PEOPLE’S HOMESITE AND HOUSING CORP v.
JEREMIAS ISSUE: WON CAPITAL (surety) has standing to appeal the order
Muñoz-Palma, J. (1976)
 Sps. Corazon and Geronimo JEREMIAS were the occupants of
a lot located at East Ave, QC owned by People’s Homesite and
Housing Corp (PHHC)
 JEREMIAS had previously offered to buy said lot from PHHC
but the final award was given to Sps. Tiongco instead.
Claiming to have preferential right over the lot, JEREMIAS
protested PHHC’s award of the lot to the Tiongcos and
continued occupying said lot
 Their protest notwithstanding, an action for forcible entry
and illegal detainer was instituted by PHHC against JEREMIAS
before the Municipal Court (later City Court) of QC sometime
in 1960
 Oct 1961, judgment was rendered in favor of PHHC and the
lower court ordered JEREMIAS to vacate the premises and
pay PHHC rentals in the amount of P36 per month with 6%
interest thereon from Feb 1960 until they vacated the
premises and restored possession of the same to PHHC
 JEREMIAS did not appeal said judgment/order “on the
ejectment case,” hence, on June 1962, a writ of execution
was issued. However, the same was not implemented
prompting the court to require JEREMIAS to file a
performance bond in the amount of P1,100 to secure the
performance of their obligation to PHHC in accordance with
the above orders/judgment
 JEREMIAS complied and filed a surety bond issued by the
Capital Insurance and Surety Co., Inc. (CAPITAL) in the
amount of P1,100
 Oct 1963, the PHHC finally resolved JEREMIAS’s protest and
sustained the award of the lot to the Tiongcos. This caused
the lower court to issue an alias writ of execution of its Oct
1961 judgment; however, JEREMIAS refused to comply. Upon
motion and after due hearing, thus, the lower court issued a
special order of demolition against JEREMIAS’s property in
the lot in question
 To forestall the demolition, JEREMIAS appealed the lower
court’s demolition order to the CFI, which was dismissed.
They went up to the CA but there they failed, too. Then, to
the SC, and guess what, they failed there again
 Final entry of judgment “on the demolition order” was made
after the SC issued said dismissal of JEREMIAS’s appeal via
Minute Resolution on Sept 1965
 On the basis of the SC’s decision above, on Feb 1968, PHHC
sought from the now City Court of QC a writ of execution on
the performance bond filed by JEREMIAS and issued by the
surety CAPITAL. Notice of PHHC’s motion was duly sent to
CAPITAL
 CAPITAL opposed said prayer for a writ of execution against
the performance bond and disclaimed liability thereon on the
ground that its performance bond had already expired
 City Court granted PHHC’s prayer and issued writ of execution
on CAPITAL’s performance bond. CAPITAL appealed lower
court’s decision to the CFI but the same was dismissed.
Hence, CAPITAL brought this instant action
for a writ of execution on the performance bond even when it
was not initially a party in the ejectment case 1
HELD: YES, they have standing to appeal. However, on the
merits, the performance bond is not exempt for execution on
the ground of expiration
RATIO:
 A party is one who is to be benefited or injured by a
judgment or order of a court, and includes any person who
is a "party to the record."
 While it is a fact that the initial parties in the complaint for
forcible entry and detainer were PHHC and the spouses
JEREMIAS, however, when the latter filed a performance
bond to insure the execution of the judgment in said case and
PHHC moved to execute that bond, the surety company
CAPITAL became necessarily a party in the case when notice
was served on it of the motion, and the inferior court granted
a writ of execution against its performance bond. The order
of execution was a final order insofar as the surety-appellant
was concerned, hence, appealable
 In spite of CAPITAL’s standing to appeal the writ of execution
against its performance bond, the same must however be
dismissed on the ground that CAPITAL’s contention that the
performance bond has already expired is devoid of merit
 The pertinent provision of the performance bond duly filed in
the ejectment case states: “Liability of surety on this bond will
expire upon final termination of the ejectment case and said
bond will be cancelled 15 days after its expiration, unless
renewed.”
 CAPITAL argues that the final termination of the ejectment
case (subject of its suretyship) came on Sept 1965, the date
of SC Minute Resolution. And there having been no demand
within 15 days after that date, the bond had effectively
expired  this contention is UNTENABLE!
 Firstly, it is erroneous for CAPITAL to claim that the decision
“on the ejectment case” became final on Sept 1965. What
obtained finality on that date of final entry of judgment was
the order of dismissal by the CFI of JEREMIAS’s appeal “on the
demotion order”
 Recall that when CAPITAL's surety bond was filed, the lower
court’s decision “on the ejectment case” had already become
final since JEREMIAS did not appeal the same. Hence, the
phrase "upon final termination of ejectment case” appearing
in the bond could not have referred to the date of finality of
the decision “on the demotion order”
 IN ANY CASE, a civil case is deemed terminated not upon the
rendition of the final judgment but UPON EXECUTION and
satisfaction of said final judgment
 An execution is the fruit and end of the suit, and is very aptly
called the life of the law. The suit does not terminate with the
judgment and all proceedings on the execution, are
proceedings in the suit
1It seems that only this procedural issue was elevated to the SC for decision.
