affidavit that the

affiant has read the pleading and that the allegations therein are
true and correct of his personal knowledge or based on authentic
records. [35] The party itself need not sign the verification. A partys
representative, lawyer or any other person who personally knows
the truth of the facts alleged in the pleading may sign the
verification.[36] Atty. Barranda, as petitioners counsel, was in the
position to verify the truth and correctness of the allegations of
the present Petition. Hence, the Verification signed by
Atty. Barrandasubstantially complies with the formal requirements
for such.

Moreover, the Court deems it proper not to focus on the

supposed technical infirmities of Atty. Barandas Verification. It
must be borne in mind that the purpose of requiring a verification
is to secure an assurance that the allegations of the petition has
been made in good faith; or are true and correct, not merely
speculative. This requirement is simply a condition affecting the
form of pleadings, and non-compliance therewith does not
necessarily render it fatally defective. Indeed, verification is only a
formal, not a jurisdictional requirement. In the interest of
substantial justice, strict observance of procedural rules may be
dispensed with for compelling reasons. [37] The vital issues raised
in the instant Petition on the jurisdiction of the IPO Director for
Legal Affairs and the IPO Director General over trademark cases
justify the liberal application of the rules, so that the Court may
give the said Petition due course and resolve the same on the
merits.

This Court agrees, nevertheless, that the notaries public,

Rachel A. Blake and Aldrich Fitz B. Uy, were less than careful with
their jurats or notarial certificates. Parties and their counsel
should take care not to abuse the Courts zeal to resolve cases on
their merits. Notaries public in the Philippines are reminded to

exert utmost care and effort in complying with the 2004 Rules
on Notarial Practice. Parties and their counsel are further charged
with the responsibility of ensuring that documents notarized
abroad be in their proper form before presenting said documents
before Philippine courts.

Forum Shopping

Petitioner next avers that respondents are guilty of forum

shopping in filing the Petition in CA-G.R. SP No. 92785, following
their earlier filing of the Petition in CA-G.R SP No.
88004. Petitioner also asserts that respondents were guilty of
submitting to the Court of Appeals a patently false Certification of
Non-forum Shopping in CA-G.R. SP No. 92785, when they failed to
mention therein the pendency of CA-G.R SP No. 88004.

Forum shopping is the institution of two or more actions or

proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition. It is an
act of malpractice and is prohibited and condemned as trifling
with courts and abusing their processes. In determining whether
or not there is forum shopping, what is important is the vexation
caused the courts and parties-litigants by a party who asks
different courts and/or administrative bodies to rule on the same
or related causes and/or grant the same or substantially the
same reliefs and in the process creates the possibility of
conflicting decisions being rendered by the different bodies upon
the same issues.[38]

Forum shopping is present when, in two or more cases

pending, there is identity of (1) parties (2) rights or causes of

action and reliefs prayed for, and (3) the identity of the two
preceding particulars is such that any judgment rendered in the
other action, will, regardless of which party is successful, amount
to res judicata in the action under consideration.[39]

After a cursory look into the two Petitions in CA-G.R. SP No.

88004 and CA-G.R. SP No. 92785, it would at first seem that
respondents are guilty of forum shopping.

There is no question that both Petitions involved identical

parties, and raised at least one similar ground for which they
sought the same relief. Among the grounds stated by the
respondents for their Petition in CA-G.R SP No. 88004 was
that [T]he Bureau of Legal Affairs (sic) Decision and Resolution (1)
canceling [herein respondent Sehwani, Incorporated]s certificate
of registration for the mark IN-N-OUT and (2) ordering [herein
respondents] to permanently cease and desist from using the
subject mark on its goods and business are contrary to law and/or
is (sic) not supported by evidence. [40] The same ground was again
invoked by respondents in their Petition in CA-G.R. SP No. 92785,
rephrased as follows: The IPO Director General committed grave
error in affirming the Bureau of Legal Affairs (sic) Decision (1)
canceling [herein respondent Sehwani, Incorporated]s certificate
of registration for the mark IN-N-OUT, and (2) ordering [herein
respondents] to permanently cease and desist from using the
subject mark on its goods and business. [41] Both Petitions, in
effect, seek the reversal of the 22 December 2003 Decision of the
IPO Director of Legal Affairs. Undoubtedly, a judgment in either
one of these Petitions affirming or reversing the said Decision of
the IPO Director of Legal Affairs based on the merits thereof would
bar the Court of Appeals from making a contrary ruling in the
other Petition, under the principle of res judicata.

Upon a closer scrutiny of the two Petitions, however, the

Court takes notice of one issue which respondents did not raise in
CA-G.R. SP No. 88004, but can be found in CA-G.R. SP No.
92785, i.e.,
whether respondents
are
liable
for
unfair
competition. Hence, respondents seek additional reliefs in CA-G.R.
SP No. 92785, seeking the reversal of the finding of the IPO
Director General that they are guilty of unfair competition, and
the nullification of the award of damages in favor of petitioner
resulting from said finding.Undoubtedly, respondents could not
have raised the issue of unfair competition in CA-G.R. SP No.
88004 because at the time they filed their Petition therein on 28
December 2004, the IPO Director General had not yet rendered its
Decision dated 23 December 2005 wherein it ruled that
respondents were guilty thereof and awarded damages to
petitioner.

In arguing in their Petition in CA-G.R. SP No. 92785 that they

are not liable for unfair competition, it is only predictable,
although not necessarily legally tenable, for respondents to
reassert their right to register, own, and use the disputed
mark. Respondents again raise the issue of who has the better
right to the disputed mark, because their defense from the award
of damages for unfair competition depends on the resolution of
said issue in their favor. While this reasoning may be legally
unsound, this Court cannot readily presume bad faith on the part
of respondents in filing their Petition in CA-G.R. SP No. 92785; or
hold that respondents breached the rule on forum shopping by
the mere filing of the second petition before the Court of Appeals.
True, respondents should have referred to CA-G.R. SP No.
88004 in the Certification of Non-Forum Shopping, which they
attached to their Petition in CA-G.R. SP No. 92785. Nonetheless,
the factual background of this case and the importance of
resolving the jurisdictional and substantive issues raised herein,
justify the relaxation of another procedural rule. Although the

submission of a certificate against forum shopping is deemed

obligatory, it is not jurisdictional. [42] Hence, in this case in which
such a certification was in fact submitted, only it was defective,
the Court may still refuse to dismiss and, instead, give due course
to the Petition in light of attendant exceptional circumstances.

The parties and their counsel, however, are once again

warned against taking procedural rules lightly. It will do them well
to remember that the Courts have taken a stricter stance against
the disregard of procedural rules, especially in connection with
the submission of the certificate against forum shopping, and it
will not hesitate to dismiss a Petition for non-compliance
therewith in the absence of justifiable circumstances.

The Jurisdiction of the IPO

The Court now proceeds to resolve an important issue which

arose from the Court of Appeals Decision dated 18 July
2006 in CA-G.R. SP No. 92785. In the afore-stated Decision, the
Court of Appeals adjudged that the IPO Director for Legal Affairs
and the IPO Director General had no jurisdiction over the
administrative proceedings below to rule on issue of unfair
competition, because Section 163 of the Intellectual Property
Code confers jurisdiction over particular provisions in the law on
trademarks on regular courts exclusively. According to the said
provision:

Section 163. Jurisdiction of Court.All actions under

Sections 150, 155, 164, and 166 to 169 shall be brought
before the proper courts with appropriate jurisdiction
under existing laws.

The provisions referred to in Section 163 are: Section 150 on

License Contracts; Section 155 on Remedies on Infringement;
Section 164 on Notice of Filing Suit Given to the Director; Section
166 on Goods Bearing Infringing Marks or Trade Names; Section
167 on Collective Marks; Section 168 on Unfair Competition,
Rights, Regulation and Remedies; and Section 169 on False
Designations of Origin, False Description or Representation.

The Court disagrees with the Court of Appeals.

Section 10 of the Intellectual Property Code specifically

identifies the functions of the Bureau of Legal Affairs, thus:

Section 10. The Bureau of Legal Affairs.The Bureau

of Legal Affairs shall have the following functions:

10.1 Hear and decide opposition to the application

for registration of marks; cancellation of trademarks;
subject to the provisions of Section 64, cancellation of
patents and utility models, and industrial designs; and
petitions for compulsory licensing of patents;

10.2
(a) Exercise
original
jurisdiction
in
administrative complaints for violations of laws
involving intellectual property rights; Provided,
That its jurisdiction is limited to complaints where
the total damages claimed are not less than Two

hundred
thousand
pesos
(P200,000): Provided, futher, That availment of the
provisional remedies may be granted in accordance
with the Rules of Court. The Director of Legal Affairs
shall have the power to hold and punish for contempt all
those who disregard orders or writs issued in the course
of the proceedings.

(b) After formal investigation, the Director for Legal

Affairs may impose one (1) or more of the following
administrative penalties:

(i) The issuance of a cease and desist order

which shall specify the acts that the respondent
shall cease and desist from and shall require him to
submit a compliance report within a reasonable time
which shall be fixed in the order;

(ii) The acceptance of a voluntary assurance of

compliance
or
discontinuance
as
may
be
imposed. Such voluntary assurance may include one
or more of the following:

(1) An assurance to comply with the

provisions of the intellectual property law
violated;

(2)
An assurance to refrain from
engaging in unlawful and unfair acts and

practices
subject
investigation

of

the

formal

(3)
An assurance to recall,
replace, repair, or refund the money value
of
defective
goods
distributed
in
commerce; and

(4)
An assurance to reimburse
the complainant the expenses and costs
incurred in prosecuting the case in the
Bureau of Legal Affairs.

The Director of Legal Affairs may

also require the respondent to submit
periodic compliance reports and file a
bond to guarantee compliance of his
undertaking.

(iii) The condemnation or seizure of products

which are subject of the offense. The goods seized
hereunder shall be disposed of in such manner as
may be deemed appropriate by the Director of Legal
Affairs, such as by sale, donation to distressed local
governments or to charitable or relief institutions,
exportation, recycling into other goods, or any
combination thereof, under such guidelines as he
may provide;

(iv)
The forfeiture of paraphernalia and all
real and personal properties which have been used
in the commission of the offense;

(v)
The imposition of administrative fines
in such amount as deemed reasonable by the
Director of Legal Affairs, which shall in no case be
less than Five thousand pesos (P5,000) nor more
than
One
hundred
fifty
thousand
pesos
(P150,000). In addition, an additional fine of not
more than One thousand pesos (P1,000) shall be
imposed for each day of continuing violation;

(vi)
The cancellation of any permit,
license, authority, or registration which may
have been granted by the Office, or the
suspension of the validity thereof for such period of
time as the Director of Legal Affairs may deem
reasonable which shall not exceed one (1) year;

(vii)
The withholding of any permit, license,
authority, or registration which is being secured by
the respondent from the Office;

(viii)

The assessment of damages;

(ix)

Censure; and

(x)

Other analogous penalties or sanctions.

10.3
The Director General may by Regulations
establish the procedure to govern the implementation of
this Section.[43] (Emphasis provided.)

Unquestionably, petitioners complaint, which seeks the cancellation of the disputed

mark in the name of respondent Sehwani, Incorporated, and damages for violation
of petitioners intellectual property rights, falls within the jurisdiction of the IPO
Director of Legal Affairs.

The Intellectual Property Code also expressly recognizes the appellate

jurisdiction of the IPO Director General over the decisions of the IPO Director of
Legal Affairs, to wit:

Section 7. The Director General and Deputies

Director General. 7.1 Fuctions.The Director General shall
exercise the following powers and functions:

xxxx

b) Exercise exclusive appellate jurisdiction over all

decisions rendered by the Director of Legal Affairs, the
Director of Patents, the Director of Trademarks, and the
Director of Documentation, Information and Technology
Transfer Bureau. The decisions of the Director General in
the exercise of his appellate jurisdiction in respect of the
decisions of the Director of Patents, and the Director of
Trademarks shall be appealable to the Court of Appeals in

accordance with the Rules of Court; and those in respect

of the decisions of the Director of Documentation,
Information and Technology Transfer Bureau shall
be appealable to the Secretary of Trade and Industry;

The Court of Appeals erroneously reasoned that Section

10(a) of the Intellectual Property Code, conferring upon the BLAIPO jurisdiction over administrative complaints for violations of
intellectual property rights, is a general provision, over which the
specific provision of Section 163 of the same Code, found under
Part III thereof particularly governing trademarks, service marks,
and tradenames, must prevail. Proceeding therefrom, the Court of
Appeals incorrectly concluded that all actions involving
trademarks, including charges of unfair competition, are under
the exclusive jurisdiction of civil courts.

Such interpretation is not supported by the provisions of the

Intellectual Property Code. While Section 163 thereof vests in civil
courts jurisdiction over cases of unfair competition, nothing in the
said section states that the regular courts have sole jurisdiction
over unfair competition cases, to the exclusion of administrative
bodies. On the contrary, Sections 160 and 170, which are also
found under Part III of the Intellectual Property Code, recognize
the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases. These two provisions read:

Section 160. Right of Foreign Corporation to Sue in

Trademark or Service Mark Enforcement Action.Any
foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage
in business in the Philippines may bring a civil

or administrative action hereunder for opposition,

cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not
it is licensed to do business in the Philippines under
existing laws.

xxxx

Section 170. Penalties.Independent of the civil

and administrative sanctions imposed by law, a
criminal penalty of imprisonment from two (2) years to
five (5) years and a fine ranging from Fifty thousand
pesos (P50,000) to Two hundred thousand pesos
(P200,000), shall be imposed on any person who is found
guilty of committing any of the acts mentioned in Section
155, Section168, and Subsection169.1.

Based on the foregoing discussion, the IPO Director of Legal

Affairs had jurisdiction to decide the petitioners administrative
case against respondents and the IPO Director General had
exclusive jurisdiction over the appeal of the judgment of the IPO
Director of Legal Affairs.

Unfair Competition

The Court will no longer touch on the issue of the validity or

propriety of the 22 December 2003 Decision of the IPO Director of
Legal Affairs which: (1) directed the cancellation of the certificate

of registration of respondent Sehwani, Incorporated for the mark

IN-N-OUT and (2) ordered respondents to permanently cease and
desist from using the disputed mark on its goods and
business. Such an issue has already been settled by this Court in
its final and executory Decision dated 15 October 2007 in G.R. No.
171053, Sehwani, Incorporated v. In-N-Out Burger,[44] ultimately
affirming the foregoing judgment of the IPO Director of Legal
Affairs. That petitioner has the superior right to own and use the
IN-N-OUT trademarks vis--vis respondents is a finding which this
Court may no longer disturb under the doctrine of conclusiveness
of judgment. In conclusiveness of judgment, any right, fact, or
matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which
judgment is rendered on the merits is conclusively settled by the
judgment therein and cannot again be litigated between the
parties and their privies whether or not the claims, demands,
purposes, or subject matters of the two actions are the same. [45]

Thus, the only remaining issue for this Court to resolve is

whether the IPO Director General correctly found respondents
guilty of unfair competition for which he awarded damages to
petitioner.

The essential elements of an action for unfair competition

are (1) confusing similarity in the general appearance of the
goods and (2) intent to deceive the public and defraud a
competitor. The confusing similarity may or may not result from
similarity in the marks, but may result from other external factors
in the packaging or presentation ofthe goods. The intent to
deceive and defraud may be inferred from the similarity of the
appearance of the goods as offered for sale to the
public. Actual fraudulent intent need not be shown.[46]

In his Decision dated 23 December 2005, the IPO Director

General ably explains the basis for his finding of the existence of
unfair competition in this case, viz:

The evidence on record shows that the [herein

respondents] were not using their registered trademark
but that of the [petitioner]. [Respondent] SEHWANI, INC.
was issued a Certificate of Registration for IN N OUT (with
the Inside of the Letter O Formed like a Star) for
restaurant business in 1993. The restaurant opened only
in
2000
but
under
the
name
IN-N-OUT
BURGER.Apparently,
the
[respondents]
started
constructing the restaurant only after the [petitioner]
demanded that the latter desist from claiming ownership
of the mark IN-N-OUT and voluntarily cancel their
trademark registration. Moreover, [respondents] are also
using [petitioners] registered mark Double-Double for use
on hamburger products. In fact, the burger wrappers and
the French fries receptacles the [respondents] are using
do not bear the mark registered by the [respondent], but
the [petitioners] IN-N-OUT Burgers name and trademark
IN-N-OUT with Arrow design.

There is no evidence that the [respondents] were

authorized by the [petitioner] to use the latters marks in
the business. [Respondents] explanation that they are not
using their own registered trademark due to the difficulty
in printing the star does not justify the unauthorized use
of the [petitioners] trademark instead.

Further, [respondents] are giving their products the

general appearance that would likely influence

purchasers to believe that these products are those of the

[petitioner]. The intention to deceive may be inferred
from the similarity of the goods as packed and offered for
sale, and, thus, action will lie to restrain such unfair
competition. x x x.

xxxx

[Respondents]
use
of
IN-N-OUT
BURGER
in busineses signages reveals fraudulent intent to deceive
purchasers. Exhibit GG, which shows the business
establishment of [respondents] illustrates the imitation of
[petitioners] corporate name IN-N-OUT and signage IN-NOUT BURGER. Even the Director noticed it and held:

We also note that In-N-Out Burger is likewise,

[petitioners] corporate name. It has used the IN-N-OUT
Burger name in its restaurant business in Baldwin
Park, California in the United States of America since
1948. Thus it has the exclusive right to use
the tradenems In-N-Out Burger in the Philippines and the
respondents are unlawfully using and appropriating the
same.

The
Office
cannot
give
credence
to
the
[respondents] claim of good faith and that they have
openly and continuously used the subject mark since
1982 and is (sic) in the process of expanding its
business. They contend that assuming that there is value
in the foreign registrations presented as evidence by the
[petitioner], the purported exclusive right to the use of
the subject mark based on such foreign registrations is
not essential to a right of action for unfair competition.

[Respondents] also claim that actual or probable

deception and confusion on the part of customers by
reason of respondents practices must always appear, and
in the present case, the BLA has found none. This Office
finds the arguments untenable.

In contrast, the [respondents] have the burden of

evidence to prove that they do not have fraudulent intent
in using the mark IN-N-OUT. To prove their good faith,
[respondents] could have easily offered evidence of use
of their registered trademark, which they claimed to be
using as early as 1982, but did not.

[Respondents] also failed to explain why they are

using
the
marks
of
[petitioner]
particularly
DOUBLE DOUBLE, and the mark IN-N-OUT Burger and
Arrow Design. Even in their listing of menus,
[respondents]
used
[Appellants]
marks
of
DOUBLE DOUBLE and IN-N-OUT Burger and Arrow
Design. In addition, in the wrappers and receptacles being
used by the [respondents] which also contained the
marks of the [petitioner], there is no notice in such
wrappers and receptacles that the hamburger and French
fries are products of the [respondents].Furthermore, the
receipts issued by the [respondents] even indicate
representing IN-N-OUT. These acts cannot be considered
acts in good faith. [47]

Administrative proceedings are governed by the substantial

evidence rule. A finding of guilt in an administrative case would

have to be sustained for as long as it is supported by substantial

evidence that the respondent has committed acts stated in the
complaint or formal charge. As defined, substantial evidence is
such relevant evidence as a reasonable mind may accept as
adequate to support a conclusion. [48] As recounted by the IPO
Director General in his decision, there is more than enough
substantial evidence to support his finding that respondents are
guilty of unfair competition.

With such finding, the award of damages in favor of

petitioner is but proper. This is in accordance with Section 168.4
of the Intellectual Property Code, which provides that the
remedies under Sections 156, 157 and 161 for infringement shall
apply mutatis mutandis to unfair competition. The remedies
provided under Section 156 include the right to damages, to be
computed in the following manner:

Section 156. Actions, and Damages and Injunction

for Infringement.156.1 The owner of a registered mark
may recover damages from any person who infringes his
rights, and the measure of the damages suffered shall be
either the reasonable profit which the complaining party
would have made, had the defendant not infringed his
rights, or the profit which the defendant actually made
out of the infringement, or in the event such measure of
damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a
reasonable percentage based upon the amount of gross
sales of the defendant or the value of the services in
connection with which the mark or trade name was used
in the infringement of the rights of the complaining party.

In the present case, the Court deems it just and fair that the
IPO Director General computed the damages due to petitioner by
applying the reasonable percentage of 30% to the respondents
gross sales, and then doubling the amount thereof on account of
respondents actual intent to mislead the public or defraud the
petitioner,[49] thus, arriving at the amount of actual damages
of P212,574.28.

Taking into account the deliberate intent of respondents to

engage in unfair competition, it is only proper that petitioner be
awarded exemplary damages. Article 2229 of the Civil Code
provides that such damages may be imposed by way of example
or correction for the public good, such as the enhancement of the
protection accorded to intellectual property and the prevention of
similar acts of unfair competition. However, exemplary damages
are not meant to enrich one party or to impoverish another, but to
serve as a deterrent against or as a negative incentive to curb
socially deleterious action.[50] While there is no hard and fast rule
in determining the fair amount of exemplary damages, the award
of exemplary damages should be commensurate with the actual
loss
or
injury
suffered.[51] Thus,
exemplary
damages
of P500,000.00 should be reduced to P250,000.00 which more
closely approximates the actual damages awarded.

In accordance with Article 2208(1) of the Civil Code,

attorneys fees may likewise be awarded to petitioner since
exemplary damages are awarded to it. Petitioner was compelled
to protect its rights over the disputed mark. The amount
of P500,000.00 is more than reasonable, given the fact that the
case has dragged on for more than seven years, despite the
respondents
failure
to
present
countervailing
evidence. Considering moreover the reputation of petitioners

counsel, the actual attorneys fees paid by petitioner would far

exceed the amount that was awarded to it. [52]

IN VIEW OF THE FOREGOING, the instant Petition

is GRANTED. The assailed Decision of the Court of Appeals in CAG.R.
SP
No.
92785,
promulgated
on 18
July
2006,
is REVERSED. The Decision of the IPO Director General, dated 23
December 2005, is hereby REINSTATED IN PART, with the
modification that the amount of exemplary damages awarded be
reduced to P250,000.00.

SO ORDERED.

FIRST DIVISION

[G.R. No. 146364. June 3, 2004]

COLITO T. PAJUYO, petitioner, vs. COURT OF APPEALS and EDDIE

GUEVARRA, respondents.
DECISION
CARPIO, J.:

The Case
Before us is a petition for review of the 21 June 2000 Decision and 14
December 2000 Resolution of the Court of Appeals in CA-G.R. SP No.
43129. The Court of Appeals set aside the 11 November 1996 decision of the
Regional Trial Court of Quezon City, Branch 81, affirming the 15 December
1995 decision of the Metropolitan Trial Court of Quezon City, Branch 31.
[1]

[2]

[3]

[4]

[5]

[6]

The Antecedents
In June 1979, petitioner Colito T. Pajuyo (Pajuyo) paid P400 to a certain
Pedro Perez for the rights over a 250-square meter lot in Barrio Payatas,
Quezon City. Pajuyo then constructed a house made of light materials on the
lot. Pajuyo and his family lived in the house from 1979 to 7 December 1985.
On 8 December 1985, Pajuyo and private respondent Eddie Guevarra
(Guevarra) executed a Kasunduan or agreement. Pajuyo, as owner of the
house, allowed Guevarra to live in the house for free provided Guevarra would
maintain the cleanliness and orderliness of the house. Guevarra promised that
he would voluntarily vacate the premises on Pajuyos demand.
In September 1994, Pajuyo informed Guevarra of his need of the house
and demanded that Guevarra vacate the house. Guevarra refused.
Pajuyo filed an ejectment case against Guevarra with the Metropolitan
Trial Court of Quezon City, Branch 31 (MTC).
In his Answer, Guevarra claimed that Pajuyo had no valid title or right of
possession over the lot where the house stands because the lot is within the
150 hectares set aside by Proclamation No. 137 for socialized housing.
Guevarra pointed out that from December 1985 to September 1994, Pajuyo
did not show up or communicate with him. Guevarra insisted that neither he
nor Pajuyo has valid title to the lot.
On 15 December 1995, the MTC rendered its decision in favor of Pajuyo.
The dispositive portion of the MTC decision reads:
WHEREFORE, premises considered, judgment is hereby rendered for the plaintiff
and against defendant, ordering the latter to:
A) vacate the house and lot occupied by the defendant or any other person or persons
claiming any right under him;
B) pay unto plaintiff the sum of THREE HUNDRED PESOS (P300.00) monthly as
reasonable compensation for the use of the premises starting from the last demand;
C) pay plaintiff the sum of P3,000.00 as and by way of attorneys fees; and
D) pay the cost of suit.

SO ORDERED.

[7]

Aggrieved, Guevarra appealed to the Regional Trial Court of Quezon City,

Branch 81 (RTC).

On 11 November 1996, the RTC affirmed the MTC decision. The

dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, the Court finds no reversible error in the
decision appealed from, being in accord with the law and evidence presented, and the
same is hereby affirmed en toto.
SO ORDERED.

[8]

Guevarra received the RTC decision on 29 November 1996. Guevarra had

only until 14 December 1996 to file his appeal with the Court of Appeals.
Instead of filing his appeal with the Court of Appeals, Guevarra filed with the
Supreme Court a Motion for Extension of Time to File Appeal by Certiorari
Based on Rule 42 (motion for extension). Guevarra theorized that his appeal
raised pure questions of law. The Receiving Clerk of the Supreme Court
received the motion for extension on 13 December 1996 or one day before
the right to appeal expired.
On 3 January 1997, Guevarra filed his petition for review with the
Supreme Court.
On 8 January 1997, the First Division of the Supreme Court issued a
Resolution referring the motion for extension to the Court of Appeals which
has concurrent jurisdiction over the case. The case presented no special and
important matter for the Supreme Court to take cognizance of at the first
instance.
[9]

On 28 January 1997, the Thirteenth Division of the Court of Appeals

issued a Resolution granting the motion for extension conditioned on the
timeliness of the filing of the motion.
[10]

On 27 February 1997, the Court of Appeals ordered Pajuyo to comment

on Guevaras petition for review. On 11 April 1997, Pajuyo filed his Comment.
On 21 June 2000, the Court of Appeals issued its decision reversing the
RTC decision. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the assailed Decision of the court a quo in Civil
Case No. Q-96-26943 is REVERSED and SET ASIDE; and it is hereby declared that
the ejectment case filed against defendant-appellant is without factual and legal basis.
SO ORDERED.

[11]

Pajuyo filed a motion for reconsideration of the decision. Pajuyo pointed

out that the Court of Appeals should have dismissed outright Guevarras
petition for review because it was filed out of time. Moreover, it was Guevarras
counsel and not Guevarra who signed the certification against forumshopping.
On 14 December 2000, the Court of Appeals issued a resolution denying
Pajuyos motion for reconsideration. The dispositive portion of the resolution
reads:
WHEREFORE, for lack of merit, the motion for reconsideration is
hereby DENIED. No costs.
SO ORDERED.

