LIBERTAD ALTAVAS CONLU, vs. THE HONORABLE COURT OF APPEALS, ET AL.

easily stated so in its order, or simply, the order would have granted "an additional 30 days
G.R. No. L-14027 January 29, 1960
Petition to review a resolution of the Court of Appeals.
The facts involved are not controverted. On October 3, 1957, the Court of First Instance of
Capiz handed down a decision in Cadastral Case No. 5, G.L.R.O. Record No. 337, covering
a lot of the Capiz Cadastre. The herein petitioner against whom said decision was rendered
received a copy thereof on October 11, 1957. Twenty-five (25) days thereafter, or on
November 5 of the same year, petitioner filed a motion for reconsideration and new trial,
praying that the decision be set aside upon the grounds that it is contrary to law and is not
supported by sufficient evidence. The said motion was denied by the trial court in an order
dated January 11, 1958, notice of which was received by petitioner on January 15. On
January 13, she filed a "Petition Ex Parte for Extension of Time to Perfect The Appeal." The
following day, the trial court granted thirty (30) days from that day, January 14, within which
petitioner may submit her record on appeal.
On February 1, 1958, twelve (12) days after January 20 when the original reglementary
period to appeal had expired, petitioner filed notice of appeal and appeal bond, and on
February 8, that is, five days before the expiration of the thirty days extension, petitioner
filed against the approval of the record on appeal, the trial court, on March 1, 1958,
dismissed the appeal on the ground that the appeal bond and the notice of appeal were filed
out of time. Motion to reconsider that order of dismissal had been denied. Whereupon, the
petitioner filed with the Court of Appeals an action for mandamus praying that the Court of
First Instance be ordered to approve, certify and transmit to it the record on appeal. Failing
to obtain such relief from the appeals court, the petitioner has brought the case to us for
review.
to perfect the appeal." In fact, the said court clearly explained the meaning of its order of
extension as being limited to the filing of the record on appeal when on March 1, 1958, it
issued an order dismissing the appeal for the untimely filing of the notice of appeal and
appeal bond. Presumably, the reason of the trial court in granting an extension only for the
filing of the record on appeal is that the petition for extension was predicated solely on the
ground "that the record of the case is very voluminous and the Record on Appeal will
probably consist of 50 typewritten pages more or less so that it would need much time to
prepare, finish and file the Record on Appeal and furthermore due to pressure of work her
counsel cannot attend exclusively in the preparation of said Record on Appeal."
In the case of Silverio Salva vs. Hon. Perfecto R. Palacio, et al., 90 Phil., 731, 52 Off. Gaz.,
p. 3089, this Court has held that an extension of time granted to amend a record on appeal
does not carry with it an extension of the reglementary period for the filing of the appeal
bond. Similarly, in this case, we hold that the extension of time granted for the filing of the
record on appeal does not also carry with it an extension for the filing of the notice of appeal
and appeal bond.
Rules of Courts, promulgated by authority of law, have the force and effect of law; and rules
of court prescribing the time within which certain acts must be done, or certain proceedings
taken, are considered absolutely indispensable to the prevention of needless delays and to
the orderly and speedy discharge of judicial business (Shioji vs. Harvey, 43 Phil., 333;
Alvero vs. De la Rosa et al., 76 Phil., 428, 42 Off. Gaz., p. 316).
Conformably with the foregoing, the resolution sought to be reviewed is hereby affirmed, at
petitioner's costs.

After going over the record, we are persuaded that the petitioner has not made out a good
case for the issuance of a writ of mandamus.

There is no question that the petitioner was given an additional thirty (30) days within which
to submit her record on appeal, for on January 14, 1959, the Court of First Instance issued
the following order:.

As prayed for in the ex parte motion of Attorney Jose Y. Torres, he is hereby given
thirty (30) days from today within which to submit his record on appeal. (Emphasis
supplied)

Petitioner contends that the order above-quoted extended also the filing of the notice of
appeal and the appeal bond. Petitioner's main argument is that her petition dated January
13, 1958 prayed for an extension of time not merely to submit the record on appeal but to
perfect her appeal, which includes the filing of the notice of appeal and appeal bond. The
contention is devoid of merit. The language used in the order is plain and unequivocal. It
cannot be construed in the manner suggested by petitioner. If the trial court really intended
to extend also the period for the filing of the notice of appeal and appeal bond, it could have
G.R. No. 150274 August 4, 2006
IN THE MATTER TO DECLARE IN CONTEMPT OF COURT HON. SIMEON A.
DATUMANONG in the latter’s capacity as Secretary of the Department of Public
Works and Highways. JIMMIE F. TEL-EQUEN, Petitioner,
Petitioner Jimmie F. Tel-Equen, District Engineer of Mountain Province, DPWH Cordillera
Administrative Region, filed this present petition to cite the former Secretary Simeon A.
Datumanong of the Department of Public Works and Highways (DPWH) in contempt of
court for issuing Memorandum Order dated October 5, 2001 dismissing him from the
service.
The facts of the case are as follows:
The Ombudsman Task Force on Public Works and Highways filed with the Office of the
Ombudsman an administrative complaint for dishonesty, falsification of official documents,
grave misconduct, gross neglect of duty, violation of office rules and regulations, and
conduct prejudicial to the service against petitioner Tel-Equen and several others, relative to
the anomalous payment of P553,900.00 of the bailey bridge components owned by the
government. The case was docketed as OMB-ADM-0-91-0430. 1
On March 28, 1994, the Administrative Adjudication Bureau of the Office of the Ombudsman
found respondents guilty of dishonesty, falsification of public documents, misconduct and
conduct prejudicial to the best interest of the service and ordered their dismissal from the
service with accessory penalties pursuant to Section 23 of Rule XIV, Book V of Executive
Order No. 292, otherwise known as the Revised Administrative Code of 1987. 2
After the denial of the motions for reconsideration, three petitions were filed before this
Court which were consolidated and referred to the Court of Appeals in light of the ruling
in Fabian v. Desierto 3 where appeals from decisions of the Office of the Ombudsman in
administrative cases should be referred to the appellate court under Rule 43 of the Rules of
Court. 4
On March 2, 2000, the Court of Appeals affirmed with modification the decision of the
Administrative Adjudication Bureau of the Office of the Ombudsman finding petitioner and
two co-accused guilty as charged and dismissed them from the service while the other two
respondents were exonerated from administrative liability for lack of evidence. 5
Petitioner, together with his two co-accused, appealed from the decision of the Court of
Appeals which was docketed as G.R. No. 144694. 6 Meanwhile, while appeal was still
pending, Secretary Datumanong issued the assailed Memorandum Order, 7 which reads:
October 5, 2001
MEMORANDUM TO:
Messrs:
JIMMIE F. TEL-EQUEN
District Engineer
RUDY P. ANTONIO
Chief, Construction Section
All of Mountain Province Engineering District
This Department
This is with reference to the Order of the Ombudsman dated December 11, 1995 in OMB
ADM. 0-91-0430 entitled "OMB TASK FORCE ON DPWH versus JIMMIE F. TEL-EQUEN,
ET AL." (Annex "A"), affirming the March 28, 1994 Resolution (Annex "B") in the same case
finding you guilty of having committed acts of dishonesty, falsification of public documents,
misconduct and conduct prejudicial to the best interest of the service and recommending
that you be DISMISSED from the service together with its accessory penalties pursuant to
Sec. 23, Rule XIV, Book V of Executive Order No. 292.
The Order was affirmed by the Court of Appeals (Eight Division) in its Decision (Annex "C")
promulgated on March 02, 2000 in CA-G.R. SP No. 50324 entitled "ROMULO H.
MABUNGA, ET AL. versus THE OMBUDSMAND, ET AL."
Inasmuch as the Order dismissing you from the service is not a subject of any injunction or
restraining order from the Supreme Court, the same is immediately executory. Wherefore,
you are hereby ordered DROPPED/DISMISSED from the service effective upon receipt
hereof.
(Sgd.) SIMEON A. DATUMANONG
Secretary
Hence, the instant petition to cite Secretary Datumanong in contempt of court.
Petitioner contends that in issuing the Memorandum Order despite knowledge of the
pendency of G.R. No. 144694, Secretary Datumanong committed a contumacious act, a
gross and blatant display of abuse of discretion and an unlawful interference with the
proceedings before the Court, thereby directly or indirectly impeding, obstructing and
degrading the administration of justice, and pre-empting the Court’s sole right to make a
decision in accord with the evidence and law. 8
Petition lacks merit.
The power to declare a person in contempt of court and in dealing with him accordingly is
an inherent power lodged in courts of justice, to be used as a means to protect and
preserve the dignity of the court, the solemnity of the proceedings therein, and the
administration of justice from callous misbehavior, offensive personalities, and
contumacious refusal to comply with court orders. 9 This contempt power, however plenary
it may seem, must be exercised judiciously and sparingly with utmost self-restraint with the
end in view of utilizing the same for correction and preservation of the dignity of the court,
not for retaliation or vindication. 10 It should not be availed of unless necessary in the
interest of justice. 11
After careful consideration of the facts and circumstances of the case, we find that the
issuance of the Memorandum Order by Secretary Datumanong was not a contumacious
conduct tending, directly or indirectly, to impede, obstruct or degrade the administration of
justice. A conduct, to be contumacious, implies willfulness, bad faith or with deliberate intent
to cause injustice, which is not so in the case at bar. If it were otherwise, petitioner should
have been dismissed immediately after the Administrative Adjudication Bureau of the Office
of the Ombudsman rendered its decision on March 28, 1994. It was only after the Court of
Appeals rendered its decision on March 2, 2000 affirming the dismissal that Secretary
Datumanong issued the memorandum and after ascertaining that no injunction or
restraining order was issued by the Court.
At most, it may be considered only an error of judgment or a result of confusion considering
the different rules regarding execution of decisions pending appeal.
Decisions of the Civil Service Commission under the Administrative Code of 1987 12 are
immediately executory even pending appeal because the pertinent laws 13 under which the
decisions were rendered mandate them to be so. 14 Thus, "where the legislature has seen fit
to declare that the decision of the quasi-judicial agency is immediately final and executory
pending appeal, the law expressly so provides." 15 Otherwise, execution of decisions takes
place only when they become final and executory, like decisions rendered by the Office of
the Ombudsman.
Thus, in Lapid v. Court of Appeals, 16 the Court held:
Petitioner was administratively charged for misconduct under the provisions of R.A. 6770,
the Ombudsman Act of 1989. Section 27 of the said Act provides as follows:
"Section 27. Effectivity and Finality of Decisions. – All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the
Ombudsman must be filed within five (5) days after receipt of written notice and shall be
entertained only on the following grounds:
xxxxxxxxx
Findings of fact of the Office of the Ombudsman when supported by substantial evidence
are conclusive. Any order, directive or decision imposing the penalty of public censure or
reprimand, suspension of not more than one month’s salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within
ten (10) days from receipt of the written notice of the order, directive or decision or denial of
the motion for reconsideration in accordance with Rule 45 of the Rules of Court."
The Rules of Procedure of the Office of the Ombudsman likewise contain a similar
provision. Section 7, Rule III of the said Rules provides as follows:
"Sec. 7. Finality of Decision – where the respondent is absolved of the charge and in case
of conviction where the penalty imposed is public censure or reprimand, suspension of not
more than one month, or a fine not equivalent to one month salary, the decision shall be
final and unappealable. In all other cases, the decision shall become final after the
expiration of ten (10) days from receipt thereof by the respondent, unless a motion for
reconsideration or petition for certiorari, shall have been filed by him as prescribed in
Section 27 of R.A. 6770."
It is clear from the above provisions that the punishment imposed upon
petitioner, i.e. suspension without pay for one year, is not among those listed as final and
unappealable, hence, immediately executory. Section 27 states that all provisionary orders
of the Office of the Ombudsman are immediately effective and executory; and that any
order, directive or decision of the said Office imposing the penalty of censure or reprimand
or suspension of not more than one month’s salary is final and unappealable. As such the
legal maxim "inclusio[n] unius est exclusio alterius" finds application. The express mention
of the things included excludes those that are not included. The clear import of these
statements taken together is that all other decisions of the Office of the Ombudsman
which impose penalties that are not enumerated in the said Section 27 are not final,
unappealable and immediately executory. An appeal timely filed, such as the one
filed in the instant case, will stay the immediate implementation of the decision. This
finds support in the Rules of Procedure issued by the Ombudsman itself which states that
"(I)n all other cases, the decision shall become final after the expiration of ten (10) days
from receipt thereof by the respondent, unless a motion for reconsideration or petition for
certiorari (should now be petition for review under Rule 43) shall have been filed by him as
prescribed in Section 27 of R.A. 6770."
xxxx
A judgment becomes "final and executory" by operation of law. Section 27 of the
Ombudsman Act provides that any order, directive or decision of the Office of the
Ombudsman imposing a penalty of public censure or reprimand, or suspension of not more
than one month’s salary shall be final and unappealable. In all other cases, the respondent
therein has the right to appeal to the Court of Appeals within ten (10) days from receipt of
the written notice of the order, directive or decision. In all these other cases therefore, the
judgment imposed therein will become final after the lapse of the reglementary period of
appeal if no appeal is perfected or, an appeal therefrom having been taken, the judgment in
the appellate tribunal becomes final. It is this final judgment which is then correctly
categorized as a "final and executory judgment" in respect to which execution shall issue as
a matter of right. In other words, the fact that the Ombudsman Act gives parties the
right to appeal from its decisions should generally carry with it the stay of these
decisions pending appeal. Otherwise, the essential nature of these judgments as
being appealable would be rendered nugatory. (Emphasis supplied)
Petitioner was charged administratively before the Office of the Ombudsman. Accordingly,
the provisions of the Ombudsman Act and its Rules of Procedure should apply in his case. It
is a principle in statutory construction that where there are two statutes that apply to a
particular case, that which was specially designed for the said case must prevail over the
other. 17
In fine, Secretary Datumanong cannot be held in contempt of court for issuing the
Memorandum Order in the absence of malice or wrongful conduct in issuing it. The remedy
of the petitioner is not to file a petition to cite him in contempt of court but to elevate the
error to the higher court for review and correction.
However, two events supervened since the filing of this petition that would support its
dismissal. First, on March 28, 2005, the Court in G.R. No. 144694 affirmed the decisions of
the Court of Appeals and Administrative Adjudication Bureau of the Office of the
Ombudsman ordering petitioner dismissed from the service for dishonesty, falsification of
public documents, misconduct, and conduct prejudicial to the best interest of the
service. Second, Section 7, Rule III of the Rules of Procedure of the Office of the
Ombudsman was amended by Administrative Order No. 17 18 wherein the pertinent
provision on the execution of decisions pending appeal is now essentially similar to Section
47 of the Uniform Rules on Administrative Cases in the Civil Service and other related
laws, thus:
Rule III
PROCEDURE IN ADMINISTRATIVE CASES
Section 7. Finality and execution of decision. - Where the respondent is absolved of the
charge, and in case of conviction where the penalty imposed is public censure or
reprimand, suspension of not more than one month, or a fine equivalent to one
month salary, the decision shall be final, executory and unappealable. In all other
cases, the decision may be appealed to the Court of Appeals on a verified petition for
review under the requirements and conditions set forth in Rule 43 of the Rules of
Court, within fifteen (15) days from receipt of the written Notice of the Decision or
Order denying the Motion for Reconsideration.
An appeal shall not stop the decision from being executory. In case the penalty is
suspension or removal and the respondent wins such appeal, he shall be considered
as having been under preventive suspension and shall be paid the salary and such
other emoluments that he did not receive by reason of the suspension or removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed
as a matter of course. The Office of the Ombudsman shall ensure that the decision
shall be strictly enforced and properly implemented. The refusal or failure by any
officer without just cause to comply with an order of the Office of the Ombudsman to
remove, suspend, demote, fine, or censure shall be a ground for disciplinary action
against said officer.
Well-settled is the rule that procedural laws are construed to be applicable to actions
pending and undetermined at the time of their passage, and are deemed retroactive in that
sense and to that extent. As a general rule, the retroactive application of procedural laws
cannot be considered violative of any personal rights because no vested right may attach to
nor arise therefrom. 19
In the case at bar, the Rules of Procedure of the Office of the Ombudsman are clearly
procedural and no vested right of the petitioner is violated as he is considered preventively
suspended while his case is on appeal. Moreover, in the event he wins on appeal, he shall
be paid the salary and such other emoluments that he did not receive by reason of the
suspension or removal. Besides, there is no such thing as a vested interest in an
office, or even an absolute right to hold office. Excepting constitutional offices which
provide for special immunity as regards salary and tenure, no one can be said to
have any vested right in an office. 20
WHEREFORE, in view of the foregoing, the petition to cite former Secretary Simeon
A. Datumanong of the Department of Public Works and Highways in contempt of
court for issuing Memorandum Order dated October 5, 2001 dismissing petitioner
Jimmie F. Tel-Equen from the service is DISMISSED for lack of merit.
SO ORDERED.
AURORA B. GO v. SUNBANUN, ET AL., (G.R. No. 168240, February 9, 2011)
way. Aurora demanded actual damages as she claimed that she works in Hong Kong on a no-work-
When a procedural rule is amended for the benefit of litigants for the furtherance of the
no-pay basis and the suit would result in spending airfare and lost earnings.
administration of justice, it shall be retroactively applied to likewise favor actions then pending, as equity
delights in equality.

After the respondents concluded their presentation of evidence, Aurora moved on October 28, 2002
For non-compliance with the formal requirements of a petition, the Court of Appeals (CA) dismissed
that her testimony be taken by deposition upon written interrogatories, as she was unsure as to when
the certiorari petition filed by herein petitioner Aurora Go (Aurora), prompting her to file before us this
she could come home to the Philippines considering that her work schedule as a court interpreter
petition for review on certiorari.Aurora now calls for liberality in the application of the procedural rules in
in Hong Kong is erratic. She averred that arrangements have already been made with the Philippine
the hope that she would eventually be given a chance to be heard by the CA after the trial court denied
consulate in Hong Kong to take her deposition.[4] Over the objection of the respondents, the RTC
her prayer for an extension of time to file a notice of appeal.
granted Auroras motion on November 21, 2002.[5] However, Auroras deposition was taken only on

January 28, 2004[6] after her follow-up letter dated November 7, 2003 to the Philippine consulate.[7]
Factual Antecedents

Before this deposition was taken, the RTC in its December 1, 2003 Order[8] already deemed the
In November 2000, respondents filed a suit for damages against Aurora, her husband Yiu
defendants to have waived their right to present their evidence and considered the case submitted for
Wai Sang (Sang), and Yiu-Go Employment Agency (hereinafter collectively referred to as defendants),
resolution since more than a year had elapsed from the date the RTC granted Auroras motion to have
docketed as Civil Case No. CEB-25778, before the Regional Trial Court (RTC) of Cebu, Branch
her testimony be taken by deposition. Again, only Aurora moved for reconsideration[9] and prayed that
58.[1] The respondents claimed that the spouses occupied the ground floor portion of their house in 68-
the December 1, 2003 Order be recalled and instead admit the deposition. She attributed the delay of
F General Junquera Street, Cebu City under a one-year lease contract and had used the premises as
her deposition-taking to the consulates fault, as she was passed from one officer to another or no officer
the business office of Yiu-Go Employment Agency. This allegedly increased the risk of loss by fire, and
was available.
thus a breach of warranty in the fire insurance policies that the respondents made which described the

property as residential type.[2]

On January 26, 2004, the RTC rendered judgment[10] finding only Aurora liable and ordering her to pay

moral damages, attorneys fees, litigation expenses and costs.[11] The trial court disregarded her two-
Only Aurora filed her Answer with Affirmative Defenses and Counter-Claim.[3] In her
page transcript of deposition when it received the same on March 5, 2004.[12]
answer, Aurora averred that they already left the premises sometime in 2001and that during the entirety
Auroras former counsel of record, Atty. Jude Henritz R. Ycong (Atty. Ycong), belatedly
of their stay, they used the leased floor as a private residence and as a lodging house. She denied that
discovered about this adverse judgment when he received from respondents counsel a Motion to Direct
their employment agency held office there. She also pointed out that the lease contract was terminated
Issuance of Entry of Judgment and Writ of Execution[13] on March 16, 2004. It turned out that although
when the one-year term expired in July 1996, and that she was not privy to the contracts of insurance
he had already previously informed the court of his new office address, the court mistakenly sent the
since she was not informed of the contracts existence. To her, whether the house was used as a
January 26, 2004 Decision to his former office address.[14] He raised this in his opposition to the motion
business office or as a lodging house was immaterial as there was no increased risk of fire either
filed by the respondents.[15] Finding this point meritorious, the court denied respondents motion, ruling
that the judgment against Aurora has not yet attained finality as the 15-day period to appeal, counted
from March 16, 2004, has not yet lapsed.[16]
Aurora filed her Motion for Reconsideration[17] on March 31, 2004, the last day to file her
appeal. The court in its April 27, 2004 Order[18] denied said motion.
Atty. Ycong received the notice of denial on May 6, 2004, thus giving his client a day left to file
her appeal. Explaining that Aurora has been busy campaigning for the local elections as she was
running for the position of town mayor in Calubian, Leyte[19] and that he and his client have yet to discuss
the pros and cons of appealing the case, Atty. Ycong sought for the relaxation of the procedural rules
by filing an extension of 15 days to file Auroras notice of appeal.[20]
Atty. Ycong thereafter filed the Notice of Appeal on May 11, 2004.
Ruling of the Regional Trial Court
In its May 12, 2004 Order, the RTC denied the notice of appeal, viz:
While there are rulings of the Supreme Court declaring that the period to
appeal is not extendible, there are also instances when it allowed appeals to be
perfected despite their filing out of time. x x x
In the instant case, the delay is due to defendant-Gos running for an
elective post. Such is no excuse.
In other words, contrary to the belief of this court that Aurora Go had been
and is out of the country, she in fact is in the Philippines. Consequently, she could
have the time to confer with her counsels in order to prepare for her appeal.
Accordingly, the Motion for Extension of Time to File Notice of Appeal is
DENIED for lack of merit and the Notice of Appeal is hereby declared filed out of
time.
SO ORDERED.[21]
Aurora sought for reconsideration but it was denied by the RTC on June 10, 2004.[22]
Ruling of the Court of Appeals
Filing her petition for certiorari with the CA by way of registered mail on August 13,
2004,[23] Aurora claimed that the RTC gravely abused its discretion in refusing to relax the period for
filing the notice of appeal. She contended that her situation is enough reason to grant her prayer. She
averred that she could not just leave the campaign trail just to discuss matters with her lawyer about her
case as she was busy in Leyte at the homestretch of the campaign period.
However, the CA on December 8, 2004, dismissed the petition (docketed as CA-G.R. SP No. 85897)
for being procedurally flawed, viz:
1) The Verification/Certification of Non-Forum Shopping is signed by only
one petitioner without a Special Power of Attorney/Secretarys Certificate
authorizing her to represent the two (2) other petitioners;
2) The Affidavit of Service shows that respondents were personally
served copies of the petition but lacks explanation why service of the petition with
this Court was not done personally (Section 11, Rule 13 of the Revised Rules of
Court);
3) Counsel for petitioners failed to indicate his PTR and IBP numbers;
4) Certified true [sic] copies of the assailed decision dated January 26,
2004 attached to the petition is a mere photocopy of a certified true copy;
5) The following copies of pleadings and other relevant documents
referred to in the petition which would support the allegations therein are not
attached:
a) Complaint; and,
b) Answer.[24]
Invoking the liberal construction of procedural rules, petitioner Aurora asked for reconsideration[25] with
the following justifications:
1) A certification/verification of one of a number of principal parties is sufficient
compliance. Although her certiorari petition named her, her spouse, and Yiu-Go Employment Agency,

as petitioners, her co-defendants were not held liable in the lower court. It is only she who is interested
in filing the certiorari petition for her to be able to appeal, hence her lone signature.
2) Anent the lack of explanation of why personal service to the CA was not resorted
to, Aurora averred that it was redundant to explain why registered mail was used considering the
distance between Cebu, where she is based, and the CA in Manila.
3) The professional tax receipt (PTR) and Integrated Bar of the Philippines (IBP) receipt
numbers were inadvertently overlooked. However, the defect was cured when Atty. Ycong included the
numbers when he subsequently filed on October 14, 2004 his Notice of Change of Address[26] with the
CA.
4) Questioned in the certiorari are the May 12 and June 10, 2004 Orders that denied
Auroras prayer for an extension of time to file her notice of appeal. Requiring her to additionally append
to the CA petition the certified true copies of the January 26, 2004 RTC Decision (i.e., the decision on
the merits of the case), the complaint, and the answer was not necessary as these documents are not
relevant and material to the issue to be resolved.
Finding Auroras reasoning unacceptable, the CA insisted on a strict observance of the rules
in its April 8, 2005 Resolution:
As to the first ground, petitioners merely disagree with the deficiency
which occasioned the outright dismissal of their petition without even curing the said
defect. Suffice it to say here that the petition itself contains more than one
petitioner. No less than the Supreme Court pronounced in Loquias vs. Office of the
Ombudsman that where there are two or more plaintiffs or petitioners, a complaint
or petition signed by only [sic] of the parties is defective unless he/she is authorized
by his co-parties. x x x
xxxx
The reason why petitioners petition was dismissed based on the second defect was
because the said petition lacks explanation why service of the petition with this
Court was not done personally, not much for having filed the same by registered
mail. In other words, the dismissal was not due to the fact that the petition was filed
by registered mail, but because of the failure to explain why the personal service
was not resorted to. Then again, petitioners did not even bother to cure such defect.
Anent the third ground, counsel for petitioners posits that his failure to
indicate in the petition for certiorari his PTR and IBP numbers was cured by his
succeeding Notice of Change Address filed with this Court. However, a closer of
[sic] examination of the same reveals that the same was only filed on October 14,
2004 or some two (2) months after the petition for certiorari was filed on August 13,
2004. If it was really the intention of counsel for petitioners to cure such defect, he
could have done it immediately after filing the petition. Had it not been due to the
filing of the notice of change of address, We doubt if petitioners would have cured
such defect.
Considering the foregoing, We deem it unnecessary to discuss the other
grounds raised by petitioners.
x x x x[27]
The Parties Respective Arguments
Believing that her case should not have been dismissed for procedural
defects, Aurora assails the December 8, 2004 and April 8, 2005 Resolutions of the CA, reiterating to
this Court that she deserves to be accorded the chance to prove to the CA that the RTC had unfairly
denied her motion for extension of time to file her notice of appeal.
On the other hand, respondents defend the stance of the CA, insisting that perfection of an appeal is
jurisdictional and mandatory; and that the circumstances do not justify granting Aurora leniency in the
application of the procedural rules.Moreover, ever since she filed her motion for reconsideration on the
RTCs January 26, 2004 Decision, she had in the interim sufficient time to think about the next legal
action to take before the trial court issued its order of denial on April 27, 2004.
Issue
The sole question to resolve is whether the formal deficiencies in the petition before the CA may be
relaxed in the interest of justice.
Our Ruling
The signatures/authorizations of Sang and
Yiu-Go Employment Agency in the
verification and certification on non-forum
shopping are not necessary. the petitioner to file an amended petition appending thereto the required pleadings, documents or order

within a fixed period.[29] We emphasize that not all pleadings and parts of case records are required to

be attached, but only those which are material and pertinent that they may provide the basis for a
In filing a certiorari petition, one aggrieved by a courts judgment, order or resolution must verify
determination of a prima facie case for abuse of discretion.[30]
his/her petition and must also attach a sworn certification of non-forum shopping.[28] In

dismissing Auroras petition, the CA cited as one of its grounds the lack of signatures or authorizations
Thus, we agree with the petitioner that the CA required pleadings
of Sang and Yiu-Go Employment Agency in the verification and certification of non-forum
immaterial to the issue presented before it. The questioned subject of certiorari does not touch upon the
shopping. Such signatures, however, may be dispensed with as these parties are not involved in the
substantive merits of the suit for damages against Aurora but actually involves the refusal of the trial
petition. Although the caption in Auroras petition before the CA erroneously included Sang and Yiu-Go
court to entertain her notice of appeal due to late filing. The complaint and answer are not indispensable
Employment Agency as petitioners, its contents reveal that it is solely Aurora who is the person
at all in the resolution of this issue, the contents of which are already summarized in the January 26,
aggrieved, as she is the one who assailed before the CA the RTCs Order that denied her notice of
2004 Decision attached to the petition. Furthermore, since Auroras petition assails the May 12 and June
appeal and, hence, she should be the one who should sign the petition. Notably, Aurora is the only one
10, 2004 Orders of the RTC, it is the certified true copies of these orders that are required to be attached
held liable by the trial court for damages and thus is the one interested in filing an appeal and in elevating
to the petition. On the other hand, photocopy of the January 26, 2004 Decision will suffice, as this
the case to the CA. Moreover, only Aurora filed her answer before the RTC while Sang and Yiu-Go
document is material and pertinent to the petition.
Employment Agency did not file any.

Failure to indicate PTR and IBP Official

Non-submission of certified true copy of
Receipt Numbers not fatal.
the January 26, 2004 Decision and copies
of the Complaint and Answer not fatal.

The failure of petitioners former counsel, Atty. Ycong, to indicate in the petition before the CA
Another ground cited by the CA was the non-submission of the certified true copy of the
his PTR and IBP numbers for the year 2004 was obviously an oversight. A perusal of the records of the
January 26, 2004 Decision as well as the failure to attach copies of the complaint and answer in Auroras
case would show that counsel had duly paid the required dues for that year and that his PTR and IBP
petition.
receipt numbers are indicated in the pleadings he had filed with the RTC.[31] Although he omitted to

indicate the numbers on Auroras CA petition, the same numbers were nevertheless stated on his Notice
The second paragraph of Section 1 of Rule 65 requires the submission of a certified true copy
of Change of Address, around two months before the appellate court issued the questioned December
of the judgment, order or resolution subject of the petition as well as the submission of copies of all
8, 2004 Resolution.
pleadings and documents relevant to the petition. The initial determination of what pleadings,

documents or order are relevant and pertinent to the petition rests on the petitioner. [Should the CA
Rules on perfecting appeals must be
opine that additional documents must be submitted together with the petition, it may] (a) dismiss the strictly complied with; liberal application
available only under exceptional
petition under the last paragraph of [Section 3,] Rule 46 of the Rules of Court; (b) order the petitioner to circumstances.

submit the required additional pleadings, documents, or order within a specific period of time; or (c) order

Whenever practicable, personal service and personal filing of pleadings are always the
preferred modes of service. Under Section 11, Rule 13 of the Rules of Court, should one deviate from
the general rule, it is mandatory for him/her to submit a written explanation why the pleading was not
personally filed/served. Otherwise, the court has the discretion to consider the paper as not
filed. Petitioner should be aware that a court, in reasonably exercising discretionary power to dismiss a
petition that violated the rule on written explanation for resorting to modes other than personal service,
also has to take into account another factor, i.e., the prima facie merit of the pleading sought to be
expunged for violation of Section 11.[32] For this reason, we do not find any grave abuse on the part of
the CA in exercising its discretion to dismiss Auroras petition.
Indeed, judicial notice may be taken that personal service is impracticable considering the
distance between Cebu and Manila, and that Musa v. Amor[33] supports Auroras argument that a written
explanation why service was not done personally might have been superfluous considering the evident
distance between the appellate court and the place where the petition was posted. It must be
emphasized, however, that provisions with respect to the rules on the manner and periods for perfecting
appeals are strictly applied and are only relaxed in very exceptional circumstances on equitable
considerations.[34] In the case at bar, the reason behind the filing of an extension of time to file her notice
of appeal was not per se, a compelling and a highly exceptional one. Just as it is the lawyers duty to
safeguard her clients interest, it is the responsibility of the client to make herself available to her counsel
and open the lines of communication, even during the busy election period, for their discussions of legal
options. She is obliged to be vigilant in fighting for her cause and in protecting her rights. It is Aurora's
duty, as a client, to be in touch with [her] counsel so as to be constantly posted about the case. [She] is
mandated to inquire from [her] counsel about the status and progress of the case from time to time and
cannot expect that all [she] has to do is sit back, relax and await the outcome of the case.[35] Additionally,
motions for extension are not granted as a matter of right but in the sound discretion of the court, and
lawyers should never presume that their motions for extension or postponement will be granted or that
they will be granted the length of time they pray for.[36]
In spite of petitioners error, the fresh period
rule amendment as held in Neypes v.
Court of Appeals will be applied to her
benefit
Aurora had almost lost her statutory privilege to appeal, but in view of our ruling on Neypes v. Court of
Appeals,[37] we shall grant Auroras petition.
In Neypes we held that a litigant is given another fresh period of 15 days to perfect an appeal
after receipt of the order of denial of his/her motion for reconsideration/new trial before the RTC. We
said:
To standardize the appeal periods provided in the Rules and to
afford litigants fair opportunity to appeal their cases, the Court deems it
practical to allow a fresh period of 15 days within which to file the notice of
appeal in the Regional Trial Court, counted from receipt of the order
dismissing a motion for a new trial or motion for reconsideration.
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on
petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43
on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court. The new rule aims to
regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for reconsideration (whether full or partial)
or any final order or resolution.[38] (Emphasis supplied.)
[P]rocedural laws may be given retroactive effect to actions pending and undetermined at the time of
their passage, there being no vested rights in the rules of procedure.[39] Neypes, which we rendered in
September 2005, has been applied retroactively to a number of cases[40] wherein the original period to
appeal had already lapsed subsequent to the denial of the motion for reconsideration. Auroras situation
is no exception, and thus she is entitled to benefit from the amendment of the procedural rules.
The denial of Auroras Motion for Reconsideration of the trial courts January 26, 2004 decision
was received by her former counsel on May 6, 2004. Sans her motion for extension to file a notice of
appeal, with the fresh period rule under Neypes, she still has until May 21, 2004 to file her notice of

appeal and thus, had timely filed her notice of appeal on May 11, 2004.

WHEREFORE, the petition is GRANTED. The challenged Resolutions of the Court of

Appeals in CA-G.R. SP No. 85897 dated December 8, 2004 and April 8, 2005
are REVERSED and SET ASIDE; the Orders of the Regional Trial Court of Cebu, Branch 58, dated

May 12 and June 10, 2004 that denied Aurora Gos notice of appeal are likewise REVERSED and SET

ASIDE. The Regional Trial Court of Cebu, Branch 58 is hereby DIRECTED to give due course to

petitioners Notice of Appeal dated May 11, 2004.

SO ORDERED.
NEYPES v. COURT OF APPEALS (G.R. No. 141524, September 14, 2005)
motion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, denied because there were factual matters that could be determined only after trial. [1]

Jacob Obania and Domingo Cabacungan filed an action for annulment of judgment and titles
The respondent heirs filed a motion for reconsideration of the order denying their

of land and/or reconveyance and/or reversion with preliminary injunction before the Regional motion to dismiss on the ground that the trial court could very well resolve the issue of

Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of Forest prescription from the bare allegations of the complaint itself without waiting for the trial proper.

Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del
In an order[2] dated February 12, 1998, the trial court dismissed petitioners complaint

Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen. on the ground that the action had already prescribed. Petitioners allegedly received a copy of

the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March 18, 1998,
In the course of the proceedings, the parties (both petitioners and respondents) filed
filed a motion for reconsideration. On July 1, 1998, the trial court issued another order
various motions with the trial court. Among these were: (1) the motion filed by petitioners to
dismissing the motion for reconsideration[3] which petitioners received on July 22, 1998. Five
declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development in
days later, on July 27, 1998, petitioners filed a notice of appeal [4] and paid the appeal fees on
default and (2) the motions to dismiss filed by the respondent heirs and the Land Bank of the
August 3, 1998.
Philippines, respectively.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was
In an order dated May 16, 1997, the trial court, presided by public respondent Judge
filed eight days late.[5] This was received by petitioners on July 31, 1998. Petitioners filed a
Antonio N. Rosales, resolved the foregoing motions as follows: (1) the petitioners motion to
motion for reconsideration but this too was denied in an order dated September 3, 1998. [6]
declare respondents Bureau of Lands and Bureau of Forest Development in default was

granted for their failure to file an answer, but denied as against the respondent heirs of del Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil

Mundo because the substituted service of summons on them was improper; (2) the Land Procedure, petitioners assailed the dismissal of the notice of appeal before the Court of

Banks motion to dismiss for lack of cause of action was denied because there were Appeals.

hypothetical admissions and matters that could be determined only after trial, and (3) the

In the appellate court, petitioners claimed that they had seasonably filed their notice
of appeal. They argued that the 15-day reglementary period to appeal started to run only on
July 22, 1998 since this was the day they received the final order of the trial court denying
their motion for reconsideration. When they filed their notice of appeal on July 27, 1998, only
five days had elapsed and they were well within the reglementary period for appeal. [7]
On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled
that the 15-day period to appeal should have been reckoned from March 3, 1998 or the day
they received the February 12, 1998 order dismissing their complaint. According to the
appellate court, the order was the final order appealable under the Rules. It held further:
Perforce the petitioners tardy appeal was correctly dismissed for
the (P)erfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional and non-compliance with such
legal requirement is fatal and effectively renders the judgment final and
executory.[8]
Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied
by the Court of Appeals on January 6, 2000.
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following
errors allegedly committed by the appellate court:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-
36 OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL
MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL
DOCKET FEES.
II
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING
AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT
HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS
FILED OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR
FINAL ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR
NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL
DOCKET FEE ON AUGUST 3, 1998.
III
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING
THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41, OF THE
1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST]
ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES
DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL
ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY
PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.
IV.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING
THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA
280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE
PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE
FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE
ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.[9]
The foregoing issues essentially revolve around the period within which petitioners should
have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part of due process. It is
merely a statutory privilege and may be exercised only in the manner and in accordance with
the provisions of law. Thus, one who seeks to avail of the right to appeal must comply with
the requirements of the Rules. Failure to do so often leads to the loss of the right to
appeal.[10] The period to appeal is fixed by both statute and procedural rules. BP 129, [11] as for reconsideration only on July 22, 1998, the 15-day reglementary period to appeal had not

amended, provides: yet lapsed when they filed their notice of appeal on July 27, 1998.

Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards,
judgments, or decisions of any court in all these cases shall be fifteen (15) What therefore should be deemed as the final order, receipt of which triggers the
days counted from the notice of the final order, resolution, award, judgment,
or decision appealed from. Provided, however, that in habeas corpus
cases, the period for appeal shall be (48) forty-eight hours from the notice start of the 15-day reglementary period to appeal the February 12, 1998 order dismissing the
of judgment appealed from. x x x
complaint or the July 1, 1998 order dismissing the MR?

In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court declared
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
petitioner Quelnan non-suited and accordingly dismissed his complaint. Upon receipt of the
SEC. 3. Period of ordinary appeal. ― The appeal shall be taken within
fifteen (15) days from the notice of the judgment or final order
appealed from. Where a record on appeal is required, the appellant shall order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was
file a notice of appeal and a record on appeal within thirty (30) days from
the notice of judgment or final order. filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received

The period to appeal shall be interrupted by a timely motion for new trial or another order, this time dismissing his omnibus motion. He then filed his notice of appeal. But
reconsideration. No motion for extension of time to file a motion for new
trial or reconsideration shall be allowed. (emphasis supplied)
this was likewise dismissed ― for having been filed out of time.