The case did not mention whether the issue on the merits of CAPITAL’s
appeal was indeed alleged. But the SC nevertheless ruled on that part to
prevent further delays in this case.
 Execution is the process of the court for carrying its decree
into effect, and except so far as regulated by statute, is still
within the court's control. The suit is not ended by the
judgment; it is still pending.
 The case of Naric vs. Rivera invoked by CAPITAL is not in point
because in that Naric case, the bond executed by the surety
contained specific date for its expiration . On the other hand,
in the bond filed by CAPITAL, there was no specific date
provided for the bond's expiration
 MR HOLDINGS, LTD v. BAJAR, ET AL.
Sandoval-Gutierrez, J. (2002)
 On Nov 4, 1992, the Asian Development Bank (ADB) extended
to Marcopper Mining Corporation (MARCOPPER) a loan in the
aggregate amount of US$ 40M to finance the latter’s mining
project at Sta. Cruz, Marinduque
 The loan had 2 components: the principal, in the amount of
US$ 15M, sourced from ADB funds; and the complementary,
in the amount of US$ 25M, sourced from the Bank of Nova
Scotia, a participating finance institution to the ADB
 On even date, ADB and Placer Dome, Inc. (PLACER), a foreign
corporation which owns 40% of MARCOPPER, executed a
"Support and Standby Credit Agreement" whereby PLACER
agreed to provide MARCOPPER with cash flow support for the
payment of its obligations to ADB
 To secure the loan, MARCOPPER executed in favor of ADB a
"Deed of Real Estate and Chattel Mortgage" covering
substantially all of MARCOPPER’s properties and assets in
Marinduque.2 It was registered with the Register of Deeds
 When MARCOPPER defaulted, PLACER, in fulfillment of its
undertaking under the "Support and Standby Credit
Agreement," and presumably to preserve its international
credit standing, agreed to have its subsidiary corporation,
petitioner MR HOLDINGS, LTD., assume MARCOPPER’s
obligation to ADB. Simply put, MR HOLDINGS paid
MARCOPPER’s debt to the ADB
 Consequently, an "Assignment Agreement" was executed by
ADB in favor of MR HOLDINGS where ADB assigned to MR
HOLDINGS all its rights, interests and obligations under the
principal and complementary loan agreements, and to the
"Deed of Real Estate and Chattel Mortgage," etc
 MARCOPPER likewise executed a "Deed of Assignment" in
favor of MR HOLDINGS. Under its provisions, MARCOPPER
assigns, transfers, cedes and conveys to MR HOLDINGS all of
its properties, mining equipment and facilities
 Meanwhile, Solidbank Corporation (SOLIDBANK) obtained a
Partial Judgment against MARCOPPER from the RTC Manila
which ordered the latter to pay SOLIDBANK the sum of
P52.9M plus interest and charges until fully paid
 Upon SOLIDBANK’s motion, RTC Manila issued a writ of
execution pending appeal directing Carlos BAJAR, respondent
sheriff, to require MARCOPPER "to pay the sums of money to
satisfy the Partial Judgment." Thereafter, respondent BAJAR
issued two notices of levy on MARCOPPER’s personal and real
properties, and over all its stocks of scrap iron and
unserviceable mining equipment
 Together with sheriff Ferdinand JANDUSAY of the RTC Boac,
Marinduque (also a respondent), BAJAR issued two notices
setting the public auction sale of the levied properties
 Having learned of the scheduled auction sale, petitioner MR
HOLDINGS served an "Affidavit of Third-Party Claim" upon
respondent sheriffs with the RTC Manila, asserting its
ownership over all MARCOPPER’s mining properties,
equipment and facilities by virtue of the "Deeds of
2 MARCOPPER mortgaged its land & mining rights, buildings and other
structures, machinery/equipment, warehouse inventory, and all its
furniture/fixtures – as in lahat!!