[12]

The Ruling of the MTC

The MTC ruled that the subject of the agreement between Pajuyo and
Guevarra is the house and not the lot. Pajuyo is the owner of the house, and
he allowed Guevarra to use the house only by tolerance. Thus, Guevarras
refusal to vacate the house on Pajuyos demand made Guevarras continued
possession of the house illegal.
The Ruling of the RTC
The RTC upheld the Kasunduan, which established the landlord and
tenant relationship between Pajuyo and Guevarra. The terms of
the Kasunduan bound Guevarra to return possession of the house on
demand.
The RTC rejected Guevarras claim of a better right under Proclamation
No. 137, the Revised National Government Center Housing Project Code of
Policies and other pertinent laws. In an ejectment suit, the RTC has no power
to decide Guevarras rights under these laws. The RTC declared that in an
ejectment case, the only issue for resolution is material or physical
possession, not ownership.
The Ruling of the Court of Appeals

The Court of Appeals declared that Pajuyo and Guevarra are squatters.
Pajuyo and Guevarra illegally occupied the contested lot which the
government owned.
Perez, the person from whom Pajuyo acquired his rights, was also a
squatter. Perez had no right or title over the lot because it is public land. The
assignment of rights between Perez and Pajuyo, and the Kasunduan between
Pajuyo and Guevarra, did not have any legal effect. Pajuyo and Guevarra are
in pari delicto or in equal fault. The court will leave them where they are.
The Court of Appeals reversed the MTC and RTC rulings, which held
the Kasunduan between Pajuyo and Guevarra created a legal tie akin to
of a landlord and tenant relationship. The Court of Appeals ruled
the Kasunduan is not a lease contract but a commodatum because
agreement is not for a price certain.

that
that
that
the

Since Pajuyo admitted that he resurfaced only in 1994 to claim the

property, the appellate court held that Guevarra has a better right over the
property under Proclamation No. 137.President Corazon C. Aquino (President
Aquino) issued Proclamation No. 137 on 7 September 1987. At that time,
Guevarra was in physical possession of the property. Under Article VI of the
Code of Policies Beneficiary Selection and Disposition of Homelots and
Structures in the National Housing Project (the Code), the actual occupant or
caretaker of the lot shall have first priority as beneficiary of the project. The
Court of Appeals concluded that Guevarra is first in the hierarchy of priority.
In denying Pajuyos motion for reconsideration, the appellate court
debunked Pajuyos claim that Guevarra filed his motion for extension beyond
the period to appeal.
The Court of Appeals pointed out that Guevarras motion for extension filed
before the Supreme Court was stamped 13 December 1996 at 4:09 PM by the
Supreme Courts Receiving Clerk. The Court of Appeals concluded that the
motion for extension bore a date, contrary to Pajuyos claim that the motion for
extension was undated. Guevarra filed the motion for extension on time on 13
December 1996 since he filed the motion one day before the expiration of the
reglementary period on 14 December 1996. Thus, the motion for extension
properly complied with the condition imposed by the Court of Appeals in its 28
January 1997 Resolution. The Court of Appeals explained that the thirty-day
extension to file the petition for review was deemed granted because of such
compliance.
The Court of Appeals rejected Pajuyos argument that the appellate court
should have dismissed the petition for review because it was Guevarras

counsel and not Guevarra who signed the certification against forumshopping. The Court of Appeals pointed out that Pajuyo did not raise this
issue in his Comment. The Court of Appeals held that Pajuyo could not now
seek the dismissal of the case after he had extensively argued on the merits
of the case. This technicality, the appellate court opined, was clearly an
afterthought.
The Issues
Pajuyo raises the following issues for resolution:
WHETHER THE COURT OF APPEALS ERRED OR ABUSED ITS AUTHORITY
AND DISCRETION TANTAMOUNT TO LACK OF JURISDICTION:
1) in GRANTING, instead of denying, Private Respondents Motion for an
Extension of thirty days to file petition for review at the time when there
was no more period to extend as the decision of the Regional Trial Court
had already become final and executory.
2) in giving due course, instead of dismissing, private respondents Petition for
Review even though the certification against forum-shopping was signed
only by counsel instead of by petitioner himself.
3) in ruling that the Kasunduan voluntarily entered into by the parties was in
fact a commodatum, instead of a Contract of Lease as found by the
Metropolitan Trial Court and in holding that the ejectment case filed against
defendant-appellant is without legal and factual basis.
4) in reversing and setting aside the Decision of the Regional Trial Court in
Civil Case No. Q-96-26943 and in holding that the parties are in pari
delicto being both squatters, therefore, illegal occupants of the contested
parcel of land.
5) in deciding the unlawful detainer case based on the so-called Code of
Policies of the National Government Center Housing Project instead of
deciding the same under the Kasunduan voluntarily executed by the
parties, the terms and conditions of which are the laws between
themselves.[13]

The Ruling of the Court

The procedural issues Pajuyo is raising are baseless. However, we find
merit in the substantive issues Pajuyo is submitting for resolution.

Procedural Issues
Pajuyo insists that the Court of Appeals should have dismissed outright
Guevarras petition for review because the RTC decision had already become
final and executory when the appellate court acted on Guevarras motion for
extension to file the petition. Pajuyo points out that Guevarra had only one day
before the expiry of his period to appeal the RTC decision.Instead of filing the
petition for review with the Court of Appeals, Guevarra filed with this Court an
undated motion for extension of 30 days to file a petition for review. This Court
merely referred the motion to the Court of Appeals. Pajuyo believes that the
filing of the motion for extension with this Court did not toll the running of the
period to perfect the appeal. Hence, when the Court of Appeals received the
motion, the period to appeal had already expired.
We are not persuaded.
Decisions of the regional trial courts in the exercise of their appellate
jurisdiction are appealable to the Court of Appeals by petition for review in
cases involving questions of fact or mixed questions of fact and law.
Decisions of the regional trial courts involving pure questions of law are
appealable directly to this Court by petition for review. These modes of
appeal are now embodied in Section 2, Rule 41 of the 1997 Rules of Civil
Procedure.
[14]

[15]

Guevarra believed that his appeal of the RTC decision involved only
questions of law. Guevarra thus filed his motion for extension to file petition for
review before this Court on 14 December 1996. On 3 January 1997, Guevarra
then filed his petition for review with this Court. A perusal of Guevarras petition
for review gives the impression that the issues he raised were pure questions
of law. There is a question of law when the doubt or difference is on what the
law is on a certain state of facts. There is a question of fact when the doubt
or difference is on the truth or falsity of the facts alleged.
[16]

[17]

In his petition for review before this Court, Guevarra no longer disputed
the facts. Guevarras petition for review raised these questions: (1) Do
ejectment cases pertain only to possession of a structure, and not the lot on
which the structure stands? (2) Does a suit by a squatter against a fellow
squatter constitute a valid case for ejectment? (3) Should a Presidential
Proclamation governing the lot on which a squatters structure stands be
considered in an ejectment suit filed by the owner of the structure?
These questions call for the evaluation of the rights of the parties under
the law on ejectment and the Presidential Proclamation. At first glance, the

questions Guevarra raised appeared purely legal. However, some factual

questions still have to be resolved because they have a bearing on the legal
questions raised in the petition for review. These factual matters refer to the
metes and bounds of the disputed property and the application of Guevarra as
beneficiary of Proclamation No. 137.
The Court of Appeals has the power to grant an extension of time to file a
petition for review. In Lacsamana v. Second Special Cases Division of the
Intermediate Appellate Court, we declared that the Court of Appeals could
grant extension of time in appeals by petition for review. In Liboro v. Court of
Appeals, we clarified that the prohibition against granting an extension of
time applies only in a case where ordinary appeal is perfected by a mere
notice of appeal. The prohibition does not apply in a petition for review where
the pleading needs verification. A petition for review, unlike an ordinary
appeal, requires preparation and research to present a persuasive position.
The drafting of the petition for review entails more time and effort than filing
a notice of appeal. Hence, the Court of Appeals may allow an extension of
time to file a petition for review.
[18]

[19]

[20]

[21]

In the more recent case of Commissioner of Internal Revenue v. Court

of Appeals, we held that Liboros clarification of Lacsamana is consistent
with the Revised Internal Rules of the Court of Appeals and Supreme Court
Circular No. 1-91. They all allow an extension of time for filing petitions for
review with the Court of Appeals. The extension, however, should be limited to
only fifteen days save in exceptionally meritorious cases where the Court of
Appeals may grant a longer period.
[22]

A judgment becomes final and executory by operation of law. Finality of

judgment becomes a fact on the lapse of the reglementary period to appeal if
no appeal is perfected. The RTC decision could not have gained finality
because the Court of Appeals granted the 30-day extension to Guevarra.
[23]

The Court of Appeals did not commit grave abuse of discretion when it
approved Guevarras motion for extension. The Court of Appeals gave due
course to the motion for extension because it complied with the condition set
by the appellate court in its resolution dated 28 January 1997. The resolution
stated that the Court of Appeals would only give due course to the motion for
extension if filed on time. The motion for extension met this condition.
The material dates to consider in determining the timeliness of the filing of
the motion for extension are (1) the date of receipt of the judgment or final
order or resolution subject of the petition, and (2) the date of filing of the
motion for extension. It is the date of the filing of the motion or pleading, and
not the date of execution, that determines the timeliness of the filing of that
[24]

motion or pleading. Thus, even if the motion for extension bears no date, the
date of filing stamped on it is the reckoning point for determining the
timeliness of its filing.
Guevarra had until 14 December 1996 to file an appeal from the RTC
decision. Guevarra filed his motion for extension before this Court on 13
December 1996, the date stamped by this Courts Receiving Clerk on the
motion for extension. Clearly, Guevarra filed the motion for extension exactly
one day before the lapse of the reglementary period to appeal.
Assuming that the Court of Appeals should have dismissed Guevarras
appeal on technical grounds, Pajuyo did not ask the appellate court to deny
the motion for extension and dismiss the petition for review at the earliest
opportunity. Instead, Pajuyo vigorously discussed the merits of the case. It
was only when the Court of Appeals ruled in Guevarras favor that Pajuyo
raised the procedural issues against Guevarras petition for review.
A party who, after voluntarily submitting a dispute for resolution, receives
an adverse decision on the merits, is estopped from attacking the jurisdiction
of the court. Estoppel sets in not because the judgment of the court is a valid
and conclusive adjudication, but because the practice of attacking the courts
jurisdiction after voluntarily submitting to it is against public policy.
[25]

[26]

In his Comment before the Court of Appeals, Pajuyo also failed to discuss
Guevarras failure to sign the certification against forum shopping. Instead,
Pajuyo harped on Guevarras counsel signing the verification, claiming that the
counsels verification is insufficient since it is based only on mere information.
A partys failure to sign the certification against forum shopping is different
from the partys failure to sign personally the verification. The certificate of
non-forum shopping must be signed by the party, and not by counsel. The
certification of counsel renders the petition defective.
[27]

[28]

On the other hand, the requirement on verification of a pleading is a formal

and not a jurisdictional requisite. It is intended simply to secure an assurance
that what are alleged 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 party need not sign the verification. A partys representative,
lawyer or any person who personally knows the truth of the facts alleged in
the pleading may sign the verification.
[29]

[30]

[31]

We agree with the Court of Appeals that the issue on the certificate against
forum shopping was merely an afterthought. Pajuyo did not call the Court of
Appeals attention to this defect at the early stage of the proceedings. Pajuyo
raised this procedural issue too late in the proceedings.

Absence of Title over the Disputed Property will not Divest the Courts of
Jurisdiction to Resolve the Issue of Possession
Settled is the rule that the defendants claim of ownership of the disputed
property will not divest the inferior court of its jurisdiction over the ejectment
case. Even if the pleadings raise the issue of ownership, the court may pass
on such issue to determine only the question of possession, especially if the
ownership is inseparably linked with the possession. The adjudication on the
issue of ownership is only provisional and will not bar an action between the
same parties involving title to the land. This doctrine is a necessary
consequence of the nature of the two summary actions of ejectment, forcible
entry and unlawful detainer, where the only issue for adjudication is the
physical or material possession over the real property.
[32]

[33]

[34]

[35]

In this case, what Guevarra raised before the courts was that he and
Pajuyo are not the owners of the contested property and that they are mere
squatters. Will the defense that the parties to the ejectment case are not the
owners of the disputed lot allow the courts to renounce their jurisdiction over
the case? The Court of Appeals believed so and held that it would just leave
the parties where they are since they are in pari delicto.
We do not agree with the Court of Appeals.
Ownership or the right to possess arising from ownership is not at issue in
an action for recovery of possession. The parties cannot present evidence to
prove ownership or right to legal possession except to prove the nature of the
possession when necessary to resolve the issue of physical possession. The
same is true when the defendant asserts the absence of title over the
property. The absence of title over the contested lot is not a ground for the
courts to withhold relief from the parties in an ejectment case.
[36]

The only question that the courts must resolve in ejectment proceedings is
- who is entitled to the physical possession of the premises, that is, to the
possession de facto and not to the possession de jure. It does not even
matter if a partys title to the property is questionable, or when both parties
intruded into public land and their applications to own the land have yet to be
approved by the proper government agency. Regardless of the actual
condition of the title to the property, the party in peaceable quiet possession
shall not be thrown out by a strong hand, violence or terror. Neither is the
unlawful withholding of property allowed. Courts will always uphold respect for
prior possession.
[37]

[38]

[39]

[40]

Thus, a party who can prove prior possession can recover such
possession even against the owner himself. Whatever may be the character
of his possession, if he has in his favor prior possession in time, he has the
security that entitles him to remain on the property until a person with a better
right lawfully ejects him. To repeat, the only issue that the court has to settle
in an ejectment suit is the right to physical possession.
[41]

[42]

In Pitargue v. Sorilla, the government owned the land in dispute. The

government did not authorize either the plaintiff or the defendant in the case of
forcible entry case to occupy the land. The plaintiff had prior possession and
had already introduced improvements on the public land. The plaintiff had a
pending application for the land with the Bureau of Lands when the defendant
ousted him from possession. The plaintiff filed the action of forcible entry
against the defendant. The government was not a party in the case of forcible
entry.
[43]

The defendant questioned the jurisdiction of the courts to settle the issue
of possession because while the application of the plaintiff was still pending,
title remained with the government, and the Bureau of Public Lands had
jurisdiction over the case. We disagreed with the defendant. We ruled that
courts have jurisdiction to entertain ejectment suits even before the resolution
of the application. The plaintiff, by priority of his application and of his entry,
acquired prior physical possession over the public land applied for as against
other private claimants. That prior physical possession enjoys legal protection
against other private claimants because only a court can take away such
physical possession in an ejectment case.
While the Court did not brand the plaintiff and the defendant
in Pitargue as squatters, strictly speaking, their entry into the disputed land
was illegal. Both the plaintiff and defendant entered the public land without the
owners permission. Title to the land remained with the government because it
had not awarded to anyone ownership of the contested public land. Both the
plaintiff and the defendant were in effect squatting on government
property. Yet, we upheld the courts jurisdiction to resolve the issue of
possession even if the plaintiff and the defendant in the ejectment case did
not have any title over the contested land.
[44]

Courts must not abdicate their jurisdiction to resolve the issue of physical
possession because of the public need to preserve the basic policy behind the
summary actions of forcible entry and unlawful detainer. The underlying
philosophy behind ejectment suits is to prevent breach of the peace and
criminal disorder and to compel the party out of possession to respect and
resort to the law alone to obtain what he claims is his. The party deprived of
[45]

possession must not take the law into his own hands. Ejectment proceedings
are summary in nature so the authorities can settle speedily actions to recover
possession because of the overriding need to quell social disturbances.
[46]

[47]

We further explained in Pitargue the greater interest that is at stake in

actions for recovery of possession. We made the following pronouncements
in Pitargue:
The question that is before this Court is: Are courts without jurisdiction to take
cognizance of possessory actions involving these public lands before final award is
made by the Lands Department, and before title is given any of the conflicting
claimants? It is one of utmost importance, as there are public lands everywhere and
there are thousands of settlers, especially in newly opened regions. It also involves a
matter of policy, as it requires the determination of the respective authorities and
functions of two coordinate branches of the Government in connection with public
land conflicts.
Our problem is made simple by the fact that under the Civil Code, either in the old,
which was in force in this country before the American occupation, or in the new, we
have a possessory action, the aim and purpose of which is the recovery of the physical
possession of real property, irrespective of the question as to who has the title thereto.
Under the Spanish Civil Code we had the accion interdictal, a summary proceeding
which could be brought within one year from dispossession (Roman Catholic Bishop
of Cebu vs. Mangaron, 6 Phil. 286, 291); and as early as October 1, 1901, upon the
enactment of the Code of Civil Procedure (Act No. 190 of the Philippine
Commission) we implanted the common law action of forcible entry (section 80 of
Act No. 190), the object of which has been stated by this Court to be to prevent
breaches of the peace and criminal disorder which would ensue from the
withdrawal of the remedy, and the reasonable hope such withdrawal would create
that some advantage must accrue to those persons who, believing themselves
entitled to the possession of property, resort to force to gain possession rather than
to some appropriate action in the court to assert their claims. (Supia and Batioco vs.
Quintero and Ayala, 59 Phil. 312, 314.) So before the enactment of the first Public
Land Act (Act No. 926) the action of forcible entry was already available in the courts
of the country. So the question to be resolved is, Did the Legislature intend, when it
vested the power and authority to alienate and dispose of the public lands in the Lands
Department, to exclude the courts from entertaining the possessory action of forcible
entry between rival claimants or occupants of any land before award thereof to any of
the parties? Did Congress intend that the lands applied for, or all public lands for that
matter, be removed from the jurisdiction of the judicial Branch of the Government, so
that any troubles arising therefrom, or any breaches of the peace or disorders caused
by rival claimants, could be inquired into only by the Lands Department to the

exclusion of the courts? The answer to this question seems to us evident. The Lands
Department does not have the means to police public lands; neither does it have the
means to prevent disorders arising therefrom, or contain breaches of the peace among
settlers; or to pass promptly upon conflicts of possession. Then its power is clearly
limited to disposition and alienation, and while it may decide conflicts of possession
in order to make proper award, the settlement of conflicts of possession which is
recognized in the court herein has another ultimate purpose, i.e., the protection of
actual possessors and occupants with a view to the prevention of breaches of the
peace. The power to dispose and alienate could not have been intended to include
the power to prevent or settle disorders or breaches of the peace among rival settlers
or claimants prior to the final award. As to this, therefore, the corresponding
branches of the Government must continue to exercise power and jurisdiction within
the limits of their respective functions. The vesting of the Lands Department with
authority to administer, dispose, and alienate public lands, therefore, must not be
understood as depriving the other branches of the Government of the exercise of
the respective functions or powers thereon, such as the authority to stop disorders
and quell breaches of the peace by the police, the authority on the part of the courts
to take jurisdiction over possessory actions arising therefrom not involving, directly
or indirectly, alienation and disposition.
Our attention has been called to a principle enunciated in American courts to the effect
that courts have no jurisdiction to determine the rights of claimants to public lands,
and that until the disposition of the land has passed from the control of the Federal
Government, the courts will not interfere with the administration of matters
concerning the same. (50 C. J. 1093-1094.) We have no quarrel with this principle.
The determination of the respective rights of rival claimants to public lands is
different from the determination of who has the actual physical possession or
occupation with a view to protecting the same and preventing disorder and breaches
of the peace. A judgment of the court ordering restitution of the possession of a parcel
of land to the actual occupant, who has been deprived thereof by another through the
use of force or in any other illegal manner, can never be prejudicial interference with
the disposition or alienation of public lands. On the other hand, if courts were
deprived of jurisdiction of cases involving conflicts of possession, that threat of
judicial action against breaches of the peace committed on public lands would be
eliminated, and a state of lawlessness would probably be produced between
applicants, occupants or squatters, where force or might, not right or justice, would
rule.
It must be borne in mind that the action that would be used to solve conflicts of
possession between rivals or conflicting applicants or claimants would be no other
than that of forcible entry. This action, both in England and the United States and in
our jurisdiction, is a summary and expeditious remedy whereby one in peaceful and

quiet possession may recover the possession of which he has been deprived by a
stronger hand, by violence or terror; its ultimate object being to prevent breach of the
peace and criminal disorder. (Supia and Batioco vs. Quintero and Ayala, 59 Phil. 312,
314.) The basis of the remedy is mere possession as a fact, of physical possession, not
a legal possession. (Mediran vs. Villanueva, 37 Phil. 752.) The title or right to
possession is never in issue in an action of forcible entry; as a matter of fact, evidence
thereof is expressly banned, except to prove the nature of the possession. (Second 4,
Rule 72, Rules of Court.) With this nature of the action in mind, by no stretch of the
imagination can conclusion be arrived at that the use of the remedy in the courts of
justice would constitute an interference with the alienation, disposition, and control of
public lands. To limit ourselves to the case at bar can it be pretended at all that its
result would in any way interfere with the manner of the alienation or disposition of
the land contested? On the contrary, it would facilitate adjudication, for the question
of priority of possession having been decided in a final manner by the courts, said
question need no longer waste the time of the land officers making the adjudication or
award. (Emphasis ours)
The Principle of Pari Delicto is not Applicable to Ejectment Cases
The Court of Appeals erroneously applied the principle of pari delicto to
this case.
Articles 1411 and 1412 of the Civil Code embody the principle of pari
delicto. We explained the principle of pari delicto in these words:
[48]

The rule of pari delicto is expressed in the maxims ex dolo malo non eritur
actio and in pari delicto potior est conditio defedentis. The law will not aid either
party to an illegal agreement. It leaves the parties where it finds them.
[49]

The application of the pari delicto principle is not absolute, as there are
exceptions to its application. One of these exceptions is where the application
of the pari delicto rule would violate well-established public policy.
[50]

In Drilon v. Gaurana, we reiterated the basic policy behind the summary

actions of forcible entry and unlawful detainer. We held that:
[51]

It must be stated that the purpose of an action of forcible entry and detainer is that,
regardless of the actual condition of the title to the property, the party in peaceable
quiet possession shall not be turned out by strong hand, violence or terror. In affording
this remedy of restitution the object of the statute is to prevent breaches of the peace
and criminal disorder which would ensue from the withdrawal of the remedy, and the

reasonable hope such withdrawal would create that some advantage must accrue to
those persons who, believing themselves entitled to the possession of property, resort
to force to gain possession rather than to some appropriate action in the courts to
assert their claims. This is the philosophy at the foundation of all these actions of
forcible entry and detainer which are designed to compel the party out of possession
to respect and resort to the law alone to obtain what he claims is his.
[52]

Clearly, the application of the principle of pari delicto to a case of

ejectment between squatters is fraught with danger. To shut out relief to
squatters on the ground of pari delicto would openly invite mayhem and
lawlessness. A squatter would oust another squatter from possession of the
lot that the latter had illegally occupied, emboldened by the knowledge that
the courts would leave them where they are. Nothing would then stand in the
way of the ousted squatter from re-claiming his prior possession at all cost.
Petty warfare over possession of properties is precisely what ejectment
cases or actions for recovery of possession seek to prevent. Even the owner
who has title over the disputed property cannot take the law into his own
hands to regain possession of his property. The owner must go to court.
[53]

Courts must resolve the issue of possession even if the parties to the
ejectment suit are squatters. The determination of priority and superiority of
possession is a serious and urgent matter that cannot be left to the squatters
to decide. To do so would make squatters receive better treatment under the
law. The law restrains property owners from taking the law into their own
hands. However, the principle of pari delicto as applied by the Court of
Appeals would give squatters free rein to dispossess fellow squatters or
violently retake possession of properties usurped from them. Courts should
not leave squatters to their own devices in cases involving recovery of
possession.
Possession is the only Issue for Resolution in an Ejectment Case
The case for review before the Court of Appeals was a simple case of
ejectment. The Court of Appeals refused to rule on the issue of physical
possession. Nevertheless, the appellate court held that the pivotal issue in this
case is who between Pajuyo and Guevarra has the priority right as beneficiary
of the contested land under Proclamation No. 137. According to the Court of
Appeals, Guevarra enjoys preferential right under Proclamation No. 137
because Article VI of the Code declares that the actual occupant or caretaker
is the one qualified to apply for socialized housing.
[54]

The ruling of the Court of Appeals has no factual and legal basis.
First. Guevarra did not present evidence to show that the contested lot is
part of a relocation site under Proclamation No. 137. Proclamation No. 137
laid down the metes and bounds of the land that it declared open for
disposition to bona fide residents.
The records do not show that the contested lot is within the land specified
by Proclamation No. 137. Guevarra had the burden to prove that the disputed
lot is within the coverage of Proclamation No. 137. He failed to do so.
Second. The Court of Appeals should not have given credence to
Guevarras unsubstantiated claim that he is the beneficiary of Proclamation
No. 137. Guevarra merely alleged that in the survey the project administrator
conducted, he and not Pajuyo appeared as the actual occupant of the lot.
There is no proof that Guevarra actually availed of the benefits of
Proclamation No. 137. Pajuyo allowed Guevarra to occupy the disputed
property in 1985. President Aquino signed Proclamation No. 137 into law on
11 March 1986. Pajuyo made his earliest demand for Guevarra to vacate the
property in September 1994.
During the time that Guevarra temporarily held the property up to the time
that Proclamation No. 137 allegedly segregated the disputed lot, Guevarra
never applied as beneficiary of Proclamation No. 137. Even when Guevarra
already knew that Pajuyo was reclaiming possession of the property,
Guevarra did not take any step to comply with the requirements of
Proclamation No. 137.
Third. Even assuming that the disputed lot is within the coverage of
Proclamation No. 137 and Guevarra has a pending application over the lot,
courts should still assume jurisdiction and resolve the issue of possession.
However, the jurisdiction of the courts would be limited to the issue of physical
possession only.
In Pitargue, we ruled that courts have jurisdiction over possessory
actions involving public land to determine the issue of physical possession.
The determination of the respective rights of rival claimants to public land is,
however, distinct from the determination of who has the actual physical
possession or who has a better right of physical possession. The
administrative disposition and alienation of public lands should be threshed
out in the proper government agency.
[55]

[56]

[57]

The Court of Appeals determination of Pajuyo and Guevarras rights under

Proclamation No. 137 was premature. Pajuyo and Guevarra were at most

merely potential beneficiaries of the law. Courts should not preempt the
decision of the administrative agency mandated by law to determine the
qualifications of applicants for the acquisition of public lands. Instead, courts
should expeditiously resolve the issue of physical possession in ejectment
cases to prevent disorder and breaches of peace.
[58]

Pajuyo is Entitled to Physical Possession of the Disputed Property

Guevarra does not dispute Pajuyos prior possession of the lot and
ownership of the house built on it. Guevarra expressly admitted the existence
and due execution of the Kasunduan.The Kasunduan reads:
Ako, si COL[I]TO PAJUYO, may-ari ng bahay at lote sa Bo. Payatas, Quezon City,
ay nagbibigay pahintulot kay G. Eddie Guevarra, na pansamantalang manirahan sa
nasabing bahay at lote ng walang bayad.Kaugnay nito, kailangang panatilihin nila ang
kalinisan at kaayusan ng bahay at lote.
Sa sandaling kailangan na namin ang bahay at lote, silay kusang aalis ng walang
reklamo.
Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the
house and lot free of rent, but Guevarra was under obligation to maintain the
premises in good condition. Guevarra promised to vacate the premises on
Pajuyos demand but Guevarra broke his promise and refused to heed
Pajuyos demand to vacate.
These facts make out a case for unlawful detainer. Unlawful detainer
involves the withholding by a person from another of the possession of real
property to which the latter is entitled after the expiration or termination of the
formers right to hold possession under a contract, express or implied.
[59]

Where the plaintiff allows the defendant to use his property by tolerance
without any contract, the defendant is necessarily bound by an implied
promise that he will vacate on demand, failing which, an action for unlawful
detainer will lie. The defendants refusal to comply with the demand makes
his continued possession of the property unlawful. The status of the
defendant in such a case is similar to that of a lessee or tenant whose term of
lease has expired but whose occupancy continues by tolerance of the owner.
[60]

[61]

[62]

This principle should apply with greater force in cases where a contract
embodies
the
permission
or
tolerance
to
use
the
property. The Kasunduan expressly articulated Pajuyos forbearance. Pajuyo

did not require Guevarra to pay any rent but only to maintain the house and lot
in good condition. Guevarra expressly vowed in the Kasunduan that he would
vacate the property on demand. Guevarras refusal to comply with Pajuyos
demand to vacate made Guevarras continued possession of the property
unlawful.
We do not subscribe to the Court of Appeals theory that the Kasunduan is
one of commodatum.
In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for a certain
time and return it. An essential feature of commodatum is that it is gratuitous.
Another feature of commodatum is that the use of the thing belonging to
another is for a certain period. Thus, the bailor cannot demand the return of
the thing loaned until after expiration of the period stipulated, or after
accomplishment of the use for which the commodatum is constituted. If the
bailor should have urgent need of the thing, he may demand its return for
temporary use. If the use of the thing is merely tolerated by the bailor, he can
demand the return of the thing at will, in which case the contractual relation is
called
a precarium. Under
the Civil
Code, precarium is
a
kind
of commodatum.
[63]

[64]

[65]

[66]

[67]

[68]

The Kasunduan reveals that the accommodation accorded by Pajuyo to

Guevarra was not essentially gratuitous. While the Kasunduan did not require
Guevarra to pay rent, it obligated him to maintain the property in good
condition. The imposition of this obligation makes the Kasunduan a contract
different from a commodatum. The effects of the Kasunduan are also different
from that of a commodatum. Case law on ejectment has treated relationship
based on tolerance as one that is akin to a landlord-tenant relationship where
the withdrawal of permission would result in the termination of the lease. The
tenants withholding of the property would then be unlawful. This is settled
jurisprudence.
[69]

Even assuming that the relationship between Pajuyo and Guevarra is one
of commodatum, Guevarra as bailee would still have the duty to turn over
possession of the property to Pajuyo, the bailor. The obligation to deliver or to
return the thing received attaches to contracts for safekeeping, or contracts of
commission, administration and commodatum. These contracts certainly
involve the obligation to deliver or return the thing received.
[70]

[71]

Guevarra turned his back on the Kasunduan on the sole ground that like
him, Pajuyo is also a squatter. Squatters, Guevarra pointed out, cannot enter
into a contract involving the land they illegally occupy. Guevarra insists that
the contract is void.

