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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Note: Both Activity 1 and 2 have the same case reference. SECTION 42. Rate of Tax. There shall be paid to the Office of the City Treasurer by the proprietors,
lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and other places of
ACTIVITIES 1 AND 2 amusement an amusement tax at the rate of thirty percent (30%) of the gross receipts from admission
fees.
FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES
vs SECTION 43. Manner of Payment. In the case of theaters or cinemas, the tax shall first be deducted
SM PRIME HOLDINGS, INC. and withheld by their proprietors, lessee, or operators and paid to the city treasurer before the gross
DECISION receipts are divided between said proprietors, lessee, operators and the distributors of the
cinematographic films.
VILLARAMA, JR., J.:
xxxx
Petitioner appeals the Orders1 dated February 21, 2011 and July 25, 2011 of the Regional Trial Court
(RTC) of Pasig City, Branch 166 which granted respondent's motion to dismiss on the ground of litis SECTION 45. Time of Payment. The tax shall be due and payable within the first twenty (20) days of
pendentia. the succeeding month.

The factual antecedents: On June 7, 2002, Congress approved R.A. No. 9167 4 which created the Film Development Council of
the Philippines, herein petitioner. Petitioners mandate includes the development and implementation
Respondent SM Prime Holdings, Inc. is the owner and operator of cinema houses at SM Cebu in Cebu of "an incentive and reward system for the producers based on merit to encourage the production of
City. Under Republic Act (R.A.) No. 7160 otherwise known as the Local Government Code of 1991, quality films."5 The Cinema Evaluation Board (CEB) was established to review and grade films in
owners, proprietors and lessees of theaters and cinema houses are subject to amusement tax as accordance with criteria and standards and procedures it shall formulate subject to the approval of
provided in Section 140, Book II, Title One, which reads: petitioner.

SECTION 140. Amusement Tax- Films reviewed and graded favorably by the CEB are given the following privileges:

(a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators Section 13. Privileges of Graded Films. - Films which have obtained an "A" or "B" grading from the
of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges:
of not more than thirty percent (30%) of the gross receipts from admission fees.
a. Amusement tax reward. - A grade "A" or "B" film shall entitle its producer to an incentive equivalent
(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, to the amusement tax imposed and collected on the graded films by cities and municipalities in Metro
lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between Manila and other highly urbanized and independent component cities in the Philippines pursuant to
said proprietors, lessees, or operators and the distributors of the cinematographic films. Sections 140 and 151 of Republic Act No. 7160 at the following rates:

xxxx 1. For grade "A" films - 100% of the amusement tax collected on such films; and

(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the 2. For grade "B" films. - 65% of the amusement tax collected on such films. The remaining thirty-five
payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose (35%) shall accrue to the funds of the Council.
such surcharges, interest and penalties as it may deem appropriate.
For the purpose of implementing the above incentive system, R.A. No. 9167 mandates the remittance
On June 21, 1993, the Sangguniang Panglunsod of Cebu City approved City Tax Ordinance No. of the proceeds of the amusement tax collected by the local government units (LGUs) to petitioner.
LXIX2 pursuant to Section 140, in relation to Section 1513 of the Local Government Code of 1991.
Chapter XI of said ordinance provides: Section 14. Amusement Tax Deduction and Remittances. - All revenue from the amusement tax on the
graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and
CHAPTER XI highly urbanized and independent component cities in the Philippines pursuant to Section 140 of
Republic Act. No. 7160 during the period the graded film is exhibited, shall be deducted and withheld
Amusement Tax by the proprietors, operators or lessees of theaters or cinemas and remitted within thirty (30) days
from the termination of the exhibition to the Council which shall reward the corresponding amusement
tax to the producers of the graded film within fifteen (15) days from receipt thereof.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Proprietors, operators and lessees of theaters or cinemas who fail to remit the amusement tax proceeds withheld on graded films. In the apparent absence of such MOA and the "general procedure/process"
within the prescribed period shall be liable to a surcharge equivalent to five percent (5%) of the amount duly adopted by all proprietors, operators and lessees of theaters or cinemas, respondent has been
due for each month of delinquency which shall be paid to the Council. (Emphasis supplied.) withholding such taxes and remitting the same to the City of Cebu pursuant to Cebu City Tax Ordinance
No. LXIX, as shown by the Certification14 dated February 5, 2009 issued by the Office of the Treasurer
To ensure enforcement of the above provision, the law empowered petitioner not only to impose of Cebu City stating that respondent "had religiously remitted their monthly amusement taxes due to
administrative fines and penalties but also to cause or initiate criminal or administrative prosecution to the Cebu City Government." Respondent pointed out that even the Cebu City Government recognizes
the violators.6 that when it receives the amusement taxes collected or withheld by the owners, operators and
proprietors of theaters and cinema houses on graded films, it is mandated to forward the said taxes to
On January 27, 2009, petitioner through the Office of the Solicitor General (OSG) sent a demand letter petitioner.
to respondent for the payment of the sum of 76,836,807.08 representing the amusement tax rewards
due to producers of 89 films graded "A" and "B" which were shown at SM cinemas from September 11, In its Comment15 on the motion to dismiss, petitioner argued that Section 14 of R.A. No. 9167 is valid
2003 to November 4, 2008.7 and constitutional. As to respondents defense of prior payment, petitioner asserted that the execution
of a MOA with the proprietors, owners and lessees of theaters and cinema houses is not a condition
Sometime in May 2009, the City of Cebu filed in the RTC of Cebu City (Cebu City RTC) a petition 8 for sine qua non for a valid enforcement of the provisions of R.A. No. 9167. The IRR cited by respondent
declaratory relief with application for a writ of preliminary injunction against the petitioner, docketed cannot prevail over the clear import of the law on which it is based, and hence respondent cannot
as Civil Case No. CEB-35529. The City of Cebu sought to declare Section 14 of R.A. No. 9167 as invalid invoke it to excuse non-payment of the amusement tax incentive rewards due to the producers of
and unconstitutional on grounds that: (1) it violates the basic policy on local autonomy; (2) it constitutes graded films which should have been remitted to petitioner in accordance with Section 14 of R.A. No.
an undue limitation of the taxing power of LGUs; (3) it unduly deprives LGUs of the revenue from the 9167. Petitioner pointed out that from the time R.A. No. 9167 took effect up to the present, all the
amusement tax imposed on theatre owners and operators; and (4) it amounts to technical malversation cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities
since revenue from the collection of amusement taxes that would otherwise accrue to and form part in the Philippines, with the sole exception of Cebu City and a number of theater establishments therein,
of the general fund of the LGU concerned would now be directly awarded to a private entity the have unanimously acceded to and have faithfully complied with the mandate of said law
producers of graded films bypassing the budget process of the LGU and without the proper notwithstanding the absence of a MOA.
appropriation ordinance from the sanggunian.9
Respondent filed its Reply16 to petitioners Comment maintaining that its remittance of the amusement
A temporary restraining order (TRO) was issued by the Cebu City RTC enjoining petitioner and its duly tax incentive reward to the City of Cebu extinguished its obligation to petitioner, and arguing that the
constituted agents from collecting the amusement tax incentive award from the owners, proprietors or case should be dismissed on the additional ground of litis pendentia.
lessees of theaters and cinema houses within the City of Cebu; imposing surcharge on the unpaid
amount; filing any case or suit of whatever kind or nature due to or arising from the failure to deduct, On August 13, 2010, respondent filed in Civil Case No. CEB-35529 a Motion for Leave to File and Admit
withhold and remit the amusement tax incentives award on the graded films of petitioner; and initiating Attached Comment-in-Intervention.17 In its Comment-in-Intervention With Interpleader, respondent
administrative or criminal prosecution against the said owners, proprietors or lessees.10 prayed that the judgment on the validity and constitutionality of Sections 13 and 14 of R.A. No. 9167
include a pronouncement on its rights and duties as a consequence of such judgment, as it clearly has
On October 16, 2009, petitioner sued the respondent for the payment of 76,836,807.08 representing a legal interest in the success of either party in the case.18 On October 21, 2010, the Cebu City RTC
the unpaid amusement tax incentive reward (with 5% surcharge for each month of delinquency) due granted respondents motion for intervention.19
to the producers of 89 graded films which were shown at SM Cinemas in Cebu City from September
11, 2003 to November 4, 2008, plus a 5% surcharge for each month of delinquency until fully paid. On February 21, 2011, the Pasig City RTC issued the assailed order granting the motion to dismiss,
Said collection suit was docketed as Civil Case No. 72238 of the RTC of Pasig City (Pasig City RTC), holding that the action before the Cebu City RTC (Civil Case No. CEB-35529) is the appropriate vehicle
Branch 166.11 for litigating the issues between the parties in Civil Case No. 72238. Moreover, said court found all the
elements of litis pendentia present and accordingly dismissed the complaint. Petitioners motion for
Petitioner filed a Comment (In Lieu of Answer)12 in Civil Case No. CEB-35529 praying for the dismissal reconsideration was likewise denied. In a direct recourse to this Court, petitioner advances the following
of the petition filed by the City of Cebu. questions of law:

Meanwhile, respondent filed a Motion to Dismiss13 in Civil Case No. 72238 arguing that petitioners I
complaint merits outright dismissal considering that its claim had already been extinguished by
respondents prior payment or remittance of the subject amusement taxes to the City of Cebu. THE RTC, BRANCH 166, OF PASIG CITY UTTERLY IGNORED AND DISREGARDED THE WELL-SETTLED
Respondent called attention to Section 26 of the Implementing Rules and Regulations (IRR) of R.A. RULE THAT UNLESS AND UNTIL A SPECIFIC PROVISION OF LAW IS DECLARED INVALID AND
No. 9167 which directed petitioner to execute a Memorandum of Agreement (MOA) with proprietors, UNCONSTITUTIONAL, THE SAME IS ENTITLED TO OBEDIENCE AND RESPECT.
operators and lessees of theaters and cinemas as well as movie producers, on the systems and
procedures to be followed for the collection, remittance and monitoring of the amusement taxes II

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

THE RTC, BRANCH 166, OF PASIG CITY ERRED IN DISMISSING THE COMPLAINT IN CIVIL CASE NO. former case would not amount to res judicata in the latter case. Petitioner further notes that when a
72238 ON THE GROUND OF LITIS PENDENTIA.20 judgment dismissing the former case is appealed and the assailed provisions of R.A. No. 9167 are
declared constitutional by this Court, petitioner will not be automatically awarded the unpaid
Petitioner reiterates that every law has in its favor the presumption of constitutionality, and unless and amusement taxes it is claiming against respondent in Civil Case No. 72238.
until a specific provision of law is declared invalid and unconstitutional, the same is valid and binding
for all intents and purposes. In dismissing the complaint, the Pasig City RTC abdicated its solemn duty Petitioners submissions fail to persuade.
and jurisdiction to rule on the constitutional issues raised by respondent in Civil Case No. 72238 upon
the mistaken assumption that only the Cebu City RTC in Civil Case No. CEB-35529 can directly The underlying principle of litis pendentia is the theory that a party is not allowed to vex another more
determine the constitutionality of Sections 13 and 14 of R.A. No. 9167 and the indispensability of a than once regarding the same subject matter and for the same cause of action. This theory is founded
MOA in the remittance to petitioner of amusement tax rewards due to the producers of graded films. on the public policy that the same subject matter should not be the subject of controversy in courts
Petitioner further contends that, contrary to the ruling of the Pasig City RTC, the principle of judicial more than once, in order that possible conflicting judgments may be avoided for the sake of the stability
courtesy is not applicable because a judgment in Civil Case No. CEB-35529 will not result in rendering of the rights and status of persons,25 and also to avoid the costs and expenses incident to numerous
moot the issues brought before the Pasig City RTC in Civil Case No. 72238. suits.26

The petition has no merit. Among the several tests resorted to in ascertaining whether two suits relate to a single or common
cause of action are: (1) whether the same evidence would support and sustain both the first and second
We do not subscribe to petitioners view that the dismissal of the complaint in Civil Case No. 72238 causes of action; and (2) whether the defenses in one case may be used to substantiate the complaint
amounts to an abdication of the Pasig City RTCs concurrent jurisdiction to settle constitutional in the other.27
questions involving a statute or its implementing rules. The 1997 Rules of Civil Procedure, as amended,
provides for specific grounds for the dismissal of any complaint in civil cases including those where the The determination of whether there is an identity of causes of action for purposes of litis pendentia is
trial court has competence and authority to hear and decide the issues raised and relief sought. One inextricably linked with that of res judicata, each constituting an element of the other. In either case,
of these grounds is litis pendentia. both relate to the sound practice of including, in a single litigation, the disposition of all issues relating
to a cause of action that is before a court.28
Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions
are pending between the same parties for the same cause of action, so that one of them becomes In this case, what petitioner failed to take into account is that the Cebu City RTC allowed respondent
unnecessary and vexatious.21It is based on the policy against multiplicity of suits22 and authorizes a to intervene in Civil Case No. CEB-35529 by way of an interpleader action as to which government
court to dismiss a case motu proprio.23 entity whether petitioner or the Cebu City Government should have remitted the amusement taxes
it collected from the admission fees of graded films shown in respondents cinemas in Cebu City. It
Section 1(e), Rule 16 of the 1997 Rules of Civil Procedure, as amended, thus provides: must be noted that since 1993 when City Tax Ordinance No. LXIX was enforced, respondent had been
faithfully remitting amusement taxes to the City of Cebu and because of the collection suit filed by
SECTION 1. Grounds.Within the time for but before filing the answer to the complaint or pleading petitioner, such defense of prior payment and evidence to prove it which respondent could have
asserting a claim, a motion to dismiss may be made on any of the following grounds: presented at the trial in Civil Case No. 72238 would be the same defense and evidence necessary to
sustain respondents interpleader action in Civil Case No. CEB-35529 before the Cebu City RTC. Also,
xxxx in both cases, respondent had raised the matter of conflicting provisions of R.A. No. 9167 and Local
Government Code of 1991, while petitioner pleaded and argued the constitutionality and validity of
(e) That there is another action pending between the same parties for the same cause. Sections 13 and 14 of R.A. No. 9167.

The requisites in order that an action may be dismissed on the ground of litis pendentia are: (a) the The interpleader action of respondent/intervenor, anchored on its defense of prior payment, would be
identity of parties, or at least such as representing the same interest in both actions; (b) the identity considered by the Cebu City RTC in its final determination of the parties rights and interests as it
of rights asserted and relief prayed for, the relief being founded on the same facts, and (c) the identity resolves the legal questions. The Pasig City RTC is likewise confronted with the legal and constitutional
of the two cases such that judgment in one, regardless of which party is successful, would amount to issues in the collection suit, alongside with respondents defense of prior payment. It is evident that
res judicata in the other.24 petitioners claim against the respondent hinges on the correct interpretation of the conflicting
provisions of the Local Government Code of 1991 and R.A. No. 9167. There could be no doubt that a
Petitioner submits that while there is identity of parties in Civil Case Nos. CEB-35529 and 72238, the judgment in either case would constitute res judicata to the other. Sound practice thus dictates that
second and third requisites are absent. It points out that in the former, it is not claiming any monetary the common factual and legal issues be resolved in a single proceeding.
award but merely prayed for the dismissal of the declaratory relief petition. Moreover, since the issues
raised in the former case are purely legal, petitioner is not necessarily called upon to present testimonial We also find no reversible error in the Pasig City RTCs ruling that Civil Case No. CEB-35529 is the
or documentary evidence to prove factual matters. Petitioner thus concludes that the judgment in appropriate vehicle for litigating the issues raised by petitioner and respondent in Civil Case No. 72238.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Under the established jurisprudence on litis pendentia, the following considerations predominate in the are subject to amusement tax. Section 140 of which states that: The province may levy an
ascending order of importance in determining which action should prevail: (1) the date of filing, with amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert
preference generally given to the first action filed to be retained; (2) whether the action sought to be halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent
dismissed was filed merely to preempt the later action or to anticipate its filing and lay the basis for its (30%) of the gross receipts from admission fees.
dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the
parties.29 On 1993, the Sangguniang Panglungsod of Cebu City approved City Tax Ordinance No. LXIX pursuant
to the amusement tax found in the LGC. Said ordinance provides the manner of payment being that
Moreover, considering the predicament of respondent, we also find relevant the criterion of the tax shall first be deducted and withheld by their proprietors, lessee, or operators and paid to the city
consideration of the interest of justice we enunciated in Roa v. Magsaysay.30 In applying this standard, treasurer before the gross receipts are divided between said proprietors, lessee, operators and the
what was asked was which court would be "in a better position to serve the interests of justice," taking distributors of the cinematographic films
into account (a) the nature of the controversy, (b) the comparative accessibility of the court to the
parties and (c) other similar factors.31 On 2002, Congress approved RA No. 9167 which created the Film Development Council (FDC) of the
Philippines, herein petitioner. FDCs mandate includes the development and implementation of an
In this case, all things considered, there can be no doubt Civil Case No. CEB-35529 is the appropriate incentive and reward system for the producers based on merit to encourage the production of quality
vehicle to determine the rights of petitioner and respondent. In that declaratory relief case instituted of films. For the purpose of implementing the incentive system, RA 9167 mandates the remittance of
by the City of Cebu, to which respondent had been remitting the subject amusement taxes being the proceeds of the amusement tax collected by the LGUs to FDC. To ensure enforcement of the
claimed by petitioner in Civil Case No. 72238, the issue of validity or constitutionality of Sections 13 above provision, the law empowered FDC not only to impose administrative fines and penalties but
and 14 of R.A. No. 9167 was directly pleaded and argued between petitioner and the City of Cebu, with also to cause or initiate criminal or administrative prosecution to the violators.
subsequent inclusion of respondent as intervenor. Moreover, the presence of City of Cebu as party
plaintiff would afford proper relief to respondent in the event the Cebu City R TC renders judgment On 2009, FDC through the Office of the Solicitor General (OSG) sent a demand letter to SM Prime for
sustaining the validity of the said provisions. Respondent had vigorously asserted in both courts that it the payment of the sum of P76,836,807.08 representing the amusement tax rewards due to producers
had remitted the amusement taxes in good faith to the City of Cebu which had threatened sanctions of 89 films graded A and B which were shown at SM cinemas from September 11, 2003 to November
for non-compliance with City Tax Ordinance No. LXIX, and that it should not be made to pay once 4, 2008.
again the same taxes to petitioner. As equally dire consequences for non-compliance with the demand
for payment having been made by petitioner, such defense of good faith is best ventilated in Civil Case The City of Cebu filed in the Cebu City RTC a petition for declaratory relief with application for
No. CEB-35529 where the City of Cebu is a party. a writ of preliminary injunction against FDC, docketed as Civil Case No. CEB-35529. The City
of Cebu sought to declare Section 14 of R.A. No. 9167 as invalid and unconstitutional on grounds that:
Petitioner's insistence that the Pasig City RTC proceed with trial notwithstanding the pendency of Civil (1) it violates the basic policy on local autonomy; (2) it constitutes an undue limitation of the taxing
Case No. CEB-35529 before the Cebu City RTC is thus untenable. To allow the parties to litigate the power of LGUs; (3) it unduly deprives LGUs of the revenue from the amusement tax imposed on theatre
same issues upon the same evidence and defenses will only defeat the public policy reasons behind owners and operators; and (4) it amounts to technical malversation since revenue from the collection
litis pendentia, which, like the rule on forum shopping, aims to prevent the unnecessary burdening of of amusement taxes that would otherwise accrue to and form part of the general fund of the LGU
our courts and undue taxing of the manpower and financial resources of the judiciary; to avoid the concerned would now be directly awarded to a private entity the producers of graded films
situation where co-equal courts issue conflicting decisions over the same cause; and to preclude one bypassing the budget process of the LGU and without the proper appropriation ordinance from the
party from harassing the other party through the filing of an unnecessary or vexatious suit.32 sanggunian.

WHEREFORE, the petition for review on certiorari is DENIED. The Orders dated February 21, 2011 and A temporary restraining order (TRO) was issued by the Cebu City RTC enjoining FDC and its duly
July 25, 2011 of the Regional Trial Court of Pasig City, Branch 166 are hereby AFFIRMED. constituted agents from collecting the amusement tax incentive award from the owners, proprietors or
lessees of theaters and cinema houses within the City of Cebu; imposing surcharge on the unpaid
No pronouncement as to costs. amount; filing any case or suit of whatever kind or nature due to or arising from the failure to deduct,
withhold and remit the amusement tax incentives award on the graded films of FDC; and initiating
SO ORDERED. administrative or criminal prosecution against the said owners, proprietors or lessees.

DIGEST Later in 2009, FDC sued SM Prime for the payment of P76,836,807.08 representing the unpaid
amusement tax incentive reward docketed as Civil Case No. 72238 of the RTC of Pasig City.
FACTS:
Meanwhile, SM Prime led a Motion to Dismiss in Civil Case No. 72238 arguing that:
SM Prime Holdings, Inc. is the owner and operator of cinema houses at SM Cebu in Cebu City. Under
the Local Government Code of 1991, owners, proprietors and lessees of theaters and cinema houses

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

FDC's complaint merits dismissal considering that its claim had already been extinguished by has competence and authority to hear and decide the issues raised and relief sought. One of these
SM Prime's prior payment or remittance of the subject amusement taxes to the City of Cebu. grounds is litis pendentia.
SM Prime called attention to IRR of RA No. 9167 which directed FDC to execute a
Memorandum of Agreement (MOA) with proprietors, operators and lessees of theaters and Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions
cinemas as well as movie producers, on the systems and procedures to be followed for the are pending between the same parties for the same cause of action, so that one of them becomes
collection, remittance and monitoring of the amusement taxes withheld on graded films. unnecessary and vexatious. It is based on the policy against multiplicity of suits and authorizes a court
In the apparent absence of such MOA and the "general procedure/process", SM Prime has to dismiss a case motu proprio. The requisites in order that an action may be dismissed on the ground
been withholding such taxes and remitting the same to the City of Cebu pursuant to Cebu of litis pendentia are: (a) the identity of parties, or at least such as representing the same interest in
City Tax Ordinance, as shown by a Certification issued by the Office of the Treasurer of Cebu both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the
City stating that SM Prime "had religiously remitted their monthly amusement taxes due to same facts, and (c) the identity of the two cases such that judgment in one, regardless of which party
the Cebu City Government." is successful, would amount to res judicata in the other.