Assignment" in its favor. RTC Manila, however, denied MR
HOLDINGS’s "Affidavit of Third–Party Claim"
 This prompted MR HOLDINGS to file with the RTC Boac,
Marinduque a complaint for reivindication of properties with
prayer for preliminary injunction and temporary restraining
order against respondents SOLIDBANK, MARCOPPER, and
sheriffs BAJAR and JANDUSAY
 RTC Boac denied MR HOLDINGS’s application for a writ of
preliminary injunction on the following grounds: a) MR
HOLDINGS has no legal capacity to sue, it being a foreign
corporation doing business in the Philippines without license
contrary to the provisions of the Corporation Code; b) an
injunction will amount "to staying the execution of a final
judgment by a court of co-equal and concurrent jurisdiction;"
and c) the validity of the "Assignment Agreement" and the
"Deed of Assignment" has been "put into serious question by
the timing of their execution and registration"
 MR HOLDINGS then elevated the matter to the CA via
Petition for Certiorari, Prohibition and Mandamus. The CA
affirmed the RTC decision and agreed with the RTC’s ratio on
all points
 As an addition, the CA held that the MR HOLDINGS’s claim of
ownership over the subject properties is dubious as it relies
heavily on the deeds of assignment in its favor which cannot
be binding on the judgment creditor, private respondent
SOLIDBANK, under the general legal principle that contracts
can only bind the parties who had entered into it, and it
cannot favor or prejudice a third person
 The CA further held that the Deed of Assignment executed by
MARCOPPER in favor of MR HOLDINGS was clearly made in
bad faith and in fraud of creditors as this assignment contract
was executed during the pendency of the collection case filed
by its creditor SOLIDBANK in violation of Article 1387, CC –
hence, the present petition for Review on Certiorari by MR
HOLDINGS
ISSUES:
1) Does MR HOLDINGS have the legal capacity to sue?3
2) Was the Deed of Assignment between MARCOPPER and MR
HOLDINGS executed in fraud of creditors?
3) Are MR HOLDINGS, PLACER, and MARCOPPER one and the
same entity?
4) Is MR HOLDINGS guilty of forum shopping?
HELD: The petition is impressed with merit. MR HOLDINGS
wins! CA decision is REVERSED and SET ASIDE.
RATIO:
1) MR HOLDINGS has capacity to sue
 To rule on MR HOLDINGS’s standing to sue, it is important do
determine whether it is “doing business in the Philippines”
pursuant to the long established principles governing a
foreign corporation’s right to sue in local courts settled in the
Corporation Code of our jurisdiction
 These principles are: 1) if a foreign corporation does
business in the Philippines without a license, it cannot
3 This is the only relevant issue for our purposes
 sue before the Philippine courts; 2) if a foreign corporation
is not doing business in the Philippines, it needs no license to
sue before Philippine courts on an isolated transaction or on
a cause of action entirely independent of any business
transaction; and 3) if a foreign corporation does business in
the Philippines with the required license, it can sue before
Philippine courts on any transaction. Apparently, it is not the
absence of the prescribed license but the "doing (of)
business" in the Philippines without such license which bars
the foreign corporation from access to our courts
 BP 68, otherwise known as "The Corporation Code of the
Philippines," is silent as to what constitutes doing" or
"transacting" business in the Philippines. Fortunately,
jurisprudence has supplied the deficiency and has held that
the term "implies a continuity of commercial dealings and
arrangements, and contemplates, to that extent, the
performance of acts or works or the exercise of some of the
functions normally incident to, and in progressive prosecution
of, the purpose and object for which the corporation was
organized."
 Mentholatum Co. Inc., vs. Mangaliman laid down the test to
determine whether a foreign company is "doing business,"
thus: The true test, however, seems to be whether the
foreign corporation is continuing the body or substance of
the business or enterprise for which it was organized or
whether it has substantially retired from it and turned it
over to another
 These definition and test settled in jurisprudence eventually
found statutory legitimation in succeeding pieces of
legislation, e.g. the Foreign Investment Act of 1991 4 and
other laws defining the term “doing business” in the same
tenor, and as may be observed, the common denominator
among them is the concept of “continuity”
 IN THE CASE AT BAR, the CA characterized MR HOLDINGS’s
participation in the assignment contracts as “doing business”
 this in UNTENABLE!
 The expression "doing business" should not be given such a
strict and literal construction as to make it apply to any
corporate dealing whatever. At this early stage and with MR
HOLDINGS’s transactions limited to merely assignment
contracts, it cannot be said that it had performed acts
intended to continue the business for which it was
organized. It may not be amiss to point out that the purpose
or business for which petitioner was organized is not
discernible in the records. No effort was exerted by the CA
to establish the nexus between petitioner’s business and
the acts supposed to constitute "doing business." Thus,
whether the assignment contracts were incidental to
petitioner’s business or were continuation thereof is beyond
determination.