Guevarra should know that there must be honor even between

squatters. Guevarra freely entered into the Kasunduan. Guevarra cannot now
impugn the Kasunduan after he had benefited from it. The Kasunduan binds
Guevarra.
The Kasunduan is not void for purposes of determining who between
Pajuyo and Guevarra has a right to physical possession of the contested
property. The Kasunduan is the undeniable evidence of Guevarras recognition
of Pajuyos better right of physical possession. Guevarra is clearly a possessor
in bad faith. The absence of a contract would not yield a different result, as
there would still be an implied promise to vacate.
Guevarra contends that there is a pernicious evil that is sought to be
avoided, and that is allowing an absentee squatter who (sic) makes (sic) a
profit out of his illegal act. Guevarra bases his argument on the preferential
right given to the actual occupant or caretaker under Proclamation No. 137 on
socialized housing.
[72]

We are not convinced.

Pajuyo did not profit from his arrangement with Guevarra because
Guevarra stayed in the property without paying any rent. There is also no
proof that Pajuyo is a professional squatter who rents out usurped properties
to other squatters. Moreover, it is for the proper government agency to decide
who between Pajuyo and Guevarra qualifies for socialized housing. The only
issue that we are addressing is physical possession.
Prior possession is not always a condition sine qua non in ejectment.
This is one of the distinctions between forcible entry and unlawful detainer.
In forcible entry, the plaintiff is deprived of physical possession of his land or
building by means of force, intimidation, threat, strategy or stealth. Thus, he
must allege and prove prior possession. But in unlawful detainer, the
defendant unlawfully withholds possession after the expiration or termination
of his right to possess under any contract, express or implied. In such a case,
prior physical possession is not required.
[73]
[74]

[75]

[76]

Pajuyos withdrawal of his permission to Guevarra terminated

the Kasunduan. Guevarras transient right to possess the property ended as
well. Moreover, it was Pajuyo who was in actual possession of the property
because Guevarra had to seek Pajuyos permission to temporarily hold the
property and Guevarra had to follow the conditions set by Pajuyo in
the Kasunduan. Control over the property still rested with Pajuyo and this is
evidence of actual possession.

Pajuyos absence did not affect his actual possession of the disputed
property. Possession in the eyes of the law does not mean that a man has to
have his feet on every square meter of the ground before he is deemed in
possession. One may acquire possession not only by physical occupation,
but also by the fact that a thing is subject to the action of ones will. Actual or
physical occupation is not always necessary.
[77]

[78]

[79]

Ruling on Possession Does not Bind Title to the Land in Dispute

We are aware of our pronouncement in cases where we declared that
squatters and intruders who clandestinely enter into titled government
property cannot, by such act, acquire any legal right to said property. We
made this declaration because the person who had title or who had the right
to legal possession over the disputed property was a party in the ejectment
suit and that party instituted the case against squatters or usurpers.
[80]

In this case, the owner of the land, which is the government, is not a party
to the ejectment case. This case is between squatters. Had the government
participated in this case, the courts could have evicted the contending
squatters, Pajuyo and Guevarra.
Since the party that has title or a better right over the property is not
impleaded in this case, we cannot evict on our own the parties. Such a ruling
would discourage squatters from seeking the aid of the courts in settling the
issue of physical possession. Stripping both the plaintiff and the defendant of
possession just because they are squatters would have the same dangerous
implications as the application of the principle of pari delicto. Squatters would
then rather settle the issue of physical possession among themselves than
seek relief from the courts if the plaintiff and defendant in the ejectment case
would both stand to lose possession of the disputed property. This would
subvert the policy underlying actions for recovery of possession.
Since Pajuyo has in his favor priority in time in holding the property, he is
entitled to remain on the property until a person who has title or a better right
lawfully ejects him. Guevarra is certainly not that person. The ruling in this
case, however, does not preclude Pajuyo and Guevarra from introducing
evidence and presenting arguments before the proper administrative agency
to establish any right to which they may be entitled under the law.
[81]

In no way should our ruling in this case be interpreted to condone

squatting. The ruling on the issue of physical possession does not affect title
to the property nor constitute a binding and conclusive adjudication on the

merits on the issue of ownership. The owner can still go to court to recover
lawfully the property from the person who holds the property without legal
title. Our ruling here does not diminish the power of government agencies,
including local governments, to condemn, abate, remove or demolish illegal or
unauthorized structures in accordance with existing laws.
[82]

Attorneys Fees and Rentals

The MTC and RTC failed to justify the award of P3,000 attorneys fees to
Pajuyo. Attorneys fees as part of damages are awarded only in the instances
enumerated in Article 2208 of the Civil Code. Thus, the award of attorneys
fees is the exception rather than the rule. Attorneys fees are not awarded
every time a party prevails in a suit because of the policy that no premium
should be placed on the right to litigate. We therefore delete the attorneys
fees awarded to Pajuyo.
[83]

[84]

[85]

We sustain the P300 monthly rentals the MTC and RTC assessed against
Guevarra. Guevarra did not dispute this factual finding of the two courts. We
find the amount reasonable compensation to Pajuyo. The P300 monthly rental
is counted from the last demand to vacate, which was on 16 February 1995.
WHEREFORE, we GRANT the petition. The Decision dated 21 June 2000
and Resolution dated 14 December 2000 of the Court of Appeals in CA-G.R.
SP No. 43129 are SET ASIDE.The Decision dated 11 November 1996 of the
Regional Trial Court of Quezon City, Branch 81 in Civil Case No. Q-96-26943,
affirming the Decision dated 15 December 1995 of the Metropolitan Trial Court
of Quezon City, Branch 31 in Civil Case No. 12432, is REINSTATED with
MODIFICATION. The award of attorneys fees is deleted. No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna,
JJ., concur.

SECOND DIVISION
[G.R. No. 134217. May 11, 2000]

KENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and

managed by GEMMA DEMORAL-SAVAGE, petitioners, vs. JUDGE
APRONIANO B. TAYPIN, Presiding Judge, RTC-BR. 12, Cebu City, CEBU
PROVINCIAL PROSECUTOR'S OFFICE, NATIONAL BUREAU OF
INVESTIGATION, Region VII, Cebu City, JUANITA NG MENDOZA,
MENDCO DEVELOPMENT CORPORATION, ALFREDO SABJON and
DANTE SOSMEA, respondents.
DECISION
BELLOSILLO, J.: Supreme
Petitioners KENNETH ROY SAVAGE and K ANGELIN EXPORT TRADING,
owned and managed by GEMMA DEMORAL-SAVAGE, seek to nullify the
search warrant issued by respondent Judge Aproniano B. Taypin of the
Regional Trial Court, Br. 12 Cebu City, which resulted in the seizure of certain
pieces of wrought iron furniture from the factory of petitioners located in
Biasong, Talisay, Cebu. Their motion to quash the search warrant was denied
by respondent Judge as well as their motion to reconsider the denial. Hence,
this petition for certiorari.
The antecedent facts: Acting on a complaint lodged by private respondent Eric
Ng Mendoza, president and general manager of Mendco Development
Corporation (MENDCO), Supervising Agent Jose Ermie Monsanto of the
National Bureau of Investigation (NBI) filed an application for search warrant
with the Regional Trial Court of Cebu City. The application sought the
authorization to search the premises of K Angelin Export International located
in Biasong, Talisay, Cebu, and to seize the pieces of wrought iron furniture
found therein which were allegedly the object of unfair competition involving
design patents, punishable under Art. 189 of the Revised Penal Code as
amended. The assailed Search Warrant No. 637-10-1697-12 was issued by
respondent Judge on 16 October 1997 and executed in the afternoon of the
following day by NBI agents. Seized from the factory were several pieces of
furniture, indicated in the Inventory Sheet attached to the Return of Search
Warrant, and all items seized have remained in NBI custody up to the present.
[1]

[2]

[3]

[4]

On 30 October 1997 petitioners moved to quash the search warrant alleging

that: (a) the crime they were accused of did not exist; (b) the issuance of the
warrant was not based on probable cause; (c) the judge failed to ask the
witnesses searching questions; and, (d) the warrant did not particularly
describe the things to be seized.
[5]

On 10 November 1997 petitioners filed a Supplemental Motion to

Quash where they additionally alleged that the assailed warrant was applied
for without a certification against forum shopping. On 30 January 1998
respondent Judge denied the Motion to Quash and the Supplemental Motion
to Quash. On 2 March 1998 petitioners moved to reconsider the denial of
their motion to quash and alleged substantially the same grounds found in
their original Motion to Quash but adding thereto two (2) new grounds,
namely: (a) respondent court has no jurisdiction over the subject-matter; and,
(b) respondent court failed to "substantiate" the order sought to be
reconsidered. The denial of their last motion prompted petitioners to come to
this Court. Court
[6]

[7]

[8]

[9]

The principal issues that must be addressed in this petition are: (a) questions
involving jurisdiction over the offense; (b) the need for a certification of nonforum shopping; and, (c) the existence of the crime.
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual Property
Rights (IPR), citing in support thereof Supreme Court Administrative Order No.
113-95 designating certain branches of the Regional Trial Courts, Metropolitan
Trial Courts and Municipal Trial Courts in Cities as Special Courts for IPR. The
courts enumerated therein are mandated to try and decide violations of IPR
including Art. 189 of the Revised Penal Code committed within their respective
territorial jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9,
Cebu City, was designated Special Court for IPR for the 7th Judicial Region.
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that jurisdiction over all violations of IPR was thereafter confined to
the Regional Trial Courts.
[10]

[11]

The authority to issue search warrants was not among those mentioned in the
administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it may entertain pursuant to its
original jurisdiction. The authority to issue search warrants is inherent in all
courts and may be effected outside their territorial jurisdiction. In the instant
case, the premises searched located in Biasong, Talisay, Cebu, are well within
the territorial jurisdiction of the respondent court.
[12]

[13]

[14]

Petitioners apparently misconstrued the import of the designation of Special

Courts for IPR. Administrative Order No. 113-95 merely specified which court
could "try and decide" cases involving violations of IPR. It did not, and could
not, vest exclusive jurisdiction with regard to all matters (including the

issuance of search warrants and other judicial processes) in any one court.
Jurisdiction is conferred upon courts by substantive law; in this case, BP
Blg.129, and not by a procedural rule, much less by an administrative order.
The power to issue search warrants for violations of IPR has not been
exclusively vested in the courts enumerated in Supreme Court Administrative
Order No.113-95. J lexj
[15]

Petitioners next allege that the application for a search warrant should have
been dismissed outright since it was not accompanied by a certification of
non-forum shopping, citing as authority therefor Washington Distillers, Inc. v.
Court of Appeals. In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private
respondent sought a search warrant from the Manila Regional Trial Court only
after he was denied by the courts of Pampanga. The instant case differs
significantly, for here there is no allegation of forum-shopping, only failure to
acquire a certification against forum-shopping. The Rules of Court as
amended requires such certification only from initiatory pleadings, omitting
any mention of "applications." In contrast, Supreme Court Circular 04-94, the
old rule on the matter, required such certification even from "applications." Our
ruling in Washington Distillers required no such certification from applications
for search warrants. Hence, the absence of such certification will not result in
the dismissal of an application for search warrant.
[16]

[17]

The last question to be resolved is whether unfair competition involving design

patents punishable under Art. 189 of the Revised Penal Code exists in this
case. Prosecutor Ivan Herrero seems to agree as he filed the corresponding
Information against petitioners on 17 March 1998. However, since
the IPR Code took effect on 1 January 1998 any discussion contrary to the
view herein expressed would be pointless. The repealing clause of the Code
provides [18]

All Acts and parts of Acts inconsistent herewith, more particularly,

Republic Act No. 165, as amended; Republic Act No. 166, as
amended; and Articles 188 and 189 of the Revised Penal
Code; Presidential Decree No. 49, including Presidential Decree
No. 285, as amended, are hereby repealed (italics ours).
[19]

The issue involving the existence of "unfair competition" as a felony involving

design patents, referred to in Art. 189 of the Revised Penal Code, has been
rendered moot and academic by the repeal of the article.

The search warrant cannot even be issued by virtue of a possible violation of

the IPR Code. The assailed acts specifically alleged were the manufacture
and fabrication of wrought iron furniture similar to that patented by MENDCO,
without securing any license or patent for the same, for the purpose of
deceiving or defrauding Mendco and the buying public. The Code defines
"unfair competition" thus - Lexj uris
[20]

168.2. Any person who shall employ deception or any other

means contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or
shall commit any acts calculated to produce said result, shall be
guilty of unfair competition, and shall be subject to an action
therefor.
168.3. In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be
deemed guilty of unfair competition:
(a) Any person who is selling his goods and gives
them the general appearance of goods of another
manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in
which they are contained, or the devices or words
thereon, or in any other feature of their appearance
which would be likely to influence purchasers to
believe that the goods offered are those of a
manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the
public and defraud another of his legitimate trade, or
any subsequent vendor of such goods or any agent of
any vendor engaged in selling such goods with a like
purpose;
(b) Any person who by any artifice, or device, or who
employs any other means calculated to induce the
false belief that such person is offering the services of
another who has identified such services in the mind
of the public; or

(c) Any person who shall make any false statement in

the course of trade or who shall commit any other act
contrary to good faith of a nature calculated to
discredit goods, businesses or services of another.
[21]

There is evidently no mention of any crime of "unfair competition" involving

design patents in the controlling provisions on Unfair Competition. It is
therefore unclear whether the crime exists at all, for the enactment of RA 8293
did not result in the reenactment of Art. 189 of the Revised Penal Code. In the
face of this ambiguity, we must strictly construe the statute against the State
and liberally in favor of the accused, for penal statutes cannot be enlarged or
extended by intendment, implication or any equitable consideration.
Respondents invoke jurisprudence to support their contention that "unfair
competition" exists in this case. However, we are prevented from applying
these principles, along with the new provisions on Unfair Competition found in
the IPR Code, to the alleged acts of the petitioners, for such acts constitute
patent infringement as defined by the same Code-Juri smis
[22]

[23]

[24]

Sec. 76. Civil Action for Infringement. - 76.1. The making, using,
offering for sale, selling, or importing a patented product or a
product obtained directly or indirectly from a patented process, or
the use of a patented process without authorization of the
patentee constitutes patent infringement.
[25]

Although this case traces its origins to the year 1997 or before the enactment
of the IPR Code, we are constrained to invoke the provisions of the Code.
Article 22 of the Revised Penal Code provides that penal laws shall be applied
retrospectively, if such application would be beneficial to the accused. Since
the IPR Code effectively obliterates the possibility of any criminal liability
attaching to the acts alleged, then that Code must be applied here.
[26]

In the issuance of search warrants, the Rules of Court requires a finding of

probable cause in connection with one specific offense to be determined
personally by the judge after examination of the complainant and the
witnesses he may produce, and particularly describing the place to be
searched and the things to be seized. Hence, since there is no crime to
speak of, the search warrant does not even begin to fulfill these stringent
requirements and is therefore defective on its face. The nullity of the warrant
renders moot and academic the other issues raised in petitioners' Motion to
Quash and Motion for Reconsideration. Since the assailed search warrant is
null and void, all property seized by virtue thereof should be returned to
petitioners in accordance with established jurisprudence.
[27]

[28]

In petitioners' Reply with Additional Information they allege that the trial court
denied their motion to transfer their case to a Special Court for IPR. We have
gone through the records and we fail to find any trace of such motion or even
a copy of the order denying it. All that appears in the records is a copy of an
order granting a similar motion filed by a certain Minnie Dayon with regard
to Search Warrant No. 639-10-1697-12. This attachment being immaterial
we shall give it no further attention. Jjj uris
[29]

WHEREFORE, the Order of the Regional Trial Court, Br. 12, Cebu City, dated
30 January 1998, denying the Motion to Quash Search Warrant No. 637-101697-12 dated 30 October 1997 and the Supplemental Motion to Quash dated
10 November 1997 filed by petitioners, as well as the Order dated 8 April 1998
denying petitioners' Motion for Reconsideration dated 2 March 1998, is SET
ASIDE. Search Warrant No. 637-10-1697-12 issued on 16 October 1997 is
ANNULLED and SET ASIDE, and respondents are ordered to return to
petitioners the property seized by virtue of the illegal search warrant.
SO ORDERED.
Mendoza, Quisumbing, and Buena, JJ., concur.
De Leon, Jr., J., on leave.

SECOND DIVISION
PHILIPPINE AIRLINES, INC., G.R. No. 143088
MANOLO AQUINO, JORGE
MA. CUI, JR. and PATRICIA Present:
CHIONG,
Petitioners, PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
-versus- AZCUNA, and
GARCIA, JJ.
Promulgated:
FLIGHT ATTENDANTS AND

STEWARDS ASSOCIATION OF
THE PHILIPPINES (FASAP) and January 24, 2006
LEONARDO BHAGWANI,
Respondents.
x----------------------------------------------------------------------------------------x

AZCUNA, J.:

DECISION

This petition for review on certiorari under Rule 45 of the Rules of

Court presents a recurring question regarding the Courts
requirement of a certification of non-forum shopping.
Petitioners Philippine Airlines, Inc. (PAL) and Manolo Aquino,
Jorge Ma. Cui, Jr. and Patricia Chiong, in their capacity as
Executive Vice-President Administration and Services, Manager
International Cabin Crew and Assistant Vice-President Cabin
Services, respectively, are before the Court seeking the reversal
of the resolution of the Court of Appeals in C.A. G.R. No. SP-56850,
dated January 31, 2000, dismissing their appeal and the
resolution of May 11, 2000, denying the motion for
reconsideration.
The facts on the conflict between PAL and respondents Flight
Attendants and Stewards Association of the Philippines (FASAP)
and Leonardo Bhagwani are not necessary for the Courts
resolution of the petition. It is enough to state that on May 14,
1997 FASAP and Leonardo Bhagwani filed a complaint for unfair
labor practice, illegal suspension and illegal dismissal against
petitioners before the Labor Arbiter of the National Labor
Relations Commission (NLRC). The Labor Arbiter rendered a
decision holding that PAL committed unfair labor practice and
illegal dismissal of Bhagwani and, consequently, ordered the
payment of damages. The NLRC later modified the decision by

setting aside the finding that PAL was guilty of unfair labor
practice, but affirming the rest of the decision.
What is relevant to the case is the subsequent appeal to the
Court of Appeals. When petitioners filed a petition for certiorari
against the decision with the Court of Appeals, it was
accompanied by a Certification of Non-Forum Shopping executed
by Cesar R. Lamberte and Susan Del Carmen, Vice-President
Human Resources and Assistant Vice-President Cabin Services of
PAL, respectively, who are not parties to the case. The
certification, however, was without proof that the two affiants had
authority to sign in behalf of petitioners. As a result, the Court of
Appeals dismissed the case for failure to show the authority of
affiants to sign for PAL and for failure of the other petitioners to
join in the execution of the certification. A motion for
reconsideration was filed with a Secretarys Certificate attached
evidencing that affiants Cesar R. Lamberte and Susan Del Carmen
have been authorized by Board Resolution No. 00-02-03 to initiate
and/or cause to be filed on behalf of PAL petitions and pleadings
in all labor-related cases. As to the other petitioners, it was
argued that they are mere nominal parties so that their failure to
execute the certification does not justify dismissal of the petition.
Despite this submission, the Court of Appeals denied the motion
for reconsideration. Hence, the case is now before this Court.
The petition is without merit.
The necessity for a certification of non-forum shopping in filing
petitions for certiorari is found in Rule 65, Section 1, in relation to
Rule 46, Section 3 of the Rules of Court. These provisions require
it to be executed by the corresponding petitioner or petitioners.
As no distinction is made as to which party must execute the
certificate, this requirement is made to apply to both natural and
juridical entities.[1] When the petitioner is a corporation, the
certification should be executed by a natural person. Furthermore,
not just any person can be called upon to execute the

certification, although such a person

knowledge of the facts to be attested to. [2]

may

have

personal

This Court has explained that a corporation has no power

except those conferred on it by the Corporation Code and those
that are implied or incidental to its existence. The exercise of
these powers is done through the board of directors and/or duly
authorized officers and agents. Given these corporate features,
the power of a corporation to sue in any court is generally lodged
with the board of directors. The board, in turn, can delegate the
physical acts needed to sue, which may be performed only by
natural persons, to its attorneys-in-fact by a board resolution, if
not already authorized under the corporate by-laws. [3]
Thus, only individuals vested with authority by a valid board
resolution may sign the certificate of non-forum shopping in
behalf of a corporation. In addition, the Court has required that
proof of said authority must be attached. Failure to provide a
certificate of non-forum shopping is sufficient ground to dismiss
the petition. Likewise, the petition is subject to dismissal if a
certification was submitted unaccompanied by proof of the
signatorys authority.[4]
The petition filed with the Court of Appeals had a
certification of non-forum shopping executed by Cesar R.
Lamberte and Susan Del Carmen. The certification, however, was
without proof of authority to sign. When a motion for
reconsideration was filed, a Secretarys Certificate was submitted
as proof that the board of directors of PAL had authorized the two
to execute the certificate. Nonetheless, the Court finds that this
belated submission is an insufficient compliance with the
certification requirement.
This Court has allowed the reinstatement of petitions that
were dismissed due to lack of proof of authority to sign the

certification upon its subsequent submission, saying that this

amounted to
substantial compliance. The rationale was that the signatories, at
the time of execution of the certification, were in fact authorized
to sign, although proof of their authority was lacking. [5]
This is not what happened in this case. A perusal of the
Secretarys Certificate submitted reveals that the authority to
cause the filing of the petition was granted on February 15, 2000.
[6]
The petition, on the other hand, was filed on January 24,
2000 and was dismissed by the Court of Appeals on January 31,
2000. This means that at the time the certification was signed,
Cesar R. Lamberte and Susan Del Carmen were not duly
authorized by the Board of Directors of PAL and, consequently,
their signing and attestations were not in representation of PAL.
This effectively translates to a petition that was filed without a
certification at all as none was issued by PAL, the principal party
to the case.
The required certification of non-forum shopping must be
valid at the time of filing of the petition. An invalid certificate
cannot be remedied by the subsequent submission of a
Secretarys Certificate that vests authority only after the petition
had been filed.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.

EN BANC

[G.R. No. 135042. September 23, 1999]

ROBERN DEVELOPMENT CORPORATION, petitioner, vs. JUDGE JESUS

V. QUITAIN, Regional Trial Court of Davao City, Br. 15; and
NATIONAL POWER CORPORATION, respondents.
DECISION
PANGANIBAN, J.:

Expropriation proceedings are governed by revised Rule 67 of the 1997 Rules of Civil
Procedure which took effect on July 1, 1997. Previous doctrines inconsistent with this Rule are
deemed reversed or modified. Specifically, (1) an answer, not a motion to dismiss, is the
responsive pleading to a complaint in eminent domain; (2) the trial court may issue a writ of
possession once the plaintiff deposits an amount equivalent to the assessed value of the property,
pursuant to Section 2 of said Rule, without need of a hearing to determine the provisional sum to
be deposited; and (3) a final order of expropriation may not be issued prior to a full hearing and
resolution of the objections and defenses of the property owner.
The Case

Before us is a Petition under Rule 45, challenging the Decision of the Court of
Appeals[1] promulgated February 27, 1998 and its Resolution promulgated July 23, 1998 in CAGR SP-46002, which (1) dismissed the action for certiorari and preliminary injunction filed by
Robern Development Corporation ("Robern" for brevity); and (2) effectively affirmed the Orders
(dated August 13, 1997; September 11, 1997; and November 5, 1997) and the Writ of Possession
(dated September 19, 1997), all issued by the Regional Trial Court of Davao City in Civil Case
No. 25356-97.
The assailed Decision disposed as follows:[2]

IN VIEW OF ALL THE FOREGOING, the instant petition is

ordered DISMISSED. Costs against the petitioner.
In its assailed Resolution, the Court of Appeals denied reconsideration in this manner:[3]

There being no compelling reason to modify, reverse or reconsider the Decision

rendered in the case dated February 27, 1998[;] the Motion for Reconsideration posted
by petitioner on March 23, 1998 is DENIED, it appearing further that the arguments
raised therein were already considered and passed upon in the aforesaid Decision.
The Facts

The following facts are undisputed.

1. Robern is the registered owner of a parcel of land with an area of about 17,746.50 square
meters, which the National Power Corporation ("NPC" for brevity) is seeking to expropriate. The
property forms part of a proposed low-cost housing project in Inawayan, Binugao, Toril, Davao
City.
2. On June 6, 1997, NPC filed a Complaint for Eminent Domain against Robern. [4] Instead of
filing an answer, petitioner countered with a Motion to Dismiss,[5] alleging (a) that the Complaint
suffered a jurisdictional defect for not showing that the action bore the approval of the NPC
board of directors; (b) that Nemesio S. Caete, who signed the verification and certification in the
Complaint, was not the president, the general manager or an officer specifically authorized under
the NPC charter (RA 6395); (c) that the choice of property to be expropriated was improper, as it
had already been intended for use in a low-cost housing project, a public purpose within the
contemplation of law; and the choice was also arbitrary, as there were similar properties
available within the area.
3. Before this Motion could be resolved, NPC filed a Motion for the Issuance of Writ of
Possession based on Presidential Decree No. 42. On July 9, 1997, NPC deposited P6,121.20 at
the Philippine National Bank, Davao Branch, as evidenced by PNB Savings Account No. 385560728-9.[6]
4. In its Order of August 13, 1997, the trial court denied the petitioner's Motion to Dismiss in
this wise:

This refers to the motion to dismiss. The issues raised are matters that should be dealt
with during the trial proper. Suffice it to say that [NPC] has the privilege as a utility to
use the power of eminent domain.
The motion is denied for lack of merit. The pre-trial conference shall be on August 27,
1997 at 2:30 P.M.[7]
5. On September 2, 1997, petitioner filed a Motion for Reconsideration, pointing out that (a)
the issues raised in the Motion to Dismiss could be resolved without trial, as they could be
readily appreciated on the face of the Complaint itself vis--vis the applicable provisions of law
on the matter; and (b) the grounds relied upon for dismissing the Complaint did not require
evidence aliunde.
6. On September 11, 1997, the trial court denied the Motion, as follows:

The xxx motion [of the petitioner] for reconsideration is denied for lack of
merit. Finding the xxx motion [of NPC] to be meritorious[,] let a writ of possession
issue.[8]
7. On September 22, 1997, petitioner filed a Motion for Reconsideration of the Order of
September 11, 1997, arguing among others that Section 15-A of RA 6395 was virtually amended
when Caete was allowed to verify and sign the certificate of non-forum shopping in regard to the
Complaint for expropriation filed by NPC.

8. Without awaiting the outcome of the Motion for Reconsideration, NPC filed a Motion to
Implement the Writ of Possession.
9. On September 19, 1997, in spite of petitioners opposition, the trial court issued a Writ of
Possession as follows:

WHEREAS, the applicant National Power Corporation in the above-titled case has
presented to this Court a petition praying for the issuance of a Writ of Possession of
the affected property of the xxx Robern Development Corporation, described
hereinbelow, as follows:
TCT No. Total Area in Area Affected in
Square Meter Square Meter
T-251558
(T-141754) 11,469.00 3,393.00
T-251559
(T-141755) 10,000.00 2,124.00
T-251556
(T-14152) 30,000.00 3,402.00
T-251555 45,000.00 8,827.50
TOTAL - - 97,371.00 17,746.50 Total
affected area
WHEREAS, on September 11, 1997 the court issued an Order granting the issuance of
a Writ of Possession in favor of the xxx National Power Corporation for the
immediate possession and control of the parcels of land owned by the [petitioner] as
aforestated for the construction of the Mantanao-New-Loon 138 KV Transmission
Line Project to be undertaken by the petitioner affecting 17,746.50 sq.m. of the
97,371.00 sq. meters as shown above.
NOW THEREFORE, you are hereby commanded to place [NPC] in possession and
control of the affected property consisting 17,746.50 [s]quare [m]eters of the total area
of 97,371.00 square meters described above and to eject therefrom all adverse
occupants, Robern Development Corporation and [all other] persons xxx claiming
under it.[9]
10. On November 5, 1997, before counsel for the petitioner received any order from the trial
court directing the implementation of the Writ of Possession, NPC occupied the disputed
property.

11. In a Petition for Certiorari before the Court of Appeals (CA), Robern assailed the Writ on
the following grounds: (a) patent on the face of the complaint were its jurisdictional defect,
prematurity and noncompliance with RA 6395; and (b) the issuance of the Writ of Possession
was irregular, arbitrary and unconstitutional, as the trial court had yet to fix the appropriate value
for purposes of taking or entering upon the property to be expropriated.
Ruling of the Court of Appeals

The Court of Appeals upheld the trial court on the following grounds.
First, the verification and certification of the Complaint by someone other than the president
or the general manager of NPC was not a fatal jurisdictional defect. It was enough to allege that
the expropriating body had the right of eminent domain. The issues of whether the expropriation
was properly authorized by the board of directors and whether Caetes verification and
certification of the Complaint was likewise authorized were evidentiary and could be ruled upon
only after the reception of evidence.
Second, whether the disputed property could still be expropriated even if it had already been
intended to be used in a low-cost housing project and whether the choice of that lot was arbitrary
and erroneous, given the availability of similar properties in the area, were factual issues that
would entail presentation of evidence by both parties.
Third, the allegation in the Complaint that NPC sought to acquire an easement of right-ofway through the disputed property did not preclude its expropriation. Section 3-A of the NPC
charter allowed the power company to acquire an easement of right-of-way or even the land
itself if the servitude would injure the land.
Fourth, the issuance of the Writ of Possession was proper in view of NPCs compliance with
Section 2, Rule 67 of the 1997 Rules of Civil Procedure, by depositing with the Philippine
National Bank an amount equivalent to the assessed value of the disputed property.
Fifth, certiorari was not the proper remedy, as the Order sustaining the right to expropriate
the property was not final and could still be appealed by the aggrieved party. The availability of
appeal ruled out certiorari.
Hence, this Petition.[10]
The Issues

In their Memorandum,[11] petitioner raises the following issues:[12]

I WHETHER OR NOT THE QUESTIONED ORDER OF THE RESPONDENT

JUDGE DATED SEPTEMBER 11, 1997 DIRECTING THE ISSUANCE OF A
WRIT OF POSSESSION IS UNCONSTITUTIONAL, HIGHLY IRREGULAR,
ARBITRARY, AND DESPOTIC.