The court a quo ruled that petitioner should have appealed within 15 days after the
Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment
dismissal of his complaint since this was the final order that was appealable under the Rules.
or final order appealed from. A final judgment or order is one that finally disposes of a case,
We reversed the trial court and declared that it was the denial of the motion for
leaving nothing more for the court to do with respect to it. It is an adjudication on the merits
reconsideration of an order of dismissal of a complaint which constituted the final order as it
which, considering the evidence presented at the trial, declares categorically what the rights
was what ended the issues raised there.
and obligations of the parties are; or it may be an order or judgment that dismisses an

This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et
action.[12]

al.[14] where we again considered the order denying petitioner Apuyans motion for
As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion
reconsideration as the final order which finally disposed of the issues involved in the case.
for reconsideration should be construed as the final order, not the February 12, 1998 order

which dismissed their complaint. Since they received their copy of the denial of their motion
Based on the aforementioned cases, we sustain petitioners view that the order dated July 1,
1998 denying their motion for reconsideration was the final order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of the 15-day
reglementary period to appeal, did petitioners in fact file their notice of appeal on time?
Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final
order to appeal the decision of the trial court. On the 15th day of the original appeal period
(March 18, 1998), petitioners did not file a notice of appeal but instead opted to file a motion
for reconsideration. According to the trial court, the MR only interrupted the running of the 15-
day appeal period.[15] It ruled that petitioners, having filed their MR on the last day of the 15-
day reglementary period to appeal, had only one (1) day left to file the notice of appeal upon
receipt of the notice of denial of their MR. Petitioners, however, argue that they were entitled
under the Rules to a fresh period of 15 days from receipt of the final order or the order
dismissing their motion for reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the
decision of the trial court. We ruled there that they only had the remaining time of the 15-day
appeal period to file the notice of appeal. We consistently applied this rule in similar
cases,[16] premised on the long-settled doctrine that the perfection of an appeal in the manner
and within the period permitted by law is not only mandatory but also jurisdictional. [17]
rule is also founded on deep-seated considerations of public policy and sound practice that,
at risk of occasional error, the judgments and awards of courts must become final at some
definite time fixed by law.[18]
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of
Court read:
Sec. 3. How appeal is taken. Appeal maybe taken by serving
upon the adverse party and filing with the trial court within thirty (30)
days from notice of order or judgment, a notice of appeal, an appeal
bond, and a record on appeal. The time during which a motion to set
aside the judgment or order or for new trial has been pending shall be
deducted, unless such motion fails to satisfy the requirements of Rule 37.
But where such motion has been filed during office hours of the
last day of the period herein provided, the appeal must be perfected within
the day following that in which the party appealing received notice of the
denial of said motion.[19] (emphasis supplied)
According to the foregoing provision, the appeal period previously consisted of 30 days. BP
129, however, reduced this appeal period to 15 days. In the deliberations of the Committee
on Judicial Reorganization[20] that drafted BP 129, the raison d etre behind the amendment
was to shorten the period of appeal[21] and enhance the efficiency and dispensation of justice.
We have since required strict observance of this reglementary period of appeal. Seldom have
we condoned late filing of notices of appeal,[22] and only in very exceptional instances to better
serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v. Municipality of
Libmanan,[23] however, we declared that appeal is an essential part of our judicial system and
The
the rules of procedure should not be applied rigidly. This Court has on occasion advised the
lower courts to be cautious about not depriving a party of the right to appeal and that every
party litigant should be afforded the amplest opportunity for the proper and just disposition of extensions of time, based on justifiable and compelling reasons, for parties to file their

his cause, free from the constraint of technicalities. appeals. These extensions may consist of 15 days or more.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require To standardize the appeal periods provided in the Rules and to afford litigants fair

litigants to do certain acts must be followed unless, under exceptional circumstances, a delay opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15

in the filing of an appeal may be excused on grounds of substantial justice. There, we days within which to file the notice of appeal in the Regional Trial Court, counted from receipt

condoned the delay incurred by the appealing party due to strong considerations of fairness of the order dismissing a motion for a new trial or motion for reconsideration. [30]

and justice.
Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from
In setting aside technical infirmities and thereby giving due course to tardy appeals,
the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from
we have not been oblivious to or unmindful of the extraordinary situations that merit liberal
the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial
application of the Rules. In those situations where technicalities were dispensed with, our
agencies[31] to the Court of Appeals and Rule 45 governing appeals by certiorari to the
decisions were not meant to undermine the force and effectivity of the periods set by law. But
Supreme Court.[32] The new rule aims to regiment or make the appeal period uniform, to be
we hasten to add that in those rare cases where procedural rules were not stringently applied,
counted from receipt of the order denying the motion for new trial, motion for reconsideration
there always existed a clear need to prevent the commission of a grave injustice. Our judicial
(whether full or partial) or any final order or resolution.
system and the courts have always tried to maintain a healthy balance between the strict
We thus hold that petitioners seasonably filed their notice of appeal within the fresh
enforcement of procedural laws and the guarantee that every litigant be given the full
period of 15 days, counted from July 22, 1998 (the date of receipt of notice denying their
opportunity for the just and proper disposition of his cause.[25]
motion for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3
The Supreme Court may promulgate procedural rules in all courts.[26] It has the sole
of the Rules which states that the appeal shall be taken within 15 days from notice of
prerogative to amend, repeal or even establish new rules for a more simplified and
judgment or final order appealed from. The use of the disjunctive word or signifies
inexpensive process, and the speedy disposition of cases. In the rules governing appeals to
disassociation and independence of one thing from another. It should, as a rule, be construed
it and to the Court of Appeals, particularly Rules 42,[27] 43[28] and 45,[29] the Court allows
in the sense in which it ordinarily implies.[33] Hence, the use of or in the above provision
supposes that the notice of appeal may be filed within 15 days from the notice of judgment or becomes final and executory after the lapse of the original appeal period provided in Rule 41,

within 15 days from notice of the final order, which we already determined to refer to the July Section 3.

1, 1998 order denying the motion for a new trial or reconsideration. Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt

of the order denying their motion for reconsideration on July 22, 1998. Hence, the notice of
Neither does this new rule run counter to the spirit of Section 39 of BP 129 which
appeal was well within the fresh appeal period of 15 days, as already discussed. [34]
shortened the appeal period from 30 days to 15 days to hasten the disposition of cases. The

original period of appeal (in this case March 3-18, 1998) remains and the requirement for We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v.

strict compliance still applies. The fresh period of 15 days becomes significant only when a IAC[35] since the Court of Appeals never even referred to it in its assailed decision.

party opts to file a motion for new trial or motion for reconsideration. In this manner, the trial
WHEREFORE, the petition is hereby GRANTED and the assailed decision of the
court which rendered the assailed decision is given another opportunity to review the case
Court of Appeals REVERSED and SET ASIDE. Accordingly, let the records of this case be
and, in the process, minimize and/or rectify any error of judgment. While we aim to resolve
remanded to the Court of Appeals for further proceedings.
cases with dispatch and to have judgments of courts become final at some definite time, we

likewise aspire to deliver justice fairly. No costs.

In this case, the new period of 15 days eradicates the confusion as to when the 15- SO ORDERED.

day appeal period should be counted from receipt of notice of judgment (March 3, 1998) or

from receipt of notice of final order appealed from (July 22, 1998).

To recapitulate, a party litigant may either file his notice of appeal within 15 days

from receipt of the Regional Trial Courts decision or file it within 15 days from receipt of the

order (the final order) denying his motion for new trial or motion for reconsideration. Obviously,

the new 15-day period may be availed of only if either motion is filed; otherwise, the decision
JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of Jaime C.
Tan, petitioner, vs. HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A.
MAGDANGAL and ESTRELLA MAGDANGAL, respondents.
G.R. No. 136368. January 16, 2002
This is a petition for review of the Decision of the Court of Appeals dated July 15,
1998[1]and its Resolution dated November 9, 1998[2]denying petitioners motion for
reconsideration in CA-G.R. SP-41738.
The facts are as stated in the impugned Decision, viz:
Involved in this case is a parcel of land, designated as Lot No. 645-C, with an area of
34,829 square meters, more or less, situated in Bunawan, Davao City. The lot was once
covered by TCT No. T-72067 of the Registry of Deeds of Davao City in the name of the late
Jaime C. Tan (Tan, for short) married to Praxedes V. Tan.
From the petition, the motion to dismiss petition, their respective annexes and other
pleadings, we gather the following factual antecedents:
On January 22, 1981, Tan, for a consideration of P59,200.00, executed a deed of absolute
sale over the property in question in favor of
spouses Jose Magdangal and Estrella Magdangal. Simultaneous with the execution of
this deed, the same contracting parties entered into another agreement whereunder Tan
was given one (1) year within which to redeem or repurchase the property.
Albeit given several opportunities and/or extensions to exercise the option, Tan failed to
redeem the property until his death on January 4, 1988.
On May 2, 1988, Tans heirs filed before the Regional Trial Court at Davao City a suit
against the Magdangals for reformation of instrument. Docketed as CIVIL CASE
NO. 19049-88, the complaint alleged that, while Tan and the Magdangals denominated their
agreement as deed of absolute sale, their real intention was to conclude an equitable
mortgage.
Barely hours after the complaint was stamped received, the Magdangals were able to have
Tans title over the lot in question canceled and to secure in their names TCT No. T-
134470. This development prompted the heirs of Tan, who were to be later substituted by
Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a supplemental complaint.
The intervening legal tussles are not essential to this narration. What is material is that on
June 4, 1991, Branch 11 of the Regional Trial Court of Davao City rendered judgment
finding for Tan, Jr., as plaintiff therein. The dispositive portion of the decision reads:.
WHEREFORE, judgment is rendered:
1. The Deed of Absolute Sale (Exhibits B, B-1) is, in accordance with the true intention of
the parties, hereby declared and reformed an equitable mortgage;
2. The plaintiff is ordered to pay the defendants within 120 days after the finality of this
decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the date
the complaint was filed, until paid;
3. In order to avoid multiplicity of suits and to fully give effect to the true intention of the
parties, upon the payment of the aforesaid amount, TCT No. T-134470 in the name of
defendants Jose Magdangal and Estrella Magdangal (Exh. 13) and shall be deemed
canceled and null and void and TCT No. T-72067 in the name of Jaime C. Tan
and Praxedes Valles Tan (Exh. A) be reinstated.
No pronouncement as to costs.
SO ORDERED. (Annex B, Petition; Emphasis added).
From the above, the Magdangals appealed to this Court in CA-G.R. CV No. 33657.
In a decision promulgated on September 28, 1995, this Court, thru its then Special Third
Division, affirmed in toto the appealed decision of the lower court. Copy of
this affirmatory judgment was each received by the Magdangals and Tan, Jr. on October 5,
1995.
On March 13, 1996, the Clerk of this Court entered in the Book of Entries of Judgment the
Decision in CA-G.R. CV No. 33657 and issued the corresponding Entry of Judgment which,
on its face, stated that the said Decision has on October 21, 1995 become final
and executory (Annex L, Petition; Emphasis added).
On March 21, 1996, the Magdangals filed in the lower court a MOTION FOR
CONSOLIDATION AND WRIT OF POSSESSION, therein alleging that they did
not appeal from the aforesaid decision of this Court, adding [T]hat the appealed judgment of
the Court of Appeals has become final and executory 15 days from October 5, 1995 or up to
October 20, 1995, which the 120 days redemption period commences. And noting that the
redemption period has expired without Tan, Jr. exercising his option, the Magdangals thus
prayed that the title in the name of Jaime C. Tan and Praxedes Tan be consolidated and
confirmed in the name of the (Magdangals) x x x and pending such issuance, a writ of
possession be ordered issued (Annex C, Petition).
In opposition to this motion (Annex F, Petition), Tan, Jr. alleged, among other things, that
until an entry of judgment has been issued by the Court of Appeals and copy thereof
furnished the parties, the appealed decision of the court a quo in this case cannot be
considered final and executory. Pressing the point, Tan, Jr.,
citing Cueto vs. Collantes, infra., would then assert that the period of redemption on his part
commenced to run from receipt of entry of judgment in CA-G.R. CV No. 33657.
Meanwhile, Tan, Jr. via a motion for execution dated March 27, 1996, which he filed directly
with this court, prayed this court to direct the court a quo to issue the corresponding writ of
execution in Civil Case No. 19049-88. In a related move, Tan, Jr. filed on April 16,
1996, a MANIFESTATION AND MOTION therein advising the court a quo of his intention to
redeem the property in question and of the fact that, on such date, he has deposited with its
clerk of court the repurchase price, plus interest, as required by its original decision. By way
of relief, Tan, Jr. prayed that the Magdangals be ordered to claim the amount thus
deposited and the Register of Deeds of Davao City, to reinstate the title of Jaime Tan
and Praxedes Tan.
Jointly acting on the aforementioned MOTION FOR CONSOLIDATION AND WRIT OF
POSSESSION of the Magdangals (Annex C, Petition), MANIFESTATION AND MOTION of
Tan, Jr. (Annex I, Petition), the court a quo presided by the respondent judge, came out with
the first challenged order of June 10, 1996 (Annex N, Petition), dispositively reading, as
follows:
WHEREFORE, x x x the Motion for Consolidation and a Writ of Possession is hereby
DENIED for lack of merit.
The deposit of the amount of P116,032.00 made by plaintiff with the Office of the Clerk of
Court x x x on April 17, 1996 is hereby considered full payment of the redemption price and
the Clerk of Court is hereby ordered to deliver said amount to herein defendants.
The Register of Deeds of Davao City x x x is hereby directed to cancel TCT No. T-134470 in
the name of Jose Magdangal and Estrella Magdangal and, thereafter, to reinstate TCT No.
72067 in the name of Jaime C. Tan and Praxedes Valles Tan and to submit her compliance
thereto within ten (10) days from receipt of this Order.
SO ORDERED.
Explaining her action, the respondent judge wrote in the same order:
Following the ruling of the Supreme Court in Cueto vs. Collantes, et al., 97 Phil. 325, the
120 days period for plaintiff to pay the amount of P59,200.00 plus interest x x x should be
reckoned from the date of Entry of Judgment x x x which was March 13, 1996.The
plaintiff made a deposit on April 17, 1996 well within the 120-day period mandated by the
decision of this Court.
In due time, the Magdangals moved for a reconsideration. However, in her next assailed
order of July 24, 1996 (Annex R, Petition), the respondent judge denied the motion for being
pro-forma and fatally defective.[3]
Petitioner assails the aforequoted Decision as follows:
I. Petitioners right to due process was violated when the Court of Appeals rendered
a judgment on the merits of private respondents petition without granting to
petitioner the opportunity to controvert the same.
II. Appeal not certiorari was the appropriate remedy of private respondents as
there was no grave abuse of discretion as to amount to lack of or excess of
jurisdiction on the part of the trial judge. Neither is delay in resolving the main
case a ground for giving due course to the petition.
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the Court of Appeals in
resolving the petition of private respondents. It is still good case law and was
in effect made a part of section 2 of Rule 68 of the 1997 Rules of Civil
Procedure on Foreclosure of Mortgage.
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA 242 case is not
applicable to the case at bar; on the other hand the
ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827, applies.
V. Equity considerations justify giving due course to this petition.[4](emphasis ours)
We will immediately resolve the key issue of what rule should govern the finality of
judgment favorably obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial court held that:
(1) the contract between the parties is not an absolute sale but an equitable mortgage; and
(2) petitioner Tan should pay to the respondents Magdangal within 120 days after
the finality of this decision P59,200.00 plus interest at the rate of 12% per annum from May
2, 1988, the date the complaint was filed, until paid. [5]
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third Division of the
Court of Appeals affirmed the decision of the trial court in toto. Both parties received the
decision of the appellate court on October 5, 1995. On March 13, 1996, the clerk of court of
the appellate court entered in the Book of Entries of Judgement the decision in CA-G.R. CV
No. 33657 and issued the corresponding Entry of Judgment which, on its face, stated that the
said decision has on October 21, 1995 become final and executory.[6]
The respondents Magdangal filed in the trial court a Motion for Consolidation and Writ
of Possession.[7]They alleged that the 120-day period of redemption of the petitioner has
expired. They reckoned that the said period began 15 days after October 5, 1995, the date
when the finality of the judgment of the trial court as affirmed by the appellate court
commenced to run.
On the other hand, petitioner filed on March 27, 1996 a motion for execution in the
appellate court praying that it direct the court a quo to issue the corresponding writ of
execution in Civil Case No. 19049-88.[8]On April 17, 1996, petitioner deposited
with the clerk of court the repurchase price of the lot plus interest as ordered by the decision.
On June 10, 1996, the trial court allowed the petitioner to redeem the lot in question. It
ruled that the 120-day redemption period should be reckoned from the date of Entry of
Judgment in the appellate court or from March 13, 1996.[9]The redemption price was
deposited on April 17, 1996. As aforestated, the Court of Appeals set aside the ruling of the
trial court.
From 1991-1996, the years relevant to the case at bar, the rule that governs finality of
judgment is Rule 51 of the Revised Rules of Court. Its sections 10 and 11 provide:
SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or
reconsideration is filed within the time provided in these Rules, the judgment or final
resolution shall forthwith be entered by the clerk in the book of entries of judgments.The
date when the judgment or final resolution becomes executory shall be deemed as the date
of its entry. The record shall contain the dispositive part of the judgment or final resolution
and shall be signed by the clerk, with a certificate that such judgment or final resolution has
become final and executory. (2a, R36)
SEC. 11. Execution of judgment. Except where the judgment or final order or resolution, or
a portion thereof, is ordered to be immediately executory, the motion for its execution may
only be filed in the proper court after its entry.
In original actions in the Court of Appeals, its writ of execution shall be accompanied by
a certified true copy of the entry of judgment or final resolution and addressed to any
appropriate officer for its enforcement.
In appealed cases, where the motion for execution pending appeal is filed in the Court
of Appeals at a time that it is in possession of the original record or the record on appeal, the
resolution granting such motion shall be transmitted to the lower court from which the case
originated, together with a certified true copy of the judgment or final order to be executed,
with a directive for such court of origin to issue the proper writ for its enforcement.
This rule has been interpreted by this Court in Cueto vs. Collantes as follows:[10]
The only error assigned by appellants refer to the finding of the lower court that plaintiff can
still exercise his right of redemption notwithstanding the expiration of the 90-day period fixed
in the original decision and, therefore, defendants should execute the deed
of reconveyance required in said decision. Appellants contend that, the final judgment of the
Court of Appeals having been entered on July 8, 1953, the 90-day period for the exercise of
the right of redemption has long expired, it appearing that plaintiff deposited the redemption
money with the clerk of court only on October 17, 1953, or, after the expiration of 101
days. Appellee brands this computation as erroneous, or one not in accordance with the
procedure prescribed by the rules of court.
Appellees contention should be sustained. The original decision provides that appellee may
exercise his right of redemption within the period of 90 days from the date the judgment has
become final. It should be noted that appellee had appealed from this decision. This
decision was affirmed by the court of appeals and final judgment was entered on July 8,
1953. Does this mean that the judgment became final on that date?
Let us make a little digression for purposes of clarification. Once a decision is rendered by
the Court of Appeals a party may appeal therefrom by certiorari by filing with the Supreme
Court a petition within 10 days from the date of entry of such decision (Section 1, Rule
46). The entry of judgment is made after it has become final, i.e., upon the expiration of 15
days after notice thereof to the parties (Section 8, Rule 53, as modified by a resolution of
the Supreme Court dated October 1, 1945). But, as Chief Justice Moran has said, such
finality *** is subject to the aggrieved partys right of filing a petition for certiorari under this
section, which means that the Court of Appeals shall remand the case to the lower court for
the execution of its judgment, only after the expiration of ten (10) days from the date of such
judgment, if no petition for certiorari is filed within that period. (1 Moran, Comments on the
Rules of Court, 1952 ed., p. 950) It would therefore appear that the date of entry
of judgment of the Court of Appeals is suspended when a petition for review is filed to
await the final entry of the resolution or decision of the Supreme Court.
Since in the present case appellee has filed a petition for review within
the reglementary period, which was dismissed by resolution of July 6, 1953, and for lack of
a motion for reconsideration the entry of final judgment was made on August 7, 1953, it
follows that the 90-day period within which appellee may exercise his right of redemption
should be counted from said date, August 7, 1953. And appellee having exercised such
right on October 17, 1953 by depositing the redemption money with the clerk of court, it is
likewise clear that the motion be filed for the exercise of such right is well taken and is within
the purview of the decision of the lower court.[11]
On April 18, 1994, this Court issued Circular No. 24-94, viz:
TO: COURT OF APPEALS, SANDIGANBAYAN, COURT OF TAX APPEALS,
REGIONAL TRIAL COURTS, METROPOLITAN TRIAL COURTS,
MUNICIPAL TRIAL COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, AND
ALL MEMBERS OF THE INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: RESOLUTION OF THE COURT EN BANC APPROVING AND
PROMULGATING THE REVISED PROVISION ON EXECUTION OF
JUDGMENTS, SPECIFICALLY IN APPEALED CASES, AND AMENDING
SECTION 1, RULE 39 OF THE RULES OF COURT
It appears that in a number of instances, the execution of judgments in appealed cases
cannot be promptly enforced because of undue administrative delay in the remand of the
records to the court of origin, aggravated at times by misplacement or misdelivery of said
records. The Supreme Court Committee on the Revision of the Rules of Court has drafted
proposals including a provision which can remedy the procedural impasse created by said
contingencies.
Accordingly, pending approval by the Court of the revised rules on Civil Procedure, and to
provide a solution to the aforestated problems, the Court Resolved to approve and
promulgate the following section thereof on execution of judgments, amending Section 1,
Rule 39 of the Rules of Court:
Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of
right, on motion, upon a judgment or order that disposes of the action or proceeding upon
expiration of the period to appeal therefrom if no appeal has been duly perfected.
If the appeal has been duly perfected and finally resolved, such execution may forthwith be
applied for in the lower court from which the action originated, on motion of the
judgment obligee, submitting therewith certified true copies of the judgment or judgments or
the final order or orders sought to be enforced and of the entry thereof, with notice to the
adverse party.
The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.
This resolution shall be published in two (2) newspapers of general circulation and shall
take effect on June 1, 1994.
April 18, 1994.
(Sgd.) ANDRES R. NARVASA
Chief Justice
The Circular took effect on June 1, 1994.
The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of
judgment by providing in section 1, Rule 39 as follows:
Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of
right, on motion, upon a judgment or order that disposes of the action or proceeding upon
the expiration of the period to appeal therefrom if no appeal has been duly perfected. (1a)
If the appeal has been duly perfected and finally resolved, the execution may forthwith be
applied for in the court of origin, on motion of the judgment obligee, submitting therewith
certified true copies of the judgment or judgments or final order or orders sought to be
enforced and of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.
The rationale of the new rule is explained by retired Justice F.D. Regalado as follows:[12]
1. The term final order is used in two senses depending on whether it is used on the issue
of appealability or on the issue of binding effect. For purposes of appeal, an order is final if it
disposes of the action, as distinguished from an interlocutory order which leaves something
to be done in the trial court with respect to the merits of the case (De la Cruz, et al.
vs. Paras, et al., L-41053, Feb. 27, 1976). For purposes of binding effect or whether it can
be subject of execution, an order is final or executory after the lapse of
the reglementary period to appeal and no appeal has been perfected (see Perez, et al.
vs. Zulueta, L-10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al., G.R. No. 75000,
Feb. 27, 1987; Montilla vs. CA, et al., L-47968, May 9, 1988).
2. On the aspect of appealability, these revised Rules use the adjective final with respect to
orders and resolutions, since to terminate a case the trial courts issue orders while the
appellate courts and most of the quasi-judicial agencies issue resolutions.Judgments are
not so qualified since the use of the so-called interlocutory judgments is not favored in this
jurisdiction, while the categorization of an order or a resolution for purposes of denoting that
it is appealable is to distinguish them from interlocutory orders or resolutions. However, by
force of extended usage the phrase final and executory judgment is sometimes used and
tolerated, although the use of executory alone would suffice. These observations also apply
to the several and separate judgments contemplated in Rule 36, or partial judgments which
totally dispose of a particular claim or severable part of the case, subject to the power of the
court to suspend or defer action on an appeal from or further proceedings in such special
judgment, or as provided by Rule 35 on the matter of partial summary judgments which are
not considered as appealable (see Sec. 4, Rule 35 and the explanation therein).
The second paragraph of this section is an innovation in response to complaints over the
delay caused by the former procedure in obtaining a writ of execution of a judgment, which
has already been affirmed on appeal, with notice to the parties. As things then stood, after
the entry of judgment in the appellate court, the prevailing party had to wait for the records
of the case to be remanded to the court of origin when and where he could then move for
the issuance of a writ of execution. The intervening time could sometimes be substantial,
especially if the court a quo is in a remote province, and could also be availed of by the
losing party to delay or thwart actual execution.
On these considerations, the Supreme Court issued Circular No. 24-94, dated April 18,
1994, approving and promulgating in advance this amended Section 1 of Rule 39 and
declaring the same effective as of June 1, 1994.
Under the present procedure, the prevailing party can secure certified true copies of the
judgment or final order of the appellate court and the entry thereof, and submit the same to
the court of origin with and to justify his motion for a writ of execution, without waiting for its
receipt of the records from the appellate court. That motion must be with notice to the
adverse party, with a hearing when the circumstances so require, to enable him to file any
objection thereto or bring to the attention of said court matters which may have transpired
during the pendency of the appeal and which may have a bearing on the execution sought
to enforce the judgment.
The third paragraph of this section, likewise a new provision, is due to the experience of the
appellate courts wherein the trial court, for reasons of its own or other unjustifiable
circumstances, unduly delays or unreasonably refuses to act on the motion for execution or
issue the writ therefor. On motion in the same case while the records are still with the
appellate court, or even after the same have been remanded to the lower court, the
appellate court can direct the issuance of the writ of execution since such act is merely in
the enforcement of its judgment and which it has the power to require.
It is evident that if we apply the old rule on finality of judgment, petitioner redeemed the
subject property within the 120-day period of redemption reckoned from the appellate courts
entry of judgment. The appellate court, however, did not apply the old rule but the 1997
Revised Rules of Civil Procedure. In fine, it applied the new rule retroactively and we hold
that given the facts of the case at bar this is an error.
There is no dispute that rules of procedure can be given retroactive effect. This general
rule, however, has well-delineated exceptions. We quote author Agpalo:[13]
9.17. Procedural laws.
Procedural laws are adjective laws which prescribe rules and forms of procedure of
enforcing rights or obtaining redress for their invasion; they refer to rules of procedure by
which courts applying laws of all kinds can properly administer justice. They include rules of
pleadings, practice and evidence. As applied to criminal law, they provide or regulate the
steps by which one who commits a crime is to be punished.
The general rule that statutes are prospective and not retroactive does not ordinarily apply
to procedural laws. It has been held that a retroactive law, in a legal sense, is one which
takes away or impairs vested rights acquired under laws, or creates a new obligation and
imposes a new duty, or attaches a new disability, in respect of transactions or
considerations already past. Hence, remedial statutes or statutes relating to remedies or
modes of procedure, which do not create new or take away vested rights, but only operate
in furtherance of the remedy or confirmation of rights already existing, do not come within
the legal conception of a retroactive law, or the general rule against the retroactive
operation of statutes. The general rule against giving statutes retroactive operation whose
effect is to impair the obligations of contract or to disturb vested rights does not prevent the
application of statutes to proceedings pending at the time of their enactment where they
neither create new nor take away vested rights. A new statute which deals with procedure
only is presumptively applicable to all actions those which have accrued or are pending.
Statutes regulating the procedure of the courts will be construed as applicable to actions
pending and undetermined at the time of their passage. Procedural laws are retroactive in
that sense and to that extent. The fact that procedural statutes may somehow affect the
litigants rights may not preclude their retroactive application to pending actions. The
retroactive application of procedural laws is not violative of any right of a person who may
feel that he is adversely affected. Nor is the retroactive application of procedural statutes
constitutionally objectionable. The reason is that as a general rule no vested right may
attach to, nor arise from, procedural laws. It has been held that a person has no vested right
in any particular remedy, and a litigant cannot insist on the application to the trial of his
case, whether civil or criminal, of any other than the existing rules of procedure.
Thus, the provision of Batas Bilang 129 in Section 39 thereof prescribing that no record on
appeal shall be required to take an appeal is procedural in nature and should therefore be
applied retroactively to pending actions. Hence, the question as to whether an appeal from
an adverse judgment should be dismissed for failure of appellant to file a record on appeal
within thirty days as required under the old rules, which question is pending resolution at the
time Batas Bilang 129 took effect, became academic upon the effectivity of said law
because the law no longer requires the filing of a record on appeal and its retroactive
application removed the legal obstacle to giving due course to the appeal. A statute which
transfers the jurisdiction to try certain cases from a court to a quasi-judicial tribunal is a
remedial statute that is applicable to claims that accrued before its enactment but
formulated and filed after it took effect, for it does not create new nor take away vested
rights. The court that has jurisdiction over a claim at the time it accrued cannot validly try the
claim where at the time the claim is formulated and filed the jurisdiction to try it has been
transferred by law to a quasi-judicial tribunal, for even actions pending in one court may be
validly taken away and transferred to another and no litigant can acquire a vested right to be
heard by one particular court.
9.18. Exceptions to the rule.
The rule that procedural laws are applicable to pending actions or proceedings admits
certain exceptions. The rule does not apply where the statute itself expressly or by
necessary implication provides that pending actions are excepted from its
operation, orwhere to apply it to pending proceedings would impair vested rights. Under
appropriate circumstances, courts may deny the retroactive application of procedural laws in
the event that to do so would not be feasible or would work injustice. Nor may procedural
laws be applied retroactively to pending actions if to do so would involve intricate problems
of due process or impair the independence of the courts.
We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be
given retroactive effect in this case as it would result in great injustice to the
petitioner. Undoubtedly, petitioner has the right to redeem the subject lot and this right is a
substantive right. Petitioner followed the procedural rule then existing as well as the decisions
of this Court governing the reckoning date of the period of redemption when he redeemed the
subject lot. Unfortunately for petitioner, the rule was changed by the 1997 Revised
Rules of Procedure which if applied retroactively would result in his losing the right to redeem
the subject lot. It is difficult to reconcile the retroactive application of this procedural rule with
the rule of fairness. Petitioner cannot be penalized with the loss of the subject lot when he
faithfully followed the laws and the rule on the period of redemption when he made the
redemption. The subject lot may only be 34,829 square meters but as petitioner claims, it is
the only property left behind by their father, a private law practitioner who was felled by an
assassins bullet.[14]
Petitioner fought to recover this lot from 1988. To lose it because of a change of
procedure on the date of reckoning of the period of redemption is inequitous. The manner of
exercising the right cannot be changed and the change applied retroactively if to do so will
defeat the right of redemption of the petitioner which is already vested.
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998 and
its Resolution dated November 9, 1998 in CA-G.R. SP-41738 are annulled and set
aside. The Orders dated June 10, 1996 and July 24, 1996 of the RTC of Davao City,
11th Judicial Region, Branch 11, in Civil Case No. 19049-88 are reinstated. No costs.
SO ORDERED.
LUCIA BARRAMEDA VDA. DE BALLESTEROS V. RURAL BANK OF CANAMAN
INC., represented by its Liquidator, THE PHILIPPINE DEPOSIT INSURANCE extrajudicial partition and waiver, and the subsequent mortgage in favor of RBCI be declared
CORPORATION
null and void having been executed without her knowledge and consent. She also prayed for
(G.R. No. 176260, November 24, 2010) damages.

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Civil
Procedure assailing the August 15, 2006 Decision[1] of the Court of Appeals (CA) in CA-G.R.

No. 82711, modifying the decision of the Regional Trial Court of Iriga City, Branch 36 (RTC- In its Answer, RBCI claimed that in 1979, Lucia sold one of the two parcels to Rico which

Iriga), in Civil Case No. IR-3128, by ordering the consolidation of the said civil case with represented her share in the estate of her husband. The extrajudicial partition, waiver and

Special Proceeding Case No. M-5290 (liquidation case) before mortgage were all executed with the knowledge and consent of Lucia although she was not

the Regional Trial Court of Makati City, Branch 59 (RTC-Makati). able to sign the document. RBCI further claimed that Parcel B had already been foreclosed

way back in 1999 which fact was known to Lucia through the auctioning notary
public. Attorneys fees were pleaded as counterclaim.

It appears from the records that on March 17, 2000, petitioner Lucia Barrameda Vda.
The case was then set for pre-trial conference. During the pre-trial, RBCIs counsel filed a
De Ballesteros (Lucia) filed a complaint for Annulment of Deed of Extrajudicial Partition, Deed
motion to withdraw after being informed that Philippine Deposit Insurance
of Mortgage and Damages with prayer for Preliminary Injunction against her children, Roy,
Corporation (PDIC) would handle the case as RBCI had already been closed and placed
Rito, Amy, Arabel, Rico, Abe, Ponce Rex and Adden, all surnamed Ballesteros, and the Rural
under the receivership of the PDIC. Consequently, on February 4, 2002, the lawyers of PDIC
Bank of Canaman, Inc., Baao Branch (RBCI) before the RTC-Iriga. The case was docketed
took over the case of RBCI.
as Civil Case No. IR-3128.

On May 9, 2003, RBCI, through PDIC, filed a motion to dismiss on the ground that the RTC-
In her complaint, Lucia alleged that her deceased husband, Eugenio, left two (2) parcels of
Iriga has no jurisdiction over the subject matter of the action. RBCI stated that pursuant to
land located in San Nicolas, Baao, Camarines Sur, each with an area of 357 square
Section 30, Republic Act No. 7653 (RA No. 7653), otherwise known as the New Central Bank
meters; that on March 6, 1995, without her knowledge and consent, her children executed a
Act, the RTC-Makati, already constituted itself, per its Order dated August 10, 2001, as the
deed of extrajudicial partition and waiver of the estate of her husband wherein all the heirs,
liquidation court to assist PDIC in undertaking the liquidation of RBCI.Thus, the subject matter
including Lucia, agreed to allot the two parcels to Rico Ballesteros (Rico); that, still, without
of Civil Case No. IR-3128 fell within the exclusive jurisdiction of such liquidation court. Lucia
her knowledge and consent, Rico mortgaged Parcel B of the estate in favor of RBCI which
opposed the motion.
mortgage was being foreclosed for failure to settle the loan secured by the lot; and that Lucia

was occupying Parcel B and had no other place to live. She prayed that the deed of
 On July 29, 2003, the RTC-Iriga issued an order[2] granting the Motion to Dismiss, to
wit:
This resolves the Motion to Dismiss filed by the defendant Rural
Bank of Canaman, Inc., premised on the ground that this court has no
jurisdiction over the subject matter of the action. This issue of jurisdiction
was raised in view of the pronouncement of the Supreme Court in Ong v.
C.A. 253 SCRA 105 and in the case of Hernandez v. Rural Bank of Lucena,
Inc., G.R. No. L-29791 dated January 10, 1978, wherein it was held that
the liquidation court shall have jurisdiction to adjudicate all claims against
the bank whether they be against assets of the insolvent bank, for Specific
Performance, Breach of Contract, Damages or whatever.
It is in view of this jurisprudential pronouncement made by no less
than the Supreme Court, that this case is, as far as defendant Rural Bank
of Canaman Inc., is concerned, hereby ordered DISMISSED without
prejudice on the part of the plaintiff to ventilate their claim before
the Liquidation Court now, RTC Branch 59, Makati City.
SO ORDERED.
Not in conformity, Lucia appealed the RTC ruling to the CA on the ground that the RTC-Iriga
erred in dismissing the case because it had jurisdiction over Civil Case No. IR-3128 under the
rule on adherence of jurisdiction.
On August 15, 2006, the CA rendered the questioned decision ordering the consolidation of
dated December 14, 2006.[5]
Civil Case No. IR-3128 and the liquidation case pending before RTC-Makati. The appellate
court ratiocinated thus:
The consolidation is desirable in order to prevent confusion, to avoid
multiplicity of suits and to save unnecessary cost and expense. Needless
to add, this procedure is well in accord with the principle that the rules of
procedure shall be liberally construed in order to promote their object and
to assist the parties in obtaining just, speedy and inexpensive determination
of every action and proceeding (Vallacar Transit, Inc. v. Yap, 126 SCRA
500 [1983]; Suntay v. Aguiluz, 209 SCRA 500 [1992] citing Ramos v.
Ebarle, 182 SCRA 245 [1990]). It would be more in keeping with the
demands of equity if the cases are simply ordered consolidated. Pursuant
to Section 2, Rule 1, Revised Rules of Court, the rules on consolidation
should be liberally construed to achieve the object of the parties in obtaining
just, speedy and inexpensive determination of their cases (Allied Banking
Corporation v. Court of Appeals, 259 SCRA 371 [1996]).
The dispositive portion of the decision reads:
IN VIEW OF ALL THE FOREGOING, the appealed decision is
hereby MODIFIED, in such a way that the dismissal of this case (Civil Case
No. IR-3128) is set aside and in lieu thereof another one is entered ordering
the consolidation of said case with the liquidation case docketed as
Special Proceeding No. M-5290 before Branch 59 of
the Regional Trial Court of Makati City, entitled In Re: Assistance in the
Judicial Liquidation of Rural Bank of Canaman, Camarines Sur, Inc.,
Philippine Deposit Corporation, Petitioner. No pronouncement as to cost.
SO ORDERED.[3]
Lucia filed a motion for reconsideration[4] but it was denied by the CA in its Resolution
Hence, the present petition for review on certiorari anchored on the following
 GROUNDS
(I)
THE COURT OF APPEALS ERRED IN NOT FINDING THAT
THE REGIONAL TRIAL COURT OF IRIGA CITY, BRANCH 36 IS
VESTED WITH JURISDICTION TO CONTINUE TRYING AND
ULTIMATELY DECIDE CIVIL CASE NO. IR-3128.
(II)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION IN ORDERING THE CONSOLIDATION OF CIVIL CASE
NO. IR-3128 WITH THE LIQUIDATION CASE DOCKETED AS SPECIAL
PROCEEDINGS NO. M-5290 BEFORE BRANCH 59 OF
THE REGIONAL TRIAL COURT OF MAKATI CITY.[6]
Given the foregoing arguments, the Court finds that the core issue to be resolved in this
petition involves a determination of whether a liquidation court can take cognizance of a case
wherein the main cause of action is not a simple money claim against a bank ordered closed,
placed under receivership of the PDIC, and undergoing a liquidation proceeding.
Lucia contends that the RTC-Iriga is vested with jurisdiction over Civil Case No.
3128, the constitution of the liquidation court notwithstanding. According to her, the case was
filed before the RTC-Iriga on March 17, 2000 at the time RBCI was still doing business or
before the defendant bank was placed under receivership of PDIC in January 2001.
She further argues that the consolidation of the two cases is improper. Her case,
which is for annulment of deed of partition and waiver, deed of mortgage and damages,
cannot be legally brought before the RTC-Makati with the liquidation case considering that
her cause of action against RBCI is not a simple claim arising out of a creditor-debtor
relationship, but one which involves her rights and interest over a certain property irregularly
acquired by RBCI. Neither is she a creditor of the bank, as only the creditors of the insolvent
bank are allowed to file and ventilate claims before the liquidator, pursuant to the August 10,
2001 Order of the RTC-Makati which granted the petition for assistance in the liquidation of
RBCI.
In its Comment,[7] PDIC, as liquidator of RBCI, counters that the consolidation of Civil
Case No. 3128 with the liquidation proceeding is proper. It posits that the liquidation court of
RBCI, having been established, shall have exclusive jurisdiction over all claims against the
said bank.
After due consideration, the Court finds the petition devoid of merit.
Lucias argument, that the RTC-Iriga is vested with jurisdiction to continue trying Civil
Case No. IR-3128 until its final disposition, evidently falls out from a strained interpretation of
the law and jurisprudence. She contends that:
Since the RTC-Iriga has already obtained jurisdiction over the
case it should continue exercising such jurisdiction until the final termination
of the case. The jurisdiction of a court once attached cannot be ousted by
subsequent happenings or events, although of a character which would
have prevented jurisdiction from attaching in the first instance, and the
 Court retains jurisdiction until it finally disposes of the case (Aruego Jr. v.
Court of Appeals, 254 SCRA 711).
When a court has already obtained and is exercising jurisdiction
over a controversy, its jurisdiction to proceed to final determination of the
case is not affected by a new legislation transferring jurisdiction over such
proceedings to another tribunal. (Alindao v. Joson, 264 SCRA 211). Once
jurisdiction is vested, the same is retained up to the end of the litigation
(Bernate v. Court of Appeals, 263 SCRA 323).[8]
actions against the insolvent bank and designed to
establish due process and orderliness in the liquidation
of the bank, to obviate the proliferation of litigations and
to avoid injustice and arbitrariness (citing Ong v. CA, 253
SCRA 105 [1996]). The lawmaking body contemplated
that for convenience, only one court, if possible, should
pass upon the claims against the insolvent bank and that
the liquidation court should assist the Superintendents of
Banks and regulate his operations (citing Central Bank
of the Philippines, et al. v. CA, et al., 163 SCRA 482
[1988]).[9]

The afore-quoted cases, cited by Lucia to bolster the plea for the continuance of her
As regards Lucias contention that jurisdiction already attached when Civil Case No. IR-3128
case, find no application in the case at bench.
was filed with, and jurisdiction obtained by, the RTC-Iriga prior to the filing of the liquidation

case before the RTC-Makati, her stance fails to persuade this Court. In refuting this assertion,

Indeed, the Court recognizes the doctrine on adherence of jurisdiction. Lucia, respondent PDIC cited the case of Lipana v. Development Bank of Rizal[10] where it was held

however, must be reminded that such principle is not without exceptions. It is well to quote that the time of the filing of the complaint is immaterial, viz:

the ruling of the CA on this matter, thus: It is the contention of petitioners, however, that the placing under
receivership of Respondent Bank long after the filing of the complaint
This Court is not unmindful nor unaware of the doctrine on the removed it from the doctrine in the said Morfe Case.
adherence of jurisdiction. However, the rule on adherence of jurisdiction is
not absolute and has exceptions. One of the exceptions is that when the
change in jurisdiction is curative in character (Garcia v. Martinez, 90 SCRA
This contention is untenable. The time of the filing of the complaint
331 [1979]; Calderon, Sr. v. Court of Appeals, 100 SCRA 459 [1980]; Atlas
is immaterial. It is the execution that will obviously prejudice the other
Fertilizer Corporation v. Navarro, 149 SCRA 432 [1987]; Abad v. RTC of
depositors and creditors. Moreover, as stated in the said Morfe case, the
Manila, Br. Lll, 154 SCRA 664 [1987]).
effect of the judgment is only to fix the amount of the debt, and not to give
priority over other depositors and creditors.