4 The phrase ‘doing business’ shall include soliciting orders, service
contracts, opening offices, whether called ‘liaison’ offices or branches;
appointing representatives or distributors domiciled in the Philippines
xxx and any other act or acts that imply a continuity of commercial
dealings or arrangements, and contemplate to that extent the
performance of acts or works; or the exercise of some of the functions
normally incident to, and in progressive prosecution of, commercial
gain or of the purpose and object of the business organization; xxx
 The cited case of Far East International v. Nankai Kogyo
where it was held that a single act (like participating in an
assignment contract) can still be considered as “doing
business” if it is not merely incidental or casual, but is of such
character as distinctly to indicate a purpose on the part of the
foreign corporation to do other business in the country is
NOT applicable here because in that case, there was an
express admission of desire/intent on the part of the foreign
corporation to continue business in the Philippines while the
same is not obtaining in the case at bar
 Admittedly, the CA is not totally misplaced in theorizing that
ultimately, MR HOLDINGS might decide to
operate/resuscitate MARCOPPER. Unfortunately, at this
stage, that remains to be a mere speculation. It has not been
proven that MR HOLDINGS cannot choose another way to
recover its huge financial investment which it poured to
MARCOPPER aside from simply continuing its business5
 To see through the present facts an intention on the part of
petitioner to start a series of business transaction is to rest
on assumptions or probabilities falling short of actual proof.
Courts should never base its judgments on a state of facts so
inadequately developed that it cannot be determined where
inference ends and conjecture begins. Absent overt acts of
foreign companies from which we may directly infer its
intention to continue business in the Philippines, it cannot be
held to be “doing business” here.
 The CA therefor committed reversible error in ruling that MR
HOLDINGS is “doing business” as it is based on mere
assumptions and speculation.
 Moreover, it is a settled doctrine that the mere ownership by
a foreign corporation of a property in a certain
state, unaccompanied by its active use in furtherance of the
business for which it was formed, is insufficient in itself to
constitute doing business. On the same vein, petitioner, a
foreign corporation, which became the assignee of mining
properties, facilities and equipment cannot be automatically
considered as doing business, nor presumed to have the
intention of engaging in mining business
 Also, the pouring by MR HOLDINGS of huge amounts of
money in favor of MARCOPPER cannot be construed as
“investments” for the simple reason that it shelled out money
on account of an obligation it had pursuant to the “Support
and Standby Credit Agreement” executed between ADB and
PLACER (MR HOLDING’s mother company). MR HOLDINGS
was merely fulfilling its obligation as a guarantor/surety of
sorts. That MR HOLDINGS stepped into the shoes of ADB and
became MARCOPPER’s creditor was a mere legal
consequence of that agreement, further casting doubt as to
whether MR HOLDINGS really intended to continue or take
over MARCOPPER’s business
 More to the point, the “Support and Standby Credit
Agreement” was executed 4 years prior to MARCOPPER’s
insolvency. Hence, theorizing MR HOLDINGS’s supposed
intention to pursue MARCOPPER’s business could not have
5As the J. Sandoval-Gutierrez pointed out, other sound business options like
selling out the assigned properties is always an open option for MR
HOLDINGS to recover its huge investment in MARCOPPER. It is, at this point,
not constrained to continue/operate MARCOPPER’s business
 had any basis at that time since MARCOPPER’s fate surely
could not have yet been determined then
 In the final analysis, MR HOLDINGS was engaged only in
isolated acts or transactions. Single or isolated acts, contracts,
or transactions of foreign corporations are not regarded as a
doing or carrying on of business. The statutory bar to sue in
our local courts hence does not apply to MR HOLDINGS
2) The deeds of assignments were not executed to defraud
MARCOPPER’s creditors
 Art 13876 prohibits conveyances by a debtor of his properties
in fraud of his creditors. And this article presumes the
existence of fraud made by a debtor. Thus, in the absence of
satisfactory evidence to the contrary, an alienation of a
property will be held fraudulent if it is made after a judgment
has been rendered against the debtor making the
alienation. This presumption of fraud, however, is not
conclusive and may be rebutted by satisfactory and
convincing evidence. All that is necessary is to establish
affirmatively that the conveyance is made in good faith and
for a sufficient and valuable consideration
 IN THE CASE AT BAR, the questioned deeds of assignment
were executed not only for valuable consideration but the
facts of the case also show that these assignment contracts
were execute in good faith. Recall that the assignments were
mere incidents of a contract (Support and Standby Credit
Agreement) executed long before SOLIDBANK’s collection
case was filed. Hence, the reason for the assignments could
not have been to defraud SOLIDBANK and defeat its claims as
the obligations from which the deeds of assignment were
spewed out as a legal consequence was already executed
years before
 Also, it is highly inconceivable that ADB, a reputable
international financial organization, will connive with
MARCOPPER to feign or simulate a contract in 1992 just to
defraud SOLIDBANK for its claim four years thereafter. It also
doesn’t make sense for MARCOPPER to pay a huge sum of
US$ 18M to ADB only for the purpose of defrauding
SOLIDBANK of the sum of P52.9M
 The test as to whether or not a conveyance is fraudulent is --
does it prejudice the rights of creditors?  IN THE CASE AT
BAR, SOLIDBANK’s right could not have been prejudiced by
the assignment contracts considering that substantially all of
MARCOPPER’s properties were already mortgaged in favor of
ADB as early as Nov 1992. As such, SOLIDBANK cannot assert
a better right than ADB, the latter being a preferred creditor
 It is basic that mortgaged properties answer primarily for
the mortgaged credit, not for the judgment credit of the
mortgagor’s unsecured creditor. Considering that petitioner
6 Art. 1387. All contracts by virtue of which the debtor alienates property
by gratuitous title are presumed to have been entered into in fraud of
creditors, when the donor did not reserve sufficient property to pay all
debts contracted before the donation.