II WHETHER OR NOT THE COMPLAINT FILED IN THE INSTANT CASE IS

DISMISSIBLE ON ITS FACE FOR LACK OF JURISDICTION, BEING
FLAWED WITH PREMATURITY, AND VIOLATIVE OF RA 6395.
III WHETHER OR NOT THE COURT OF APPEALS MADE A FINDING NOT
BORNE OUT BY THE COMPLAINT, THUS IT EXCEEDED ITS
JURISDICTION AMOUNTING TO LACK OF JURISDICTION.
IV WHETHER OR NOT THE CHOICE OF THE PROPERTY TO BE
EXPROPRIATED IS ARBITRARY.
Simply stated, the petition raises the following issues:
1. Were there valid grounds to dismiss the Complaint?
2. Was the Writ of Possession validly issued, considering that the trial court had not conducted
any hearing on the amount to be deposited?

This Courts Ruling

The Court of Appeals was correct in its rulings, but in the interest of substantial justice, the
petitioner should be given an opportunity to file its answer.
First Issue:

Grounds for Dismissal

Jurisdiction

Petitioner contends that the trial court did not acquire jurisdiction over the case
because, first, Atty. Caete who signed the verification and certification of non-forum shopping
was neither the president nor the general manager of NPC; and second, under Section 15-A of
RA 6395, only the NPC chief legal counsel, under the supervision of the Office of the Solicitor
General is authorized to handle legal matters affecting the government power corporation. On the
other hand, NPC argues that Caete, as its regional legal counsel in Mindanao, is authorized to
prepare the Complaint on its behalf.
We find the disputed verification and certification to be sufficient in form. Verification is
intended to assure that the allegations therein have been prepared in good faith or are true and
correct, not mere speculations.[13] Generally, lack of verification is merely a formal defect that is
neither jurisdictional nor fatal. Its absence does not divest the trial court of jurisdiction. [14] The
trial court may order the correction of the pleading or act on the unverified pleading, if the

attending circumstances are such that strict compliance with the rule may be dispensed with in
order to serve the ends of justice.
The certificate of non-forum shopping directs the plaintiff or principal party to attest under
oath that (1) no action or claim involving the same issues have been filed or commenced in any
court, tribunal or quasi-judicial agency and that, to the best of the plaintiff's knowledge, no such
other action or claim is pending; (2) if there is such other pending action or claim, a complete
statement of its present status shall be made; and (3) if it should be learned that the same or a
similar action or claim has been filed or is pending, the plaintiff shall report this fact to the court
where the complaint or initiatory pleading was filed. [15] This rule is rooted in the principle that a
party-litigant shall not be allowed to pursue simultaneous remedies in different forums, as this
practice is detrimental to orderly judicial procedure.[16]Administrative Circular No. 04-94, which
came before the 1997 Rules of Court, is deemed mandatory but not jurisdictional, as jurisdiction
over the subject or nature of the action is conferred by law.[17]
In this case, the questioned verification stated that Atty. Caete was the acting regional legal
counsel of NPC at the Mindanao Regional Center in Iligan City. He was not merely a retained
lawyer, but an NPC in-house counsel and officer, whose basic function was to prepare legal
pleadings and to represent NPC-Mindanao in legal cases. As regional legal counsel for the
Mindanao area, he was the officer who was in the best position to verify the truthfulness and the
correctness of the allegations in the Complaint for expropriation in Davao City. As internal legal
counsel, he was also in the best position to know and to certify if an action for expropriation had
already been filed and pending with the courts.
Besides, Atty. Caete was not the only signatory to the Complaint; he was joined by Comie P.
Doromal, OIC-assistant general counsel; and Catherine J. Pablo -- both of the NPC Litigation &
Land and Land Rights Department. They all signed on behalf of the solicitor general in
accordance with the NPC charter.[18] Their signatures prove that the NPC general counsel and the
solicitor general approved the filing of the Complaint for expropriation. Clearly then, the CA did
not err in holding that the Complaint was not dismissible on its face, simply because the person
who had signed the verification and certification of non-forum shopping was not the president or
the general manager of NPC.
Legal Standing and Condition Precedent

Next, petitioner asserts that NPC had no legal standing to file the expropriation case,
because the Complaint did not allege that its board of directors had authorized its filing. It added
that under Section 6, RA 6395, only the board was vested with the corporate power to sue and be
sued.
The National Power Corporation explains that, like other corporate officers and employees
whose functions are defined by the board, Atty. Caete is authorized to file the expropriation
case. Even if he is not the general counsel, he has residual authority to prepare, verify and certify
the Complaint for expropriation.
We rule for the private respondent. Rule 67, Section 1 of the Rules of Court, provides:

SECTION 1. The complaint.The right of eminent domain shall be exercised by the

filing of a verified complaint which shall state with certainty the right and purpose of
expropriation, describe the real or personal property sought to be expropriated, and
join as defendants all persons owning or claiming to own, or occupying, any part
thereof or interest therein, showing, so far as practicable, the separate interest of each
defendant. xxxx.
The foregoing Rule does not require that the Complaint be expressly approved by the board
of directors of a corporation. In any event, such authorization is a factual issue that can be
threshed out during the trial. As held by the appellate court, the issue of whether or not the
expropriation proceedings [were] authorized by the Board of Directors or that those who signed
the complaint [were] authorized representatives are evidentiary in character determinable only in
[the] trial proper.
Prematurity of the Complaint

The same ruling applies to the argument alleging prematurity of the Complaint. Petitioner's
insistence that NPC must secure the approval of the provincial board and the municipal council
is unfounded.Section 3(j), RA 6395, merely requires that the Complaint be filed in the same
manner as an expropriation case of the national, the provincial or the municipal government. At
bottom, all that is needed is compliance with Rule 67 of the Rules of Court and
the prevailing jurisprudence on expropriation.
Defenses and Objections

Petitioner avers that the Complaint should be dismissed, because the subject property was
already committed to be used in a low-cost housing project. Besides, there were other available
properties in the area. Finally, the Complaint allegedly sought only an easement of a right-ofway, not essentially an expropriation.
We disagree. Petitioner's argument in this case is premised on the old rule. Before the 1997
amendment, Section 3 of Rule 67 allowed a defendant in lieu of an answer, [to] present in a
single motion to dismiss or for other appropriate relief, all of his objections and defenses to the
right of the plaintiff to take his property xxx. A motion to dismiss was not governed by Rule 15
which covered ordinary motions.Such motion was the required responsive pleading that took the
place of an answer and put in issue the plaintiff's right to expropriate the defendant's property.
[19]
Any relevant and material fact could be raised as a defense in a condemnation proceeding,
such as that which tended to show that (1) the exercise of the power to condemn was
unauthorized, or (2) there was cause for not taking defendants property for the purpose alleged in
the petition, or (3) the purpose for the taking was not public in character.[20]
This old rule found basis in the constitutional provisions on the exercise of the power of
eminent domain, which were deemed to be for the protection of the individual property owner

against the aggressions of the government.[21] Under the old rule, the hearing of the motion and
the presentation of evidence followed.
However, Rule 67 of the 1997 Rules of Civil Procedure no longer requires such
extraordinary motion to dismiss. Instead, it provides:

SEC. 3. Defenses and objections. x x x x

If a defendant has any objection to the filing of or the allegations in the complaint, or
any objection or defense to the taking of his property, he shall serve his answer within
the time stated in the summons.The answer shall specifically designate or identify the
property in which he claims to have an interest, state the nature and extent of the
interest claimed, and adduce all his objections and defenses to the taking of his
property. x x x x.
In his book on remedial law, Justice Florenz D. Regalado writes that the old Rule was a bit
confusing as the previous holdings under that former provision also allowed the filing of another
motion to dismiss, as that is understood in Rule 16, to raise additionally the preliminary
objections authorized by that Rule. Further, an answer, which is now required, gives more
leeway. First, even if it still applies the omnibus motion rule, it allows amendments to be made
within ten days from its filing.[22] Second, the failure to file an answer does not produce all the
disastrous consequences of default in ordinary civil actions, because the defendant may still
present evidence as to just compensation.[23]
When petitioner filed its Motion to Dismiss, the 1997 Rules of Civil Procedure had already
taken effect. Statutes regulating procedure in the courts are applicable to actions pending and
undetermined at the time those statutes were passed. [24] New court rules apply to proceedings that
take place after the date of their effectivity.[25] On April 8, 1997, the Court en banc issued a
Resolution in Bar Matter No. 803, declaring that the revisions in the Rules of Court were to
become effective on July 1, 1997.
Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds for a
motion to dismiss the allotment of the disputed land for another public purpose or the petition for
a mere easement of right-of-way in the complaint for expropriation. The grounds for dismissal
are exclusive to those specifically mentioned in Section 1, Rule 16 of the Rules of Court, and an
action can be dismissed only on a ground authorized by this provision.[26]
To be exact, the issues raised by the petitioner are affirmative defenses that should be
alleged in an answer, since they require presentation of evidence aliunde.[27] Section 3 of Rule 67
provides that if a defendant has any objection to the filing of or the allegations in the complaint,
or any objection or defense to the taking of his property, he should include them in his
answer. Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. It
would be precipitate to dismiss the Complaint on such grounds as claimed by the
petitioner. Dismissal of an action upon a motion to dismiss constitutes a denial of due process if,
from a consideration of the pleadings, it appears that there are issues that cannot be decided
without a trial of the case on the merits.[28]

Inasmuch as the 1997 Rules had just taken effect when this case arose, we believe that in the
interest of substantial justice, the petitioner should be given an opportunity to file its answer to
the Complaint for expropriation in accordance with Section 3, Rule 67 of the 1997 Rules of Civil
Procedure.
Order of Condemnation

The Court will now tackle the validity of the trial court's assailed Order of August 13, 1997,
which Respondent Court affirmed in this wise:

xxxx The denial of Roberns Motion to Dismiss [is tantamount] to a confirmation

or a determination of the authority of NPC to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the
case. Under Section 4 of the present Rule 67, 1997 Rules, supra, an order
sustaining the right to expropriate the property is a final one and may be appealed
by any aggrieved party (Municipality of Bian v. Garcia, 180 SCRA 576
[1989]). xxxx.[29]
We clarify. Founded on common necessity and interest, eminent domain is the inherent right
of the state (and of those entities to which the power has been lawfully delegated) to condemn
private property to public use upon payment of just compensation. It may appear to be harsh and
encompassing, but judicial review limits the exercise of eminent domain to the following areas
of concern: (1) the adequacy of the compensation, (2) the necessity of the taking, and (3) the
public-use character of the purpose of the taking.[30]
If there are objections and defenses that require the presentation of evidence and the hearing
of arguments, the trial court should not immediately issue an order of expropriation. This is
clearly implied in Section 4 of Rule 67, which mandates that [i]f the objections to and the
defenses against the right of the plaintiff to expropriate the property are overruled, or when no
party appears to defend as required by this Rule, the court may issue an order of expropriation
declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for
the public use or purpose described in the complaint x x x.
The Court of Appeals ruled that there were issues that required presentation of evidence
during the trial proper; namely, whether the expropriation proceeding was authorized by the NPC
board of directors, whether the property to be expropriated was already devoted to public use,
and whether the choice of the property was arbitrary and erroneous in view of the other
properties available in the area.The necessity of the taking and the public character of the
purpose of the expropriation were still in issue and pending resolution by the trial court. To these
we add the issue of whether the taking of the disputed property would require only an easement
of right-of-way or would perpetually deprive Robern of its proprietary rights. Therefore, the trial
court should not have issued the assailed Order of Expropriation which foreclosed any further
objection to the NPCs right to expropriate and to the public purpose of the expropriation, leaving
the matter of just compensation as the only remaining substantial issue.

The nullity of the Order was glaring. While the trial court correctly denied the Motion to
Dismiss, as the issues raised by the petitioner should be dealt with during the trial proper, it
nonetheless ruled that NPC had the privilege as a [public] utility to use the power of eminent
domain.
Second Issue

Requisites of a Writ of Possession

Petitioner objects to the issuance of the

arbitrary and despotic, because the Motion to
there was no hearing on the correct amount of
property, as required in Panes v. Visayas State
contention.

Writ of Possession for being highly irregular,

Dismiss was yet to be resolved. It stresses that
just compensation for the taking of the disputed
College of Agriculture.[31] We cannot uphold this

There is no prohibition against a procedure whereby immediate possession of the land

involved in expropriation proceedings may be taken, provided always that due provision is made
to secure the prompt adjudication and payment of just compensation to the owners. [32] However,
the requirements for authorizing immediate entry in expropriation proceedings have changed.
To start with, in Manila Railroad Company v. Paredes,[33] the Court held that the railway
corporation had the right to enter and possess the land involved in condemnation proceedings
under Section 1, Act No. 1592,[34] immediately upon the filing of a deposit fixed by order of the
court.
The Rules of Court of 1964[35] sanctioned this procedure as follows:

SEC. 2. Entry of plaintiff upon depositing value with National or Provincial

Treasurer.-- Upon the filing of the complaint or at any time thereafter the plaintiff
shall have the right to take or enter upon the possession of the real or personal
property involved if he deposits with the National or Provincial Treasurer its value, as
provisionally and promptly ascertained and fixed by the court having jurisdiction of
the proceedings, to be held by such treasurer subject to the orders and final dispositon
of the court. xxxx. (Underscoring ours.)
Subsequently, former President Ferdinand E. Marcos signed into law Presidential Decree
No. 42 and its companion decrees, which removed the court's discretion in determining the
amount of the provisional value of the land to be expropriated and fixed the provisional deposit
at its assessed value for taxation purposes. Hearing was not required; only notice to the owner of
the property sought to be condemned.
On the issue of immediate possession, PD 42 (Authorizing The Plaintiff In Eminent Domain
Proceedings To Take Possession Of The Property Involved Upon Depositing The Assessed Value,
For Purposes of Taxation) provided:

WHEREAS, the existing procedure for the exercise of the right of eminent domain is
not expeditious enough to enable the plaintiff to take or enter upon the possession of
the real property involved as soon as possible, when needed for public purposes;
xxxxxxxxx

xxx [T]hat, upon filing in the proper court of the complaint in eminent domain
proceedings or at anytime thereafter, and after due notice to the defendant, plaintiff
shall have the right to take or enter upon the possession of the real property involved
if he deposits with the Philippine National Bank, xxx an amount equivalent to the
assessed value of the property for purposes of taxation, to be held by said bank subject
to the orders and final disposition of the court.
The provisions of Rule 67 of the Rules of Court and of any other existing law contrary
to or inconsistent herewith are hereby repealed.
Paragraph 3 of PD No. 1224 (Defining The Policy On The Expropriation Of Private
Property For Socialized Housing Upon Payment Of Just Compensation) also authorized
immediate takeover of the property in this manner:

3. Upon the filing of the petition for expropriation and the deposit of the amount of
just compensation as provided for herein, the Government, or its authorized agency or
entity, shall immediately have possession, control and disposition of the real property
and the improvements thereon even pending resolution of the issues that may be
raised whether before the Court of First Instance or the higher courts.
Where the taking was for socialized housing, Section 3, PD 1259 (Amending Paragraphs 1,
2, And 3 Of PD No. 1224 Further Defining The Policy On The Expropriation Of Private
Property For Socialized Housing Upon Payment Of Just Compensation), amending the abovequoted paragraph, provided:

Upon the filing of the petition for expropriation and the deposit of the amount of the
just compensation provided for in Section 2 hereof, the Government, or its authorized
agency or entity, shall immediately have possession, control and disposition of the real
property and the improvements thereon even pending resolution of the issues that may
be raised whether before the Court of First Instance, Court of Agrarian Relations or
the higher courts.
Similarly, Section 1, PD No. 1313 (Further Amending Paragraph 3 Of Presidential Decree
No. 1224 As Amended By Presidential Decree No. 1259, Defining The Policy On The
Expropriation Of Private Property For Socialized Housing Upon Payment Of Just
Compensation), amending paragraph 3 of PD 1224, decreed:

Upon the filing of the petition for expropriation and the deposit in the Philippine
National Bank at its main office or any of its branches of the amount equivalent to ten
percent (10%) of the just compensation provided for in Section 2 of Presidential
Decree No. 1259, the government, or its authorized agency or entity, shall
immediately have possession, control and disposition of the real property and the
improvements thereon with the power of demolition, if necessary, even pending
resolution of the issues that may be raised whether before the Court of First Instance,
Court of Agrarian Relations, or the higher Courts.
In this connection, we also quote Section 7 of PD No. 1517 (Proclaiming Urban Land
Reform In The Philippines And Providing For The Implementing Machinery Thereof), which
reads:
xxxxxxxxx

Upon the filing of the petition for expropriation and the deposit in the Philippine
National Bank at its main office or any of its branches of the amount equivalent to ten
per cent (10%) of the declared assessment value in 1975, the Government, or its
authorized agency or entity shall immediately have possession, control and disposition
of the real property and the improvements thereon with the power of demolition, if
necessary, even pending resolution of the issues that may be raised whether before the
Court of First Instance, Court of Agrarian Relations, or the higher Courts.
Finally, PD 1533 (Establishing A Uniform Basis For Determining Just Compensation And
The Amount Of Deposit For Immediate Possession Of The Property Involved In Eminent
Domain Proceedings)mandated the deposit of only ten percent (10%) of the assessed value of the
private property being sought to be expropriated, after fixing the just compensation for it at a
value not exceeding that declared by the owner or determined by the assessor, whichever is
lower. Section 2 thereof reads:

SEC. 2. Upon the filing of the petition for expropriation and the deposit in the
Philippine National Bank at its main office or any of its branches of an amount
equivalent to ten per cent (10%) of the amount of compensation provided in Section 1
hereof, the government or its authorized instrumentality agency or entity shall be
entitled to immediate possession, control and disposition of the real property and the
improvements thereon, including the power of demolition if necessary,
notwithstanding the pendency of the issues before the courts.
Accordingly, in San Diego v. Valdellon,[36] Municipality of Daet v. Court of Appeals,
[37]
and Haguisan v. Emilia,[38] the Court reversed itself and ruled that Section 2, Rule 67 of the
1964 Rules, was repealed by Presidential Decree No. 42. The judicial duty of ascertaining and
fixing the provisional value of the property was done away with, because the hearing on the
matter had not been expeditious enough to enable the plaintiff to take possession of the property
involved as soon as possible, when needed for public purpose.[39]

In Daet, the Court clarified that the provisional value of the land did not necessarily
represent the true and correct one but only tentatively served as the basis for immediate
occupancy by the condemnor.The just compensation for the property continued to be based on its
current and fair market value, not on its assessed value which constituted only a percentage of its
current fair market value.
However, these rulings were abandoned in Export Processing Zone Authority v. Dulay,
because [t]he method of ascertaining just compensation under the aforecited decrees
constitute[d] impermissible encroachment on judicial prerogatives. It tend[ed] to render this
Court inutile in a matter which under the Constitution [was] reserved to it for final determination.
The Court added:
[40]

We return to older and more sound precedents. This Court has the duty to formulate
guiding and controlling constitutional principles, precepts, doctrines, or rules. (See
Salonga v. Cruz Pano, supra).
The determination of just compensation in eminent domain cases is a judicial
function. The executive department or the legislature may make the initial
determinations but when a party claims a violation of the guarantee in the Bill of
Rights that private property may not be taken for public use without just
compensation, no statute, decree, or executive order can mandate that its own
determination shall prevail over the courts findings. Much less can the courts be
precluded from looking into the just-ness of the decreed compensation.
In Province of Camarines Sur v. Court of Appeals,[41] the Court reaffirmed the
unconstitutionality of the presidential decrees that fixed the just compensation in an
expropriation case at the value given to the condemned property either by the owners or by the
assessor, whichever was lower.
More precisely, Panes v. Visayas State College of Agriculture[42] ruled that the judicial
determination of just compensation included the determination of the provisional deposit. In that
case, the Court invalidated the Writ of Possession because of lack of hearing on the provisional
deposit, as required under then Section 2 of Rule 67, pre-1997 Rules. In the light of the declared
unconstitutionality of PD Nos. 76, 1533 and 42, insofar as they sanctioned executive
determination of just compensation, any right to immediate possession of the property must be
firmly grounded on valid compliance with Section 2 of Rule 67, pre-1997 Rules; that is, the
value of the subject property, as provisionally and promptly ascertained and fixed by the court
that has jurisdiction over the proceedings, must be deposited with the national or the provincial
treasurer.[43]
However, the 1997 Rules of Civil Procedure revised Section 2 of Rule 67 and clearly
reverted to the San Diego, Daet and Haguisan rulings. Section 2 now reads:

SEC. 2. Entry of plaintiff upon depositing value with authorized government

depositary.Upon the filing of the complaint or at any time thereafter and after due
notice to the defendant, the plaintiff shall have the right to take or enter upon the

possession of the real property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the property for purposes of
taxation to be held by such bank subject to the orders of the court. xxxx
xxxxxxxxx

After such deposit is made the court shall order the sheriff or other proper officer to
forthwith place the plaintiff in possession of the property involved and promptly
submit a report thereof to the court with service of copies to the parties. [Underscoring
ours.]
In the present case, although the Complaint for expropriation was filed on June 6, 1997, the
Motion for the Issuance of the Writ of Possession was filed on July 28, 1997; thus, the issuance
of the Writ is covered by the 1997 Rules. As earlier stated, procedural rules are given immediate
effect and are applicable to actions pending and undetermined at the time they are passed; new
court rules apply to proceedings that take place after the date of their effectivity.[44] Therefore,
Section 2, Rule 67 of the 1997 Rules of Civil Procedure, is the prevailing and governing law in
this case.[45]
With the revision of the Rules, the trial court's issuance of the Writ of Possession becomes
ministerial, once the provisional compensation mentioned in the 1997 Rule is deposited. Thus, in
the instant case the trial court did not commit grave abuse of discretion when it granted the NPCs
Motion for the issuance of the Writ, despite the absence of hearing on the amount of the
provisional deposit.
The Court nonetheless hastens to add that PD 1533 is not being revived.
Under Section 2, Rule 67 of the 1997 Rules, the provisional deposit should be in an amount
equivalent to the full assessed value of the property to be condemned, not merely ten percent of
it. Therefore, the provisional deposit of NPC is insufficient. Since it seeks to expropriate
portions, not the whole, of four parcels of land owned by Robern, the provisional deposit should
be computed on the basis of the Tax Declarations of the property:[46]

TCT No. Total Area Area Affected Assessed Provisional

in Sq. M. in Sq. M. Value Deposit
T-251558
(T-141754) 11,469.00 3,393.00 P4,250.00 P1,257.32
T-251559
(T-141755) 10,000.00 2,124.00 8,960.00 1,903.10
T-251556
(T-14152) 30,000.00 3,402.00 18,910.00 2,144.39
T-251555 45,000.00 8,827.50 18,450.00 3,619.28

TOTAL 97,371.00 17,746.50 P8,924.09

Hence, the amount of the provisional deposit should be increased, in order to conform to the
requirement that it should be equivalent to the assessed value of the property. In the interest of
justice, NPC should in the meantime pay Robern reasonable rental, to be fixed by the trial court
in its final decision, for the use and occupation of the disputed property from the date of entry
until the deposit of the full assessed value of the property, as mandated by Rule 67.
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-GR
SP-46002 are AFFIRMED with the following MODIFICATIONS: (1) petitioner is granted a
period of ten days from the finality of this Decision within which to file its answer, in accordance
with Rule 67 of the 1997 Rules of Court; (2) NPC shall deposit, also within ten days from the
finality if this Decision, the full amount required under the aforecited Rule; and (3) the trial court
shall, in its final decision, fix the rental for the use and the occupation of the disputed property,
from the date of NPCs entry until its deposit of the full amount required under the 1997
Rules. No costs.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Quisumbing, Purisima,
Pardo, Buena, Gonzaga-Reyes, and Ynares-Santiago, JJ., concur.
ROBERN DEVELOPMENT CORP. VS. QUITAIN
315 SCRA 150 (1999)
Facts: P filed a complaint for eminent domain against D. Instead of filing an answer, D
countered with a Motion to Dismiss, alleging, among other things, that the choice of property to
be expropriated was improper.
Issue: Whether the Motion to Dismiss should prosper.
Held: No. The issues raised by D are affirmative defenses that should be alleged in an answer,
since they require presentation of evidence aliunde. Section 3 of the Rules of Court provides
that if a defendant has any objections to the filing of or the allegations in the complaint, or any
objection or defense to the taking of his property, he should include them in his answer.
Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. Dismissal
of an action upon a motion to dismiss constitutes a denial of due process if, from a
consideration of the pleadings, it appears that there are issues that cannot be decided without a
trial of the case on the merits.

FIRST DIVISION

MARANAW HOTELS AND G.R. No. 149660

RESORT CORP.,
Petitioner,
Present:

PUNO, C.J., Chairperson,

- versus - CARPIO,
CORONA,
AZCUNA, and
LEONARDO-DE CASTRO, JJ.
COURT OF APPEALS, SHERYL
OABEL AND MANILA Promulgated:
RESOURCE DEVELOPMENT
CORP.,
Respondents. January 20, 2009

x------------------------------------------------x

DECISION
PUNO, C.J.:

Before the Court is a petition for review on certiorari

assailing a resolution issued by the Court of Appeals. The
resolution denied the petition for review filed by petitioner
Maranaw Hotels and Resort Corp.

The present proceedings emanate from a complaint for

regularization, subsequently converted into one for illegal
dismissal, filed before Labor Arbiter Madjayran H. Ajan by private
respondent Sheryl Oabel.

It appears that private respondent Oabel was initially hired

by petitioner as an extra beverage attendant on April 24, 1995.
This lasted until February 7, 1997. [1]Respondent worked in Century
Park Hotel, an establishment owned by the petitioner.

On September 16, 1996,[2] petitioner contracted with Manila

Resource Development Corporation.[3] Subsequently, private
respondent Oabel was transferred to MANRED, with the latter
deporting itself as her employer. [4] MANRED has intervened at all
stages of these proceedings and has consistently claimed to be
the employer of private respondent Oabel. For the duration of her
employment, private respondent Oabel performed the following
functions:
Secretary, Public Relations Department: February 10, 1997 March
6, 1997
Gift Shop Attendant: April 7, 1997 April 21, 1997
Waitress: April 22, 1997 May 20, 1997
Shop Attendant: May 21, 1997 July 30, 1998[5]

On July 20, 1998, private respondent filed before the Labor

Arbiter a petition for regularization of employment against the
petitioner. On August 1, 1998, however, private respondent Oabel
was dismissed from employment. [6] Respondent converted her
petition for regularization into a complaint for illegal dismissal.

Labor Arbiter Madjayran H. Ajan rendered a decision on July

13, 1999, dismissing the complaint against the petitioner. The
decision held:
While complainant alleged that she has been working with the
respondent hotel in different department (sic) of the latter on (sic)
various capacities (although not all departments are part and parcel of
the hotels), complainant never disputed the fact that her work with the
same were on a per function basis or on a need basis co-terminus with
the function she was hired for.Considering that complainant job (sic)
with the respondent hotel was on a per function basis or on a need
basis, complainant could not even be considered as casual employee
or provisional employee. Respondent hotel consider (sic) complainant,
at most, a project employee which does not ripened (sic) into regular
employee (sic).[7]

Private respondent appealed before the National Labor

Relations Commission (NLRC). The NLRC reversed the ruling of the
Labor Arbiter and held that: (1) MANRED is a labor-only
contractor, and (2) private respondent was illegally dismissed.