For sure, Section 30, R.A. 7653 is curative in character when it

declared that the liquidation court shall have jurisdiction in the same
proceedings to assist in the adjudication of the disputed claims against the
Bank.The interpretation of this Section (formerly Section 29, R.A. 265) The cited Morfe case[11] held that after the Monetary Board has declared that a bank
becomes more obvious in the light of its intent. In Manalo v. Court of
is insolvent and has ordered it to cease operations, the Board becomes the trustee of its
Appeals (366 SCRA 752, [2001]), the Supreme Court says:
assets for the equal benefit of all the creditors, including depositors. The assets of the

xxx The requirement that all claims against the
bank be pursued in the liquidation proceedings filed by
the Central Bank is intended to prevent multiplicity of
insolvent banking institution are held in trust for the equal benefit of all creditors, and after its
insolvency, one cannot obtain an advantage or a preference over another by an attachment,
execution or otherwise.

Thus, to allow Lucias case to proceed independently of the liquidation case, a
possibility of favorable judgment and execution thereof against the assets of RBCI would not
only prejudice the other creditors and depositors but would defeat the very purpose for which
a liquidation court was constituted as well.
Anent the second issue, Lucia faults the CA in directing the consolidation of Civil
Case No. IR-3128 with Special Proceedings No. M-5290. The CA committed no error. Lucias
complaint involving annulment of deed of mortgage and damages falls within the purview of
a disputed claim in contemplation of Section 30 of R.A. 7653 (The New Central Bank Act).
The jurisdiction should be lodged with the liquidation court. Section 30 provides:
Sec. 30. Proceedings in Receivership and Liquidation. -
Whenever, upon report of the head of the supervising or examining
department, the Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the
ordinary course of business: Provided, That this shall not include inability
to pay caused by extraordinary demands induced by financial panic in the
banking community;
(b) has insufficient realizable assets, as determined by the
Bangko Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses
to its depositors or creditors; or
(d) has wilfully violated a cease and desist order under Section 37
that has become final, involving acts or transactions which amount to fraud
or a dissipation of the assets of the institution; in which cases, the Monetary
Board may summarily and without need for prior hearing forbid the
institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the banking
institution.
For a quasi-bank, any person of recognized competence in
banking or finance may be designated as receiver.
The receiver shall immediately gather and take charge of all the
assets and liabilities of the institution, administer the same for the benefit
of its creditors, and exercise the general powers of a receiver under the
Revised Rules of Court but shall not, with the exception of administrative
expenditures, pay or commit any act that will involve the transfer or
disposition of any asset of the institution: Provided, That the receiver may
deposit or place the funds of the institution in non-speculative
investments. The receiver shall determine as soon as possible, but not later
than ninety (90) days from take over, whether the institution may be
rehabilitated or otherwise placed in such a condition that it may be
permitted to resume business with safety to its depositors and creditors and
the general public: Provided, That any determination for the resumption of
business of the institution shall be subject to prior approval of the Monetary
Board.
If the receiver determines that the institution cannot be
rehabilitated or permitted to resume business in accordance with the next
preceding paragraph, the Monetary Board shall notify in writing the board
of directors of its findings and direct the receiver to proceed with the
liquidation of the institution. The receiver shall:
(1) file ex parte with the proper regional trial court, and without
requirement of prior notice or any other action, a petition for assistance in
the liquidation of the institution pursuant to a liquidation plan adopted by
the Philippine Deposit Insurance Corporation for general application to all
closed banks. In case of quasi-banks, the liquidation plan shall be adopted
by the Monetary Board. Upon acquiring jurisdiction, the court shall, upon
motion by the receiver after due notice, adjudicate disputed
claims against the institution, assist the enforcement of individual liabilities
of the stockholders, directors and officers, and decide on other issues as
may be material to implement the liquidation plan adopted. The receiver
shall pay the cost of the proceedings from the assets of the institution.
(2) convert the assets of the institution to money, dispose of the
same to creditors and other parties, for the purpose of paying the debts of
such institution in accordance with the rules on concurrence and preference
of credit under the Civil Code of the Philippines and he may, in the name
of the institution, and with the assistance of counsel as he may retain,
institute such actions as may be necessary to collect and recover accounts
and assets of, or defend any action against, the institution. The assets of
an institution under receivership or liquidation shall be deemed in custodia
legis in the hands of the receiver and shall, from the moment the institution
was placed under such receivership or liquidation, be exempt from any
order of garnishment, levy, attachment, or execution. [Emphasis supplied]
xxx
Disputed claims refers to all claims, whether they be against the assets of the
insolvent bank, for specific performance, breach of contract, damages, or whatever. [12] Lucias
action being a claim against RBCI can properly be consolidated with the liquidation
proceedings before the RTC-Makati. A liquidation proceeding has been explained in the case
of In Re: Petition For Assistance in the Liquidation of the Rural Bank of BOKOD (Benguet), It is clear, therefore, that the liquidation court has jurisdiction over all claims,
Inc. v. Bureau of Internal Revenue[13] as follows: including that of Lucia against the insolvent bank. As declared in Miranda v. Philippine
Deposit Insurance Corporation,[14] regular courts do not have jurisdiction over actions filed by

A liquidation proceeding is a single proceeding which consists of claimants against an insolvent bank, unless there is a clear showing that the action taken by
a number of cases properly classified as "claims." It is basically a two-
the BSP, through the Monetary Board, in the closure of financial institutions was in excess of
phased proceeding. The first phase is concerned with the approval and
disapproval of claims. Upon the approval of the petition seeking the jurisdiction, or with grave abuse of discretion. The same is not obtaining in this present case.
assistance of the proper court in the liquidation of a closed entity, all
money claims against the bank are required to be filed with the liquidation
court. This phase may end with the declaration by the liquidation court that
the claim is not proper or without basis. On the other hand, it may also The power and authority of the Monetary Board to close banks and liquidate them
end with the liquidation court allowing the claim. In the latter case, the
claim shall be classified whether it is ordinary or preferred, and thereafter thereafter when public interest so requires is an exercise of the police power of the
included Liquidator. In either case, the order allowing or disallowing a State. Police power, however, is subject to judicial inquiry. It may not be exercised arbitrarily
particular claim is final order, and may be appealed by the party aggrieved
thereby. or unreasonably and could be set aside if it is either capricious, discriminatory, whimsical,

arbitrary, unjust, or is tantamount to a denial of due process and equal protection clauses of

The second phase involves the approval by the Court of the the Constitution.[15]
distribution plan prepared by the duly appointed liquidator. The distribution
plan specifies in detail the total amount available for distribution to
creditors whose claim were earlier allowed. The Order finally disposes of
the issue of how much property is available for disposal. Moreover, it In sum, this Court holds that the consolidation is proper considering that the
ushers in the final phase of the liquidation proceeding - payment of all
liquidation court has jurisdiction over Lucias action. It would be more in keeping with law and
allowed claims in accordance with the order of legal priority and the
approved distribution plan. equity if Lucias case is consolidated with the liquidation case in order to expeditiously

determine whether she is entitled to recover the property subject of mortgage from RBCI and,

xxx if so, how much she is entitled to receive from the remaining assets of the bank.

WHEREFORE, the petition is DENIED. SO ORDERED.

A liquidation proceeding is commenced by the filing of a single
petition by the Solicitor General with a court of competent jurisdiction
entitled, "Petition for Assistance in the Liquidation of e.g., Pacific Banking
Corporation. All claims against the insolvent are required to be filed with
the liquidation court. Although the claims are litigated in the same
proceeding, the treatment is individual. Each claim is heard separately.
And the Order issued relative to a particular claim applies only to said
claim, leaving the other claims unaffected, as each claim is considered
separate and distinct from the others. x x x [Emphasis supplied.]
G.R. No. 127240 March 27, 2000
ONG CHIA, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.
MENDOZA, J.:
This is a petition for review of the decision1 of the Court of Appeals reversing the decision of
the Regional Trial Court, Branch 24, Koronadal, South Cotabato 2 admitting petitioner Ong
Chia to Philippine citizenship.
The facts are as follows:
Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a nine-year old boy, he
arrived at the port of Manila on board the vessel "Angking." Since then, he has stayed in the
Philippines where he found employment and eventually started his own business, married a
Filipina, with whom he had four children. On July 4, 1989, at the age of 66, he filed a verified
petition to be admitted as a Filipino citizen under C.A. No. 473, otherwise known as the
Revised Naturalization Law, as amended. Petitioner, after stating his qualifications as
required in §2, and lack of the disqualifications enumerated in §3 of the law, stated —
17. That he has heretofore made (a) petition for citizenship under the provisions of
Letter of Instruction No. 270 with the Special Committee on Naturalization, Office
of the Solicitor General, Manila, docketed as SCN Case No. 031776, but the same
was not acted upon owing to the fact that the said Special Committee on
Naturalization was not reconstituted after the February, 1986 revolution such that
processing of petitions for naturalization by administrative process was suspended;
During the hearings, petitioner testified as to his qualifications and presented three
witnesses to corroborate his testimony. So impressed was Prosecutor Isaac Alvero V.
Moran with the testimony of petitioner that, upon being asked by the court whether the State
intended to present any witness present any witness against him, he remarked:
Actually, Your Honor, with the testimony of the petitioner himself which is rather
surprising, in the sense that he seems to be well-versed with the major portion of
the history of the Philippines, so, on our part, we are convinced, Your Honor
Please, that petitioner really deserves to be admitted as a citizen of the
Philippines. And for this reason, we do not wish to present any evidence to
counteract or refute the testimony of the witnesses for the petitioner, as well as the
petitioner himself.3
Accordingly, on August 25, 1999, the trial court granted the petition and admitted petitioner
to Philippine citizenship. The State, however, through the Office of the Solicitor General,
appealed all the names by which he is or had been known; (2) failed to state all his former
placer of residence in violation of C.A. No. 473, §7; (3) failed to conduct himself in a proper
and irreproachable manner during his entire stay in the Philippines, in violation of §2; (4)
has no known lucrative trade or occupation and his previous incomes have been insufficient
or misdeclared, also in contravention of §2; and (5) failed to support his petition with the
appropriate documentary evidence.4
Annexed to the State's appellant's brief was a copy of a 1977 petition for naturalization filed
by petitioner with the Special Committee on Naturalization in SCN Case No. 031767, 5 in
which petitioner stated that in addition to his name of "Ong Chia," he had likewise been
known since childhood as "Loreto Chia Ong." As petitioner, however, failed to state this
other name in his 1989 petition for naturalization, it was contended that his petition must
fail.6 The state also annexed income tax returns7 allegedly filed by petitioner from 1973 to
1977 to show that his net income could hardly support himself and his family. To prove that
petitioner failed to conduct himself in a proper and irreproachable manner during his stay in
the Philippines, the State contended that, although petitioner claimed that he and Ramona
Villaruel had been married twice, once before a judge in 1953, and then again in church in
1977, petitioner actually lived with his wife without the benefit of marriage from 1953 until
they were married in 1977. It was alleged that petitioner failed to present his 1953 marriage
contract, if there be any. The State also annexed a copy of petitioner's 1977 marriage
contract8 and a Joint-Affidavit9 executed by petitioner and his wife. These documents show
that when petitioner married Ramona Villaruel on February 23, 1977, no marriage license
had been required in accordance with Art. 76 of the Civil Code because petitioner and
Ramona Villaruel had been living together as husband and wife since 1953 without the
benefit of marriage. This, according to the State, belies his claim that when he started living
with his wife in 1953, they had already been married.
The State also argued that, as shown by petitioner's Immigrant Certificate of
Residence, 10 petitioner resided at "J.M. Basa Street, Iloilo," but he did not include said
address in the petition.
On November 15, 1996, the Court of Appeals rendered its decision which, as already noted,
reversed the trial court and denied petitioner's application for naturalization. It ruled that due
to the importance naturalization cases, the State is not precluded from raising questions not
presented in the lower court and brought up for the first time on appeal. 11 The appellate
court held:
As correctly observed by the Office of the Solicitor General, petitioner Ong Chia
failed to state in this present petition for naturalization his other name, "LORETO
CHIA ONG," which name appeared in his previous application under Letter of
Instruction No. 270. Names and pseudonyms must be stated in the petition for
naturalization and failure to include the same militates against a decision in his
favor. . . This is a mandatory requirement to allow those persons who know
(petitioner) by those other names to come forward and inform the authorities of any
legal objection which might adversely affect his application for citizenship.
Furthermore, Ong Chia failed to disclose in his petition for naturalization that he
formerly resided in "J.M. Basa St., Iloilo" and "Alimodian, Iloilo." Section 7 of the
Revised Naturalization Law requires the applicant to state in his petition "his
present and former places of residence." This requirement is mandatory and failure
of the petitioner to comply with it is fatal to the petition. As explained by the Court,
 the reason for the provision is to give the public, as well as the investigating
agencies of the government, upon the publication of the petition, an opportunity to
be informed thereof and voice their objections against the petitioner. By failing to
comply with this provision, the petitioner is depriving the public and said agencies
of such opportunity, thus defeating the purpose of the law. . .
Ong Chia had not also conducted himself in a proper and irreproachable manner
when he lived-in with his wife for several years, and sired four children out of
wedlock. It has been the consistent ruling that the "applicant's 8-year cohabitation
with his wife without the benefit of clergy and begetting by her three children out of
wedlock is a conduct far from being proper and irreproachable as required by the
Revised Naturalization Law", and therefore disqualifies him from becoming a
citizen of the Philippines by naturalization . . .
Lastly, petitioner Ong Chia's alleged annual income in 1961 of P5,000.00,
exclusive of bonuses, commissions and allowances, is not lucrative income. His
failure to file an income tax return "because he is not liable for income tax yet"
confirms that his income is low. . . "It is not only that the person having the
employment gets enough for his ordinary necessities in life. It must be shown that
the employment gives one an income such that there is an appreciable margin of
his income over expenses as to be able to provide for an adequate support in the
event of unemployment, sickness, or disability to work and thus avoid one's
becoming the object of charity or public charge." . . . Now that they are in their old
age, petitioner Ong Chia and his wife are living on the allowance given to them by
their children. The monthly pension given by the elder children of the applicant
cannot be added to his income to make it lucrative because like bonuses,
commissions and allowances, said pensions are contingent, speculative and
precarious. . .
Hence, this petition based on the following assignment of errors:
I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN RULING
THAT IN NATURALIZATION CASES, THE APPELLATE COURT CAN DENY AN
APPLICATION FOR PHILIPPINE CITIZENSHIP ON THE BASIS OF
DOCUMENTS NOT PRESENTED BEFORE THE TRIAL COURT AND NOT
FORMING PART OF THE RECORDS OF THE CASE.
II. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER HAS
BEEN KNOWN BY SOME OTHER NAME NOT STATED IN HIS PETITION IS
NOT SUPPORTED BY THE EVIDENCE ON RECORD.
III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE
PETITIONER STATED IN HIS PETITION AND ITS ANNEXES HIS PRESENT
AND FORMER PLACES OF RESIDENCE.
IV. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER
FAILED TO CONDUCT HIMSELF IN A PROPER AND IRREPROACHABLE
MANNER IS NOT SUPPORTED BY THE EVIDENCE ON RECORD.
Petitioner's principal contention is that the appellate court erred in considering the
documents which had merely been annexed by the State to its appellant's brief and, on the
basis of which, justified the reversal of the trial court's decision. Not having been presented
and formally offered as evidence, they are mere "scrap(s) of paper devoid of any evidentiary
value," 12 so it was argued, because under Rule 132, §34 of the Revised Rules on Evidence,
the court shall consider no evidence which has not been formally offered.
13 of
The contention has no merit. Petitioner failed to note Rule 143 the Rules of Court which
provides that —
These rules shall not apply to land registration, cadastral and election
cases, naturalization and insolvency proceedings, and other cases not herein
provided for, except by analogy or in a suppletory character and whenever
practicable and convenient. (Emphasis added).
Prescinding from the above, the rule on formal offer of evidence (Rule 132, §34) now being
invoked by petitioner is clearly not applicable to the present case involving a petition for
naturalization. The only instance when said rules may be applied by analogy or suppletorily
in such cases is when it is "practicable and convenient." That is not the case here, since
reliance upon the documents presented by the State for the first time on appeal, in fact,
appears to be the more practical and convenient course of action considering that decisions
in naturalization proceedings are not covered by the rule on res judicata. 14 Consequently, a
final favorable judgment does not preclude the State from later on moving for a revocation
of the grant of naturalization on the basis of the same documents.
Petitioner claims that as a result of the failure of the State to present and formally offer its
documentary evidence before the trial court, he was denied the right to object against their
authenticity, effectively depriving him of his fundamental right to procedural due
process. 15 We are not persuaded. Indeed, the reason for the rule prohibiting the admission
of evidence which has not been formally offered is to afford the opposite party the chance to
object to their admissibility. 16 Petitioner cannot claim that he was deprived of the right to
object to the authenticity of the documents submitted to the appellate court by the State. He
could have included his objections, as he, in fact, did, in the brief he filed with the Court of
Appeals. thus:
The authenticity of the alleged petition for naturalization (SCN Case No. 031767)
which was supposedly filed by Ong Chia under LOI 270 has not been established.
In fact, the case number of the alleged petition for naturalization. . . is 031767 while
the case number of the petition actually filed by the appellee is 031776. Thus, said
document is totally unreliable and should not be considered by the Honorable
Court in resolving the instant appeal. 17
Indeed, the objection is flimsy as the alleged discrepancy is trivial, and, at most, can be
accounted for as a typographical error on the part of petitioner himself. That "SCN Case No.
031767," a copy of which was annexed to the petition, is the correct case number is
confirmed by the Evaluation Sheet 18 of the Special Committee on Naturalization which was
also docketed as "SCN Case No. 031767." Other than this, petitioner offered no evidence to
disprove the authenticity of the documents presented by the State.
Furthermore, the Court notes that these documents — namely, the petition in SCN Case
No. 031767, petitioner's marriage contract, the joint affidavit executed by him and his wife,
and petitioner's income tax returns — are all public documents. As such, they have been
executed under oath. They are thus reliable. Since petitioner failed to make a satisfactory
showing of any flaw or irregularity that may cast doubt on the authenticity of these
documents, it is our conclusion that the appellate court did not err in relying upon them.

One last point. The above discussion would have been enough to dispose of this case, but
to settle all the issues raised, we shall briefly discuss the effect of petitioner's failure to
include the address "J.M. Basa St., Iloilo" in his petition, in accordance with §7, C.A. No.
473. This address appears on petitioner's Immigrant Certificate of Residence, a document
which forms part of the records as Annex A of his 1989 petition for naturalization. Petitioner
admits that he failed to mention said address in his petition, but argues that since the
Immigrant Certificate of Residence containing it had been fully published, 19 with the petition
and the other annexes, such publication constitutes substantial compliance with §7. 20 This
is allegedly because the publication effectively satisfied the objective sought to be achieved
by such requirement, i.e., to give investigating agencies of the government the opportunity
to check on the background of the applicant and prevent suppression of information
regarding any possible misbehavior on his part in any community where he may have lived
at one time or another. 21 It is settled, however, that naturalization laws should be rigidly
enforced and strictly construed in favor of the government and against the applicant. 22 As
noted by the State, C.A. No. 473, §7 clearly provides that the applicant for naturalization
shall set forth in the petition his present and former places of residence. 23 This provision
and the rule of strict application of the law in naturalization cases defeat petitioner's
argument of "substantial compliance" with the requirement under the Revised Naturalization
Law. On this ground alone, the instant petition ought to be denied.1âwphi1.nêt

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the instant petition is
hereby DENIED.

SO ORDERED.
ROLANDO SASAN, SR., et al. v. NLRC (G.R. No. 176240, October 17, 2008)
Several conciliation hearings were scheduled by Labor Arbiter Gutierrez but the

Assailed in this Petition for Review under Rule 45 of the Rules of Court are the parties still failed to arrive at a mutually beneficial settlement; hence, Labor Arbiter Gutierrez

Decision[1] dated 24 April 2006 of the Court of Appeals in CA-G.R. SP No. 79912, which ordered that they submit their respective position papers.

affirmed the Decision dated 22 January 2003of the National Labor Relations Commission
(NLRC) in NLRC Case No. V-000241-2002 finding that Helpmate, Inc. (HI) is a legitimate In their position papers, petitioners claimed that they had become regular employees

independent job contractor and that the petitioners were not illegally dismissed from work; of E-PCIBank with respect to the activities for which they were employed, having continuously

and the Resolution[2] dated 31 October 2006 of the same court denying the Motion for rendered janitorial and messengerial services to the bank for more than one year; that E-

Reconsideration filed by the petitioners. PCIBank had direct control and supervision over the means and methods by which they were

to perform their jobs; and that their dismissal by HI was null and void because the latter had

Respondent Equitable-PCI Bank (E-PCIBank),[3] a banking entity duly organized and no power to do so since they had become regular employees of E-PCIBank.

existing under and by virtue of Philippine laws, entered into a Contract for Services[4] with HI,

a domestic corporation primarily engaged in the business of providing janitorial and For its part, E-PCIBank averred that it entered into a Contract for Services with HI,

messengerial services. Pursuant to their contract, HI shall hire and assign workers to E- an independent job contractor which hired and assigned petitioners to the bank to perform

PCIBank to perform janitorial/messengerial and maintenance services. The contract was janitorial and messengerial services thereat. It was HI that paid petitioners wages, monitored

impliedly renewed year after year. Petitioners Rolando Sasan, Sr.,[5] Leonilo petitioners daily time records (DTR) and uniforms, and exercised direct control and

Dayday,[6] Modesto Aguirre,[7] Alejandro Ardimer,[8] Eleuterio Sacil,[9] Wilfredo supervision over the petitioners and that therefore HI has every right to terminate their

Juegos,[10] Petronilo Carcedo,[11] and Cesar Peciencia[12] were among those employed and services legally. E-PCIBank could not be held liable for whatever misdeed HI had committed

assigned to E-PCIBank at its branch along Gorordo Avenue, Lahug, Cebu City, as well as to against its employees.

its other branches in the Visayas.[13]

HI, on the other hand, asserted that it was an independent job contractor engaged

O 23 July 2001, petitioners filed with the Arbitration Branch of the NLRC in Cebu in the business of providing janitorial and related services to business establishments, and E-

City separate complaints[14] against E-PCIBank and HI for illegal dismissal, with claims for PCIBank was one of its clients. Petitioners were its employees, part of its pool of

separation pay, service incentive leave pay, allowances, damages, attorneys fees and janitors/messengers assigned to E-PCIBank. The Contract for Services between HI and E-

costs. Their complaints were docketed as NLRC RAB-VII Case No. 07-1381-2001 and raffled PCIBank expired on 15 July 2000. E-PCIBank no longer renewed said contract with HI and,

to Labor Arbiter Jose G. Gutierrez (Labor Arbiter Gutierrez) for their proper instead, bidded out its janitorial requirements to two other job contractors, Able Services and

disposition. Subsequently, on 22 August 2001, the petitioners[15] amended their complaints to Puritan. HI designated petitioners to new work assignments, but the latter refused to comply

include a claim for 13th month-pay. with the same. Petitioners were not dismissed by HI, whether actually or constructively, thus,

petitioners complaints before the NLRC were without basis.

 = 5 years
Labor Arbiter Gutierrez focused on the following issues: (a) whether petitioners were =P190.00 x 26 days x 5 years / 2 =P12,350.00
regular employees of HI; (b) whether petitioners were illegally dismissed from their
c) 13th Month Pay
employment; and (c) whether petitioners were entitled to their money claims. = P190.00 x 26 days = P4,940.00
Total P43,130.00

II Dominador Suico, Jr. (did not file

On 7 January 2002, on the basis of the parties position papers and documentary Amended Complaint)
evidence, Labor Arbiter Gutierrez rendered a Decision finding that HI was not a legitimate job
a) Backwages
contractor on the ground that it did not possess the required substantial capital or investment July 15, 2001 to January 15, 2002
same as Paciencia = P25,840.00
to actually perform the job, work, or service under its own account and responsibility as
b) Separation Pay
required under the Labor Code.[16] HI is therefore a labor-only contractor and the real Feb. 2, 1999 to July 15, 2001
employer of petitioners is E-PCIBank which is held liable to petitioners. According to Labor = P190.00 x 26 days x 2.5 years / 2 = P6,175.00
Total = P32,015.00
Arbiter Gutierrez:
III Roland Mosquera (did not file Amended
Complaint)
[T]he undisputed facts show that the [herein petitioners] were made to
perform not only as janitors but also as messengers, drivers and one of a) Backwages
them even worked as an electrician. For us, these jobs are not only directly (same as Paciencia) = P25,840.00
related to the main business of the principal but are, likewise deemed
necessary in the conduct of respondent Equitable-PCI Banks principal b) Separation Pay
business. Thus, based on the above, we so declare that the [petitioners] March 8, 1998 to July 15, 2001
are employees of respondent Equitable-PCI Bank. And having worked with = P190.00 x 26 days x 3 yrs. / 2 = P7,410.00
respondent Equitable-PCI Bank for more than one (1) year, they are Total = P33,250.00
deemed regular employees. They cannot, therefore, be removed from
employment without cause and without due process, which is wanting in IV Petronillo Carcedo
this case.Hence, the severance of their employment in the guise of
termination of contract is illegal.[17] a) Backwages
(same as Paciencia) = P25,840.00

b) Separation Pay
In the dispositive portion of his 7 January 2002 Decision, Labor Arbiter Gutierrez Sept. 16, 1984 to July 15, 2001
awarded to petitioners the following amounts: = P190.00 x 26 days x 17 yrs. / 2 = P41,990.00
c) 13th Month Pay
= P190.00 x 26 days
I. CESAR PACIENCIA Total = P4,940.00
= P72,770.00
a) Backwages
July 15, 2001 to January 8, 2002 V Rolando Sasan, Sr.
= P190.00 per day
= 5 months and 6 days a) Backwages
= 136 days x P190.00 = P25,840.00 (same as Paciencia) = P25,840.00

b) Separation Pay b) Separation Pay

June 10, 1996 to July 15, 2001 October 1989 to July 15, 2001
= P190.00 x 26 days x 12 yrs. / 2 = P29,640.00 b) Separation Pay
July 23, 1990 to July 15, 2001
c) 13th Month Pay = P190.00 x 26 days x 11 yrs. / 2 = P27,170.00
= P190.00 x 26 days = P4,940.00
Total = P60,420.00 c) 13th Month Pay
= P190.00 x 26 days = P4,840.00
VI Leonilo Dayday Total = P57,950.00

a) Backwages X Modesto Aguirre

(same as Paciencia) = P25,840.00
a) Backwages
b) Separation Pay (same as Paciencia) = P25,840.00
Feb. 8, 1983 to July 15, 2001
= P190.00 x 26 days x 18 yrs. / 2 = P44,460.00 b) Separation Pay
= Jan. 5, 1992 to July 15, 2001
c) 13th Month Pay = P190.00 x 26 days x 9.5 yrs. / 2 = P23,465.00
= P190.00 x 26 days = P4,940.00
Total = P75,240.00 c) 13th Month Pay
= P190.00 x 26 days = P4,940.00
VII Eleuterio Sacil Total = P54,245.00

a) Backwages XI Alejandro Ardimer

(same as Paciencia) = P25,840.00
a) Backwages
b) Separation Pay (same as Paciencia) = P25,840.00
June 2, 1992 to July 15, 2001
= P190.00 x 26 days x 9 yrs. / 2 = P22,230.00 b) Separation Pay
= Jan. 20, 1990 to July 15, 2001
c) 13th Month Pay = P190.00 x 26 days x 11.5 yrs. / 2 = P28,405.00
= P190.00 x 26 days = P4,940.00
Total = P53,010.00 c) 13th Month Pay
= P190.00 x 26 days = P4,940.00
VIII Mario Juntilla Total = P59,185.00

a) Backwages
(same as Pacencia)
b) Separation Pay
October 7, 1987 to July 15, 2001
= P190.00 x 26 days x 14 yrs. / 2
c) 13th Month Pay
= P190.00 x 26 days
Total
IX Wilfredo Juegos
a) Backwages
(same as Pacencia)
xxxx
= P25,840.00
WHEREFORE, the foregoing premises considered, judgment is
hereby rendered directing the respondents Equitable PCI Bank and
Helpmate, Inc. to pay jointly and solidarily the complainants as follows:
= P34,580.00
1. Cesar Paciencia - P43,130.00
2. Dominador Suico, Jr. - 32,015.00
= P4,940.00 3. Roland Mosquera - 33,250.00
= P65,360.00 4. Petronilo Carceda - 72,770.00
5. Roland Sasan, Sr. - 60,420.00
6. Leonilo Dayday - 75,240.00
7. Eleuterio Sacil - 53,010.00
8. Mario Juntilla - 65,360.00
= P25,840.00 9. Wilfredo Juegos - 57,950.00
10. Modesto Aguirre - 54,245.00
 11. Alejandro Ardimer - 59,185.00
TOTAL - P606,575.00[18]
Aggrieved by the decision of Labor Arbiter Gutierrez, respondents E-PCIBank and
HI appealed the same to the NLRC, 4th Division, stationed in Cebu City. Their appeals were
docketed as NLRC Case No. V-000241-2002. In support of its allegation that it was a
legitimate job contractor, HI submitted before the NLRC several documents which it did not
present before Labor Arbiter Gutierrez. These are:
1. Certificate of Filing of Certificate of Increase of Capital Stock, Certificate
of Filing Amended Articles of Incorporation, and General Information
Sheet Stock Corporation of HI showing therein that it increased its
authorized capital stock from P1,500,000.00 to P20,000,000.00 on 12
March 1999 with the Securities and Exchange Commission;
2. Audited Financial Statement of HI showing therein that it has Total
Assets of P20,939,935.72 as of 31 December 2000;
3. Transfer Certificate of Title No. 110173 and Tax Declaration No. GR2K-
09-063-00582 registered under the name of HI showing that it has a
parcel of land with Market Value of P1,168,860.00 located along Rizal
Avenue (now Bacalso Avenue), Cebu City, and
4. Tax Declaration No. GR2K-09-063-00583 registered under the name
of HI showing that it has a commercial building constructed on the
preceding lot located along Bacalso Avenue, Cebu City with market
value of P2,515,170.00.[19]
The NLRC promulgated its Decision on 22 January 2003 modifying the ruling of
Labor Arbiter Gutierrez. The NLRC took into consideration the documentary evidence
presented by HI for the first time on appeal and, on the basis thereof, declared HI as a highly
capitalized venture with sufficient capitalization, which cannot be considered engaged in
labor-only contracting.
On the charge of illegal dismissal, the NLRC ruled that:
The charge of illegal dismissal was prematurely filed. The record
shows that barely eight (8) days from 15 July 2001 when the complainants
were placed on a temporary off-detail, they filed their complaints on 23 July
2001 and amended their complaints on 22 August 2001 against the
respondents on the presumption that their services were already
terminated. Temporary off-detail is not equivalent to dismissal. x x x.[20]
The NLRC deleted Labor Arbiter Gutierrezs award of backwages and separation
pay, but affirmed his award for 13th month pay and attorneys fees equivalent to ten percent
(10%) of the 13th month pay, to thepetitioners.[21] Thus, the NLRC decreed in its 22 January
2003 Decision, the payment of the following reduced amounts to petitioners:
WHEREFORE, premises considered, the decision of Labor
Arbiter Jose G. Gutierrez dated 7 January 2002 is MODIFIED, to wit:
Ordering respondents Helpmate, Inc. and Equitable PCI Bank to
jointly and severally[22] pay the complainants of their 13th month pay and
attorneys fees in the aggregate amount of Forty-Three Thousand Four
Hundred Seventy-Two and 00/100 (P43,472.00), broken down as follows:
1. Aguirre, Modesto - P5,434.00
2. Ardimer, Alejandro - 5,434.00
3. Carcedo, Petronilo - 5,434.00
4. Dayday, Leonilo - 5,434.00
5. Juegos, Wilfredo - 5,434.00
6. Juntilla, Mario - 5,434.00
7. Paciencia, Cesar - 5,434.00
8. Sacil, Eleuterio - 5,434.00
TOTAL P43,472.00[23]
Petitioners Motion for Reconsideration was denied by the NLRC in its Resolution dated 1 July
2003.[24]
Distressed by the decision of the NLRC, petitioners sought recourse with the Court of Appeals
by filing a Petition for Certiorari[25] under Rule 65 of the 1997 Rules of Civil Procedure
docketed as CA-G.R. SP No. 79912.
In its Decision dated 24 April 2006, the Court of Appeals affirmed the findings of the NLRC
that HI was a legitimate job contractor and that it did not illegally dismiss petitioners:
 As to the question of whether or not, as a legitimate independent
job contractor, respondent HI illegally dismissed the petitioners. We rule in
the negative.
It is undisputed that the contract between respondent HI and its client E-
PCIBank expired on July 15, 2000. The record shows that after said
expiration, respondent HI offered the petitioners new work assignments to
various establishments which are HIs clients. The petitioners, therefore,
were not even placed on floating status. They simply refused, without
justifiable reason, to assume their new work assignments which refusal was
tantamount to abandonment. There being no illegal dismissal, petitioners
are not entitled to backwages or separation pay. [26]
The fallo of the 24 April 2006 Decision of the appellate court reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered by us DENYING the petition filed in this case and AFFIRMING
the decision of the NLRC, Fourth Division, in NLRC Case No. V-000145-
2003 promulgated on June 22, 2003.[27]
Petitioners now come before us via the instant Petition raising the following issues:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ACTED
IN EXCESS OF THEIR JURISDICTION AND/OR COMMITTED GRAVE
ABUSE OF DISCRETION IN UPHOLDING THE NLRC 4TH DIVISIONS
DECISION AND GRAVELY ERRED IN:
I. ACCEPTING AND APPRECIATING THE PIECES OF EVIDENCE
SUBMITTED BY RESPONDENTS DURING APPEAL, ALL EXISTING
DURING THE TIME THE NLRC RAB 7S TRIAL, CONTRARY TO THIS
HONORABLE COURTS PREVIOUS ESTABLISHED DECISIONS.
II. REVERSING, WITHOUT ANY LEGAL BASIS, THE FACTUAL FINDING
OF NLRC RAB 7 THAT THE RESPONDENT HI WAS LABOR ONLY
CONTRACTOR.
III. RULING, WITHOUT ANY LEGAL BASIS, THAT THE ILLEGAL
DISMISSAL COMPLAINTS WERE PREMATURELY FILED.[28]
Before proceeding to the substantive issues, we first address the procedural issues
raised by petitioners.
Petitioners object to the acceptance and consideration by the NLRC of the evidence
presented by HI for the first time on appeal. This is not a novel procedural issue, however,
and our jurisprudence is already replete with cases [29] allowing the NLRC to admit evidence,
not presented before the Labor Arbiter, and submitted to the NLRC for the first time on
appeal. Technical rules of evidence are not binding in labor cases. Labor officials should use
every reasonable means to ascertain the facts in each case speedily and objectively, without
regard to technicalities of law or procedure, all in the interest of due process. [30]
The submission of additional evidence before the NLRC is not prohibited by its New
Rules of Procedure. After all, rules of evidence prevailing in courts of law or equity are not
controlling in labor cases. The NLRC and labor arbiters are directed to use every and all
reasonable means to ascertain the facts in each case speedily and objectively, without regard
to technicalities of law and procedure all in the interest of substantial justice. In keeping with
this directive, it has been held that the NLRC may consider evidence, such as documents and
affidavits, submitted by the parties for the first time on appeal. The submission of additional
evidence on appeal does not prejudice the other party for the latter could submit counter-
evidence.[31]
In Clarion Printing House, Inc. v. National Labor Relations Commission,[32] we again
emphasized that:
[T]he NLRC is not precluded from receiving evidence, even for the first time
on appeal, because technical rules of procedure are not binding in labor
cases.
The settled rule is that the NLRC is not precluded from receiving evidence
on appeal as technical rules of evidence are not binding in labor cases. In
fact, labor officials are mandated by the Labor Code to use every and all
reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure, all in the
interest of due process. Thus, in Lawin Security Services v. NLRC,
and Bristol Laboratories Employees Association-DFA v. NLRC, we held
that even if the evidence was not submitted to the labor arbiter, the fact that
 it was duly introduced on appeal to the NLRC is enough basis for the latter
to be more judicious in admitting the same, instead of falling back on the
mere technicality that said evidence can no longer be considered on
appeal. Certainly, the first course of action would be more consistent with
equity and the basic notions of fairness.
For the same reasons, we cannot find merit in petitioners protestations against the
documentary evidence submitted by HI because they were mere photocopies. Evidently,
petitioners are invoking the best evidence rule, espoused in Section 3, Rule130 of the Rules
of Court. It provides that:
Section 3. Original document must be produced; exceptions. When the
subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself x x x.
The above provision explicitly mandates that when the subject of inquiry is the
contents of a document, no evidence shall be admissible other than the original document
itself. Notably, certified true copies of these documents, acceptable under the Rules of
Court[33] were furnished to the petitioners. Even assuming that petitioners were given mere
photocopies, again, we stress that proceedings before the NLRC are not covered by the
technical rules of evidence and procedure as observed in the regular courts. Technical rules
of evidence do not apply if the decision to grant the petition proceeds from an examination of
its sufficiency as well as a careful look into the arguments contained in position papers and
other documents.[34]
Petitioners had more than adequate opportunity when they filed their motion for
reconsideration before the NLRC, their Petition to the Court of Appeals and even to this Court,
to refute or present their counter-evidence to the documentary evidence presented by HI.
Having failed in this respect, petitioners cannot now be heard to complain about these
documentary evidences presented by HI upon which the NLRC and the Court of Appeals
based its finding that HI is a legitimate job contractor.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, a fair and reasonable opportunity to explain one's side. It is also
an opportunity to seek a reconsideration of the action or ruling complained of. It is not the
denial of the right to be heard but denial of the opportunity to be heard that constitutes violation
of due process of law. Petitioners herein were afforded every opportunity to be heard and to
seek reconsideration of the adverse judgment against them. They had every opportunity to
strengthen their positions by presenting their own substantial evidence to controvert those
submitted by E-PCIBank and HI before the NLRC, and even before the Court of Appeals. It
cannot win its case by merely raising unsubstantiated doubt or relying on the weakness of
the adverse parties evidence.
We now proceed to the resolution of the substantive issues submitted by petitioners
for our consideration, particularly, whether HI is a labor-only contactor and E-PCIBank should
be deemed petitioners principal employer; and whether petitioners were illegally dismissed
from their employment.
Permissible job contracting or subcontracting refers to an arrangement whereby a
principal agrees to put out or farm out to a contractor or subcontractor the performance or
completion of a specific job, work or service within a definite or predetermined period,
regardless of whether such job, work or service is to be performed or completed within or
outside the premises of the principal.[35] A person is considered engaged in legitimate job
contracting or subcontracting if the following conditions concur:
(a) The contractor or subcontractor carries on a distinct and independent
business and undertakes to perform the job, work or service on its own
account and under its own responsibility according to its own manner and
method, and free from the control and direction of the principal in all matters
connected with the performance of the work except as to the results
thereof;
(b) The contractor or subcontractor has substantial capital or investment;
and
(c) The agreement between the principal and contractor or subcontractor
assures the contractual employees entitlement to all labor and occupational
 safety and health standards, free exercise of the right to self-organization,
security of tenure, and social and welfare benefits. [36]
In contrast, labor-only contracting, a prohibited act, is an arrangement where the
contractor or subcontractor merely recruits, supplies or places workers to perform a job, work
or service for a principal.[37] In labor-only contracting, the following elements are present:
(a) The contractor or subcontractor does not have substantial
capital or investment to actually perform the job, work or service under its
own account and responsibility; and
(b) The employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly
related to the main business of the principal.[38]
In distinguishing between permissible job contracting and prohibited labor-only
contracting,[39] we elucidated in Vinoya v. National Labor Relations Commission,[40] that it is
not enough to show substantial capitalization or investment in the form of tools,
equipment, etc. Other facts that may be considered include the following: whether or not the
contractor is carrying on an independent business; the nature and extent of the work; the skill
required; the term and duration of the relationship; the right to assign the performance of
specified pieces of work; the control and supervision of the work to another; the employers
power with respect to the hiring, firing and payment of the contractors workers; the control of
the premises; the duty to supply premises, tools, appliances, materials and labor; and the
mode and manner or terms of payment.[41] Simply put, the totality of the facts and the
surrounding circumstances of the case are to be considered. [42] Each case must be
determined by its own facts and all the features of the relationship are to be considered.[43]
In the case at bar, we find substantial evidence to support the finding of the NLRC, affirmed
by the Court of Appeals, that HI is a legitimate job contractor.
We take note that HI has been issued by the Department of Labor and Employment
(DOLE) Certificate of Registration[44] Numbered VII-859-1297-048. The said certificate states
among other things:
CERTIFICATE OF REGISTRATION
Numbered VII-859-1297-048
is issued to
HELPMATE, INCORPORATED
330 N. Bacalso Avenue, Cebu City
for having complied with the requirements as provided for under the Labor
Code, as amended, and its Implementing Rules and having paid the
registration fee in the amount of ONE HUNDRED PESOS (P100.00) per
Official Receipt Number 9042769, dated October 16, 1997.
In witness whereof, and by authority vested in me by the Labor Code, as
amended, and its Implementing Rules specifically Department Order No.
10 series of 1997, I have hereunto set my hand and affixed the Official on
this 23rd day of December 1997.[45]
Having been issued by a public officer, this certification carries with it the
presumption that it was issued in the regular performance of official duty.[46] In the absence
of proof, petitioners bare assertion cannot prevail over this presumption. Moreover, the DOLE
being the agency primarily responsible for regulating the business of independent job
contractors, we can presume in the absence of evidence to the contrary that it thoroughly
evaluated the requirements submitted by HI as a precondition to the issuance of the Cerificate
of Registration.
The evidence on record also shows that HI is carrying on a distinct and independent
business from E-PCIBank. The employees of HI are assigned to clients to perform janitorial
and messengerial services, clearly distinguishable from the banking services in which E-
PCIBank is engaged.
 Despite the afore-mentioned compliance by HI with the requisites for permissible job
contracting, Labor Arbiter Gutierrez still declared that HI was engaged in prohibited labor-only
contracting because it did not possess substantial capital or investment to actually perform
the job, work or service under its own account or responsibility. Both the NLRC and the Court
of Appeals ruled to the contrary, and we agree.
Substantial capital or investment refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipments, implements, machineries and
work premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out. [47] An independent
contractor must have either substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others. The law does not require both substantial capital
and investment in the form of tools, equipment, machineries, etc.[48] It is enough that it has
substantial capital. In the case of HI, it has proven both.
We have expostulated that once it is established that an entity such as in this case,
HI has substantial capital, it was no longer necessary to adduce further evidence to prove
that it does not fall within the purview of labor-only contracting.[49] There is even no need for
HI to refute the contention of petitioners that some of the activities they performed such as
those of messengerial services are directly related to the principal business of E- PCIBank.
In any event, we have earlier declared that while these services rendered by the
petitioners as janitors, messengers and drivers are considered directly related to the principal
business of a bank, in this case E-PCIBank, nevertheless, they are not necessary in the
conduct of its (E-PCIBANKs) principal business.[50]
HI has substantial capital in the amount of P20,939,935.72. It has its own building
where it holds office and it has been engaged in business for more than a decade now. [51] As
observed by the Court of Appeals, surely, such a well-established business entity cannot be
considered a labor-only contractor.
Etched in an unending stream of cases are four standards in determining the
existence of an employer-employee relationship, namely: (a) the manner of selection and
engagement of the putative employee; (b) the mode of payment of wages; (c) the presence
or absence of power of dismissal; and, (d) the presence or absence of control of the putative
employees conduct. Most determinative among these factors is the so-called control test.[52]
The presence of the first requisite for the existence of an employer-employee
relationship to wit, the selection and engagement of the employee is shown by the fact that it
was HI which selected and engaged the services of petitioners as its employees. This is
fortified by the provision in the contract of services between HI and E-PCIBank which states:
Selection, Engagement, Discharge. [HI] shall have exclusive
discretion in the selection, engagement, investigation, discipline and
discharge of its employees.[53]
On the second requisite regarding the payment of wages, it was HI who paid
petitioners their wages and who provided their daily time records and uniforms and other
materials necessary for the work they performed.Therefore, it is HI who is responsible for
petitioners claims for wages and other employees benefits. Precisely, the contract of services
between HI and E-PCIBank reveals the following:
Indemnity for Salaries and Benefits, etc. [HI] shall be responsible
for the salaries, allowances, overtime and holiday pay, and other benefits
of its personnel including withholding taxes.[54]
As to the third requisite on the power to control the employees conduct, and the
fourth requisite regarding the power of dismissal, again E-PCIBank did not have the power to
control petitioners with respect to the means and methods by which their work was to be
accomplished. It likewise had no power of dismissal over the petitioners. All that E-PCIBank
could do was to report to HI any untoward act, negligence, misconduct or malfeasance of any
employee assigned to the premises. The contract of services between E-PCIBank and HI is were not even dismissed by HI; they were only off-detail pending their re-assignment by HI to