In its Comment on the motion to dismiss, FDC argued that: Among the several tests resorted to in ascertaining whether two suits relate to a single or common
cause of action are: (1) whether the same evidence would support and sustain both the first and second
Section 14 of R.A. No. 9167 is valid and constitutional. causes of action; and (2) whether the defenses in one case may be used to substantiate the complaint
FDC asserted that the execution of a MOA is not a condition sine qua non for a valid in the other. The determination of whether there is an identity of causes of action for purposes of litis
enforcement of the provisions of R.A. No. 9167. pendentia is inextricably linked with that of res judicata, each constituting an element of the other. In
The IRR cited by SM Prime cannot prevail over the clear import of the law on which it is either case, both relate to the sound practice of including, in a single litigation, the disposition of all
based, and hence SM Prime cannot invoke it to excuse non-payment of the amusement tax issues relating to a cause of action that is before a court.
incentive rewards due to the producers of graded films which should have been remitted to
FDC in accordance with R.A. No. 9167. In this case, what FDC failed to take into account is that the Cebu City RTC allowed SM Prime to
intervene in Civil Case No. CEB-35529 by way of an interpleader action as to which government entity
On 2010, SM Prime led in Civil Case No. CEB-35529 a Motion for Leave to File and Admit Attached whether FDC or the Cebu City Government should have remitted the amusement taxes it collected
Comment-in-Intervention. In its Comment-in Intervention With Interpleader, SM Prime prayed that the from the admission fees of graded films shown in SM Prime's cinemas in Cebu City. It must be noted
judgment on the validity and constitutionality of Sections 13 and 14 of R.A. No. 9167 include a that since 1993 when City Tax Ordinance was enforced, SM Prime had been faithfully remitting
pronouncement on its rights and duties as a consequence of such judgment, as it clearly has a legal amusement taxes to the City of Cebu and because of the collection suit led by FDC, such defense of
interest in the success of either party in the case. prior payment and evidence to prove it which SM Prime could have presented at the trial in Civil Case
No. 72238 would be the same defense and evidence necessary to sustain SM Prime's interpleader
Cebu City RTC granted SM Prime's motion for intervention. Pasig City RTC issued the assailed order action in Civil Case No. CEB-35529 before the Cebu City RTC. Also, in both cases, SM Prime had raised
granting the motion to dismiss, holding that the action before the Cebu City RTC (Civil Case No. CEB- the matter of conflicting provisions of R.A. No. 9167 and Local Government Code of 1991, while FDC
35529) is the appropriate vehicle for litigating the issues between the parties in Civil Case No. 72238. pleaded and argued the constitutionality and validity of Sections 13 and 14 of R.A. No. 9167. The
Moreover, said court found all the elements of litis pendentia present and accordingly dismissed the interpleader action of SM Prime/intervenor, anchored on its defense of prior payment, would be
complaint. FDC's motion for reconsideration was denied. considered by the Cebu City RTC in its final determination of the parties' rights and interests as it
resolves the legal questions. The Pasig City RTC is likewise confronted with the legal and constitutional
ISSUES: issues in the collection suit, alongside with SM Prime's defense of prior payment. It is evident that
FDC's claim against SM Prime hinges on the correct interpretation of the conflicting provisions of the
1. WON the Pasig City RTC ignored the well-settled rule that unless and until a specific provision Local Government Code of 1991 and R.A. No. 9167. There could be no doubt that a judgment in either
of law is declared invalid and unconstitutional, the same is entitled to obedience and respect case would constitute res judicata to the other. Sound practice thus dictates that the common factual
2. WON the Pasig City RTC erred in dismissing the complaint in Civil Case No. 72238 on the and legal issues be resolved in a single proceeding.
ground of litis pendentia
2. NO, Pasig City RTC did not commit any error in ruling that Civil Case No. CEB-35529 is
RULING: the appropriate vehicle for litigating the issues raised by FDC and SM Prime in Civil Case
No. 72238.
1. NO, the dismissal of the complaint in Civil Case No. 72238 does not amount to abdication
of Pasig City RTC's concurrent jurisdiction to settle constitutional questions involving a Under the established jurisprudence on litis pendentia, the following considerations predominate in the
statute or its implementing rules. The 1997 Rules of Civil Procedure, as amended, provides for ascending order of importance in determining which action should prevail: (1) the date of filing, with
specific grounds for the dismissal of any complaint in civil cases including those where the trial court preference generally given to the first action led to be retained; (2) whether the action sought to be
dismissed was led merely to preempt the later action or to anticipate its filing and lay the basis for its

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the (1) Uy Chin Ho a director of UNIFISH buys in bulk from the company;
parties. Moreover, considering the predicament of SM Prime, we also find relevant the criterion of the
consideration of the interest of justice we enunciated in Roa v. Magsaysay. In applying this standard, (2) Being a director, Uy Chin Ho has a lot of clout in the distribution of the
what was asked was which court would be "in a better position to serve the interests of justice," taking canned sardines processed by UNIFISH;
into account (a) the nature of the controversy, (b) the comparative accessibility of the court to the
parties and (c) other similar factors. (3) Uy Chin Ho dictates the value of canned sardines that he orders and buys
from UNIFISH without any receipt of his purchases;
In this case, all things considered, there can be no doubt Civil Case No. CEB 35529 is the appropriate
vehicle to determine the rights of FDC and SM Prime. In that declaratory relief case instituted by the (4) The moment he has the quantity he wants, UNIFISH through Uy Chin Ho
City of Cebu, to which SM Prime had been remitting the subject amusement taxes being claimed by delivers to the different supermarkets such as White Gold, Gaisano, etc.;
FDC in Civil Case No. 72238, the issue of validity or constitutionality of Sections 13 and 14 of R.A. No.
9167 was directly pleaded and argued between FDC and the City of Cebu, with subsequent inclusion (5) Payments made by these tax evading establishments are made by checks
of SM Prime as intervenor. Moreover, the presence of City of Cebu as party plaintiff would afford proper drawn payable to cash and delivered to Uy Chin Ho; These payments
relief to SM Prime in the event the Cebu City RTC renders judgment sustaining the validity of the said are also not receipted (sic);
provisions. SM Prime had vigorously asserted in both courts that it had remitted the amusement taxes
in good faith to the City of Cebu which had threatened sanctions for non-compliance with City Tax (6) Uy Chin Ho will then pay UNIFISH for the quantity of sardines he had
Ordinance No. LXIX, and that it should not be made to pay once again the same taxes to FDC. As withdrawn from the corporation;
equally dire consequences for non-compliance with the demand for payment having been made by
FDC, such defense of good faith is best ventilated in Civil Case No. CEB-35529 where the City of Cebu 3. Another fraudulent practice perpetrated by UNIFISH through Uy Chin Hos direction is the sale of
is a party. FDC's insistence that the Pasig City RTC proceed with trial notwithstanding the pendency of imported oil locally to different customers. This is a case of smuggling in the sense that UNIFISH, being
Civil Case No. CEB-35529 before the Cebu City RTC is thus untenable. an export company registered with the Board of Investments, is enjoying certain exemptions in their
importation of oil as one of the raw materials in its processing of canned tuna for export. These tax
ACTIVITY 3 exemptions are granted by the government on the condition that the oil is to be used only in the
processing of tuna for export and that it is not to be sold unprocessed as is to local customers.
FRANK UY and UNIFISH PACKING CORPORATION
vs 4. Another fraudulent practice involves the sales of unused cans; UNIFISH also enjoys tax exemptions
BUREAU OF INTERNAL REVENUE and HON. MERCEDES GOZO-DADOLE in its purchases of tin cans subject to the condition that these are to be used as containers for its
processed tuna for export. These cans are never intended to be sold locally to other food processing
companies.
DECISION
5. Prior to 1990, that is from 1980 to 1990, the factory of the UNIFISH PACKING CORPORATION was
KAPUNAN, J.: then run by the PREMIER INDUSTRIAL & DEVELOPMENT CORPORATION (hereinafter referred to as
PREMIER) [,] which corporation was being controlled by the same majority stockholders as those now
Petitioners assail the validity of the warrants issued for the search of the premises of the Unifish running and controlling UNIFISH; [a]t that time, PREMIER was also committing the same fraudulent
Packing Corporation, and pray for the return of the items seized by virtue thereof. acts as what is being perpetrated by UNIFISH at present.

On 30 September 1993, a certain Rodrigo Abos reported to the Bureau of Internal Revenue (BIR) 6. The records containing entries of actual volume of production and sales, of both UNIFISH AND
that petitioners Unifish Packing Corporation and Uy Chin Ho alias Frank Uy were engaged in activities PREMIER, are found in the office of the corporation at its factory site at H. Cortes Street, Mandaue
constituting violations of the National Internal Revenue Code. Abos, who claimed to be a former City. The particular place or spot where these records [official receipts, sales invoices, delivery receipts,
employee of Unifish, executed an Affidavit[1] stating: sales records or sales books, stock cards, accounting records (such as ledgers, journals, cash receipts
books, and check disbursements books)] are kept and may be found is best described in the herein
1. He has personal knowledge that UNIFISH PACKING CORPORATION (hereinafter referred to as attached sketch of the arrangement of the offices furniture and fixture of the corporation which is made
UNIFISH), a canning factory located at Hernan Cortes Street, under the active management of UY an integral part hereof and marked as Annex A,
CHIN HO alias Frank Uy [,] is selling by the thousands of [sic] cartons of canned sardines without
issuing receipt. This is in violation of Sections 253 and 263 of the Internal Revenue Code. 7. He is executing this affidavit to attest under oath the veracity of the foregoing allegations and he is
reserving his right to claim for reward under the provisions of Republic Act No. 2338.
2. This grand scale tax fraud is perpetrated through the following scheme:

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

On 1 October 1993, Nestor N. Labaria, Assistant Chief of the Special Investigation Branch of the Packing Corporation, Hernan Cortes St., Mandaue City has in his possession, care and control, the
BIR, applied for search warrants from Branch 28 of the Regional Trial Court of Cebu. The application following:
sought permission to search the premises of Unifish.
1. Multiple sets of Books of Accounts; Ledgers, Journals, Columnar Books, Cash
After hearing the depositions of Labaria and Abos, Judge Mercedes Gozo-Dadole issued the Register Books, Sales Books or Records; Provisional & Official Receipts;
disputed search warrants. The first[2] is docketed as SEARCH WARRANT NO. 93-10-79
FOR: VIOLATION OF SECTION 253 ("Search Warrant A-1"), and consists of two pages. A verbatim 2. Production Record Books/Inventory Lists [,] Stock Cards;
reproduction of Search Warrant A-1 appears below:
3. Unregistered Delivery Receipts;
REPUBLIC OF THE PHILIPPINES
4. Unregistered Purchase & Sales Invoices;
REGIONAL TRIAL COURT OF CEBU
5. Sales Records, Job Order;
7th Judicial Region
6. Corporate Financial Records; and
Branch 28
7. Bank Statements/Cancelled Checks
Mandaue City
You are hereby commanded to make an immediate search at any time of day or night of said premises
THE PEOPLE OF THE PHILIPPINES, and its immediate vicinity and to forthwith seize and take possession of the articles above-mentioned
and other properties relative to such violation and bring said properties to the undersigned to be dealt
Plaintiff, with as the law directs.

- versus - SEARCH WARRANT NO. 93-10-79 WITNESS MY HAND this 1st day of October, 1993.

FOR: VIOLATION OF SEC. 253 (sgd.)

UY CHIN HO alias FRANK UY, MERCEDES GOZO-DADOLE

Unifish Packing Corporation Judge

Hernan Cortes St., Cebu City The second warrant[3]is similarly docketed as SEARCH WARRANT 93-10-79 FOR: VIOLATION OF
SEC. 253 ("Search Warrant A-2"). Search Warrant A-2, reproduced below, is almost identical in content
x-------------------------/ to Search Warrant A-1, save for the portions indicated in bold print. It consisted of only one page.

(with sketch) REPUBLIC OF THE PHILIPPINES

SEARCH WARRANT REGIONAL TRIAL COURT OF CEBU

TO ANY PEACE OFFICER: 7th Judicial Region

G R E E T I N G S: Branch 28

It appearing to the satisfaction of the undersigned, after examination underoath (sic), Nestor N. Mandaue City
Labaria, Asst. Chief, Special Investigation Branch, BIR and witness Rodrigo Abos that there is a (sic)
probable cause to believe that the crime of violation of Section 253 - attempt to evade or defeat the THE PEOPLE OF THE PHILIPPINES,
tax has been committed and there is good and sufficient reason to believe that Uy Chin Ho c/o Unifish

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Plaintiff, and other properties relative to such violation and bring said properties to the undersigned to be dealt
with as the law directs.
- versus - SEARCH WARRANT NO. 93-10-79
WITNESS MY HAND this 1st day of October, 1993.
FOR: VIOLATION OF SEC. 253
(sgd.)
UY CHIN HO alias FRANK UY, and
MERCEDES GOZO-DADOLE
Unifish Packing Corporation
Judge
Hernan Cortes St., Mandaue City
Judge Gozo-Dadole issued a third warrant,[4] which was docketed as SEARCH WARRANT 93-10-
x-------------------------/ 80 FOR: VIOLATION OF SEC. 238 in relation to SEC. 263 (hereinafter, "Search Warrant B"). Except for
the docket number and the designation of the crime in the body of the warrant (Section 238 in relation
(with sketch) to Sec. 263 - non-issuance of sales invoice and use and possession of unregistered delivery receipts
and/or sales invoices), Search Warrant B is a verbatim reproduction of Search Warrant A-2.
SEARCH WARRANT
On the strength of these warrants, agents of the BIR, accompanied by members of the Philippine
TO ANY PEACE OFFICER: National Police, on 2 October 1993, searched the premises of the Unifish Packing Corporation. They
seized, among other things, the records and documents of petitioner corporation. A return of said
G R E E T I N G S: search was duly made by Nestor Labaria with the RTC of Cebu , Branch 28.

It appearing to the satisfaction of the undersigned, after examination underoath [sic], Nestor N. On 8 February 1995, the BIR filed against petitioners a case before the Department of
Labaria, Asst. Chief, Special Investigation Branch, BIR and witness Rodrigo Abos that there is a [sic] Justice. The records, however, do not reveal the nature of this case.
probable cause to believe that the crime of violation of Section 253 - attempt to evade or defeat the
tax has been committed and there is good and sufficient reason to believe that Uy Chin Ho alias Frank On 31 March 1995, petitioners filed motions to quash the subject search warrants with Branch
Uy and Unifish Packing Corporation, Hernan Cortes St., Mandaue City has in his possession, care and 28 of the Cebu RTC.
control, the following:
The RTC, however, denied petitioners' motions to quash as well as their subsequent motion for
1. Multiple sets of Books of Accounts; Ledgers, Journals, Columnar Books, Cash reconsideration, prompting petitioners to file a petition for certiorari with the Court of Appeals
Register Books, Sales Books or Records; Provisional & Official Receipts; (CA). The CA dismissed their petition, holding that petitioners failed to comply with Section 2(a), Rule
6 of the Revised Internal Rules of the Court of Appeals (RIRCA), which states:
2. Production Record Books/Inventory Lists [,] Stock Cards;
a. What Should be Filed. - The petition shall be filed in seven (7) legible copies and a copy thereof shall
3. Unregistered Delivery Receipts; be served on each of the respondents, and must be accompanied by a certified true copy of the decision
or order complained of and true copies of the pleadings and other pertinent documents and papers. (As
4. Unregistered Purchase & Sales Invoices; amended by S.Ct. Res., dated November 24, 1992).

5. Sales Records, Job Order; The CA found that petitioners did not submit certified true copies of (1) the Motions to Quash, (2) the
Motion for Reconsideration, and (3) the Affidavit of Rodrigo Abos.
6. Corporate Financial Records; and
The CA also held that certiorari was not the proper remedy to question the resolution denying
7. Bank Statements/Cancelled Checks the motion to quash.

You are hereby commanded to make an immediate search at any time of day or night of said premises In this case now before us, the available remedies to the petitioners, assuming that the Department of
and its immediate vicinity and to forthwith seize and take possession of the articles above-mentioned Justice will eventually file the case, are: a petition for reinvestigation; the right to post bail; a Motion
to Quash the Information; and in case of denial, an appeal, after judgment on the merits, or after the

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

case shall have been tried. This brings us to the case of Lai vs. Intermediate 220 SCRA 149 and the compliance with Section 3, Rule 46 of the Rules of Court, requiring the submission of a certified true
pronouncement, thus: copy of material portions of the record as are referred to [in the petition], and other documents relevant
or pertinent thereto along with the petition. So should it be in this case, especially considering that it
Criminal Procedure: Certiorari: Certiorari should not be allowed where petitioner has other remedies involves an alleged violation of a constitutionally guaranteed right. The rules of procedure are not to
available. -- Anent the remedy resorted to by petitioners (referring to the petition for certiorari) from be applied in a very rigid, technical sense; rules of procedure are used only to help secure substantial
the Regional Trial Court of Negros Oriental presided by Judge Diez, the same should not have been justice. If a technical and rigid enforcement of the rules is made, their aim could be defeated.[7]
granted. Petitioners were not without plain, speedy and adequate remedies in the ordinary course of
law against Judge Lomeda's order for their arrest. These remedies are as enumerated by respondent The CA likewise erred in holding that petitioners cannot avail of certiorari to question the
appellate court in its decision: "1. they can post bail for their provisional release; 2. They can ask the resolution denying their motions to quash the subject search warrants. We note that the case of Lai
Provincial Fiscal for a reinvestigation of the charge against them. If unsatisfied with the fiscal's vs. Intermediate, cited by the appellate court as authority for its ruling does not appear in 220
resolution they can ask for a review by the Minister of Justice; (Sec. 1(), RA 5180 as amended by P.D. SCRA 149. The excerpt of the syllabus quoted by the court, as observed by petitioners,[8] appears to
911); 3. if their petition for review does not prosper, they can file a motion to quash the information i have been taken from the case of Yap vs. Intermediate Appellate Court, 220 SCRA 245 (1993). Yap,
n the trial court.(Rule 117, Rules of however, is inapplicable since that case involved a motion to quash a complaint for qualified theft,
Court). 4. If the motion is denied, they can appeal the judgment of the court after the case shall hav not a motion to quash a search warrant.
e been tried on the merits.
The applicable case is Marcelo vs. De Guzman,[9] where we held that the issuing judges
x x x Where motion to quash is denied, remedy is not certiorari, but to go to trial.-- Moreover, in the disregard of the requirements for the issuance of a search warrant constitutes grave abuse
case of Acharon vs. Purisima, this Court held of discretion, which may be remedied by certiorari:
that when a motion to quash a criminal case is denied, the remedy is not certioraribut to go to trial w
ithout prejudice to reiterating the special defenses involved in said Motion. In the event that an Expressly announced in Section 1, Rule 65 of the Rules of Court is the general rule that certiorari is
adverse decision is rendered after trial on the merits, an appeal therefrom should be the next legal available where a tribunal or officer exercising judicial functions has acted without or in excess of its
step. or his jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law.
xxx
In the light of the findings of the lower court, herein above quoted, it is indisputable that Judge de
In this case now before Us, there is no pretention [sic] that the Court issued the Search Warrants Guzman gravely abused his discretion in issuing the said search warrant. Indeed, he acted whimsically
without jurisdiction. On the contrary, it had jurisdiction. The argument therefore that the Court and capriciously when he ignored the explicit mandate of Section 3, Rule 126 of the Rules of Court that
committed an error in not describing the persons or things to be searched; that the Search Warrants a search warrant shall not issue but upon probable cause in connection with one specific offense to be
did not describe with particularity the things to be seized/taken; the absence of probable cause; and determined by the municipal or city judge after examination under oath or affirmation of the
for having allegedly condoned the discriminating manner in which the properties were taken, to us, are complainant and the witnesses he may produce, and particularly describing the place to be searched
merely errors in the Court's finding, certainly not correctible by certiorari, but instead thru an appeal.[5] and the persons or things to be seized; and that no search warrant shall issue for more than one
specific offense.
In any event, the CA ruled, no grave abuse of discretion amounting to lack of jurisdiction was
committed by the RTC in the issuance of the warrants. The utter disregard by Judge de Guzman of the requirements laid down by the said rule renders the
warrant in question absolutely null and void. It has been held that where the order complained of is a
As petitioners' motion for reconsideration proved futile, petitioners filed the instant petition for patent nullity, a petition for certiorari and mandamus may properly be entertained despite the existence
review. of the remedy of appeal.

Petitioners claim that they did submit to the CA certified true copies of the pleadings and Moreover, an appeal from the order of Judge de Guzman would neither be an adequate nor speedy
documents listed above along with their Petition, as well as in their Motion for Reconsideration. An remedy to relieve appellee of the injurious effects of the warrant. The seizure of her personal property
examination of the CA Rollo, however, reveals that petitioners first submitted the same in their Reply, had resulted in the total paralization of the articles and documents which had been improperly
after respondents, in their Comment, pointed out petitioners failure to attach them to the Petition. seized. Where the remedy of appeal cannot afford an adequate and expeditious relief, certiorari can
be allowed as a mode of redress to prevent irreparable damage and injury to a party.
Nevertheless, the CA should not have dismissed the petition on this ground although, to its credit,
it did touch upon the merits of the case. First, it appears that the case could have been decided without This Court had occasion to reiterate the above pronouncement in Silva vs. Presiding Judge, RTC
these pleadings and documents. Second, even if the CA deemed them essential to the resolution of the of Negros Oriental, Br. XXXIII,[10] which also involved a special civil action for certiorari:[11]
case, it could have asked for the records from the RTC. Third, in a similar case,[6] we held that the
submission of a document together with the motion for reconsideration constitutes substantial

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Thus, in issuing a search warrant, the judge must strictly comply with the constitutional requirement (4) the warrant issued must particularly describe the place to be searched and persons or
that he must determine the existence of probable cause by examining the applicant and his witnesses things to be seized.
in the form of searching questions and answers. His failure to comply with this requirement constitutes
grave abuse of discretion. As declared in Marcelo vs. De Guzman, G.R. No. L-29077, June 29, 1982, The absence of any of these requisites will cause the downright nullification of the
114 SCRA 657, the capricious disregard by the judge in not complying with the requirements before search warrants.[13] The proceedings upon search warrants must be absolutely legal, for there is not
issuance of search warrants constitutes grave abuse of discretion. a description of process known to the law, the execution of which is more distressing to the
citizen. Perhaps there is none which excites such intense feeling in consequence of its humiliating and
In this case, petitioners alleged in their petition before the CA that the issuing judge degrading effect. The warrants will always be construed strictly without, however, going the full length
violated the pertinent provisions of the Constitution and the Rules of Court in issuing the of requiring technical accuracy. No presumptions of regularity are to be invoked in aid of the process
disputed search warrants, which, if true, would have constituted grave abuse of when an officer undertakes to justify under it.[14]
discretion. Petitioners also alleged that the enforcers of the warrants seized almost all the
records and documents of the corporation thus resulting in the paralysis of its Petitioners contend that there are several defects in the subject warrants that command their
business. Appeal, therefore, would not be an adequate remedy that would afford nullification. They point out inconsistencies in the description of the place to be searched in Search
petitioners expeditious relief. Warrant A-1, as well as inconsistencies in the names of the persons against whom Search Warrants A-
1 and A-2 were issued. That two search warrants (Search Warrants A-1 and A-2) were issued for the
We now proceed to the merits of the case. same crime, for the same place, at a single occasion is cited as another irregularity. Petitioners also
dispute the existence of probable cause that would justify the issuance of the warrants. Finally, they
Section 2, Article III of the Constitution guarantees the right of the people against unreasonable claim that the things to be seized were not described with particularity. These defects, according to
searches and seizures: petitioners, render the objects seized inadmissible in evidence.[15]

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable Inconsistencies in the description of the place to be searched
searches and seizures of whatever nature and for any purpose shall be inviolable, and no search
warrant or warrant of arrest shall issue except upon probable cause to be determined personally by Petitioners observe that the caption of Search Warrant A-1 indicates the address of Uy Chin Ho
the judge after examination under oath or affirmation of the complainant and the witnesses he may alias Frank Uy as Hernan Cortes St., Cebu City while the body of the same warrant states the address
produce, and particularly describing the place to be searched and the persons or things to be seized. as Hernan Cortes St., Mandaue City. Parenthetically, Search Warrants A-2 and B consistently state
the address of petitioner as Hernan Cortes St., Mandaue City.
In relation to the above provision, Rule 126 of the Rules of Court provides:
The Constitution requires, for the validity of a search warrant, that there be a particular
SEC. 3. Requisite for issuing search warrant. - A search warrant shall not issue but upon probable cause description of the place to be searched and the persons of things to be seized. The rule is
in connection with one specific offense to be determined personally by the judge after examination that a description of a place to be searched is sufficient if the officer with the warrant can, with
under oath or affirmation of the complainant and the witnesses he may produce, and particularly reasonable effort, ascertain and identify the place intended and distinguish it from other places in the
describing the place to be searched and the things to be seized. community. Any designation or description known to the locality that points out the place to the
exclusion of all others, and on inquiry leads the officers unerringly to it, satisfies the constitutional
SEC. 4. Examination of complainant; record. - The judge must, before issuing the warrant, personally requirement. Thus, in Castro vs. Pabalan, where the search warrant mistakenly identified the residence
examine in the form of searching questions and answers, in writing and under oath the complainant of the petitioners therein as Barrio Padasil instead of the adjoining Barrio Maria Cristina, this Court
and any witnesses he may produce on facts personally known to them and attach to the record their "admitted that the deficiency in the writ is not of sufficient gravity to call for its invalidation."
sworn statements together with any affidavits submitted.
In this case, it was not shown that a street similarly named Hernan Cortes could be
A search warrant must conform strictly to the requirements of the foregoing constitutional and found in Cebu City. Nor was it established that the enforcing officers had any difficulty in
statutory provisions. These requirements, in outline form, are: locating the premises of petitioner corporation. That Search Warrant A-1, therefore,
inconsistently identified the city where the premises to be searched is not a defect that would spell
(1) the warrant must be issued upon probable cause; the warrants invalidation in this case.

(2) the probable cause must be determined by the judge himself and not by the applicant Inconsistencies in the description of the persons named in the two warrants
or any other person;
Petitioners also find fault in the description of the names of the persons in Search Warrants A-1
(3) in the determination of probable cause, the judge must examine, under oath or and A-2. Search Warrant A-1 was issued solely against Uy Chin Ho alias Frank Uy. Search Warrant A-
affirmation, the complainant and such witnesses as the latter may produce; and

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

2, on the other hand, was directed against UY CHIN HO alias FRANK UY, and Unifish Packing but must make his own inquiry on the intent and justification of the application.[25] Asking of leading
Corporation. questions to the deponent in an application for search warrant, and conducting of examination in a
general manner, would not satisfy the requirements for issuance of a valid search warrant.[26]
These discrepancies are hardly relevant.
The witnesses, in turn, must testify under oath to facts of their own personal knowledge. The
In Miller v. Sigler,[21] it was held that the Fourth Amendment of the United States Constitution, oath required must refer to the truth of the facts within the personal knowledge of the petitioner or his
from which Section 2, Article III of our own Constitution is historically derived, does not require the witnesses, because the purpose thereof is to convince the committing magistrate, not the individual
warrant to name the person who occupies the described premises. Where the search warrant is issued making the affidavit and seeking the issuance of the warrant, of the existence of probable
for the search of specifically described premises only and not for the search of a person, the failure to cause.[27] Search warrants are not issued on loose, vague or doubtful basis of fact, nor on mere
name the owner or occupant of such property in the affidavit and search warrant does not invalidate suspicion or belief.[28]
the warrant; and where the name of the owner of the premises sought to be searched is incorrectly
inserted in the search warrant, it is not a fatal defect if the legal description of the premises to be It may be recalled that before issuing the warrants, the judge deposed two witnesses, namely,
searched is otherwise correct so that no discretion is left to the officer making the search as to the Nestor Labaria of the BIR, and Rodrigo Abos, who claimed to be an old employee of Unifish. Petitioners
place to be searched.[22] claim that the testimonies of Labaria and Abos are hearsay. We agree with this contention, but
only as to the testimony of Labaria, who stated during the examination:
Since, in the case at bar, the warrant was issued not for search of the persons owning or
occupying the premises, but only a search of the premises occupied by them, the search could Q. Do you know of a certain Uy Chin Ho alias Frank Uy?
not be declared unlawful or in violation of the constitutional rights of the owner or occupants of the
premises, because of inconsistencies in stating their names. A. No.