Alienations by onerous title are also presumed fraudulent when made
by persons against whom some judgment has been rendered in any
instance or some writ of attachment has been issued. The decision or
attachment need not refer to the property alienated, and need not have
been obtained by the party seeking rescission.
In addition to these presumptions, the design to defraud creditors may be
proved in any other manner recognized by law and of evidence.
assumed MARCOPPER’s debt to ADB, it follows that
SOLIDBANK’s right as judgment creditor over the subject
properties must give way to that of the former
3) MR HOLDINGS, PLACER and MARCOPPER are not one entity
 The records are bereft of any indication that these companies
are one and the same hiding under the cloak of the corporate
veil
 While admittedly, petitioner is a wholly-owned subsidiary of
Placer Dome, which in turn, was then a minority stockholder
of Marcopper, however, the mere fact that a corporation
owns all of the stocks of another corporation, taken alone is
not sufficient to justify their being treated as one entity. If
used to perform legitimate functions, a subsidiary’s separate
existence shall be respected, and the liability of the parent
corporation as well as the subsidiary will be confined to those
arising in their respective business.7
 PLACER and MARCOPPER, on the same vein, cannot be
considered as one entity. PLACER has its own set of
shareholders, most of whom are Canadian while MARCOPPER
also has its own, majority of whom are Filipinos
4) No violation of the Rule against Forum Shopping
 MR HOLDINGS should be guilty of Forum Shopping had it
been the case that it is one and the same entity as
MARCOPPER
 But since MR HOLDINGS has a separate personality, it has the
right to pursue its third-party claim by filing the independent
reivindicatory action with the RTC of Boac, Marinduque,
pursuant to Rule 39, Section 16 of the 1997 Rules of Civil
Procedures. This remedy has been recognized in a long line of
cases decided by this Court
 It has long been settled in this jurisdiction that the claim of
ownership of a third party over properties levied for
execution of a judgment presents no issue for determination
by the court issuing the writ of execution. Thus, when a
property levied upon by the sheriff pursuant to a writ of
execution is claimed by third person in a sworn statement of
ownership thereof, an entirely different matter calling for a
new adjudication arises. And dealing as it does with the all
important question of title, it is reasonable to require the
filing of proper pleadings and the holding of a trial on the
matter in view of the requirements of due process
 IN THE CASE AT BAR, the "reivindicatory action" filed by MR
HOLDINGS has for its object the recovery of ownership or
possession of the property seized by the sheriff, despite the
third party claim, as well as damages resulting therefrom, and
it may be brought against the sheriff and such other parties
as may be alleged to have connived with him in the
supposedly wrongful execution proceedings, such as the
judgment creditor himself. Such action is an entirely
separate and distinct action from that in which execution
has been issued. Thus, there being no identity of parties and
cause of action between “reivindicatory action” filed by MR
7A cited case PNB v. Ritratto Group, Inc outlines the circumstances that are
useful to determine whether a subsidiary is but a mere instrumentality of
the parent company. I will not put it here anymore kasi hindi naman
relevant.
 HOLDINGS in RTC Boac and those cases filed by MARCOPPER
and SOLIDBANK in RTC, Manila as to give rise to res
judicata or litis pendentia, the allegation of forum-shopping
cannot prosper

 ALL CONSIDERED, MR HOLDINGS is entitled to the issuance of

a writ of preliminary injunction pursuant to Sec 3, Rule 58 of
the 1997 Rules of Civil Procedure
 Petitioner’s right to stop the further execution of the
properties covered by the assignment contracts is clear under
the facts so far established. An execution can be issued only
against a party and not against one who did not have his day
in court. The duty of the sheriff is to levy the property of the
judgment debtor not that of a third person. For, as the saying
goes, one man’s goods shall not be sold for another man's
debts.