noteworthy. It states: another client. And when they were actually given new assignments by HI with other

clients,[59] petitioners even refused the same. As the NLRC pronounced, petitioners complaint
[HI] shall have the entire charge, control and supervision over all
its employees who may be fielded to [E-PCIBank]. For this purpose, [HI] for illegal dismissal is apparently premature.
shall assign a regular supervisor of its employees who may be fielded to
the Bank and which regular supervisor shall exclusively supervise and
control the activities and functions defined in Section 1 hereof. x x x.[55] WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The Decision

dated 24 April 2006 and Resolution dated 31 October 2006 of the Court of Appeals are

All these circumstances establish that HI undertook said contract on its account, AFFIRMED. Costs against petitioners.

under its own responsibility, according to its own manner and method, and free from the
SO ORDERED.
control and direction of E-PCIBank. Where the control of the principal is limited only to the

result of the work, independent job contracting exists. The janitorial service agreement

between E-PCIBank and HI is definitely a case of permissible job contracting.

Considering the foregoing, plus taking judicial notice of the general practice in

private, as well as in government institutions and industries, of hiring an independent

contractor to perform special services,[56] ranging from janitorial, security and even technical

services, we can only conclude that HI is a legitimate job contractor. As such legitimate job

contractor, the law creates an employer-employee relationship between HI and

petitioners[57] which renders HI liable for the latters claims.

In view of the preceding conclusions, petitioners will never become regular

employees of E-PCIBank regardless of how long they were working for the latter. [58]

We further rule that petitioners were not illegally dismissed by HI. Upon the

termination of the Contract of Service between HI and E-PCIBank, petitioners cannot insist to
continue to work for the latter. Their pull-out from E-PCIBank did not constitute illegal
dismissal since, first, petitioners were not employees of E-PCIBank; and second, they were

pulled out from said assignment due to the non-renewal of the Contract of Service between

HI and E-PCIBank. At the time they filed their complaints with the Labor Arbiter, petitioners
RICO ROMMEL ATIENZA v. BOARD OF MEDICINE and EDITHA SIOSON (G.R. No.
177407, February 9, 2011)
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing
the Decision[1] dated September 22, 2006 of the Court of Appeals (CA) in CA-G.R. SP No.
87755. The CA dismissed the petition for certiorari filed by petitioner Rico Rommel Atienza
(Atienza), which, in turn, assailed the Orders[2] issued by public respondent Board of Medicine
(BOM) in Administrative Case No. 1882.
The facts, fairly summarized by the appellate court, follow.
Due to her lumbar pains, private respondent Editha Sioson went to Rizal
Medical Center (RMC) for check-up on February 4, 1995. Sometime in
1999, due to the same problem, she was referred to Dr. Pedro Lantin III of
RMC who, accordingly, ordered several diagnostic laboratory tests. The
tests revealed that her right kidney is normal. It was ascertained, however,
that her left kidney is non-functioning and non-visualizing. Thus, she
underwent kidney operation in September, 1999.
On February 18, 2000, private respondents husband, Romeo Sioson (as
complainant), filed a complaint for gross negligence and/or incompetence
before the [BOM] against the doctors who allegedly participated in the
fateful kidney operation, namely: Dr. Judd dela Vega, Dr. Pedro Lantin, III,
Dr. Gerardo Antonio Florendo and petitioner Rico Rommel Atienza.
It was alleged in the complaint that the gross negligence and/or
incompetence committed by the said doctors, including petitioner, consists
of the removal of private respondents fully functional right kidney, instead
of the left non-functioning and non-visualizing kidney.
The complaint was heard by the [BOM]. After complainant Romeo Sioson
presented his evidence, private respondent Editha Sioson, also named as
complainant there, filed her formal offer of documentary evidence. Attached
to the formal offer of documentary evidence are her Exhibits A to D, which
she offered for the purpose of proving that her kidneys were both in their
proper anatomical locations at the time she was operated. She described
her exhibits, as follows:
EXHIBIT A the certified photocopy of the X-ray Request
form dated December 12, 1996, which is also marked as
Annex 2 as it was actually originally the Annex to x x x
Dr. Pedro Lantin, IIIs counter affidavit filed with the City
Prosecutor of Pasig City in connection with the criminal
complaint filed by [Romeo Sioson] with the said office,
on which are handwritten entries which are the
interpretation of the results of the ultrasound
examination. Incidentally, this exhibit happens to be the
same as or identical to the certified photocopy of the
document marked as Annex 2 to the Counter-Affidavit
dated March 15, 2000, filed by x x x Dr. Pedro Lantin, III,
on May 4, 2000, with this Honorable Board in answer to
this complaint;
EXHIBIT B the certified photo copy of the X-ray request
form dated January 30, 1997, which is also marked as
Annex 3 as it was actually likewise originally an Annex to
x x x Dr. Pedro Lantin, IIIs counter-affidavit filed with the
Office of the City Prosecutor of Pasig City in connection
with the criminal complaint filed by the herein
complainant with the said office, on which are
handwritten entries which are the interpretation of the
results of the examination. Incidentally, this exhibit
happens to be also the same as or identical to the
certified photo copy of the document marked as Annex 3
which is likewise dated January 30, 1997, which is
appended as such Annex 3 to the counter-affidavit dated
March 15, 2000, filed by x x x Dr. Pedro Lantin, III on May
4, 2000, with this Honorable Board in answer to this
complaint.
EXHIBIT C the certified photocopy of the X-ray request
form dated March 16, 1996, which is also marked as
Annex 4, on which are handwritten entries which are the
interpretation of the results of the examination.
EXHIBIT D the certified photocopy of the X-ray request
form dated May 20, 1999, which is also marked as Annex
16, on which are handwritten entries which are the
interpretation of the results of the examination.
Incidentally, this exhibit appears to be the draft of the
typewritten final report of the same examination which is
the document appended as Annexes 4 and 1
respectively to the counter-affidavits filed by x x x Dr.
Judd dela Vega and Dr. Pedro Lantin, III in answer to the
complaint. In the case of Dr. dela Vega however, the
document which is marked as Annex 4 is not a certified
photocopy, while in the case of Dr. Lantin, the document
marked as Annex 1 is a certified photocopy. Both
documents are of the same date and typewritten
contents are the same as that which are written on
Exhibit D.

Petitioner filed his comments/objections to private respondents [Editha
Siosons] formal offer of exhibits. He alleged that said exhibits are
inadmissible because the same are mere photocopies, not properly
identified and authenticated, and intended to establish matters which are
hearsay. He added that the exhibits are incompetent to prove the purpose
for which they are offered.
Dispositions of the Board of
Medicine
The formal offer of documentary exhibits of private respondent [Editha
Sioson] was admitted by the [BOM] per its Order dated May 26, 2004. It
reads:
The Formal Offer of Documentary Evidence of [Romeo
Sioson], the Comments/Objections of [herein petitioner]
Atienza, [therein respondents] De la Vega and Lantin,
and the Manifestation of [therein] respondent Florendo
are hereby ADMITTED by the [BOM] for whatever
purpose they may serve in the resolution of this case.
Let the hearing be set on July 19, 2004 all at 1:30 p.m.
for the reception of the evidence of the respondents.
SO ORDERED.
Petitioner moved for reconsideration of the abovementioned Order
basically on the same reasons stated in his comment/objections to the
formal offer of exhibits.
The [BOM] denied the motion for reconsideration of petitioner in its Order
dated October 8, 2004. It concluded that it should first admit the evidence
being offered so that it can determine its probative value when it decides
the case. According to the Board, it can determine whether the evidence is
relevant or not if it will take a look at it through the process of admission. x
x x.[3]
Disagreeing with the BOM, and as previously adverted to, Atienza filed a petition
for certiorari with the CA, assailing the BOMs Orders which admitted Editha Siosons (Edithas)
Formal Offer of Documentary Evidence. The CA dismissed the petition for certiorari for lack
of merit.
Hence, this recourse positing the following issues:
I. PROCEDURAL ISSUE:
WHETHER PETITIONER ATIENZA AVAILED OF THE PROPER
REMEDY WHEN HE FILED THE PETITION
FOR CERTIORARI DATED 06 DECEMBER 2004 WITH THE
COURT OF APPEALS UNDER RULE 65 OF THE RULES OF
COURT TO ASSAIL THE ORDERS DATED 26 MAY 2004 AND
08 OCTOBER 2004 OF RESPONDENT BOARD.
II. SUBSTANTIVE ISSUE:
WHETHER THE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR AND DECIDED A QUESTION OF
SUBSTANCE IN A WAY NOT IN ACCORDANCE WITH LAW
AND THE APPLICABLE DECISIONS OF THE HONORABLE
COURT WHEN IT UPHELD THE ADMISSION OF
INCOMPETENT AND INADMISSIBLE EVIDENCE BY
RESPONDENT BOARD, WHICH CAN RESULT IN THE
DEPRIVATION OF PROFESSIONAL LICENSE A PROPERTY
RIGHT OR ONES LIVELIHOOD.[4]
We find no reason to depart from the ruling of the CA.
Petitioner is correct when he asserts that a petition for certiorari is the proper remedy to assail
the Orders of the BOM, admitting in evidence the exhibits of Editha. As the assailed Orders
were interlocutory, these cannot be the subject of an appeal separate from the judgment that
completely or finally disposes of the case.[5] At that stage, where there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, the only and remaining
remedy left to petitioner is a petition for certiorari under Rule 65 of the Rules of Court on the
ground of grave abuse of discretion amounting to lack or excess of jurisdiction.
However, the writ of certiorari will not issue absent a showing that the BOM has
acted without or in excess of jurisdiction or with grave abuse of discretion. Embedded in the
CAs finding that the BOM did not exceed its jurisdiction or act in grave abuse of discretion is
the issue of whether the exhibits of Editha contained in her Formal Offer of Documentary
Evidence are inadmissible.
 Petitioner argues that the exhibits formally offered in evidence by Editha: (1) violate
the best evidence rule; (2) have not been properly identified and authenticated; (3) are
completely hearsay; and (4) are incompetent to prove their purpose. Thus, petitioner contends
that the exhibits are inadmissible evidence.
We disagree.
To begin with, it is well-settled that the rules of evidence are not strictly applied in
proceedings before administrative bodies such as the BOM. [6] Although trial courts are
enjoined to observe strict enforcement of the rules of evidence, [7] in connection with evidence
which may appear to be of doubtful relevancy, incompetency, or admissibility, we have held
that:
[I]t is the safest policy to be liberal, not rejecting them on doubtful or
technical grounds, but admitting them unless plainly irrelevant, immaterial
or incompetent, for the reason that their rejection places them beyond the
consideration of the court, if they are thereafter found relevant or
competent; on the other hand, their admission, if they turn out later to be
irrelevant or incompetent, can easily be remedied by completely discarding
them or ignoring them.[8]
From the foregoing, we emphasize the distinction between the admissibility of evidence and
the probative weight to be accorded the same pieces of evidence. PNOC Shipping and
Transport Corporation v. Court of Appeals[9] teaches:
Admissibility of evidence refers to the question of whether or not the
circumstance (or evidence) is to be considered at all. On the other hand,
the probative value of evidence refers to the question of whether or not it
proves an issue.
Second, petitioners insistence that the admission of Edithas exhibits violated his
substantive rights leading to the loss of his medical license is misplaced. Petitioner mistakenly
relies on Section 20, Article I of the Professional Regulation Commission Rules of Procedure,
which reads:
Section 20. Administrative investigation shall be conducted in
accordance with these Rules. The Rules of Court shall only apply in these
proceedings by analogy or on a suppletory character and whenever
practicable and convenient. Technical errors in the admission of evidence
which do not prejudice the substantive rights of either party shall not vitiate
the proceedings.[10]
As pointed out by the appellate court, the admission of the exhibits did not prejudice the
substantive rights of petitioner because, at any rate, the fact sought to be proved thereby, that
the two kidneys of Editha were in their proper anatomical locations at the time she was
operated on, is presumed under Section 3, Rule 131 of the Rules of Court:
Sec. 3. Disputable presumptions. The following presumptions are
satisfactory if uncontradicted, but may be contradicted and overcome by
other evidence:
xxxx
(y) That things have happened according to the ordinary course of nature
and the ordinary habits of life.
The exhibits are certified photocopies of X-ray Request Forms dated December 12,
1996, January 30, 1997, March 16, 1996, and May 20, 1999, filed in connection with Edithas
medical case. The documents contain handwritten entries interpreting the results of the
examination. These exhibits were actually attached as annexes to Dr. Pedro Lantin IIIs
counter affidavit filed with the Office of the City Prosecutor of Pasig City, which was
investigating the criminal complaint for negligence filed by Editha against the doctors of Rizal
Medical Center (RMC) who handled her surgical procedure. To lay the predicate for her case,
Editha offered the exhibits in evidence to prove that her kidneys were both in their proper
anatomical locations at the time of her operation.
 The fact sought to be established by the admission of Edithas exhibits, that her The subject of inquiry in this case is whether respondent doctors before the BOM are liable

kidneys were both in their proper anatomical locations at the time of her operation, need not for gross negligence in removing the right functioning kidney of Editha instead of the left non-

be proved as it is covered by mandatory judicial notice. [11] functioning kidney, not the proper anatomical locations of Edithas kidneys. As previously

discussed, the proper anatomical locations of Edithas kidneys at the time of her operation at

Unquestionably, the rules of evidence are merely the means for ascertaining the the RMC may be established not only through the exhibits offered in evidence.

truth respecting a matter of fact.[12] Thus, they likewise provide for some facts which are

established and need not be proved, such as those covered by judicial notice, both mandatory Finally, these exhibits do not constitute hearsay evidence of the anatomical locations

and discretionary.[13] Laws of nature involving the physical sciences, specifically of Edithas kidneys. To further drive home the point, the anatomical positions, whether left or

biology,[14] include the structural make-up and composition of living things such as human right, of Edithas kidneys, and the removal of one or both, may still be established through a

beings. In this case, we may take judicial notice that Edithas kidneys before, and at the time belated ultrasound or x-ray of her abdominal area.

of, her operation, as with most human beings, were in their proper anatomical locations.

Third, contrary to the assertion of petitioner, the best evidence rule is inapplicable. Section 3 In fact, the introduction of secondary evidence, such as copies of the exhibits, is

of Rule 130 provides: allowed.[15] Witness Dr. Nancy Aquino testified that the Records Office of RMC no longer had

the originals of the exhibits because [it] transferred from the previous building, x x x to the
1. Best Evidence Rule
new building.[16] Ultimately, since the originals cannot be produced, the BOM properly
Sec. 3. Original document must be produced; exceptions. When the
admitted Edithas formal offer of evidence and, thereafter, the BOM shall determine the
subject of inquiry is the contents of a document, no evidence shall be
admissible other than the original document itself, except in the following probative value thereof when it decides the case.
cases:

(a) When the original has been lost or destroyed, or cannot be produced in
court, without bad faith on the part of the offeror; WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-

G.R. SP No. 87755 is AFFIRMED. Costs against petitioner.

(b) When the original is in the custody or under the control of the party
against whom the evidence is offered, and the latter fails to produce it after
reasonable notice; SO ORDERED.

(c) When the original consists of numerous accounts or other documents

which cannot be examined in court without great loss of time and the fact
sought to be established from them is only the general result of the whole;
and

(d) When the original is a public record in the custody of a public officer or
is recorded in a public office.
EDGARDO PINGA v. THE HEIRS OF GERMAN TINGA (G.R. No. 170354, June 30, 2006)
had already been ordered ejected from the properties after a complaint for forcible entry was

The constitutional faculty of the Court to promulgate rules of practice and filed by the heirs of Edmundo Pinga. It was further claimed that respondents application for

procedure[1] necessarily carries the power to overturn judicial precedents on points of free patent over the properties was rejected by the Office of the President in 1971. Defendants

remedial law through the amendment of the Rules of Court. One of the notable changes in turn prayed that owing to respondents forcible re-entry in the properties and the

introduced in the 1997 Rules of Civil Procedure is the explicit proviso that if a complaint is irresponsible and reckless filing of the case, they be awarded various types of damages

dismissed due to fault of the plaintiff, such dismissal is without prejudice to the right of the instead in amounts totaling P2,100,000 plus costs of suit.[9]

defendant to prosecute his counterclaim in the same or in a separate action.[2] The innovation
By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as
was instituted in spite of previous jurisprudence holding that the fact of the dismissal of the
plaintiffs, had failed to present their evidence. It appears that on 25 October 2004, the RTC
complaint was sufficient to justify the dismissal as well of the compulsory counterclaim. [3]
already ordered the dismissal of the complaint after respondents counsel had sought the

In granting this petition, the Court recognizes that the former jurisprudential rule can postponement of the hearing scheduled then. [10] However, the order of dismissal was

no longer stand in light of Section 3, Rule 17 of the 1997 Rules of Civil Procedure. subsequently reconsidered by the RTC in an Order dated 9 June 2005, which took into

account the assurance of respondents counsel that he would give priority to that case. [11]
The relevant facts are simple enough. Petitioner Eduardo Pinga was named as one of two

defendants in a complaint for injunction [4] filed with Branch 29 of the Regional Trial Court At the hearing of 27 July 2005, plaintiffs counsel on record failed to appear, sending

(RTC)[5] of San Miguel, Zamboanga del Sur, by respondent Heirs of German Santiago, in his stead a representative who sought the postponement of the hearing. Counsel for

represented by Fernando Santiago. The Complaint [6] dated 28 May 1998 alleged in essence defendants (who include herein petitioner) opposed the move for postponement and moved

that petitioner and co-defendant Vicente Saavedra had been unlawfully entering the coco instead for the dismissal of the case. The RTC noted that it was obvious that respondents

lands of the respondent, cutting wood and bamboos and harvesting the fruits of the coconut had failed to prosecute the case for an unreasonable length of time, in fact not having

trees therein. Respondents prayed that petitioner and Saavedra be enjoined from committing presented their evidence yet. On that ground, the complaint was dismissed. At the same time,

acts of depredation on their properties, and ordered to pay damages. the RTC allowed defendants to present their evidence ex-parte.[12]

In their Amended Answer with Counterclaim,[7] petitioner and his co-defendant disputed Respondents filed a Motion for Reconsideration[13] of the order issued in open court

respondents ownership of the properties in question, asserting that petitioners father, on 27 July 2005, opting however not to seek that their complaint be reinstated, but praying

Edmundo Pinga, from whom defendants derived their interest in the properties, had been in instead that the entire action be dismissed and petitioner be disallowed from presenting

possession thereof since the 1930s.[8] They alleged that as far back as 1968, respondents evidence ex-parte. Respondents claimed that the order of the RTC allowing petitioner to
present evidence ex-parte was not in accord with established jurisprudence. They cited
cases, particularly City of Manila v. Ruymann[14] and Domingo v. Santos,[15] which noted
those instances in which a counterclaim could not remain pending for independent
adjudication.
On 9 August 2005, the RTC promulgated an order granting respondents Motion for
Reconsideration and dismissing the counterclaim, citing as the only ground therefor that there
is no opposition to the Motion for Reconsideration of the [respondents]. [16] Petitioner filed a
Motion for Reconsideration, but the same was denied by the RTC in an Order dated 10
October 2005.[17] Notably, respondents filed an Opposition to Defendants Urgent Motion for
Reconsideration, wherein they argued that the prevailing jurisprudential rule [18] is that
compulsory counterclaims cannot be adjudicated independently of plaintiffs cause of action,
and a conversu, the dismissal of the complaint carries with it the dismissal of the compulsory
counterclaims.[19]
The matter was elevated to this Court directly by way of a Petition for Review under
Rule 45 on a pure question of law, the most relevant being whether the dismissal of the
complaint necessarily carries the dismissal of the compulsory counterclaim.
We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the
dismissal of the complaint due to the fault of plaintiff does not necessarily carry with it the
dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint
is without prejudice to the right of defendants to prosecute the counterclaim.
On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt
respondents argument that the dismissal of their complaint extended as well to the
counterclaim. Instead, the RTC justified the dismissal of the counterclaim on the ground that
there is no opposition to [plaintiffs] Motion for Reconsideration [seeking the dismissal of the
counterclaim].[20] This explanation is hollow, considering that there is no mandatory rule
requiring that an opposition be filed to a motion for reconsideration without need for a court
order to that effect; and, as posited by petitioner, the failure to file an opposition to the Plaintiffs
Motion for Reconsideration is definitely not one among the established grounds for dismissal
[of the counterclaim].[21] Still, the dismissal of the counterclaim by the RTC betrays at very
least a tacit recognition of respondents argument that the counterclaim did not survive the
dismissal of the complaint. At most, the dismissal of the counterclaim over the objection of
the defendant (herein petitioner) on grounds other than the merits of the counterclaim, despite
the provisions under Rule 17 of the 1997 Rules of Civil Procedure, constitutes a debatable
question of law, presently meriting justiciability through the instant action. Indeed, in reviewing
the assailed orders of the RTC, it is inevitable that the Court consider whether the dismissal
of the complaint, upon motion of the defendant, on the ground of the failure to prosecute on
plaintiffs part precipitates or carries with it the dismissal of the pending counterclaims.
Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil
Procedure, which states:
SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause,
the plaintiff fails to appear on the date of the presentation of his evidence
in chief on the complaint, or to prosecute his action for an unreasonable
length of time, or to comply with these Rules or any order of the court, the
complaint may be dismissed upon motion of defendant or upon the court's
own motion, without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. This dismissal shall have
the effect of an adjudication upon the merits, unless otherwise declared by
the court.
The express qualification in the provision that the dismissal of the complaint due to the of the complaints in these four cases were dismissed either due to the fault of the plaintiff or

plaintiffs fault, as in the case for failure to prosecute, is without prejudice to the right of the upon the instance of the defendant.[27]

defendant to prosecute his counterclaim in the same or separate action. This stands in

marked contrast to the provisions under Rule 17 of the 1964 Rules of Court which were The distinction is relevant, for under the previous and current incarnations of the

superseded by the 1997 amendments. In the 1964 Rules, dismissals due to failure to Rules of Civil Procedure, it is Section 3, Rule 17 that governs the dismissals due to the failure

prosecute were governed by Section 3, Rule 17, to wit: of the plaintiff to prosecute the complaint, as had happened in the case at bar. Otherwise, it

is Section 2, Rule 17, which then, and still is now, covered dismissals ordered by the trial
SEC. 3. Failure to prosecute. If plaintiff fails to appear at the time of the
trial, or to prosecute his action for an unreasonable length of time, or to court upon the instance of the plaintiff.[28] Yet, as will be seen in the foregoing discussion, a
comply with these rules or any order of the court, the action may be
dismissed upon motion of the defendant or upon the courts own motion. discussion of Section 2 cannot be avoided as the postulate behind that provision was
This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise provided by court. eventually extended as well in cases that should have properly been governed by Section 3.

Evidently, the old rule was silent on the effect of such dismissal due to failure to prosecute on

the pending counterclaims. As a result, there arose what one authority on remedial law Even though the cases cited by respondents involved different factual antecedents, there

characterized as the nagging question of whether or not the dismissal of the complaint carries exists more appropriate precedents which they could have cited in support of their claim that

with it the dismissal of the counterclaim.[22] Jurisprudence construing the previous Rules was the counterclaim should have been dismissed even if the dismissal of the complaint was upon

hardly silent on the matter. the defendants motion and was predicated on the plaintiffs fault. BA Finance Corp. v.

Co[29] particularly stands out in that regard, although that ruling is itself grounded on other

In their arguments before the RTC on the dismissal precedents as well. Elucidation of these cases is in order.

of the counterclaim, respondents cited in support City of Manila v.

On the general effect of the dismissal of a complaint, regardless of cause, on the pending

counterclaims, previous jurisprudence laid emphasis on whether the counterclaim was

Ruymann,[23] Domingo v. Santos,[24] Belleza v. Huntington,[25] and Froilan v. Pan Oriental compulsory or permissive in character. The necessity of such distinction was provided in the

Shipping Co.,[26] all of which were decided more than five decades ago. Notably though, none 1964 Rules itself, particularly Section 2, Rule 17, which stated that in instances wherein the
plaintiff seeks the dismissal of the complaint, if a counterclaim has been pleaded by a dismissal of the counterclaim upon dismissal of the complaint applied regardless of the cause

defendant prior to the service upon him of the plaintiffs motion to dismiss, the action shall not of the complaints dismissal.[35]

be dismissed against the defendants objection unless the counterclaim can remain pending
Notably, the qualification concerning compulsory counterclaims was provided in Section 2,
for independent adjudication by the court.[30] The
Rule 17 of the 1964 Rules, the provision governing dismissals by order of the court, and not

Section 3, Rule 17. As stated earlier, Section 3, which covered dismissals for failure to

prosecute upon motion of the defendant or upon motu proprio action of the trial court, was
vaunted commentaries of Chief Justice Moran, remarking on Section 2, Rule 17, noted that
silent on the effect on the counterclaim of dismissals of such nature.
[t]here are instances in which a counterclaim cannot remain pending for independent

adjudication, as, where it arises out of, or is necessarily connected with, the transaction or Spouses Sta. Maria, Jr. v. Court of Appeals,[36] decided in 1972, ostensibly supplied the gap

occurrence which is the subject matter of the opposing partys claim. [31] on the effect on the counterclaim of complaints dismissed under Section 3. The defendants

therein successfully moved before the trial court for the dismissal of the complaint without
This view expressed in Morans Commentaries was adopted by the Court in cases where the
prejudice and their declaration in default on the counterclaim after plaintiffs therein failed to
application of Section 2, Rule 17 of the 1964 Rules of Court was called for, such as in Lim
attend the pre-trial. After favorable judgment was rendered on the counterclaim, plaintiffs
Tanhu v. Ramolete,[32] and Dalman v. City Court of Dipolog City.[33] The latter case warrants
interposed an appeal, citing among other grounds, that the counterclaim could no longer have
brief elaboration. Therein, the plaintiff in a civil case for damages moved for the withdrawal of
been heard after the dismissal of the complaint. While the Court noted that the adjudication
her own case on the ground that the dispute had not been referred to the barangay council
of the counterclaim in question does not depend upon the adjudication of the claims made in
as required by law. Over the objection of the defendant, who feared that her own counterclaim
the complaint since they were virtually abandoned by the non-appearance of the plaintiffs
would be prejudiced by the dismissal, plaintiffs motion was granted, the complaint and the
themselves, it was also added that [t]he doctrine invoked is not available to plaintiffs like the
counterclaim accordingly dismissed by the trial court. The Court refused to reinstate the
petitioners, who prevent or delay the hearing of their own claims and allegations. [37] The
counterclaim, opining without elaboration, [i]f the civil case is dismissed, so also is the
Court, through Justice JBL Reyes, noted:
counterclaim filed therein.[34] The broad nature of that statement gave rise to the notion that

the mandatory The doctrine that the complaint may not be dismissed if the
counterclaim cannot be independently adjudicated is not available to,
and was not intended for the benefit of, a plaintiff who prevents or
delays the prosecution of his own complaint. Otherwise, the trial of
counterclaims would be made to depend upon the maneuvers of the
plaintiff, and the rule would offer a premium to vexing or delaying tactics to
the prejudice of the counterclaimants. It is in the same spirit that we have
 ruled that a complaint may not be withdrawn over the opposition of the
defendant where the counterclaim is one that arises from, or is necessarily finally determined in one action, and to discourage multiplicity of suits. [43] Also, the Court
connected with, the plaintiffs action and cannot remain pending for
independent adjudication.[38] noted that since the complaint was dismissed for lack of jurisdiction, it was as if no claim was

filed against the defendant, and there was thus no more leg for the complaint to stand on. [44]

There is no doubt that under the 1964 Rules, the dismissal of a complaint due to the
In International Container, the defendant filed a motion to dismiss which was granted
failure of the plaintiff to appear during pre-trial, as what had happened in Sta. Maria, fell within
by the trial court. The defendants counterclaim was dismissed as well. The Court summarized
the coverage of Section 3, Rule 17. On the other hand, Section 2 was clearly limited in scope
the key question as what is the effect of the dismissal of a complaint ordered at the instance
to those dismissals sustained at the instance of the plaintiff. [39] Nonetheless, by the early
of the defendant upon a compulsory counterclaim duly raised in its answer. [45] Then it ruled
1990s, jurisprudence was settling on a rule that compulsory counterclaims were necessarily
that the counterclaim did not survive such dismissal. After classifying the counterclaim therein
terminated upon the dismissal of the complaint not only if such dismissal was upon motion of
as compulsory, the Court noted that [i]t is obvious from the very nature of the counterclaim
the plaintiff, but at the instance of the defendant as well. Two decisions from that period stand
that it could not remain pending for independent adjudication, that is, without adjudication by
out in this regard, Metals Engineering Resources Corp. v. Court of
the court of the complaint itself on which the counterclaim was based.[46]
Appeals[40] and International Container Terminal Services v. Court of Appeals.[41]

Then in 1993, a divided Court ruled in BA Finance that the dismissal of the complaint
In Metals, the complaint was expunged from the record after the defendant had filed
for nonappearance of plaintiff at the pre-trial, upon motion of the defendants, carried with it
a motion for reconsideration of a trial court order allowing the filing of an amended complaint
the dismissal of their compulsory counterclaim. [47] The Court reiterated the rule that a
that corrected a jurisdictional error in the original complaint pertaining to the specification of
compulsory counterclaim cannot remain pending for independent adjudication by the court as
the amount of damages sought. When the defendant was nonetheless allowed to present
it is auxiliary to the proceeding in the original suit and merely derives its jurisdictional support
evidence on the counterclaim, the plaintiff assailed such allowance on the ground that the
therefrom.[48] Express reliance was made on Metals, International Container, and
counterclaim was compulsory and could no longer remain pending for independent
even Dalman in support of the majoritys thesis. BA Finance likewise advised that the proper
adjudication. The Court, in finding for the plaintiff, noted that the counterclaim was indeed
remedy for defendants desirous that their counterclaims not be dismissed along with the main
compulsory in nature, and as such, was auxiliary to the proceeding in the original suit and
complaint was for them to move to declare the plaintiffs to be non-suited on their complaint
derived its jurisdictional support therefrom.[42] It was further explained that the doctrine was in
and as in default on their compulsory counterclaim, instead of moving for the dismissal of the
consonance with the primary objective of a counterclaim, which was to avoid and prevent
complaint.[49]
circuitry of action by allowing the entire controversy between the parties to be litigated and