Of the first holding, the NLRC observed that under the very
terms of the service contract, MANRED shall provide the petitioner
not specific jobs or services but personnel and that MANRED had
insufficient capitalization and was not sufficiently equipped to
provide specific jobs.[8] The NLRC likewise observed that the
activities performed by the private respondent were directly
related to and usually necessary or desirable in the business of
the petitioner.[9]

With respect to the termination of private respondents

employment, the NLRC held that it was not effected for a valid or
just cause and was therefore illegal. The dispositive portion of the
ruling reads thus:
WHEREFORE, the decision appealed from is hereby REVERSED.
xxxx Respondents Century Park Hotel and Manila Resource
Development Corporation are hereby declared jointly and severally
liable for the following awards in favor of complainant: 1) her full
backwages and benefits from August 1, 1998 up to the date of her
actual reinstatement; 2) her salary differentials, share in the service
charges, service incentive leave pay and 13 th month pay from July 20,
1995 to July 31, 1998.

SO ORDERED.[10]

Petitioner subsequently appealed before the Court of

Appeals. In a resolution, the appellate court dismissed the petition
on account of the failure of the petitioner to append the board
resolution authorizing the counsel for petitioner to file the petition
before the Court of Appeals. The Court of Appeals held:

After a careful perusal of the records of the case, We resolve to DISMISS

the present petition on the ground of non-compliance with the rule on certification
against forum shopping taking into account that the aforesaid certification was
subscribed and verified by the Personnel Director of petitioner corporation
without attaching thereto his authority to do so for and in behalf of petitioner
corporation per board resolution or special power of attorney executed by the
latter.[11]

Petitioner duly filed its motion for reconsideration which was denied by the
Court of Appeals in a resolution dated August 30, 2001.[12]

In the present petition for review, the petitioner invokes substantial justice as
justification for a reversal of the resolution of the Court of Appeals. [13] Petitioner
likewise contends that the filing of a motion for reconsideration with the certificate
of non-forum shopping attached constitutes substantial compliance with the
requirement.[14]

There is no merit to the petition.

Well-settled is the rule that the certificate of non-forum shopping is a mandatory

requirement. Substantial compliance applies only with respect to the contents of
the certificate but not as to its presence in the pleading wherein it is required.

Petitioners contention that the filing of a motion for reconsideration with an

appended certificate of non forum-shopping suffices to cure the defect in the
pleading is absolutely specious. It negates the very purpose for which the
certification against forum shopping is required: to inform the Court of the
pendency of any other case which may present similar issues and involve similar
parties as the one before it. The requirement applies to both natural and juridical
persons.

Petitioner relies upon this Courts ruling in Digital Microwave Corp. v. Court of
Appeals[15] to show that its Personnel Director has been duly authorized to sign
pleadings for and in behalf of the petitioner. Petitioner, however, has taken the
ruling in Digital Microwave out of context. The portion of the ruling in Digital
Microwave upon which petitioner relies was in response to the issue of
impossibility of compliance by juridical persons with the requirements of Circular
28-91.[16] The Courts identification of duly authorized officers or directors as the
proper signatories of a certificate of non forum-shopping was in response to that
issue. The ruling does not, however, ipso facto clothe a corporate officer or director
with authority to execute a certificate of non-forum shopping by virtue of the
formers position alone.

Any doubt on the matter has been resolved by the Courts ruling in BPI Leasing
Corp. v. Court of Appeals[17] where this Court emphasized that the lawyer acting
for the corporation must be specifically authorized to sign pleadings for the
corporation.[18] Specific authorization, the Court held, could only come in the form
of a board resolutionissued by the Board of Directors that specifically authorizes
the counsel to institute the petition and execute the certification, to make his
actions binding on his principal, i.e., the corporation.[19]

This Court has not wavered in stressing the need for strict adherence to
procedural requirements. The rules of procedure exist to ensure the orderly
administration of justice. They are not to be trifled with lightly.

For this reason alone, the petition must already be dismissed. However, even
if this grave procedural infirmity is set aside, the petition must still fail. In the
interest of averting further litigation arising from the present controversy, and in
light of the respective positions asserted by the parties in the pleadings and other
memoranda filed before this Court, the Court now proceeds to resolve the case on
the merits.

Petitioner posits that it has entered into a service agreement with intervenor
MANRED. The latter, in turn, maintains that private respondent Oabel is its
employee and subsequently holds itself out as the employer and offers the
reinstatement of private respondent.

Notably, private respondents purported employment with MANRED

commenced only in 1996, way after she was hired by the petitioner as extra
beverage attendant on April 24, 1995. There is thus much credence in the private
respondents claim that the service agreement executed between the petitioner and
MANRED is a mere ploy to circumvent the law on employment, in particular that
which pertains on regularization.

In this regard, it has not escaped the notice of the Court that the operations
of the hotel itself do not cease with the end of each event or function and that there
is an ever present need for individuals to perform certain tasks necessary in the
petitioners business. Thus, although the tasks themselves may vary, the need for
sufficient manpower to carry them out does not. In any event, as borne out by the
findings of the NLRC, the petitioner determines the nature of the tasks to be
performed by the private respondent, in the process exercising control.

This being so, the Court finds no difficulty in sustaining the finding of the
NLRC that MANRED is a labor-only contractor.[20] Concordantly, the real
employer of private respondent Oabel is the petitioner.

It appears further that private respondent has already rendered more than one
year of service to the petitioner, for the period 1995-1998, for which she must
already be considered a regular employee, pursuant to Article 280 of the Labor
Code:
Art. 280. Regular and casual employment. The
provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That any employee

who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Emphasis supplied)

IN VIEW WHEREOF, the present petition is DENIED. The

resolution of the Court of Appeals dated June 15, 2001 is affirmed.

Costs against petitioner.

SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

CECILIA AMODIA VDA. DE MELENCION,

VENERANDA AMODIA, FELIPE AMODIA,
EUTIQUIO AMODIA and GO KIM CHUAN,
Petitioners,

G.R. No. 148846

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

- versus -

HONORABLE COURT OF APPEALS and

AZNAR BROTHERS REALTY COMPANY,
Respondents.

Promulgated:
September 25, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Civil Procedure seeking the reversal of the Court of Appeals
(CA) Decision[2] dated March 30, 2001 and praying that the Decision[3] of the
Regional Trial Court (RTC) of Lapu-Lapu City, dated February 18, 1993, be
upheld.
The Facts
The subject property is a 30,351 square meter parcel of land (subject property)
particularly denominated as Lot No. 3368, located at Suba-basbas,
Marigondon, Lapu-Lapu City, Cebu, and part of a total area of 30,777 square

meters covered by Transfer Certificate of Title (TCT) No. 20626 [4] (entire property)
in the name of the late petitioner Go Kim Chuan (Go Kim Chuan).[5]
The entire property was originally owned by Esteban Bonghanoy[6] who had only
one child, Juana Bonghanoy-Amodia,[7] mother of the late Leoncia Amodia and
petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia,
and Eutiquio Amodia[8] (the Amodias). The entire property was brought under the
operation of the Torrens System.[9] However, the title thereto was lost during the
Second World War.
On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of
Real Estate with Deed of Absolute Sale[10] whereby they extra-judicially settled the
estate of Esteban Bonghanoy and conveyed the subject property to respondent
Aznar Brothers Realty Company (AZNAR) for a consideration of P10,200.00.
On August 10, 1964, the said Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale was registered under Act 3344 [11] as there was no title on file at the
Register of Deeds of Lapu-Lapu
City (Register of Deeds). Thereafter, AZNAR made some improvements and
constructed a beach house thereon.
On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda
Amodia, Felipe Amodia and Eutiquio Amodia[12] (petitioners Amodias) executed a
Deed of Extra-Judicial Settlement with Absolute Sale,[13] conveying the subject
property in favor of Go Kim Chuan for and in consideration of P70,000.00. The
lost title covering the subject property was reconstituted pursuant to Republic Act
(RA) No. 26.[14] A reconstituted title particularly designated as Original Certificate
of Title (OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy [15] and,
subsequently, a derivative title (TCT No. 20626) was issued in the name of Go
Kim Chuan on December 1, 1989. Thereafter, Go Kim Chuan exercised control
and dominion over the subject property in an adverse and continuous manner and
in the concept of an owner.
On February 14, 1990, AZNAR wrote a letter[16] to petitioners Amodias asking the
latter to withdraw and/or nullify the sale entered into between them and Go Kim

Chuan. On the same date, a Notice of Adverse Claim[17] was annotated by AZNAR
on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April
25, 1990, AZNAR filed a case against petitioners Amodias and Go Kim Chuan for
Annulment of Sale and Cancellation of TCT No. 20626 [18] alleging that the sale to
Go Kim Chuan was an invalid second sale of the subject property which had
earlier been sold to it. Petitioners Amodias denied that they executed the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR,
claiming that their purported signatures thereon were forged. [19] Trial on the merits
ensued.
The RTC's Decision
On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go
Kim Chuan as the real owner of the subject property. The RTC ratiocinated that the
signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed
of Absolute Sale executed in favor of AZNAR were found by the document
examiner of the Philippine Constabulary (PC) Crime Laboratory to be forged, thus,
the said deed did not convey anything in favor of AZNAR. Moreover, the subject
property had been brought under the Land Registration Act; hence, all transactions
involving the same should have complied with the said law. Finally, the RTC held
that AZNAR failed to show that Go Kim Chuan acquired the subject property in
bad faith.
Aggrieved, AZNAR appealed the RTC Decision to the CA.[20]
The CA's Decision
On March 30, 2001, the CA rendered a Decision holding that the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in
favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement
with Absolute Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the
New Civil Code, the former deed should be given preference over the latter; that
AZNAR's adverse claim was annotated earlier than the execution of the Deed of
Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan; hence, the
latter should have respected said adverse claim and should have made inquiries as

to possible defects that may exist in the title over the subject property; and that in
the absence of a final determination by a court of proper jurisdiction
on the alleged forged signatures of the Amodias in the Extra-Judicial Partition of
Real Estate with Deed of Absolute Sale, the finding of the document examiner was
insufficient for the RTC to rule in favor of the petitioners.
The CA disposed of the case in this wise:
WHEREFORE, premises considered, the assailed decision dated
February 18, 1993 of the Regional Trial Court of Lapu-Lapu City,
Branch 27, in Civil Case No. 2254-L is hereby REVERSED and SET
ASIDE and a new one is hereby entered as follows:
(1) Declaring
plaintiff-appellant
Aznar
Brothers
Realty Company as the real owner of the land in
question;
(2) Declaring both the Deed of Extra-judicial Settlement
with Absolute Sale dated February 1, 1989 executed
by Felipe Amodia, Cecilia Amodia, Veneranda A. Ibag
and Eustaquio Amodia in favor of Go Kim Chuan and
the Transfer Certificate of Title No. 20626 in the name
of Go Kim Chuan as NULL AND VOID;
(3) Ordering Go Kim Chuan to deliver to the aforesaid
plaintiff-appellant the possession of the land in
question and to execute a registrable deed of
conveyance of the subject property to the said plaintiffappellant.
No costs.
SO ORDERED.[21]

Petitioners filed a Motion for Reconsideration [22] which the CA denied in its
Resolution[23] dated June 5, 2001.
Hence, this Petition based on the following grounds:
I

Lot 3368 was already a registered land under Act 496, thus, the
registration by respondent of the Deed of Sale in 1964 under Act 3344
produces no legal effect whatsoever;
II
Even assuming arguendo that the lot in question was duly registered
under Act 3344 as an unregistered land, it is without prejudice to better
rights and the provision of Article 1544 of the New Civil Code would
be inapplicable;
III
The Honorable Court of Appeals erred in holding that an adverse claim
was already existing at the time the subject land was sold to petitioner
Go Kim Chuan; on the contrary, the latter had purchased the said land
in good faith and for value, without notice of any fact that would
reasonably impel a closer inquiry as to the possibility of a defect in the
vendor's title; and
IV
The Court of Appeals has misapplied the case of Heirs of Severa
Gregorio v. CA, 300 SCRA 565, cited in support of its ruling that the
court a quo committed error in appreciating the testimony of an expert
witness as to the forgery of the first Deed of Sale. [24]

In its Comment[25] dated September 18, 2001, AZNAR argued, among others, that
the Petition is dismissible because the Verification and Certification of Non-forum
Shopping were not signed by all the petitioners, invoking this Court's Decision in
the case of Loquias v. Office of the Ombudsman, [26] and that the same were signed
only by one April Socorro Go, daughter of the late Go Kim Chuan, who did not
even appear to be authorized to file the instant case in behalf of the other
petitioners.
In their Reply[27] dated October 22, 2001, petitioners contended that April Socorro
Go is one of the legitimate children and an heir of the late Go Kim Chuan and, as

such, she has personal knowledge of the truth of the facts alleged in the Petition.
Petitioners submitted that they substantially complied with the Rules of Court by
attaching the required Verification and Certification of Non-Forum Shopping and
since the same are required simply to facilitate and promote the orderly
administration of justice, compliance therewith should not be imposed with
absolute literalness.
On December 19, 2001, petitioners, through counsel, filed a Motion [28] for Leave to
Admit
Amended
Petition[29] for
Review
on Certiorari (Amended
Petition). Petitioners manifested that they were seeking to correct a defect in the
designation of parties and prayed that the Heirs of Go Kim Chuan, namely, Estrella
S. Go, Sonia Beth Go-Reynes, Daryl Go, and April Socorro Go be impleaded as
petitioners instead of the earlier designated petitioners, Cecilia Amodia Vda. de
Melencion, Veneranda Amodia, Felipe Amodia, Eutiquio Amodia, and Go Kim
Chuan. Counsel for petitioners admitted that he inadvertently included the
petitioners Amodias in the initial Petition for Review on Certiorari(Original
Petition), as they were parties before the RTC and CA. The counsel also
manifested that he was only representing the Heirs of Go Kim Chuan in this case.
Lastly, he claimed that other than the substitution of the original petitioners, both
the Original Petition and Amended Petition uniformly raised the same issues and
should be given due course in the greater interest of justice and that the instant
Motion was not interposed for delay.
Per directive of the Court,[30] AZNAR filed its Comment[31] on the said motion
wherein AZNAR manifested that it had no serious objection to the admission of the
Amended Petition if the same was intended merely to implead the Heirs of Go Kim
Chuan as petitioners. However, AZNAR interposed strong opposition to the
Amended Petition's admission since the names of the petitioners Amodias were
deleted without their written consent.
In their Reply,[32] the Heirs of Go Kim Chuan, through counsel, claimed that
petitioners Amodias were excluded from the Amended Petition because they can
no longer be located despite diligent efforts exerted by counsel. The counsel claims
that after the rendition of the assailed CA Decision, he sent several letters to
petitioners Amodias but they did not reply; hence, the Heirs of Go Kim Chuan, left
with no choice, filed the instant case before this Court on their own.

The Court issued a Resolution[33] dated September 16, 2002 giving due course to
the Petition and requiring the parties to submit their respective Memoranda.
In their Memorandum,[34] petitioners Heirs of Go Kim Chuan reiterate the same
issues raised in the Original Petition and the Amended Petition. They argue that
Act 3344 only refers to transactions affecting lands or interests therein not
previously registered under the Spanish Mortgage Law or under the Torrens
system; that if AZNAR could not have registered the sale in 1964 under Act 496
because the title over the subject property was lost, AZNAR should have availed
itself of the remedy of reconstitution; that registration under Act 3344 is without
legal effect and could not operate as constructive notice to petitioners and third
persons, hence, may not be used as basis for the application of Art. 1544 of the
New Civil Code; that the Notice of Adverse Claim of AZNAR was annotated on
TCT No. 20626 only on February 14, 1990 after the execution of the Deed of
Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan on
February 18, 1989, hence, the CA erred when it held that Go Kim Chuan was not a
buyer in good faith for supposedly having knowledge of such adverse claim; and
that the doctrine laid down in Heirs of Severa Gregorio v. CA[35] is inapplicable
since it referred to a case wherein the original copy of the document under review
was not produced in evidence while in the instant case, the original copy of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by the
Amodias in favor of AZNAR was presented before the trial court judge.
On the other hand, in its Memorandum, [36] AZNAR maintains that the Original
Petition is dismissible because the Verification and Certification of NonForum Shopping
thereof
were
not
signed
by
all
the
petitioners. AZNAR further claims that the Amended Petition was filed in order to
cure a fatal defect which should not be countenanced by this Court. AZNAR also
contends that Go Kim Chuan was a buyer in bad faith as he had prior constructive
notice that the subject property was sold to AZNAR because the sale was
registered with the Register of Deeds under Act 3344; that the 1964 sale was
registered under Act 3344 because the subject property was not actually covered by
a Torrens title at the time; that there was no other mode of registration except under
Act 3344; that Go Kim Chuan had to wait for the reconstitution of the lost
title, hence, it could not be said that he examined any certificate of title and could

feign ignorance of the sale in favor of AZNAR; that the second sale did not transfer
the subject property to Go Kim Chuan since it was no longer within the vendors'
power to convey; that with respect to the issue of forgery, the finding of the
document examiner is not conclusive; and that such issue was belied by petitioner
Veneranda Amodia herself when she declared that the negotiated sale in 1964
between AZNAR and the Amodias was not consummated because the latter did not
receive the full consideration for the subject property.
Before resolving the main issues raised, the Court shall first deal with an apparent
procedural lapse in this case.
Counsel for petitioners filed a Motion for Leave to Admit Amended Petition for
Review on Certiorari in order to implead the Heirs of the late Go Kim Chuan as
the new petitioners and to delete the names of petitioners Amodias because they
could no longer be located. Said petitioners sought the relaxation of the rules so
that in the interest of justice, the case can be decided on the merits. AZNAR
opposes the Amended Petition because it was allegedly filed to cure a fatal defect
in the original petition non-compliance with the rules on Verification and
Certification of Non-Forum Shopping.
In this regard, the case of Iglesia ni Cristo v. Ponferrada[37] is instructive, viz.:
The purpose of verification is simply to secure an assurance that the
allegations of the petition (or complaint) have been made in good faith;
or are true and correct, not merely speculative. This requirement is
simply a condition affecting the form of pleadings, and noncompliance
therewith does not necessarily render it fatally defective. Indeed,
verification is only a formal, not a jurisdictional requirement.
The issue in the present case is not the lack of verification but the
sufficiency of one executed by only one of plaintiffs. This Court held
in Ateneo de Naga University v. Manalo, that the verification
requirement is deemed substantially complied with when, as in the
present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it. Such
verification is deemed sufficient assurance that the matters alleged in
the petition have been made in good faith or are true and correct, not
merely speculative.

The same liberality should likewise be applied to the certification

against forum shopping. The general rule is that the certification must
be signed by all plaintiffs in a case and the signature of only one of
them is insufficient. However, the Court has also stressed in a number
of cases that the rules on forum shopping were designed to promote and
facilitate the orderly administration of justice and thus should not be
interpreted with such absolute literalness as to subvert its own ultimate
and legitimate objective. The rule of substantial compliance may be
availed of with respect to the contents of the certification. This is
because the requirement
of strict compliance with the provisions merely underscores its
mandatory
nature in that the certification cannot be altogether dispensed with or its
requirements completely disregarded.

Thus, we held in Iglesia ni Cristo that the commonality of interest is material and
crucial to relaxation of the Rules.
In the case at bench, the petitioners in the Amended Petition are Heirs of the late
Go Kim Chuan. They represent their predecessor-in-interest in whose favor a title
was issued covering the subject property and said title is sought to be canceled by
AZNAR. Clearly, there is presence of the commonality of interest referred to
in Iglesia ni Cristo. Under the circumstances, the rules may be reasonably and
liberally construed to avoid a patent denial of substantial justice, because it cannot
be denied that the ends of justice are better served when cases are determined on
the merits after all parties are given full opportunity to ventilate their causes and
defenses rather than on technicality or some procedural imperfections.[38]
The Issues
We now proceed to the merits of the case. From the issues raised, there are
ultimately two questions that require resolution:
First, did the CA misapply the doctrine in Heirs of Severa Gregorio v. CA in ruling
that the RTC committed an error in appreciating the testimony of an expert witness
as to the forgery of the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale?

Second, who between Go Kim Chuan and AZNAR has the better right over the
subject property?
We resolve the first question in the negative.
Forgery cannot be presumed. It must be proved by clear, positive and convincing
evidence and the burden of proof rests on the party alleging forgery. Handwriting
experts are usually helpful in the examination of forged documents because of the
technical procedure involved in analyzing them. But 1resort to these experts is not
mandatory or indispensable. A finding of forgery does not depend entirely on the
testimonies of handwriting experts, because the judge must conduct an
independent examination of the questioned signature in order to arrive at a
reasonable conclusion as to its authenticity.[39]
The RTC's finding with respect to the issue of forgery reads:
After a thorough study of the pleadings and evidence of the parties, the
court finds that preponderance of evidence heavily tilts in favor of the
defendants. The document relied upon by the plaintiff in its claim of
ownership over the land in question, the extrajudicial partition and sale,
has been found by the document examiner of the PC Crime Laboratory
to be a forgery. Being a forgery, said document conveyed nothing in
favor of the plaintiff. Hence, plaintiff's claim of ownership over the same
has no more leg to stand on. x x x[40]

While it is true that the original document was produced before the RTC, the
finding of forgery relies wholly on the testimony of the document examiner. It falls
short of the required independent examination to be conducted by the trial court
judge. Other than the statement of the document examiner, the RTC decision
contains
no
other
basis
to
support
its conclusion
of the existence of forgery. Accordingly, the CA was correct in rejecting the RTCs
finding and in applying the doctrine laid down in the case of Heirs of Severa
Gregorio v. CA.
However, we resolve the second question in favor of Go Kim Chuan.

Without doubt, we have here a case of double sale of registered land. Apropos is
Article 1544 of the New Civil Code which provides:
ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may have
first taken possession thereof in good faith, if it should be movable
property.
Should it be immovable property, the ownership shall belong to
the person acquiring it who in good faith first recorded it in the Registry
of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the absence
thereof, to the person who presents the oldest title, provided there is
good faith.

We have already ruled that the registration contemplated in this provision refers to
registration under the Torrens System, which considers the act of registration as the
operative act[41] that gives validity to the transfer or creates a lien upon the land.
[42]
This rule precisely applies to cases involving conflicting rights over registered
property and those of innocent transferees who relied on the clean title of the
properties.[43] Thus, we held that registration must be done in the proper registry in
order to bind the same.[44]

In the case at bench, it is uncontroverted that the subject property was under the
operation of the Torrens System even before the respective conveyances to
AZNAR and Go Kim Chuan were made. AZNAR knew of this, and admits this as
fact. Yet, despite this knowledge, AZNAR registered the sale in its favor under Act
3344 on the contention that at the time of sale, there was no title on file. We are not
persuaded by such a lame excuse.
Act 3344 provides for the system of recording of transactions or claims over
unregistered real estate[45] without prejudice to a third party with a better right.
[46]
But if the land is registered under the Land Registration Act (and therefore has a

Torrens Title), and it is sold and the sale is registered not under the Land
Registration Act but under Act 3344, as amended, such sale is not considered
registered, as the term is used under Art. 1544 of the New Civil Code.[47]
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale in favor of AZNAR was registered under Act No. 3344 and not under Act No.
496, the said document is deemed not registered. [48] Rather, it was the sale in favor
of Go Kim Chuan which was registered under Act No. 496.
AZNAR insists that since there was no Torrens title on file in 1964, insofar as the
vendors, AZNAR, and the Register of Deeds are concerned, the subject property
was unregistered at the time. The contention is untenable. The fact that the
certificate of title over the registered land is lost does not convert it into
unregistered land. After all, a certificate of title is merely an evidence of ownership
or title over the particular property described therein. [49] This Court agrees with the
petitioners that AZNAR should have availed itself of the legal remedy of
reconstitution of the lost certificate of title, instead of registration under Act 3344.
We note that in Aznar Brothers Realty Company v. Aying,[50] AZNAR, beset with
the similar problem of a lost certificate of title over a registered land, sought the
reconstitution thereof. It is unfortunate that, in the instant case, despite the sale
of the subject property way back in 1964 and the existence of the remedy of
reconstitution at that time, AZNAR opted to register the same under the improper
registry (Act 3344) and allowed such status to lie undisturbed. From 1964 to 1989,
AZNAR did not bother to have the lost title reconstituted or even have the subject
property declared under its name for taxation purposes. Vigilantibus, non
dormientibus, jura subveniunt. Laws must come to the assistance of the vigilant,
not of the sleepy.[51]
Although it is obvious that Go Kim Chuan registered the sale in his favor under
Act 496 while AZNAR did not, we still cannot make an outright award of the
subject property to the petitioners solely on that basis. For the law is clear: mere
registration of title is not enough. Good faith must accompany the registration.
Thus, to be able to enjoy priority status, the second purchaser must be in good
faith, i.e., he must have no knowledge of the previous alienation of the property by
the vendor to another. Notably, what is important for this purpose is not whether

the second buyer is a buyer in good faith, but whether he registers the second sale
in good faith, meaning, he does so without knowledge of any defect in the title
over the property sold. [52]
To fully resolve the second question, therefore, it is imperative that we determine
whether Go Kim Chuan was a registrant in good faith.
The CA found that AZNAR registered its Notice of Adverse Claim ahead of the
Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim
Chuan. Because of this, the CA declared that Go Kim Chuan was not a buyer in
good faith, because he should have respected such adverse claim or, at least,
inquired into the validity thereof.
We do not agree.
While factual issues are not within the province of this Court, as it is not a trier of
facts and is not required to examine the oral and documentary evidence de novo,
this Court has the authority to review and, in proper cases, reverse the factual
findings of lower courts in the following instances: (a) when the findings of fact of
the trial court are in conflict with those of the appellate court; (b) when the
judgment of the appellate court is based on a misapprehension of facts; and, (c)
when the appellate court manifestly overlooked certain relevant facts which, if
properly considered, would justify a different conclusion.[53]
The instant case falls squarely within the foregoing exceptions.
Concededly, inscription of an adverse claim serves as a warning to third parties
dealing with a piece of real property that someone claims an interest therein or that
there is a right superior to that of the titled owner.[54] However, as pointed out by
petitioners and as admitted by AZNAR, the Notice of Adverse Claim was
annotated on TCT No. 20626 only on February 4, 1990, after the lost certificate of
title was reconstituted and after the issuance of said TCT in the name of Go Kim
Chuan on December 1, 1989. It is, therefore, absurd to say that Go Kim Chuan
should be bound by
an adverse claim which was not previously annotated on the lost title or on the new
one, or be shackled by a claim which he did not have any knowledge of.

Citing Santiago v. Court of Appeals,[55] AZNAR contends that even if the adverse
claim was annotated on TCT No. 20626 only on February 4, 1990, the prior
registration of the sale in its favor under Act 3344 served as constructive notice to
Go Kim Chuan and thus negates the latter's claim of good faith, since the Court
held in that case, Registration, however, by the first buyer under Act 3344 can have
the effect of constructive notice to the second buyer that can defeat his right as
such buyer in good faith.
AZNAR's reliance on Santiago is misplaced. In Santiago, the first buyers
registered the sale under the Torrens System, as can be inferred from the issuance
of the TCT in their names. There was no registration under Act
3344. Conversely, in the instant case, AZNAR registered the sale in its favor under
Act 3344 despite its full knowledge that the subject property is under the operation
of the Torrens System. To repeat, there can be no constructive notice to the second
buyer through registration under Act 3344 if the property is registered under
the Torrens system.[56]
Moreover, before buying the subject property, Go Kim Chuan made verifications
with the Office of the City Assessor of Lapu-Lapu City and the Register of Deeds.
He likewise visited the premises of the subject property and found that nobody
interposed any adverse claim against the Amodias. After he decided to buy the
subject property, he paid all taxes in arrears, caused the publication of the Deed of
Extra-Judicial Settlement with Absolute Sale in a newspaper of general
circulation, caused the reconstitution of the lost certificate of title and caused the
issuance of the assailed TCT in his name.[57] Given these antecedents, good faith on
the part of Go Kim Chuan cannot be doubted.
We also note that AZNAR's complaint for cancellation of title contains
no allegation that the (second) purchaser was aware of defects in his title. In the
absence of such an allegation and proof of bad faith, it would be grossly
inappropriate for this Court to render judgment against the purchaser who had
already acquired title not only because of lack of evidence, but also because of the
indefeasibility and conclusiveness of such title.[58]
Finally, it is worth stressing that the Torrens system was adopted in this country
because it was believed to be the most effective measure to guarantee the integrity

of land titles and to insure their indefeasibility once the claim of ownership is
established and recognized. If a person purchases a piece of land on the assurance
that the seller's title thereto is valid, he should not run the risk of losing his
acquisition. If this were permitted, public confidence in the system would be
eroded and land transactions would have to be attended by complicated and not
necessarily conclusive investigations and proof of ownership.[59]
WHEREFORE, the instant petition for review is GRANTED. The Decision of
the Court of Appeals in CA-G.R. CV No. 51814 is REVERSED and SET ASIDE.
The Decision of the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil
Case No. 2254-L, is REINSTATED. No costs.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

ALAN JOSEPH A. SHEKER,

Petitioner,

G.R. No. 157912

Present:

YNARES-SANTIAGO, J.,
- versus -

Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and

ESTATE
SHEKER,

OF

ALICE

O.