Two warrants issued at one time for one crime and one place Q. Do you know his establishment known as Unifish Packing Corporation?

In any event, Search Warrant A-1 should be deemed superseded by Search Warrant A- A. I have only heard of that thru the affidavit of our informer, Mr. Abos.
2.
Q. Why are you applying for search warrant in the premises of Unifish Packing Corporation?
Two warrants, Search Warrants A-1 and A-2, were actually issued by the trial court for the same
crime (violation of SEC. 253 of the National Internal Revenue Code). It appears, however, that Search A. Because of that information we received that they are using only delivery receipts instead of the
Warrant A-2 was issued merely to correct the inconsistencies in the address in Search legal sales invoices. It is highly indicative of fraud.
Warrant A-1, as well as to include Unifish Packing Corporation as a party against whom
the warrant was issued. Search Warrant A-2 was evidently an attempt by the issuing judge to be Q. From where did you get that information?
more precise in the names of the persons against whom the warrant was issued and in the description
of the place to be searched. Indeed, it would be absurd for the judge to issue on a single occasion two A. From our informer, the former employee of that establishment.[29]
warrants authorizing the search of a single place for a single offense. Inasmuch as the apparent intent
in issuing Search Warrant A-2 was to supersede Search Warrant A-1, the latter should be deemed The above portion of the transcript shows that Labarias knowledge of the alleged illegal
revoked by the former. activities of petitioners was acquired not through his own perception but was merely
supplied by Abos. Therefore, the deposition of Labaria, which is based on hearsay, standing alone,
The alleged absence of probable cause cannot justify the issuance of the search warrants.[30]

Petitioners claim there was no probable cause for Judge Gozo-Dadole to issue the subject search The application for the warrants, however, is not based solely on Labarias deposition
warrants. but is supported by that of Abos, whose knowledge of petitioners alleged illegal practices was
apparently obtained during his employment with Unifish. In his deposition, Abos detailed the schemes
Probable cause is defined as such facts and circumstances which would lead a reasonably discreet employed by Frank Uy and Unifish to evade the payment of taxes, and described the place where the
and prudent man to believe that an offense has been committed and that the objects sought in documents supposedly evidencing these schemes were located:
connection with the offense are in the place sought to be searched.
Q Do you know Frank Uy?
In the determination of probable cause, the Constitution and the Rules of Court require an
examination of the witnesses under oath. The examination must be probing and exhaustive, not merely A Yes.
routine or pro forma. The examining magistrate must not simply rehash the contents of the affidavit

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Q Why do you know him? Q Can you tell this Court the name of that certain supermarkets?

A Because I were (sic) an employee of his from 1980 until August of 1993. A White Gold and Gaisano.

Q Where is this Unifish Packing Corporation located? Q How did you know this fact?

A Hernan Cortes St. A As a manager of the company I have access to all the records of that company for the last three
years. I was the Operating Chief.
Q What is it being engaged of?
Q Until now?
A It is engaged in canning of fish.
A No. I was separated already.
Q You have executed an affidavit here to the effect that it seems that in his business dealings that
he is actually doing something that perpetrated tax evasion. Is that correct? Q When?

A Yes. A August, 1993.

Q How is it done? Q How does he do this manipulation?

A As an officer, he is an active member of the corporation who is at the same time making his A He sells the goods to the supermarkets afterwhich the company, Unifish will deliver to his
authority as appointing himself as the distributor of the company's products. He sells these customers, then his customers will pay directly to him and in turn, he pays to the company.
products thru supermarkets in Visayas and Mindanao, in fact, the whole Philippines. He
makes it appear that it is the company which is selling when actually it is him selling the Q And these transactions, were they reflected in their books of account or ledger or whatever?
goods and he does not issue any invoices.
A It is written but it is supposed to be a secret transaction. It is not for the public, not for the BIR
Q Since he does not issue any invoices, how is it done? but it is only for the purpose of keeping the transactions between the company and him. It
is not made to be shown to the BIR.
A Thru delivery receipts.
Q In that books of account, is it reflected that they have made some deliveries to certain
Q Is the delivery receipt official? supermarkets?

A No. It is unregistered. A Yes.

Q For how long has this been going on? Q For the consumption of the BIR what are the papers that they show?

A As far as I know, it is still in 1986 since we started producing the sardines. A It is the private accounting firm that prepares everything.

Q When was the last time that you observed that that is what he is doing? Q Based on what?

A August, 1993, last month. A Based on some fictitious records just as they wish to declare.

Q How did you happen to know about this last month? Q In your affidavit you stated that there are sales invoices, official receipts, delivery receipts, sales
records, etc. These documents are records that you have stated, in your affidavit, which are
A Because he delivered to certain supermarkets and the payments of that supermarket did not go only for the consumption of the company?
directly to the company. It went to him and he is the one who paid the company for the
goods that he sold. A Yes, not for the BIR.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Q Where are they kept now? Q Do these entries appear in the columnar books which are the basis for the report to the BIR?

A They are kept on the table which I have drawn in the sketch. This is the bird's eyeview (sic) of A As far as I know, it does not reflect.
the whole office. When you enter thru the door this Gina Tan is the one recording all the
confidential transactions of the company.In this table you can find all the ledgers and Q What are these xerox copies of checks?
notebooks.
A I think we cannot trace it up. These ones are the memos received by Unifish for payment of
Q This sketch is a blow-up of this portion, Exh. "A"? sardines. This is the statement of the company given to Uy Chin Ho for collection.

A Yes. Exh. "B" is the blow-up of Exh. "A" inside the office. Q It is also stated in your affidavit that the company imported soya oil. How is it done?

In this blow-up there are four personnel plus one new personnel. Gina Tan collects all the records A The company imports soya oil to be used as a component in the processing of canned tuna for
from this girl and this girl makes the statements. This first girl delivers the receipts. The export. The company enjoys certain BOI privilege and so it is tax free. As far as I know, they
second girl prepares the bill of lading.The third girl keeps the inventory of all the stocks. profit more to dispose the product locally. Whatever excess of this soya oil are sold to another
company.
This sketch here is the bodega where the records are kept. The records from these people are
stored in this place which is marked as "C". Q Is that fact reflected in the xerox copies?

Q So what you want to impress on that now is that only current records are kept by Gina because A No. I have the actual delivery receipt.
according to you the whole records are already placed in the bodega?
Q In other words, the company imports soya oil supposedly to be used as a raw material but
A Yes. instead they are selling it locally?

Q But how can you enter the bodega? A Yes. ([W]itness showing DR No. 3053 dated November 13, 1991.) This delivery receipt was the
delivery receipt to Celebes Canning Corp. of the 90 grams soya oil.
A Here, from the main entrance there is a door which will lead to this part here. If you go straight
there is a bodega there and there is also a guard from this exit right after opening the door. Q In other words, this soya oil should have to be used by Unifish but instead they are seeling (sic)
it?
Q The problem is that, when actually in August have you seen the current records kept by Gina?
A Yes, at a profit.
A I cannot exactly recall but I have the xerox copies of the records.
Q You also said that there is tax evasion in the selling of cans. What do you mean by this?
Q Where are they now?
A There is another privileged [sic] by the BOI for a special price given to packaging materials. When
A They are in my possession (witness handling [sic] to the Court a bunch of records). you export the product there is a 50% price difference. Now, taking that advantage of that
exemption, they sold it to certain company here, again to Virginia Farms.
Q The transactions that are reflected in these xerox copies that you have given me, especially this
one which seems to be pages of a ledger, they show that these are for the months of January, Q Do you have proof to that effect?
February, March, April and May.Are these transactions reflected in these xerox copies which
appear in the ledger being shown to the BIR? A No, but we can get it there.

A As far as I know, it did not appear. Q Will that fact be shown in any listed articles in the application for search warrant since according
to you, you have seen this manipulation reflected on the books of account kept by Gina? Are
Q What about this one which says Columnar Book Cash Receipt for the month of January, what you sure that these documents are still there?
does it show?
A Yes. I have received information.
A It shows that Frank Uy is the one purchasing from the company and these are his customers.

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COURT: Alright.[31] xxx

Abos stated that, as former Operating Chief of Unifish, he had access to the company In Uy Kheytin, et al. vs. Villareal, etc., et al., 42 Phil. 886, 896, this Court had occasion to explain the
records, and even showed the issuing judge photocopies thereof. Thus, we reject the purpose of the requirement that the warrant should particularly describe the place to be searched and
contention that this witness did not have personal knowledge of the facts to which he testified. The the things to be seized, to wit:
contents of the deposition clearly demonstrate otherwise.
x x x Both the Jones Law (sec. 3) and General Orders No. 68 (sec. 97) specifically require that a search
The deposition also shows that, contrary to petitioners submission, the inquiries made by the warrant should particularly describe the place to be searched and the things to be seized. The evident
judge were far from leading or being a rehash of the witness affidavit. We find such inquiries to be purpose and intent of this requirement is to limit the things to be seized to those, and only those,
sufficiently probing. particularly described in the search warrant - to leave the officers of the law with no discretion regarding
what articles they shall seize, to the end that unreasonable searches and seizures may not be made, -
Alleged lack of particularity in the description of the things seized that abuses may not be committed. That is the correct interpretation of this constitutional provision
borne out by the American authorities.
Petitioners note the similarities in the description of the things to be seized in the subject warrants
and those in Stonehill vs. Diokno,[32] Bache & Co. (Phil.), Inc. vs. Ruiz,[33] and Asian Surety & Insurance The purpose as thus explained could, surely and effectively, be defeated under the search warrant
Co., Inc. vs. Herrera. issued in this case.

In Stonehill, the effects to be searched and seized were described as: A search warrant may be said to particularly describe the things to be seized when the description
therein is as specific as the circumstances will ordinarily allow (People vs. Rubio, 57 Phil, 384); or when
Books of accounts, financial records, vouchers, journals correspondence, receipts, ledgers, portfolios, the description expresses a conclusion of fact - not of law - by which the warrant officer may be guided
credit journals, typewriters, and other documents and/or papers showing all business transactions in making the search and seizure (idem., dissent of Abad Santos, J.,); or when the things described
including disbursement receipts, balance sheets and related profit and loss statements. are limited to those which bear direct relation to the offense for which the warrant is being issued (Sec.
2, Rule 126, Revised Rules of Court). The herein search warrant does not conform to any of the
This Court found that the foregoing description failed to conform to the requirements set forth foregoing tests. If the articles desired to be seized have any direct relation to an offense committed,
by the Constitution since: the applicant must necessarily have some evidence, other than those articles, to prove the said offense;
and the articles subject of search and seizure should come in handy merely to strengthen such
x x x the warrants authorized the search for and seizure of records pertaining to all business evidence. In this event, the description contained in the herein disputed warrant should have
transactions of petitioners herein, regardless of whether the transactions were legal or illegal. The mentioned, at least, the dates, amounts, persons, and other pertinent data regarding the receipts of
warrants sanctioned the seizure of all records of the petitioners and the aforementioned corporations, payments, certificates of stocks and securities, contracts, promissory notes, deeds of sale, messages
whatever their nature, thus openly contravening the explicit command of our Bill of Rights - that the and communications, checks, bank deposits and withdrawals, records of foreign remittances, among
things to be seized be particularly described - as well as tending to defeat its major object: the others, enumerated in the warrant.
elimination of general warrants.
In Asian Surety & Insurance Co., Inc. vs. Herrera, the description of the things to be seized, i.e.,
In Bache & Co., this Court struck down a warrant containing a similar description as those Fire Registers, Loss, Bordereau, Adjusters' Report, including subrogation receipts and proof of loss,
in Stonehill: Loss Registers, Book of Accounts including cash receipts and disbursements and general ledger, etc.
was held to be an omnibus description and, therefore, invalid:
The documents, papers, and effects sought to be seized are described in Search Warrant No. 2-M-70
in this manner: x x x Because of this all embracing description which includes all conceivable records of petitioner
corporation, which if seized x x x, could paralyze its business, petitioner in several motions filed for
Unregistered and private books of accounts (ledgers, journals, columnars, receipts and disbursements early resolution of this case, manifested that the seizure of TWO carloads of their papers has paralyzed
books, customers' ledgers); receipts for payments received; certificates of stocks and securities; their business to the grave prejudice of not only the company, its workers, agents, employees but also
contracts, promissory notes and deeds of sale; telex and coded messages; business communications; of its numerous insured and beneficiaries of bonds issued by it, including the government itself, and of
accounting and business records; checks and check stubs; records of bank deposits and withdrawals; the general public. And correlating the same to the charges for which the warrant was issued, We have
and records of foreign remittances, covering the years 1966 to 1970. before Us the infamous general warrants of old.

The description does not meet the requirement in Art. III, Sec. 1, of the Constitution, and of Sec. 3, In the case at bar, the things to be seized were described in the following manner:
Rule 126 of the Revised Rules of Court, that the warrant should particularly describe the things to be
seized.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

1. Multiple sets of Books of Accounts; Ledgers, Journals, Columnar Books, Cash Register myriad other generally described items. On appeal, the California Supreme Court held that only the
Books, Sales Books or Records; Provisional & Official Receipts; books were particularly described in the warrant and lawfully seized. The court acknowledged that the
warrant was flawed, but rather than suppress everything seized, the court chose to sever the defective
2. Production Record Books/Inventory Lists [,] Stock Cards; portions of the warrant and suppress only those items that were not particularly described.

3. Unregistered Delivery Receipts; Although the warrant was defective x x x it does not follow that it was invalid as a whole. Such a
conclusion would mean that the seizure of certain articles, even though proper if viewed separately,
4. Unregistered Purchase & Sales Invoices; must be condemned merely because the warrant was defective with respect to other articles. The
invalid portions of the warrant are severable from the authorization relating to the named books x x
5. Sales Records, Job Order; x. The search for and seizure of these books, if otherwise valid, were not rendered illegal by the defects
concerning other articles.
6. Corporate Financial Records; and
xxx
7. Bank Statements/Cancelled Checks
x x x We agree with the reasoning of the Supreme Court of California and the majority of state courts
We agree that most of the items listed in the warrants fail to meet the test of that have considered this question and hold that in the usual case the district judge should sever the
particularity, especially since witness Abos had furnished the judge photocopies of the infirm portion of the search warrant as passes constitutional muster. See United States v. Giresi, 488
documents sought to be seized. The issuing judge could have formed a more specific description F.Supp. 445, 459-60 (D.N.J.1980). Items that were not described with the requisite particularity in the
of these documents from said photocopies instead of merely employing a generic description warrant should be suppressed, but suppression of all of the fruits of the search is hardly consistent
thereof. The use of a generic term or a general description in a warrant is acceptable only when a more with the purposes underlying exclusion. Suppression of only the items improperly described prohibits
specific description of the things to be seized is unavailable. The failure to employ the specificity the Government from profiting from its own wrong and removes the court from considering illegally
available will invalidate a general description in a warrant. The use by the issuing judge of the terms obtained evidence. Moreover, suppression of only those items that were not particularly described
multiple sets of books of accounts, ledgers, journals, columnar books, cash register books, sales books serves as an effective deterrent to those in the Government who would be tempted to secure a warrant
or records, provisional & official receipts, production record books/inventory lists, stock cards, sales without the necessary description. As the leading commentator has observed, it would be harsh
records, job order, corporate financial records, and bank statements/cancelled checks is therefore medicine indeed if a warrant which was issued on probable cause and which did particularly describe
unacceptable considering the circumstances of this case. certain items were to be invalidated in toto merely because the affiant and the magistrate erred in
seeking and permitting a search for other items as well. 2 W. LaFave, Search and Seizure: A Treatise
As regards the terms unregistered delivery receipts and unregistered purchase & sales on the Fourth Amendment 4.6(f) (1978).
invoices, however, we hold otherwise. The Solicitor General correctly argues that the serial
markings of these documents need not be specified as it is not possible to do so precisely Accordingly, the items not particularly described in the warrants ought to be returned to
because they are unregistered. Where, by the nature of the goods to be seized, their description petitioners.
must be rather general, it is not required that a technical description be given, as this would mean that
no warrant could issue. Taking into consideration the nature of the articles so described, it is clear that Petitioners allege that the following articles, though not listed in the warrants, were also taken
no other more adequate and detailed description could have been given, particularly because it is by the enforcing officers:
difficult to give a particular description of the contents thereof. Although it appears that photocopies
of these unregistered documents were among those handed by Abos to the issuing judge, it would be 1. One (1) composition notebook containing Chinese characters,
impractical to require the latter to specify each and every receipt and invoice, and the contents thereof,
to the minutest detail. 2. Two (2) pages writing with Chinese characters,

The general description of most of the documents listed in the warrants does not 3. Two (2) pages Chinese character writing,
render the entire warrant void. Insofar as the warrants authorize the search and seizure of
unregistered delivery receipts and unregistered purchase and sales invoices, the warrants 4. Two (2) packs of chemicals,
remain valid. The search warrant is severable, and those items not particularly described may be cut
off without destroying the whole warrant. In United States v. Cook,[38] the United States Court of 5. One (1) bound gate pass,
Appeals (Fifth Circuit) made the following pronouncement:
6. Surety Agreement.[39]
x x x. The leading decision is Aday v. Superior Court, 53 Cal.2d 789, 362 P.2d 47, 13 Cal.Rptr. 415
(1961). In Aday, a warrant was issued authorizing the seizure of two particularly described books and

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

In addition, the searching party also seized items belonging to the Premier Industrial and Development petitioners, except the unregistered delivery receipts and unregistered purchase and sales invoices. SO
Corporation (PIDC), which shares an office with petitioner Unifish. ORDERED.

The things belonging to petitioner not specifically mentioned in the warrants, like those not DIGEST
particularly described, must be ordered returned to petitioners. In order to comply with the
constitutional provisions regulating the issuance of search warrants, the property to be seized under a FACTS:
warrant must be particularly described therein and no other property can be taken
thereunder.[40] In Tambasen vs. People,[41] it was held: Rodrigo Abos, a former employee of UNIFISH, reported to the BIR that petitioners Unifish Packing
Corporation and Uy Chin Ho alias Frank Uy were engaged in activities constituting violations of the
Moreover, by their seizure of articles not described in the search warrant, the police acted beyond the NIRC. Abos, executed an Affidavit stating:
parameters of their authority under the search warrant. Section 2, Article III of the 1987 Constitution
requires that a search warrant should particularly describe the things to be seized. The evident purpose 1. He has personal knowledge that UNIFISH PACKING CORPORATION is selling cartons of canned
and intent of the requirement is to limit the things to be seized to those, and only those, particularly sardines without issuing receipt, which is in violation of Sections 253 and 263 of the NIRC.
described in the search warrant, to leave the officers of the law with no discretion regarding what
articles they should seize, to the end that unreasonable searches and seizures may not be made and XXXXX
that abuses may not be committed (Corro v. Lising, 137 SCRA 541, 547 [1985]); Bache & Co. [Phil.],
Inc. v. Ruiz, 37 SCRA 823 [1971]; Uy Kheytin v. Villareal, 42 Phil. 886 [1920]). The same constitutional 3. Another fraudulent practice is the sale of imported oil locally to different customers, which is a case
provision is also aimed at preventing violations of security in person and property and unlawful smuggling. UNIFISH is exempted in the importation of oil as long it is used only for processing of
invasions of the sanctity of the home, and giving remedy against such usurpations when attempted canned tuna.
(People v. Damaso, 212 SCRA 547 [1992] citing Alvero v. Dizon, 76 Phil. 637, 646 [1946]).
4. Another fraudulent practice involves the sales of unused cans; UNIFISH also enjoys tax exemptions
Clearly then, the money which was not indicated in the search warrant, had been illegally seized from in its purchases of tin cans subject to the condition that these are to be used as containers for its
petitioner. The fact that the members of the police team were doing their task of pursuing subversives processed tuna for export.
is not a valid excuse for the illegal seizure. The presumption juris tantum of regularity in the
performance of official duty cannot by itself prevail against the constitutionally protected right of an XXXXX
individual (People v. Cruz, 231 SCRA 759 [1994]; People v. Veloso, 48 Phil. 169, 176 [1925]). Although
public welfare is the foundation of the power to search and seize, such power must be exercised and Nestor N. Labaria, Assistant Chief of the Special Investigation Branch of the BIR, applied for search
the law enforced without transgressing the constitutional rights of the citizens (People v. warrants before the RTC of Cebu. After hearing the depositions of Labaria and Abos, Judge Mercedes
Damaso, supra, citing Rodriguez v. Evangelista, 65 Phil. 230, 235 [1937]). As the Court aptly puts it Gozo-Dadole issued the disputed search warrants.
in Bagahilog v. Fernandez, 198 SCRA 614 (1991), [z]eal in the pursuit of criminals cannot ennoble the
use of arbitrary methods that the Constitution itself abhors. The first Seach Warrant, FOR: VIOLATION OF SECTION 253 ("Search Warrant A-1"), and consists
of two pages.
The seizure of the items not specified in the warrants cannot be justified by the directive in the
penultimate paragraph thereof to "seize and take possession of other properties relative to such The second Search Warrant, FOR: VIOLATION OF SEC. 253 ("Search Warrant A-2"). Search
violation," which in no way can be characterized as a particular description of the things to be seized. Warrant A-2, is almost identical in content to Search Warrant A-1.

As regards the articles supposedly belonging to PIDC, we cannot order their return in Judge Gozo-Dadole issued a third Search Warrant, FOR: VIOLATION OF SEC. 238 in relation to SEC.
the present proceedings. The legality of a seizure can be contested only by the party whose rights 263 (hereinafter, "Search Warrant B"). Except for the docket number and the designation of the
have been impaired thereby, and the objection to an unlawful search and seizure is purely personal crime in the body of the warrant, Search Warrant B is a verbatim reproduction of Search Warrant A-2.
and cannot be availed of by third parties.
As such, agents of the BIR, accompanied by members of the PNP, searched the premises of
WHEREFORE, the Resolutions of respondent Court of Appeals dated 27 June 1996 and 14 May UNIFISH. They seized, among other things, the records and documents of petitioner corporation. A
1987, affirming the Order of the Regional Trial Court dated 17 July 1995, are hereby AFFIRMED insofar return of said search was duly made by Labaria. Then, the BIR filed against a case against UY and
as said Resolutions upheld the validity of the subject Search Warrants authorizing the seizure of the UNIFISH before the DOJ.
unregistered delivery receipts and unregistered purchase and sales invoices, but REVERSED with
respect to the rest of the articles subject of said warrants. The respondent Bureau of Internal Revenue
is hereby ordered to return to petitioners all items seized from the subject premises and belonging to

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

UY and UNIFISH filed motions to quash the subject search warrants with the RTC that issued said (1) the warrant must be issued upon probable cause;
warrants. However, the RTC denied petitioners' motions to quash as well as their subsequent motion
for reconsideration, prompting petitioners to file a petition for certiorari with the CA. (2) the probable cause must be determined by the judge himself and not by the
applicant or any other person;
The CA dismissed their petition, holding that petitioners failed to comply with Section 2(a), Rule 6 of
the Revised Internal Rules of the Court of Appeals (RIRCA). The CA found that petitioners did not (3) in the determination of probable cause, the judge must examine, under oath or
submit certified true copies of (1) the Motions to Quash, (2) the Motion for Reconsideration, and (3) affirmation, the complainant and such witnesses as the latter may produce; and
the Affidavit of Rodrigo Abos. It also held that certiorari was not the proper remedy to question
the resolution denying the motion to quash. (4) the warrant issued must particularly describe the place to be searched and persons
or things to be seized.
ISSUES:
The absence of any of these requisites will cause the downright nullification of the search
1. Whether or not the CA erred in dismissing the petition of UY and UNIFISH. warrants.
2. Whether or not the subject warrants are defective.
Inconsistencies in the description of the place to be searched
HELD: Petitioners observe that the caption of Search Warrant A-1 indicates the address of Uy Chin Ho
alias Frank Uy as Hernan Cortes St., Cebu City while the body of the same warrant states the
1. YES. CA should not have dismissed the petition on the ground of failure to submit certified true address as Hernan Cortes St., Mandaue City. Parenthetically, Search Warrants A-2 and B
copies of (1) the Motions to Quash, (2) the Motion for Reconsideration, and (3) the Affidavit of consistently state the address of petitioner as Hernan Cortes St., Mandaue City.
Rodrigo Abos. First, it appears that the case could have been decided without these pleadings and
documents. Second, even if the CA deemed them essential to the resolution of the case, it could The Constitution requires, for the validity of a search warrant, that there be a particular
have asked for the records from the RTC. Third, in a similar case, we held that the submission of description of the place to be searched and the persons of things to be seized. The rule
a document together with the motion for reconsideration constitutes substantial compliance with is that a description of a place to be searched is sufficient if the officer with the warrant can, with
Section 3, Rule 46 of the Rules of Court, requiring the submission of a certified true copy of reasonable effort, ascertain and identify the place intended and distinguish it from other places in
material portions of the record as are referred to [in the petition], and other documents relevant the community. Any designation or description known to the locality that points out the place to
or pertinent thereto along with the petition. So should it be in this case, especially considering the exclusion of all others, and on inquiry leads the officers unerringly to it, satisfies the
that it involves an alleged violation of a constitutionally guaranteed right. The rules of procedure constitutional requirement.
are not to be applied in a very rigid, technical sense; rules of procedure are used only to help
secure substantial justice. If a technical and rigid enforcement of the rules is made, their aim In this case, it was not shown that a street similarly named Hernan Cortes could be
could be defeated. found in Cebu City. Nor was it established that the enforcing officers had any difficulty
in locating the premises of petitioner corporation. That Search Warrant A-1, therefore,
The CA likewise erred in holding that petitioners cannot avail of certiorari to question the inconsistently identified the city where the premises to be searched is not a defect that would
resolution denying their motions to quash the subject search warrants.The applicable spell the warrants invalidation in this case.
jurisprudence is Marcelo vs. De Guzman, where we held that the issuing judges disregard of
the requirements for the issuance of a search warrant constitutes grave abuse of Inconsistencies in the description of the persons named in the two warrants
discretion, which may be remedied by certiorari. Petitioners also find fault in the description of the names of the persons in Search Warrants A-1
In this case, petitioners alleged in their petition before the CA that the issuing judge violated the and A-2. Search Warrant A-1 was issued solely against Uy Chin Ho alias Frank Uy. Search
pertinent provisions of the Constitution and the Rules of Court in issuing the disputed search Warrant A-2, on the other hand, was directed against UY CHIN HO alias FRANK UY, and Unifish
warrants, which, if true, would have constituted grave abuse of discretion. Petitioners also alleged Packing Corporation.
that the enforcers of the warrants seized almost all the records and documents of the corporation
thus resulting in the paralysis of its business. Appeal, therefore, would not be an adequate However, these discrepancies are hardly relevant. Since, in the case at bar, the warrant was
remedy that would afford petitioners expeditious relief. issued not for search of the persons owning or occupying the premises, but only a search of
the premises occupied by them, the search could not be declared unlawful or in violation
2. YES, but only as regards the failure to indicate with particularity, the things to be of the constitutional rights of the owner or occupants of the premises, because of
seized. inconsistencies in stating their names.