Justice Regalado, joined by Chief Justice Narvasa, registered a strong objection to
the theory of the majority. They agreed that the trial court could no longer hear the
counterclaim, but only on the ground that defendants motion to be allowed to present
evidence on the counterclaim was filed after the order dismissing the complaint had already
become final. They disagreed however that the compulsory counterclaim was necessarily
dismissed along with the main complaint, pointing out that a situation wherein the dismissal
of the complaint was occasioned by plaintiffs failure to appear during pre-trial was governed
under Section 3, Rule 17, and not Section 2 of the same rule. Justice Regalado, who ironically
penned the decision in Metals cited by the majority, explained:
Turning back to Rule 17, it is readily apparent that Sections 2
and 3 thereof envisage different factual and adjective situations. The
dismissal of the complaint under Section 2 is at the instance of
plaintiff, for whatever reason he is minded to move for such dismissal,
and, as a matter of procedure, is without prejudice unless otherwise
stated in the order of the court or, for that matter, in plaintiff's motion
to dismiss his own complaint. By reason thereof, to curb any dubious or
frivolous strategy of plaintiff for his benefit or to obviate possible prejudice
to defendant, the former may not dismiss his complaint over the
defendant's objection if the latter has a compulsory counterclaim since said
counterclaim would necessarily be divested of juridical basis and defendant
would be deprived of possible recovery thereon in that same judicial
proceeding.
Section 3, on the other hand, contemplates a dismissal not
procured by plaintiff, albeit justified by causes imputable to him and
which, in the present case, was petitioner's failure to appear at the
pre-trial. This situation is also covered by Section 3, as extended by
judicial interpretation, and is ordered upon motion of defendant
or motu proprio by the court. Here, the issue of whether defendant
has a pending counterclaim, permissive or compulsory, is not of
determinative significance. The dismissal of plaintiff's complaint is
evidently a confirmation of the failure of evidence to prove his cause
of action outlined therein, hence the dismissal is considered, as a
matter of evidence, an adjudication on the merits. This does not,
however, mean that there is likewise such absence of evidence to
prove defendant's counterclaim although the same arises out of the
subject matter of the complaint which was merely terminated for lack
of proof. To hold otherwise would not only work injustice to defendant
but would be reading a further provision into Section 3 and wresting
a meaning therefrom although neither exists even by mere
implication. Thus understood, the complaint can accordingly be
dismissed, but relief can nevertheless be granted as a matter of course to
defendant on his counterclaim as alleged and proved, with or without any
reservation therefor on his part, unless from his conduct, express or
implied, he has virtually consented to the concomitant dismissal of his
counterclaim.[50]
Justice Regalado also adverted to Sta. Maria and noted that the objections raised and
rejected by the Court therein were the same as those now relied upon by the plaintiff. He
pointed out that Dalman and International Container, both relied upon by the majority,
involved the application of Section 2, Rule 17 and not Section 3, which he insisted as the
applicable provision in the case at bar.[51]
The partial dissent of Justice Regalado in BA Finance proved opportune, as he happened
then to be a member of the Rules of Court Revision Committee tasked with the revision of
the 1964 Rules of Court. Just a few months after BA Finance was decided, Justice Regalado
proposed before the Committee an amendment to Section 3, Rule 17 that would explicitly
provide that the dismissal of the complaint due to the fault of the plaintiff shall be without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. The amendment, which was approved by the Committee, is reflected in the
minutes of the meeting of the Committee held on 12 October 1993:
[Justice Regalado] then proposed that after the words upon the
courts own motion in the 6th line of the draft in Sec. 3 of Rule 17, the
following provision be inserted: without prejudice to the right of the
defendant to prosecute his counterclaim in the same or in a separate
action. The Committee agreed with the proposed amendment of
Justice Regalado.
Justice Herrera observed that under Secs. 1 to 3 of Rule 17, it is not the
action that is dismissed but the complaint. He asked whether there is any
distinction between complaint and action. Justice Regalado opined that the
action of the plaintiff is initiated by his complaint.
 Justice Feria then suggested that the dismissal be limited to the
complaint[.] Thus, in the 1st line of Sec. 1, the words An action will be
changed to a complaint; in the 2nd line of Sec. 2, the words an action
will be changed to a complaint and in Sec. 3, the word action on the
5th line of the draft will be changed to complaint. The Committee
agreed with Justice Ferias suggested amendments.
CA Pao believed that there is a need to clarify the counterclaim that
the defendant will prosecute, whether it is permissive or compulsory
or all kinds of counterclaims.
Justice Regalado opined that there is no need of making a
clarification because it is already understood that it covers both
counterclaims.[52]
It is apparent from these minutes that the survival of the counterclaim despite the dismissal
of the complaint under Section 3 stood irrespective of whether the counterclaim was
permissive or compulsory. Moreover, when the Court itself approved the revisions now
contained in the 1997 Rules of Civil Procedure, not only did Justice Regalados amendment
to Section 3, Rule 17 remain intact, but the final version likewise eliminated the qualification
formerly offered under Section 2 on counterclaims that can remain pending for independent
adjudication by the court.[53] At present, even Section 2, concerning dismissals on motion of
the plaintiff, now recognizes the right of the defendant to prosecute the counterclaim either in
the same or separate action notwithstanding the dismissal of the complaint, and without
regard as to the permissive or compulsory nature of the counterclaim.
In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on
the effects of the amendments to Section 2 and 3 of Rule 17:
2. Under this revised section [2], where the plaintiff moves for the dismissal
of his complaint to which a counterclaim has been interposed, the dismissal
shall be limited to the complaint. Such dismissal shall be without prejudice
to the right of the defendant to either prosecute his counterclaim in a
separate action or to have the same resolved in the same action. Should
he opt for the first alternative, the court should render the corresponding
order granting and reserving his right to prosecute his claim in a separate
complaint. Should he choose to have his counterclaim disposed of in the
same action wherein the complaint had been dismissed, he must manifest
such preference to the trial court within 15 days from notice to him of
plaintiffs motion to dismiss. These alternative remedies of the defendant
are available to him regardless of whether his counterclaim is
compulsory or permissive. A similar alternative procedure, with the same
underlying reason therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of this
Rule, wherein the complaint is dismissed on the motion of the defendant or,
in the latter instance, also by the court motu proprio.
xxxx
2. The second substantial amendment to [Section 3] is with respect to the
disposition of the defendants counterclaim in the event the plaintiffs
complaint is dismissed. As already observed, he is here granted the choice
to prosecute that counterclaim in either the same or a separate action. x x
xx
3. With the aforestated amendments in Secs. 2 and 3 laying down
specific rules on the disposition of counterclaims involved in the
dismissal actions, the controversial doctrine in BA Finance
Corporation vs. Co, et al., (G.R. No.105751, June 30, 1993) has been
abandoned, together with the apparent confusion on the proper
application of said Secs. 2 and 3. Said sections were distinguished and
discussed in the authors separate opinion in that case, even before they
were clarified by the present amendments x x x.[54]
Similarly, Justice Feria notes that the present rule reaffirms the right of the defendant to move
for the dismissal of the complaint and to prosecute his counterclaim, as stated in the separate
opinion [of Justice Regalado in BA Finance.][55] Retired Court of Appeals Justice Herrera
pronounces that the amendment to Section 3, Rule 17 settles that nagging question whether
the dismissal of the complaint carries with it the dismissal of the counterclaim, and opines that
by reason of the amendments, the rulings in Metals Engineering, International Container,
and BA Finance may be deemed abandoned.[56] On the effect of amendment to Section 3,
Rule 17, the commentators are in general agreement, [57] although there is less unanimity of
views insofar as Section 2, Rule 17 is concerned.[58]
To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the
amended Rule 17, those previous jural doctrines that were inconsistent with the new rules
incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned insofar as
incidents arising after the effectivity of the new procedural rules on 1 July 1997. BA Finance,
or even the doctrine that a counterclaim may be necessarily dismissed along with the
complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA
Finance as doctrine extends as far back as 1997, when the Court adopted the new Rules of
Civil Procedure. If, since then, such abandonment has not been affirmed in jurisprudence, it
is only because no proper case has arisen that would warrant express confirmation of the
new rule. That opportunity is here and now, and we thus rule that the dismissal of a complaint
due to fault of the plaintiff is without prejudice to the right of the defendant to prosecute any
pending counterclaims of whatever nature in the same or separate action. We confirm that BA
Financeand all previous rulings of the Court that are inconsistent with this present holding are
now abandoned.
Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since
Section 3, Rule 17 mandates that the dismissal of the complaint is without prejudice to the
right of the defendant to prosecute the counterclaim in the same or separate action. If the
RTC were to dismiss the counterclaim, it should be on the merits of such counterclaim.
Reversal of the RTC is in order, and a remand is necessary for trial on the merits of the
counterclaim.
It would be perfectly satisfactory for the Court to leave this matter at that. Still, an explanation
of the reason behind the new rule is called for, considering that the rationale behind the
previous rule was frequently elaborated upon.
Under Act No. 190, or the Code of Procedure in Civil Actions promulgated in 1901,
it was recognized in Section 127(1) that the plaintiff had the right to seek the dismissal of the
complaint at any time before trial, provided a counterclaim has not been made, or affirmative
relief sought by the cross-complaint or answer of the defendant.[59] Note that no qualification
was made then as to the nature of the counterclaim, whether it be compulsory or permissive.
The protection of the defendants right to prosecute the counterclaim was indeed unqualified.
In City of Manila, decided in 1918, the Court explained:
By paragraph 1 [of Section 127], it will be seen that, where the
defendant has interposed a counterclaim, or is seeking affirmative relief by
a cross-complaint, that then, and in that case, the plaintiff cannot dismiss
the action so as to affect the right of the defendant in his counterclaim or
prayer for affirmative relief. The reason for that exception is clear. When the
answer sets up an independent action against the plaintiff, it then
becomes an action by the defendant against the plaintiff, and, of
course, the plaintiff has no right to ask for a dismissal of
the defendants action.[60]
Nonetheless, a new rule was introduced when Act No. 190 was replaced by the 1940 Rules
of Court. Section 2, Rule 30 of the 1940 Rules specified that if a counterclaim is pleaded by
a defendant prior to the service of the plaintiffs motion to dismiss, the action shall not be
dismissed against the defendants objection unless the counterclaim can remain pending for
independent adjudication by the court. This qualification remained intact when the 1964 Rules
of Court was introduced.[61] The rule referred only to compulsory counterclaims, or
counterclaims which arise out of or are necessarily connected with the transaction or
occurrence that is the subject matter of the plaintiffs claim, since the rights of the parties
arising out of the same transaction should be settled at the same time. [62] As was evident same time, other considerations rooted in actual practice provide a counterbalance to the

in Metals, International Container and BA Finance, the rule was eventually extended to above-cited rationales.

instances wherein it was the defendant with the pending counterclaim, and not the plaintiff,

that moved for the dismissal of the complaint. Whatever the nature of the counterclaim, it bears the same integral characteristics as a

complaint; namely a cause (or causes) of action constituting an act or omission by which a
We should not ignore the theoretical bases of the rule distinguishing compulsory
party violates the right of another. The main difference lies in that the cause of action in the
counterclaims from permissive counterclaims insofar as the dismissal of the action is
counterclaim is maintained by the defendant against the plaintiff, while the converse holds true
concerned. There is a particular school of thought that informs the broad proposition
with the complaint. Yet, as with a complaint, a counterclaim without a cause of action cannot
in Dalman that if the civil case is dismissed, so also is the counterclaim filed therein,[63] or the
survive.
more nuanced discussions offered in Metals, International Container, and BA Finance. The
It would then seemingly follow that if the dismissal of the complaint somehow eliminates the
most potent statement of the theory may be found in Metals,[64] which proceeds from the
cause(s) of the counterclaim, then the counterclaim cannot survive. Yet that hardly is the case,
following fundamental premisesa compulsory counterclaim must be set up in the same
especially as a general rule. More often than not, the allegations that form the
proceeding or would otherwise be abated or barred in a separate or subsequent litigation on
counterclaim are rooted in an act or omission of the plaintiff other than the plaintiffs
the ground of auter action pendant, litis pendentia or res judicata; a compulsory counterclaim
very act of filing the complaint. Moreover, such acts or omissions imputed to the
is auxiliary to the main suit and derives its jurisdictional support therefrom as it arises out of
plaintiff are often claimed to have occurred prior to the filing of the complaint itself. The
or is necessarily connected with the transaction or occurrence that is the subject matter of the
only apparent exception to this circumstance is if it is alleged in the counterclaim that
complaint;[65] and that if the court dismisses the complaint on the ground of lack of jurisdiction,
the very act of the plaintiff in filing the complaint precisely causes the violation of the
the compulsory counterclaim must also be dismissed as it is merely ancilliary to the main
defendants rights. Yet even in such an instance, it remains debatable whether the
action and no jurisdiction remained for any grant of relief under the counterclaim.
dismissal or withdrawal of the complaint is sufficient to obviate the pending cause of

action maintained by the defendant against the plaintiff.[67]

The first point is derived from Section 4, Rule 9, of the 1964 Rules of Court, while the two latter

points are sourced from American jurisprudence. There is no disputing the theoretical viability
These considerations persist whether the counterclaim in question is permissive or
of these three points. In fact, the requirement that the compulsory counterclaim must be set
compulsory. A compulsory counterclaim arises out of or is connected with the transaction or
up in the same proceeding remains extant under the 1997 Rules of Civil Procedure. [66] At the
occurrence constituting the subject matter of the opposing partys claim, does not require for
its adjudication the presence of third parties, and stands within the jurisdiction of the court both appears to be merely ancillary or auxiliary is chiefly the offshoot of an accident of chronology,

as to the amount involved and the nature of the claim. [68] The fact that the culpable acts on more than anything else.

which the counterclaim is based are founded within the same transaction or occurrence as the

complaint, is insufficient causation to negate the counterclaim together with the complaint. The The formalistic distinction between a complaint and a counterclaim does not detract from the

dismissal or withdrawal of the complaint does not traverse the boundaries of time to undo the fact that both of them embody causes of action that have in their end the vindication of rights.

act or omission of the plaintiff against the defendant, or vice versa. While such dismissal or While the distinction is necessary as a means to facilitate order and clarity in the rules of

withdrawal precludes the pursuit of litigation procedure, it should be remembered that the primordial purpose of procedural rules is to

provide the means for the vindication of rights. A party with a valid cause of action against

another party cannot be denied the right to relief simply because the opposing side had the

by the plaintiff, either through his/her own initiative or fault, it would be iniquitous to similarly good fortune of filing the case first. Yet this in effect was what had happened under the

encumber the defendant who maintained no such initiative or fault. If the defendant similarly previous procedural rule and correspondent doctrine, which under their final permutation,

moves for the dismissal of the counterclaim or neglects to timely pursue such action, let the prescribed the automatic dismissal of the compulsory counterclaim upon the dismissal of the

dismissal of the counterclaim be premised on those grounds imputable to the defendant, and complaint, whether upon the initiative of the plaintiff or of the defendant.

not on the actuations of the plaintiff.

Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable
The other considerations supplied in Metals are anchored on the premise that the jurisdictional
disposition of the counterclaims by ensuring that any judgment thereon is based on the merit
foundation of the counterclaim is the complaint itself. The theory is correct, but there are other
of the counterclaim itself and not on the survival of the main complaint. Certainly, if the
facets to this subject that should be taken into account as well. On the established premise
counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent
that a counterclaim involves separate causes of action than the complaint even if derived from
of the complaint, the trial court is not precluded from dismissing it under the amended rules,
the same transaction or series of transactions, the counterclaim could have very well been
provided that the judgment or order dismissing the counterclaim is premised on those defects.
lodged as a complaint had the defendant filed the action ahead of the complainant. [69] The
At the same time, if the counterclaim is justified, the amended rules now unequivocally protect
terms ancillary or auxiliary may mislead in signifying that a complaint innately possesses more
such counterclaim from peremptory dismissal by reason of the dismissal of the complaint.
credence than a counterclaim, yet there are many instances wherein the complaint is trivial

but the counterclaim is meritorious. In truth, the notion that a counterclaim is, or better still, WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005 and 10 October

2005 of Branch 29, Regional Trial Court of San Miguel, Zamboanga del Sur in Civil Case No.
98-012 are SET ASIDE. Petitioners counterclaim as defendant in Civil Case. No. 98-012 is

REINSTATED. The Regional Trial Court is ORDERED to hear and decide the counterclaim

with deliberate dispatch.

SO ORDERED.
ARNOLD GINETE, FLOR GINETE, assisted by Jose Bontigao, and NORA GINETE,
assisted by Ricardo Sabayle, petitioners, vs. HON. COURT OF APPEALS, JOSEFINA
RIBAYA-GINETE, VICTOR AND ALEX, both surnamed GINETE, EUDARLIO B.
VALENCIA and MIRAFE BELLEN-VALENCIA, respondents. (G.R. No.
127596. September 24, 1998)
Before this Court is a Petition for Review assailing four (4) Resolutions of the Court of
Appeals. The June 16, 1995 Resolution 1 dismissed petitioners' appeal for their failure to file
Appellants' Brief despite the extension given. The December 8, 1995 2 Resolution ordered
entry of judgment on the ground that the June 16, 1995 Resolution had already become
final and executory, there being no Motion for Reconsideration filed contesting the dismissal
of the appeal. The January 26, 1996 Resolution 3 ordered the release of entry of judgment
while the December 18, 1996 Resolution 4 denied petitioners' Omnibus Motiion for
Reconsideration and reiterated the order of release of entry of judgement.
The issue is basically one of ownership and succession involving seven parcels of land with
an area of 59 hectares, all located in Bulan, Sorsogon. The resolution of said issue,
however, hinges on the proper determination of paternity and filiation of the contending
parties.
Petitioners Arnold Ginete, Flor Ginete assisted by Jose Bontigao, and Nora Ginete assisted
by Ricardo Sabayle were plaintiffs in a Complaint for Annulment of Sale and for Partition
filed against private respondents Josefina Ribaya-Ginete, Victor and Alex, both surnamed
Ginete, Eudarlio B. Valencia 5 and Mirafe Bellen-Valencia. 6
There are two conflicting versions as to the original ownership of said parcels of land. On
the one hand, petitioners allege that the subject lots were originally conjugal properties of
the deceased spouses Mauricio Ginete and Aniceta Ginga who had six children, one of
whom was Onofre (or Odelon) Ginete, now deceased. Petitioners claim to be legitimate
children of the late Onofre Ginete by his first wife, Beatriz Tamboong.
According to petitioners, when Mauricio Ginete died, his surviving heirs submitted a project
of partition7 wherein the subject lots were apportioned to Onofre (Odelon) Ginete. During
the lifetime of Onofre and after the death of his first wife Beatriz Tamboong, petitioners
occupied some of the lots at the instance of the former.
On the other hand, private respondents contend that the subject lots originally belonged
solely to Aniceta Ginga who subsequently sold two of the seven lots to private respondent
Josefina Ribaya-Ginete, the second wife of Onofre (Odelon). After Onofre's (Odelon's)
death, Aniceta sold another lot to Onofre's (Odelon's) acknowledged natural children. Then,
Josefina Ribaya Ginete redeemed three lots from one Rufina Gacis and thereafter sold the
same to private respondent Mirafe Bellen Valencia, Aniceta's daughter by her second
husband and Odelon's half-sister. Said lots were subsequently titled in the name of Mirafe
Valencia married to Eudarlio Valencia.
After hearing both sides, the trial court, on June 29, 1992, ruled in favor of private
respondents and declared them owners of the entire 59 hectares of subject lots. Petitioners
were ordered to pay private respondents P50,000.00 as moral damages; and P15,000.00
as attorney's fees and necessary litigation expenses. In addition, petitioners were ordered to
pay actual damages of P183,600.00 representing the value of the coconuts and/or proceeds
of the fruits from the parcels (or portions) they have been occupying since 1975 up to 1992,
specifically parcels 2, 3 (portion), 4, 5 and 6 plus P10,200.00 per annum effective 1993 until
they finally vacate and turn over the possession thereof to private respondents and to the
pay the costs.
Having received the above decision on September 22, 1992, petitioners had until October 7,
1992 to file a notice of appeal. Petitioners eventually filed a notice of appeal on October 5,
1992.8 Said notice was acted upon and given due course by Presiding Judge Ireneo B.
Escandor on October 8, 1992 9 in view of the retirement of Judge Alparce on June 30, 1992.
However, Judge Escandor inhibited himself and withdrew his October 8, 1992 order 10 giving
due course to the appeal for an unspecified reason. Instead, Judge Simon S. Encinas acted
upon and gave due course to the appeal on January 26, 1993. 11
The Court of Appeals, however, dismissed the appeal in a June 16, 1995 Resolution for
failure of petitioners to file appellants' brief. Petitioners' counsel received the resolution on
July 3, 1995. As such, the last day for the filing of a motion for reconsideration would have
been on July 18, 1995. Corrollarily, said resolution would have attained finality on July 19,
1995.
On August 1, 1995, petitioners filed their Appellants' Brief. A Motion for Reconsideration
dated July 18, 1995 was allegedly filed together with the Appellants' Brief but received by
the Court of Appeals only on December 29, 1995. On December 8, 1995, the Court of
Appeals ordered entry of judgment and expunction of Appellants' Brief after verifying that no
Motion for Reconsideration was filed with the Court of Appeals. Nor was an appeal to the
Supreme Court filed.
Petitioners moved to reconsider the December 8, 1995 Resolution of the Court of Appeals.
On January 26, 1996, the Court of Appeals ordered the release of entry of judgment after a
verification report dated January 16, 1996 revealed that only the Appellants' Brief was
received on August 31, 1995 but without the Motion for Reconsideration. On December 18,
1996, the Court of Appeals denied petitioners' motion for leave to file and admit
incorporated omnibus motion for reconsideration and reiterated its order to release entry of
judgment.
Believing that they have a meritorious case and claiming that they would be unjustly
deprived of their rightful share in the inheritance if their appeal is not reinstated in the Court
of Appeals, petitioners filed this instant petition for review on the following grounds:
1. The Court of Appeals abused its discretion in considering petitioners'
appeal abandoned and consequently dismissed for their failure to file their
appellants' brief, overlooking the fact that their failure to file the same was
due to the gross negligence of their former counsel, whose negligence
should not be binding on them.
2. The Court of Appeals' dismissal of petitioners' appeal was based on
technicality thereby denying the rights of petitioners as plaintiffs-
 appellants to prosecute their case before said appellate court so that it
can be decided on the merits and not on its technicality aspect.
3. The entry of judgment ordered by the Court of Appeals to be entered in
this case was erroneous and premature considering that petitioners
actually filed their motion for reconsideration of the June 16, 1995 order
dismissing petitioners' appeal.
4. The suspension of the rules in the instant case is warranted so that
petitioners' appeal with the appellate court could be reinstated and
proceed in due course in order not to deprive the petitioners of their
rightful shares of their inheritance which they were unlawfully deprived of
by the private respondents.
Petitioners claim that their counsel, who happened to be the third, declined to continue with
the case for fear of antagonizing the respondent-spouses who are judges. The same held
true with their second counsel and was the main reason for the refusal of other lawyers to
accept petitioners' case. Hence, allegedly the reason for their failure to file appellants' brief
within the reglementary period.
The petition is impressed with merit.
Private respondents lay stress on the jurisprudentially-established rule that the timely
perfection of an appeal is not only mandatory but likewise jurisdictional. It is private
respondents' position that there are certain procedural rules that must remain inviolable, like
those setting the periods for perfecting an appeal or filing a petition for review, for it is
doctrinally entrenched that the right to appeal is a statutory right and one who seeks to avail
of the right must comlpy with the statute or rules. The rules, particularly the requirements for
perfecting an appeal within the reglementary period specified in the law, must be strictly
followed as they are considered indispensable interdictions against needless delays and for
orderly discharge of judicial business. Furthermore, the perfection of an appeal in the
manner and within the period permitted by law is not only mandatory but also jurisdictional
and the failure to perfect the appeal renders the judgment of the court final and executory.
As a losing party has the right to file an appeal within the prescribed period, so also the
winning party has the correlative right to enjoy the finality of the resolution of his/her case. 12
Private respondents' argument is misleading for the above-discussed statutory requirement
is not applicable to the instant case. Records show that the notice of appeal was filed within
the reglementary peniod.13 As such, it was seasonably filed.
In Carco Motor Sales v. Court of Appeals14 this Court held that:
As held by the Court in Gregorio v. Court of Appeals (70 SCRA 546
[1976]), (T)he expiration of the time to file brief, unlike lateness in filing the
notice of appeal, appeal bond or record on appeal is not a jurisdictional
matter and may be waived by the parties. Even after the expiration of the
time fixed for the filing of the brief, the reviewing court may grant an
extension of time, at least where no motion to dismiss has been made.
Late filing or service of briefs may be excused where no material injury
has been suffered by the appellee by reason of the delay or where there
is no contention that the appellee's cause was prejudiced. (Emphasis
supplied)
Thus, a distinction should be made between failure to file a notice of appeal within the
reglementary period and failure to file brief within the period granted by the appellate court.
The former would result in the failure of the appellate court to obtain jurisdiction of the
appealed decision resulting in its becoming final and executory upon failure to move for
reconsideration. The latter would simply result in the abandonment of the appeal which
could lead to its dismissal upon failure to move for its reconsideration. Consequently, the
appealed decision would become final and executory but prior thereto, the appellate court
shall have obtained jurisdiction of the appealed decision.
In the instant case, petitioners simply failed to file the Appellants' Brief within the extended
period accorded to them after the appellate court had obtained jurisdiction of the case.
Nevertheless, this Court will not countenance the failure of petitioners' counsel to observe
the reglementary period to file appellants' brief. Counsel are sworn to protect the interest of
their clients and in the process, should be knowlegeable about the rules of procedure to
avoid prejudicing the interests of their clients or worse, compromising the integrity of the
courts. Ignorance of the procedural rules on their part is tantamount to inexcusable
negligence.
The matter before this Court, however, does not even call for counsel's knowledge of
procedural rules but merely his managerial skill in keeping track of deadlines for filing
necessary pleadings, failing which, he can opt to withdraw from the case in order not to
prejudice further his client's interest.
Failure of petitioners' former counsel to file the Appellants' Brief within the reglementary
period constitutes gross negligence in violation of the Code of Professional Responsibility.
In Perla Compania De Seguros, Inc. v. Atty. Benedicto G. Saquilabon,15 this Court held:
An attorney is bound to protect his client's interest to the best of his ability
and with utmost diligence, (Del Rosario v. Court of Appeals, 114 SCRA
159) A failure to file brief for his client certainly constitutes inexcusable
negligence on his part. (People v. Villar, 46 SCRA 107) The respondent
has indeed committed a serious lapse in the duty owed by him to his
client as well as to the Court not to delay litigation and to aid in the
speedy administration of justice. (People v. Daban, 43 SCRA 185; People
v. Estocada, 43 SCRA 515). (Emphasis supplied)
While, certainly, an Appellants' Brief was filed, it was admittedly filed beyond the
reglementary period. Such lapse indubitably prejudiced the interest of petitioners since it
unduly delayed the resolution of this case on the merits before the Court of Appeals. As it is,
it has taken more than twenty (20) years since the case was first filed on July 19, 1978 and
the merits of the appeal are yet to be resolved before the Court of Appeals.
Considering that the bone of contention consists of fifty-nine hectares of alleged inherited
lands, it cannot be presumed that petitioners were disinterested in pursuing the case. They
hired counsel precisely to handle all the legal matters and to protect their interests. No duty
was imposed upon them to remind their counsel to file Appellants' Brief.
Failure of petitioners' former counsel to file Appellants' Brief clearly manifests his negligence
which became more pronounced when he was granted an extended period of time within
which to file the brief. Ordinarily, such negligent act or omission on the part of counsel
would, as a rule, have bound his clients. Under the prevailing circumstances and in the
interest of justice and equity, this Court cannot strictly apply the same rule in the case
before it.
This Court may suspend its own rules or exempt a particular case from its operation where
the appellate court failed to obtain jurisdiction over the case owing to appellant's failure to
perfect an appeal. Hence, with more reason would this Court suspend its own rules in cases
where the appellate court has already obtained jurisdiction over the appealed case. This
prerogative to relax procedural rules of the most mandatory character in terms of
compliance, such as the period to appeal has been invoked and granted in a considerable
number of cases. 16
Thus, in Republic v. Court of Appeals,17 although the appeal was perfected six days after
the expiration of the reglementary period, this Court ordered the Court of Appeals to
entertain the same, as the Republic stood to lose close to 300 hectares of land already titled
in its name and used exclusively for educational purposes.
In the instant case, petitioners stand to lose their alleged rightful share in the inheritance
consisting of fifty-nine hectares of land just because their former counsel failed to file the
Appellants' Brief within the reglementary period.
To deprive petitioners of their share in the inheritance due to the negligence of their counsel
coupled with their submissions of the trial court's failure to appreciate and consider some of
their evidence, documentary at that, are sufficient demonstrations of the merits of their case.
While this Court would not readily accept petitioners' allegation that the trial court's decision
was drafted by one of the private respondents who happened to be the Executive Judge
exercising supervisory functions over the branch where the instant case was being heard, it
cannot be overlooked that this particular situation may have engendered some justifiable
suspicion in the mind of petitioners. While such an allegation, coupled with the allegation
that another intervenor was also a judge,18 as well as the belief that the reason they kept on
changing their lawyers was because their lawyers were intimidated by private respondents
who were judges, or that the lawyers themselves refused to accept their case, are bereft of
concrete proof, still they may not entirely be without merit. In fact, the Appellants' Brief,
belatedly filed with the Court of Appeals, as well as the Motion for Reconsideration, was
signed by petitioners themselves claiming that the lawyer who drafted the same refused to
sign his name.
The above circumstances, taken cumulatively, are sufficient demonstration of the merits of
their case, hence must be given due course if only to dispel from the minds of petitioners, as
well as the public, the image of partiality of our courts, as well as to determine definitively
the ownership over the subject parcels of land.
Justice Teehankee, in his concurring opinion in Republic v. Court of Appeals, stated, thus:
The precedent of Paulino v. Court of Appeals (80 SCRA 257 [1977])
where the Court ordered the giving of due course to an appeal
notwithstanding that the same was admittedly filed two days beyond the
reglementary period and had been therefore rejected by the appellate
court is fully applicable to the case at bar. We cited therein inter alia the
demands of substantial justice and the presence of special circumstances
for giving due course to the appeal and reiterated that '(T)he underlying
principle in the administration of justice and application of the rules
is substantial justice and.fair play. As restated by the Court in Obut v.
Court of Appeals (70 SCRA 546 [1976]), '(W)e cannot look with favor on a
course of action which would place the administration of justice in a
straight jacket for then the result would be a poor kind of justice if there
would be justice at all. Verily, judicial orders, such as the one subject of
this petition, are issued to be obeyed, nonetheless a non-compliance is to
be dealt with as the circumstances attending the case may warrant. What
should guide judicial action is the principle that a party-litigant is to be
given the fullest opportunity to establish the merits of his complaint or
defense rather than for him to lose life, liberty, honor or property on
technicalities.19 (Emphasis supplied)
Let it be emphasized that the rules of procedure should be viewed as mere tools designed
to facilitate the attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must always be
eschewed. Even the Rules of Court reflect this principle. The power to suspend or even
disregard rules can be so pervasive and compelling as to alter even that which this Court
itself has already declared to be final, as we are now constrained to do in instant case.20
Thus, this court is not averse to suspending its own rules in the pursuit of the ends of
justice. ". . . . For when the operation of the Rules will lead to an injustice we have, in
justifiable instances, resorted to this extraordinary remedy to prevent it. The rules have been
drafted with the primary objective of enhancing fair trials and expediting justice. As a
corollary, if their application and operation tend to subvert and defeat, instead of promote
and enhance it, their suspension is justitied. In the words of Justice Antonio P. Barredo in
his concurring opinion in Estrada v. Sto.Domingo, "(T)his Court, through the revered and
eminent Mr. Justice Abad Santos, found occasion in the case of C. Viuda de Ordovesa v.
Raymundo, to lay down for recognition in this jurisdiction, the sound rule in the
administration of justice holding 'it is always in the power of the court (Supreme Court) to
suspend its own rules or to except a particular case from its operation, whenever the
purposes of justice require
it . . ." 21
The Rules of Court were conceived and promulgated to set forth guidelines in the
dispensation of justice but not to bind and chain the hand that dispenses it, for otherwise,
courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is
precisely why courts, in rendering justice have always been, as they in fact ought to be,
conscientiously guided by the norm that on the balance, technicalities take a backseat to
substantive rights, and not the other way around. As applied to instant case, in the language
of Justice Makalintal, technicalities "should give way to the realities of the situation." 22
Private respondents' reliance on technicalities should be placed in proper perspective lest it
lead to a great injustice and an abuse of the rules of procedure which are primarily
established to protect the rights of the parties. Technicality should not be relied upon to
subject and defeat substantive rights of the other party. "Technicality, when it deserts its
proper office as an aid to justice and becomes its great hindrance and chief enemy,
deserves scant consideration from courts."23
The emerging trend in the rulings of this Court is to afford every party-litigant the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held that rules must not be
applied rigidly so as not to override substantial justice. 24
This Court, likewise, has held that "(W)here compelling circumstances are cited by the
appellant that would warrant an examination and review by the appellate court as the
reviewer of the findings of fact made by the trial court, 'a liberal application of the rules
becomes imperative and conversely, an overstrict or rigid enforcement of the reglementary
period for the filing of briefs, extensions of which for justifiable reasons are after all
addressed to the sound discretion of the court, is to be shunned and avoided lest 'a grave
miscarriage of justice be committed'."25
Further, this Court has declared that "the higher interests of justice and fairness justify the
setting aside of respondent court's peremptory dismissal of petitioner's appeal for failure to
file appellant's brief within the original reglementary period due to a cause not entirely at
attributable to its fault or negligence and that the exercise of the Court's "inherent right" to
reinstate an appeal that was dismissed as the result of fraud, mistake or unavoidable
casualty is fully justified under the circumstances of the case at bar." 26
In the case at bar, the lawyer's negligence without any participatory negligence on the part
of petitioners is a sufficient reason to set aside the resolutions of the Court of Appeals.
Aside from matters of life, liberty, honor or property which would warrant the suspension of
the rules of the most mandatory character and an examination and review by the appellate
court of the lower court's findings of fact, the other elements that should be considered are
the following: (1) the existence of special or compelling circumstances, (2) the merits of the
case, (3) a cause not entirely attributable to the fault or negligence of the party favored by
the suspension of the rules, (4) a lack of any showing that the review sought is merely
frivolous and dilatory,27 (5) the other party will not be unjustly prejudiced thereby.
On the whole, the principal considerations in giving due course to an appeal by suspending
the enforcement of statutory and mandatory rules are substantial justice and equity
considerations. But the above-cited elements should likewise be considered for the appeal
to be reinstated and given due course.
Lest this Court be misinterpreted, the statutory requirement that when no motion for
reconsideration was filed within the reglementary period, the decision attains finality and
becomes executory in due course is to be strictly enforced. This Court has held that the
necessity for such a requirement is considered an indispensable interdiction against
needless delays and for the orderly discharge of judicial business. 28 The essential rationale
behind this statutory requirement is expressed by this court in Legarda v. Court of
Appeals,29 thus:
The necessity of giving finality to judgments that are not void is self-
evident. The interest of society imposes it. The opposite view might make
litigations more unendurable than the wrong (they are) intended to
redress. It would create doubt, real-or imaginary, and controversy would
constantly arise as to what the judgment or order was. Public policy and
sound practice demand that, at the risk of occasional errors, judgments of
courts should become final at some definite date fixed by law. The very
object for which courts were instituted was to put an end to controversies.
When judgments of lower courts gain finality, they, too, become
inviolable, impervious to modification. They may, then, no longer be
reviewed, or in any way modified directly or indirectly, by a higher court,
not even by the Supreme Court. In other words, once a judgment
becomes final, the only errors that may be corrected are those which are
clerical.
From the foregoing, it can be inferred that the purposes for such a statutory requirement are
two-fold: first, to avoid delay in the administration of justice and thus, procedurally, to make
orderly the discharge of judicial business, and; second; to put an end to judicial
controversies, at the risk of occasional errors, which is precisely why courts exist.
Obviously, the first purpose is in line with the dictum that justice delayed is justice denied.
But said dictum presupposes that the court properly appreciates the facts and the applicable
law to arrive at a judicious decision. The end should always be the meting out of justice.
As to the second purpose, controversies cannot drag on indefinitely. The rights and
obligations of every litigant must not hang in suspense for an indefinite period of time. It
must be adjudicated properly and seasonably to better serve the ends of justice and to
place everything in proper perspective. In the process, the possibility that errors may be
commiited in the rendition of a decision cannot be discounted.
To be sure, this Court will not disturb a final and executory judgment even at the risk that
errors may have been committed in its rendition as long as due process was observed. It
has been held that as long as a party was given the opportunity to defend his interests in
due course, he cannot he said to have been denied due process of law, for this opportunity
to be heard is the very essence of due process. 30
Due process means giving every contending party the opportunity to be heard and the Court
to consider every piece of evidence presented in their favor. In the instant case, there is no
dispute that petitioners were given every opportunity to be heard. In fact, this was never
presented as an issue before the lower court. What was made an issue before the Court of
Appeals was the misappreciation of facts and misapplication of laws despite clear and
uncontroverted evidence. In effect, petitioners claim that they would be deprived of their
rightful shares of their inheritance if their appeal is not reinstated and the findings of fact
made by the lower court are not reviewed.
In this Court's perusal of the records of the case, it appears that the lower court disregarded
and misappreciated certain documents presented by petitioners in proving filiation as
allowed by the Civil Code and the Rules of Court. Second, it seems to have misapplied the
established presumptions in cases of marriage and filiation. Third, the forgery of the
signature of the Notary Public in one of the questioned Deeds of Sale appears to have been
clearly established by petitioners and unsatisfactory and insufficiently rebutted by private
respondents.
In view of these circumstances, this Court finds it imperative for the Court of Appeals to
review the findings of fact made by the trial court. For while this Court may review factual
findings of the lower court, it will not preempt the Court of Appeals in reviewing the same
and reappreciating the evidence presented by petitioners to resolve factual questions.
Prior resolution of the aforecited issues is necesssary in order to determine the question of
original ownership over the subject parcels of land which in turn would resolve the question
of succession. Said questions pertain to factual matters that could best be resolved by the
Court of Appeals which is mandated to examine and review the findings of fact made by the
lower court.
The demands of substantial justice and fair play make it absolutely necessary for the courts
to completely, judiciously and satisfactorily resolve said questions of fact. Failure to give due
course to the appeal and to resolve those questions might give rise to the impression that
the courts may be fostering and promoting injustice if and when the appellants' or
petitioners' case turns out to be meritorious.
This Court cannot help but observe that the Court of Appeals itself is doubtful as to whether
a motion for reconsideration of the June 16, 1995 resolution which dismissed petitioners'
appeal was filed together with the Appellants' Brief. While the Appellants' Brief was indeed
filed late, the Court of Appeals, in its December 8, 1995 resolution stated that the said brief
was filed on August 1, 1995,31 thirteen days after the supposed last day for filing a motion
for reconsideration. However in its January 26, 1996 resolution, it stated that according to
the Judicial Records Division Report, the Appellants' Brief was received and dated August
31, 1995.32
Without imputing any irregularity or negligence in the conduct of the official duties of the
Court of Appeals' Judicial Records Division, this Court cannot help but observe that it is the
common practice among lawyers, when filing a motion for reconsideration of the dismissal
of their appeal or petition or any required pleading, to attach the required appellant's brief,
petition or pleading to said motion.
In the instant case, petitioners' Motion for Reconsideration was dated July 18, 1995 but
allegedly received by the Court of Appeals on December 29, 1995 or five months later. Said
Motion for Reconsideration stated that "attached to this motion are the required copies of
their Brief for admission by the Honorable Court." In fact, said motion prayed:
WHEREFORE, it is prayed that the resolution dated June 16, 1995
dismissing the appeal be set aside and the appeal be reinstated and
the attached Brief for appellants be admitted. . . . (Emphasis supplied)
While said motion may indeed have been filed on December 29, 1995, apart from and much
later than the Appellants' Brief despite the former's being dated July 18, 1995, any sensible
lawyer would have known that the next step after such dismissal of one's appeal for failure
to file Appellant's Brief would be to file a motion for reconsideration of said dismissal.
Common sense would have dictated that the required brief, the late filing of which precisely
caused the dismissal of the appeal, would be attached to the motion for reconsideration.
This may have been the reasoning of the Court of Appeals as it was itself undecided on
whether a motion for reconsideration was indeed filed on time. This is obvious from its
resolutions regarding entry of judgment.
The decision of the lower court was supposed to have become final and executory on July
19, 1995 when no motion for reconsideration of the dismissal of the appeal was filed on July
18, 1995, the last day for filing said motion. In the Revised Internal Rules of the Court of
Appeals, Section 1, Rule 11 on Entry of Judgment and Remand of the Records, it is
provided:
Unless a motion for reconsideration or an appeal is taken to the Supreme
Court, judgement and final resolutions of the Court of Appeals shall be
entered upon the expiration of fifteen (15) days after notice to the parties.
(Empasis Supplied)
Petitioners made known their intention to question the resolutions of the Court of Appeals
before the Supreme Court only on January 17, 1997. 33 Hence, no appeal to the Supreme
Court was filed for more than a year from the finality of the judgment or resolution of the
Court of Appeals which could have suspended or delayed the entry of judgement.
The other reason that could have forestalled the entry of judgment was filing of a motion for
reconsideration. The Court of Appeals, in its December 8, 1995 resolution, declared:
Considering:
1) Judicial Records Division verification reports dated November 8, 1995
that no Motion for Reconsideration/Supreme Court Appeal received as
per docket book; . . .
the Court Resolved:
 1) to issue entry of judgment and records remanded; the Court's
Resolution of June 16, 1995 having become final and executory as of July
19, 1995; . . .
It is apparent from the above-quoted Resolution that no entry of judgment was made as of
November 8, 1995 after the finality of the Resolution dismissing the appeal on July 19,
1995. This should have been automatically done by the Division Clerk of Court in
accordance with Section 5, Rule 11 of the Revised Internal Rules of the Court of Appeals
which provides:
After promulgation of the decision or final resolution it shall be the duty
and responsibility of the Division Clerks of Court to see to it that the entry
of judgement is made in due time without undue delay. (Emphasis
supplied)
Granted that an allowance for delay was taken into consideration, Section 6 of the same
Revised Internal Rules of the Court of Appeals provides that:
In making entries of judgments, the Division Clerk of Court shall
determine the finality of the decision by making allowance for delay of
mail, computed from the last day of the period of appeal fiom the decision
or final resolution, as follows: . . .; twenty (20) days, if the addressee is
from Luzon, except Metro Manila; . . . (Emphasis supplied)
Prescinding from the foregoing disquisition, the provisions of the Internal Rules of the Court
of Appeals further state that the Division Clerk of Court should have automatically entered
the resolution which had become final and executory on August 7, 1995 since petitioners
were from the province of Sorsogon in Luzon. This Court cannot comprehend why the
Division Clerk of Court had not entered the resolution as of November 8, 1995 or One
Hundred and Fifteen (115) days after the last day of the period to appeal from said
resolution on July 18, 1995.
As if this were not enough., the Court of Appeals, in a January 26, 1996 Resolution, again
declared and ordered:
Considering:
xxx xxx xxx
2) Judicial Record Division Verification report dated January 16, 1996 that
only appellants' brief was received and dated August 31, 1995 but without
the Motion for Reconsideration;
the Court Resolved:
Release entry of judgment.
Then in a December 18, 1996 Resolution, the Court of Appeals reiterated:
. . . . The entry judgment is hereby ordered RELEASED.
This Court can only infer that the Court of Appeals itself was not certain as to whether
petitioner had indeed filed a Motion for Reconsideration since it had to order the Judicial
Records Division to verify if one was filed, not only once but twice. Only after it received
confirmation that no Motion for Reconsideration had indeed been filed did it order the
issuance of the entry of judgment when that should have been automatically done by the
Division Clerk of Court Five Hudnred Fifty-One (551) days earlier.
While the Court of Appeals itself appears unsure as to whether petitioner filed a Motion for
Reconsideration of the dismissal of its appeal within the reglementary period, greater
prejudice would be avoided if petitioners' appeal is reinstated and given due course.
This Court is aware that the instant case has dragged far too long, thereby causing
prejudice to both parties. But greater harm, if not injustice, would be caused to petitioners if
their appeal were not reinstated and given due course by the Court of Appeals, than it would
to private respondents. Petitioners would be made to return the fruits in addition to payment
of damages as well as P10,200.00 per annum effective 1993 until they finally vacate and
turn over possession of the subject parcels of land to private respondents in case the
appellate court upholds the decision of the lower court. If the upper court reverses the
decision of the lower court and adjudges petitioners as entitled to a share in the subject
parcels of land, then private respondents shall not have lost anything.
While this Court seeks to balance and harmonize procedural and substantive law, the words
of Charles Rembrar could not be truer than in this case: "There is danger to real justice that
inheres in the concepts of "fairness" and "general rules"; the hurt done by the sharp corners
of an angular legal structure, the hospitality to tyranny that lies in easy disregard of rules.
Both ideas are needed — adherence to abstractions that override the inclinations (bad or
good) of those who make decisions, attention to the requirements of special situations.
From time to time, one or the other becomes too prominent. Then there is clamor for its
counterpart.34
IN VIEW OF THE FOREGOING, the following Resolutions of the Court of Appeals, dated
June 16, 1995 dismissing the appeal; that dated December 8, 1995 ordering entry of
judgment; that dated January 26, 1996 ordering release of entry of judgment, and finally that
dated December 18, 1996 ordering release of entry of judgment in CA G.R. CV NO. 43573
are hereby SET ASIDE. The case is REMANDED to the Court of Appeals which is
DIRECTED to admit petitioners' Appellants' Brief, to give due course to their Appeal and
decide the same on the merits. No costs.
SO ORDERED.
LOURDES DELA CRUZ v. HON. COURT OF APPEALS (G.R. No. 139442, December 6,
2006) question for residential purposes.Despite the sale, petitioner Dela Cruz did not give up the

lot.
For unto every one that hath shall be given, and he shall have
abundance: but from him that hath not shall be taken away even
that which he hath.
On January 14, 1997, petitioner was sent a written demand to relinquish the premises which
Holy Bible, Matthew 25:29
she ignored, prompting respondent Tan Te to initiate conciliation proceedings at the barangay

level. While respondent attempted to settle the dispute by offering financial assistance,
The Case
petitioner countered by asking PhP 500,000.00 for her house. Respondent rejected the

counter offer which she considered unconscionable. As a result, a certificate to file action was
This petition for review seeks to nullify the April 30, 1999 Decision and the July 16, 1999
issued to Tan Te.
Resolution of the Court of Appeals in CA-G.R. SP No. 49097, which reversed the Decision of

the Manila Regional Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and reinstated
On September 8, 1997, respondent Tan Te filed an ejectment complaint with damages before
the Decision of the Manila Metropolitan Trial Court (MeTC), Branch 20, which ordered the Manila MeTC, entitled Melba Tan Te v. Lourdes Dela Cruz and docketed as Civil Case
petitioner Dela Cruz to vacate the subject lot in favor of respondent Tan Te. [1]
No. 156730-CV. The complaint averred that: (1) the previous owners, the Reyeses were in
The Facts
possession and control of the contested lot; (2) on November 26, 1996, the lot was sold to

Tan Te; (3) prior to the sale, Dela Cruz forcibly entered the property with strategy and/or
The Reyes family, represented by Mr. Lino Reyes, owned the lot located at No. 1332
stealth; (4) the petitioner unlawfully deprived the respondent of physical possession of the
Lacson Street (formerly Gov. Forbes Street), Sampaloc, Manila. Petitioner Lourdes Dela Cruz
property and continues to do so; and, (5) the respondent sent several written demands to
was one of their lessees, and she religiously paid rent over a portion of the lot for well over
petitioner to vacate the premises but refused to do so.
40 years. Sometime in 1989, a fire struck the premises and destroyed, among others,

petitioners dwelling. After the fire, petitioner and some tenants returned to the said lot and
On October 24, 1997, petitioner filed her answer and alleged that: (1) the MeTC had no
rebuilt their respective houses; simultaneously, the Reyes family made several verbal
jurisdiction over the case because it falls within the jurisdiction of the RTC as more than one
demands on the remaining lessees, including petitioner, to vacate the lot but the latter did not
year had elapsed from petitioners forcible entry; (2) she was a rent-paying tenant protected
comply. On February 21, 1994, petitioner was served a written demand to vacate said lot but
by PD 20;[2] (3) her lease constituted a legal encumbrance upon the property; and (4) the lot
refused to leave. Despite the setback, the Reyes family did not initiate court proceedings
was subject of expropriation.
against any of the lessees.