REYES, JJ.

VICTORIA S. MEDINAAdministratrix,

Promulgated:

Respondent.

December 13, 2007

x-----------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Review on Certiorari seeking the

reversal of the Order[1] of the Regional Trial Court of Iligan City,
Branch 6 (RTC) dated January 15, 2003 and its Omnibus Order
dated April 9, 2003.

The undisputed facts are as follows.

The RTC admitted to probate the holographic will of Alice

O. Sheker and thereafter issued an order for all the creditors to file
their respective claims against the estate. In compliance
therewith, petitioner filed on October 7, 2002 a contingent claim
for
agent's
commission
due
him
amounting
to
approximately P206,250.00 in the event of the sale of certain
parcels of land belonging to the estate, and the amount
of P275,000.00, as reimbursement for expenses incurred and/or to
be incurred by petitioner in the course of negotiating the sale of
said realties.

The executrix of the Estate of Alice O. Sheker (respondent) moved

for the dismissal of said money claim against the estate on the
grounds that (1) the requisite docket fee, as prescribed in Section
7(a), Rule 141 of the Rules of Court, had not been paid; (2)
petitioner failed to attach a certification against non-forum
shopping; and (3) petitioner failed to attach a written explanation
why the money claim was not filed and served personally.

On January 15, 2003, the RTC issued the assailed Order dismissing
without prejudice the money claim based on the grounds
advanced by respondent. Petitioner's motion for reconsideration
was denied per Omnibus Order dated April 9, 2003.

Petitioner then filed the present petition for review on certiorari,

raising the following questions:

(a) must a contingent claim filed in the probate

proceeding contain a certification against non-forum
shopping, failing which such claim should be dismissed?

(b) must a contingent claim filed against an estate in a

probate proceeding be dismissed for failing to pay the
docket fees at the time of its filing thereat?

(c) must a contingent claim filed in a probate proceeding

be dismissed because of its failure to contain a written
explanation on the service and filing by registered mail?[2]

Petitioner maintains that the RTC erred in strictly applying to

a probate proceeding the rules requiring a certification of nonforum shopping, a written explanation for non-personal filing, and
the payment of docket fees upon filing of the claim. He insists that
Section 2, Rule 72 of the Rules of Court provides that rules in
ordinary actions are applicable to special proceedings only in
a suppletory manner.

The Court gave due course to the petition for review

on certiorari although directly filed with this Court, pursuant to
Section 2(c), Rule 41 of the Rules of Court.[3]

The petition is imbued with merit.

However, it must be emphasized that petitioner's contention that

rules in ordinary actions are only supplementary to rules in
special proceedings is not entirely correct.
Section 2, Rule 72, Part II of the same Rules of Court
provides:
Sec. 2. Applicability of rules of Civil Actions. - In the
absence of special provisions, the rules provided for in
ordinary actions shall be, as far as practicable, applicable
in special proceedings.

Stated differently, special provisions under Part II of the

Rules of Court govern special proceedings; but in the absence of
special provisions, the rules provided for in Part I of the Rules
governing ordinary civil actions shall be applicable to special
proceedings, as far as practicable.
The word practicable is defined as: possible to practice or
perform; capable of being put into practice, done or
accomplished.[4] This means that in the absence of special
provisions, rules in ordinary actions may be applied in special
proceedings as much as possible and where doing so would not
pose an obstacle to said proceedings. Nowhere in the Rules of
Court does it categorically say that rules in ordinary actions are
inapplicable
or
merely suppletory to
special
proceedings. Provisions of the Rules of Court requiring a
certification of non-forum shopping for complaints and
initiatory pleadings, a written explanation for non-personal
service and filing, and the payment of filing fees for money claims
against an estate would not in any way obstruct probate
proceedings, thus, they are applicable to special proceedings such

as the settlement of the estate of a deceased person as in the

present case.
Thus, the principal question in the present case is: did the
RTC err in dismissing petitioner's contingent money claim against
respondent estate for failure of petitioner to attach to his motion
a certification against non-forum shopping?
The Court rules in the affirmative.
The certification of non-forum shopping is required only for
complaints and other initiatory pleadings. The RTC erred in
ruling that a contingent money claim against the estate of a
decedent is an initiatory pleading. In the present case, the whole
probate proceeding was initiated upon the filing of the
petition for allowance of the decedent's will. Under Sections
1 and 5, Rule 86 of the Rules of Court, after granting letters of
testamentary or of administration, all persons having money
claims against the decedent are mandated to file or notify the
court and the estate administrator of their respective money
claims; otherwise, they would be barred, subject to certain
exceptions.[5]
Such being the case, a money claim against an estate is more
akin to a motion for creditors' claims to be recognized and taken
into consideration in the proper disposition of the properties of
the estate. In Arquiza v. Court of Appeals,[6] the Court explained
thus:
x x x The office of a motion is not to initiate new
litigation, but to bring a material but incidental
matter arising in the progress of the case in which
the motion is filed. A motion is not an independent

right or remedy, but is confined to incidental matters in

the progress of a cause. It relates to some question
that is collateral to the main object of the action
and is connected with and dependent upon the
principal remedy.[7] (Emphasis supplied)

A money claim is only an incidental matter in the main action for

the settlement of the decedent's estate; more so if the claim is
contingent since the claimant cannot even institute a separate
action for a mere contingent claim. Hence, herein petitioner's
contingent money claim, not being an initiatory pleading,
does not require a certification against non-forum
shopping.
On the issue of filing fees, the Court ruled in Pascual v. Court of
Appeals,[8] that the trial court has jurisdiction to act on a money
claim (attorney's fees) against an estate for services rendered by
a lawyer to the administratrix to assist her in fulfilling her duties
to the estate even without payment of separate docket fees
because the filing fees shall constitute a lien on the judgment
pursuant to Section 2, Rule 141 of the Rules of Court, or the trial
court may order the payment of such filing fees within a
reasonable time.[9]After all, the trial court had already assumed
jurisdiction over the action for settlement of the estate. Clearly,
therefore, non-payment of filing fees for a money claim against
the estate is not one of the grounds for dismissing a money claim
against the estate.
With
regard
to
the
requirement
of
a
written
explanation, Maceda v.
De
Guzman Vda. de Macatangay[10] is
squarely in point. Therein, the Court held thus:

In Solar Team Entertainment, Inc. v. Ricafort, this Court,

passing upon Section 11 of Rule 13 of the Rules of Court,
held that a court has the discretion to consider a pleading
or paper as not filed if said rule is not complied with.
Personal service and filing are preferred for obvious reasons. Plainly,
such should expedite action or resolution on a pleading, motion or
other paper; and conversely, minimize, if not eliminate, delays likely to
be incurred if service or filing is done by mail, considering the
inefficiency of the postal service. Likewise, personal service will do
away with the practice of some lawyers who, wanting to appear clever,
resort to the following less than ethical practices: (1) serving or filing
pleadings by mail to catch opposing counsel off-guard, thus leaving the
latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or (2) upon receiving notice from the post
office that the registered mail containing the pleading of or other paper
from the adverse party may be claimed, unduly procrastinating before
claiming the parcel, or, worse, not claiming it at all, thereby causing
undue delay in the disposition of such pleading or other papers.

If only to underscore the mandatory nature of this innovation to our set

of adjective rules requiring personal service whenever practicable,
Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of
service

or

filing

were

not

resorted

to

and

no

written

explanation was made as to why personal service was not done

in the first place.The exercise of discretion must, necessarily
consider the practicability of personal service, for Section 11
itself begins with the clause whenever practicable.

We thus take this opportunity to clarify that under Section 11, Rule 13
of the 1997 Rules of Civil Procedure, personal service and filing is the
general rule, and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or filing is
practicable, in the light of the circumstances of time, place and person,
personal service or filing is mandatory. Only when personal service or
filing is not practicable may resort to other modes be had, which must
then be accompanied by a written explanation as to why personal
service or filing was not practicable to begin with. In adjudging the
plausibility of an explanation, a court shall likewise consider the
importance of the subject matter of the case or the issues involved
therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11. (Emphasis and italics supplied)

In Musa v. Amor, this Court, on noting the impracticality of

personal service, exercised its discretion and liberally
applied Section 11 of Rule 13:
As [Section 11, Rule 13 of the Rules of Court] requires,
service and filing of pleadings must be done personally
whenever practicable. The court notes that in the
present case, personal service would not be
practicable. Considering the distance between the
Court of Appeals and Donsol, Sorsogon where the
petition was posted, clearly, service by registered
mail [sic] would have entailed considerable time,
effort and expense. A written explanation why
service was not done personally might have been
superfluous. In any case, as the rule is so worded
with the use of may, signifying permissiveness, a
violation thereof gives the court discretion whether
or not to consider the paper as not filed. While it is
true that procedural rules are necessary to secure

an
orderly
and
speedy
administration
of
justice, rigid application of Section 11, Rule 13 may
be relaxed in this case in the interest of substantial
justice. (Emphasis and italics supplied)

In the case at bar, the address of respondents counsel is

Lopez, Quezon,
while
petitioner
Sonias counsels is Lucena City. Lopez, Quezon is
83
kilometers away from Lucena City. Such distance makes
personal service impracticable. As in Musa v. Amor, a
written explanation why service was not done personally
might have been superfluous.
As this Court held in Tan v. Court of Appeals, liberal
construction of a rule of procedure has been allowed
where, among other cases, the injustice to the adverse
party is not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed.[11] (Emphasis supplied)

In
the
present
case,
petitioner
holds
office
in Salcedo Village, Makati City, while counsel for respondent and
the RTC which rendered the assailed orders are both
in Iligan City.The lower court should have taken judicial notice of
the great distance between said cities and realized that it is
indeed not practicable to serve and file the money claim
personally. Thus, following Medina v. Court of Appeals,[12] the
failure of petitioner to submit a written explanation why service
has not been done personally, may be considered as superfluous
and the RTC should have exercised its discretion under Section
11, Rule 13, not to dismiss the money claim of petitioner, in the
interest of substantial justice.
The ruling spirit of the probate law is the speedy settlement
of estates of deceased persons for the benefit of creditors and

those entitled to residue by way of inheritance or legacy after the

debts and expenses of administration have been paid. [13] The
ultimate purpose for the rule on money claims was further
explained in Union Bank of the Phil. v. Santibaez,[14] thus:
The filing of a money claim against the decedents estate
in the probate court is mandatory. As we held in the
vintage case of Py Eng Chong v. Herrera:

x x x This requirement is for the purpose of protecting the

estate

of

the

deceased

by

informing

the

executor

or

administrator of the claims against it, thus enabling him to

examine each claim and to determine whether it is a proper one which
should be allowed. The plain and obvious design of the rule is the
speedy settlement of the affairs of the deceased and the early delivery
of the property to the distributees, legatees, or heirs. The law strictly
requires the prompt presentation and disposition of the claims
against the decedent's estate in order to settle the affairs of
the estate as soon as possible, pay off its debts and distribute the
residue.[15]

(Emphasis supplied)

The RTC should have relaxed and liberally construed the

procedural rule on the requirement of a written explanation for
non-personal service, again in the interest of substantial justice.

WHEREFORE, the petition is GRANTED. The Orders of the

Regional Trial Court of Iligan City, Branch 6 dated January 15, 2003
and
April
9,
2003,
respectively,
are REVERSED and SET ASIDE. The Regional Trial Court of Iligan C
ity, Branch 6, is hereby DIRECTED to give due course and take
appropriate action on petitioner's money claim in accordance with
Rule 82 of the Rules of Court.
No pronouncement as to costs.
SO ORDERED.

SECOND DIVISION

[G.R. No. 127064. August 31, 1999]

FIVE

STAR
BUS
COMPANY
INC.,
and
IGNACIO
TORRES, petitioners, vs. COURT OF APPEALS, JUDGE JAIME F.
BAUTISTA, RTC-Br. 75, Valenzuela, Metro Manila and SAMUEL
KING SAGARAL II, respondents.
DECISION

BELLOSILLO, J.:

The threshold issue in this petition for review on certiorari is whether the Court of Appeals
can summarily dismiss a petition on the ground that the certification on non-forum shopping
required by Supreme Court Circular No. 28-91 was signed by counsel and not by petitioners
themselves.
On 9 November 1991, at around 11:00 oclock in the evening, along the MacArthur Highway
in Valenzuela, Metro Manila, the Suzuki Supercarry Mini-Van driven by private respondent
Samuel King Sagaral II collided with a passenger bus owned and operated by petitioner Five Star
Bus Company and driven by co-petitioner Ignacio Torres.[1]

On 1 April 1992 private respondent Sagaral filed a civil action for damages against
petitioners and the case was assigned to Branch 171 of the Valenzuela Regional Trial Court and
docketed as Civil Case No. 3812-V-92.
When amicable settlement failed, trial ensued with private respondent Sagaral (plaintiff in
the court a quo) initially presenting his evidence. Several years passed and on 26 December 1996
Sagaral finally rested his case.[2] On 12 March 1996 the trial court ordered petitioners herein
(defendants in the court a quo) to present their evidence on 25 April 1996 and 9 May 1996.[3]
The presentation of evidence by petitioners was snagged by several postponements. The first
was when Presiding Judge Adriano R. Osorio reset the 25 April 1996 hearing to 9 May 1996 as
he had to go on forced vacation leave from 23 April 1996 to 25 April 1996. [4] But during the 9
May 1996 hearing, petitioner Ignacio Torres failed to appear prompting the lower court to cancel
the hearing. According to petitioners, Torres was then detained in jail due to a separate pending
criminal case filed against him by Sagaral before Br. 172 of the RTC of Valenzuela. Petitioners
further explained that Torres could not post bail earlier for his provisional liberty since no notice
was sent to him regarding the criminal complaint.[5]
On 4 June 1996 Judge Osorio ordered the civil case to be unloaded in view of his courts
designation as a permanent special court to exclusively try heinous crimes under RA 7659.[6] On
17 June 1996 the case was re-raffled to Br. 75 of the same RTC, this time under Judge Jaime F.
Bautista who immediately scheduled a hearing for the initial presentation of petitioners' evidence
on 8 August 1996.[7]Nonetheless on 9 July 1996 petitioners filed a motion to reset the hearing
scheduled on 8 August 1996 to 15 August 1996 citing as reason their counsels conflict of
schedule.[8]
It seemed however that even prior to the scheduled hearing of 8 August 1996, former
Presiding Judge Osorio had already set a hearing for 2 July 1996 and 16 July 1996. But instead
of conducting a hearing on said dates, Judge Bautista issued an order on 2 July 1996, thus -

It appearing from the records that this case had been previously set by Branch 171
today and July 16, 1996 and considering the Urgent Motion to Reset filed by the
defendants thru counsel, the hearing set for today is hereby cancelled and is reset to
July 16, 1996 as previously scheduled and August 8, 1996 both at 8:30 a.m. x x x x [9]
When the case was called for hearing on 16 July 1996, counsel for petitioners was not
present. In fact he arrived twenty (20) minutes late. Thus, upon motion of respondent Sagaral,
the trial court issued the disputed Order-

There being no certainty as to what time defendants counsel would be in court, and
upon manifestation of plaintiffs counsel that lawyer should be aware of his time x x x
as prayed for, the defendants right to present their evidence is deemed waived and the
case is now submitted for decision x x x x (underscoring supplied).[10]
Petitioners forthwith filed a motion for reconsideration of the above-mentioned Order
arguing that the right to be heard was a basic tenet guaranteed by the Constitution which the

courts could not impinge upon in the absence of any justifying reason to do so. They also blamed
the heavy traffic for their lawyer's tardiness.
To simplify the proceedings due to the various motions filed by petitioners, Judge Bautista
cancelled the 8 August 1996 hearing and reset it to 20 August 1996. He also set for hearing
petitioner's motion for reconsideration on 20 August 1996.[11]
However, as if trying to test the patience of the trial court, petitioners once again filed on 5
August 1996 an Urgent Motion to Reset the 20 August 1996 hearing. Their counsel pleaded that
he could not make it on such date because he had previously committed himself to appear before
the Antipolo Regional Trial Court. He prayed that the hearing be moved to 2 September 1996.[12]
The hearing set for 20 August 1996 was cancelled [13] and the trial court on that day issued
instead its Order denying petitioners' motion for reconsideration of its Order dated 16 July 1996
which considered the case submitted for resolution. The lower court noted that the case had been
pending for more than four (4) years and it had always been at the "mercy" of petitioners when it
acted favorably on their motions. There would be no end to this litigation if the court would give
due course to this motion.[14]
Undeterred, petitioners sought recourse in the Court of Appeals through a petition
for certiorari. But in the assailed Resolution dated 23 September 1996 the appellate court
summarily dismissed their petition on the ground that the affidavit of non-forum shopping was
signed and executed by counsel for petitioners and not by petitioners themselves, or one of them,
as required by Circular No. 28-91 of the Supreme Court.[15]
Petitioners moved for reconsideration which the Court of Appeals rejected in its Resolution
of 31 October 1996.[16] Petitioners are now before us contending that the appellate court erred in
affirming the Order of the trial court dated 16 July 1996 and in dismissing their petition for noncompliance with the requirement of Circular No. 28-91. They pray that the appellate court
remand the case to the court of origin for further proceedings.
Circular No. 28-91, which took effect on 1 April 1994, provides inter alia:

(1) (I)n every petition filed with the Supreme Court or the Court of Appeals, the
petitioner, aside from complying with the pertinent provisions of the Rules of Court
and existing circulars, must certify under oath all of the following facts or
undertakings x x x x;
(2) Any violation of this revised Circular will entail the following sanctions: (a) it
shall be a cause for the summary dismissal of the multiple petitions or complaints; x x
x x (underscoring supplied).
Circular No. 28-91 has its roots in the rule that a party-litigant shall not be allowed to pursue
simultaneous remedies in two (2) different fora, for such practice works havoc upon orderly
judicial procedure. Forum shopping has been characterized as an act of malpractice that is
prohibited and condemned as trifling with the courts and abusing their processes. It constitutes
improper conduct which tends to degrade the administration of justice. It has also been aptly

described as deplorable because it adds to the congestion of the already heavily burdened dockets
of the courts.[17]
Nonetheless, we are not unmindful of this Courts ruling in Gabionza v. Court of Appeals,
Loyola v. Court of Appeals,[19] and Kavinta v. Castillo, Jr.[20] that substantial compliance with
Circular No. 28-91 is sufficient:
[18]

It is scarcely necessary to add that Circular No. 28-91 must be so interpreted and
applied to achieve the purposes projected by the Supreme Court when it promulgated
that circular. Circular No. 28-91 was designed to serve as an instrument to promote
and facilitate the orderly administration of justice and should not be interpreted with
such absolute literalness as to subvert its own ultimate and legitimate objective or the
goal of all rules of procedure which is to achieve substantial justice as expeditiously
as possible.
The fact that the Circular requires that it be strictly complied with merely underscores
its mandatory nature in that it cannot be dispensed with or its requirements altogether
disregarded, but it does not thereby interdict substantial compliance with its
provisions under justifiable circumstances.
In the instant case, we cannot apply the "substantial compliance" rule to petitioners and be as
liberal minded. For one thing, counsel for petitioners gave a rather frail excuse for his noncompliance, i.e., oversight and haste in ensuring that the petition would be filed at the earliest
possible time for the protection of his clients interests thereby overlooking the aforesaid circular.
[21]

In Ortiz v. Court of Appeals[22] which involves a similar set of facts, we ruled -

(I)t should be recalled that Revised Circular No. 28-91 provides that the party must
certify under oath that he has not commenced any other action or proceeding
involving the same issues in the Supreme Court, the Court of Appeals, or different
Divisions thereof, or any other tribunal or agency, and that to the best of his
knowledge, no such action or proceeding is pending in the Supreme Court x x x x
Petitioners admit that their lawyer x x x signed the Certification on Non-Forum
Shopping. Allegedly, Atty. Paulite has personal knowledge that the Ortizes had not
commenced any other action or proceeding involving the same parties and causes of
action. Petitioners now assert that their lawyers signature must be accepted as
substantial compliance with the requirements of the Circular.
Regrettably, we find that substantial compliance will not suffice in a matter involving
strict observance as provided for in Circular No. 28-91. The attestation contained in
the certification on non-forum shopping requires personal knowledge by the party
who executed the same. To merit the Courts consideration, petitioners here must show

reasonable cause for failure to personally sign the certification. The petitioners must
convince the court that the outright dismissal of the petition would defeat the
administration of justice. However, the petitioners did not give any explanation to
warrant their exemption from the strict application of the rule utter disregard of the
rules cannot justly be rationalized by harking on the policy of liberal construction x x
xx
Finally, petitioners argue that the delay in the proceedings in the court below was not
entirely their fault "as various circumstances and incidents beyond (their) control contributed to
the delay."[23]
Contrary to petitionerss assertions, their failure to present their evidence was their own
undoing. A review of the records shows that the trial court had scheduled a total of six (6)
hearing dates for the presentation of their evidence. These were 25 April 1996, 9 May 1996, 2
July 1996, 16 July 1996, 8 August 1996 and 20 August 1996. Five (5) of these trial dates were
cancelled at the instance of petitioners.They themselves admitted that the 9 May 1996 hearing
was postponed when Isagani Torres failed to appear in court because he was then
incarcerated. Likewise, through a motion petitioners were able to have the hearing on 2 July
1996 moved to 16 July 1996. However on said date petitioners counsel failed to appear on time,
thus prompting the trial court to declare petitioners right to present evidence as waived.As to the
8 August 1996 hearing, they moved to have the same reset, citing as reason the conflict of
schedule of their counsel. And when the trial court granted the motion and transferred the
hearing to 20 August 1996, petitioners once again submitted a motion praying that the hearing be
reset to 2 September 1996. From these repeated resettings, it can be gleaned that the delay in the
proceedings was largely, if not mainly, due to petitioners.
We also do not miss the fact that petitioners were represented by a law firm which meant
that any of its members could lawfully act as their counsel during the trial. As such petitioners
frequent motions to reset hearings by reason of their counsels unavailability should be cautiously
considered to make sure that these were not mere dilatory tactics. As observed by the lower
court, a perusal of the records shows that the case has been pending for a long period of time,
with the court often accommodating petitioners. Thus there could be no grave abuse of discretion
when the trial court finally ordered petitioners right to present evidence as waived to put an end
to their foot dragging. Indeed, it is never too often to say that justice delayed is justice denied.
WHEREFORE, there being no reversible error committed by the Court of Appeals, the
petition for review on certiorari is DENIED and the assailed Resolution of 23 September 1996
summarily dismissing the petition for certiorari and the Resolution of 31 October 1996 denying
reconsideration are AFFIRMED. Consequently, the Regional Trial Court of Valenzuela, Metro
Manila, is DIRECTED forthwith to render its decision in Civil Case No. 3812-V-92 without
delay. Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing, and Buena, JJ., concur.

THIRD DIVISION

[G.R. No. 140153. March 28, 2001]

ANTONIO DOCENA and ALFREDA DOCENA, petitioners, vs. HON.

RICARDO P. LAPESURA, in his capacity as Presiding Judge of the
RTC, Branch III, Guian, Eastern Samar; RUFINO M. GARADO,
Sheriff IV; and CASIANO HOMBRIA, respondents.
DECISION
GONZAGA-REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking the nullification of the Court of Appeals [1] Resolutions dated June 18, 1999
and September 9, 1999 which dismissed the Petition for Certiorari and
Prohibition[2] under Rule 65 and denied the corresponding motion for reconsideration,
respectively.
The antecedent facts are as follows:
On June 1, 1977, private respondent Casiano Hombria filed a Complaint for the
recovery of a parcel of land against his lessees, petitioner-spouses Antonio and
Alfreda Docena.[3] The petitioners claimed ownership of the land based on occupation
since time immemorial.[4] A certain Guillermo Abuda intervened in the case. In a
Decision dated November 24, 1989, the trial court ruled in favor of the petitioners and
the intervenor Abuda.[5] On appeal, the Court of Appeals reversed the judgment of the
trial court and ordered the petitioners to vacate the land they have leased from the
plaintiff-appellant [private respondent Casiano Hombria], excluding the portion
which the petitioners reclaimed from the sea and forms part of the shore, as shown in
the Commissioners Report, and to pay the plaintiff-appellant the agreed rental
of P1.00 per year from the date of the filing of the Complaint until they shall have
actually vacated the premises.[6] The Complaint in Intervention of Abuda was
dismissed.[7]
On May 22, 1995, private respondent Hombria filed a Motion for Execution of the
above decision which has already become final and executory.[8] The motion was
granted by the public respondent judge, and a Writ of Execution was issued
therefor. However, the public respondent sheriff subsequently filed a Manifestation

requesting that he be clarified in the determination of that particular portion which is

sought to be excluded prior to the delivery of the land adjudged in favor of plaintiff
Casiano Hombria in view of the defects in the Commissioners Report and the
Sketches attached thereto.[9] After requiring the parties to file their Comment on the
sheriffs Manifestation, the public respondent judge, in a Resolution dated August 30,
1996, held that xxx no attempt should be made to alter or modify the decision of the
Court of Appeals. What should be delivered therefore to the plaintiff xxx is that
portion leased by the defendant-appellees from the plaintiff-appellant excluding the
portion that the defendant-appellee have reclaimed from the sea and forms part of the
shore as shown in the commissioners report xxx. [10] Pursuant to the Resolution, the
public respondent sheriff issued an alias Writ of Demolition.The petitioners filed a
Motion to Set Aside or Defer the Implementation of Writ of Demolition. This motion
was denied by the public respondent judge in an Order dated November 18, 1998, a
copy of which was received by the petitioners on December 29, 1998. [11] Also on
December 29, 1998, the public respondent judge, in open court, granted the petitioners
until January 13, 1999 to file a Motion for Reconsideration. [12] On January 13, 1999,
petitioners moved for an extension of the period to file a motion for reconsideration
until January 28, 1999.[13] The motion was finally filed by the petitioners on January
27, 1999, but was denied by the trial court in an Order dated March 17, 1999. [14] A
copy of the Order was received by the petitioners on May 4, 1999. [15]
A Petition for Certiorari and Prohibition was filed by the petitioners with the
Court of Appeals, alleging grave abuse of discretion on the part of the trial court judge
in issuing the Orders dated November 18, 1998 and March 17, 1999, and of the sheriff
in issuing the alias Writ of Demolition. In a Resolution dated June 18, 1999, the Court
of Appeals dismissed the petition on the grounds that the petition was filed beyond the
60-day period provided under Section 4 of Rule 65 of the 1997 Revised Rules of Civil
Procedure as amended by Bar Matter No. 803 effective September 1, 1998, and that
the certification of non-forum shopping attached thereto was signed by only one of the
petitioners.[16] The Motion for Reconsideration filed by the petitioners was denied by
the Court of Appeals in a Resolution dated September 9, 1999. [17]
Hence this petition.
The sole issue in this case is whether or not the Court of Appeals erred in
dismissing the Petition for Certiorari and Prohibition.
The petition is meritorious.
The Court of Appeals dismissed the Petition for Certiorari upon the following
grounds, viz: (1) the petition was filed beyond the 60-day period provided under Sec.
4, Rule 65 of the 1997 Revised Rules of Civil Procedure as amended by Bar Matter
No. 803 effective September 1, 1998; and (2) the certification of non-forum shopping
was signed by only one of the petitioners.