A search warrant must conform strictly to the requirements of the foregoing constitutional and Two warrants issued at one time for one crime and one place
statutory provisions. These requirements, in outline form, are: In any event, Search Warrant A-1 should be deemed superseded by Search Warrant A-2.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

4. Unregistered Purchase & Sales Invoices;


Two warrants, Search Warrants A-1 and A-2, were actually issued by the trial court for the same
crime (violation of SEC. 253 of the National Internal Revenue Code). It appears, however, that 5. Sales Records, Job Order;
Search Warrant A-2 was issued merely to correct the inconsistencies in the address in
Search Warrant A-1, as well as to include Unifish Packing Corporation as a party 6. Corporate Financial Records; and
against whom the warrant was issued. Search Warrant A-2 was evidently an attempt by the
issuing judge to be more precise in the names of the persons against whom the warrant was 7. Bank Statements/Cancelled Checks
issued and in the description of the place to be searched. Indeed, it would be absurd for the judge
to issue on a single occasion two warrants authorizing the search of a single place for a single
offense. Inasmuch as the apparent intent in issuing Search Warrant A-2 was to supersede Search We agree that most of the items listed in the warrants fail to meet the test of
Warrant A-1, the latter should be deemed revoked by the former. particularity, especially since witness Abos had furnished the judge photocopies of the
documents sought to be seized. The issuing judge could have formed a more specific description
The alleged absence of probable cause of these documents from said photocopies instead of merely employing a generic description
Petitioners claim there was no probable cause for Judge Gozo-Dadole to issue the subject search thereof. The use of a generic term or a general description in a warrant is acceptable only when
warrants. a more specific description of the things to be seized is unavailable. The failure to employ the
specificity available will invalidate a general description in a warrant. The use by the issuing judge
It may be recalled that before issuing the warrants, the judge deposed two witnesses, namely, of the terms multiple sets of books of accounts, ledgers, journals, columnar books, cash register
Nestor Labaria of the BIR, and Rodrigo Abos, who claimed to be an old employee of books, sales books or records, provisional & official receipts, production record books/inventory
Unifish. Petitioners claim that the testimonies of Labaria and Abos are hearsay. We agree with lists, stock cards, sales records, job order, corporate financial records, and bank
this contention, but only as to the testimony of Labaria. His testimony shows that his statements/cancelled checks is therefore unacceptable considering the circumstances of this case.
knowledge of the alleged illegal activities of petitioners was acquired not through his
own perception but was merely supplied by Abos. Therefore, the deposition of Labaria, As regards the terms unregistered delivery receipts and unregistered purchase & sales
which is based on hearsay. invoices, however, we hold otherwise. The Solicitor General correctly argues that the serial
markings of these documents need not be specified as it is not possible to do so
The application for the warrants, however, is not based solely on Labarias deposition but is precisely because they are unregistered. Where, by the nature of the goods to be seized,
supported by that of Abos, whose knowledge of petitioners alleged illegal practices was their description must be rather general, it is not required that a technical description be given,
apparently obtained during his employment with Unifish. In his deposition, Abos detailed the as this would mean that no warrant could issue. Taking into consideration the nature of the articles
schemes employed by Frank Uy and Unifish to evade the payment of taxes, and described the so described, it is clear that no other more adequate and detailed description could have been
place where the documents supposedly evidencing these schemes were located: given, particularly because it is difficult to give a particular description of the contents thereof.
Although it appears that photocopies of these unregistered documents were among those handed
Abos stated that, as former Operating Chief of Unifish, he had access to the company by Abos to the issuing judge, it would be impractical to require the latter to specify each and every
records, and even showed the issuing judge photocopies thereof. Thus, we reject the receipt and invoice, and the contents thereof, to the minutest detail.
contention that this witness did not have personal knowledge of the facts to which he
testified. The contents of the deposition clearly demonstrate otherwise. The general description of most of the documents listed in the warrants does not render
The deposition also shows that, contrary to petitioners submission, the inquiries made by the the entire warrant void. Insofar as the warrants authorize the search and seizure of
judge were far from leading or being a rehash of the witness affidavit. We find such inquiries unregistered delivery receipts and unregistered purchase and sales invoices, the warrants remain
to be sufficiently probing. valid. The search warrant is severable, and those items not particularly described may be cut off
without destroying the whole warrant.
Alleged lack of particularity in the description of the things seized
In the case at bar, the things to be seized were described in the following manner: Accordingly, things belonging to petitioner not specifically mentioned in the warrants, like those
not particularly described, must be ordered returned to petitioners. The money which was not
1. Multiple sets of Books of Accounts; Ledgers, Journals, Columnar Books, Cash indicated in the search warrant, had been illegally seized from petitioner. The fact that the
Register Books, Sales Books or Records; Provisional & Official Receipts; members of the police team were doing their task of pursuing subversives is not a valid excuse
for the illegal seizure. The presumption juris tantum of regularity in the performance of official
2. Production Record Books/Inventory Lists [,] Stock Cards; duty cannot by itself prevail against the constitutionally protected right of an individual.

3. Unregistered Delivery Receipts; However, as regards the articles supposedly belonging to PIDC, we cannot order their
return in the present proceedings. The legality of a seizure can be contested only by the

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

party whose rights have been impaired thereby, and the objection to an unlawful search and
seizure is purely personal and cannot be availed of by third parties.

ACTIVITY 4

ENGR. RANULFO C. FELICIANO


vs
NESTOR P. VILLASIN

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Certiorari under Rule 65 of the Revised Rules of Court assailing the following: (1)
the Order[1] dated 28 July 2006 of Branch 6 of the Regional Trial Court (RTC) of Tacloban City, Leyte,
dismissing petitioner Ranulfo C. Felicianos Petition for Quo Warranto against respondent Nestor P.
Villasin in Civil Case No. 2006-03-29; and (2) the Order[2] dated 8 September 2006 of the same
court denying petitioners Motion for Reconsideration.

The following are the antecedent facts of this case:

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Petitioner Feliciano was appointed General Manager (GM) of Leyte Metropolitan Water District (LMWD) On 20 July 1998, the take-over of the management and operations of the LMWD by the LWUA was
on 11 June 1975 by the LMWD Board of Directors through Resolution No. 14, Series of 1975.[3] lifted by the LWUA Board of Trustees in its Resolution No. 138, Series of 1998.[8]

On 6 March 1990, the Local Water Utilities Administration (LWUA) took over the management and On 25 September 1998, the new regular LMWD Board of Directors unanimously approved Resolution
policy-making functions of LMWD owing to LMWDs default on the payment of its obligations to No. 98-002 ordering Feliciano to re-assume[9] the post he had vacated as GM of LMWD. The position
LWUA. Said move was made pursuant to Presidential Decree No. 198, otherwise known as THE was accepted by Feliciano on 27 September 1998.[10]
PROVINCIAL WATER UTILITIES ACT OF 1973,[4] issued on 25 May 1973. The LWUA appointed an
Interim General Manager and Chairman of the Board of Directors, as well as its members. As GM, Feliciano appointed Edgar R. Nedruda, Milagros A. Majadillas and Edgar B. Ortega as Division
Manager, Quality Control Assurance Officer and Plant Equipment Operator E, respectively, at the
After the LWUA took over the management and policy-making functions of the LMWD in March 1990, LMWD.[11] In compliance with CSC Memorandum Circular No. 41, Series of 1993, Feliciano submitted
Engineer (Engr.) Cayo U. Emnas was appointed as take-over General Manager. Emnas thereafter filed the same to the CSC Regional Office (CSCRO) for approval. The CSCRO, however, disapproved
administrative charges against Feliciano for Grave Misconduct, Dishonesty and Conduct Unbecoming Felicianos LMWD personnel appointments in its Order issued on 8 June 1999 since GM Feliciano did not
an LMWD Official, docketed as Administrative Case No. LMWD-OGCC-01-01.[5] Feliciano was accused possess the required CSC-approved appointment pursuant to CSC Memorandum Circular No. 41, S.
of authorizing payment of his backwages amounting to P134,721.64, for the period 6 March 1990 up 1993.[12] Feliciano appealed the Order to the CSC.
to 23 October 1990, although he did not report for work during said period.
On 8 September 2000, the CSC through its Chairperson Corazon Alma G. de Leon, issued CSC
The Office of the Government Corporate Counsel (OGCC) handled the investigation of the charges Resolution No. 002107 denying Felicianos appeal of his disapproved LMWD personnel appointments
against Feliciano. In a Resolution dated 16 September 1991, the OGCC found Feliciano guilty as on the ground that he was only a de facto officer.[13] It found that Feliciano had no authority to make
charged and recommended the penalty of dismissal. Pertinent portions of the OGCC Resolution reads: appointments since he himself lacked the required CSC-approved appointment pursuant to CSC
Memorandum Circular No. 40, Series of 1998, and Memorandum Circular No. 41, Series of 1993.[14] The
The action of respondent in authorizing, causing and receiving the aforesaid CSC thus resolved:
disbursement of P134,721.64 in payment obstensibly of his backwages for the
period starting 6 March 1990 up to and until 23 October 1990, knowing that during WHEREFORE, the Order issued by the Civil Service Commission (CSCRO) Regional Office No.
the said period he did not report for work nor rendered service to LMWD as VIII, Palo, Leyte, disapproving the appointments of Nedruda, Majadillas and Ortega on the
testified to by complainants witnesses, is not only irregular but unlawful. Worse, ground that Ranulfo Feliciano lacks the authority to appoint, is hereby affirmed.
respondent being the General Manager, necessarily had taken advantage of his
position and abused the confidence reposed in his office in the perpetration of the Accordingly, the Human Resource Management Officer/Personnel Officer of the
said rank dishonesty. As a consequence thereof, LMWD was defrauded and Leyte Metro Water District (LMWD) may re-submit the appointment of
suffered damage in the sum of P134,721.64. Ranulfo Feliciano to the position of General Manager of the LMWD, to the CSC
Leyte Field Office for attestation.
Accordingly, undersigned finds respondent Ranulfo C. Feliciano guilty, as charged,
of GRAVE MISCONDUCT, DISHONESTY, AND CONDUCT UNBECOMING OF AN Feliciano may likewise re-appoint Nedruda, Majadillas and Ortega to the
LMWD OFFICIAL. same positions. (Emphases ours.)

In view of the grave nature of the offense committed by respondent, the large Feliciano filed a Motion for Reconsideration citing as main argument the fact that the LMWD was not a
sum which LMWD has been defrauded of, and the existence of aggravating government-owned and controlled corporation, but a special type of non-stock, non-profit private
circumstances occasioned by respondents taking undue advantage of his position corporation imbued with public interest, and therefore, not covered by the civil service rules.
and abusing the confidence of his office, undersigned recommends the imposition
of the penalty of DISMISSAL on respondent.[6] The CSC denied Felicianos Motion for Reconsideration in its Resolution No. 010218, issued on 22
January 2001, which reiterated that Felicianos argument on the private character of water districts had
On 11 November 1991, the Interim LMWD Board of Directors approved in toto the findings of the OGCC long been put to rest in Davao City Water District v. Civil Service Commission, which declared water
including its recommendation to dismiss Feliciano.[7] districts to be government-owned or controlled corporations with original charter, falling under the
jurisdiction of the CSC and Commission on Audit (COA).
On 1 October 1993, the Civil Service Commission (CSC) issued Memorandum Circular No. 41, Series of
1993, directing Board Chairpersons and GMs of water districts to submit personnel appointments for Not satisfied, Feliciano appealed CSC Resolutions No. 002107 and 010218 to the Court of Appeals via
approval by the CSC. Petition for Certiorari. The case was docketed as CA-G.R. No. 63325. On 1 September 2005, the Court
of Appeals in Cebu City, through Associate Justice Ramon M. Bato, Jr., denied the petition.[15] Feliciano
filed a Motion for Reconsideration but the same was denied per Resolution dated 15 August

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

2006.[16] Feliciano thereafter appealed to this Court on 15 August 2006 via petition for review 2. Starting February 6, 2001, Feliciano is a mere usurper or intruder without any
on certiorari in G.R. No. 174178. In an en banc Decision issued on 17 October 2006, this Court denied right or title to the office/position of General Manager of the Leyte
the petition for its failure to sufficiently show that the CSC committed any reversible error in issuing Metropolitan Water District (LMWD). His further occupancy of the position of
the challenged decision and resolution. Felicianos Motion for Reconsideration thereof was denied on 23 General Manager after February 6, 2001 holds him criminally liable for
January 2007. usurpation of authority. Effective upon receipt of this Resolution, he is
ordered to vacate the position of LMWD General Manager.[18]
On 12 January 2005, the CSC issued a Memorandum directing its Regional Director (for Region 8)
Rodolfo Encajonado (RD Encajonado) to submit an update on the status of Felicianos appointment as On 22 March 2005, Feliciano again sought recourse at the Court of Appeals where he filed a Petition
GM of LMWD. for Certiorari and Prohibition with application for Temporary Restraining Order (TRO) and Writ of
Injunction, seeking to enjoin the implementation of CSC Resolution No. 050307, Series of 2005. The
In his Memorandum submitted to the CSC on 14 January 2005, RD Encajonado reported that the LMWD case was docketed as CA-G.R. SP No. 00489.[19]
Board of Directors had not yet submitted the required appointment of Feliciano as GM of LMWD for
attestation, as required by CSC Resolutions No. 002107 and No. 010218. On account thereof, the CSC, On 30 March 2005, while CA-G.R. SP No. 00489 was still pending with the Court of Appeals, with no
through its Chairperson Karina Constantino-David, issued on 28 February 2005 CSC Resolution No. injunction having been issued by the appellate court, the LMWD Board of Directors declared the GM
050307, declaring Feliciano to be a mere de facto officer of LMWD and ordering him to vacate the position occupied by Feliciano vacant by virtue of LMWD Resolution No. 050307.[20]
position of GM, to wit:
The Court of Appeals subsequently issued on 12 April 2005 a Resolution in CA-G.R. SP No. 00489
With the promulgation on September 13, 1991 of the above-mentioned Supreme granting a TRO effective for sixty days. After the lapse of the TRO, the LMWD Board of Directors
Court decision,[17] the issuance on October 1, 1993 of the aforestated CSC appointed Villasin as the new GM of LMWD on 14 June 2005. On 16 September 2005, the Court of
Memorandum Circular, and the adoption on January 22, 2001 of CSC Resolution Appeals dismissed CA-G.R. SP No. 00489 which reached this Court via petition for review in G.R. No.
No. 01-2018 denying Felicianos motion for reconsideration, Feliciano is under legal 172141. This was eventually denied by this Court and entry of judgment was made on 14 November
obligation to comply by submitting his appointment to the Commission for 2006. On 28 December 2005, the LMWD Board of Directors unanimously approved LMWD Resolution
attestation/approval. This, he did not do. He instead stubbornly maintained his No. 05-145 certifying that Villasin was the GM of LMWD pursuant to the provisions of Presidential
personal stand that water districts are private corporations, not government- Decree No. 198 and the CSC Rules and Regulations.
owned or controlled corporations with original charter. For all legal intents and
purposes, effective upon his receipt on February 6, 2001 of CSC Resolution No. On 28 March 2006, Feliciano thus filed with the RTC a Petition for Quo Warranto against Villasin
01-0218 denying his motion for reconsideration, Feliciano is a mere usurper or under Rule 66 of the 1997 Rules of Civil Procedure, docketed as Civil Case No. 2006-03-29.
intruder who has no right or title whatsoever to the position/office of General
Manager. His further occupancy of the position after said date holds him criminally Feliciano asked the RTC to restore him to his position as GM of LMWD, and to remove Villasin
liable for usurpation of authority. therefrom. In particular, he prayed for the following in his Petition for Quo Warranto:

xxxx 1. To order [Villasin] to vacate the Office of General Manager of LMWD and for
[Feliciano] to be seated to such office;
WHEREFORE, the Commission resolves as follows:
2. To mandate [Villasin] to pay the salaries and other emoluments of [Feliciano]
1. Between June 8, 1999 (the date when the Civil Service Commission Regional which as of this date amounts to more than One Million Two Hundred
Office No. VIII issued an Order disapproving the appointments of Edgar R. Thousand Pesos (P1,200,000.00);
Nedruda, Milagros A. Majadillas and Edgar B. Ortega on the ground that
Ranulfo C. Feliciano does not possess a CSC-approved appointment) and 3. To direct [Villasin] to pay [Feliciano] attorneys fees comprised of Two
February 6, 2001 (the date when Feliciano received a copy of CSC Resolution Hundred Thousand Pesos (P200,000.00) as acceptance fees and Five
No. 01-0218 denying his motion for reconsideration and affirming CSC Thousand Pesos (P5,000.00) appearance per hearing;
Resolution No. 00-2107), Feliciano shall be treated as a de facto officer whose
acts are valid and binding only as regards innocent third persons. Insofar as 4. To command [Villasin] to pay the cost of herein Petition for Quo Warranto.
Feliciano himself is concerned, his acts are void, hence, he is not entitled to
the emoluments of the office. Regarding the three (3) issued appointments, [Feliciano] also prays for such other reliefs as may be necessary under the
the same are all void, since Feliciano has no authority to issue the same. circumstances.[21]

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Citing the Courts ruling in Villaluz v. Zaldivar,[22] Feliciano argued that since the LWUA had no power to court in the order dated, July 28, 2006, the motion for reconsideration is hereby
remove a GM appointed by a regular Board of Directors, it should follow then that an interim Board of denied.[25]
Directors neither had the power to discipline or remove a regular GM of LMWD.
On 14 October 2006, Feliciano went directly to this Court via the instant Petition
Villasin countered by filing a Comment/Answer with Motion to Dismiss the Petition for Quo Warranto, for Certiorari under Rule 65 of the Revised Rules of Court, raising the following arguments:
on the following grounds:
I. RESPONDENT COURT HAS COMMITTED GRAVE ABUSE OF DISCRETION
(a) Forum shopping; AMOUNTING TO LACK OR EXCESS OF JURISDICTION AS ITS DISMISSAL OF THE
PETITION IS SO WHIMSICAL, CAPRICIOUS AND ARBITRARY AMOUNTING
(b) Feliciano is disqualified from government service due to his dismissal from THEREFORE TO A PATENT AND GROSS EVASION OF A POSITIVE DUTY OR
office on 11 November 1991; VIRTUAL REFUSAL TO PERFORM JUDICIAL DUTY.

(c) Petitioners claim that LMWD is a private entity defeats his petition since quo II. RESPONDENT COURT HAS COMMITTED GRAVE ABUSE OF DISCRETION AS ITS
warranto is a remedy of a person claiming a public office; DISMISSAL OF THE PETITION, BASED ON GROUNDS NOT SOUGHT AND PRAYED
FOR IN THE MOTION TO DISMISS, CONSTITUTES A DENIAL OF DUE PROCESS.
(d) Quo warranto case was filed more than a year from the time the cause of
action arose or beyond the reglementary period; As hereinbefore stated, CA-G.R. SP No. 00489, Felicianos Petition for Certiorari and Prohibition
seeking to enjoin the implementation of CSC Resolution No. 050307, was dismissed by the Court of
(e) The Court of Appeals had already denied his petition for Review Appeals in a Decision dated 16 September 2005. Feliciano appealed said Court of Appeals Decision
on Certiorari on CSC Resolution No. 050307. before this Court through a Petition for Review on Certiorari, docketed as G.R. No. 172141. This
Court, however, in an En Banc Resolution dated 6 June 2006, ruled to:
A hearing with notice to the parties was set for 2 June 2006 but Feliciano failed to attend the
same.[23] The RTC then ordered Civil Case No. 2006-03-29 submitted for Resolution. b) DENY the petition for failure thereof to sufficiently show that the Court of
Appeals committed any reversible error in issuing the challenged decision and
On 28 July 2006, the RTC issued an Order dismissing Felicianos Petition for Quo Warranto, finding that: resolution as to warrant the exercise by this Court of its discretionary appellate
jurisdiction.[26]
The scope of the remedy of quo warranto instituted by an individual is that he, the petitioner,
has prior right to the position or office held by the respondent. Where there is no legal ground The Court En Banc denied with finality Felicianos Motion for Reconsideration on 22 August 2006, and
or where the fundamental basis of the petition is none or destroyed, it becomes unnecessary entry of judgment was made in G.R. No. 172141 on 14 November 2006.
to pass upon the right of the respondent.
In the instant Petition, which actually arose from the appointment by the LMWD Board of Directors of
xxxx Villasin as the new GM of LMWD after the CSC ordered Feliciano to vacate the same in its Resolution
No. 050307, Feliciano prays that this Court set aside and declare null and void the Orders dated 28
WHEREFORE, in view of the aforegoing (sic), for lack of cause of action amounting July 2006 and 8 September 2006 of the RTC dismissing his Petition for Quo Warranto in Civil Case No.
to want of jurisdiction, this petition shall be, as it is hereby ordered, dismissed.[24] 2006-03-29.

Feliciano filed his Motion for Reconsideration alleging that the Order issued by the RTC was Petitioner raises several issues in this Petition, which all boil down to the sole question of whether the
conjectural, presumptuous and specious. However, the Motion for Reconsideration was denied RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing
by the RTC in an Order dated 8 September 2006. According to the RTC, the Quo Warranto Petition was Felicianos Petition for Quo Warranto.
prematurely filed considering that Felicianos Petition for Review on Certiorari with the Court of Appeals,
involving CSC Resolutions No. 002107 and No. 010218, was still pending with the Court of Appeals. Worthy to note is the failure of Feliciano to implead herein the RTC, the tribunal that rendered
Hence, the issue of whether Feliciano is holding the GM position in a de facto or a de jure capacity is the assailed Orders, as a nominal party (public respondent) in the instant Petition for Certiorari. One
yet to be resolved. The RTC therefore decreed: of the requisites of an independent civil action for Certiorari is that it must be directed against a
tribunal, a board, or an officer exercising judicial or quasi-judicial functions. Feliciano failed
WHEREFORE, with prematurity in the institution of the present petition as duly to comply with said requirement and this failure is sufficient to dismiss this Petition.
admitted by herein petitioner-movant coupled with the fact that the rest of the
arguments raised in the motion have already been considered and rejected by this Under Rule 65 of the Rules of Court, failure to comply with any of the aforesaid requirements for filing
an independent civil action for Certiorari is sufficient ground for the dismissal of the petition. This rule

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

accords sufficient discretion to the court hearing the special civil action whether or not to dismiss the exercises a public office, position or franchise; a public officer whose acts
petition outright for failure to comply with said requirement. constitute a ground for the forfeiture of his office; or against an association which
acts as a corporation without being legally incorporated or without lawful authority
Evidently, the function of this Court is merely to check whether the RTC committed grave abuse of to so act.[31]
discretion amounting to lack or excess of jurisdiction in dismissing Felicianos Petition for Quo
Warranto before it. The action may also be instituted by an individual in his own name who claims
to be entitled to the public office or position usurped or unlawfully held or exercised
In a petition for certiorari under Section 1, Rule 65 of the Rules of Court, the following essential by another.[32] (Emphasis supplied.)
requisites must be present, to wit: (1) the writ is directed against a tribunal, a board, or an officer
exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or The possible outcome of a Petition for Quo Warranto can be any of the following:
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction;
and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.[27] If the court finds for the respondent, the judgment should simply state that the
respondent is entitled to the office. If, however, the court finds for the petitioner
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent and declares the respondent guilty of usurping, intruding into, or unlawfully
to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic holding or exercising the office, judgment may be rendered as follows:
manner by reason of passion or personal hostility,[28] 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 "Sec. 10. Judgment where usurpation found.-- When the
contemplation of law.[29] defendant is found guilty of usurping, intruding into, or
unlawfully holding or exercising an office, position, right,
A petition for certiorari under Rule 65 of the Rules of Court will prosper only if there is a showing of privilege, or franchise, judgment shall be rendered that such
grave abuse of discretion or an act without or in excess of jurisdiction on the part of respondent defendant be ousted and altogether excluded therefrom, and
tribunal. In the absence of such a showing, there is no reason for this Court to annul the decision of that the plaintiff or relator, as the case may be, recover his
the respondent tribunal or to substitute it with its own judgment, for the simple reason that it is not costs. Such further judgment may be rendered determining
the office of a petition for Certiorari to inquire into the correctness of the assailed decision. the respective rights in and to the office, position, right,
privilege, or franchise of all the parties to the action as justice
Nonetheless, even as this Court delves into the merits of the present Petition, it still must fail. requires."