The Ruling of the Manila MeTC

On November 26, 1996, the disputed lot was sold by the Reyeses to respondent Melba Tan
On April 3, 1998, the MeTC decided as follows:
Te by virtue of the November 26, 1996 Deed of Absolute Sale. Respondent bought the lot in
 WHEREFORE, judgment is hereby rendered in favor of the plaintiff
as follows: CA rendered a Decision in favor of respondent Tan Te reversing the Manila RTC September

1, 1998 Decision and reinstated the Manila MeTC April 3, 1998 Decision.
1. Ordering the defendant and all persons claiming right under her
to vacate the premises situated at 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila and
peacefully return possession thereof to plaintiff; Petitioner tried to have the CA reconsider its Decision but was rebutted in its July 16,

2. Ordering the defendant to pay the plaintiff the amount of P360.00 1999 Resolution.
a month from December 1996 to November 1997; P432.00 a month
from December 1997 to November 1998, plus 20% for each
subsequent year until the premises shall have been vacated and Unyielding to the CA Decision and the denial of her request for reconsideration, petitioner
turned over to the plaintiff;
Dela Cruz now seeks legal remedy through the instant Petition for Review on Certiorari before

the Court.
3. Ordering the defendant to pay the plaintiff the amount of
P10,000.00 as attorneys fees; and, the costs of the suit.
The Issues
SO ORDERED.[3]

Petitioner Dela Cruz claims two (2) reversible errors on the part of the appellate

The Ruling of the Regional Trial Court court, to wit:

A
Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC in the Manila
THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT
RTC and the appeal was docketed as Civil Case No. 98-89174. On September 1, 1998, the BEYOND THE ISSUES OF THE CASE AND CONTRARY TO
RTC rendered its judgment setting aside the April 3, 1998 Decision of the Manila MeTC and THOSE OF THE TRIAL COURT.

dismissed respondent Tan Tes Complaint on the ground that it was the RTC and not the MeTC B

which had jurisdiction over the subject matter of the case. The RTC believed that since Tan THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED
IN REVERSING THE DECISION OF THE RTC AND IN EFFECT,
Tes predecessor-in-interest learned of petitioners intrusion into the lot as early as February REINSTATING THE DECISION OF THE [MeTC] WHICH IS
21, 1994, the ejectment suit should have been filed within the one-year prescriptive period CONTRADICTED BY THE EVIDENCE ON RECORD.[4]

which expired on February 21, 1995. Since the Reyes did not file the ejectment suit and

respondent Tan Te filed the action only on September 8, 1997, then the suit had become The Courts Ruling

an accion publiciana cognizable by the RTC.

Discussion on Rule 45

The Ruling of the Court of Appeals

Disappointed at the turn of events, respondent Tan Te appealed the adverse Decision Before we dwell on the principal issues, a few procedural matters must first be resolved.

to the Court of Appeals (CA) which was docketed as CA-G.R. SP No. 49097. This time, the

Petitioner Dela Cruz asks the Court to review the findings of facts of the CA, a course of action
proscribed by Section 1, Rule 45. Firm is the rule that findings of fact of the CA are final and
conclusive and cannot be reviewed on appeal to this Court provided they are supported by
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in civil cases.Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:
xxxx

evidence on record or substantial evidence. Fortunately for petitioner, we will be liberal with
her petition considering that the CAs factual findings contradict those of the RTC, and there
was an asseveration that the court a quo went beyond the issues of the case. Indeed, these
grounds were considered exceptions to the factual issue bar rule.
(2) Exclusive original jurisdiction over cases of forcible entry and
unlawful detainer: Provided, That when, in such cases, the
defendant raises the question of ownership in his pleadings and the
question of possession cannot be resolved without deciding the
issue of ownership, the issue of ownership shall be resolved only to
determine the issue of possession.

Secondly, the petition unnecessarily impleaded the CA in violation of Section 4, Rule 45. We
Thus exclusive, original jurisdiction over ejectment proceedings (accion interdictal)
will let this breach pass only because there is a need to entertain the petition due to the
is lodged with the first level courts. This is clarified in Section 1, Rule 70 of the 1997 Rules of
conflicting rulings between the lower courts; however, a repetition may result to sanctions.
Civil Procedure that embraces an action for forcible entry (detentacion), where one is deprived

of physical possession of any land or building by means of force, intimidation, threat, strategy,
The actual threshold issue is which court, the Manila RTC or the Manila MeTC, has jurisdiction
or stealth. In actions for forcible entry, three (3) requisites have to be met for the municipal
over the Tan Te ejectment suit. Once the jurisdictional issue is settled, the heart of the dispute
trial court to acquire jurisdiction. First, the plaintiffs must allege their prior physical possession
is whether or not respondent is entitled to the ejectment of petitioner Dela Cruz from the
of the property. Second, they must also assert that they were deprived of possession either
premises.
by force, intimidation, threat, strategy, or stealth. Third, the action must be filed within one (1)

year from the time the owners or legal possessors learned of their deprivation of physical
However, the petition is bereft of merit.
possession of the land or building.

On the Issue of Jurisdiction

The other kind of ejectment proceeding is unlawful detainer (desahucio), where one

unlawfully withholds possession of the subject property after the expiration or termination of
Jurisdiction is the power or capacity given by the law to a court or tribunal to
the right to possess. Here, the issue of rightful possession is the one decisive; for in such
entertain, hear and determine certain controversies. [5] Jurisdiction over the subject matter is
action, the defendant is the party in actual possession and the plaintiffs cause of action is the
conferred by law.
termination of the defendants right to continue in possession.[7] The essential requisites of

unlawful detainer are: (1) the fact of lease by virtue of a contract express or implied; (2) the
Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal Trial Courts, and
expiration or termination of the possessors right to hold possession; (3) withholding by the
Municipal Circuit Trial Courts of B. P. No. 129[6] provides:
lessee of the possession of the land or building after expiration or termination of the right to

possession; (4) letter of demand upon lessee to pay the rental or comply with the terms of the
lease and vacate the premises; and (5) the action must be filed within one (1) year from date

of last demand received by the defendant. To determine whether a complaint for recovery of possession falls under the

jurisdiction of the MeTC (first level court) or the RTC (second level court), we are compelled

A person who wants to recover physical possession of his real property will prefer to go over the allegations of the complaint.The general rule is that what determines the nature

an ejectment suit because it is governed by the Rule on Summary Procedure which allows of the action and the court that has jurisdiction over the case are the allegations in the

immediate execution of the judgment under Section 19, Rule 70 unless the defendant perfects complaint. These cannot be made to depend upon the defenses set up in the answer or

an appeal in the RTC and complies with the requirements to stay execution; all of which are pleadings filed by the defendant.[8]

nevertheless beneficial to the interests of the lot owner or the holder of the right of possession.
This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was

On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional Trial Courts held that while the allegations in the complaint make out a case for forcible entry, where

provides: tenancy is averred by way of defense and is proved to be the real issue, the case should be

dismissed for lack of jurisdiction as the case should properly be filed with the then Court of
Section 19. Jurisdiction in civil cases.Regional Trial Courts shall
exercise exclusive original jurisdiction: Agrarian Relations.[9]

xxxx
The cause of action in a complaint is not what the designation of the complaint
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, except actions for forcible entry into states, but what the allegations in the body of the complaint define and describe. The
and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon Metropolitan Trial Courts, Municipal Trial designation or caption is not controlling, more than the allegations in the complaint
Courts and Municipal Circuit Trial Courts.
themselves are, for it is not even an indispensable part of the complaint.[10]

Let us refer to the allegations of the complaint filed in the Manila MeTC in Civil Case
Two (2) kinds of action to recover possession of real property which fall under the
No. 98-89174, which we quote verbatim:
jurisdiction of the RTC are: (1) the plenary action for the recovery of the real right of
possession (accion publiciana) when the dispossession has lasted for more than one year or
3. That plaintiff is the absolute and registered owner of a parcel of
when the action was filed more than one (1) year from date of the last demand received by land located at No. 1332, Lacson Street, Sampaloc, Manila now
being occupied by defendant;
the lessee or defendant; and (2) an action for the recovery of ownership (accion
4. That plaintiff purchased the above-said parcel of land together
reivindicatoria) which includes the recovery of possession. with its improvements from the legal heirs of the late EMERLINDA
DIMAYUGA REYES on November 26, 1996, under and by virtue of
a Deed of Absolute Sale x x x;
These actions are governed by the regular rules of procedure and adjudication takes 5. That pursuant to the said deed of sale, the title to the land and all
its improvements was transferred in plaintiffs name as evidenced by
a longer period than the summary ejectment suit. Transfer Certificate of Title No. 233273 issued by the Register of
Deeds of Manila on April 22, 1997 x x x;

6. That prior to said sale, the previous owners, represented by Mr.
Lino Reyes, husband of the said deceased Emerlinda D. Reyes and
the administrator of her estate, was in possession and control of the
property subject of this complaint;
7. That also prior to said sale, defendant, without the knowledge and
consent of Mr. Lino Reyes, surreptitiously and by means of stealth
and strategy entered, used and occupied the said premises thus
depriving the former of rightful possession thereof;
8. That on February 21, 1994, Mr. Lino Reyes, through Atty. Alejo
Sedico, his lawyer, furnished the defendants a letter formally
demanding that defendant vacate the premises x x x;
9. That, however, defendant failed and refused to vacate despite
just and legal demand by Mr. Lino Reyes;
10. That after the sale to plaintiff of said premises, plaintiff has
several times demanded of defendants to vacate the premises, the
last demand having been made on them personally and in writing
on January 14, 1997 x x x;
11. That defendant failed and refused and still fails and refuses to
vacate the premises without legal cause or justifiable reason
whatsoever;[11]
The answer of petitioner averred:
4. The Court has no jurisdiction over the case, having been filed by
plaintiff more than the reglementary one year period to commence
forcible entry case, which is reckoned from the date of the alleged
unlawful entry of defendant by the use of stealth and strategy into
the premises;
5. For more than four decades now, defendant has been and still is
a rent-paying tenant of the subject land occupied by their residential
house, dating back to the original owner-lessor, the Dimayuga
family. Her lease with no definite duration, commenced with a rent
at P60.00 per month until it was gradually increased in the ensuing
years. As of November 1996, it stood at P300.00 a month;
6. In this circumstances [sic], defendant enjoys the protective
mantle of P.D. 20 and the subsequent rental control status against
dispossession. She cannot be ejected other than for causes
prescribed under B.P. Blg. 25. Further, in case of sale of the land,
she has the right of first refusal under the express provision of P.D.
1571;
7. Throughout the years of her tenancy, defendant has been
updated in her rental payment until the collector of the original
owner-lessor no longer came around as she has done theretofore;
7.1. As a result, she was compelled to file a petition for
consignation of rent before the Metropolitan Trial Court
of Manila;
8. A bona fide tenant within the ambit if [sic] P.D. 20 and the
subsequent rental control status, including B.P. Blg. 25, under its
terms, cannot be ousted on a plea of expiration of her monthly
lease;
9. Her lease constitutes a legal encumbrance upon the property of
the lessor/owner and binds the latters successor-in-interest who is
under obligation to respect it;
10. The land at bench is the subject of a pending expropriation
proceedings;
11. Plaintiff being a married woman cannot sue or be sued without
being joined by her husband;[12]
Undeniably, the aforequoted allegations of the complaint are vague and iffy in
revealing the nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino Reyes,
representing the estate of his wife Emerlinda Reyes, he was in possession and control of the
subject lot but were deprived of said possession when petitioner, by means of stealth and
strategy, entered and occupied the same lot. These circumstances imply that he had prior
physical possession of the subject lot and can make up a forcible entry complaint.
On the other hand, the allegation that petitioner Dela Cruz was served several
demands to leave the premises but refused to do so would seem to indicate an action for
unlawful detainer since a written demand is not necessary in an action for forcible entry. It is
a fact that the MeTC complaint was filed on September 8, 1997 within one (1) year from the
date of the last written demand upon petitioner Dela Cruz on January 14, 1997.
 As previously discussed, the settled rule is jurisdiction is based on the allegations in
the initiatory pleading and the defenses in the answer are deemed irrelevant and immaterial
in its determination. However, we relax the rule and consider the complaint at bar as an
exception in view of the special and unique circumstances present. First, as in Ignacio v. CFI
of Bulacan,[13] the defense of lack of jurisdiction was raised in the answer wherein there was
an admission that petitioner Dela Cruz was a lessee of the former owners of the lot, the
Reyeses, prior to the sale to respondent Tan Te. The fact that petitioner was a tenant of the
predecessors-in-interest of respondent Tan Te is material to the determination of
jurisdiction. Since this is a judicial admission against the interest of petitioner, such admission
can be considered in determining jurisdiction. Second, the ejectment suit was filed with the
Manila MeTC on September 8, 1997 or more than nine (9) years ago. To dismiss the
complaint would be a serious blow to the effective dispensation of justice as the parties will
start anew and incur additional legal expenses after having litigated for a long time. Equitable
justice dictates that allegations in the answer should be considered to aid in arriving at the
real nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly empowers the
Court to construe Rule 70 and other pertinent procedural issuances in a liberal manner to
promote just, speedy, and inexpensive disposition of every action and proceeding.
Based on the complaint and the answer, it is apparent that the Tan Te ejectment
complaint is after all a complaint for unlawful detainer. It was admitted that petitioner Dela
Cruz was a lessee of the Reyeses for around four (4) decades. Thus, initially petitioner as
lessee is the legal possessor of the subject lot by virtue of a contract of lease. When fire
destroyed her house, the Reyeses considered the lease terminated; but petitioner Dela Cruz
persisted in returning to the lot and occupied it by strategy and stealth without the consent of
the owners. The Reyeses however tolerated the continued occupancy of the lot by
petitioner. Thus, when the lot was sold to respondent Tan Te, the rights of the Reyeses, with
respect to the lot, were transferred to their subrogee, respondent Tan Te, who for a time
also tolerated the stay of petitioner until she decided to eject the latter by sending several
demands, the last being the January 14, 1997 letter of demand. Since the action was filed
with the MeTC on September 8, 1997, the action was instituted well within the one (1) year
period reckoned from January 14, 1997. Hence, the nature of the complaint is one of unlawful
detainer and the Manila MeTC had jurisdiction over the complaint.
Thus, an ejectment complaint based on possession by tolerance of the owner, like
the Tan Te complaint, is a specie of unlawful detainer cases.
As early as 1913, case law introduced the concept of possession by tolerance in
ejectment cases as follows:
It is true that the landlord might, upon the failure of the tenant to pay
the stipulated rents, consider the contract broken and demand
immediate possession of the rented property, thus converting a
legal possession into illegal possession. Upon the other hand,
however, the landlord might conclude to give the tenant credit for
the payment of the rents and allow him to continue indefinitely in the
possession of the property. In other words, the landlord might
choose to give the tenant credit from month to month or from year
to year for the payment of their rent, relying upon his honesty of his
financial ability to pay the same. During such period the tenant
would not be in illegal possession of the property and the landlord
could not maintain an action of desahucio until after he had taken
steps to convert the legal possession into illegal possession. A mere
failure to pay the rent in accordance with the contract would justify
the landlord, after the legal notice, in bringing an action of
desahucio. The landlord might, however, elect to recognize the
contract as still in force and sue for the sums due under it. It would
seem to be clear that the landlord might sue for the rents due and
[unpaid, without electing to terminate the contract of tenancy;]
[w]hether he can declare the contract of tenancy broken and sue in
an action desahucio for the possession of the property and in a
separate actions for the rents due and damages, etc. [14]
The concept of possession by tolerance in unlawful detainer cases was further
refined and applied in pertinent cases submitted for decision by 1966. The rule was articulated
as follows:
Where despite the lessees failure to pay rent after the first demand,
the lessor did not choose to bring an action in court but suffered the
lessee to continue occupying the land for nearly two years, after
which the lessor made a second demand, the one-year period for
bringing the detainer case in the justice of the peace court should
 be counted not from the day the lessee refused the first demand for
payment of rent but from the time the second demand for rents and without any participation on the part of Tan Te is sufficient special or compelling reason for
surrender of possession was not complied with.[15]
the grant of relief.
In Calubayan v. Pascual, a case usually cited in subsequent decisions on ejectment,

the concept of possession by tolerance was further elucidated as follows:

The case of Barnes v. Padilla[17] elucidates the rationale behind the exercise by this

Court of the power to relax, or even suspend, the application of the rules of procedure:
In allowing several years to pass without requiring the occupant to
vacate the premises nor filing an action to eject him, plaintiffs have
acquiesced to defendants possession and use of the
premises. It has been held that a person who occupies the land
of another at the latters tolerance or permission, without any
contract between them, is necessarily bound by an implied
promise that he will vacate upon demand, failing which a
summary action for ejectment is the proper remedy against
them. The status of the defendant is analogous to that of a lessee
or tenant whose term of lease has expired but whose occupancy
continued by tolerance of the owner. In such a case, the unlawful
deprivation or withholding of possession is to be counted from the
date of the demand to vacate.[16] (Emphasis supplied.)
From the foregoing jurisprudence, it is unequivocal that petitioners possession after
she intruded into the lot after the firewas by tolerance or leniency of the Reyeses and hence,
Let it be emphasized that the rules of procedure should be viewed
as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that
tend to frustrate rather than promote substantial justice, must
always be eschewed. Even the Rules of Court reflect this
principle. The power to suspend or even disregard rules can be so
pervasive and compelling as to alter even that which this Court itself
has already declared to be final x x x.
The emerging trend in the rulings of this Court is to afford every
party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held that
rules must not be applied rigidly so as not to override substantial
justice.[18]

the action is properly an unlawful detainer case falling under the jurisdiction of the Manila

MeTC.
Moreover, Section 8, Rule 40 authorizes the RTCin case of affirmance of an order

of the municipal trial court dismissing a case without trial on the merits and the ground of
Even if we concede that it is the RTC and not the MeTC that has jurisdiction over
dismissal is lack of jurisdiction over the subject matterto try the case on the merits as if the
the Tan Te complaint, following the reasoning that neither respondent nor her predecessor-
case was originally filed with it if the RTC has jurisdiction over the case. In the same vein, this
in-interest filed an ejectment suit within one (1) year from February 21, 1994 when the
Court, in the exercise of its rule-making power, can suspend its rules with respect to this
Reyeses knew of the unlawful entry of petitioner, and hence, the complaint is transformed
particular case (pro hac vice), even if initially, the MeTC did not have jurisdiction over the
into an accion publiciana, the Court deems it fair and just to suspend its rules in order to
ejectment suit, and decide to assume jurisdiction over it in order to promptly resolve the
render efficient, effective, and expeditious justice considering the nine (9) year pendency of
dispute.
the ejectment suit. More importantly, if there was uncertainty on the issue of jurisdiction that
arose from the averments of the complaint, the same cannot be attributed to respondent Tan
The issue of jurisdiction settled, we now scrutinize the main issue.
Te but to her counsel who could have been confused as to the actual nature of the ejectment

suit. The lawyers apparent imprecise language used in the preparation of the complaint
 At the heart of every ejectment suit is the issue of who is entitled to physical
possession of the lot or possession de facto.
We rule in favor of respondent Tan Te for the following reasons:
1. Petitioner admitted in her Answer that she was a rent-paying tenant of the
Reyeses, predecessors-in-interest of respondent Tan Te. As such, she recognized the
ownership of the lot by respondent, which includes the right of possession.
2. After the fire raged over the structures on the subject lot in late 1989 the contracts
of lease expired, as a result of which Lino Reyes demanded that all occupants, including
petitioner, vacate the lot but the latter refused to abandon the premises. During the duration
of the lease, petitioners possession was legal but it became unlawful after the fire when the
lease contracts were deemed terminated and demands were made for the tenants to return
possession of the lot.
3. Petitioners possession is one by the Reyeses tolerance and generosity and later
by respondent Tan Tes.
Petitioner fully knows that her stay in the subject lot is at the leniency and
magnanimity of Mr. Lino Reyes and later of respondent Tan Te; and her acquiescence to
such use of the lot carries with it an implicit and assumed commitment that she would leave
the premises the moment it is needed by the owner. When respondent Tan Te made a last,
written demand on January 14, 1997 and petitioner breached her promise to leave upon
demand, she lost her right to the physical possession of the lot. Thus, respondent Tan Te
should now be allowed to occupy her lot for residential purposes, a dream that will finally be
realized after nine (9) years of litigation.
Petitioner raises the ancillary issue that on March 15, 1998, the Manila City Council
passed and approved Ordinance No. 7951:
[a]uthorizing the Manila City Mayor to acquire either by negotiation
or expropriation certain parcels of land covered by Transfer
Certificates of Title Nos. 233273, 175106 and 140471, containing
an area of One Thousand Four Hundred Twenty Five (1,425)
square meters, located at Maria Clara and Governor Forbes
Streets, Sta. Cruz, Manila, for low cost housing and award to actual
bonafide residents thereat and further authorizing the City Mayor to
avail for that purpose any available funds of the city and other
existing funding facilities from other government agencies x x x. [19]
It readily appears that this issue was not presented before the Court of Appeals in
CA-G.R. SP No. 49097 despite the fact that the respondents petition was filed on September
25, 1998, six months after the ordinance was passed. Thus, this issue is proscribed as are all
issues raised for the first time before the Court are proscribed.
Even granting for the sake of argument that we entertain the issue, we rule that the
intended expropriation of respondents lot (TCT No. 233273) by the city government
of Manila will not affect the resolution of this petition. For one thing, the issue can be raised
by petitioner in the appropriate legal proceeding. Secondly, the intended expropriation might
not even be implemented since it is clear from the ordinance that the City Mayor will still locate
available funds for project, meaning the said expense is not a regular item in the budget.
WHEREFORE, this petition is DENIED for lack of merit. The April 30, 1999 Decision
of the Court of Appeals reinstating the April 3, 1998 MeTC Decision in Civil Case No. 156730-
CV and the July 16, 1999 Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN
TOTO.
No costs.
SO ORDERED.
G.R. Nos. 162335 & 162605 March 6, 2012
SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK, FERNANDO M. MANOTOK III,
MA. MAMERTA M. MANOTOK, PATRICIA L. TIONGSON, PACITA L. GO, ROBERTO
LAPERAL III, MICHAEL MARSHALL V. MANOTOK, MARYANN MANOTOK, FELISA
MYLENE V. MANOTOK, IGNACIO V. MANOTOK, JR., MILAGROS V. MANOTOK,
SEVERINO MANOTOK III, ROSA R. MANOTOK, MIGUEL A.B. SISON, GEORGE M.
BOCANEGRA, MA. CRISTINA E. SISON, PHILIPP L. MANOTOK, JOSE CLEMENTE L.
MANOTOK, RAMON SEVERINO L. MANOTOK, THELMA R. MANOTOK, JOSE MARIA
MANOTOK, JESUS JUDE MANOTOK, JR. and MA. THERESA L. MANOTOK,
represented by their Attorney- in-fact, Rosa R. Manotok, Petitioners,
vs.
HEIRS OF HOMER L. BARQUE, represented by TERESITA BARQUE
HERNANDEZ, Respondents.
RESOLUTION
VILLARAMA, JR., J.:
At bar are the motions for reconsideration separately filed by the Manotoks, Barques and
Manahans of our Decision promulgated on August 24, 2010, the dispositive portion of which
reads:
WHEREFORE, the petitions filed by the Manotoks under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, as well as the petition-in-intervention of the Manahans, are
DENIED. The petition for reconstitution of title filed by the Barques is likewise DENIED. TCT
No. RT-22481 (372302) in the name of Severino Manotok IV, et al., TCT No. 210177 in the
name of Homer L. Barque and Deed of Conveyance No. V-200022 issued to Felicitas B.
Manahan, are all hereby declared NULL and VOID. The Register of Deeds of Caloocan City
and/or Quezon City are hereby ordered to CANCEL the said titles. The Court hereby
DECLARES that Lot 823 of the Piedad Estate, Quezon City legally belongs to the
NATIONAL GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, without prejudice
to the institution of REVERSION proceedings by the State through the Office of the Solicitor
General.
With costs against the petitioners.
SO ORDERED.
The Manotoks raised the following grounds in their motion for reconsideration with motion
for oral arguments:
1. It is unjust and oppressive to deprive the Manotoks of property they have long
held and acquired from the State, on consideration fully paid and received, and
under registered title issued by the State itself, on nothing more than the assumed
failure of the State’s agents to inscribe a ministerial "approval" on the transaction
deeds.
2. The annulment of Friar Land sales, simply because physical evidence of the
Secretary’s ministerial approval can no longer be found, may void transactions
involving thousands of hectares of land, and affect possibly millions of people to
whom the lands may have since been parceled out, sold and resold.
3. The Manotoks were given no due notice of the issue of reversion, which this
case on appeal did not include, and which was thrust upon the Manotoks only in
the final resolution disposing of the appeal.
It would be error for the Honorable Court to let this matter go without a serious and
full re-examination. This can be accomplished, among others, by allowing this
motion for reconsideration to be heard on oral argument, to try to permit all
pertinent considerations to be aired before the Court and taken into account.
4. These G.R. Nos. 162335 and 162605 were an appeal from administrative
reconstitution proceedings before LRA Reconstitution officer Benjamin Bustos. But
the Resolution dated 18 December 2008 which finally reversed the CA’s rulings,
affirmed the denial by Bustos of the application for administrative reconstitution of
the Barques’ purported transfer certificate of title, and terminated the appeal
introduced a new "case" on the Manotok property. It ordered evidence-taking at the
CA, on which the Supreme Court proposed itself to decide, in the first instance, an
alleged ownership controversy over the Manotok property.
5. The Manotoks objected to the "remand" on jurisdictional and due process
grounds. The original and exclusive jurisdiction over the subject matter of the case
is vested by law on the regional trial courts.
6. The Honorable Court erred in proceeding to judgment divesting the Manotoks of
their title to Lot 823 of the Piedad Estate, without a trial in the courts of original and
exclusive jurisdiction, and in disregard of process which the law accords to all
owners-in-possession.
7. The Honorable Court erred in concluding that the Manotoks, despite being
owners in possession under a registered title, may be compelled to produce the
deeds by which the Government had transferred the property to them, and "failing"
which can be divested of their ownership in favor of the Government, even if the
latter has not demanded a reversion or brought suit for that purpose.
8. The Honorable Court erred in imposing on the Manotoks, contrary to Art. 541 of
the Civil Code, the obligation to prove their ownership of the subject property, and
in awarding their title to the Government who has not even sued to contest that
ownership.
9. The Honorable Court erred in finding that Sale Certificate No. 1054, which
Severino Manotok acquired by assignment in 1923, was not approved by the
Director of Lands and the Secretary of Agriculture and Natural Resources, and in
finding that a Sale Certificate without the Secretary’s approval is void.
 10. The Honorable Court erred in concluding that the Manotoks had no valid Deed
of Conveyance of Lot 823 from the Government The original of Deed of
Conveyance No. 29204 gave the register of deeds the authority to issue the
transfer certificate of title in the name of the buyer Severino Manotok, which is
required by law to be filed with and retained in the custody of the register of
deeds.We presume that the copy thereof actually transmitted to and received by
the register of deeds did contain the Secretary’s signature because he in fact
issued the TCT. And we rely on this presumption because the document itself can
no longer be found.
11. Assuming arguendo that the original Deed of Conveyance No. 29204 the
register of deeds received did not bear the Department Secretary’s signature,
DENR Memorandum Order No. 16-05 dated October 27, 2005 cured the defect. To
deny the Manotoks the benefit of ratification under said MO, on the erroneous
interpretation that it covered only those found in the records of the "field offices" of
the DENR and LMB, would be discriminatory. The Department Secretary’s
(assumed) failure to affix his signature on the deed of conveyance could not defeat
the Manotoks’ right to the lot after they had fully paid for it.
Republic Act No. 9443 must be applied, mutatis mutandis, to the Manotoks and the
Piedad Estate.
12. The Honorable Court erred in denying their right to be informed of the CA’s
report and be heard thereon prior to judgment, as basic requirements of due
process.
The Barques anchor their motion for reconsideration on the following:
I
THE HONORABLE SUPREME COURT GRAVELY ERRED IN DENYING THE
PETITION FOR RECONSTITUTION FILED BY RESPONDENTS HEIRS OF
BARQUE WITHOUT STATING THE GROUNDS FOR SUCH DENIAL.
II
THE HONORABLE SUPREME COURT GRAVELY ERRED IN INSTANTLY
DECLARING IN THE DISPOSITIVE PORTION OF THE DECISION THAT ALONG
WITH FELICITAS B. MANAHAN’S TITLE, RESPONDENTS HEIRS OF
BARQUE’S TITLE TCT NO. 210177 IS LIKEWISE NULL AND VOID, WITHOUT
STATING A CLEAR AND DEFINITE BASIS THEREFOR.
III
THE HONORABLE SUPREME COURT GRAVELY ERRED IN DECLARING
TRANSFER CERTIFICATE OF TITLE NO. 210177 IN THE NAME OF HOMER L.
BARQUE NULL AND VOID.
IV
THE HONORABLE COURT OF APPEALS’ FACTUAL FINDINGS, ADOPTED BY
THE HONORABLE SUPREME COURT IN THE DECISION DATED 24 AUGUST
2010, ARE CONTRARY TO THE EVIDENCE PRESENTED.
V
THE HONORABLE SUPREME COURT’S FINDINGS IN THE DECISION DATED
24 AUGUST 2010 ARE CONTRARY TO LAW.
As to the Manahans, they seek a partial reconsideration and to allow further reception of
evidence, stating the following grounds:
I. As the original of Sale Certificate No. 511 could not be found in the files of the
LMB or the DENR-NCR at the time of the hearings before the Commissioners, the
existence of the certificate was proven by secondary evidence. The
Commissioners erred in ignoring secondary evidence of the contents of Sale
Certificate No. 511 because of mere doubt and suspicion as to its authenticity and
in the absence of contradicting evidence.
II. The OSG which has been tasked by the Honorable Court to obtain documents
from the LMB and DENR-NCR relative to the conveyance of Lot 823, Piedad
Estate, furnished intevenors with a certified true copy of Sale Certificate No. 511
which it obtained from the DENR-NCR on September 11, 2010, together with the
explanation of DENR-NCR why the document is available only now. (Certified true
copy of Sale Certificate No. 511 and Sworn Explanation of Evelyn G. Celzo
attached as Annexes "I" and "II".
III. When Valentin Manahan offered to purchase Lot 823, Piedad Estate, being the
"actual settler and occupant" who under the law enjoyed preference to buy the lot,
his status as "actual settler and occupant" must have been verified by the Bureau
of Public Lands because the presumption is that official duty has been regularly
performed. The administrative determination of the status of Valentin Manahan as
"actual settler and occupant" can not now be reviewed after the lapse of about
eight (8) decades when parties, witnesses, documents and other evidence are
hardly or no longer available.
IV. Abundant evidence was submitted by intervenors that they and their
predecessors-in-interest occupied and possessed Lot 823 up to 1948 when they
were dispossessed by armed men. It was error for the Commissioners to ignore
the evidence of the intervenors, there being no contradicting proof.
V. The Commissioners committed palpable error in not according evidentiary value
to the Investigation Report of Evelyn dela Rosa because it is allegedly "practically
a replica or summation of Felicitas B. Manahan’s allegations embodied in her
petition." Examination of the dates of the documents will show that the
 Investigation Report preceded the Petition. The Petition, therefore, is based on the
Investigation Report, and not the other way around.
VI. The pronouncement of the Commissioners that Sale Certificate No. 511 is stale
is incorrect. Intervenors made continuing efforts to secure a deed of conveyance
based on Sale Certificate No. 511. Defense of staleness or laches belongs to the
party against whom the claim is asserted; it is only that party who can raise it. It
can also be waived, as in this case when the LMB which had the sole authority
under Act No. 1120 to convey friar lands, issued to intervenor Felicitas B. Manahan
Deed of Conveyance No. V-2000-22.
VII. The requirement of Act No. 1120 that a deed of conveyance of friar land must
be signed by the Secretary of Interior was dispensed with pursuant to law and
Presidential issuances which have the force of law.
VIII. Deeds of conveyance lacking the signature of the Department Secretary were
ratified by President Joseph Estrada and DENR Secretary Michael T. Defensor.
The motions are bereft of merit.
Upon the theory that this Court had no power to cancel their certificate of title over Lot 823,
Piedad Estate in the resolution of the present controversy, the Manotoks contend that our
Resolution of December 18, 2008 terminated the appeal from the Land Registration
Authority (LRA) administrative reconstitution proceedings by reversing the CA’s rulings and
affirming the denial by LRA Reconstitution Officer Benjamin M. Bustos of the application for
administrative reconstitution of the Barques’ Transfer Certificate of Title (TCT) No. 210177.
The appeal having been terminated, the Manotoks argued that the remand to the CA for
evidence-taking had introduced a new "case" in which this Court will decide, in the first
instance, an "alleged" ownership issue over the property. Such action is legally infirm since
the law has vested exclusive original jurisdiction over civil actions involving title to real
property on the trial courts.
The argument is untenable.
In our December 18, 2008 Resolution, we set aside the December 12, 2005 Decision
rendered by the First Division and recalled the entry of judgment. We ruled that neither the
CA nor the LRA had jurisdiction to cancel the Manotok title, a relief sought by the Barques in
the administrative reconstitution proceedings. The Court En Banc proceeded with the
reevaluation of the cases on a pro hac vice basis. During the oral arguments, there were
controversial factual matters which emerged as the parties fully ventilated their respective
claims, in the course of which the Barques’ claim of ownership was found to be exceedingly
weak. Indeed, both the LRA and CA erred in ruling that the Barques had the right to seek
reconstitution of their purported title. Reevaluation of the evidence on record likewise
indicated that the Manotoks’ claim to title is just as flawed as that of the Barques. Following
the approach in Alonso v. Cebu Country Club, Inc.1 also involving a Friar Land, Republic v.
Court of Appeals2 and Manotok Realty Inc. v. CLT Realty Development Corporation,3 the
majority resolved to remand this case for reception of evidence on the parties’ competing
claims of ownership over Lot 823 of the Piedad Estate. Given the contentious factual issues,
it was necessary for this Court to resolve the same for the complete determination of the
present controversy involving a huge tract of friar land. It was thus not the first time the
Court had actually resorted to referring a factual matter pending before it to the CA.
Maintaining their objection to the order for reception of evidence on remand, the Manotoks
argue that as owners in possession, they had no further duty to defend their title pursuant to
Article 541 of the Civil Code which states that: "[a] possessor in the concept of owner has in
his favor the legal presumption that he possesses with a just title and he cannot be obliged
to show or prove it." But such presumption is prima facie, and therefore it prevails until the
contrary is proved.4 In the light of serious flaws in the title of Severino Manotok which were
brought to light during the reconstitution proceedings, the Court deemed it proper to give all
the parties full opportunity to adduce further evidence, and in particular, for the Manotoks to
prove their presumed just title over the property also claimed by the Barques and the
Manahans. As it turned out, none of the parties were able to establish by clear and
convincing evidence a valid alienation from the Government of the subject friar land. The
declaration of ownership in favor of the Government was but the logical consequence of
such finding.
We have ruled that the existence of Sale Certificate No. 1054 in the records of the DENR-
LMB was not duly established. No officer of the DENR-NCR or LMB having official custody
of sale certificates covering friar lands testified as to the issuance and authenticity of Exh.
10 submitted by the Manotoks. And even assuming that Exh. 10 was actually sourced from
the DENR-LMB, there was no showing that it was duly issued by the Director of Lands and
approved by the Secretary of Agriculture and Natural Resources (DENR). On this point, the
Manotoks hinted that the LMB’s certifying the document (Exh. 10) at the Manotoks’ request
was a deliberate fraud in order to give them either a false document, the usual unsigned
copy of the signed original, or a fake copy.
The Manotoks further assert that this would imply that the LMB either did not produce the
genuine article, or could not produce it. This could only mean that the document which the
NBI "found" to be fake or spurious, if this Court accepts that finding, was "planted
evidence"or evidence inserted in the LMB files to discredit the Manotok title. Nonetheless,
the Manotoks insist there were independent evidence which supposedly established the
prior existence of Sale Certificate No. 1054. These documents are: (a) photocopy of
Assignment of Sale Certificate No. 1054 dated 1929; (b) official receipt of payment for said
certified copy; (c) photocopies of the other assignment deeds dated 1923; (d) official
receipts of installment payments on Lot 823 issued to Severino Manotok; (e) file copies in
the National Archives of the Deed of Conveyance No. 29204; and (f) the notarial registers in
which the said Deed of Conveyance, as well as the assignment documents, were entered.
The contentions have no merit, and at best speculative. As this Court categorically ruled in
Alonso v. Cebu Country Club, Inc.,5 "approval by the Secretary of Agriculture and
Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of
such approval made the sale null and void ab initio." In that case, the majority declared that
no valid titles can be issued on the basis of the sale or assignment made in favor of
petitioner’s father due to the absence of signature of the Director of Lands and the
Secretary of the Interior, and the approval of the Secretary of Natural Resources in the Sale
Certificate and Assignment of Sale Certificate. Applying the Alonso ruling to these cases,
we thus held that no legal right over the subject friar land can be recognized in favor of the
Manotoks under the assignment documents in the absence of the certificate of sale duly ATTY. SAN JUAN:
signed by the Director of Lands and approved by the Secretary of Agriculture and Natural
Resources. How about this part concerning Valentin Manahan having applied for the purchase of the
land? Did you get this from the neighbors or from Felicitas Manahan?
That a valid certificate of sale was issued to Severino Manotok’s assignors cannot simply be
presumed from the execution of assignment documents in his favor. Neither can it be xxxx
deduced from the alleged issuance of the half-torn TCT No. 22813, itself a doubtful
document as its authenticity was not established, much less the veracity of its recitals
because the name of the registered owner and date of issuance do not appear at all. The WITNESS:
Manotoks until now has not offered any explanation as to such condition of the alleged title
of Severino Manotok; they assert that it is the Register of Deeds himself "who should be in a No, sir. Only the Records Section, sir, that Valentin Manahan applied, sir.
position to explain that condition of the TCT in his custody." But then, no Register of Deeds
had testified and attested to the fact that the original of TCT No. 22813 was under his/her ATTY. SAN JUAN:
custody, nor that said certificate of title in the name of Severino Manotok existed in the files
of the Registry of Deeds of Caloocan or Quezon City. The Manotoks consistently evaded
having to explain the circumstances as to how and where TCT No. 22813 came about. You did not see Valentin Manahan’s application but only the Records Section saw it?
Instead, they urge this Court to validate their alleged title on the basis of the disputable
presumption of regularity in the performance of official duty. Such stance hardly satisfies the WITNESS:
standard of clear and convincing evidence in these cases. Even the existence of the official
receipts showing payment of the price to the land by Severino Manotok does not prove that
Yes, sir.
the land was legally conveyed to him without any contract of sale having been executed by
the government in his favor. Neither did the alleged issuance of TCT No. 22183 in his favor
vest ownership upon him over the land nor did it validate the alleged purchase of Lot 283, ATTY. SAN JUAN:
which is null and void. The absence of the Secretary’s approval in Certificate of Sale No.
1054 made the supposed sale null and void ab initio.6 Did they tell you that they saw the application?