Upon the first ground, the Court of Appeals stated in its Resolution dated June 18,
1999 that:
xxx the 60-day period is counted not from the receipt of the Order denying their
Motion for Reconsideration but from the date of receipt of the Order of November 18,
1998 which was on December 29, 1998, interrupted by the filing of the Motion for
Reconsideration on January 27, 1999. The Motion for Reconsideration was denied in
an Order dated March 17, 1999 received by the petitioners on May 4, 1999.Counting
the remaining period, this petition should have been filed on June 4, 1999 but it was
filed only on June 14, 1999 or ten (10) days beyond the 60-day period computed in
accordance with Bar Matter No. 803.
xxx xxx xxx[18]
The petitioners agree that the counting of the 60-day period should commence on
December 29, 1998, the date of the receipt by the petitioners of the assailed trial court
order, interrupted by the filing of a motion for reconsideration on January 27, 1999,
and resume upon receipt by the petitioners of the denial of the motion by the trial
court on May 4, 1999; however, the petitioners contend that from December 29, 1998
up to January 27, 1999, only the 15-day period allowed for the filing of a motion for
reconsideration[19] should be deemed to have elapsed considering the grant by the trial
court of an extension of the period to file the motion until January 13, 1999. Hence,
on May 4, 1999, the petitioners still had 45 days to file a petition for certiorari and/or
prohibition, and the filing made on June 14, 1999 was timely.
We hold that the Petition for Certiorari and Prohibition has been timely filed.
A.M. No. 00-2-03-SC, which took effect on September 1, 2000, amended Section
4 of Rule 65 of the 1997 Revised Rules of Civil Procedure [20] to provide thus:
SEC. 4. When and where petition filed.-- The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not,
the sixty (60) day period shall be counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions
of a lower court or of a corporation, board, officer or person, in the Regional Trial
Court exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed in the Court of Appeals whether or not the same is in aid of
its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless
otherwise provided by law or these rules, the petition shall be filed in and cognizable
only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason
and in no case exceeding fifteen (15) days. [Emphasis ours]
In the case of Systems Factors Corporation versus NLRC,[21] we held that the
abovequoted Resolution, being procedural in nature, is applicable to actions pending
and undetermined at the time of their passage. The retroactive application of
procedural laws such as this Resolution is not violative of any right of a person who
may feel adversely affected thereby, as no vested right may attach to nor arise from
procedural laws.[22] The ruling in the Systems Factors case was reiterated in the recent
case of Unity Fishing Development Corporation, et. al. vs. Court of Appeals, et. al.
[23]
Applying the Resolution to the case at bar, the 60-day period for the filing of a
petition for certiorari and prohibition should be reckoned from the date of receipt of
the order denying the motion for reconsideration, i.e., May 4, 1999, and thus, the
filing made on June 14, 1999 was well within the 60-day reglementary period.
Anent the ground that the certification of non-forum shopping was signed by only
one of the petitioners, it is the contention of the petitioners that the same is sufficient
compliance with the requirements of Sections 1 and 2 of Rule 65 (Petition for
Certiorari and Prohibition) in relation to Section 3 of Rule 46 (Original Cases Filed in
the Court of Appeals). The petitioners argue that since they are spouses with joint or
indivisible interest over the alleged conjugal property subject of the original action
which gave rise to the petition for certiorari and prohibition, the signing of the
certificate of non-forum shopping by only one of them would suffice, especially
considering the long distance they had to travel just to sign the said certificate.
[24]
Moreover, there is substantial compliance with the Rules of Court where the
certification was signed by the husband who is the statutory administrator of the
conjugal property.[25]
It has been our previous ruling that the certificate of non-forum shopping should
be signed by all the petitioners or plaintiffs in a case, and that the signing by only one
of them is insufficient. In the case of Efren Loquias, et. al. vs. Office of the
Ombudsman, et. al.,[26] we held that the signing of the Verification and the Certification
on Non-Forum Shopping by only one of the petitioners constitutes a defect in the
petition.[27] The attestation contained in the certification on non-forum shopping
requires personal knowledge by the party executing the same,[28] and the lone signing
petitioner cannot be presumed to have personal knowledge of the filing or non-filing
by his co-petitioners of any action or claim the same as or similar to the current
petition. To merit the Courts consideration, petitioners must show reasonable cause for
failure to personally sign the certification.
In the case at bar, however, we hold that the subject Certificate of Non-Forum
Shopping signed by the petitioner Antonio Docena alone should be deemed to
constitute substantial compliance with the rules. [29] There are only two petitioners in

this case and they are husband and wife. Their residence is the subject property
alleged to be conjugal in the instant verified petition. The Verification/Certification on
Non-Forum Shopping[30] attached to the Petition for Certiorari and Prohibition was
signed only by the husband who certified, inter alia, that he and his wife have not
commenced any other action or proceeding involving the same issues raised in the
petition in any court, tribunal or quasi-judicial agency; that to the best of their
knowledge no such action is pending therein; and that he and his wife undertake to
inform the Court within five (5) days from notice of any similar action or proceeding
which may have been filed.
The property subject of the original action for recovery is conjugal. Whether it is
conjugal under the New Civil Code or the Family Code, a fact that cannot be
determined from the records before us, it is believed that the certificate on non-forum
shopping filed in the Court of Appeals constitutes sufficient compliance with the rules
on forum-shopping.
Under the New Civil Code, the husband is the administrator of the conjugal
partnership.[31] In fact, he is the sole administrator, and the wife is not entitled as a
matter of right to join him in this endeavor.[32] The husband may defend the conjugal
partnership in a suit or action without being joined by the wife. [33] Corollarily, the
husband alone may execute the necessary certificate of non-forum shopping to
accompany the pleading. The husband as the statutory administrator of the conjugal
property could have filed the petition for certiorari and prohibition [34] alone, without
the concurrence of the wife. If suits to defend an interest in the conjugal properties
may be filed by the husband alone, with more reason, he may sign the certificate of
non-forum shopping to be attached to the petition.
Under the Family Code, the administration of the conjugal property belongs to the
husband and the wife jointly.[35] However, unlike an act of alienation or encumbrance
where the consent of both spouses is required, joint management or administration
does not require that the husband and wife always act together. Each spouse may
validly exercise full power of management alone, subject to the intervention of the
court in proper cases as provided under Article 124 of the Family Code. [36] It is
believed that even under the provisions of the Family Code, the husband alone could
have filed the petition for certiorari and prohibition to contest the writs of demolition
issued against the conjugal property with the Court of Appeals without being joined
by his wife. The signing of the attached certificate of non-forum shopping only by the
husband is not a fatal defect.
More important, the signing petitioner here made the certification in his behalf
and that of his wife. The husband may reasonably be presumed to have personal
knowledge of the filing or non-filing by his wife of any action or claim similar to the
petition for certiorari and prohibition given the notices and legal processes involved in

a legal proceeding involving real property. We also see no justifiable reason why he
may not lawfully undertake together with his wife to inform the court of any similar
action or proceeding which may be filed. If anybody may repudiate the certification or
undertaking for having been incorrectly made, it is the wife who may conceivably do
so.
In view of the circumstances of this case, namely, the property involved is a
conjugal property, the petition questioning the writ of demolition thereof originated
from an action for recovery brought against the spouses, and is clearly intended for
the benefit of the conjugal partnership, and the wife, as pointed out in the Motion for
Reconsideration in respondent court, was in the province of Guian, Samar, whereas
the petition was prepared in Metro Manila, a rigid application of the rules on forum
shopping that would disauthorize a husbands signing the certification in his behalf and
that of his wife is too harsh and is clearly uncalled for.
It bears stressing that the rules on forum shopping, which were designed to
promote and facilitate the orderly administration of justice, should not be interpreted
with such absolute literalness as to subvert its own ultimate and legitimate objective. [37]
The petitioners motion for the issuance of a temporary restraining order to put on
hold the demolition of the subject property is principally anchored on their alleged
right to the nullification of the assailed orders and writs issued by the public
respondents.[38] As the existence of the right being asserted by the petitioners is a
factual issue proper for determination by the Court of Appeals, the motion based
thereon should likewise be addressed to the latter court.
WHEREFORE, premises considered, the petition is hereby GRANTED. The
Court of Appeals Resolutions dated June 18, 1999 and September 9, 1999 are hereby
SET ASIDE and the case is REMANDED to the Court of Appeals for further
proceedings.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

Republic of the Philippines

Supreme Court

Baguio City

THIRD DIVISION

TIBLE & TIBLE COMPANY, INC., G.R. No. 155806

HEIRS OF EMILIO G. TIBLE, JR.,
namely: ALMABELLA MENLA
VDA. DE TIBLE, EMILIO M. Present:
TIBLE IV, MA. MYLENE TIBLE,
VICTOR M. TIBLE, ERIC M. AUSTRIA-MARTINEZ,* J.,
TIBLE, ALLAN M. TIBLE, Acting Chairperson,
NORMAN M. TIBLE and JOHANN TINGA,**
EMIL M. TIBLE, CHICO-NAZARIO,
Petitioners, NACHURA, and
REYES, JJ.

- versus -

ROYAL SAVINGS AND LOAN

ASSOCIATION (now assigned to
COMSAVINGS BANK) and
GODOFREDO E. QUILING,
Deputy Provincial Sheriff of Promulgated:
Calamba, Laguna,
Respondents. April 8, 2008

x--------------------------------------------------x

DECISION

REYES, R.T., J.:

THE remedies of appeal and certiorari are mutually

exclusive, not alternative or successive. Certiorari being an
extraordinary remedy, the party which seeks to avail of it must
observe the Rules strictly.

This is a Rule 45 petition for review on certiorari of the

Resolution[1] of the Court of Appeals (CA) which dismissed a Rule
65 petition for certiorari on procedural flaws.

The Facts

The facts, as reflected in the petition and its annexes, are as

follows:

Sometime in June 1997, petitioners Tible & Tible Company, Inc.

(TTCI) and Emilio G. Tible, Jr. (now deceased), jointly and
severally, obtained a loan and/or credit accommodation from
respondent Royal Savings and Loan Association (RSLA) in the total
amount of one million five hundred thousand and eighty pesos
(P1,500,080.00). The loan amount was released to petitioner TTCI
in four instalments, as follows:

Date Released

Amount

Due Date

June 6, 1977

P750,000.00

June 6, 1980

July 30, 1977

250,040.00

June 30, 1980

September
1977

21, 250,040.00

September
1980

February
1978

21, 250,000.00

February
1980

TOTAL
P1,500,080.

9,
21,

00

Securing the loan were the following mortgages:

(a) Chattel Mortgage executed on June 2, 1977 over 64

units/pieces of logging, heavy, and sawmill
equipment, their accessions and accessories, all
valued at P3,123,035.00; and
(b) Chattel Mortgage on 2,243 pieces of logs, with total
volume of 683,818 board feet.

The loan was intended to finance the logging and lumber

business of petitioner TTCI. Unfortunately, between 1977 to 1980,
TTCI did not come up to its projected capacity of 12,000 board
feet per 8-hour operation due to mechanical and design
deficiencies. Despite remedial measures undertaken, it was
unsuccessful in its efforts to rehabilitate the sawmill. TTCI was
thus able to pay only P418,317.40 through dacion en pago by
delivery of its lumber products.

In a Decision dated February 4, 1980 in Civil Case No.

2893, then Judge Luis L. Victor of the Court of First Instance (CFI)
of Cavite, Branch 2, approved the compromise agreement
between respondent RSLA, as then plaintiff on the one hand, and
petitioners TTCI and Emilio Tible, Jr., as then defendants, on the
other. TTCI expressly admitted to be indebted to RSLA in the sum
of P2,428,290.20, inclusive of interests, attorneys fees service
charges, stamps collection costs and expenses of suit, to be
restructured for 18 months commencing January 12, 1980.[2]

Also stipulated in said compromise agreement is the mode of

payment, to wit:

2.
That defendants, after having fully examined
and verified the said sum of P2,428,290.20 to be correct
and/or untainted by any illegality or any imperfection in
law and in fact, do hereby expressly propose to pay the
said sum of P2,428,290.20 strictly according to the
fallowing schedule:

a.

P156,176.58 on or before March 30, 1980;

b.

P156,176.58 on or before April 30, 1980 and

every 30th day of the immediately succeeding
months thereafter until the account is paid in
full, it being expressly understood that all
unpaid instalments shall bear fourteen per cent
(14%) interest per annum from their respective
dates of default until full payment.[3]

The compromise agreement further stated that failure on the

part of the defendants to pay any one of the installments as and
when the same is due and payable, shall make the whole
obligation immediately due and payable and shall entitle the
plaintiff to immediately execute without further verbal or
written notice to the defendants x x x.[4]

After TTCI defaulted in its monthly payments, RSLA

moved for immediate execution of the February 4, 1980 Decision
based on the compromise in Civil Case No. N-2893, without

furnishing TTCI any copy of such motion. CFI granted the motion
and issued the order dated July 16, 1980 stating as follows:

For failure of the defendants to comply with the

decision rendered by the Court on February 4, 1980, the
omnibus ex parte motion for appointment of special
sheriff to enforce the same, dated July 1, 1980, filed by
the plaintiff is granted.

WHEREFORE, in view thereof, let a writ of execution

be issued in this case and the same be implemented by
the City Sheriff of Naga City.

SO ORDERED.[5]

In its manifestation with ex parte motion dated August 17,

1981 in the said civil case, RSLA sought the issuance of
an alias writ of execution, which was again granted by the CFI, as
follows:

Considering the manifestation with ex parte motion,

dated August 17, 1981, filed by counsel for the plaintiff,
to be well-taken, the motion is granted and an alias writ
of execution is hereby issued in this case and to
implement the same, Deputy Provincial Sheriff of Laguna
Godofredo Quiling is hereby appointed as a special sheriff
for the purpose.

SO ORDERED.[6]

Accordingly, an alias writ of execution[7] was issued.

In a public auction sale conducted on December 12, 1983 by

Godofredo E. Quiling, then Deputy Sheriff of the Province of
Laguna, twenty-three (23) parcels of land [8]were awarded to RSLA
as highest bidder for the total bid price of P950,000.00.

On November 5, 1993, almost ten years after the supposed

public auction sale, Quiling, now Sheriff IV of Calamba, Laguna,
issued the final deed of sale[9] in favor of RSLA (now Comsavings
Bank).

Upon another ex parte motion by now respondent

Comsavings Bank, the former CFI of Cavite, now Regional Trial
Court (RTC), Branch 16, in Cavite City, issued an Order [10] for: (a)
the Register of Deeds of Naga City to cancel Transfer Certificate of
Title (TCT) No. 9061; (b) the Register of Deeds of Camarines Sur
to cancel seven original and transfer certificates of title; (c) the
Provincial Assessor of Camarines Sur to cancel eight tax
declarations; and (d) the City Assessor of Naga City to cancel two
tax declarations and (e) all of them to issue in lieu thereof new
certificates of title and tax declarations in the name of respondent
Comsavings Bank, upon payment of corresponding fees and
subject to subsisting encumbrances.

Aggrieved by these developments, petitioners filed an action

for Annulment of Execution Sale, and TCT Nos. 27994, 24002,
24003, 24004, 24005 and other related Documents, and/or

Reconveyance of Real Property with prayer to Preliminary

Injunction and Restraining Order with Damages initially with
the RTC, Branch 24, Naga City which was docketed as Civil Case
No. RTC-96-3626, considering that the subject matter in
litigation are located within the territorial jurisdiction of the said
court.

In an Order[11] dated October 13, 1997, however, RTC, Branch

24, in Naga City dismissed the complaint for want of jurisdiction
and suggested that the complaint be filed in Cavite City instead. It
cited Philippine National Bank v. Javelana[12] which held that the
rule which prohibits a judge from interfering with the actuations of
the judge of another branch of the same court is not infringed
when the judge who modifies or annuls the order issued by the
other judge acts in the same case and belongs to the same court.
[13]

Opting against elevating the said order of dismissal to the

appellate court, petitioners filed the same complaint, which is now
the case involved in the present petition, with the RTC in Cavite
City as suggested by the RTC in Naga City. This was considered as
a new case, docketed as Civil Case No. N-6619, raffled to the
same RTC, Branch 16 in which Civil Case No. N-2893 was
docketed.

Instead of filing an answer, respondent Comsavings bank

filed a motion to dismiss on the ground that petitioners claim or
demand has been waived, abandoned or otherwise extinguished.

RTC and CA Dispositions

On February 6, 2002, the RTC dismissed the complaint

in Civil Case No. N-6619 for want of proof. The RTC likewise
dismissed the counterclaim. Petitioners motion for reconsideration
of said dismissal was also denied by the RTC in its Order
dated March 26, 2002, stating that:

Acting
on
the
motion
for
reconsideration
dated February 22, 2002 and finding no new and cogent
reason
which
would
warrant
a
reversal
of
the decision dated February 6, 2002 considering that the
issues raised have already been passed upon and dealt
with adequately, the same is DENIED.

SO ORDERED.[14]

Petitioners elevated the case to the CA on May 15, 2002 via

petition for review under Rule 42. On May 20, 2002, after
allegedly
realizing
that
the
decision
of RTC,
Branch
16, Cavite City was not rendered in the exercise of appellate
jurisdiction, petitioners filed a motion to withdraw petition for
review. The CA granted the motion to withdraw.

On May
23,
2002,
for certiorari with the CA.

petitioners

filed

petition

On July 11, 2002, the CA dismissed outright the petition

for certiorari on procedural grounds, viz.:

(1) the Verification Affidavit of Non-Forum

Shopping was signed by one Almabella
Menla Vda. de Tible, but there is no Special
Power of Attorney, Board Resolution nor
Secretarys Certificate was attached thereto
authorizing said signatory to sign the
Verification and Affidavit of Non-Forum
Shopping in behalf of the other petitioners;
(Sec. 3, Rule 46 of the 1997 Rules of Civil
Procedure as amended)

(2) there is no written explanation to justify

service by mail in lieu of the required
personal service of copies of the petition
upon the respondents was made (Section
11, Rule 13, Id.; Solar Team Entertainment,
Inc. vs. Hon. Ricafort, et al., 293 SCRA 661).

Further, even a perfunctory reading of the petition

reveals that the same is seriously infirmed in that it is not
the proper remedy from the assailed decision dismissing
petitioners complaint for Annulment of Execution Sale and
T.C.T. Nos. 27994, 24002, 24003, 24005 and other related
documents, and/or Reconveyance of Real Property with
prayer for Preliminary Injunction and Restraining Order
with Damages in Civil Case No. N-6619 before the
Regional Trial Court of Cavite City, Branch 16, but
ordinary appeal therefrom under Rule 41 of the 1997
Rules of Civil Procedure.[15]

On August 5, 2002, petitioners filed a motion for

reconsideration and motion to admit petitioners special power of
attorney and board resolution. In a Resolution dated October 29,
2002, the CA denied petitioners plea for reconsideration.

Hence, the present petition for review on certiorari.

Issues

The two main issues are both procedural in nature:

1.
Is petitioners proper remedy an ordinary appeal
under Rule 41 or a petition for certiorari under Rule 65?

2.
May the CA relax the application of the rules
requiring verification and certification of non-forum shopping
under Section 3, Rule 46, as well as compliance with the rule
regarding priorities in modes of service and filing of pleadings
under Section 11, Rule 13?

Our Ruling

The CA aptly dismissed the

petition for certiorari for being
an improper remedy.

In the assailed Resolution of July 11, 2002, the CA dismissed

petitioners certiorari petition for being the wrong remedy or mode
of review of the decision dated February 6, 2002 of RTC, Branch
16, in Cavite City.

The RTC decision is a judgment from which an appeal may

be taken in accordance with Section 1, Rule 41 of the Rules of
Court, which states:

SECTION 1. Subject of appeal. An appeal may be

taken from a judgment or final order that completely
disposes of the case or of a particular matter therein
when declared by these Rules to be appealable.

The CA was, therefore, correct when it dismissed outright the

petition for certiorari. This Court has invariably upheld dismissals
of certiorari petitions erroneously filed, appeal being the correct
remedy. It is a very basic rule in our jurisprudence
that certiorari cannot be availed of when the party has adequate
remedy such as an appeal.

Section 1, Rule 65 of the 1997 Rule of Civil Procedure

explicitly states when a petition for certiorari may be availed of,
to wit:

SECTION 1. Petition for certiorari. When any tribunal,

board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction, or

with grave abuse of discretion amounting to lack or

excess of jurisdiction, and there is no appeal, or any
plain, speedy and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered
annulling or modifying the proceedings of such tribunal,
board or officer, and granting such incidental reliefs as
law and justice may require. (Emphasis supplied)

The Court has exhaustively enumerated and painstakingly

discussed the differences between these two remedies
in Madrigal Transport, Inc. v. Lapanday Holdings Corporation,
[16]
viz.:

Appeal and Certiorari Distinguished

Between an appeal and a petition for certiorari,

there are substantial distinctions which shall be explained
below.

As to the Purpose. Certiorari is a remedy

designed for the correction of errors of jurisdiction, not
errors of judgment. In Pure Foods Corporation v. NLRC, we
explained the simple reason for the rule in this light:

When a court exercises its jurisdiction, an

error committed while so engaged does not
deprive it of the jurisdiction being exercised

when the error is committed. If it did, every

error committed by a court would deprive it of
its jurisdiction and every erroneous judgment
would be a void judgment. This cannot be
allowed. The administration of justice would
not survive such a rule. Consequently, an error
of judgment that the court may commit in the
exercise of its jurisdiction is not correctable
through the original civil action of certiorari.

The supervisory jurisdiction of a court over the

issuance of a writ of certiorari cannot be exercised for the
purpose of reviewing the intrinsic correctness of a
judgment of the lower court on the basis either of the law
or the facts of the case, or of the wisdom or legal
soundness of the decision. Even if the findings of the
court are incorrect, as long as it has jurisdiction over the
case, such correction is normally beyond the province
of certiorari. Where the error is not one of jurisdiction, but
of an error of law or fact a mistake of judgment appeal is
the remedy.

As to the Manner of Filing. Over an appeal, the

CA exercises its appellate jurisdiction and power of
review. Over a certiorari, the higher court uses its original
jurisdiction in accordance with its power of control and
supervision over the proceedings of lower courts. An
appeal is thus a continuation of the original suit, while a
petition for certiorari is an original and independent
action that was not part of the trial that had resulted in
the rendition of the judgment or order complained of. The
parties to an appeal are the original parties to the action.
In contrast, the parties to a petition for certiorari are the

aggrieved party (who thereby becomes the petitioner)

against the lower court or quasi-judicial agency, and the
prevailing parties (the public and the private respondents,
respectively).

As to the Subject Matter. Only judgments or final

orders and those that the Rules of Court so declare are
appealable. Since the issue is jurisdiction, an original
action
for certiorarimay
be
directed
against
an
interlocutory order of the lower court prior to an appeal
from the judgment; or where there is no appeal or any
plain, speedy or adequate remedy.

As to the Period of Filing. Ordinary appeals

should be filed within fifteen days from the notice of
judgment or final order appealed from. Where a record on
appeal is required, the appellant must file a notice of
appeal and a record on appeal within thirty days from the
said notice of judgment or final order. A petition for
review should be filed and served within fifteen days from
the notice of denial of the decision, or of the petitioners
timely filed motion for new trial or motion for
reconsideration. In an appeal by certiorari, the petition
should be filed also within fifteen days from the notice of
judgment or final order, or of the denial of the petitioners
motion for new trial or motion for reconsideration.

On the other hand, a petition for certiorari should be

filed not later than sixty days from the notice of
judgment, order, or resolution. If a motion for new trial or
motion for reconsideration was timely filed, the period
shall be counted from the denial of the motion.

As
to
the
Need
for
a
Motion
for
Reconsideration. A motion for reconsideration is
generally required prior to the filing of a petition
for certiorari, in order to afford the tribunal an opportunity
to correct the alleged errors. Note also that this motion is
a plain and adequate remedy expressly available under
the law. Such motion is not required before appealing a
judgment or final order.[17]

With these distinctions, it is plainly discernible why a party is

precluded from filing a petition for certiorari when appeal is
available, or why the two remedies of appeal and certiorari are
mutually exclusive and not alternative or successive. [18] Where
appeal is available, certiorari will not prosper, even if the ground
availed of is grave abuse of discretion. [19]

More than that, We find no grave abuse of discretion

here. Applying the settled jurisprudence on the matter, appeal
would have been an adequate remedy, especially since the
dismissal by the RTC was mainly based on factual considerations.

After a thorough review of all the arguments of petitioners,

We are unconvinced that the alleged errors referred to are acts of
grave abuse of discretion that would fall under the definition of
this phrase. As We explained in Pilipino Telephone Corporation v.
Pilipino Telephone Employees Association:[20]

For a petition for certiorari under Rule 65 of the

Rules of Court to prosper, the tribunal, board or officer
exercising judicial or quasi-judicial functions must be

proven to have acted without or in excess of its or his

jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction. Grave abuse of discretion
has been defined as a capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction. Mere
abuse of discretion is not enough, it must be so grave as
when the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and
must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to
perform a duty enjoined or to act at all in contemplation
of law.[21]

It should be stressed that it is not sufficient that a tribunal, in

the exercise of its power, abused its discretion; such abuse must
be grave.[22]

Non-compliance with the rules

is fatal to a petition for
certiorari.

Even assuming, arguendo, that the petition for certiorari filed with
the CA is the correct remedy, still, petitioners defective
verification and affidavit of non-forum shopping as required by
Section 3, Rule 46, as well as the absence of any written
explanation to justify service by mail in lieu of personal service, as
required by Section 11, Rule 13 of the 1997 Rule of Civil
Procedure, are fatal to their cause.

In Athena Computers, Inc. v. Reyes,[23] the Court stressed

that certiorari, being an extraordinary remedy, the party who

seeks to avail of the same must strictly observe the rules laid
down by the law. The Court further explained in Athena:

The acceptance of a petition for certiorari as well as

the grant of due course thereto is, in general, addressed
to the sound discretion of the court. Although the court
has absolute discretion to reject and dismiss a petition
for certiorari, it does so only (1) when the petition fails to
demonstrate grave abuse of discretion by any court,
agency, or branch of the government; or (2) when there
are procedural errors, like violations of the Rules of Court
or Supreme Court Circulars. Clearly petitioners in their
petition before the Court of Appeals committed
procedural errors.

The verification of the petition and certification of

non-forum shopping before the Court of Appeals were
signed only by Jimenez. There is no showing that he was
authorized to sign the same by Athena, his co-petitioner.

Section 4, Rule 7 of the Rules states that a pleading

is verified by an affidavit that the affiant has read the
pleading and that the allegations therein are true and
correct of his knowledge and belief. Consequently, the
verification should have been signed not only by Jimenez
but also by Athenas duly authorized representative.

In Docena v. Lapesura, we ruled that the certificate

of non-forum shopping should be signed by all the
petitioners or plaintiffs in a case, and that the signing by
only one of them is insufficient. The attestation on non-

forum shopping requires personal knowledge by the party

executing the same, and the lone signing petitioner
cannot be presumed to have personal knowledge of the
filing or non-filing by his co-petitioners of any action or
claim the same as similar to the current petition.[24]

As noted by the CA in its Resolution of July 11, 2002, petitioner

Almabella Menla Vda. de Tibles signature in the verification and
affidavit of non-forum shopping of the petition for certiorari was
not ratified by any special power of attorney, board resolution nor
secretarys certificate executed by her co-petitioners authorizing
her to sign for and in their behalf. The CA used this as one of its
basis to dismiss the petition.

The CA refused to reverse its earlier dismissal upon petitioners

motion for reconsideration despite subsequent compliance by
submitting the required special power of attorney, [25] secretarys
certificate,[26] and board resolution.[27]

In Digital Microwave Corporation v. Court of Appeals,[28] the Court

affirmed the CA dismissal of a petition on the same ground, noting

x x x That petitioner did not in the first instance

comply with the requirement of Revised Circular No. 2-91
by having the certification against forum shopping signed
by one of its officers, as it did after its petition before
the Court of Appeals had been dismissed, is beyond our
comprehension.[29] (Emphasis supplied)

At any rate, it must be noted that subsequent compliance

does not ipso facto entitle a party to a reconsideration of the
dismissal order. As the Court aptly observed in Batoy v. Regional
Trial Court, Br. 50, Loay, Bohol:[30]

x x x the requirement under Administrative Circular

No. 04-94 for a certificate of non-forum shopping is
mandatory. The subsequent compliance with said
requirement does not excuse a partys failure to
comply therewith in the first instance. In those cases
where this Court excused the non-compliance with the
requirement of the submission of a certificate of nonforum
shopping,
it
found special
circumstances or compelling reasons which made the
strict application of said Circular clearly unjustified or
inequitable. x x x[31] (Emphasis supplied)

Moreover, petitioners failed to include any written

explanation to justify service by mail in lieu of the required
personal
service
of
copies
of
the
petition
upon
respondents.Section 11, Rule 13 of the Rules of Court states:

SEC. 11. Priorities in modes of service and

filing. Whenever practicable, the service and filing of
pleadings
and
other
papers
shall
be
done
personally. Except with respect to papers emanating from
the court, a resort to other modes must be accompanied
by a written explanation why the service or filing was
not done personally. A violation of this Rule may be cause
to consider the paper as not filed. (Emphasis supplied)

In Solar Team Entertainment v. Ricafort,[32] the Court has

unequivocally stated that for the guidance of the Bench and
the Bar, strictest compliance with Section 11, Rule 13 is
mandated x x x.[33] The Court finds no cogent reason not to
apply the same strict standard to petitioners.

The
doctrine
of
liberal
application of Procedural rules
applies
when
there
is
justifiable
cause
for
noncompliance
or
compelling
reason to relax it.

Much reliance is placed on the rule that Courts are not

slaves or robots of technical rules, shorn of judicial discretion. In
rendering justice, courts have always been, as they ought to be,
conscientiously guided by the norm that on balance,
technicalities take a backseat against substantive rights, and not
the other way around.[34] This rule must always be used in the
right context, lest injustice, rather than justice would be its end
result.

It must never be forgotten that, generally, the application of

the rules must be upheld, and the suspension or even mere
relaxation of its application, is the exception. This Court
previously explained:

The Court is not impervious to the frustration that

litigants and lawyers alike would at times encounter in
procedural
bureaucracy
but
imperative
justice
requires correct
observance
of
indispensable
technicalities precisely designed to ensure its
proper dispensation. It has long been recognized that
strict compliance with the Rules of Court is indispensable
for the prevention of needless delays and for the orderly
and expeditious dispatch of judicial business.