Felicianos Petition for Quo Warranto centers on his alleged right as the one legally entitled to occupy If it is found that the respondent or defendant is usurping or intruding into the
the position of GM of LMWD. He presented two main issues therein: office, or unlawfully holding the same, the court may order:

(1) Whether or not the LMWD Board of Directors, through Resolution No. 05-037, (1) The ouster and exclusion of the defendant from office;
legally and validly ousted him; and
(2) The recovery of costs by plaintiff or relator;
(2) Whether or not the LMWD Board of Directors legally and validly appointed
Villasin. (3) The determination of the respective rights in and to the
office, position, right, privilege or franchise of all the parties
Contending that his appointment as GM on 11 June 1975 by the LMWD Board of Directors and to the action as justice requires.[33]
subsequent assumption of office bestowed on him a legal right to the said position, Feliciano argues
that Republic Act No. 9286,[30] which further amended Presidential Decree No. 198, and was approved In the instance in which the Petition for Quo Warranto is filed by an individual in his own name, he
on 2 April 2004, vested him with security of tenure. Feliciano adds that the Interim LMWD Board of must be able to prove that he is entitled to the controverted public office, position, or franchise;
Directors, in fact, had no power to dismiss him when he was dismissed on 11 November 1991. 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
It is well-established that Quo Warranto proceedings determine the right of a person to the use or the plaintiff is entitled to the office.[34] In Garcia v. Perez,[35] this Court ruled that the person
exercise of a franchise or an office and to oust the holder from its enjoyment, if the latters claim is not instituting Quo Warranto proceedings on his own behalf, under Section 5, Rule 66 of the Rules of Court,
well-founded, or if he has forfeited his right to enjoy the privilege. According to the Rules of Procedure: 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.[36]
The action may be commenced for the Government by the Solicitor General or the
fiscal against a person who usurps, intrudes into, or unlawfully holds or

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Due to the recent turn of events, Feliciano lost any legal standing to pursue via Quo We find his argument untenable.
Warranto proceedings his claim to the position of GM of LMWD considering this Courts En
BancResolutions dated 6 June 2006 and 22 August 2006 in G.R. No. 172141 which denied with finality To determine whether personnel of the LMWD, particularly the GM, are subject to CSC Rules and
his Petition for Review on Certiorari of the Court of Appeals Decision dated 16 September 2005 and Regulations, we must delve into the pertinent laws affecting the management and policy-making
Resolution dated 31 March 2006 in CA-G.R. SP No. 00489 upholding the legality of CSC Resolution No. functions of the LMWD.
050307. To recall, CSC Resolution No. 050307 treated Feliciano as a de facto officer with regard to his
acts as GM of LMWD; and declared him to be a usurper of or an intruder to the said position beginning 6 The provisions of Presidential Decree No. 198 read:
February 2001, and thus ordered him to vacate the same.
Chapter VI
Considering that entry of judgment was already made in G.R. No. 172141 as of 14 November 2006, Officers and Employees
there is therefore no more obstacle to the appointment by the LMWD Board of Directors of
Villasin as the new GM of LMWD. Section 23. Additional Officers. - At the first meeting of the board, or as soon
thereafter as practicable, the board shall appoint, by a majority vote, a general
Feliciano imputes grave abuse of discretion on the part of the RTC for allegedly failing to afford him manager, an auditor, and an attorney, and shall define their duties and fix their
due process, since his Petition for Quo Warranto was dismissed based on its face and without having compensation. Said officers shall service at the pleasure of the board.
been heard. In granting Villasins Motion to Dismiss the Petition for Quo Warranto, the RTC ratiocinated:
xxxx
Inferred, in the year 1999, petitioner herein already knew that his appointment as
General Manager of LMWD was placed in doubt and declared ineffective. So his Section 25. Exemption from Civil Service. - The district and its employees,
acts as such since then were void. Petitioner, in fact was ordered by the Civil being engaged in a proprietary function, are hereby exempt from the provisions
Service Commission to vacate the position of LMWD General Manager since he of the Civil Service Law. x x x.
assumed the position without completed appointment (General Manager,
Philippine Ports Authority, et al. vs. Julieta Monserat, 381 SCRA 200.) On 15 August 1975, Presidential Decree No. 768 amended Section 23 of Presidential Decree No. 198
to read:
x x x As of the moment, without the CSC approved appointment, he is, the law
points, a de facto officer. He held the position of General Manager of LMWD SEC. 23. The General Manager. - At the first meeting of the board, or as soon
without the completed appointment. Over this, but for the creed petitioner avows, thereafter as practicable, the board shall appoint, by a majority vote, a general
the court believes that while the necessary intent is there, the sporting idea of fair manager and shall define his duties and fix his compensation. Said officer shall
play, is not sufficient for the petition to succeed. Petitioner surely is a de facto serve at the pleasure of the board.
officer.[37]
On 11 June 1978, Presidential Decree No. 1479[40] amended Presidential Decree No. 198, as amended
The Court emphasizes that an action for Quo Warranto may be dismissed at any stage when it becomes by Presidential Decree No. 768, removing Section 25 of the latter, which had exempted the district and
apparent that the plaintiff is not entitled to the disputed pubic office, position or franchise.[38] Hence, its employees from the coverage of the Civil Service. Thus, with such amendment, officers and
the RTC is not compelled to still proceed with the trial when it is already apparent on the employees of water districts were put under the mantle of Civil Service Rules and Regulations.
face of the Petition for Quo Warranto that it is insufficient. The RTC may already dismiss said
petition at this point. On 2 April 2004, Republic Act No. 9286 further amended Section 23 of Presidential Decree No. 198, to
read:
Feliciano presents as an alternative argument the fact that as GM of LMWD, he is not part of the
personnel of the water district, arguing that his appointment does not need CSC attestation. He explains Sec. 23. The General Manager. At the first meeting of the Board, or as soon
that: thereafter as practicable, the Board shall appoint, by a majority vote, a general
manager and shall define his duties and fix his compensation. Said officer shall
[E]ven granting that the CSC can declare him a de facto officer and usurper, the not be removed from office, except for cause and after due process.
same has already prescribed, since as early as September 8, 2000 in its Resolution
No. 002107 or four (4) years before its Resolution No. 050307, it has already From the foregoing, as early as the issuance of Presidential Decree No. 1479 on 11 June 1978, it is
known about petitioner being a de facto officer, that being the GM of LMWD, he clear that the LMWD GM is covered by Civil Service Rules and Regulations.
is not part of the personnel of LMWD, thus, his appointment is not subject to
attestation under CSC Resolution No. 41, S. 1993 x x x.[39] As we have held in Tanjay Water District v. Gabaton,[41] Davao City Water District v. Civil Service
Commission,[42] and Hagonoy Water District v. National Labor Relations Commission,[43] water

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

districts are government instrumentalities[44] whose officers and employees belong to the dismissal of the case without prejudice, unless otherwise provided, upon motion
civil service. These rulings are in consonance with the provisions of Article IX-B, Section 2 of the and after hearing. The submission of a false certification or non-compliance with
Constitution, whose provisions read: 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 civil service embraces all branches, subdivisions, instrumentalities, and the party or his counsel clearly constitute willful and deliberate forum shopping,
agencies of the Government, including government-owned or controlled the same shall be ground for summary dismissal with prejudice and shall constitute
corporations with original charters. direct contempt, as well as a cause for administrative sanctions.

The position of General Manager being unequivocally part of the personnel of the water district What is pivotal to consider in determining whether forum shopping exists or not is the vexation caused
whose officers and employees are covered under the civil service, an appointment thereto requires to courts and the parties-litigants by a party who asks appellate courts and/or administrative entities
the attestation of the CSC for it to be valid. to rule on the same or related causes and/or to grant the same or substantially the same reliefs, in the
process creating the possibility of conflicting decisions being rendered by the different courts upon the
Moreover, this Court cannot ignore the fact that petitioner Feliciano violated the rule on forum same issues.[48]
shopping[45] in his quest for a favorable opinion on his cause of action.
Feliciano has evidently trifled with the courts and abused their processes in improperly instituting
Forum shopping exists when a party repetitively avails himself of several judicial remedies in different several cases and filing multiple petitions, cases or proceedings, and splitting causes of action all of
courts, simultaneously or successively, all substantially founded on the same transactions and the same which focused on the legality of his termination as LMWD GM. While a party may avail himself of the
essential facts and circumstances, and all raising substantially the same issues either pending in, or remedies prescribed by the Rules of Court for the myriad reliefs from the court, such party is not free
already resolved adversely by, some other court.[46] to resort to them simultaneously or at his pleasure or caprice.

The following elements of forum shopping have been established: It is pertinent to note that at the time Feliciano filed G.R. No. 174929 on 14 October 2006, the legality
of his termination as LMWD GM has, in fact, been resolved with finality with the entry of judgment in
(a) identity of parties, or at least such parties as represent the same G.R. No. 172141. To recall, this Court En Banc denied G.R. No. 172141 and affirmed CA-G.R. SP No.
interests in both actions; 00489 which upheld CSC Resolution No. 050307. With the denial of G.R. No. 172141, the validity of
CSC Resolution No. 050307 declaring Feliciano to be a de facto officer from 8 June 1999 to 6 February
(b) identity of rights asserted and relief prayed for, the relief being 2001, and a mere usurper thereafter, has been laid to rest.
founded on the same set of facts; and
Feliciano, however, insisted on pursuing this petition for certiorari, being fully aware of the finality of
(c) the identity of the two preceding particulars, such that any judgment G.R. No. 172141 and the consequences resulting therefrom.
rendered in the other action will, regardless of which party is successful, amount
to res judicata in the action under consideration.[47] This Court reiterates the raison detre for the proscription against forum shopping. The grave evil
sought to be avoided by the rule against forum shopping is the rendition by two competent tribunals
The prohibition on forum shopping is embodied in Rule 7 of the Rules of Court, which provides, viz: of two separate and contradictory decisions unscrupulous party litigants, taking advantage of a variety
of competent tribunals, may repeatedly try their luck in several fora until a favorable result is
Sec. 5. Certification against forum shopping.The plaintiff or principal party shall reached.[49]
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 IN ALL, we find that the RTC committed no grave abuse of discretion in dismissing Felicianos Petition
therewith: (a) that he has not theretofore commenced any action or filed any claim for Quo Warranto.
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 WHEREFORE, premises considered, this Petition for Certiorari is DISMISSED, and the Orders dated
there is such other pending action or claim, a complete statement of the present 8 July 2006 and 8 September 2006 issued by Branch 6 of the Regional Trial Court in Tacloban, Leyte,
status thereof; and (c) if he should thereafter learn that the same or similar action in Civil Case No. 2006-03-29, dismissing petitioner Ranulfo C. Felicianos Petition for Quo Warranto, are
or claim has been filed or is pending, he shall report that fact within five (5) days hereby AFFIRMED.
therefrom to the court wherein his aforesaid complaint or initiatory pleading has
been filed. Feliciano and his counsel are hereby REPRIMANDED for FORUM SHOPPING, with
a WARNING that a repetition of the same or similar act will be dealt with more severely. Costs against
Failure to comply with the foregoing requirements shall not be curable by mere petitioner. SO ORDERED.
amendment of the complaint or other initiatory pleading but shall be cause for the

25
PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

DIGEST While the case was pending with the CA, Villasin was appointed as the new GM of LMWD. Thereafter,
the CA dismissed the appeal of Feliciano. Moreover, the SC also denied the appeal by Feliciano.
FACTS:
Feliciano thus filed with the RTC a Petition for Quo Warranto against Villasin. He asked the RTC to
Petitioner Feliciano was appointed General Manager (GM) of Leyte Metropolitan Water District (LMWD) restore him to his position as GM of LMWD, and to remove Villasin therefrom. After hearing, the RTC
on 11 June 1975 by the LMWD Board of Directors. On 6 March 1990, the Local Water Utilities dismissed the petition for quo warranto. Felicianos motion for reconsideration was likewise denied by
Administration (LWUA) took over the management and policy-making functions of LMWD owing to the RTC. Aggrieved, Feliciano went directly to this Court via the instant Petition
LMWDs default on the payment of its obligations to LWUA, pursuant to P.D. No. 198, otherwise known for Certiorari under Rule 65 of the Revised Rules of Court.
as THE PROVINCIAL WATER UTILITIES ACT OF 1973. LWUA appointed Engr. Cayo U. Emnas take-
over General Manager and the latter filed administrative charges against Feliciano for Grave ISSUE:
Misconduct, Dishonesty and Conduct Unbecoming an LMWD Official. Whether or not Feliciano has a right to file a petition for Quo Warranto under the circumstances
surrounding the case.
The Office of the Government Corporate Counsel (OGCC) handled the investigation of the charges
against Feliciano. In a Resolution dated 16 September 1991, the OGCC found Feliciano guilty as HELD:
charged and recommended the penalty of dismissal. The Interim LMWD Board of Directors NO. Due to the recent turn of events, Feliciano lost any legal standing to pursue via Quo
approved in toto the findings of the OGCC including its recommendation to dismiss Feliciano. Warranto proceedings his claim to the position of GM of LMWD considering the SCs En Banc
Resolutions dated 6 June 2006 and 22 August 2006 in G.R. No. 172141. To recall, CSC Resolution No.
The CSC issued Memorandum Circular No. 41, Series of 1993, directing Board Chairpersons and GMs 050307 treated Feliciano as a de facto officer with regard to his acts as GM of LMWD; and declared
of water districts to submit personnel appointments for approval by the CSC. him to be a usurper of or an intruder to the said position beginning 6 February 2001, and thus ordered
him to vacate the same.
By virtue of the issuance of Resolution No. 138, Series of 1998 issued by the LWUA Board of Trustees,
the take-over of the management and operations of the LMWD by the LWUA was lifted. Also, Feliciano Considering that entry of judgment was already made in G.R. No. 172141 as of 14 November 2006,
re-assumed the post as GM when the new regular LMWD Board of Directors unanimously there is therefore no more obstacle to the appointment by the LMWD Board of Directors of
approved Resolution No. 98-002 ordering his re-assumption. Villasin as the new GM of LMWD.

As GM, Feliciano appointed Edgar R. Nedruda, Milagros A. Majadillas and Edgar B. Ortega to various Feliciano imputes grave abuse of discretion on the part of the RTC for allegedly failing to afford him
positions at the LMWD. However, the CSCRO disapproved Felicianos LMWD personnel appointments due process, since his Petition for Quo Warranto was dismissed based on its face and without having
since GM Feliciano did not possess the required CSC-approved appointment pursuant to CSC been heard.
Memorandum Circular No. 41, S. 1993. The CSC likewise denied Felicianos appeal through CSC
Resolution No. 002107, on the ground that he was only a de facto officer. Feliciano had no The Court emphasizes that an action for Quo Warranto may be dismissed at any stage when it becomes
authority to make appointments since he himself lacked the required CSC-approved appointment apparent that the plaintiff is not entitled to the disputed pubic office, position or franchise. Hence, the
RTC is not compelled to still proceed with the trial when it is already apparent on the face
In his motion for reconsideration, Feliciano argued that LMWD is not covered by the CSC rules as it is of the Petition for Quo Warranto that it is insufficient. The RTC may already dismiss said
not a GOCC, but a special type of non-stock, non-profit private corporation imbued with public interest. petition at this point.
The CSC denied Felicianos Motion for Reconsideration in its Resolution No. 010218,
Feliciano presents as an alternative argument the fact that as GM of LMWD, he is not part of the
Feliciano filed a certiorari with the CA. However, the CA denied the petition. His motion for personnel of the water district, arguing that his appointment does not need CSC attestation.
reconsideration was likewise denied. Feliciano thereafter filed a petition for review on certiorari. In
an en banc Decision, the SC denied the petition for its failure to sufficiently show that the CSC The SC finds this claim untenable.
committed any reversible error in issuing the challenged decision and resolution. His motion for
reconsideration was likewise denied. To determine whether personnel of the LMWD, particularly the GM, are subject to CSC Rules and
Regulations, we must delve into the pertinent laws affecting the management and policy-making
Now due to the failure of the LMWD Board of Directors to submit the required appointment of Feliciano functions of the LMWD.
as GM of LMWD for attestation, the CSC CSC Resolution No. 050307, declaring Feliciano to be a
mere de facto officer of LMWD and ordering him to vacate the position of GM. The provisions of Presidential Decree No. 198 read:

From this, Feliciano filed with the CA a Petition for Certiorari and Prohibition with application for TRO Chapter VI Officers and Employees
and Writ of Injunction, seeking to enjoin the implementation of CSC Resolution No. 050307.

26
PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Section 23. Additional Officers. - At the first meeting of the board, or as soon
thereafter as practicable, the board shall appoint, by a majority vote, a general
manager, an auditor, and an attorney, and shall define their duties and fix their
compensation. Said officers shall service at the pleasure of the board.

xxxx

Section 25. Exemption from Civil Service. - The district and its employees,
being engaged in a proprietary function, are hereby exempt from the provisions
of the Civil Service Law. x x x.

On 15 August 1975, Presidential Decree No. 768 amended Section 23 of Presidential Decree
No. 198 to read:

SEC. 23. The General Manager. - At the first meeting of the board, or as soon
thereafter as practicable, the board shall appoint, by a majority vote, a general
manager and shall define his duties and fix his compensation. Said officer shall
serve at the pleasure of the board.

On 11 June 1978, Presidential Decree No. 1479[40] amended Presidential Decree No. 198, as
amended by Presidential Decree No. 768, removing Section 25 of the latter, which had
exempted the district and its employees from the coverage of the Civil Service. Thus, with
such amendment, officers and employees of water districts were put under the mantle of
Civil Service Rules and Regulations.

On 2 April 2004, Republic Act No. 9286 further amended Section 23 of Presidential Decree
No. 198, to read:

Sec. 23. The General Manager. At the first meeting of the Board, or as soon ACTIVITY 5
thereafter as practicable, the Board shall appoint, by a majority vote, a general
manager and shall define his duties and fix his compensation. Said officer shall NOTE: There is no case reference here.
not be removed from office, except for cause and after due process.
On July 8, 2017, Cebu City Mayor Tomas R. Osmena sent a Notice of Taking & Final Price Offer Letter
From the foregoing, as early as the issuance of Presidential Decree No. 1479 on 11 June for the Right-of-Way Acquisition of Lot 2 (Pcs-07-005327) with TCT No. 107-2011 to Ms. Amparo Yap,
1978, it is clear that the LMWD GM is covered by Civil Service Rules and Regulations. President of Best Deal Incorporated, the registered owner of the lot, with address at Natalio Bacalso
More so, water districts are government instrumentalities whose officers and Avenue, Brgy. Bulacao, Cebu City. Mayor Osmena wrote Ms. Yap that the Department of Transportation
employees belong to the civil service. (DOTr) has approved the construction and improvement of the Cebu Bus Rapid Transit Project so that
it is necessary to acquire certain real property and rights to accomplish the proposed construction.
The position of General Manager being unequivocally part of the personnel of the water Mayor Osmena said that he is authorized by the Implementing Agency to offer to Ms. Yap the sum of
district whose officers and employees are covered under the civil service, an appointment P 20,000.00 per sq meter for the 277 sq meter of Lot 2 affected by the BRT Project or a total of P 5,
thereto requires the attestation of the CSC for it to be valid. 540,000.00. This amount of the purchase price offered by Mayor Osmena is based on the lot area
affected times the current market value. Mayor Osmena also offered to pay replacement cost of the
improvements on the affected area, consisting of the warehouse in the amount of P 1,610,000.00. The
amounts exclude payments on capital gains tax, documentary stamp tax, transfer tax and registration
fees to be paid by the city government. Any unpaid real property tax shall be off set from the total
approved compensation at Ms. Yap's option. In his letter, Mayor Osmena, invoking Sec. 5, RA 10752,
informed Ms. Yap that she has 30 calendar days to accept or reject the offer and that she should do so

27
PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

by completing and forwarding the return slip to the Office of the City Administrator of the Cebu City Petitioner Autocorp failed to pay the loan. Despite its failure, it asked for an additional loan
Government. If Ms. Yap refuses or fails to respond or submit the documents required for payment, of P48,800,000.00 payable in one year at 20% interest per annum. Of this additional
Mayor Osmena shall initiate the filing of expropriation proceedings in court pursuant to Sec. 7 of the loan, P17,000,000.00 was applied partially against the original loan. Autocorp was again unable to pay
IRR of RA 10752. both accounts totaling P116,800,000.00, despite repeated demands and various requests for
extension.[6]
On August 7, 2017 Ms. Amparo Yap wrote Mayor Osmena that the corporation has decided to refuse
the offer because the amount is too small. Hence, in a notarized letter[7] dated September 8, 1997, addressed to the Office of the Provincial Sheriff
of Cebu City, respondent bank requested for the sale of the six (6) mortgaged lots at a public auction,
As Cebu City Legal Officer, you have been instructed by Mayor Osmena to initiate the proper for the satisfaction of petitioner Autocorps obligations, which, as of July 15, 1997, allegedly amounted
proceedings in court. Prepare the pleading and file it in court. to P143,871,904.00, and a sum equivalent to 10% as attorneys fees. The letter was filed with the
Office of the Clerk of Court Ex Oficio Provincial Sheriff of Cebu City on September 12, 1997, and raffled
to Deputy Sheriff Jessie Belarmino on September 15, 1997, for implementation.[8]

Before Deputy Sheriff Belarmino could prepare the requisite publication and notice, the petitioners filed
a complaint for Annulment of Loan Agreement and Real Estate Mortgage/ Declaration of
Unenforceability of Loan Agreement and Real Estate Mortgage with ex parte Restraining Order,
Preliminary Injunction and Damages[9] against respondent bank, the Clerk of Court Ex Oficio Provincial
Sheriff of Cebu, and Deputy Sheriff Belarmino. Summons and notice of raffle were served on
respondent bank and its co-defendants on September 24, 1997. The case was raffled to Branch 23 of
ACTIVITY 6 the RTC of Cebu City. On October 1, 1997, the trial court issued a Temporary Restraining Order (TRO)
effective for seventy-two (72) hours. After a summary hearing on October 3, 1997, the TRO was
AUTOCORP GROUP and AUTOGRAPHICS, INC. extended for twenty (20) days.[10]
vs
Hon. COURT OF APPEALS and KEPPEL MONTE BANK On October 16, 1997, the trial court issued a writ of preliminary injunction,[11] conditioned on petitioners
(formerly Promulgated: Monte de Piedad and Savings Bank) filing of a bond of two million pesos (P2,000,000.00). It also set the pre-trial hearing of the case. The
respondent bank sought a reconsideration of the order but in vain.

DECISION Respondent bank filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of
Appeals, to annul the order and resolution of the trial court. It contended that the preliminary injunction
PUNO, J.: was issued without the requisite prior notice and hearing, provided under Section 5, Rule 58 of the
1997 Rules of Court. The Court of Appeals granted the petition on November 12, 1998, after finding
Petitioners are before us on a Petition for Review on Certiorari assailing the decision[1] and that the summary hearing conducted by the trial court was insufficient. The decision was held to be
resolution[2] of the Court of Appeals in CA-G.R. SP No. 59004, which set aside the order[3] and without prejudice to his (the trial court judges) conducting the required hearing to determine whether
resolution[4] of the Regional Trial Court (RTC) of Cebu City, Branch 5, granting a writ of preliminary preliminary injunction should be issued.[12]
injunction against the respondent Keppel Monte Bank and the Register of Deeds of Cebu City.
The counsel for respondent bank immediately informed Deputy Sheriff Belarmino of the Court of
The records show that respondent bank extended a loan of eighty-five million pesos (P85,000,000.00) Appeals favorable decision. In a letter[13] dated November 25, 1998, said counsel furnished Deputy
in favor of petitioner Autocorp Group (Autocorp). The loan is embodied in an Agreement[5] dated Sheriff Belarmino with a copy of the November 12, 1998 Decision of the Court of Appeals and requested
December 16, 1994 which was secured by pledge and real estate mortgage on several properties, him to proceed with the foreclosure.
among which, were lots in Cebu City, co-owned by petitioner Autographics, Inc., and covered by
Transfer Certificates of Title (TCT) Nos. 72002, 72132, 85737, and 102042, and lots in Lapu-lapu City, In response, Deputy Sheriff Belarmino prepared and served the Notice of Extrajudicial Sale.[14] He
registered under the name of Eurasia Heavy Industries, Inc., and covered by TCT Nos. 19135 and scheduled the extrajudicial sale on January 7, 1999 at 10:00 a.m. Before the notice could be published,
19136. The Agreement provided that the CREDITOR may, at its sole discretion, treat the whole petitioners filed an Urgent Motion to Hold in Abeyance the Extrajudicial Sale in Case No. EJF-2397-
obligation, its principal and accrued interest and other charges, as immediately due, payable and CEB[15] dated December 7, 1997 with Branch 5[16] of the RTC of Cebu City. In addition, it filed a Very
defaulted, without necessity of any demand, presentment or notice by the CREDITOR to the DEBTOR Urgent Motion for Issuance of an Order of Status Quo[17] with the Court of Appeals on December 17,
in any event of default, such as, when [t]he DEBTOR fails to pay the principal loan, interests, and other 1998.
fees and charges, or any part thereof as they fall due.