 To allow the execution of petitioner’s properties would surely
work injustice to it and render the judgment on the
reivindicatory action, should it be favorable, ineffectual. It has
been held that an injunction is a proper remedy to prevent a
sheriff from selling the property of one person for the
purpose of paying the debts of another; and that while the
general rule is that no court has authority to interfere by
injunction with the judgments or decrees of another court of
equal or concurrent or coordinate jurisdiction, however, it is
not so when a third-party claimant is involved
 CARLOS v. SANDOVAL
Reyes, RT, J. (2008)
 Sps. Felix and Felipa Carlos died intestate. They left 6 parcels
of land located at Muntinlupa and Manila to their 2 sons
TEOFILO and JUAN (latter is herein petitioner)
 During the lifetime of Felix Carlos, he agreed to transfer his
estate to TEOFILO. The agreement was made in order to
avoid the payment of inheritance taxes. TEOFILO, in turn,
undertook to deliver and turn over the share of the other
legal heir, petitioner JUAN
 3 parcels were eventually registered to TEOFILO and the 4th to
JUAN. May 1992, TEOFILO died intestate. He was survived by
respondents FELICIDAD Sandoval and their son, Teofilo Carlos
II (TEOFILO II). Upon TEOFILO's death, Parcels 5 and 6 were
registered in the name of respondents
 1994, JUAN instituted a suit against respondents FELICIDAD
and TEOFILO II but the same never got to trial. The parties
instead executed a compromise agreement which was
approved by the court. In said compromise, the parties
mutually agreed to share the proceeds of the sale of the 1st
parcel of land and then agreed to partition between them the
remaining unsold portions
 When a portion of parcel 2 was sold, the compromise
agreement was again amended and the parties once more
agreed to share the proceeds and partition the remaining
unsold portions. The compromise was amended 2 more times
with respect to parcels 3 and 4 where the parties seem to be
amicably settling their conflicts
 HOWEVER, on August 1995, JUAN commenced the instant
action before the RTC Muntinlupa against FELICIDAD and
TEOFILO II with the following causes of action: (a) declaration
of nullity of marriage; (b) status of a child; (c) recovery of
property; (d) reconveyance; and (e) sum of money and
damages
 Complainant JUAN asserted that the marriage between his
late brother TEOFILO and respondent FELICIDAD was a nullity
in view of the absence of the required marriage license. He
likewise maintained that his deceased brother was neither
the natural nor the adoptive father of respondent TEOFILO II.
Consequently, JUAN argues that the contracts (compromise
agreements) he entered into with respondents should be
voided and that the subject properties be reconveyed to him
+ damages and costs
 In their answer, respondents denied the allegations of JUAN
and on the grounds of lack of jurisdiction and cause of action,
filed their motion to dismiss + counterclaim for damages
 BUT before the case could begin with pre-trial, respondents
moved for summary judgment on the strength of the affidavit
of the justice of peace who solemnized TEOFILO’s and
FELICIDAD’s marriage and TEOFILO II’s birth certificate where
TEOFILO and FELICIDAD were designated as his parents
 JUAN opposed respondents’ motion for summary judgment
and instead filed his own motion for summary judgment on
the strength of a certification from the civil registrar of
Calumpit, Bulacan attesting that there is no record of birth of
TEOFILO II and the irregularity of his deceased brother’s and
FELCIDAD’s marriage contracts (marriage license number was
not indicated)
 After the Office of the City Prosecutor submitted to the trial
court its report and manifestation that no collusion between
the parties is extant, the RTC handed down a judgment in
favor of JUAN, declaring TEOFILO and FELICIDAD’s marriage a
nullity, TEOFILO not being natural or adopted father of
TEOFILO II, etc.
 Respondents appealed the RTC decision with the CA. In the
appeal, FELICIDAD and TEOFILO II asserted that the RTC acted
without or in excess of jurisdiction in rendering a summary
judgment on the case that involved the declaration of nullity
of a marriage and the status of a child
 The CA reversed the RTC. It opined that the RTC acted
contrary to law and public policy when it rendered the
assailed judgment summarily instead of setting the same for
trial on the merits. Plainly, the CA held that the Rule on
Summary Judgment does not apply to an action to annul a
marriage. Also, Arts 88 and 101 of the Civil Code expressly
prohibit the rendition of a decree annulling a marriage upon a
stipulation of facts or a confession of judgment. Rather that
the summary nature by which RTC resolved the issues in the
case, the rule is to the effect that the material facts alleged in
the complaint for annulment of marriage should always be
proved pursuant to Section 1, Rule 19 of the Revised Rules of
Court should have been observed – hence, this petition
lodged by JUAN for review on certiorari under Rule 45
ISSUES: WON a marriage may be declared void ab initio through
a judgment on the pleadings or a summary judgment and
without the benefit of a trial; and WON one who is not a spouse
has the capacity of bringing the action for nullity of some other
couple’s marriage
HELD: NO. NO. Only a spouse can initiate an action to sever the
marital bond for marriages solemnized during the effectivity of
the Family Code, except cases commenced prior to March 15,
2003. The nullity and annulment of a marriage cannot be
declared in a judgment on the pleadings, summary judgment, or
confession of judgment. Case remanded to the RTC for further
proceedings
RATIO:
1) The grounds for declaration of absolute nullity of marriage
must be proved. Neither judgment on the pleadings nor
summary judgment is allowed. So is confession of judgment
disallowed
 JUAN faults the CA for applying the provisions under Sec 1,
Rule 19 (Rule on Judgment on Pleadings) instead of applying
Rule 35 (Rule on Summary Judgment)  this contention of
JUAN is misplaced because the CA did not limit its reversal of
the RTC summary judgment based on the rule on judgment
on pleadings but also considered the provisions on the rule
on summary judgments
 But whether it is based on judgment on the pleadings or
summary judgment, the CA was correct in reversing the
summary judgment rendered by the trial court. Both the
rules on judgment on the pleadings and summary
judgments have no place in cases of declaration of absolute
nullity of marriage and even in annulment of marriage
 Through A.M. No. 02-11-10-SC (which took effect March 15,
2003), otherwise known as "Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable
Marriages," the question on the application of summary
judgments or even judgment on the pleadings in cases of
nullity or annulment of marriage has been stamped with
clarity  under par. 2, Sec 17 thereof, “the grounds for
declaration of absolute nullity or annulment of marriage must
be proved. No judgment on the pleadings, summary
judgment, or confession of judgment shall be allowed.”