Procedural rules are not to be disdained as

mere technicalities that may be ignored at will to
suit the convenience of a party. Adjective law is
important in ensuring the effective enforcement of
substantive rights through the orderly and speedy
administration of justice. These rules are not intended to
hamper litigants or complicate litigation but, indeed to
provide for a system under which a suitor may be heard
in the correct form and manner and at the prescribed
time in a peaceful confrontation before a judge whose
authority they acknowledge.

It cannot be overemphasized that procedural

rules have their own wholesome rationale in the
orderly administration of justice. Justice has to
be administered according to the Rulesin order to
obviate arbitrariness, caprice, or whimsicality. We
have been cautioned and reminded in Limpot vs. CA, et
al., that:

Rules of procedure are intended to ensure

the orderly administration of justice and the

protection of substantive rights in judicial and

extrajudicial proceedings. It is a mistake to
propose that substantive law and adjective law
are contradictory to each other or, as often
suggested, that enforcement of procedural
rules should never be permitted if it will result
in prejudice to the substantive rights of the
litigants. This is not exactly true; the concept is
much misunderstood. As a matter of fact, the
policy of the courts is to give both kinds of law,
as complementing each other, in the just and
speedy resolution of the dispute between the
parties. Observance of both substantive rights
is equally guaranteed by due process,
whatever the source of such rights, be it the
Constitution itself or only a statute or a rule of
court.

xxxx

x x x (T)hey are required to be followed

except only when for the most persuasive of
reasons them may be relaxed to relieve a
litigant of an injustice not commensurate with
the degree of his thoughtlessness in not
complying with the procedure prescribed. x x
x While it is true that a litigation is not a game
of technicalities, this does not mean that the
Rules of Court may be ignored at will and at
random to the prejudice of the orderly
presentation and assessment of the issues and
their just resolution. Justice eschews anarchy.[35]

For the exception to come into play, first and foremost

should be the party litigants plausible explanation for noncompliance with the rules he proposes to be exempted
from. Absent any acceptable explanation, the partys plain
violation of the rules will not be countenanced.

Thus, in Suzuki v. De Guzman,[36] the Court held:

As a general rule, these requirements are

mandatory, meaning, non-compliance therewith is a
sufficient ground for the dismissal of the petition. While
the Court is not unmindful of exceptional cases where this
Court has set aside procedural defects to correct a patent
injustice, concomitant to a liberal application of the rules
of procedure should be an effort on the part of the party
invoking liberality to at least explain his failure to
comply with the rules. There must be at least a
reasonable attempt at compliance with the Rules. Utter
disregard of the Rules cannot justly be rationalized by
harking on the policy of liberal construction. [37] (Emphasis
supplied)

In Ortiz v. Court of Appeals,[38] the CA dismissed the petition

for review outright for failure of petitioners to sign the certification
of non-forum shopping. The certification was signed only by their
lawyer. In affirming the dismissal of the petition, the Court said:

Regrettably, we find substantial compliance will not

suffice in a matter involving strict observance as provided
for in Circular No. 28-91. The attestation contained in the
certification on non-forum shopping requires personal

knowledge by the party who executed the same. To

merit the Courts consideration, petitioner here
must show reasonable cause for failure to
personally sign the certification. The petitioners must
convince the court that the outright dismissal of the
petition
would
defeat
the
administration
of
justice. However, the petitioner did not give any
explanation to warrant their exemption from the strict
application of the rule. Utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal
construction.[39] (Emphasis supplied)

Too, the party litigant must convince the Court that the
outright dismissal of the petition would defeat the administration
of justice.[40] The Courts pronouncements in Pet Plans, Inc. v.
Court of Appeals[41] are illustrative:

x x x In Loquias vs. Office of the Ombudsman (338

SCRA 62, 68 [2000]), we held that failure of one of the
petitioners to sign the verification and certificate against
forum shopping constitutes a defect in the petition, which
is a ground for dismissing the same. While we have held
in rulings subsequent to Loquias that this rule may be
relaxed,
petitioners
must
comply
with
two
conditions: first, petitioners must show justifiable cause
for their failure to personally sign the certification,
and; second, they must also be able to prove that the
outright dismissal of the petition would seriously impair
the orderly administration of justice. x x x[42]

Recapitulating, the two pre-requisites for the relaxation of

the rules are: (a) justifiable cause or plausible reason for noncompliance; and (b) compelling reason to convince the court that
outright dismissal of the petition would seriously impair the
orderly administration of justice.

Perusing the records, We find neither justifiable cause nor

compelling reason to relax the rules in petitioners favor.

Petitioners do not have any plausible reason for noncompliance. In their motion for reconsideration[43] of the CA
dismissal, petitioners claimed that co-petitioners of Almabella
Vda. de Tible, who signed the verification in their behalf, had
executed a Special Power of Attorney (SPA) way back
in November
22,
1997,
but
offered no
acceptable
explanation why they did not attach a copy of said SPA to their
petition for certiorari. The same is true with the lack of a board
resolution. Supposed
oversight
and/or
inadvertence committed by petitioners counsel which may easily
be alleged, do not per se constitute an acceptable explanation for
non-compliance.

Also, the Court finds nothing on record which constitutes

compelling reason for a liberal application of procedural rules.

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

FIRST DIVISION
[G.R. No. 127624. November 18, 2003]

BPI

LEASING CORPORATION, petitioner, vs. THE HONORABLE

COURT OF APPEALS, COURT OF TAX APPEAL AND
COMMISSIONER OF INTERNAL REVENUE, respondents.
DECISION

AZCUNA, J.:

The present petition for review on certiorari assails the decision of the
Court of Appeals in CA-G.R. SP No. 38223 and its subsequent
resolution denying the motion for reconsideration. The assailed decision and
resolution affirmed the decision of the Court of Tax Appeals (CTA) which
denied petitioner BPI Leasing Corporations (BLC) claim for tax refund in CTA
Case No. 4252.
[1]

[2]

The facts are not disputed.

BLC is a corporation engaged in the business of leasing properties. For
the calendar year 1986, BLC paid the Commissioner of Internal Revenue
(CIR) a total of P1,139,041.49 representing 4% contractors percentage tax
then imposed by Section 205 of the National Internal Revenue Code (NIRC),
based on its gross rentals from equipment leasing for the said year amounting
to P27,783,725.42.
[3]

[4]

On November 10, 1986, the CIR issued Revenue Regulation 19-86.

Section 6.2 thereof provided that finance and leasing companies registered
under Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1% on
actual income earned. This means that companies registered under Republic
Act 5980, such as BLC, are not liable for contractors percentage tax under
Section 205 but are, instead, subject to gross receipts tax under Section 260

(now Section 122) of the NIRC. Since BLC had earlier paid the
aforementioned contractors percentage tax, it re-computed its tax liabilities
under the gross receipts tax and arrived at the amount of P361,924.44.
On April 11, 1988, BLC filed a claim for a refund with the CIR for the
amount
of P777,117.05,
representing
the
difference
between
the P1,139,041.49 it had paid as contractors percentage tax and P361,924.44
it should have paid for gross receipts tax. Four days later, to stop the running
of the prescriptive period for refunds, petitioner filed a petition for review with
the CTA.
[5]

[6]

In a decision dated May 13, 1994, the CTA dismissed the petition and
denied BLCs claim of refund. The CTA held that Revenue Regulation 19-86,
as amended, may only be applied prospectively such that it only covers all
leases written on or after January 1, 1987, as stated under Section 7 of said
revenue regulation:
[7]

Section 7. Effectivity These regulations shall take effect on January 1, 1987 and shall
be applicable to all leases written on or after the said date.
The CTA ruled that, since BLCs rental income was all received prior to
1986, it follows that this was derived from lease transactions prior to January
1, 1987, and hence, not covered by the revenue regulation.
A motion for reconsideration of the CTAs decision was filed, but was
denied in a resolution dated July 26, 1995. BLC then appealed the case to
the Court of Appeals, which issued the aforementioned assailed decision and
resolution. Hence, the present petition.
[8]

[9]

In seeking to reverse the denial of its claim for tax refund, BLC submits
that the Court of Appeals and the CTA erred in not ruling that Revenue
Regulation 19-86 may be applied retroactively so as to allow BLCs claim for a
refund of P777,117.05.
Respondents, on the other hand, maintain that the provision on the date of
effectivity of Revenue Regulation 19-86 is clear and unequivocal, leaving no
room for interpretation on its prospective application. In addition, respondents

argue that the petition should be dismissed on the ground that the
Verification/Certification of Non-Forum Shopping was signed by the counsel of
record and not by BLC, through a duly authorized representative, in violation
of Supreme Court Circular 28-91.
In a resolution dated March 29, 2000, the petition was given due course
and the Court required the parties to file their respective Memoranda. Upon
submission of the Memoranda, the issues in this case were delineated, as
follows:
[10]

[11]

WHETHER THE INSTANT PETITION FOR REVIEW ON CERTIORARI

SUBSTANTIALLY COMPLIES WITH SUPREME COURT CIRCULAR 28-91.
WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS LEGISLATIVE
OR INTERPRETATIVE IN NATURE.
WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS PROSPECTIVE
OR RETROACTIVE IN ITS APPLICATION.
WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS, FAILED
TO MEET THE QUANTUM OF EVIDENCE REQUIRED IN REFUND CASES.
WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS, IS
ESTOPPED FROM CLAIMING ITS PRESENT REFUND.
As to the first issue, the Court agrees with respondents contention that the
petition should be dismissed outright for failure to comply with Supreme Court
Circular 28-91, now incorporated as Section 2 of Rule 42 of the Rules of
Court. The records plainly show, and this has not been denied by BLC, that
the certification was executed by counsel who has not been shown to have
specific authority to sign the same for BLC.
In BA Savings Bank v. Sia, it was held that the certificate of non-forum
shopping may be signed, for and on behalf of a corporation, by a specifically
authorized lawyer who has personal knowledge of the facts required to be
disclosed in such document. This ruling, however, does not mean that any
lawyer, acting on behalf of the corporation he is representing, may routinely
[12]

sign a certification of non-forum shopping. The Court emphasizes that the

lawyer must be specifically authorized in order validly to sign the certification.
Corporations have no powers except those expressly conferred upon them
by the Corporation Code and those that are implied by or are incidental to its
existence. These powers are exercised through their board of directors and/or
duly authorized officers and agents. Hence, physical acts, like the signing of
documents, can be performed only by natural persons duly authorized for the
purpose by corporate bylaws or by specific act of the board of directors.
[13]

The records are bereft of the authority of BLCs counsel to institute the
present petition and to sign the certification of non-forum shopping. While said
counsel may be the counsel of record for BLC, the representation does not
vest upon him the authority to execute the certification on behalf of his
client. There must be a resolution issued by the board of directors that
specifically authorizes him to institute the petition and execute the certification,
for it is only then that his actions can be legally binding upon BLC.
BLC however insists that there was substantial compliance with SC
Circular No. 28-91 because the verification/certification was issued by a
counsel who had full personal knowledge that no other petition or action has
been filed or is pending before any other tribunal. According to BLC, said
counsels law firm has handled this case from the very beginning and could
very well attest and/or certify to the absence of an instituted or pending case
involving the same or similar issues.
The argument of substantial compliance deserves no merit, given the
Courts ruling in Mendigorin v. Cabantog:
[14]

The CA held that there was substantial compliance with the Rules of Court, citing
Dimagiba vs. Montalvo, Jr. [202 SCRA 641] to the effect that a lawyer who assumes
responsibility for a client's cause has the duty to know the entire history of the case,
especially if any litigation is commenced. This view, however, no longer holds
authoritative value in the light of Digital Microwave Corporation vs. CA [328 SCRA
286], where it was held that the reason the certification against forum shopping is
required to be accomplished by petitioner himself is that only the petitioner himself
has actual knowledge of whether or not he has initiated similar actions or proceedings

in other courts or tribunals. Even counsel of record may be unaware of such fact. To
our mind, this view is more in accord with the intent and purpose of Revised Circular
No. 28-91.
Clearly, therefore, the present petition lacks the proper certification as
strictly required by jurisprudence and the Rules of Court.
Even if the Court were to ignore the aforesaid procedural infirmity, a
perusal of the arguments raised in the petition indicates that a resolution on
the merits would nevertheless yield the same outcome.
BLC attempts to convince the Court that Revenue Regulation 19-86 is
legislative rather than interpretative in character and hence, should retroact to
the date of effectivity of the law it seeks to interpret.
Administrative issuances may be distinguished according to their nature
and substance: legislative and interpretative. A legislative rule is in the matter
of subordinate legislation, designed to implement a primary legislation by
providing the details thereof. An interpretative rule, on the other hand, is
designed to provide guidelines to the law which the administrative agency is in
charge of enforcing.
[15]

The Court finds the questioned revenue regulation to be legislative in

nature. Section 1 of Revenue Regulation 19-86 plainly states that it was
promulgated pursuant to Section 277 of the NIRC. Section 277 (now Section
244) is an express grant of authority to the Secretary of Finance to promulgate
all needful rules and regulations for the effective enforcement of the provisions
of the NIRC. In Paper Industries Corporation of the Philippines v. Court of
Appeals, the Court recognized that the application of Section 277 calls for
none other than the exercise of quasi-legislative or rule-making
authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was
issued pursuant to the rule-making power of the Secretary of Finance, thus
making it legislative, and not interpretative as alleged by BLC.
[16]

BLC further posits that, assuming the revenue regulation is legislative in

nature, it is invalid for want of due process as no prior notice, publication and
public hearing attended the issuance thereof. To support its view, BLC

cited CIR v. Fortune Tobacco, et al., wherein the Court nullified a revenue
memorandum circular which reclassified certain cigarettes and subjected
them to a higher tax rate, holding it invalid for lack of notice, publication and
public hearing.
[17]

The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v.

Michel J. Lhuillier Pawnshop, Inc., is that when an administrative rule goes
beyond merely providing for the means that can facilitate or render less
cumbersome the implementation of the law and substantially increases the
burden of those governed, it behooves the agency to accord at least to
those directly affected a chance to be heard and, thereafter, to be duly
informed, before the issuance is given the force and effect of
law. In Lhuillier and Fortune Tobacco, the Court invalidated the revenue
memoranda concerned because the same increased the tax liabilities of the
affected taxpayers without affording them due process. In this case, Revenue
Regulation 19-86 would be beneficial to the taxpayers as they are subjected
to lesser taxes. Petitioner, in fact, is invoking Revenue Regulation 19-86 as
the very basis of its claim for refund.If it were invalid, then petitioner all the
more has no right to a refund.
[18]

After upholding the validity of Revenue Regulation 19-86, the Court now
resolves whether its application should be prospective or retroactive.
The principle is well entrenched that statutes, including administrative
rules and regulations, operate prospectively only, unless the legislative intent
to the contrary is manifest by express terms or by necessary implication. In
the present case, there is no indication that the revenue regulation may
operate retroactively. Furthermore, there is an express provision stating that it
shall take effect on January 1, 1987, and that it shall be applicable to all
leases written on or after the said date. Being clear on its prospective
application, it must be given its literal meaning and applied without further
interpretation. Thus, BLC is not in a position to invoke the provisions of
Revenue Regulation 19-86 for lease rentals it received prior to January 1,
1987.
[19]

[20]

It is also apt to add that tax refunds are in the nature of tax exemptions. As
such, these are regarded as in derogation of sovereign authority and are to be

strictly construed against the person or entity claiming the exemption. The
burden of proof is upon him who claims the exemption and he must be able to
justify his claim by the clearest grant under Constitutional or statutory law, and
he cannot be permitted to rely upon vague implications. Nothing that BLC
has raised justifies a tax refund.
[21]

It is not necessary to rule on the remaining issues.

WHEREFORE, the petition for review is hereby DENIED, and the assailed
decision and resolution of the Court of Appeals are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Carpio,
JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 151413

February 13, 2008

CAGAYAN VALLEY DRUG CORPORATION, petitioner,

vs.
COMMISSIONER OF INTERNAL REVENUE, respondent.
DECISION
VELASCO, JR., J.:
The Case
This petition for review under Rule 45 of the Rules of Court seeks the recall of the August 31, 2000
Resolution1 of the Court of Appeals (CA) in CA-G.R. SP No. 59778, which dismissed petitioner
Cagayan Valley Drug Corporations petition for review of the April 26, 2000 Decision 2 of the Court of

Tax Appeals (CTA) in C.T.A. Case No. 5581 on the ground of defective verification and certification
against forum shopping.
The Facts
Petitioner, a corporation duly organized and existing under Philippine laws, is a duly licensed retailer
of medicine and other pharmaceutical products. It operates two drugstores, one in Tuguegarao,
Cagayan, and the other in Roxas, Isabela, under the name and style of "Mercury Drug."
Petitioner alleged that in 1995, it granted 20% sales discounts to qualified senior citizens on
purchases of medicine pursuant to Republic Act No. (RA) 74323 and its implementing rules and
regulations.
In compliance with Revenue Regulation No. (RR) 2-94, petitioner treated the 20% sales discounts
granted to qualified senior citizens in 1995 as deductions from the gross sales in order to arrive at
the net sales, instead of treating them as tax credit as provided by Section 4 of RA 7432.
On December 27, 1996, however, petitioner filed with the Bureau of Internal Revenue (BIR) a claim
for tax refund/tax credit of the full amount of the 20% sales discount it granted to senior citizens for
the year 1995, allegedly totaling to PhP 123,083 in accordance with Sec. 4 of RA 7432.
The BIRs inaction on petitioners claim for refund/tax credit compelled petitioner to file on March 18,
1998 a petition for review before the CTA docketed as C.T.A. Case No. 5581 in order to forestall the
two-year prescriptive period provided under Sec. 2304 of the 1977 Tax Code, as amended.
Thereafter, on March 31, 2000, petitioner amended its petition for review.
The Ruling of the Court of Tax Appeals
On April 26, 2000, the CTA rendered a Decision dismissing the petition for review for lack of merit. 5
The CTA sustained petitioners contention that pursuant to Sec. 4 of RA 7432, the 20% sales
discounts petitioner extended to qualified senior citizens in 1995 should be treated as tax credit and
not as deductions from the gross sales as erroneously interpreted in RR 2-94. The CTA reiterated its
consistent holdings that RR 2-94 is an invalid administrative interpretation of the law it purports to
implement as it contravenes and does not conform to the standards RA 7432 prescribes.
Notwithstanding petitioners entitlement to a tax credit from the 20% sales discounts it extended to
qualified senior citizens in 1995, the CTA nonetheless dismissed petitioners action for refund or tax
credit on account of petitioners net loss in 1995. First, the CTA rejected the refund as it is clear that
RA 7432 only grants the 20% sales discounts extended to qualified senior citizens as tax credit and
not as tax refund. Second, in rejecting the tax credit, the CTA reasoned that while petitioner may be
qualified for a tax credit, it cannot be so extended to petitioner on account of its net loss in 1995.
The CTA ratiocinated that on matters of tax credit claim, the government applies the amount
determined to be reimbursable after proper verification against any sum that may be due and
collectible from the taxpayer. However, if no tax has been paid or if no amount is due and collectible

from the taxpayer, then a tax credit is unavailing. Moreover, it held that before allowing recovery for
claims for a refund or tax credit, it must first be established that there was an actual collection and
receipt by the government of the tax sought to be recovered. In the instant case, the CTA found that
petitioner did not pay any tax by virtue of its net loss position in 1995.
Petitioners Motion for Reconsideration was likewise denied through the appellate tax courts June
30, 2000 Resolution.6
The Ruling of the Court of Appeals
Aggrieved, petitioner elevated the matter before the CA, docketed as CA-G.R. SP No. 59778. On
August 31, 2000, the CA issued the assailed Resolution 7 dismissing the petition on procedural
grounds. The CA held that the person who signed the verification and certification of absence of
forum shopping, a certain Jacinto J. Concepcion, President of petitioner, failed to adduce proof that
he was duly authorized by the board of directors to do so.
As far as the CA was concerned, the main issue was whether or not the verification and certification
of non-forum shopping signed by the President of petitioner is sufficient compliance with Secs. 4 and
5, Rule 7 of the 1997 Rules of Civil Procedure.
The verification and certification in question reads:
I, JACINTO J. CONCEPCION, of legal age with office address at 2nd Floor, Mercury Drug
Corporation, No. 7 Mercury Ave, Bagumbayan, Quezon City, under oath, hereby state that:
1. I am the President of Cagayan Valley Drug Corporation, Petitioner in the above-entitled
case and am duly authorized to sign this Verification and Certification of Absence of Forum
Shopping by the Board of Director.
xxxx
The CA found no sufficient proof to show that Concepcion was duly authorized by the Board of
Directors of petitioner. The appellate court anchored its disposition on our ruling in Premium Marble
Resources, Inc. v. Court of Appeals (Premium), that "[i]n the absence of an authority from the Board
of Directors, no person, not even the officers of the corporation, can validly bind the corporation." 8
Hence, we have this petition.
The Issues
Petitioner raises two issues: first, whether petitioners president can sign the subject verification and
certification sans the approval of its Board of Directors. And second, whether the CTA committed
reversible error in denying and dismissing petitioners action for refund or tax credit in C.T.A. Case
No. 5581.
The Courts Ruling

The petition is meritorious.

Premium not applicable
As regards the first issue, we find the CA to have erroneously relied on Premium. In said case, the
issue tackled was not on whether the president of Premium Marble Resources, Inc. was authorized
to sign the verification and certification against forum shopping, but rather on which of the two sets of
officers, both claiming to be the legal board of directors of Premium, have the authority to file the suit
for and in behalf of the company. The factual antecedents and issues in Premium are not on all fours
with the instant case and is, therefore, not applicable.
With respect to an individual litigant, there is no question that litigants must sign the sworn
verification and certification unless they execute a power of attorney authorizing another person to
sign it. With respect to a juridical person, Sec. 4, Rule 7 on verification and Sec. 5, Rule 7 on
certification against forum shopping are silent as to who the authorized signatory should be. Said
rules do not indicate if the submission of a board resolution authorizing the officer or representative
is necessary.
Corporate powers exercised through board of directors
It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly
enunciates that all corporate powers are exercised, all business conducted, and all properties
controlled by the board of directors. A corporation has a separate and distinct personality from its
directors and officers and can only exercise its corporate powers through the board of directors.
Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board of directors. This has been our
constant holding in cases instituted by a corporation.
In a slew of cases, however, we have recognized the authority of some corporate officers to sign the
verification and certification against forum shopping. In Mactan-Cebu International Airport Authority
v. CA, we recognized the authority of a general manager or acting general manager to sign the
verification and certificate against forum shopping; 9 in Pfizer v. Galan, we upheld the validity of a
verification signed by an "employment specialist" who had not even presented any proof of her
authority to represent the company;10 in Novelty Philippines, Inc., v. CA, we ruled that a personnel
officer who signed the petition but did not attach the authority from the company is authorized to sign
the verification and non-forum shopping certificate;11 and in Lepanto Consolidated Mining Company
v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and
President of the Company can sign the verification and certificate against non-forum shopping even
without the submission of the boards authorization.12
In sum, we have held that the following officials or employees of the company can sign the
verification and certification without need of a board resolution: (1) the Chairperson of the Board of
Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager,
(4) Personnel Officer, and (5) an Employment Specialist in a labor case.

While the above cases do not provide a complete listing of authorized signatories to the verification
and certification required by the rules, the determination of the sufficiency of the authority was done
on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of
corporate officers or representatives of the corporation to sign the verification or certificate against
forum shopping, being "in a position to verify the truthfulness and correctness of the allegations in
the petition."13
Authority from board of directors required
In Philippine Airlines v. Flight Attendants and Stewards Association of the Philippines, we ruled that
only individuals vested with authority by a valid board resolution may sign the certificate of nonforum shopping on behalf of a corporation. The action can be dismissed if the certification was
submitted unaccompanied by proof of the signatorys authority.14 We believe that appending the
board resolution to the complaint or petition is the better procedure to obviate any question on the
authority of the signatory to the verification and certification. The required submission of the board
resolution is grounded on the basic precept that corporate powers are exercised by the board of
directors,15 and not solely by an officer of the corporation. Hence, the power to sue and be sued in
any court or quasi-judicial tribunal is necessarily lodged with the said board.
There is substantial compliance with Rule 7, Secs. 4 and 5
In the case at bar, we so hold that petitioner substantially complied with Secs. 4 and 5, Rule 7 of the
1997 Revised Rules on Civil Procedure. First, the requisite board resolution has been submitted
albeit belatedly by petitioner. Second, we apply our ruling in Lepanto with the rationale that the
President of petitioner is in a position to verify the truthfulness and correctness of the allegations in
the petition. Third, the President of petitioner has signed the complaint before the CTA at the
inception of this judicial claim for refund or tax credit.
Consequently, the petition in CA-G.R. SP No. 59778 ought to be reinstated. However, in view of the
enactment of RA 9282 which made the decisions of the CTA appealable to this Court, we will directly
resolve the second issue which is a purely legal one.
Petitioner entitled to tax credit
The pith of the dispute between petitioner and respondent is whether petitioner is entitled to a tax
refund or tax credit of 20% sales discount granted to senior citizens under RA 7432 or whether the
discount should be treated as a deduction from gross income.
This issue is not new, as the Court has resolved several cases involving the very same issue.
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation (Central Luzon),16 we held
that private drug companies are entitled to a tax credit for the 20% sales discounts they granted to
qualified senior citizens under RA 7432 and nullified Secs. 2.i and 4 of RR 2-94. In Bicolandia Drug
Corporation (formerly Elmas Drug Corporation) v. Commissioner of Internal Revenue,17 we ruled that
petitioner therein is entitled to a tax credit of the "cost" or the full 20% sales discounts it granted
pursuant to RA 7432. In the related case of Commissioner of Internal Revenue v. Bicolandia Drug

Corporation,18 we likewise ruled that respondent drug company was entitled to a tax credit, and we
struck down RR 2-94 to be null and void for failing to conform with the law it sought to implement.
A perusal of the April 26, 2000 CTA Decision shows that the appellate tax court correctly ruled that
the 20% sales discounts petitioner granted to qualified senior citizens should be deducted from
petitioners income tax due and not from petitioners gross sales as erroneously provided in RR 294. However, the CTA erred in denying the tax credit to petitioner on the ground that petitioner had
suffered net loss in 1995, and ruling that the tax credit is unavailing.
Net loss in a taxable year does not preclude grant of tax credit
It is true that petitioner did not pay any tax in 1995 since it suffered a net loss for that taxable year.
This fact, however, without more, does not preclude petitioner from availing of its statutory right to a
tax credit for the 20% sales discounts it granted to qualified senior citizens. The law then applicable
on this point is clear and without any qualification. Sec. 4 (a) of RA 7432 pertinently provides:
Sec. 4. Privileges for the Senior citizens.The senior citizens shall be entitled to the
following:
a) the grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishments, restaurants and recreation
centers and purchase of medicines anywhere in the country: Provided, That private
establishments may claim the cost as tax credit. (Emphasis ours.)
The fact that petitioner suffered a net loss in 1995 will not make the tax credit due to petitioner
unavailable. This is the core issue resolved in Central Luzon, where we ruled that the net loss for a
taxable year does not bar the grant of the tax credit to a taxpayer pursuant to RA 7432 and that prior
tax payments are not required for such grant. We explained:
Although this tax credit benefit is available, it need not be used by losing ventures, since
there is no tax liability that calls for its application. Neither can it be reduced to nil by the
quick yet callow stroke of an administrative pen, simply because no reduction of taxes can
instantly be effected. By its nature, the tax credit may still be deducted from a future, not
a present, tax liability, without which it does not have any use. x x x
xxxx
While a tax liability is essential to the availment or use of any tax credit, prior tax payments
are not. On the contrary, for the existence or grant solely of such credit, neither a tax liability
nor a prior tax payment is needed. The Tax Code is in fact replete with provisions granting or
allowing tax credits, even though no taxes have been previously paid. 19
It is thus clear that petitioner is entitled to a tax credit for the full 20% sales discounts it extended to
qualified senior citizens for taxable year 1995. Considering that the CTA has not disallowed the PhP
123,083 sales discounts petitioner claimed before the BIR and CTA, we are constrained to grant
them as tax credit in favor of petitioner.

Consequently, petitioners appeal before the CA in CA-G.R. SP No. 59778 must be granted, and,
necessarily, the April 26, 2000 CTA Decision in C.T.A. Case No. 5581 reversed and set aside.
WHEREFORE, the petition is GRANTED. The August 31, 2000 CA Resolution in CA-G.R. SP No.
59778 is ANNULLED AND SET ASIDE. The April 26, 2000 CTA Decision in C.T.A. Case No. 5581
dismissing petitioners claim for tax credit is accordingly REVERSED AND SET ASIDE. The
Commissioner of Internal Revenue is ORDERED to issue a Tax Credit Certificate in the name of
petitioner in the amount of PhP 123,083. No costs.
SO ORDERED.