28
PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

In its Resolution[18] dated December 22, 1998, the Court of Appeals denied the motion of the January 7, 1999, and likewise defendant Monte de Piedad is directed not to take possession or do any
petitioners. It ruled that its November 12, 1998 Decision had become final and executory, hence, the act related thereto on the properties subject of said Certificate of [S]ale until further orders from this
motion of petitioners should be resolved by the trial court. On January 6, 1999, the RTC of Cebu City, court.[25]
Branch 5, also denied petitioners motion to hold the extrajudicial sale in abeyance on the ground that
petitioners violated the rule against forum-shopping.[19] Petitioners filed a motion for the Respondent banks motion for reconsideration was denied in an Order dated March 9, 1999.[26]
reconsideration of the trial courts decision but without any success.
On May 29, 2000, respondent bank filed a petition for certiorari[27] under Rule 65 of the Rules of Court
The extrajudicial sale proceeded on January 7, 1999 at 10:00 a.m. and closed at 10:45 a.m. The six with the Court of Appeals, seeking to annul the orders of the trial court dated February 15, 1999 and
(6) properties were awarded to respondent bank as the lone bidder. Deputy Sheriff Belarmino issued March 9, 1999. Respondent bank contended that the entry of the certificate of sale in the primary entry
a Certificate of Sale dated January 7, 1999 with the approval of Executive Judge Priscila Agana.[20] book on January 21, 1999 was equivalent to registration. Hence, the TRO dated January 25, 1999 and
the preliminary injunction dated February 15, 1999, were issued with grave abuse of discretion, the
On January 13, 1999, petitioners filed a motion to admit their Amended/Supplemental Complaint with registration of the certificate of sale having already become fait accompli at the time. Respondent bank
a prayer for the issuance of an ex parte Temporary Restraining Order and an Order for Preliminary also faulted the part of the order prohibiting petitioner from taking possession of the properties as it
Injunction[21] with the RTC of Cebu City, Branch 5. It aimed to stop the Register of Deeds of Cebu from has not even filed a petition for a writ of possession at the time as required by Section 7 of Act No.
registering the Certificate of Sale in the name of respondent bank and the latter from taking possession 3135.
of the properties subject of the foreclosure. In addition, the amended complaint sought the annulment
of the extrajudicial foreclosure due to several alleged irregularities in the conduct of the sale. On August 16, 2002, the Court of Appeals rendered its first assailed decision,[28] annulling and setting
aside the trial courts February 15, 1999 Order and April 28, 2000 Resolution. It held that the entry of
On January 21, 1999 at 4:30 p.m., respondent bank presented the sheriffs certificate of sale to the the certificate of sale in the primary entry book was equivalent to registration, citing Section 56 of
Register of Deeds of Cebu City, involving the four (4) properties located in Cebu City covered by TCT Presidential Decree (P.D.) No. 1529, also known as the Property Registration Decree, and the case
Nos. 72002, 72132, 85737, and 102042. On the same date, the certificate was entered in the primary of DBP vs. Acting Register of Deeds of Nueva Ecija.[29] The Court of Appeals held that the failure
entry book of the Register of Deeds of Cebu. However, the entry fee of P30.00 and the registration fee of respondent bank to pay the entry and registration fees, on the same day that the sheriffs certificate
of P154,923.00 were paid only the following day or on January 22, 1999 as the cashier in charge of of sale was presented and entered in the primary entry book, was not respondents fault but due to the
receiving payment had already left. Respondent bank also presented the sheriffs certificate of sale to absence of the cashier. In any case, it ruled that the payment by respondent bank the following day
the Register of Deeds of Lapu-lapu City with respect to the two (2) subject lots, covered by TCT Nos. cured the defect. The Court of Appeals also found as premature the injunction to stop respondent bank
19135 and 19136, located therein.[22] The certificate of sale was duly annotated at the back of the from taking possession of the properties.
transfer certificates of title of the subject lots with a note that this include[s] four (4) other lots situated
in Cebu City.[23] Petitioners motion for reconsideration was denied by the Court of Appeals in a Resolution dated March
17, 2003.[30]
On January 25, 1999, the RTC of Cebu City, Branch 5, admitted the amended/supplemental complaint
of petitioners and granted their prayer for the issuance of a TRO, directing the Office of the Register Hence, this petition where petitioners raise the following issues:
of Deeds to refrain from registering the assailed sheriffs certificate of sale and also respondent bank
from taking possession of the properties subject of the certificate of sale. It required the respondent I. ARE THE QUESTIONED DECISION OF THE COURT OF APPEALS AND ITS RESOLUTION
bank to file its answer to the amended/supplemental complaint, within ten (10) days from receipt of DATED AUGUST 16, 2002 AND MARCH 17, 2003 IN CA-G.R. SP. NO. 59004 IN ACCORD
the order, and set a hearing on the propriety of issuing a writ of preliminary injunction on February 15, WITH THE LAW AND JURISPRUDENCE THEREON?
1999.[24]
II. CAN THE COURT OF APPEALS IN A PETITION FOR CERTIORARI PASS UPON AND
Respondent banks counsel failed to appear on the scheduled February 15, 1999 hearing despite due REVERSE THE FINDINGS OF FACT AND LAW OF THE TRIAL COURT MADE IN THE
notice. Petitioners presented their evidence ex parte. As the TRO it issued was to expire on the same EXERCISE OF ITS JURISDICTION?[31]
day, the trial court issued the preliminary injunction on the basis of the evidence adduced by
petitioners. The dispositive portion of the order states: Petitioners contend that payment of the entry fee is a condition sine qua non before any valid entry
can be made in the primary entry book. Allegedly, the Court of Appeals resorted to judicial legislation
WHEREFORE, in view of the foregoing, the court hereby grants the preliminary injunction and let a writ when it held that the subsequent payment of the entry fee was curative and a substantial compliance
issue after the plaintiffs shall have put up a bond of ONE HUNDRED THOUSAND (P100,000.00) Pesos with the law. Petitioners claim that the ruling in DBP vs. Acting Register of Deeds of Nueva
conditioned that the applicant will pay the adverse party of all damages which it may sustain by reason Ecija does not apply to this case. As there was no valid registration, petitioners conclude that the order
of the injunction if the court will finally decide that the applicant is not entitled thereto. Consequently, of the trial court issuing a writ of preliminary injunction was proper, considering the irregularities
the Office of the Register of Deeds, CebuCity is enjoined not to register the Certificate of Sale, dated present in the conduct of the extrajudicial foreclosure such as: (a) the petition for extrajudicial
foreclosure was not filed with the executive judge of the RTC of Cebu City but only with the Clerk of

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Court Ex Oficio Sheriff, Atty. Jeffrey Joaquino; (b) the notice of extrajudicial foreclosure was made interested in registering the instrument and would willingly surrender, present or produce his duplicate
three (3) days ahead of the finality of the November 12, 1998 Decision of the Court of Appeals in CA- certificate of title to the register of deeds in order to accomplish such registration. On the other hand,
G.R. SP No. 48305, which dissolved the first writ of preliminary injunction issued by the court a quo; as the registration of an involuntary instrument is contrary to the interest of the registered owner or
and (c) the extrajudicial foreclosure sale on January 7, 1999 was not supervised by the Clerk of Court Ex will affect him adversely, it is but natural that he will not willingly present or produce his duplicate
Oficio Sheriff, as required under Administrative Order No. 3-98 of this Court.[32] certificate or at least delay the production as long as possible.[37]

We find the petition bereft of merit. Like in DBP vs. Acting Register of Deeds of Nueva Ecija,[38] the instrument involved in the case
at bar, is a sheriffs certificate of sale. We hold now, as we held therein, that the registrant is under no
First. The objection as to the payment of the requisite fees is unavailing. There is no question that the necessity to present the owners duplicates of the certificates of title affected, for purposes of primary
fees were paid, albeit belatedly. Respondent bank presented the certificate of sale to the Office of the entry, as the transaction sought to be recorded is an involuntary transaction.
Register of Deeds of Cebu City for registration on January 21, 1999 at 4:30 p.m. As the cashier had
already left, the Office could not receive the payment for entry and registration fees, but still, the Registration is merely a specie of notice.[39] It is a ministerial act by which an instrument is sought to
certificate of sale was entered in the primary entry book. The following day, respondent bank paid the be inscribed in the records of the Office of the Register of Deeds and annotated at the back of the
requisite entry and registration fees. Given the peculiar facts of the case, we agree with the Court of certificate of title covering the land subject of the instrument. It is not a declaration by the State that
Appeals that the payment of respondent bank must be deemed to be substantial compliance with the such an instrument is a valid and subsisting interest in the land.[40] The law on registration does not
law; and, the entry of the instrument the day before, should not be invalidated. In any case, even if require that only valid instruments shall be registered. The purpose of registration is merely to give
we consider the entry to have been made on January 22, the important fact is that the entry in the notice.[41]
primary entry book was done prior to the issuance of the writ of injunction by the trial court.
It is a ministerial duty on the part of the Register of Deeds to annotate the instrument on the certificate
Section 56 of P.D. No. 1529 provides: of sale after a valid entry in the primary entry book. P.D. No. 1524 provides:

SEC. 56. Primary Entry Book; fees; certified copies. Each Register of Deeds shall keep a primary entry SEC. 63. Foreclosure of Mortgage. x x x
book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all
instruments including copies of writs and processes filed with him relating to registered land. He shall,
(b) If the mortgage was foreclosed extrajudicially, a certificate of sale executed by the officer
as a preliminary process in registration, note in such book the date, hour and minute of reception of
who conducted the sale shall be filed with the Register of Deeds who shall make a brief
all instruments, in the order in which they were received. They shall be regarded as registered
memorandum thereof on the certificate of title. (emphases ours)
from the time so noted, and the memorandum of each instrument, when made on the certificate of
title to which it refers, shall bear the same date: Provided, that the national government as well as the
provincial and city governments shall be exempt from the payment of such fees in advance in order to In fine, petitioners prayer for the issuance of a writ of injunction, to prevent the register of deeds from
be entitled to entry and registration. (emphasis ours) registering the subject certificate of sale, had been rendered moot and academic by the valid entry of
the instrument in the primary entry book. Such entry is equivalent to registration. Injunction would not
Second. Petitioners contend that the aforecited case of DBP is not apropos to the case at lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished
bar. Allegedly, in DBP, the bank not only paid the registration fees but also presented the owners act.
duplicate certificate of title. We find no merit in petitioners posture. They fail to consider the voluntary
or involuntary nature of the instrument subject of registration. A voluntary instrument is a willful act of Third. As to the writ of injunction preventing respondent bank from possessing the subject lands, Act
the registered owner of the land to be affected by registration,[33] while an involuntary instrument is No. 3135 provides:
one pertaining to a transaction affecting lands in which the registered owners cooperation is not needed
and which transaction may even be done against his will.[34] For the registration of a voluntary
instrument, it is necessary not only to register the deed, instrument or assignment, mortgage, or lease SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the
in the entry book of the register of deeds, but a memorandum thereof must also be made on the Court of First Instance of the province or place where the property or any part thereof is situated,
owners duplicate and on its original. The mere entry by the register of deeds in the entry or diary book, to give him possession thereof during the redemption period, furnishing bond in an amount
without the presentation of the owners duplicate certificate of title for corresponding annotation of the equivalent to the use of the property for a period of twelve months, to indemnify the debtor in
conveyance, does not have the effect of a conveyance of the property.[35] On the other hand, for the case it be shown that the sale was made without violating the mortgage or without complying
registration of an involuntary instrument, the law does not require the presentation of the owners with the requirements of this Act. Such petition shall be made under oath and filed in form of an
duplicate certificate of title and considers the annotation of such instrument upon the entry book, as ex parte motion in the registration or cadastral proceedings if the property is registered, or in
sufficient to affect the real estate to which it relates.[36] The reason for the difference is obvious. In a special proceedings in the case of property registered under the Mortgage Law or under section
voluntary instrument, the registered owner of the land to be affected by registration is presumed to be one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in accordance

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, As such, Keppel resorted to an extrajudicial foreclosure of the 6 lots mortgaged. It filed a notarized
collect the fees specified in paragraph eleven of section one hundred and fourteen of Act letter with the Office of the Clerk of Court Ex Oficio Provincial Sheriff of Cebu City and the same was
Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred raffled to Deputy Sheriff Jessie Belarmino for implementation.
and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession
issue, addressed to the sheriff of the province in which the property is situated, who shall execute However, Autocorp filed a complaint to annul the loan agreement and real estate mortgage, with ex
said order immediately. parte Restraining Order, Preliminary injunction and Damages. The trial court issued a writ of preliminary
injunction, conditioned on petitioners filing of a bond of two million pesos (P2,000,000.00).
A writ of possession is generally understood to be an order whereby a sheriff is commanded to place
a person in possession of a real or personal property, such as, when a property is extrajudicially Keppel filed a certiorari with the CA, to annul the order and resolution of the trial court. It contended
foreclosed. It has been consistently held that during the period of redemption after the registration of that the preliminary injunction was issued without the requisite prior notice and hearing, provided
the sale, a writ of possession issues as a matter of course upon the filing of the proper motion and the under Section 5, Rule 58 of the 1997 Rules of Court. The Court of Appeals granted the petition after
approval of a bond. A writ of possession may also be issued after consolidation of ownership of the finding that the summary hearing conducted by the trial court was insufficient.
property in the name of the purchaser. It is settled that the buyer in a foreclosure sale, who becomes
the absolute owner of the property if the same is not redeemed during the one-year redemption period Thereafter, Deputy Sheriff Belarmino prepared and served the Notice of Extrajudicial Sale. However,
after the registration of the sale, is entitled to the possession of the property and can demand it at any before the notice could be published, Autocorp filed an Urgent Motion to Hold in Abeyance the
time, following the consolidation of ownership in his name and the issuance to him of a new transfer Extrajudicial Sale with the RTC of Cebu. In addition, it filed a Very Urgent Motion for Issuance of an
certificate of title. To underscore the writs ministerial character, we have disallowed injunction to Order of Status Quo with the CA.
prohibit its issuance, just as we have held that issuance of the same may not be stayed by a pending
action for annulment of the mortgage or the foreclosure itself. The CA denied the motion of Autocorp. The RTC of Cebualso denied petitioners motion to hold the
extrajudicial sale in abeyance on the ground that petitioners violated the rule against forum-shopping.
The preliminary injunction issued by the trial court to prevent respondent bank from taking possession Petitioners filed a motion for the reconsideration of the trial courts decision but without any success.
of the subject lots, was properly set aside by the Court of Appeals, as the trial court judge acted with
grave abuse of discretion when it issued the same. It was not alleged that respondent bank committed After the extrajudicial sale, The 6 properties were awarded to Keppel as the lone bidder. A Certificate
acts of possession over the properties before it could file a petition for a writ of possession during the of Sale with the approval of Executive Judge Priscila Agana, was issued.
redemption period. If the trial court cannot refuse to issue a writ of possession in the event that
respondent bank complies with the requisites for its issuance, with more reason that the trial court Autocorp filed a motion to admit their Amended/Supplemental Complaint with a prayer for the issuance
cannot issue an injunction, preempting respondent bank from filing a petition or application for a writ of an ex parte TRO and an Order for Preliminary Injunction to stop the Register of Deeds of Cebu from
of possession, over the properties subject of the certificate of sale. registering the Certificate of Sale in the name of respondent bank and the latter from taking possession
of the properties subject of the foreclosure.
IN VIEW WHEREOF, the petition is dismissed. The assailed decision and resolution of the Court of
Appeals are affirmed. Cost against petitioners. SO ORDERED. Keppel presented the Certificate of Sale to the Register of Deeds of Cebu and Lapu-Lapu on separate
occasions. However, in the Register of Deeds of Cebu, the entry fee and the registration were belatedly
DIGEST paid, that is, paid only the next day as the cashier in charge had already left. Nevertheless, the
certificate of sale was entered in the primary entry book. Also, the certificate of sale was duly annotated
FACTS: at the back of the TCTs.

Keppel Monte Bank extended a loan of (P85,000,000.00) in favor of petitioner Autocorp Group But then, the RTC admitted the amended/supplemental complaint of Autocorp and granted their prayer
(Autocorp). The loan was secured by pledge and real estate mortgage on several properties, among for the issuance of a TRO, directing the Office of the Register of Deeds to refrain from registering the
which, were 4 lots in Cebu City and 2 other lots in Lapu-lapu City. The lots in Cebu is co-owned by assailed sheriffs certificate of sale and also respondent bank from taking possession of the properties
petitioner Autographics, Inc, while the lots in Lapu-lapu City registered under the name of Eurasia subject of the certificate of sale. Eventually, it granted a preliminary injunction.
Heavy Industries, Inc. The Agreement provided an acceleration clause.
Keppel filed a petition for certiorari with the CA. As such, the CA reversed the orders of the RTC.
Autocorp failed to pay the loan. Despite its failure, it asked for an additional loan of P48,800,000.00 Autocorps motion for reconsideration was likewise denied by the CA.
payable in 1 year at 20% interest per annum. Of this additional loan, P17,000,000.00 was applied
partially against the original loan. However, Autocorp was again unable to pay both accounts ISSUES:
totaling P116,800,000.00, despite repeated demands and various requests for extension.
1. Whether or not the payment of the registration fees is a condition precedent before any valid
entry can be made in the primary book.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

2. Whether the case of DBP vs Acting Register of Deeds of Nueva Ecija is applicable in this (b) If the mortgage was foreclosed extrajudicially, a certificate of sale executed by the officer who
case. conducted the sale shall be filed with the Register of Deeds who shall make a brief
3. Whether the injunction to prevent Keppel Monte Bank from taking possession of the memorandum thereof on the certificate of title. (emphases ours)
properties was proper.
In fine, petitioners prayer for the issuance of a writ of injunction, to prevent the register of deeds
RULING: from registering the subject certificate of sale, had been rendered moot and academic by the valid
entry of the instrument in the primary entry book. Such entry is equivalent to
1. NO. The objection as to the payment of the requisite fees is unavailing. There is no question that registration. Injunction would not lie anymore, as the act sought to be enjoined had already
the fees were paid, albeit belatedly. Respondent bank presented the certificate of sale to the become a fait accompli or an accomplished act.
Office of the Register of Deeds of Cebu City for registration on January 21, 1999 at 4:30 p.m. As
the cashier had already left, the Office could not receive the payment for entry and registration 3. NO.
fees, but still, the certificate of sale was entered in the primary entry book. The following day,
respondent bank paid the requisite entry and registration fees. Given the peculiar facts of the A writ of possession is generally understood to be an order whereby a sheriff is commanded to
case, we agree with the Court of Appeals that the payment of respondent bank must be deemed place a person in possession of a real or personal property, such as, when a property is
to be substantial compliance with the law; and, the entry of the instrument the day before, should extrajudicially foreclosed. It has been consistently held that during the period of redemption after
not be invalidated. In any case, even if we consider the entry to have been made on January 22, the registration of the sale, a writ of possession issues as a matter of course upon the filing of the
the important fact is that the entry in the primary entry book was done prior to the issuance of proper motion and the approval of a bond. A writ of possession may also be issued after
the writ of injunction by the trial court. consolidation of ownership of the property in the name of the purchaser. It is settled that the
buyer in a foreclosure sale, who becomes the absolute owner of the property if the same is not
Section 56 of P.D. No. 1529 provides: redeemed during the one-year redemption period after the registration of the sale, is entitled to
SEC. 56. Primary Entry Book; fees; certified copies. Each Register of Deeds shall keep a the possession of the property and can demand it at any time, following the consolidation of
primary entry book in which, upon payment of the entry fee, he shall enter, in the order of ownership in his name and the issuance to him of a new transfer certificate of title. To underscore
their reception, all instruments including copies of writs and processes filed with him relating the writs ministerial character, we have disallowed injunction to prohibit its issuance, just
to registered land. He shall, as a preliminary process in registration, note in such book the as we have held that issuance of the same may not be stayed by a pending action for annulment
date, hour and minute of reception of all instruments, in the order in which they were of the mortgage or the foreclosure itself.
received. They shall be regarded as registered from the time so noted, and the
memorandum of each instrument, when made on the certificate of title to which it refers, As such, the preliminary injunction issued by the trial court to prevent respondent bank from
shall bear the same date: Provided, that the national government as well as the provincial taking possession of the subject lots, was properly set aside by the Court of Appeals, as the trial
and city governments shall be exempt from the payment of such fees in advance in order to court judge acted with grave abuse of discretion when it issued the same. It was not alleged
be entitled to entry and registration. (emphasis ours) that respondent bank committed acts of possession over the properties before it could file a
petition for a writ of possession during the redemption period. If the trial court cannot refuse to
2. YES. Like in DBP vs. Acting Register of Deeds of Nueva Ecija, the instrument involved in issue a writ of possession in the event that respondent bank complies with the requisites for its
the case at bar, is a sheriffs certificate of sale. We hold now, as we held therein, that the registrant issuance, with more reason that the trial court cannot issue an injunction, preempting respondent
is under no necessity to present the owners duplicates of the certificates of title affected, for bank from filing a petition or application for a writ of possession, over the properties subject of
purposes of primary entry, as the transaction sought to be recorded is an involuntary transaction. the certificate of sale.

Registration is merely a specie of notice. It is a ministerial act by which an instrument is sought


to be inscribed in the records of the Office of the Register of Deeds and annotated at the back of
the certificate of title covering the land subject of the instrument. It is not a declaration by the
State that such an instrument is a valid and subsisting interest in the land. The law on registration
does not require that only valid instruments shall be registered. The purpose of registration is
merely to give notice.

It is a ministerial duty on the part of the Register of Deeds to annotate the instrument on the
certificate of sale after a valid entry in the primary entry book. P.D. No. 1524 provides:

SEC. 63. Foreclosure of Mortgage. x x x

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

ACTIVITY 7

VALENTIN CABRERA, MANUEL CABRERA, and REBECCA LESLIE CABRAS


vs
ELIZABETH GETARUELA, EULOGIO ABABON, LEONIDA LIGAN, MARIETTO ABABON,
GLORIA PANAL, LEONORA OCARIZA, SOTERO ABABON, JR., and JOSEPH ABABON,

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the 22 January 2004 Decision[2] and 3 May 2004
Resolution[3] of the Court of Appeals in CA-G.R. SP No. 80062.

The Antecedent Facts

Lot Nos. 3635-CC and 3635-Y, located in Inayawan, Pardo, Cebu City were covered by Tax Declaration
Nos. GR2K-12-078-02409 and GR2K-12-078-02431 in the name of Arcadio Jaca (Arcadio).The heirs of
Arcadio executed a notarized document known as Kasabutan nga Hinigala dated 25 July 1951 which
stipulated that all the inherited properties of Arcadio, including Lot No. 3635, would go to Peregrina
Jaca Cabrera (Peregrina). However, in a Repartition Project approved on 21 November 1956 by Judge
Jose M. Mendoza of the Court of First Instance of Cebu City, Branch 6 in Special Proceedings No. 211-
V, Lot Nos. 3635-CC and 3635-Y were given to Urbana Jaca Ababon (Urbana), mother of Elizabeth
Getaruela, Eulogio Ababon, Leonida Ligan, Marietto Ababon, Gloria Panal, Leonora Ocariza, Sotero
Ababon, Jr., and Joseph Ababon (respondents). Upon Urbanas death in 1997, respondents inherited
the lots.

Valentin Cabrera (Valentin), Manuel Cabrera (Manuel), and Rebecca Leslie Cabras (Cabras), Peregrinas
adopted daughter, occupied the lots with the knowledge and consent of respondents.

Respondents alleged that Valentin, Manuel, and Cabras (collectively, petitioners) were occupying
portions of the lots without paying any rentals, but with an agreement that they would vacate the
premises and demolish their houses at their expense should respondents need the property. In 2001,
respondents personally notified petitioners that they would repossess the property. Respondents asked
petitioners to vacate the premises and remove the houses they built on the lots. However, despite
repeated demands, petitioners refused to vacate the premises. The matter was referred to the Lupong
Tagapamayapa of Barangay Inayawan, Cebu for possible amicable settlement but petitioners still
refused to vacate the premises. Thus, respondents filed an action for ejectment against petitioners,
docketed as Civil Case No. R-45280.

Petitioners assailed the Project of Partition as incredible because its first page was missing and it lacked
the signatures of the parties who executed it. Petitioners asserted the validity of the Kasabutan nga
Hinigala. Cabras alleged that as owner of Lot No. 3635 upon Peregrinas death, she could not be ejected
from the premises. Valentin and Manuel alleged that they could not be ejected because they built their
houses with Peregrinas knowledge and consent.