 The vice of RTC’s summary judgment not only affects the
parties’ rights and status. It also deprived the State of its
lawful right and duty to intervene in the case as mandated by
both the Civil Code and the Family Code. The participation of
the State is not terminated by the declaration of the public
prosecutor that no collusion exists between the parties. The
State should have been given the opportunity to present
controverting evidence before the judgment was rendered.
The State, through the prosecutor, must be able to clearly
established that no evidence is being suppressed or that the
evidence presented are not fabricated. Obviously, these tasks
can only carried out if evidence is produced and presented
ON TRIAL!
2) A petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or wife
 Exceptions: (a) Nullity of marriage cases commenced before
the effectivity of A.M. No. 02-11-10-SC; and (b) Marriages
celebrated during the effectivity of the Civil Code
 Under Sec 2(a) of the Rule on Declaration of Absolute Nullity
of Void Marriages and Annulment of Voidable Marriages,
the petition for declaration of absolute nullity of marriage
may not be filed by any party outside of the marriage. The
Rule made it exclusively a right of the spouses
 The rationale for the Rule is that only an aggrieved or injured
spouse may file a petition for annulment of voidable
marriages or declaration of absolute nullity of void marriages.
Such petition cannot be filed by compulsory or intestate heirs
of the spouses or by the State. Aside from the spouses, others
do not have a legal right to file the petition. Compulsory or
intestate heirs have only inchoate rights prior to the death of
their predecessor, and, hence, can only question the validity
of the marriage of the spouses upon the death of a spouse in
a proceeding for the settlement of the estate of the deceased
spouse filed in the regular courts. On the other hand, the
concern of the State is to preserve marriage and not to seek
its dissolution
 Quoteable Quote: “The new Rule recognizes that the
husband and the wife are the sole architects of a healthy,
loving, peaceful marriage. They are the only ones who can
decide when and how to build the foundations of marriage.
The spouses alone are the engineers of their marital life. They
are simultaneously the directors and actors of their
matrimonial true-to-life play. Hence, they alone can and
should decide when to take a cut, but only in accordance with
the grounds allowed by law.”
 The innovation incorporated in A.M. No. 02-11-10-SC extends
only to marriages entered into during the effectivity of the
Family Code which took effect on August 3, 1988  The
advent of the Rule on Declaration of Absolute Nullity of Void
Marriages marks the end of the right of the heirs of the
deceased spouse to bring a nullity of marriage case against
the surviving spouse
 But the Rule never intended to deprive the compulsory or
intestate heirs of their successional rights. While A.M. No.
02-11-10-SC declares that a petition for declaration of
absolute nullity of marriage may be filed solely by the
husband or the wife, it does not mean that the compulsory or
intestate heirs are without any recourse under the law 
they can still protect their successional right. Compulsory or
intestate heirs can still question the validity of the marriage
of the spouses, not in a proceeding for declaration of nullity
but upon the death of a spouse in a proceeding for the
settlement of the estate of the deceased spouse filed in the
regular courts
 It is emphasized, however, that the Rule does not apply to
cases already commenced before March 15, 2003 even when
the marriage involved is within the coverage of the Family
Code. This is so, as the new Rule became effective only on
March 15, 2003 and must be prospective in its application
 IN THE CASE AT BAR, JUAN commenced the nullity of
marriage case against respondent FELICIDAD in 1995. The
marriage in controversy was celebrated on May 14, 1962
 The marriage having been solemnized prior to the effectivity
of the Family Code, the applicable law is the Civil Code. But
the Civil Code is silent as to who may bring an action to
declare the marriage void. Does this mean that any person
can bring an action for the declaration of nullity of
marriage?  NO.