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

The Rulings of the MTCC and RTC Respondents filed a motion for reconsideration. In its 29 July 2003 Order, the RTC partially granted
respondents motion. The RTC ruled that it erred in finding that Urbana sold her share to Asas. The RTC
In its Decision[4] dated 4 April 2002, the Municipal Trial Court in Cities, Branch 7, Cebu City (MTCC) ruled that the Project of Partition showed that it was Panfilo Jaca who sold his share to Asas. The RTC
ruled in favor of respondents, as follows: modified its 19 May 2003 Decision as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against Wherefore, the judgment in the Decision dated April 4, 2002, of the Municipal Trial
the defendants, ordering the latter to vacate the premises in question and to Court in Cities, Branch 7, Cebu City, in Civil Case No. R-45280, is MODIFIED, as
demolish whatever improvements introduced thereon and surrender complete follows:
control and possession thereof to the plaintiffs, and to jointly and severally pay the
latter: 1) Dismissing the complaint as regards Lot 3655-Y; and

1) the amount of P15,000.00 for and as attorneys fees; 2) Ordering defendants-appellants to vacate Lot No. 3655-CC, demolish
whatever improvements they may have introduced thereon and
2) litigation expenses in the sum of P5,000.00; and cost of suit. surrender complete control and possession thereof to plaintiffs-
appellees.
SO ORDERED.[5]
No pronouncement as to costs.
The MTCC ruled that the Kasabutan nga Hinigala was superseded by the court-approved Repartition
Project. The MTCC noted that in the Repartition Project, Lot Nos. 3635-CC and 3635-Y were given to SO ORDERED.[8]
Urbana, respondents predecessor-in-interest. The MTCC ruled that while the lots were still in Urbanas
name, respondents were not barred from judicially ejecting petitioners from the premises. Petitioners moved for reconsideration of the RTCs 29 July 2003 Order, assailing the Project of
Partition. In its 3 September 2003 Order,[9] the RTC denied petitioners motion. The RTC ruled that
Petitioners appealed from the MTCCs Decision. petitioners failed to present any evidence supporting the purported falsity of the Project of
Partition. The RTC upheld the jurisdiction of the MTCC and further ruled that respondents action was
In its 19 May 2003 Decision,[6] the Regional Trial Court of Cebu City, Branch 7 (RTC) reversed the an ejectment case.
MTCCs Decision. The RTC ruled that the Project of Partition showed that Lot No. 3635-Y was co-owned
by Urbana (251 sq. m.), Peregrina (863 sq. m.), and Andres Jaca (251 sq. m.). The RTC ruled that as Petitioners filed a petition for review before the Court of Appeals.
Peregrinas heir, Cabras became a co-owner of Lot No. 3635-Y and she could not be ejected from the
property. The RTC ruled that Valentin and Manuel could not likewise be ejected from the property as The Ruling of the Court of Appeals
they were allowed by Cabras to occupy the lot.
In its 22 January 2004 Decision, the Court of Appeals affirmed the 29 July 2003 and 3 September 2003
The RTC ruled that the Project of Partition also showed that Urbanas total share of 1,499 sq. m., Orders of the RTC.
covering 1,248 sq. m. of Lot No. 3635-CC and 251 sq. m. of Lot No. 3635-Y, was sold to one Josefina
Asas (Asas). As such, respondents had no cause of action against petitioners. The Court of Appeals held that the jurisdiction of the court is determined by the allegations in the
complaint. The Court of Appeals held that a complaint for unlawful detainer is sufficient if it alleges
The dispositive portion of the RTCs Decision reads: that the withholding of possession or the refusal to vacate is unlawful. The Court of Appeals ruled that
prior physical possession is indispensable only in actions for forcible entry but not in unlawful
Wherefore, the judgment in the Decision dated April 4, 2002, of the Municipal Trial detainer. The Court of Appeals further ruled that occupation of the premises must be tolerated by the
Court in Cities, Branch 7, Cebu City, in Civil Case No. R-45280, is REVERSED, and owners right from the start of the possession of the property sought to be recovered.
another one is entered DISMISSING the case against defendants-appellants.
The Court of Appeals found that in this case, petitioners were occupying the lots without rentals upon
Plaintiffs-appellees are directed to compensate defendants-appellants attorneys agreement with respondents that they would relinquish possession once respondents need the
fees in the amount of P15,000.00, and litigation expenses in the amount property. However, petitioners refused to vacate the premises despite demands by respondents. The
of P5,000.00, as well as to pay the costs. Court of Appeals ruled that the allegations were sufficient to confer jurisdiction upon the MTCC where
the ejectment suit was instituted and tried.
SO ORDERED.[7]
The Court of Appeals noted that petitioners challenged respondents claim of ownership of the
property. The Court of Appeals ruled that the only issue involved in an ejectment case is possession de

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

facto. However, when the issue of possession could not be resolved without resolving the issue of The petition has no merit.
ownership, the court may receive evidence upon the question of title to the property but solely for the
purpose of determining the issue of possession. Hence, the MTCC acted correctly when it received Petitioners insist that the MTCC had no jurisdiction to entertain respondents complaint because there
evidence on the issue of ownership. The Court of Appeals further noted that the RTC upheld the MTCCs was no contract, oral or written, between the parties. Petitioners allege that the proper action should
finding that the Project of Partition superseded the Kasabutan nga Hinigala. The Court of Appeals have been one for recovery of possession and not for unlawful detainer.
sustained the RTC in refusing to admit documents submitted by petitioners which they failed to present
before the MTCC. The Court of Appeals stressed that the MTCCs finding on the issue of ownership was We do not agree.
merely provisional. Thus, petitioners were not legally barred from filing the proper action to settle the
question of title. It is settled that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the
following:
The dispositive portion of the Decision of the Court of Appeals reads:
(1) initially, possession of property by the defendant was by contract with or by
WHEREFORE, premises considered, the present petition is hereby DENIED DUE tolerance of the plaintiff;
COURSE and accordingly DISMISSED. The assailed Orders dated July 29, 2003 and
September 3, 2003 of the court a quo are hereby both AFFIRMED. (2) eventually, such possession became illegal upon notice by plaintiff to
defendant of the termination of the latters right of possession;
No pronouncement as to costs.
(3) thereafter, the defendant remained in possession of the property and deprived
SO ORDERED.[10] the plaintiff of the enjoyment thereof; and

Petitioners filed a motion for reconsideration. In its 3 May 2004 Resolution, the Court of Appeals denied (4) within one year from the last demand on defendant to vacate the property,
the motion. the plaintiff instituted the complaint for ejectment.[12]

The Court of Appeals ruled that a complaint for unlawful detainer must be filed within one year from In this case, the complaint alleged that petitioners were occupying the property, with agreement that
demand and not from the start of possession as claimed by petitioners. The Court of Appeals reiterated should respondents need the property, petitioners would relinquish possession of the lots and demolish
that in cases of forcible entry and unlawful detainer, the issue is pure physical or de facto possession their houses at their expense. Respondents personally notified petitioners to vacate the premises and
and pronouncements made on the question of ownership are provisional in nature. The Court of to demolish their houses but petitioners refused to vacate the lots. The complaint established that
Appeals further ruled that all cases of forcible entry and unlawful detainer shall be filed before the petitioners possession was by tolerance of respondents, and their possession became illegal
proper Municipal Trial Court, there being no jurisdictional amount involved, even with respect to when they refused to vacate the premises upon demand by respondents. Here, the possession
damages or unpaid rentals sought. became illegal not from the time petitioners started occupying the property but from the time demand
was made for them to vacate the premises. In short, the complaint sufficiently established a case
Hence, the petition before this Court. for unlawful detainer.

The Issues Contrary to petitioners contention, the issue in this case is not the ownership of the lots. It should be
stressed that the allegations in the complaint and the character of the relief sought determine the
Petitioners raise the following issues in their Memorandum:[11] nature of the action and the court with jurisdiction over it. The defenses set up in an answer are not
determinative of jurisdiction. The jurisdiction of the court cannot be made to depend on the exclusive
1. Whether the MTCC had jurisdiction to entertain the ejectment case considering characterization of the case by one of the parties. Thus:
the absence of a contract, written or oral, entered into by respondents
and petitioners as lessors and lessees, respectively; In an unlawful detainer case, the sole issue for resolution is physical or material
possession of the property involved, independent of any claim of ownership by any
2. Whether tolerance as a ground for ejectment is tenable in this case; and of the parties. However, where the issue of ownership is raised, the courts may
pass upon the issue of ownership in order to determine who has the right to
3. Whether the Project of Partition superseded the Kasabutan nga Hinigala. possess the property. We stress, however, that this adjudication is only an initial
determination of ownership for the purpose of settling the issue of possession, the
The Ruling of this Court issue of ownership being inseparably linked thereto. The lower courts adjudication
of ownership in the ejectment case is merely provisional and would not bar or

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

prejudice an action between the same parties involving title to the property. It is, 2)Ordering defendants-appellants to vacate Lot No. 3655-CC, demolish whatever
therefore, not conclusive as to the issue of ownership improvements they may have introduced thereon and surrender complete control
and possession thereof to plaintiffs-appellees.
The MTCC, the RTC, and the Court of Appeals all held that the Repartition Project superseded
the Kasabutan nga Hinigala. We sustain their factual finding as this Court gives substantial weight to Petitioners moved for reconsideration but it was likewise denied. The RTC ruled that petitioners failed
the factual finding of the trial court, particularly if this factual finding is sustained by appellate to present any evidence supporting the purported falsity of the Project of Partition. The RTC upheld the
courts. However, we also reiterate that this resolution on the issue of ownership is only provisional for jurisdiction of the MTCC and further ruled that respondents action was an ejectment case.
the purpose of settling the issue of possession.
The Ruling of the Court of Appeals
WHEREFORE, we DENY the petition. We AFFIRM the 22 January 2004 Decision and 3 May 2004
Resolution of the Court of Appeals in CA-G.R. SP No. 80062. Upon petition for review, the CA affirmed the decision of the RTC.

SO ORDERED. The CA ruled that the allegations were sufficient to confer jurisdiction upon the MTCC where the
ejectment suit was instituted and tried. It also ruled that the only issue involved in an ejectment case
DIGEST is possession de facto.

FACTS: The CA further noted that the RTC upheld the MTCCs finding that the Project of Partition superseded
the Kasabutan nga Hinigala. The Court of Appeals sustained the RTC in refusing to admit documents
Arcadio Jaca (Arcadio) owned Lot Nos. 3635-CC and 3635-Y, located in Inayawan, Pardo, Cebu City, submitted by petitioners which they failed to present before the MTCC. The Court of Appeals stressed
The heirs of Arcadio executed a notarized document known as Kasabutan nga Hinigala which stipulated that the MTCCs finding on the issue of ownership was merely provisional. Thus, petitioners were not
that all the inherited properties of Arcadio, including Lot No. 3635, would go to Peregrina Jaca Cabrera legally barred from filing the proper action to settle the question of title.
(Peregrina). However, the CFI approved a Repartition Project, wherein Lots 3635-CC and 3635-Y were
given to Urbana Jaca Ababon (Urbana), mother of Elizabeth Getaruela, Eulogio Ababon, Leonida Ligan, Petitioners motion for reconsideration was likewise denied by the CA. It ruled that a complaint for
Marietto Ababon, Gloria Panal, Leonora Ocariza, Sotero Ababon, Jr., and Joseph Ababon unlawful detainer must be filed within one year from demand and not from the start of possession as
(respondents). Upon Urbanas death in 1997, respondents inherited the lots. claimed by petitioners. The Court of Appeals further ruled that all cases of forcible entry and unlawful
detainer shall be filed before the proper Municipal Trial Court, there being no jurisdictional amount
Valentin Cabrera (Valentin), Manuel Cabrera (Manuel), and Rebecca Leslie Cabras (Cabras), Peregrinas involved, even with respect to damages or unpaid rentals sought.
adopted daughter, occupied the lots with the knowledge and consent of respondents. They occupied
portions of the lots without paying any rentals, but with an agreement that they would vacate the ISSUE:
premises and demolish their houses at their expense should respondents need the property.
Whether the MTCC had jurisdiction to entertain the ejectment case considering the absence of a
Now when notified petitioners that they would repossess the property. Respondents asked petitioners contract, written or oral, entered into by respondents and petitioners as lessors and lessees,
to vacate the premises and remove the houses they built on the lots. However, despite repeated respectively;
demands, petitioners refused to vacate the premises. Eventually, respondents filed an action for
ejectment against petitioners. HELD:

The Rulings of the MTCC and RTC YES. The MTCC had jurisdiction to entertain the ejectment case.

The MTCC ruled in favor of respondents. It held that Kasabutan nga Hinigala was superseded by the It is settled that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the
court-approved Repartition Project. The MTCC noted that while the lots were still in Urbanas name, following:
respondents were not barred from judicially ejecting petitioners from the premises.
(1) initially, possession of property by the defendant was by contract with or by
On appeal, the RTC reversed the MTCCs Decision and ruled in favor of petitioners. But upon motion tolerance of the plaintiff;
for reconsideration, the RTC partially granted respondents motion. As such: (2) eventually, such possession became illegal upon notice by plaintiff to defendant of the
termination of the latters right of possession;
1) Dismissing the complaint as regards Lot 3655-Y; and (3) thereafter, the defendant remained in possession of the property and deprived the
plaintiff of the enjoyment thereof; and

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

(4) within one year from the last demand on defendant to vacate the property, DECISION
the plaintiff instituted the complaint for ejectment.
In this case, the complaint alleged that petitioners were occupying the property, with agreement that CALLEJO, SR., J.:
should respondents need the property, petitioners would relinquish possession of the lots and demolish
their houses at their expense. Respondents personally notified petitioners to vacate the premises and This is a petition for review on certiorari under Rule 45, Rules of Court, of the Order[1] dated April 15,
to demolish their houses but petitioners refused to vacate the lots. The complaint established that 2004 of the Regional Trial Court (RTC) of Cebu City, in Civil Case No. CEB-29783 dismissing the Petition
petitioners possession was by tolerance of respondents, and their possession became illegal for Indirect Contempt of petitioner Atty. Ramon B. Ceniza against respondents Daniel Wistehuff, Sr.,
when they refused to vacate the premises upon demand by respondents. Here, the possession Daniel Wistehuff III, Marites Gonzales-Wistehuff, Bryan K. Wistehuff, Atty. Francis M. Zosa, and
became illegal not from the time petitioners started occupying the property but from the time demand Gemalyn Peteros. Also assailed in this petition is the Order[2] denying the motion for reconsideration
of said decision. Petitioner prays, inter alia, that the court enjoin the Court of Appeals (CA) from
was made for them to vacate the premises. In short, the complaint sufficiently established a case
enforcing its Resolution in CA-G.R. SP No. 85301 granting the plea of Inmark Marketing Philippines,
for unlawful detainer.
Inc. (IMPI) for a temporary restraining order, as well as the Resolution dated October 14, 2004 which
granted IMPIs plea for a writ of preliminary injunction on a P50,000.00 bond.
Contrary to petitioners contention, the issue in this case is not the ownership of the lots. It should be
stressed that the allegations in the complaint and the character of the relief sought determine the
Petitioner and his client Daniel Wistehuff, Sr. organized and established IMPI.[3] Petitioner owns 5% of
nature of the action and the court with jurisdiction over it. The defenses set up in an answer are not
the shares of stocks of the IMPI, and the other stockholders are respondents Daniel Wistehuff III,
determinative of jurisdiction. The jurisdiction of the court cannot be made to depend on the exclusive
Marites Gonzales-Wistehuff, and Bryan K. Wistehuff.[4]
characterization of the case by one of the parties. Thus:
Petitioner, as plaintiff, filed a Complaint against IMPI and the Wistehuffs with the RTC of Cebu City for
In an unlawful detainer case, the sole issue for resolution is physical or material
accounting, declaration of dividends, specific performance, damages and attorneys fees with a plea for
possession of the property involved, independent of any claim of ownership by any
a writ of preliminary mandatory injunction. The case was raffled to Branch 11 of the court and docketed
of the parties. However, where the issue of ownership is raised, the courts may
as Civil Case No. CEB-26274-SRC. The complaint contained the following prayer:
pass upon the issue of ownership in order to determine who has the right to
possess the property. We stress, however, that this adjudication is only an initial
determination of ownership for the purpose of settling the issue of possession, the x x x [That a] writ of preliminary mandatory injunction be issued ordering defendant corporation, its
issue of ownership being inseparably linked thereto. The lower courts adjudication President Daniel Wistehuff III and its former President Daniel Wistehuff, Sr. to: a) produce all financial
of ownership in the ejectment case is merely provisional and would not bar or documents of the corporation from 1996 up to the present and deposit the same with the Court; b)
prejudice an action between the same parties involving title to the property. It is, faithfully comply with the terms of the Retainership Contract to pay his retainer fee of P35,000.00 per
therefore, not conclusive as to the issue of ownership month and the extra legal services rendered; a Management Committee of a Receiver be constituted;
ordering defendants to make full accounting; ordering the declaration of stock and cash dividends;
ordering the individual defendants to whom legal services were rendered to pay attorneys fees of not
The MTCC, the RTC, and the Court of Appeals all held that the Repartition Project superseded
less than P200,000.00; ordering defendants Daniel Wistehuff III and Daniel Wistehuff, Sr., jointly and
the Kasabutan nga Hinigala. We sustain their factual finding as this Court gives substantial weight
severally, to pay plaintiff not less than P500,000.00 in moral damages and not less than P250,000.00
to the factual finding of the trial court, particularly if this factual finding is sustained by appellate
in exemplary damages, attorneys fees of not less than P100,000.00 and litigation expenses of not less
courts. However, we also reiterate that this resolution on the issue of ownership is only provisional for
than P10,000.00, plus appearance fees amounting to P2,000.00 per hour. x x x[5]
the purpose of settling the issue of possession.
Petitioner thereafter amended his complaint, alleging therein that it had been filed by way of a
derivative suit against the defendants. He prayed for an accounting of income and expenses of the
IMPI, declaration of dividends, enforcement of his right to financial statements, attorneys fees, and
damages.[6] In the course of the proceedings, the RTC issued an Order on October 10, 2001 denying
his plea for the appointment of a receiver or management committee pendente lite.[7]
ACTIVITY 8
On March 27, 2003, however, the court rendered judgment in favor of petitioner. The fallo of the
ATTY. RAMON B. CENIZA
decision reads:
vs
DANIEL WISTEHUFF, SR., DANIEL WISTEHUFF III, MARITES GONZALES-WISTEHUFF,
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered in favor of the
BRYAN K. WISTEHUFF, ATTY. FRANCIS M. ZOSA, and GEMALYN PETEROS,
plaintiff and against the defendants ordering the latter as follows:

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

1. to make a true and correct accounting of the earnings of the corporation which will be 6. Following the willful, deliberate and contumacious refusal of respondents, this time with
the basis of the declaration of dividends; the participation of, and in collusion with, respondent Atty. Francis M. Zosa, their counsel in
the intracorporate case before Branch 23, when said counsel acting for and in behalf of
2. to enjoin defendant Inmark Marketing Philippines, Inc. and the individual defendants respondents willfully, deliberately, insultingly and contumaciously submitted the 2002
to comply with the terms and conditions of plaintiff Cenizas Retainer Contract; Financial Statement of Inmark (Annexes E, F, and F-1 hereto attached) which he very well
knew fraudulently and incorrectly reported a loss and, having been marked and presented
3. to order the individual defendants to whom services were rendered to pay attorneys fees by him in evidence, is not, and cannot possibly be, in compliance with the Writ of Execution
of P200,000.00; served upon him and his client, which directed the defendants to make a true and
correct accounting of the earnings of Inmark Marketing Philippines, Inc. which
4. to order defendants Daniel Wistehuff III and Daniel Wistehuff, Sr., jointly and shall be the basis of declaration of dividends.
severally, to pay plaintiff the sum of P500,000.00 in moral damages and P25,000.00 in
exemplary damages; Plaintiff (now petitioner) then moved the Court for a show cause order against the same respondents
herein but the Honorable Court, thru Judge Generosa A. Labra, in its Order dated 10 December 2003
5. to order defendants Daniel Wistehuff III and Daniel Wistehuff, Sr. to pay, jointly and ruled that indirect contempt must be initiated by a verified petition with supporting particulars and
severally, attorneys fees of P100,000.00 and litigation expenses of P10,000.00. certified true copies of documents or papers involved in accordance with the provisions of Sec. 4, Rule
71 of the 1997 Rules, hence, the instant petition;
SO ORDERED.[8]
7. Pursuant to the above-cited Sec. 4 of Rule 71, it is within the discretion of the Honorable
Petitioner moved for the execution of the decision pending appeal. On August 14, 2003, the RTC issued Presiding Judge of Branch 23 to order the consolidation of the present petition which is a
an Omnibus Order,[9] partially granting the motion. The dispositive portion of the Order reads: Special Civil Action and Civil Case No. CEB-26274-SRC which is the principal action pending
before Branch 23 for joint hearing and resolution/decision.
WHEREFORE, in view of [the] foregoing premises, the Court hereby does the following:
8. The 2002 Financial Statement is incorrect and fraudulent based on the judgment of this
(a) Orders the issuance of a writ of execution to enforce the portion of the judgment Honorable Court in Civil Case No. CEB-26274-SRC which found that:
rendered in this case on March 27, 2003 ordering the defendants to make a true and correct
accounting of the earnings of Inmark Marketing Philippines, Inc. which will be the basis of 1) P28,000,000.00 was paid for the residential lot and building occupied by
declaration of dividends; defendant Daniel Wistehuff, Sr. located at Northtown Homes (Decision, p. 6);

(b) Denies the plaintiffs motion for immediate execution of the portions of the judgment 2) P14,000,000.00 was paid for the residential lot and building occupied by
relating to awards for damages, attorneys fees, and expenses of litigation; and defendant Daniel Wistehuff III located at Ma. Luisa Subdivision (Ibid);

(c) Orders the release to Judge Jose P. Burgos of the receivers cash bond in the sum 9. Other hidden or misappropriated earnings of defendant corporation were:
of P25,000.00.
1) Dollar deposits of Inmarks fund deposited with UCPB, Makati Branch, under
SO ORDERED.[10] Dollar Account No. 01-317-300307-0 from which are sourced funds transferred to
317-000429-1 UCPB, Banilad Branch, which is an Inmark account, per CPA Celso
Consequently, a Writ of Execution[11] was issued by the court on September 11, 2003, a copy of which Inocentes report dated July 5, 2002 (Annex E, etc. Urgent Omnibus Motion) who
was served on the defendants on the same day. On September 15, 2003, the IMPI, through Atty. at one time was engaged as a member of the staff of the former Receiver;
Francis M. Zosa of the law firm of Zosa and Quijano, submitted the following documents to the sheriff
in compliance with the writ issued by the court: (a) Report of Sta. Ana Rivera & Co.; (b) Balance Sheet; 2) $75,000.00 deposited by defendant Daniel Wistehuff III with a bank
(3) Statements of Operation; (4) Statements of Changes in Equity; (5) Statements of Cash Flows; and designated by the Philippine Retirement Authority in support of his application for
(6) Notes to Financial Statements pertaining to the corporation.[12] retirees visa;

Believing that the defendants-stockholders and their counsel acted in conspiracy with each other and 3) The amounts used for the purchases of several cars/motor vehicles of the
willfully and deliberately refused to comply with the writ of execution issued by the court, petitioner individual defendants with the collective value conservatively estimated
filed against them a petition for indirect contempt under Rule 39, Section 11, in relation to Rule 71, at P3,000,000.00;
Section 3(d) of the Rules of Court, in the RTC of Cebu City. Petitioner alleged therein that:

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

4) Funds utilized for the purchase of furnitures and fixtures of the residences On April 15, 2004, the RTC issued an Order[16] dismissing the petition for indirect contempt proceedings
located at Northtown Homes and at the Ma. Luisa Subdivision; based on the Answer of the respondents. The court ruled that the petition for indirect contempt was
criminal in nature; hence, Ceniza, as petitioner, had to prove the guilt of the respondents beyond
5) And other hidden earnings/funds which are yet to be discovered. reasonable doubt. It declared that petitioner had not overcome the presumption of innocence in favor
of respondents, who had sufficiently complied with the writ of execution by submitting the 2002
10. The present contempt charges arose out of or are related to Civil Case No. CEB-26274- Financial Statement containing all the data required of an accounting.[17]
SRC before Branch 23 of this Honorable Court which rendered the judgment which[,] being
in a nature of special judgment[,] may be enforced by contempt proceedings if the same On May 3, 2004, petitioner filed a Motion for Reconsideration of the RTC Order on the ground that his
should be disobeyed pursuant to Sec. 11, Rule 39 of the 1997 Rules.[13] petition for indirect contempt was civil in nature; he adduced the requisite quantum of evidence to
prove respondents guilt for indirect contempt; and that they failed to present the auditor who prepared
Petitioner prayed that judgment be rendered against respondents, as follows: the 1992 Financial Statement of IMPI. He also alleged that he was denied his right to due process when
the court dismissed his petition without conducting any hearing. He pointed out that the auditor who
1. To require the respondents to comment on the petition within asuch period as may be prepared the 2002 Financial Statement of IMPI was not presented and consequently could not be cross-
fixed by the Court (Sec. 3, Rule 71) and thereafter to set the date for hearing on the contempt examined by him. He cited the ruling of this Court in Slade Perkins v. Director of Prisons,[18] as
charge requiring all respondents to appear in person at such hearing. (But nothing in this precedent, and prayed:
section shall be so construed as to prevent the court from issuing process to bring the
respondent into court, or from holding him in custody pending such proceedings.) [Sec. 3]; WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court
(preferably through another Presiding Judge in view of the requested voluntary inhibition of
2. If the hearing is not ordered to be had forthwith, to allow the release of the respondents Hon. Agapito L. Hontanosas, Jr.), to RECONSIDER and SET ASIDE the order of this Honorable
from custody upon filing bonds in amounts fixed by the Court for their appearance at the Court thru Judge Hontanosas dated 15 April 2004 and for this Honorable Court (preferably
next hearing of the charge (Sec. 6); through another Presiding Judge) to ACT on petitioners OMNIBUS MOTION (dated 15
January 2004):
3. When respondents, released on bail, fail to appear on the date set under item 2 of the
reliefs herein prayed, for this Honorable Court to issue another order of arrest as well as to 1) TO SET CONTEMPT CHARGE FOR HEARING AND TO REQUIRE RESPONDENTS TO APPEAR
declare the bonds of respondents to be forfeited and confiscated, or both, such bonds being IN PERSON;
understood to answer for the measure of damages to the extent of the loss or injury
sustained by petitioner by reason of misconduct for which the contempt charge was 2) FOR THE ISSUANCE OF A HOLD DEPARTURE ORDER;
prosecuted, with costs of the proceedings and that such recovery shall be ordered by the
Court for the benefit of the petitioner (Sec. 9); 3) TO EXPUNGE COUNTERCLAIM.[19]

4. After hearing, to SENTENCE to the maximum, in view of aggravating circumstances On May 19, 2004, petitioner also filed a Motion for the appointment of a commissioner.
attendant to the commission of the offenses, the respondents guilty of indirect contempt
according to the penalties prescribed in Sec. 7, Rule 71 which consists of a fine not On July 7, 2004, the RTC issued an Order[20] denying his Motion for Reconsideration of the Order of
exceeding P30,000.00 or imprisonment not exceeding 6 months or both, without prejudice the Court on the ground that respondents acquittal is not appealable, or cannot be the subject of a
to the provisions of Sec. 8 which calls for an indefinite imprisonment should respondents motion for reconsideration as such a motion amounted to an appeal. The court ruled that, as in criminal
refuse or omit to do an act which are yet in their power to perform. proceedings, an appeal would not lie from the order of dismissal of, or exoneration from, a charge of
contempt of court.[21] The registry return receipt showed that petitioner received a copy of the Order
Petitioner prays for such other reliefs and remedies just and equitable in the premises.[14] on July 13, 2004.

The case was docketed as CEB-29783 and raffled to Branch 23 of the RTC of Cebu. However, the case On July 15, 2004, the court issued an Order[22] in Civil Case No. CEB-26274-SRC granting petitioners
was re-raffled to Branch 16 of said court. Motion for the Appointment of Atty. Bayani Atup as Commissioner to receive and report evidence to
the court on the following issue of fact the true and correct accounting of the earnings of IMPI since
In their answer to the petition, respondents averred that only the dispositive portion of the decision the start of its operations in 1996 up to the present. The Commissioner was ordered to file a report
on the subject execution may be enforced by the sheriff, and that they complied with the writ issued within ten (10) days after completion of proceedings, and to attach all exhibits, affidavits, depositions,
by the court and submitted a true and correct accounting of the earnings of the IMPI which will be the papers and transcripts of the testimonial evidence presented before him.
basis of the computation of dividends.[15]
Petitioner filed a Notice of Appeal with Alternative Motion to Squarely Rule[23] on July 19, 2004. In his
alternative motion, he prayed that the court resolve the issues raised in his motion for reconsideration

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

premised on the following grounds: (1) this being a case for civil indirect contempt, an appeal lies from applicable to criminal cases, this is not so in civil contempt proceedings. Accordingly, an appeal from
the order finding respondents guilty or absolving them of the charge; and (2) even in criminal the decision dismissing the same is not barred by double jeopardy.[30]
proceedings, an appeal lies in instances where there has been lack of due process or lack of jurisdiction.
Petitioner further posits that respondents should be found guilty of indirect contempt for willfully and
During the hearing of the motion, the petitioner offered in evidence Exhibits A to F and their sub- deliberately refusing to submit a full and correct accounting of the earnings of the corporation. He
markings in support of his motion.[24] posits that the 2001 Financial Statements submitted by the corporation do not constitute compliance
with the Order to render a true and correct accounting as they do not merit faith and credence but
On September 30, 2004, the RTC issued an Order[25] denying the Alternative Motion of petitioner and show documented fraud, wrongdoing and deception.[31] Petitioner prays that:
declining to give due course to his Notice of Appeal. It ruled that, as gleaned from the relief prayed for
in the Petition for Indirect Contempt, petitioners purpose was primarily punishment and, only 1. The challenged order of the Court a quo dated 15 April 2004 issued by ex-judge Agapito
incidentally, compensatory or remedial. The acquittal of the respondents was not subject to a motion Hontanosas, Jr. (formerly of Branch 16 of the Regional Trial Court of Cebu) dismissing on
for reconsideration or appeal. the merits the petition for contempt in Civil Case No. CEB-29783 and the other challenged
order of the Court a quo issued by Judge Simeon P. Dumdum, Jr. of Branch 7 of the same
Petitioner received a copy of the September 30, 2004 Order on October 5, 2004. On November 10, Regional Trial Court of Cebu, denying petitioners Motion for Reconsideration on grounds of
2004, he filed with this Court a Motion for Extension of time to file a petition for review under Rule 45 double jeopardy, be REVERSED and SET ASIDE;
of the Rules of Court. On December 1, 2004, the Court issued a Resolution[26] granting the motion and
gave him an extension of 30 days counted from the expiration of the reglementary period and 2. Pending final outcome of this petition, and in view of the continued, deliberate, willful and
conditioned upon the timeliness of the motion. intransigent refusal of respondents to render a true and correct, full and complete accounting
of the earnings of the corporation for over 1 year and 6 months now since the judgment
The IMPI filed a petition for certiorari, prohibition and mandamus with the Court of Appeals for the dated 27 March 2003 in Civil Case No. CEB-26274-SRC, to HOLD respondents in the
nullification of the July 14, 2004 Order of the trial court in Civil Case No. CEB-26274-SRC (which granted CUSTODY of the Court (Sec. 6, Rule 71) to be released only upon their filing the
petitioners Motion for the Appointment of a Commissioner to receive evidence of the parties, and report commensurate bonds the amounts of which shall be fixed corresponding to the measure of
on the true and correct accounting of the earnings of IMPI from 1996 up to the present). The case was damages which shall be to the extent of the loss or injury sustained, and [continues] to be
docketed in the appellate court as CA-G.R. SP No. 85301. On August 4, 2004, the CA issued a sustained, by petitioner Ramon B. Ceniza (Sec. 9);
Resolution[27] granting the motion of IMPI for a temporary restraining order, and thereafter, a
Resolution[28] dated October 14, 2004 granting the plea of IMPI for a writ of preliminary prohibitory 3. To render a judgment FINDING respondents Daniel Wistehuff, Sr., Daniel Wistehuff, Jr.,
injunction. Bryan K. Wistehuff, Atty. Francis M. Zosa and Gemalyn Peteros (except respondent Marites
Gonzales-Wistehuff) guilty of civil contempt in said case and SENTENCING them accordingly
Petitioner then filed a petition for review on certiorari with this Court, seeking to nullify the April 15, by ordering the continued detention of respondents (Sec. 8, Rule 71) until they shall have
2004 and September 30, 2004 Orders of the RTC in Case No. CEB-29783, as well as the August 4, fully complied with the true and correct, full and complete accounting of the earnings of
2004 and October 14, 2004 Resolutions of the appellate court in CA-G.R. SP No. 85301. He alleged the Inmark Marketing Phils., Inc. which shall be the basis of the declaration of dividends as
following therein: decreed by the Court a quo in its judgment dated 27 March 2003 in Civil Case No. CEB-
26274-SRC;
I. The Court a quo seriously erred in not holding that Civil Case No. CEB-29783 for Indirect
Contempt being civil in nature, a Motion for Reconsideration and an appeal from a judgment 4. In the interest of justice and equity, and on account of extreme urgency, pending final
exonerating the respondents is not barred by double jeopardy. outcome of this petition, that the Special 18th Division of the Court of Appeals in CA-G.R. [SP]
No. 85301, be TEMPORARILY RESTRAINED, and later PERMANENTLY RESTRAINED, from
II. The Court a quo seriously erred in not finding respondents-appellees guilty as a matter enforcing its October 14, 2004 Resolution and the writ of preliminary injunction issued
of law of Indirect Civil Contempt and sentencing them accordingly.[29] pursuant thereto stopping the implementation of the July 15, 2004 Order of Judge Simeon
P. Dumdum, Jr. in Civil Case No. CEB-26274-SRC appointing a commissioner tasked to
Petitioner avers that contempt proceedings may actually be either civil or criminal: it is criminal when conduct an accounting of the true and correct earnings of Inmark Marketing Phils., Inc. which
the purpose is to vindicate the authority of the court and protect its outraged dignity; it is civil when shall be the basis for the declaration of dividends;
there is failure to do something ordered by a court to be done for the benefit of a party. He asserts
that his petition for indirect contempt below is civil in nature for the reason that the accounting ordered 5. Pending final action on this Petition, to further ISSUE a Hold-[D]eparture Order to the
by the trial court was for the benefit of one party and the purpose of the contempt proceeding below Commissioner of Immigration to prevent the respondents from avoiding the jurisdiction of
was not to vindicate the authority of the court and to protect its outraged dignity. He maintains that this Honorable Court and thereby preserve its authority and dignity which should be
while criminal contempt proceedings should be conducted according to the principles and rules respected even by foreigners, especially in the light of the fact that respondent Daniel
Wistehuff, Sr. has already fled from the jurisdiction of Philippine Courts; and

40
PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

6. In regard to respondent Atty. Francis M. Zosa, to require him to EXPLAIN why he should (c) Any abuse of or any unlawful interference with the processes or proceedings of a court
not be disbarred. not constituting direct contempt under Section 1 of this Rule;

Petitioner prays for such other reliefs and remedies just and equitable in the premises.[32] (d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice;
For their part, respondents aver that the proper remedy of petitioner to question an order denying due
course to a notice of appeal is a petition for certiorari under Rule 65 of the Rules of Court and not a (e) Assuming to be an attorney or an officer of a court, and acting as such without authority;
petition for review under Rule 45. They assert that the RTC correctly denied the Notice of Appeal of
petitioner since the Petition for Indirect Contempt filed by him below was criminal in nature; hence, (f) Failure to obey a subpoena duly served;
the decision of the trial court dismissing the charge was not appealable. Moreover, the RTC correctly
dismissed petitioners contempt charge because they submitted the report of the independent auditor (g) The rescue, or attempted rescue, of a person or property in the custody of an officer by
together with the other documents, which, according to them, serve as a true and correct accounting virtue of an order or process of a court held by him.
of the earnings of the corporation.[33]
But nothing in this section shall be so construed as to prevent the court from issuing process
The issues for resolution are: (1) whether the petition states a cause of action for the nullification of to bring the respondent into court, or from holding him in custody pending such proceedings.
the assailed Resolutions in CA-G.R. SP No. 85301; (b) whether the petition for indirect contempt filed
by the petitioner below is criminal in nature; (c) whether the assailed Orders of the RTC in Civil Case Section 7 of the same Rule provides for the punishment of indirect contempt, thus:
No. CEB-29783 are appealable; and (d) whether a petition for certiorari under Rule 65 of the Rules of
Court is the proper remedy in seeking to nullify the assailed Orders of the RTC. SEC. 7. Punishment for indirect contempt. If the respondent is adjudged guilty of indirect
contempt committed against a Regional Trial Court or a court of equivalent or higher rank,
On the first issue, we find that the petition fails to state a cause of action for petition for review he may be punished by a fine not exceeding thirty thousand (P30,000) pesos or
on certiorari. The assailed Resolutions of the imprisonment not exceeding six (6) months, or both. If he is adjudged guilty of contempt
CA are interlocutory in nature and not appealable; to nullify the same, the proper remedy of the committed against a lower court, he may be punished by a fine not exceeding five thousand
petitioner was to file a petition for certiorari under Rule 65, on the allegation that the CA acted with (P5,000) pesos or imprisonment not exceeding one (1) month, or both. If the contempt
grave abuse of its discretion amounting to excess or lack of jurisdiction. Consequently, the petition for consists in the violation of a writ of injunction, temporary restraining order or status
review on certiorari of the petitioner for the nullification of the assailed resolutions of the appellate quo order, he may also be ordered to make complete restitution to the party injured by such
court should be as it is hereby denied. It must be stressed that a petition for review on certiorari under violation of the property involved or such amount as may be alleged and proved.
Rule 45 of the Rules of Court is a mode of appealing a judgment or final order of the CA.
The writ of execution as in ordinary civil action shall issue for the enforcement of a judgment
Considering that the rest of the issues are interrelated, the Court shall delve into and resolve them imposing a fine, unless the court otherwise provides.
simultaneously.
Section 8 of the same Rule further states:
The pertinent provision of the Rules of Court is Section 3, Rule 71, which provides:
SEC. 8 Imprisonment until order obeyed.When the contempt consists in the refusal or
SEC. 3. Indirect contempt to be punished after charge and hearing. After a charge in writing omission to do an act which is yet in the power of the respondent to perform, he may be
has been filed, and an opportunity given to the respondent to comment thereon within such imprisoned by order of the court concerned until he performs it.
period as may be fixed by the court and to be heard by himself or counsel, a person guilty
of any of the following acts may be punished for indirect contempt: In the recent case of Montenegro v. Montenegro,[34] the Court distinguished criminal contempt from
civil contempt, as follows:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his
official transactions; Contempt, whether direct or indirect, may be civil or criminal depending on the nature and
effect of the contemptuous act. Criminal contempt is conduct directed against the authority
(b) Disobedience of, or resistance to, a lawful writ, process, order, or judgment of a court, and dignity of the court or a judge acting judicially; it is an act obstructing the administration
including the act of a person who, after being dispossessed or ejected from any real property of justice which tends to bring the court to disrepute or disrespect. On the other hand, civil
by the judgment or process of any court of competent jurisdiction, enters or attempts or contempt is the failure to do something ordered to be done by a court or a judge for the
induces another to enter into or upon such real property, for the purpose of executing acts benefit of the opposing party therein and is therefore, an offense against the party in whose
of ownership or possession, or in any manner disturbs the possession given to the person behalf the violated order was made. If the purpose is to punish, then it is criminal in nature;
adjudged to be entitled thereto; but if to compensate, then it is civil.[35]

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

Thus, contempt proceedings has a dual function: (1) vindication of public interest by punishment of respondents willfully and deliberately refused to comply with the decision of the court requiring them
contemptuous conduct; (2) coercion to compel the contemnor to do what the law requires him to to submit a true and correct accounting of the earnings of IMPI which could be the basis of the
uphold the power of the Court, and also to secure the rights of the parties to a suit awarded by the declaration of dividends and that the 2002 Financial Statement submitted by them did not comply with
Court.[36] such decision. Petitioner maintains that said financial statement is fraudulent, and the purpose of the
petition was to have the respondents punished for their alleged recalcitrance and to compel them to
Contempt proceedings are neither wholly civil nor altogether criminal. It may not always be easy to comply with the courts decision. Indeed, the petitioners prayer, that respondents be incarcerated and
classify a particular act as belonging to one of those two classes. It may partake of the characteristics remain in detention until they comply with the decision of the court conformably with Rule 71, Section
of both.[37] If it is remedial and coercive in nature, it is civil; the parties are the individuals whose private 8 of the Rules of Court, is in the nature of an execution to enforce the judgment. Thus, the punishment
rights and remedies they were instituted to protect or enforce. The absence of willfulness does not sought by petitioner for the respondents is not punitive in nature, but designed for his own benefit and
release one from civil contempt.[38] It is civil if it is instituted to preserve and enforce the rights and advantage, and not for the purpose of vindicating the dignity of the court and preserving its power.
administer the remedies of the parties to which the court has to force them to obey.
Since the proceedings below is civil in nature, petitioner had the right to file a motion for reconsideration
Proceedings for contempt are criminal in nature if presented to preserve the power of the courts and of the RTCs April 15, 2004 Order and to appeal therefrom within the period therefor after its
to punish for disobedience to their orders. Criminal contempt involves no element of personal injury; it denial.[44] However, the RTC disallowed the appeal on its perception that the petition for indirect
is directed against the power and dignity of the court and the private parties have little, if any interest contempt was criminal in nature and that, therefore, no motion for reconsideration or appeal could be
in the proceedings for its punishment. filed, since respondents would thereby be placed in double jeopardy. Such disallowance by the trial
court of petitioners appeal cannot be the subject of an appeal as provided for in Section 1(d) of Rule
The Rules of Court provides for the following punishment for the contemnor: fine or imprisonment, or 41 of the Rules of Court. Under Section 3, Rule 65, the remedy from an Order disallowing an appeal is
both to file a petition for mandamus with the CA.[45] However, petitioner filed with this Court a
petition for review on certiorari under Rule 45; patently then, the remedy resorted to by petitioner is
It is not the fact of punishment, but rather its character and purpose, that often serve to distinguish inappropriate.
between the two classes of contempt. If it is for civil contempt the punishment is remedial, and for the
benefit of the complainant. But if it is for criminal contempt the sentence is punitive, to vindicate the Anent the issue of whether or not respondents are liable for indirect contempt, we need not resolve
authority of the court. But if the contempt consists in the refusal of a party or a person to do an act the same in this case for the reason that the trial court had already granted petitioners plea for the
which the court has ordered him to do for the benefit or the advantage of a party to a suit or action appointment of a commissioner to receive the evidence of the parties. The Order of the trial court
pending before it, and he is committed until he complies with the order, the commitment is in the appointing a commissioner is now the subject of the petition filed by respondents in CA-G.R. SP No.
nature of an execution to enforce the judgment of the court, and the party in whose favor that 85301.
judgment was rendered is the real party-in-interest in the proceedings.
IN LIGHT OF THE FOREGOING, the petition is DENIED. No pronouncement as to costs. SO
It is true that punishment by imprisonment may be remedial as well as punitive, and many civil ORDERED.
contempt proceedings have resulted not only in the imposition of a fine, payable to the complainant,
but also in committing the defendant to prison. But imprisonment for civil contempt is ordered where DIGEST
the defendant has refused to do an affirmative act required by the provisions of an order which, either
in form or substance, is mandatory in its character. Imprisonment in such cases is not inflicted as a FACTS:
punishment, but is intended to be remedial by coercing the defendant to do what he had refused to
do. The order in such cases is that the defendant stand committed unless and until he performs the Atty. Ceniza and his client Daniel Wistehuff, Sr. organized and established Inmark Marketing Philippines,
affirmative act required by the courts order.[41] The defendant can end his imprisonment and discharge Inc. (IMPI). Petitioner owns 5% of the shares of stocks of the IMPI, and the other stockholders are
himself at any moment by doing what he had previously refused to do. In fine, the defendant carries respondents Daniel Wistehuff III, Marites Gonzales-Wistehuff, and Bryan K. Wistehuff.
the keys of his prison in his own pocket.
Atty. Ceniza filed a Complaint for an accounting of income and expenses of the IMPI, declaration of
It may happen that, in proceedings for criminal contempt, where the imprisonment is solely punitive dividends, enforcement of his right to financial statements, attorneys fees, and damages. The RTC
to vindicate the authority of the courts, the complainant may also derive some incidental benefits from denied his plea for the appointment of a receiver or management committee pendente lite.
the fact that such punishment tends to prevent a repetition of the disobedience. However, such indirect Nevertheless, the RTC ruled in favor of Atty. Ceniza and thus order the respondents to make a true
consequences will not change imprisonment which is merely coercive and remedial into that which is and correct accounting of the earnings of IMPI, which will be the basis of the declaration of dividents.
solely punitive in character or vice- versa.
When petitioner moved for the execution, the RTC issued an Omnibus Order. Consequently, a Writ of
We agree with the contention of petitioner that, as gleaned from the averments of his petition and the Execution was issued. Then, the IMPI submitted the following documents to the sheriff in compliance
relief prayed for, the indirect contempt charge filed by him below was civil in nature. He submits that with the writ issued by the court: (a) Report of Sta. Ana Rivera & Co.; (b) Balance Sheet; (3) Statements

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

of Operation; (4) Statements of Changes in Equity; (5) Statements of Cash Flows; and (6) Notes to of the contempt proceeding below was not to vindicate the authority of the court and to
Financial Statements pertaining to the corporation. protect its outraged dignity.
An appeal from the decision dismissing the same is not barred by double jeopardy.
However, Atty. Ceniza filed for indirect contempt on the belief that defendants-stockholders and their Respondents should be found guilty of indirect contempt for willfully and deliberately refusing
counsel acted in conspiracy with each other and willfully and deliberately refused to comply with the to submit a full and correct accounting of the earnings of the corporation. He posits that the
writ of execution issued by the court to render a true and correct accounting of the earning of IMPI. 2001 Financial Statements submitted by the corporation do not constitute compliance with
Petitioner prayed that judgment be rendered against respondents. the Order to render a true and correct accounting as they do not merit faith and credence
but show documented fraud, wrongdoing and deception.
In their answer to the petition, respondents averred they complied with the writ issued by the court
and submitted a true and correct accounting of the earnings of the IMPI which will be the basis of the Defense of Respondents:
computation of dividends.
The RTC correctly denied the Notice of Appeal of petitioner since the Petition for Indirect
The RTC dismissed the petition for indirect contempt. The court ruled that the petition for Contempt filed by him below was criminal in nature; hence, the decision of the trial court
indirect contempt was criminal in nature; hence, Ceniza, as petitioner, had to prove the guilt of the dismissing the charge was not appealable.
respondents beyond reasonable doubt. The RTC correctly dismissed Atty. Cenizas contempt charge because they submitted the
report of the independent auditor together with the other documents, which, according to
Atty. Ceniza filed a Motion for Reconsideration on the ground that his petition for indirect contempt them, serve as a true and correct accounting of the earnings of the corporation.
was civil in nature; he adduced the requisite quantum of evidence to prove respondents guilt for indirect
contempt; and that they failed to present the auditor who prepared the 1992 Financial Statement of ISSUE:
IMPI. Then, Atty. Ceniza also filed a Motion for the appointment of a commissioner.
Whether the petition for indirect contempt filed by the Atty. Ceniza is criminal in nature
However, the RTC denied his motion for reconsideration on the ground that respondents
acquittal is not appealable, or cannot be the subject of a motion for reconsideration as such a motion HELD:
amounted to an appeal. The court ruled that, as in criminal proceedings, an appeal would not lie from
the order of dismissal of, or exoneration from, a charge of contempt of court. NO. The petition for indirect contempt filed by Atty. Ceniza is actually civil in nature, not criminal.

However, the RTC granted Motion for the Appointment of Atty. Bayani Atup as Commissioner to receive The SC agree with the contention of petitioner that, as gleaned from the averments of his petition and
and report evidence to the court on the following issue of fact the true and correct accounting of the the relief prayed for, the indirect contempt charge filed by him below was civil in nature. He submits
earnings of IMPI since the start of its operations in 1996 up to the present. that respondents willfully and deliberately refused to comply with the decision of the court
requiring them to submit a true and correct accounting of the earnings of IMPI which could
Atty. Ceniza filed a Notice of Appeal with Alternative Motion. But the RTC denied the Alternative Motion be the basis of the declaration of dividends and that the 2002 Financial Statement submitted by them
and declined to give due course to his Notice of Appeal. It ruled that, as gleaned from the relief prayed did not comply with such decision. Petitioner maintains that said financial statement is fraudulent, and
for in the Petition for Indirect Contempt, petitioners purpose was primarily punishment and, only the purpose of the petition was to have the respondents punished for their alleged recalcitrance and
incidentally, compensatory or remedial. The acquittal of the respondents was not subject to a motion to compel them to comply with the courts decision. Indeed, the petitioners prayer, that respondents
for reconsideration or appeal. be incarcerated and remain in detention until they comply with the decision of the court conformably
with Rule 71, Section 8 of the Rules of Court, is in the nature of an execution to enforce the judgment.
The IMPI on the other hand, filed a petition for certiorari, prohibition and mandamus with the Court of Thus, the punishment sought by petitioner for the respondents is not punitive in nature,
Appeals for the nullification of the Appointment of a Commissioner to receive evidence of the parties, but designed for his own benefit and advantage, and not for the purpose of vindicating the
and report on the true and correct accounting of the earnings of IMPI from 1996 up to the present. dignity of the court and preserving its power.

Now Atty. Ceniza eventually filed a petition for review on certiorari under Rule 45 of the Rules of Court Since the proceedings below is civil in nature, petitioner had the right to file a motion for reconsideration
with the SC. of the RTCs April 15, 2004 Order and to appeal therefrom within the period therefor after its
denial. However, the RTC disallowed the appeal on its perception that the petition for indirect contempt
Allegations of Atty. Ceniza: was criminal in nature and that, therefore, no motion for reconsideration or appeal could be filed, since
respondents would thereby be placed in double jeopardy. Such disallowance by the trial court of
Contempt proceedings may actually be either civil or criminal. petitioners appeal cannot be the subject of an appeal as provided for in Section 1(d) of Rule 41 of the
He asserts that his petition for indirect contempt below is civil in nature for the reason that Rules of Court. Under Section 3, Rule 65, the remedy from an Order disallowing an appeal is to file a
the accounting ordered by the trial court was for the benefit of one party and the purpose petition for mandamus with the CA. However, petitioner filed with this Court a

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PROVISIONAL REMEDIES | Justice Yap | (1st Sem, SY 2017-2018) - FINALS

petition for review on certiorari under Rule 45; patently then, the remedy resorted to by petitioner is
inappropriate.

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