 The absence of a provision in the Civil Code cannot be
construed as a license for any person to institute a nullity of
marriage case. Such person must appear to be the party who
stands to be benefited or injured by the judgment in the suit,
or the party entitled to the avails of the suit. The plaintiff
must be the real party-in-interest. For it is basic in procedural
law that every action must be prosecuted and defended in
the name of the real party-in-interest.
 Interest within the meaning of the rule means material
interest or an interest in issue to be affected by the decree
or judgment of the case, as distinguished from mere
curiosity about the question involved or a mere incidental
interest. One having no material interest to protect cannot
invoke the jurisdiction of the court as plaintiff in an action.
When plaintiff is not the real party-in-interest, the case is
dismissible on the ground of LACK OF CAUSE OF ACTION
 A petition to declare the nullity of marriage, like any
other actions, must be prosecuted or defended in the name of
the real party-in-interest and must be based on a cause of
action.
3) The case must be remanded to determine whether or not
JUAN is a real-party-in-interest to seek the declaration of
nullity of the marriage in controversy
 When TEOFILO died intestate in 1992, his only surviving
compulsory heirs are respondent FELICIDAD and their son,
TEOFILO II. Under the law on succession, successional rights
 are transmitted from the moment of death of the decedent dismiss the nullity of marriage case for lack of cause of
and the compulsory heirs are called to succeed by operation action if it is proven by evidence that TEOFILO II is a
of law  all his property, rights and obligations to the extent legitimate, illegitimate, or legally adopted son TEOFILO, the
of the value of the inheritance are transmitted to his deceased brother of petitioner  in other words, if TEOFILO
compulsory heirs II is found to be TEOFILO’s son, JUAN loses personality to
 Who are to be considered “compulsory heirs” are outlined in assail FELICIDAD’s marriage with his brother. But if TEOFILO II
Art 887, CC and a brother is not among those considered as is found NOT TO BE TEOFILO’s son, then JUAN may bring
compulsory heirs. But although a collateral relative, such as a action to declare FELCIDAD and TEOFILO’s marriage. In both
brother does not fall within the ambit of a compulsory heir, cases though, a trial on the merits is necessary, hence the
he still has a right to succeed to the estate remand
 Under Art 1001 and 1003,8 if there are no descendants,  The disposition of the RTC as to the avoidance of the
ascendants, illegitimate children, or a surviving spouse, the compromise agreements, awards of damages and
collateral relatives shall succeed to the ENTIRE estate of the reconveyance of properties must be VACATED. Trial and
decedent. If the decedent has a surviving spouse, the proceedings on the merits must be heard before these may
collateral relatives get HALF of the decedent’s estate so long be finally decided
as he has no descendants, ascendants or illegitimate children.
Indeed, only the presence of descendants, ascendants or
illegitimate children excludes collateral relatives from
succeeding to the estate of the decedent.
 IN THE CASE AT BAR, if respondent TEOFILO II is declared and
finally proven NOT to be the legitimate, illegitimate, or
adopted son of TEOFILO, JUAN would then have a personality
to seek the nullity of marriage of his deceased brother with
FELICIDAD. This is so, considering that collateral relatives
acquire successional right over the estate if the decedent dies
without issue and without ascendants in the direct line
 Since TEOFILO does not have any other siblings save for
JUAN, if Teofilo II is finally found and proven to be NOT a
legitimate, illegitimate, or adopted son of TEOFILO, JUAN
succeeds to the other half of the estate of his brother, the
first half being allotted to the widow FELICIDAD pursuant to
Article 1001  this makes JUAN a real-party-interest to seek
the declaration of absolute nullity of marriage of his deceased
brother with FELICIDAD. If the subject marriage is found to be
void ab initio, JUAN succeeds to the ENTIRE estate!
 It bears stressing, however, that the legal personality of
petitioner to bring the nullity of marriage case is contingent
upon the final declaration that TEOFILO II is not a legitimate,
adopted, or illegitimate son of TEOFILO.
 If TEOFILO II is proven to be a legitimate, illegitimate, or
legally adopted son, then JUAN has no legal personality to ask
for the nullity of marriage of his deceased brother  this is
based on the ground that he has no successional right to be
protected, hence, does not have proper interest. For
although the marriage in controversy may be found to be
void from the beginning, still, JUAN would not inherit. This is
because the presence of descendant, illegitimate, or even an
adopted child excludes the collateral relatives from inheriting
from the decedent
 Thus, the Court finds that a remand of the case for trial on
the merits to determine the validity or nullity of the subject
marriage is called for. But the RTC is strictly instructed to

8 ART. 1001. Should brothers and sisters or their children survive with the
widow or widower, the latter shall be entitled to one-half of the
inheritance and the brothers and sisters or their children to the other half.
ART. 1003. If there are no descendants, ascendants, illegitimate children,
or a surviving spouse, the collateral relatives shall succeed to the entire
estate of the deceased in accordance with the following articles.