In the light of the foregoing, the claim of the Barques who, just like the Manahans, were WITNESS:
unable to produce an authentic and genuine sale certificate, must likewise fail. The Decision
discussed extensively the findings of the CA that the Barques’ documentary evidence were
I did not go further, sir.
either spurious or irregularly procured, which even buttressed the earlier findings mentioned
in the December 18, 2008 Resolution. The CA’s findings and recommendations with respect
to the claims of all parties, have been fully adopted by this Court, as evident in our xxxx
disquisitions on the indispensable requirement of a validly issued Certificate of Sale over Lot
823, Piedad Estate. ATTY. SAN JUAN:

As to the motion of the Manahans to admit an alleged certified true copy of Sale Certificate
No. 511 dated June 23, 1913 in the name of Valentin Manahan which, as alleged in the
attached Sworn Explanation of Evelyn G. Celzo, the latter hadinadvertently failed to attach
to her Investigation Report forwarded to the CENRO, this Court cannot grant said motion.
And this report of yours says that Valentin Manahan was issued Sale Certificate No. 511
after completing the payment of the price of P2,140?
WITNESS:

This belatedly submitted copy of Sale Certificate No. 511 was not among those official
documents which the Office of the Solicitor General (OSG) offered as evidence, as in fact Yes, sir.
no copy thereof can be found in the records of either the DENR-NCR or LMB. Moreover, the
sudden emergence of this unauthenticated document is suspicious, considering that Celzo ATTY. SAN JUAN:
who testified, as witness for both the OSG and the Manahans, categorically admitted that
she never actually saw the application to purchase and alleged Sale Certificate No. 511 of You also got this from the records of the LMB, is that correct?
the Manahans. The relevant portions of the transcript of stenographic notes of the cross-
examination of said witness during the hearing before the CA are herein quoted:
WITNESS:
Yes, sir. ATTY. SAN JUAN:

ATTY. SAN JUAN: And it was only after he applied for the purchase of the lot sometime after the survey of
1939 that he was issued sale certificate No. 511?
You actually saw the sale certificate that was issued to Valentin Manahan after he paid the
price of P2,140? WITNESS:

WITNESS: I am not aware of the issuance of sale certificate. I am aware only of the deed of
assignment, Sir.
No, sir. I did not go further.
x x x x7 (Emphasis supplied.)
ATTY. SAN JUAN:
In view of the above admission, Celzo’s explanation that the copy of Sale Certificate No.
You did not see the sale certificate? 511 signed by the Director of Lands and Secretary of the Interior was originally attached to
her Investigation Report, cannot be given credence. Even her testimony regarding the
conduct of her investigation of Lot 823, Piedad Estate and the Investigation Report she
WITNESS: submitted thereafter, failed to impress the CA on the validity of the Manahans’ claim.
Indeed, records showed that Celzo’s findings in her report were merely based on what
Yes, Sir, but I asked only. Felicitas Manahan told her about the alleged occupation and possession by Valentin
Manahan of the subject land.
ATTY. SAN JUAN:
In their Offer of Additional Evidence, the Manahans submitted a photocopy of a letter dated
Who did you ask? December 21, 2010 allegedly sent by Atty. Allan V. Barcena (OIC, Director) to their counsel,
Atty. Romeo C. dela Cruz, which reads:

WITNESS:
This has reference to your letter dated August 20, 2010 addressed to the Secretary of the
Department of Environment and Natural Resources (DENR) requesting that Deed of
The records officer, sir. Conveyance No. V-200022 issued on October 30, 2000 over Lot 823 of the Piedad Estate in
favor of Felicitas B. Manahan be ratified or confirmed for reasons stated therein. The Office
ATTY. SAN JUAN: of the DENR Secretary in turn referred the letter to us for appropriate action.

Whose name you can no longer recall, correct? Records of this Office on Lot 823 of the Piedad Estate, show that the Deed of Conveyance
No. V-200022 covering said lot in favor of Felicitas Manahan was issued by then Director of
the Land Management Bureau (LMB), now Undersecretary Ernesto D. Adobo, Jr., on
WITNESS:
October 30, 2000. The Deed was issued based on General Memorandum Order (GMO) No.
1 issued by then Secretary Jose J. Leido, Jr. of the Department of Natural Resources on
I can no longer recall, sir. January 17, 1977, which authorized the Director of Lands, now Director of LMB, to approve
contracts of sale and deeds of conveyance affecting Friar Lands.
ATTY. SAN JUAN:
It is stressed that the confirmation of the Deed by this office is only as to the execution and
And the information to you was the Sale Certificate No. 511 was issued after the price was issuance based on the authority of LMB Director under GMO No. 1. This is without prejudice
fully paid? to the final decision of the Supreme Court as to its validity in the case of "Severino Manotok
IV, et al. versus Heirs of Homer L, Barque" (G.R. No. 162335 & 162605).
WITNESS:
Please be guided accordingly.8 (Emphasis supplied.)
Yes, sir.
However, in the absence of a valid certificate of sale duly signed by the Secretary of Interior
or Agriculture and Natural Resources, such alleged confirmation of the execution and
issuance by the DENR-LMB of Deed of Conveyance No V-00022 in favor of Felicitas
Manahan on October 30, 2000 is still insufficient to prove the Manahans’ claim over the
subject land.
In a Supplemental Manifestation dated November 18, 2010, the Manotoks submitted an
affidavit supposedlyexecuted on November 11, 2010 by former DENR Secretary Michael T.
Defensor("Defensor Affidavit") clarifying that MO 16-05 applies to all Deeds of Conveyance
that do not bear the signature of the Secretary of Natural Resources, contrary to the CA and
this Court’s statement that said issuance refers only to those deeds of conveyance on file
with the records of the DENR field offices.
By its express terms, however, MO 16-05 covered only deeds of conveyances and not
unsigned certificates of sale. The explanation of Secretary Defensor stated theavowed
purpose behind the issuance, which is "to remove doubts or dispel objections as to the
validity of all Torrens transfer certificates of title issued over friar lands" thereby "ratifying the
deeds of conveyance to the friar land buyers who have fully paid the purchase price, and
are otherwise not shown to have committed any wrong or illegality in acquiring such lands."
The Manahans propounded the same theory that contracts of sale over friar lands without
the approval of the Secretary of Natural Resources may be subsequently ratified, but
pointed out that unlike the Manotoks’ Deed of Conveyance No. 29204 (1932), their Deed of
Conveyance No. V-2000-22 (2000) was issued and approved by the Director of Lands upon
prior authority granted by the Secretary.
In their Consolidated Memorandum dated December 19, 2010, the Manahans reiterated
their earlier argument that the LMB Director himself had the authority to approve contracts
of sale and deeds of conveyance over friar lands on the basis of General Memorandum
Order No. 1 issued in 1977 by then Secretary of Natural Resources Jose J. Leido, Jr.
delegating such function to the Director of Lands. This delegated power can also be
gleaned from Sec. 15, Chapter 1, Title XIV of the Administrative Code of 1987 which
provides that the Director of Lands shall "perform such other functions as may be provided
by law or assigned by the Secretary." Moreover, former President Corazon C. Aquino
issued Executive Order No. 131 dated January 20, 1987 reorganizing the LMB and
providing that the LMB Director shall, among others, perform other functions as may be
assigned by the Minister of Natural Resources.
On the basis of Art. 13179 of the Civil Code, the Manahans contend that deeds of
conveyance not bearing the signature of the Secretary can also be ratified. Further, they cite
Proclamation No. 172 issued by former President Joseph Ejercito Estrada which declared
that there should be no legal impediment for the LMB to issue such deeds of conveyance
since the applicants/purchasers have already paid the purchase price of the lot, and as
sellers in good faith, it is the obligation of the Government to deliver to said
applicants/purchasers the friar lands sold free of any lien or encumbrance whatsoever.
Eventually, when MO 16-05 was issued by Secretary Defensor, all these deeds of
conveyance lacking the signature of the Secretary of Natural Resources are thus deemed
signed or otherwise ratified. The CA accordingly erred in holding that MO 16-05 cannot
override Act No. 1120 which requires that a deed of conveyance must be signed by the
Secretary, considering that MO 16-05 is based on law and presidential issuances,
particularly EO 131, which have the force of law.
Meanwhile, in compliance with our directive, the Solicitor General filed his Comment on the
Defensor Affidavit submitted by the Manotoks. The Solicitor General contends that said
document is hearsay evidence, hence inadmissible and without probative value. He points
out that former DENR Secretary Defensor was not presented as a witness during the
hearings at the CA, thus depriving the parties including the government of the right to cross-
examine him regarding his allegations therein. And even assuming arguendo that such
affidavit is admissible as evidence, the Solicitor General is of the view that the Manotoks,
Barques and Manahans still cannot benefit from the remedial effect of MO 16-05 in view of
the decision rendered by this Court which ruled that none of the parties in this case has
established a valid alienation from the Government of Lot 823 of the Piedad Estate, and
also because the curative effect of MO 16-05 is intended only for friar land buyers whose
deeds of conveyance lack the signature of the Secretary of the Interior or Agriculture and
Natural Resources, have fully paid the purchase price and are otherwise not shown to have
committed any wrong or illegality in acquiring the friar lands. He then emphasizes that this
Court has ruled that it is not only the deed of conveyance which must be signed by the
Secretary but also the certificate of sale itself. Since none of the parties has shown a valid
disposition to any of them of Lot 823 of the Piedad Estate, this Court therefore correctly held
that said friar land is still part of the patrimonial property of the national government.
The Court is not persuaded by the "ratification theory" espoused by the Manotoks and
Manahans.
The argument that the Director of Lands had delegated authority to approve contracts of
sale and deeds of conveyances over friar landsignores the consistent ruling of this Court in
controversies involving friar lands. The aforementioned presidential/executive issuances
notwithstanding, this Court held in Solid State Multi-Products Corporation v. CA,10 Liao v.
Court of Appeals,11 and Alonso v. Cebu Country Club12 that approval of the Secretary of
Agriculture and Commerce (later the Natural Resources) is indispensable to the validity of
sale of friar land pursuant to Sec. 18 of Act No. 1120 and that the procedure laid down by
said law must be strictly complied with.
As to the applicability of Art. 1317 of the Civil Code, we maintain that contracts of sale
lacking the approval of the Secretary fall under the class of void and inexistent contracts
enumerated in Art. 140913 which cannot be ratified. Section 18 of Act No. 1120 mandated
the approval by the Secretary for a sale of friar land to be valid.
In his dissenting opinion, Justice Antonio T. Carpio disagreed with the majority’s
interpretation of Section 18 of Act No. 1120, and proposed that based on Section 12 of the
same Act, it is the Deed of Conveyance that must bear the signature of the Secretary of
Interior/Agriculture and Natural Resources "because it is only when the final installment is
paid that the Secretary can approve the sale, the purchase price having been fully paid." It
was pointed out that the majority itself expressly admit that "it is only a ministerial duty on
the part of the Secretary to sign the Deed of Conveyance once the applicant had made full
payment on the purchase price of the land", citing jurisprudence to the effect that
"notwithstanding the failure of the government to issue the proper instrument of conveyance
when the purchaser finally pays the final installment of the purchase price, the purchase of
the friar land still acquired ownership.
We are unable to agree with the view that it is only the Director of Lands who signs the
Certificate of Sale.
The official document denominated as "Sale Certificate" clearly required both the signatures
of the Director of Lands who issued such sale certificate to an applicant settler/occupant
and the Secretary of the Interior/Agriculture and Natural Resources indicating his approval
of the sale. These forms had been prepared and issued by the Chief of the Bureau of Public
Lands under the supervision of the Secretary of the Interior, consistent with Act No. 1120
"as may be necessary x x x to carry into effect all the provisions [thereof] that are to be
administered by or under [his] direction, and for the conduct of all proceedings arising under
such provisions."14
We reiterate that Section 18 of Act No. 1120, as amended, is plain and categorical in stating
that:
SECTION 18. No lease or sale made by the Chief of the Bureau of Public Lands under the
provisions of this Act shall be valid until approved by the Secretary of the Interior.
Section 12 did not mention the requirement of signature or approval of the Secretary in the
sale certificate and deed of conveyance.
SECTION 12. It shall be the duty of the Chief of the Bureau of Public Lands by proper
investigation to ascertain what is the actual value of the parcel of land held by each settler
and occupant, taking into consideration the location and quality of each holding of land, and
any other circumstances giving [it] value. The basis of valuation shall likewise be, so far as
practicable, such [as] the aggregate of the values of all the holdings included in each
particular tract shall be equal to the cost to the Government to the entire tract, including the
cost of surveys, administration and interest upon the purchase money to the time of sale.
When the cost thereof shall have been thus ascertained, the Chief of the Bureau of Public
Lands shall give the said settler and occupant a certificate which shall set forth in detail that
the Government has agreed to sell to such settler and occupant the amount of land so held
by him, at the price so fixed, payable as provided in this Act at the office of the Chief of
Bureau of Public Lands, in gold coin of the United States or its equivalent in Philippine
currency, and that upon the payment of the final installment together with [the] accrued
interest the Government will convey to such settler and occupant the said land so held by
him by proper instrument of conveyance, which shall be issued and become effective in the
manner provided in section one hundred and twenty-two of the Land Registration Act. The
Chief of the Bureau of Public Lands shall, in each instance where a certificate is given to the
settler and occupant of any holding, take his formal receipt showing the delivery of such
certificate, signed by said settler and occupant.
On the other hand, the first paragraph of Section 15 provides for the reservation of title in
the Government only for the purpose of ensuring payment of the purchase price, which
means that the sale was subject only to the resolutory condition of non-payment, while the
second paragraph states that the purchaser thereby acquires "the right of possession and
purchase" by virtue of a certificate of sale "signed under the provisions [thereof]." The
certificate of sale evidences the meeting of the minds between the Government and the
applicant regarding the price, the specific parcel of friar land, and terms of payment. In Dela
Torre v. Court of Appeals,15 we explained that the non-payment of the full purchase price is
the only recognized resolutory condition in the case of sale of friar lands. We have also held
that it is the execution of the contract to sell and delivery of the certificate of sale that vests
title and ownership to the purchaser of friar land.16 Where there is no certificate of sale
issued, the purchaser does not acquire any right of possession and purchase, as implied
from Section 15. By the mandatory language of Section 18, the absence of approval of the
Secretary of Interior/Agriculture and Natural Resources in the lease or sale of friar land
would invalidate the sale. These provisions read together indicate that the approval of the
Secretary is required in both the certificate of sale and deed of conveyance, although the
lack of signature of the Secretary in the latter may not defeat the rights of the applicant who
had fully paid the purchase price.
Justice Conchita Carpio Morales’ dissent asserted that case law does not categorically state
that the required "approval" must be in the form of a signature on the Certificate of Sale, and
that there is no statutory basis for the requirement of the Secretary’s signature on the
Certificate of Sale "apart from a strained deduction of Section 18."
As already stated, the official forms being used by the Government for this purpose clearly
show that the Director of Lands signs every certificate of sale issued covering a specific
parcel of friar land in favor of the applicant/purchaser while the Secretary of Interior/Natural
Resources signs the document indicating that the sale was approved by him. To approve is
to be satisfied with; to confirm, ratify, sanction, or consent to some act or thing done by
another; to sanction officially.17 The Secretary of Interior/Natural Resources signs and
approves the Certificate of Sale to confirm and officially sanction the conveyance of friar
lands executed by the Chief of the Bureau of Public Lands (later Director of Lands). It is
worth mentioning thatSale Certificate No. 651 in the name of one Ambrosio Berones dated
June 23, 1913,18 also covering Lot 823 of the Piedad Estate and forming part of the official
documents on file with the DENR-LMB which was formally offered by the OSG as part of the
official records on file with the DENR and LMB pertaining to Lot 823, contains the signature
of both the Director of Lands and Secretary of the Interior. The Assignment of Sale
Certificate No. 651 dated April 19, 1930 was also signed by the Director of Lands. 19
Following the dissent’s interpretation that the Secretary is not required to sign the certificate
of sale while his signature in the Deed of Conveyance may also appear although merely a
ministerial act, it would result in the absurd situation wherein thecertificate of sale and deed
of conveyance both lacked the signature and approval of the Secretary, and yet the
purchaser’s ownership is ratified, courtesy of DENR Memorandum Order (MO) No. 16-05. It
is also not farfetched that greater chaos will arise from conflicting claims over friar lands,
which could not be definitively settled until the genuine and official manifestation of the
Secretary’s approval of the sale is discerned from the records and documents presented.
This state of things is simply not envisioned under the orderly and proper distribution of friar
lands to bona fide occupants and settlers whom the Chief of the Bureau of Public Lands
was tasked to identify.20
The existence of a valid certificate of sale therefore must first be established with clear and
convincing evidence before a purchaser is deemed to have acquired ownership over a friar
land notwithstanding the non-issuance by the Government, for some reason or another, of a
deed of conveyance after completing the installment payments. In the absence of such
certificate of sale duly signed by the Secretary, no right can be recognized in favor of the
applicant. Neither would any assignee or transferee acquire any right over the subject land.
In Alonso v. Cebu Country Club, Inc.,21 the Court categorically ruled that the absence of
approval by the Secretary of Agriculture and Commerce in the sale certificate and
assignment of sale certificate made the sale null and void ab initio. Necessarily, there can
be no valid titles issued on the basis of such sale or assignment. 22
Justice Carpio, however, opined that the ruling in Alonso "was superseded with the
issuance by then Department of [Environment] and Natural Resources (DENR) Secretary
Michael T. Defensor of DENR Memorandum Order No. 16-05." It was argued that the
majority had construed a "limited application" when it declared that the Manotoks could not
benefit from said memorandum order because the latter refers only to deeds of conveyance
"on file with the records of the DENR field offices".
We disagree with the view that Alonso is no longer applicable to this controversy after the
issuance of DENR MO No. 16-05 which supposedly cured the defect in the Manotoks’ title.
First, DENR MO No. 16-05 explicitly makes reference only to Deeds of Conveyances, not to
Sale Certificates by which, under the express language of Section 15, the purchaser of friar
land acquires the right of possession and purchase pending final payment and the issuance
of title, such certificate being duly signed under the provisions of Act No. 1120. Although the
whereas clause of MO No. 16-05 correctly stated that it was only a ministerial duty on the
part of the Secretary to sign the Deed of Conveyance once the applicant had made full
payment on the purchase price of the land, it must be stressed that in those instances
where the formality of the Secretary’s approval and signature is dispensed with, there was a
valid certificate of sale issued to the purchaser or transferor. In this case, there is no
indication in the records that a certificate of sale was actually issued to the assignors of
Severino Manotok, allegedly the original claimants of Lot 823, Piedad Estate.
Second, it is basic that an administrative issuance like DENR Memorandum Order No. 16-
05 must conform to and not contravene existing laws. In the interpretation and construction
of the statutes entrusted to them for implementation, administrative agencies may not make
rules and regulations which are inconsistent with the statute it is administering, or which are
in derogation of, or defeat its purpose. In case of conflict between a statute and an
administrative order, the former must prevail.23 DENR Memorandum Order No. 16-05
cannot supersede or amend the clear mandate of Section 18, Act No. 1120 as to dispense
with the requirement of approval by the Secretary of the Interior/Agriculture and Natural
Resources of every lease or sale of friar lands.
But what is worse, as the dissent suggests, is that MO 16-05 would apply even to those
deeds of conveyances not found in the records of DENR or its field offices, such as the
Manotoks’ Deed of Conveyance No. 29204 sourced from the National Archives. It would
then cover cases of claimants who have not been issued any certificate of sale but were
able to produce a deed of conveyance in their names. The Bureau of Lands was originally
charged with the administration of all laws relative to friar lands, pursuant to Act No. 2657
and Act No. 2711. Under Executive Order No. 192,24 the functions and powers previously
held by the Bureau of Lands were absorbed by the Lands Management Bureau (LMB) of
the DENR, while those functions and powers not absorbed by the LMB were transferred to
the regional field offices.25 As pointed out by the Solicitor General in the Memorandum
submitted to the CA, since the LMB and DENR-NCR exercise sole authority over friar lands,
they are naturally the "sole repository of documents and records relative to Lot No. 823 of
the Piedad Estate."26
Third, the perceived disquieting effects on titles over friar lands long held by generations of
landowners cannot be invoked as justification for legitimizing any claim or acquisition of
these lands obtained through fraud or without strict compliance with the procedure laid
down in Act No. 1120. This Court, in denying with finality the motion for reconsideration filed
by petitioner in Alonso v. Cebu Country Club, Inc.27 reiterated the settled rule that
"[a]pproval by the Secretary of the Interior cannot simply be presumed or inferred from
certain acts since the law is explicit in its mandate."28 Petitioners failed to discharge their
burden of proving their acquisition of title by clear and convincing evidence, considering the
nature of the land involved.
As consistently held by this Court, friar lands can be alienated only upon proper compliance
with the requirements of Act No. 1120. The issuance of a valid certificate of sale is a
condition sine qua non for acquisition of ownership under the Friar Lands Act. Otherwise,
DENR Memorandum Order No. 16-05 would serve as administrative imprimatur to holders
of deeds of conveyance whose acquisition may have been obtained through irregularity or
fraud.
Contrary to the dissent of Justice Maria Lourdes P. A. Sereno that our decision has "created
dangers for the system of property rights in the Philippines", the Court simply adhered
strictly to the letter and spirit of the Friar Lands Actand jurisprudence interpreting its
provisions. Such imagined scenario of instability and chaos in the established property
regime, suggesting several other owners of lands formerly comprising the Piedad Estate
who are supposedly similarly situated, remains in the realm of speculation. Apart from their
bare allegations, petitioners (Manotoks) failed to demonstrate how the awardees or present
owners of around more than 2,000 hectares of land in the Piedad Estate can be embroiled
in legal disputes arising from unsigned certificates of sale.
On the other hand, this Court must take on the task of scrutinizing even certificates of title
held for decades involving lands of the public domain and those lands which form part of the
Government’s patrimonial property, whenever necessary in the complete adjudication of the
controversy before it or where apparent irregularities and anomalies are shown by the
evidence on record. There is nothing sacrosanct about the landholdings in the Piedad
Estate as even prior to the years when Lot 823 could have been possibly "sold" or disposed
by the Bureau of Lands, there were already reported anomalies in the distribution of friar
lands in general.29
Significantly, subsequent to the promulgation of our decision in Alonso, Republic Act No.
(RA) 9443 was passed by Congress confirming and declaring, subject to certain exceptions,
the validity of existing TCTs and reconstituted certificates of title covering the Banilad Friar
Lands Estate situated in Cebu. Alonso involved a friar land already titled but without a sale
certificate, and upon that ground we declared the registered owner as not having acquired
ownership of the land. RA 9443 validated the titles "notwithstanding the lack of signatures
and/or approval of the then Secretary of Interior (later Secretary of Agriculture and Natural
Resources) and/or the then Chief of the Bureau of Public lands (later Director of Public
Lands) in the copies of the duly executed Sale Certificate and Assignments of Sale
Certificates, as the case may be, now on file with the Community Environment and Natural
Resources Office (CENRO), Cebu City".
The enactment of RA 9443 signifies the legislature’s recognition of the statutory basis of the
Alonso ruling to the effect that in the absence of signature and/or approval of the Secretary
of Interior/Natural Resources in the Certificates of Sale on file with the CENRO, the sale is
not valid and the purchaser has not acquired ownership of the friar land. Indeed, Congress
found it imperative to pass a new law in order to exempt the already titled portions of the
Banilad Friar Lands Estate from the operation of Section 18. This runs counter to the
dissent’s main thesis that a mere administrative issuance (DENR MO No. 16-05) would be
sufficient to cure the lack of signature and approval by the Secretary in Certificate of Sale
No. 1054 covering Lot 823 of the Piedad Estate.
In any event, the Manotoks now seek the application of RA 9443 to the Piedad Estate,
arguing that for said law to be constitutionally valid, its continued operation must be
interpreted in a manner that does not collide with the equal protection clause. Considering
that the facts in Alonso from which RA 9443 sprung are similar to those in this case, it is
contended that there is no reason to exclude the Piedad Estate from the ambit of RA 9443.
Justice Carpio’s dissent concurs with this view, stating that to limit its application to the
Banilad Friar Lands Estate will result in class legislation. RA 9443 supposedly should be
extended to lands similarly situated, citing the case of Central Bank Employees Association,
Inc. v. Bangko Sentral ng Pilipinas.30
In the aforesaid case, the Court extended the benefits of subsequent laws exempting all
rank-and-file employees of other government financing institutions (GFIs) from the Salary
Standardization Law (SSL) to the rank-and-file employees of the BSP. We upheld the
position of petitioner association that the continued operation of Section 15 (c), Article II of
RA 7653 (the New Central Bank Act), which provides that the compensation and wage
structure of employees whose position fall under salary grade 19 and below shall be in
accordance with the rates prescribed under RA 6758 (SSL), constitutes "invidious
discrimination on the 2,994 rank-and-file employees of the [BSP]". Thus, as regards the
exemption from the SSL, we declared that there were no characteristics peculiar only to the
seven GFIs or their rank-and-file so as to justify the exemption from the SSL which BSP
rank-and-file employees were denied. The distinction made by the law is superficial,
arbitrary and not based on substantial distinctions that make real differences between BSP
rank-and-file and the seven other GFIs.31
We are of the opinion that the provisions of RA 9443 may not be applied to the present case
as to cure the lack of signature of the Director of Lands and approval by the Secretary of
Agriculture and Natural Resources in Sale Certificate No. 1054.
The Court has explained the nature of equal protection guarantee in this manner:
The equal protection of the law clause is against undue favor and individual or class
privilege, as well as hostile discrimination or the oppression of inequality. It is not intended
to prohibit legislation which is limited either in the object to which it is directed or by territory
within which it is to operate. It does not demand absolute equality among residents; it
merely requires that all persons shall be treated alike, under like circumstances and
conditions both as to privileges conferred and liabilities enforced. The equal protection
clause is not infringed by legislation which applies only to those persons falling within a
specified class, if it applies alike to all persons within such class, and reasonable grounds
exist for making a distinction between those who fall within such class and those who do
not.32(Emphasis and underscoring supplied.)
Section 1 of RA 9443 provides:
Section 1. All existing Transfer Certificates of Title and Reconstituted Certificates of Title
duly issued by the Register of Deeds of Cebu Province and/or Cebu City covering any
portion of the Banilad Friar Lands Estate, notwithstanding the lack of signatures and/or
approval of the then Secretary of the Interior (later Secretary of Agriculture and Natural
Resources) and/or the then Chief of the Bureau of Public Lands (later Director of Public
Lands) in the copies of the duly executed Sale Certificates and Assignments of Sales
Certificates, as the case may be, now on file with the Community Environment and Natural
Resources Office (CENRO), Cebu City, are hereby confirmed and declared as valid titles
and the registered owners recognized as absolute owners thereof.
This confirmation and declaration of validity shall in all respects be entitled to like effect and
credit as a decree of registration, binding the land and quieting the title thereto and shall be
conclusive upon and against all persons, including the national government and al1
branches thereof; except when, in a given case involving a certificate of title or
areconstituted certificate of title, there is clear evidence that such certificate of title or
reconstituted certificate of title was obtained through fraud, in which case the solicitor
general or his duly designated representative shall institute the necessary judicial
proceeding to cancel the certificate of title or reconstituted certificate of title as the case may
be, obtained through such fraud.(Emphasis supplied.)
Without ruling on the issue of violation of equal protection guarantee if the curative effect of
RA 9443 is not made applicable to all titled lands of the Piedad Estate, it is clear that the
Manotoks cannot invoke this law to "confirm" and validate their alleged title over Lot 823. It
must be stressed that the existence and due issuance of TCT No. 22813 in the name of
Severino Manotok was not established by the evidence on record. There is likewise no copy
of a "duly executed certificate of sale" "on file" with the DENR regional office. In the absence
of an existing certificate of title in the name of the predecessor-in-interest of the Manotoks
and certificate of sale on file with the DENR/CENRO, there is nothing to confirm and
validate through the application of RA 9443.
Moreover, RA 9443 expressly excludes from its coverage those cases involving certificates
of title which were shown to have been fraudulently or irregularly issued. As the
reconstitution and remand proceedings in these cases revealed, the Manotoks’ title to the
subject friar land, just like the Barques and Manahans, is seriously flawed. The Court cannot
allow them now to invoke the benefit of confirmation and validation of ownership of friar
lands under duly executed documents, which they never had in the first place. Strict
application by the courts of the mandatory provisions of the Friar Lands Act is justified by
the laudable policy behind its enactment -- to ensure that the lands acquired by the
government would go to the actual occupants and settlers who were given preference in
their distribution.33
The dissent reiterates that the existence of Sale Certificate No. 1054 was clearly and
convincingly established by the original of Assignment of Sale Certificate No. 1054 dated
May 4, 1923 between M. Teodoro and Severino Manotok as assignors and Severino
Manotok as assignee (approved by the Director of Lands on June 23, 1923), which is on file
with the LMB, as well as the Deed of Conveyance No. 29204 secured from the National
Archives which is the repository of government and official documents, the original of
Official Receipt No. 675257 dated 20 February 1920 for certified copy of Assignment of Sale
Certificate No. 1054 on Lot 823 and the original of the Provincial Assessor’s declaration of
title in Severino Manotok’s name for tax purposes on August 9, 1933 assessing him
beginning with the year 1933. The dissent further listed some of those alleged sale
certificates, assignment deeds and deeds of conveyance either signed by the Director of
Lands only or unsigned by both Director of Lands and Secretary of Interior/Natural
Resources, gathered by the Manotoks from the LMB. It was stressed that if MO 16-05 is not
applied to these huge tracts of land within and outside Metro Manila, "[H]undreds of
thousands, if not millions, of landowners would surely be dispossessed of their lands in
these areas," "a blow to the integrity of our Torrens system and the stability of land titles in
this country."
The Court has thoroughly examined the evidence on record and exhaustively discussed the
merits of the Manotoks’ ownership claim over Lot 823, in the light of established precedents
interpreting the provisions of the Friar Lands Act. The dissent even accused the majority of
mistakenly denigrating the records of the National Archives which, under R.A. No. 9470
enacted on May 21, 2007, is mandated to store and preserve "any public archive transferred
to the National Archives" and tasked with issuing certified true copies or certifications on
public archives and for extracts thereof.
The Friar Lands Act mandated a system of recording all sale contracts to be implemented
by the Director of Lands, which has come to be known as the Friar Lands Sales Registry.
SEC. 6. The title, deeds and instruments of conveyance pertaining to the lands in each
province, when executed and delivered by said grantors to the Government and placed in
the keeping of the Chief of the Bureau of Public Lands, as above provided, shall be by him
transmitted to the register of deeds of each province in which any part of said lands lies, for
registration in accordance with law. But before transmitting the title, deeds, and
instruments of conveyance in this section mentioned to the register of deeds of each
province for registration, the Chief of the Bureau of Public Lands shall record all
such deeds and instruments at length in one or more books to be provided by him for
that purpose and retained in the Bureau of Public Lands, when duly certified by him
shall be received in all courts of the Philippine Islands as sufficient evidence of the contents
of the instrument so recorded whenever it is not practicable to produce the originals in court.
(Section 1, Act No. 1287).
It is thus the primary duty of the Chief of the Bureau of Public Lands to record all these
deeds and instruments in sales registry books which shall be retained in the Bureau of
Public Lands. Unfortunately, the LMB failed to produce the sales registry book in court,
which could have clearly shown the names of claimants, the particular lots and areas
applied for, the sale certificates issued and other pertinent information on the sale of friar
lands within the Piedad Estate. Witness Teresita J. Reyes, a retired Assistant Chief of the
Records Management Division (RMD), LMB who was presented by the Manahans, testified
that when the LMB was decentralized, the sales registry books pertaining to friar lands were
supposedly turned over to the regional offices. These consisted of copies of the appropriate
pages of the sales registry books in the LMB RMD main office which has an inventory of lots
subject of deeds of conveyance and sales certificates. However, Reyes said that the sales
registry book itself is no longer with the RMD. On the other hand, the alleged affidavit of
Secretary Defensor dated November 11, 2010 states that MO 16-05 was intended to
address situations when deeds of conveyance lacked the signature of the Secretary of
Agriculture and Commerce, or such deeds or records from which the Secretary’s signature
or approval may be verified were lost or unavailable.
Whether the friar lands registry book is still available in the LMB or properly turned over to
the regional offices remains unclear. With the statutorily prescribed record-keeping of sales
of friar lands apparently in disarray, it behooves on the courts to be more judicious in
settling conflicting claims over friar lands. Titles with serious flaws must still be carefully
scrutinized in each case. Thus, we find that the approach in Alonso remains as the more
rational and prudent course than the wholesale ratification introduced by MO 16-05.
The prospect of litigants losing friar lands they have possessed for years or decades had
never deterred courts from upholding the stringent requirements of the law for a valid
acquisition of these lands. The court’s duty is to apply the law. Petitioners’ concern for other
landowners which may be similarly affected by our ruling is, without doubt, a legitimate one.
The remedy though lies elsewhere -- in the legislature, as what R.A. 9443 sought to rectify.
WHEREFORE, the present motions for reconsideration are all hereby DENIED with
FINALITY. The motions for oral arguments and further reception of evidence are likewise
DENIED.
Let entry of judgment be made in due course.
SO ORDERED.
CITY OF DUMAGUETE, herein Represented by City Mayor, Agustin R. Perdices v.
PHILIPPINE PORTS AUTHORITY (G.R. No. 168973, August 24, 2011)
Before Us is a Petition for Review under Rule 45 of the Rules of Court assailing the
Decision[1] dated March 4, 2005 and Resolution[2] dated June 6, 2005 of the Court Appeals in
CA-G.R. SP No. 64379, which granted the Petition for Certiorari and Prohibition of respondent
3. That to the best of my knowledge and belief, there is
no mortgage or encumbrance of any kind whatsoever affecting said land,
nor another person having any estate or interest therein, legal or equitable,
in possession, remainder, reversion or expectancy;
4. That the land was acquired by possessory title in
open, continuous, adverse occupation and possession in the concept of
owner for more than thirty years since 1960 (please refer to ANNEX A);

Philippine Ports Authority and set aside the Orders dated December 7, 2000 and February 5. That the land is adjoined by the following:
20, 2001 of the Regional Trial Court (RTC), Branch 44 of the City of Dumaguete in LRC Case NorthWest
NorthEast
No. N-201.
SouthEast

All along line 1-2-3-4-5-6-7-8-9-10 by Flores Avenue, City Road

The antecedent facts are as follows: and the Dumaguete Port Road
SouthWest along line 10-1 by Plan Msi-V-20453

On October 14, 1998, petitioner City of Dumaguete, through Mayor Felipe Antonio
B. Remollo (Remollo), filed before the RTC an Application for Original Registration of Title
over a parcel of land with improvements, located at Barangay Looc, City of Dumaguete
(subject property), under the Property Registration Decree. The application was docketed as
LRC Case No. N-201.
xxxx
8. That the land included is bounded on the West by Flores
Avenue and on the North by the City Road, all public highways and on the
East by the Dumaguete Port Road, a private road made part of the Port
Zone.[3]

Petitioner alleged in support of its application: In an Order[4] dated October 23, 1998, the RTC noted that:

1. That the applicant, City of Dumaguete through its A perusal of the records of the case shows that the annexes lack
Honorable Mayor Felipe Antonio B. Remollo, is the owner of the land the following copies:
subject of this application with all improvements and buildings comprising
the Engineers Compound where it is now situated and has been in a) two blue print copies of the approved plan;
continuous occupation and possession of the same for more than 30 years
or from the year 1960 (Affidavit of Ownership executed by Felipe Antonio b) two copies of the technical description of the lot
G. Remollo, the City Mayor, dated August 21, 1998 herein attached as sought to be registered;
ANNEX A). The said land consist of 5,410 square meters and is situated
and bounded and described as shown on the plan (true and photostatic c) two copies of the Surveyors certificate;
copies of the original plan marked Psu-07-006805 approved by the
Regional Technical Director of the [Department of Environment and Natural d) a certificate in quadruplicate of the City Assessor of
Resources] DENR, Regional Office, Cebu City herein attached as ANNEX the assessed value of the land;
B) and technical descriptions attached hereto (technical description
attached as ANNEX C) and made a part hereof; e) all original muniments of title in the possession of the
applicant which prove ownership of the land;
2. That said land at the last assessment for taxation
was assessed at P676,250, Philippine currency, with market value f) two copies of the petition/application.
of P1,352,500.00, Philippine currency. (Declaration of Real Property with
the assessed and market values attached as ANNEX D); Further, the application did not state the number of the lot sought
to be registered, the number of parcels applied for, the improvements found
 thereon, and indicate whether it claims a portion of the road which serves
as a boundary line.
All these must be alleged in the petition so that the Court will know
the nature of the property.
The RTC explained that the extra copies submitted by petitioner shall be forwarded
by the RTC Clerk of Court to the Land Registration Commission (LRC) in Manila for
comment. Only thereafter would the RTC set the application for hearing.
Petitioner filed its Compliance[5] with the above-mentioned Order, submitting
additional copies of the required documents and clarifying thus:
1. The approved plan does not state the number of lot sought to
be registered because it is a public land, thus, only PSU-07-
006805 appears on the plan which is being applied for registration;
2. Only one (1) parcel of land is applied for by petitioners which
consist of five thousand four hundred ten (5,410) square meters,
more or less;
3. The City Engineers Building within the City Engineers
compound are the only improvement found thereon; and
4. Petitioners do not claim any portion of the road which serves
as a boundary line.
The RTC accordingly set the initial hearing of LRC Case No. N-201 on April 12,
1999, and sent notices to the parties.
The Republic of the Philippines, represented by the Director of Lands, and
respondent, represented by the Office of the Government Corporate Counsel, filed separate
Oppositions [6] to the application for registration of petitioner. Both the Republic and
respondent averred that petitioner may not register the subject property in its name since
petitioner had never been in open, continuous, exclusive, and notorious possession of the
said property for at least 30 years immediately preceding the filing of the application; and the
subject property remains to be a portion of the public domain which belongs to the Republic.
After several postponements of the scheduled hearings, petitioner presented the
testimony of its first witness, Engineer Rilthe P. Dorado (Engr. Dorado), on January 14,
2000. Engr. Dorados examination on the witness stand was terminated on April 7, 2000. The
presentation of the other witnesses of petitioner was then scheduled to continue on June 2,
2000.[7]
However, before the next hearing, respondent filed a Motion to Dismiss,[8] seeking
the dismissal of LRC Case No. N-201 on the ground that the RTC lacked jurisdiction to hear
and decide the case. Respondent argued that Section 14(1) of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, refers only to alienable and disposable
lands of the public domain under a bona fide claim of ownership. The subject property in LRC
Case No. N-201 is not alienable and disposable, since it is a foreshore land, as explicitly
testified to by petitioners own witness, Engr. Dorado. A foreshore land is not registerable. This
was precisely the reason why, respondent points out, that the subject property was included
in Presidential Proclamation No. 1232 (delineating the territorial boundaries of the Dumaguete
Port Zone), so that the same would be administered and managed by the State, through
respondent, for the benefit of the people.
In its Terse Opposition to Oppositors Motion to Dismiss, petitioner claimed that the
subject property was a swamp reclaimed about 40 years ago, which it occupied openly,
continuously, exclusively, and notoriously under a bona fide claim of ownership. The
technical description and approved plan of the subject property showed that the said property
was not bounded by any part of the sea. Petitioner invoked Republic Act No. 1899,[9]which
authorizes chartered cities and municipalities to undertake and carry out, at their own
expense, the reclamation of foreshore lands bordering them; and grants said chartered cities
and municipalities ownership over the reclaimed lands. Presidential Proclamation No. 1232
is immaterial to the present application for registration because it merely authorizes
respondent to administer and manage the Dumaguete Port Zone and does not confer upon
respondent ownership of the subject property.[10]

Respondent filed a Reply/Rejoinder (To Applicants Opposition to Oppositors Motion
to Dismiss), [11] asserting that there are no factual or legal basis for the claim of petitioner that
the subject property is reclaimed land. Petitioner sought the original registration of its title over
the subject property acquired through alleged continuous possession for 30 years under
Section 14(1) of the Property Registration Decree, and not through the reclamation of the said
property at its own expense under Republic Act No. 1899. The present claim of petitioner that
the subject property is reclaimed land should not be allowed for it would improperly change
the earlier theory in support of the application for registration. Respondent reiterated that the
subject property is foreshore land which cannot be registered; and that Presidential
Proclamation No. 1232 is very material to LRC Case No. N-201 because it confirms that areas
within the Dumaguete Port Zone, including the subject property, are not alienable and
disposable lands of the public domain.
On September 7, 2000, the RTC issued an Order[12] granting the Motion to Dismiss
of respondent based on the following ratiocination:
The Court agrees with [herein respondent] Philippine Ports
Authority that the basis of the [herein petitioners] application for original
registration of the subject lot is Section 14 of the Presidential Decree No.
1529, otherwise known as the Property Registration Decree. A circumspect
scrutiny of said Section readily shows that it refers to alienable and
disposable lands of the public domain as proper subjects of registration,
provided the applicant has met the other requirements such as open,
continuous, exclusive and notorious possession for at least thirty (30) years
under a bona fide claim of ownership.
It having been shown by [petitioners] own evidence that the lot
subject of the application for original registration is a foreshore land, and
therefore not registerable (Dizon, et al. vs. Bayona, et al., 98 SCRA 942,
944), the application must be denied.
Again as correctly argued by [respondent], [petitioners] reliance
on Republic Act 1899 which authorizes all municipalities and chartered
cities to undertake and carry out the reclamation by dredging, filling or other
means of any foreshore lands bordering them and which confers ownership
on them of the lands so reclaimed, is misplaced, as such has never been
alleged in the application. It is fundamental that a party cannot prove what
it has not alleged in his complaint or application, as in this case.
The admission by Engr. Dorado that there is no formal declaration
from the executive branch of government or law passed by Congress that
the land in question is no longer needed for public use or special industries
x x x further militates against the application.
Moreover, the authority granted to municipalities and chartered
cities to undertake and carry out at their own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering them is
for the purpose of establishing, providing, constructing, maintaining, and
repairing proper and adequate docking and harbor facilities as such
municipalities and chartered cities may determine in consultation with the
Secretary of Finance and the Secretary of Public Works and
Communications.
By its own evidence, [petitioner] has utilized the subject property
allegedly reclaimed by it as Office of the City Engineer and not as docking
and harboring facilities. [Petitioner] has failed to show that such
reclamation was undertaken by it in consultation with the Secretary of
Finance and the Secretary of Public Works and Communications.[13]
The RTC decreed in the end that the instant application for original registration is
dismissed for lack of merit.[14]
In its Motion for Reconsideration[15] and Supplemental Motion for
Reconsideration,[16] petitioner contended that the dismissal of its application was premature
and tantamount to a denial of its right to due process. It has yet to present evidence to prove
factual matters in support of its application, such as the subject property already being
alienable and disposable at the time it was occupied and possessed by petitioner.
Petitioner also pointed out that its witness, Engr. Dorado, testified only as to the
physical status of the land in question at the time when the cadastral survey of Dumaguete
was made sometime in 1916.[17] In fact, Engr. Dorado expressly testified that the subject
property was part of the shore or foreshore a long time ago[;] [18] and he did not testify at all
that the subject property was a foreshore lot at the time petitioner occupied and possessed
the same. The physical state of the subject property had already changed since 1916. It is
now within the alienable and disposable area as per the Land Classification Map No. 674,
Project No. 1-D, BL C-6, certified on July 3, 1927, of the Bureau of Lands, now Land
Management Sector of the Department of Environment and Natural Resources[,][19] as
verified and certified by the Chief of the Map Projection Section, Land Management Sector,
DENR Regional Office in Cebu City, who has yet to take the witness stand before the RTC.
Petitioner insisted that the RTC should continue with the hearing of LRC Case No.
N-201 and allow petitioner to present evidence that the subject property is reclaimed
land. Petitioner sufficiently alleged in its application for registration that it has been in open,
continuous, exclusive, and notorious possession of the [subject property] for more than thirty
(30) years under a bona fide claim of ownership.[20] In support of such allegation, petitioner
must necessarily prove that the subject property was previously a swampy area, which had
to be filled or reclaimed before the construction of the City Engineers Office building thereon.
Respondent based its Opposition (To Applicants Motion for Reconsideration dated
September 28, 2000)[21] and Opposition (To Applicants Supplemental Motion for
Reconsideration)[22] on technical and substantive grounds.
According to respondent, the Motion for Reconsideration of petitioner violated
Sections 4 (Hearing of motion), 5 (Notice of hearing), and 6 (Proof of service necessary), Rule
15 of the Rules of Court. Petitioner did not set its Motion for Reconsideration for hearing even
when the said Motion could not be considered as non-litigable. The RTC could not hear the
motion for reconsideration ex parte as they are prejudicial to the rights of
respondent. Petitioner also failed to comply with Section 11, Rule 13 of the Rules of Court
when it did not attach to the Motion for Reconsideration a written explanation why it did not
resort to personal service of the said Motion. Thus, respondent averred that the Motion for
Reconsideration of petitioner should be treated as a mere scrap of paper with no legal effect. It
did not interrupt the reglementary period to appeal and the RTC Order dated September 7,
2000, dismissing LRC Case No. N-201, had already attained finality. Respondent also pointed
out that the Supplemental Motion for Reconsideration of petitioner suffered from the same
fatal defects as the original Motion for Reconsideration.
Respondent again posited that the subject property was foreshore land belonging to
the State and not subject to private appropriation, unless the same had already been declared
by the executive or legislative department of the national government as no longer needed
for coast guard service, public use, or special industries, and classified as alienable and
disposable. Full- blown trial in LRC Case No. N-201 was no longer necessary as the evidence
so far presented by petitioner had already established that the RTC lacked jurisdiction over
the subject matter of the case.
In its Order[23] dated November 16, 2000, the RTC initially agreed with respondent
that the Motion for Reconsideration of petitioner violated Sections 4, 5, and 6, Rule 15 and
Section 11, Rule 13 of the Rules of Court. Resultantly, the Motion for Reconsideration of
petitioner was considered as not filed and did not toll the running of the period to file an appeal,
rendering final and executory the order of dismissal of LRC Case No. N-201.
However, after taking into consideration the Supplemental Motion for
Reconsideration of petitioner, the RTC issued another Order [24] dated December 7, 2000,
setting aside its Order dated September 7, 2000 in the interest of justice and resolving to have
a full-blown proceeding to determine factual issues in LRC Case No. N-201.
It was then the turn of respondent to file with the RTC a Motion for
Reconsideration[25] of the Order dated December 7, 2000. In an Order[26] dated February 20,
2001, the RTC denied the motion of respondent and admitted the following:
A thorough review and perusal of the disputed order
dated September 7, 2000 and December 7, 2000, whereby this Court
dismissed [petitioners] petition for registration of Lot No. 1, Dumaguete
Cadastre, and later set aside the Order of September 7, 2000, shows that
there was honest mistake in declaring said lot 1, as a shoreline. Indeed, the
adjoining lots are already titled and bounded by a City Road. It is not
bounded by a sea. The Court wants to correct this error in its findings on
 the September 7, 2000 Order, that Lot No. 1 is situated on the shoreline order to determine factual issues and to correct its error in its findings on
of Dumaguete City. The Court simply committed an oversight on the the September 7, 2000 Order. Thus, the Court of Appeals decision is
petitioners evidence that the lot in question is a foreshore land x x x when contrary to law, justice, equity and existing jurisprudence. [27]
in fact it is not. And it is for this reason that the court reconsidered and set
aside said September 7, 2000 Order, to correct the same while it is true
that said September 7, 2000 Order had attained its finality, yet this Court
cannot in conscience allow injustice to perpetuate in this case and that Respondent insists on the strict application of Sections 4, 5, and 6, Rule 15 and
hearing on the merits must proceed to determine the legality and
Section 11, Rule 13 of the Rules of Court. Violations of the said rules were fatal to the Motion
truthfulness of its application for registration of title.
for Reconsideration and Supplemental Motion for Reconsideration of the petitioner, and as a

result, the RTC Order dated September 7, 2000, dismissing LRC Case No. N-201, had
Respondent sought recourse from the Court of Appeals by filing a Petition
already become final and executory and, thus, beyond the jurisdiction of the RTC to set
for Certiorari and Prohibition under Rule 65 of the Rules of Court, docketed as CA-G.R. SP
aside. Respondent urges us to reject the plea of petitioner for a liberal application of the rules
No. 64379. Respondent challenged the RTC Orders dated December 7, 2000 and February
in the absence of a compelling reason to do so.
20, 2001 for having been issued by the RTC in grave abuse of discretion amounting to lack

or excess of jurisdiction. Respondent reiterated that the RTC Order dated September 7, 2000,
We grant the Petition.
dismissing LRC Case No. N-201 had already attained finality. The defects of the Motion for

Reconsideration of petitioner rendered the same as a mere scrap of paper, which did not toll
The grant of a petition for certiorari under Rule 65 of the Rules of Court requires
the running of the prescriptive period to appeal the RTC Order dated September 7, 2000.
grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse of

discretion exists where an act is performed with a capricious or whimsical exercise of

The Court of Appeals, in its Decision dated March 4, 2005, found merit in the Petition
judgment equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross
of respondent and set aside the RTC Orders dated December 7, 2000 and February 20,
as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined
2001. The appellate court, in its Resolution dated June 6, 2005, denied the Motion for
by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary
Reconsideration of petitioner.
and despotic manner by reason of passion or personal hostility.[28]

Hence, petitioner comes before us via the instant Petition for Review with the
The Court of Appeals erred in granting the writ of certiorari in favor of
following assignment of error:
respondent. The RTC did not commit grave abuse of discretion when, in its Orders dated

December 7, 2000 and February 20, 2001, it set aside the order of dismissal of LRC Case

No. N-201 and resolved to have a full-blown proceeding to determine factual issues in said

GROUND FOR THE APPEAL case.

Error of law: The March 4, 2005 decision of the Court of Appeals

and its June 6, 2005 Resolution, erred on question of law in setting aside
Procedural rules were conceived to aid the attainment of justice. If a stringent
the Orders of the Regional Trial Court, Branch 44, dated December 7, 2000
and February 20, 2001. The said Orders of the trial court were made in application of the rules would hinder rather than serve the demands of substantial justice, the

former must yield to the latter.[29] In Basco v. Court of Appeals,[30] we allowed a liberal
application of technical rules of procedure, pertaining to the requisites of a proper notice of
hearing, upon consideration of the importance of the subject matter of the controversy, as
illustrated in well-settled cases, to wit:
The liberal construction of the rules on notice of hearing is
exemplified in Goldloop Properties, Inc. v. CA:
Admittedly, the filing of respondent-spouses'
motion for reconsideration did not stop the running of the
period of appeal because of the absence of a notice of
hearing required in Secs. 3, 4 and 5, Rule 15, of the
Rules of Court. As we have repeatedly held, a motion
that does not contain a notice of hearing is a mere scrap
of paper; it presents no question which merits the
attention of the court. Being a mere scrap of paper, the
trial court had no alternative but to disregard it. Such
being the case, it was as if no motion for reconsideration
was filed and, therefore, the reglementary period within
which respondent-spouses should have filed an appeal
expired on 23 November 1989.
But, where a rigid application of that rule will
result in a manifest failure or miscarriage of justice, then
the rule may be relaxed, especially if a party successfully
shows that the alleged defect in the questioned final and
executory judgment is not apparent on its face or from
the recitals contained therein. Technicalities may thus
be disregarded in order to resolve the case. After all,
no party can even claim a vested right in
technicalities. Litigations should, as much as
possible, be decided on the merits and not on
technicalities.
Hence, this Court should not easily allow a
party to lose title and ownership over a party
worth P4,000,000.00 for a measly P650,000.00 without
affording him ample opportunity to prove his claim that
the transaction entered into was not in fact an absolute
sale but one of mortgage. Such grave injustice must not
be permitted to prevail on the anvil of technicalities.
Likewise, in Samoso v. CA, the Court ruled:
But time and again, the Court has stressed that
the rules of procedure are not to be applied in a very strict
and technical sense. The rules of procedure are used
only to help secure not override substantial justice
(National Waterworks & Sewerage System vs.
Municipality of Libmanan, 97 SCRA 138 [1980]; Gregorio
v. Court of Appeals, 72 SCRA 120 [1976]). The right to
appeal should not be lightly disregarded by a
stringent application of rules of procedure especially
where the appeal is on its face meritorious and the
interests of substantial justice would be served by
permitting the appeal (Siguenza v. Court of Appeals,
137 SCRA 570 [1985]; Pacific Asia Overseas Shipping
Corporation v. National Labor Relations Commission, et
al., G.R. No. 76595, May 6, 1998). . . .
In the instant case, it is petitioner's life and liberty that is at stake.
The trial court has sentenced him to suffer the penalty of reclusion
perpetua and his conviction attained finality on the basis of mere
technicality. It is but just, therefore, that petitioner be given the opportunity
to defend himself and pursue his appeal. To do otherwise would be
tantamount to grave injustice. A relaxation of the procedural rules,
considering the particular circumstances herein, is justified.[31](Emphasis
ours.)
In the case at bar, the Motion for Reconsideration and Supplemental Motion for
Reconsideration of petitioner, which sought the reversal of RTC Order dated September 7,
2000 dismissing LRC Case No. N-201, cite meritorious grounds that justify a liberal
application of procedural rules.
The dismissal by the RTC of LRC Case No. N-201 for lack of jurisdiction is patently
erroneous.
Basic as a hornbook principle is that jurisdiction over the subject matter of a case is
conferred by law and determined by the allegations in the complaint which comprise a concise
statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an
action, as well as which court or body has jurisdiction over it, is determined based on the
allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff
is entitled to recover upon all or some of the claims asserted therein. The averments in the
complaint and the character of the relief sought are the ones to be consulted. Once vested
by the allegations in the complaint, jurisdiction also remains vested irrespective of whether or Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of

not the plaintiff is entitled to recover upon all or some of the claims asserted therein. [32] 1980, created the RTC[35] in place of the CFI. Presently, jurisdiction over an application for

land registration remains with the RTC where the land is situated, except when such

As a necessary consequence, the jurisdiction of the court cannot be made to depend jurisdiction is delegated by the Supreme Court to the Metropolitan Trial Court, Municipal Trial

upon the defenses set up in the answer or upon the motion to dismiss; for otherwise, the Courts, and Municipal Circuit Trial Courts under certain circumstances.[36]

question of jurisdiction would almost entirely depend upon the defendant. What determines

the jurisdiction of the court is the nature of the action pleaded as appearing from the It is not disputed that the Application for Original Registration of Title filed by

allegations in the complaint. The averments therein and the character of the relief sought are petitioner before the RTC of the City of Dumaguete conformed to Section 15 of the Property

the ones to be consulted.[33] Registration Decree, which prescribes the form and contents of such applications. In its

Application, petitioner prayed that its title to the subject property, which it repeatedly alleged

Under Act No. 496, otherwise known as the Land Registration Act, as amended by to have acquired through continuous and adverse possession and occupation of the said

Act No. 2347, jurisdiction over all applications for registration of title to land was conferred property for more than 30 years or since 1960, be placed under the land registration laws. The

upon the Courts of First Instance (CFI) of the respective provinces in which the land sought allegations and prayer in the Application of petitioner were sufficient to vest jurisdiction on the

to be registered was situated. Jurisdiction over land registration cases, as in ordinary actions, RTC over the said Application upon the filing thereof.

is acquired upon the filing in court of the application for registration, and is retained up to the

end of the litigation.[34] Respondent sought the dismissal of LRC Case No. N-201 on the ground of lack of

jurisdiction, not because of the insufficiency of the allegations and prayer therein, but because

The land registration laws were updated and codified by the Property Registration the evidence presented by petitioner itself during the trial supposedly showed that the subject

Decree, and under Section 17 thereof, jurisdiction over an application for land registration property is a foreshore land, which is not alienable and disposable. The RTC granted the
was still vested on the CFI of the province or city where the land was situated, viz: Motion to Dismiss of respondent in its Order dated September 7, 2000. The RTC went beyond

the allegations and prayer for relief in the Application for Original Registration of petitioner,
SEC. 17. What and where to file. The application for land
registration shall be filed with the Court of First Instance of the province or and already scrutinized and weighed the testimony of Engr. Dorado, the only witness
city where the land is situated. The applicant shall file together with the
petitioner was able to present.
application all original muniments of titles or copies thereof and a survey
plan of the land approved by the Bureau of Lands.

The Clerk of Court shall not accept any application unless it is As to whether or not the subject property is indeed foreshore land is a factual issue
shown that the applicant has furnished the Director of Lands with a copy of
the application and all annexes. which the RTC should resolve in the exercise of its jurisdiction, after giving both parties the

opportunity to present their respective evidence at a full-blown trial. As we have explained in

the Estate of the Late Jesus S. Yujuico v. Republic[37]:
 The plain import of Municipality of Antipolo is that a land
registration court, the RTC at present, has no jurisdiction over the subject
matter of the application which respondent Republic claims is public
land. This ruling needs elucidation.
Firmly entrenched is the principle that jurisdiction over the subject
matter is conferred by law. Consequently, the proper CFI (now the RTC)
under Section 14 of PD 1529 (Property Registration Decree) has
jurisdiction over applications for registration of title to land.
xxxx
Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction
over the subject matter of the land registration case filed by Fermina
Castro, petitioners predecessor-in-interest, since jurisdiction over the
subject matter is determined by the allegations of the initiatory pleading the
application. Settled is the rule that the authority to decide a case and not
the decision rendered therein is what makes up jurisdiction. When there is
jurisdiction, the decision of all questions arising in the case is but an
exercise of jurisdiction.
In our view, it was imprecise to state in Municipality of
Antipolo that the Land Registration Court [has] no jurisdiction to entertain
the application for registration of public property x x x for such court
precisely has the jurisdiction to entertain land registration applications since
that is conferred by PD 1529. The applicant in a land registration case
usually claims the land subject matter of the application as his/her private
property, as in the case of the application of Castro.Thus, the conclusion of
the CA that the Pasig-Rizal CFI has no jurisdiction over the subject matter
of the application of Castro has no mooring. The land registration court
initially has jurisdiction over the land applied for at the time of the
filing of the application. After trial, the court, in the exercise of its
jurisdiction, can determine whether the title to the land applied for is
registerable and can be confirmed. In the event that the subject matter
of the application turns out to be inalienable public land, then it has
no jurisdiction to order the registration of the land and perforce must
dismiss the application. [38] (Emphasis ours.)
It is true that petitioner, as the applicant, has the burden of proving that the subject
property is alienable and disposable and its title to the same is capable of
registration. However, we stress that the RTC, when it issued its Order dated September 7,
2000, had so far heard only the testimony of Engr. Dorado, the first witness for the
petitioner. Petitioner was no longer afforded the opportunity to present other witnesses and
pieces of evidence in support of its Application. The RTC Order dated September 7,
2000 already declaring the subject property as inalienable public land, over which the RTC
has no jurisdiction to order registration was evidently premature.
The RTC Order dated September 7, 2000 has not yet become final and executory
as petitioner was able to duly file a Motion for Reconsideration and Supplemental Motion for
Reconsideration of the same, which the RTC eventually granted in its Order dated December
7, 2000. Admittedly, said motions filed by petitioner did not comply with certain rules of
procedure. Ordinarily, such non-compliance would have rendered said motions as mere
scraps of paper, considered as not having been filed at all, and unable to toll the reglementary
period for an appeal. However, we find that the exceptional circumstances extant in the
present case warrant the liberal application of the rules.
Also, the Motion for Reconsideration and Supplemental Motion for Reconsideration
of the Order dated September 7, 2000 filed by petitioner did not comply with Section 11, Rule
13 of the Rules of Court, for these did not include a written explanation why service or filing
thereof was not done personally. Nonetheless, in Maceda v. Encarnacion de Guzman Vda.
de Magpantay,[39] citing Solar Team Entertainment, Inc. v. Ricafort,[40]and Musa v.
Amor,[41] we explained the rationale behind said rule and the mandatory nature of the
same, vis--vis the exercise of discretion by the court in case of non-compliance therewith:
In Solar Team Entertainment, Inc. v. Ricafort, this Court, passing
upon Section 11 of Rule 13 of the Rules of Court, held that a court has the
discretion to consider a pleading or paper as not filed if said rule is not
complied with.
Personal service and filing are preferred for
obvious reasons. Plainly, such should expedite action or
resolution on a pleading, motion or other paper; and
conversely, minimize, if not eliminate, delays likely to be
incurred if service or filing is done by mail, considering
the inefficiency of the postal service. Likewise, personal
service will do away with the practice of some lawyers
who, wanting to appear clever, resort to the following
less than ethical practices: (1) serving or filing pleadings
by mail to catch opposing counsel off-guard, thus leaving
 the latter with little or no time to prepare, for instance,
responsive pleadings or an opposition; or (2) upon
receiving notice from the post office that the registered
containing the pleading of or other paper from the
adverse party may be claimed, unduly procrastinating
before claiming the parcel, or, worse, not claiming it at
all, thereby causing undue delay in the disposition of
such pleading or other papers.
If only to underscore the mandatory nature of
this innovation to our set of adjective rules requiring
personal service whenever practicable, Section 11 of
Rule 13 then gives the court the discretion to consider a
pleading or paper as not filed if the other modes of
service or filing were not resorted to and no written
explanation was made as to why personal service was
not done in the first place. The exercise of discretion
must, necessarily consider the practicability of
personal service, for Section 11 itself begins with the
clause whenever practicable.
We thus take this opportunity to clarify that
under Section 11, Rule 13 of the 1997 Rules of Civil
Procedure, personal service and filing is the general rule,
and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or
filing is practicable, in the light of the circumstances of
time, place and person, personal service or filing is
mandatory. Only when personal service or filing is not
practicable may resort to other modes be had, which
must then be accompanied by a written explanation as
to why personal service or filing was not practicable to
begin with. In adjudging the plausibility of an
explanation, a court shall likewise consider the
importance of the subject matter of the case or the issues
involved therein, and the prima facie merit of the
pleading sought to be expunged for violation of Section
11.
In Musa v. Amor, this Court, on noting the impracticality of
personal service, exercised its discretion and liberally applied Section 11
of Rule 13:
As [Section 11, Rule 13 of the Rules of Court]
requires, service and filing of pleadings must be done
personally whenever practicable. The court notes that
in the present case, personal service would not be
practicable. Considering the distance between the
Court of Appeals and Donsol, Sorsogon where the
petition was posted, clearly, service by registered mail
[sic] would have entailed considerable time, effort and
expense. A written explanation why service was not
done personally might have been superfluous. In
any case, as the rule is so worded with the use of
may, signifying permissiveness, a violation thereof
gives the court discretion whether or not to consider
the paper as not filed. While it is true that procedural
rules are necessary to secure an orderly and speedy
administration of justice, rigid application of Section 11,
Rule 13 may be relaxed in this case in the interest of
substantial justice.
In the case at bar, the address of respondents counsel is Lopez,
Quezon, while petitioner Sonias counsels is Lucena City. Lopez, Quezon
is 83 kilometers away from Lucena City. Such distance makes personal
service impracticable. As in Musa v. Amor, a written explanation why
service was not done personally might have been
superfluous.[42] (Emphases supplied and citations omitted.)
Our ruling in the above-cited cases is relevant to the instant case. Counsel for
petitioner holds office in Dumaguete City, Negros Oriental, in the Visayas; while counsel for
respondent holds office in Quezon City, Metro Manila, in Luzon. Given the considerable
distance between the offices of these two counsels, personal service of pleadings and
motions by one upon the other was clearly not practicable and a written explanation as to why
personal service was not done would only be superfluous. [43] In addition, we refer once more
to the merits of the Motion for Reconsideration and Supplemental Motion for Reconsideration
of the RTC Order dated September 7, 2000 filed by petitioner, which justify the liberal
interpretation of Section 11, Rule 13 of the Rules of Court in this case.
Jurisprudence confirms that the requirements laid down in Sections 4, 5, and 6, Rule
15 of the Rules of Court that the notice of hearing shall be directed to the parties concerned,
and shall state the time and place for the hearing of the motion, are mandatory. If not
religiously complied with, they render the motion pro forma. As such, the motion is a useless
piece of paper that will not toll the running of the prescriptive period. [44]
Yet, again, there were previous cases with peculiar circumstances that had
compelled us to liberally apply the rules on notice of hearing and recognize substantial
compliance with the same. Once such case is Philippine National Bank v. Paneda,[45] where WHEREFORE, the instant Petition for Review of petitioner City of Dumaguete is

we adjudged: hereby GRANTED. The Decision dated March 4, 2005 and Resolution dated June 6, 2005 of
Thus, even if the Motion may be defective for failure to address the notice
of hearing of said motion to the parties concerned, the defect was cured by the Court Appeals in CA-G.R. SP No. 64379 are SET ASIDE, and the Orders dated
the court's taking cognizance thereof and the fact that the adverse party
December 7, 2000 and February 20, 2001 of Branch 44 of the Regional Trial Court of the City
was otherwise notified of the existence of said pleading. There is
substantial compliance with the foregoing rules if a copy of the said motion of Dumaguete in LRC Case No. N-201 are REINSTATED. The said trial court
for reconsideration was furnished to the counsel of herein private
respondents. is DIRECTED to proceed with the hearing of LRC Case No. N-201 with dispatch. SO

In the present case, records reveal that the notices in the Motion ORDERED.
were addressed to the respective counsels of the private respondents and
they were duly furnished with copies of the same as shown by the receipts
signed by their staff or agents.

Consequently, the Court finds that the petitioner

substantially complied with the pertinent provisions of the Rules of
Court and existing jurisprudence on the requirements of motions and
pleadings.[46] (Emphasis supplied.)

It was not refuted that petitioner furnished respondent and respondent actually

received copies of the Motion for Reconsideration, as well as the Supplemental Motion for

Reconsideration of the RTC Order dated September 7, 2000 filed by petitioner. As a result,

respondent was able to file its Oppositions to the said Motions. The RTC, in issuing its Order
dated December 7, 2000, was able to consider the arguments presented by both

sides. Hence, there was substantial compliance by petitioner with the rules on notice of

hearing for its Motion for Reconsideration and Supplemental Motion for Reconsideration of

the RTC Order dated September 7, 2000.Respondent cannot claim that it was deprived of

the opportunity to be heard on its opposition to said Motions.

In view of the foregoing circumstances, the RTC judiciously, rather than abusively or

arbitrarily, exercised its discretion when it subsequently issued the Order dated December 7,
2000, setting aside its Order dated September 7, 2000 and proceeding with the trial in LRC
Case No. N-201.
G.R. No. 164815 September 3, 2009
SR. INSP. JERRY C. VALEROSO, Petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, Respondents.
RESOLUTION
NACHURA, J.:
For resolution is the Letter-Appeal1 of Senior Inspector (Sr. Insp.) Jerry C. Valeroso
(Valeroso) praying that our February 22, 2008 Decision2 and June 30, 2008 Resolution3 be
set aside and a new one be entered acquitting him of the crime of illegal possession of
firearm and ammunition.
The facts are briefly stated as follows:
Valeroso was charged with violation of Presidential Decree No. 1866, committed as follows:
That on or about the 10th day of July, 1996, in Quezon City, Philippines, the said accused
without any authority of law, did then and there willfully, unlawfully and knowingly have in
his/her possession and under his/her custody and control
One (1) cal. 38 "Charter Arms" revolver bearing serial no. 52315 with five (5) live ammo.
without first having secured the necessary license/permit issued by the proper authorities.
CONTRARY TO LAW.4
When arraigned, Valeroso pleaded "not guilty."5 Trial on the merits ensued.
During trial, the prosecution presented two witnesses: Senior Police Officer (SPO)2 Antonio
Disuanco (Disuanco) of the Criminal Investigation Division of the Central Police District
Command; and Epifanio Deriquito (Deriquito), Records Verifier of the Firearms and
Explosives Division in Camp Crame. Their testimonies are summarized as follows:
On July 10, 1996, at around 9:30 a.m., Disuanco received a Dispatch Order from the desk
officer directing him and three (3) other policemen to serve a Warrant of Arrest, issued by
Judge Ignacio Salvador, against Valeroso for a case of kidnapping with ransom.6
After a briefing, the team conducted the necessary surveillance on Valeroso checking his
hideouts in Cavite, Caloocan, and Bulacan. Eventually, the team members proceeded to the
Integrated National Police (INP) Central Police Station in Culiat, Quezon City, where they
saw Valeroso about to board a tricyle. Disuanco and his team approached Valeroso. They
put him under arrest, informed him of his constitutional rights, and bodily searched him.
They found a Charter Arms revolver, bearing Serial No. 52315, with five (5) pieces of live
ammunition, tucked in his waist.7
Valeroso was then brought to the police station for questioning. Upon verification in the
Firearms and Explosives Division in Camp Crame, Deriquito presented a certification 8 that
the subject firearm was not issued to Valeroso, but was licensed in the name of a certain
Raul Palencia Salvatierra of Sampaloc, Manila.9
On the other hand, Valeroso, SPO3 Agustin R. Timbol, Jr. (Timbol), and Adrian Yuson
testified for the defense. Their testimonies are summarized as follows:
On July 10, 1996, Valeroso was sleeping inside a room in the boarding house of his children
located at Sagana Homes, Barangay New Era, Quezon City. He was awakened by four (4)
heavily armed men in civilian attire who pointed their guns at him and pulled him out of the
room.10 The raiding team tied his hands and placed him near the faucet (outside the room)
then went back inside, searched and ransacked the room. Moments later, an operative
came out of the room and exclaimed, "Hoy, may nakuha akong baril sa loob!" 11
Disuanco informed Valeroso that there was a standing warrant for his arrest. However, the
raiding team was not armed with a search warrant. 12
Timbol testified that he issued to Valeroso a Memorandum Receipt 13 dated July 1, 1993
covering the subject firearm and its ammunition, upon the verbal instruction of Col. Angelito
Moreno.14
On May 6, 1998, the Regional Trial Court (RTC), Branch 97, Quezon City, convicted
Valeroso as charged and sentenced him to suffer the indeterminate penalty of four (4)
years, two (2) months and one (1) day, as minimum, to six (6) years, as maximum. The gun
subject of the case was further ordered confiscated in favor of the government.15
On appeal, the Court of Appeals (CA) affirmed16 the RTC decision but the minimum term of
the indeterminate penalty was lowered to four (4) years and two (2) months.
On petition for review, we affirmed17 in full the CA decision. Valeroso filed a Motion for
Reconsideration18 which was denied with finality19 on June 30, 2008.
Valeroso is again before us through this Letter-Appeal20 imploring this Court to once more
take a contemplative reflection and deliberation on the case, focusing on his breached
constitutional rights against unreasonable search and seizure. 21
Meanwhile, as the Office of the Solicitor General (OSG) failed to timely file its Comment on
Valeroso’s Motion for Reconsideration, it instead filed a Manifestation in Lieu of Comment. 22
In its Manifestation, the OSG changed its previous position and now recommends
Valeroso’s acquittal. After a second look at the evidence presented, the OSG considers the
testimonies of the witnesses for the defense more credible and thus concludes that
Valeroso was arrested in a boarding house. More importantly, the OSG agrees with
Valeroso that the subject firearm was obtained by the police officers in violation of
Valeroso’s constitutional right against illegal search and seizure, and should thus be
excluded from the evidence for the prosecution. Lastly, assuming that the subject firearm
was admissible in evidence, still, Valeroso could not be convicted of the crime, since he was
able to establish his authority to possess the gun through the Memorandum Receipt issued
by his superiors.
After considering anew Valeroso’s arguments through his Letter-Appeal, together with the
OSG’s position recommending his acquittal, and keeping in mind that substantial rights
must ultimately reign supreme over technicalities, this Court is swayed to reconsider. 23
The Letter-Appeal is actually in the nature of a second motion for reconsideration. While a
second motion for reconsideration is, as a general rule, a prohibited pleading, it is within the
sound discretion of the Court to admit the same, provided it is filed with prior leave
whenever substantive justice may be better served thereby.24
This is not the first time that this Court is suspending its own rules or excepting a particular
case from the operation of the rules. In De Guzman v. Sandiganbayan,25 despite the denial
of De Guzman’s motion for reconsideration, we still entertained his Omnibus Motion, which
was actually a second motion for reconsideration. Eventually, we reconsidered our earlier
decision and remanded the case to the Sandiganbayan for reception and appreciation of
petitioner’s evidence. In that case, we said that if we would not compassionately bend
backwards and flex technicalities, petitioner would surely experience the disgrace and
misery of incarceration for a crime which he might not have committed after all. 26 Also in
Astorga v. People,27 on a second motion for reconsideration, we set aside our earlier
decision, re-examined the records of the case, then finally acquitted Benito Astorga of the
crime of Arbitrary Detention on the ground of reasonable doubt. And in Sta. Rosa Realty
Development Corporation v. Amante,28 by virtue of the January 13, 2004 En Banc
Resolution, the Court authorized the Special First Division to suspend the Rules, so as to
allow it to consider and resolve respondent’s second motion for reconsideration after the
motion was heard on oral arguments. After a re-examination of the merits of the case, we
granted the second motion for reconsideration and set aside our earlier decision.
Clearly, suspension of the rules of procedure, to pave the way for the re-examination of the
findings of fact and conclusions of law earlier made, is not without basis.
We would like to stress that rules of procedure are merely tools designed to facilitate the
attainment of justice. They are conceived and promulgated to effectively aid the courts in
the dispensation of justice. Courts are not slaves to or robots of technical rules, shorn of
judicial discretion. In rendering justice, courts have always been, as they ought to be,
conscientiously guided by the norm that, on the balance, technicalities take a backseat to
substantive rights, and not the other way around. Thus, if the application of the Rules would
tend to frustrate rather than to promote justice, it would always be within our power to
suspend the rules or except a particular case from its operation. 29
Now on the substantive aspect.
The Court notes that the version of the prosecution, as to where Valeroso was arrested, is
different from the version of the defense. The prosecution claims that Valeroso was arrested
near the INP Central Police Station in Culiat, Quezon City, while he was about to board a
tricycle. After placing Valeroso under arrest, the arresting officers bodily searched him, and
they found the subject firearm and ammunition. The defense, on the other hand, insists that
he was arrested inside the boarding house of his children. After serving the warrant of arrest
(allegedly for kidnapping with ransom), some of the police officers searched the boarding
house and forcibly opened a cabinet where they discovered the subject firearm.
After a thorough re-examination of the records and consideration of the joint appeal for
acquittal by Valeroso and the OSG, we find that we must give more credence to the version
of the defense.
Valeroso’s appeal for acquittal focuses on his constitutional right against unreasonable
search and seizure alleged to have been violated by the arresting police officers; and if so,
would render the confiscated firearm and ammunition inadmissible in evidence against him.
The right against unreasonable searches and seizures is secured by Section 2, Article III of
the Constitution which states:
SEC. 2. The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable 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 the judge after examination under oath or affirmation
of the complainant and the witnesses he may produce, and particularly describing the place
to be searched and the persons or things to be seized.
From this constitutional provision, it can readily be gleaned that, as a general rule, the
procurement of a warrant is required before a law enforcer can validly search or seize the
person, house, papers, or effects of any individual. 30
To underscore the significance the law attaches to the fundamental right of an individual
against unreasonable searches and seizures, the Constitution succinctly declares in Article
III, Section 3(2), that "any evidence obtained in violation of this or the preceding section
shall be inadmissible in evidence for any purpose in any proceeding." 31
The above proscription is not, however, absolute. The following are the well-recognized
instances where searches and seizures are allowed even without a valid warrant:
1. Warrantless search incidental to a lawful arrest;
2. [Seizure] of evidence in "plain view." The elements are: a) a prior valid intrusion
based on the valid warrantless arrest in which the police are legally present in the
pursuit of their official duties; b) the evidence was inadvertently discovered by the
police who have the right to be where they are; c) the evidence must be
immediately apparent; and d) "plain view" justified mere seizure of evidence
without further search;
 3. Search of a moving vehicle. Highly regulated by the government, the vehicle’s
inherent mobility reduces expectation of privacy especially when its transit in public
thoroughfares furnishes a highly reasonable suspicion amounting to probable
cause that the occupant committed a criminal activity;
4. Consented warrantless search;
5. Customs search;
6. Stop and Frisk;
7. Exigent and emergency circumstances.32
8. Search of vessels and aircraft; [and]
9. Inspection of buildings and other premises for the enforcement of fire, sanitary
and building regulations.33
In the exceptional instances where a warrant is not necessary to effect a valid search or
seizure, what constitutes a reasonable or unreasonable search or seizure is purely a judicial
question, determinable from the uniqueness of the circumstances involved, including the
purpose of the search or seizure, the presence or absence of probable cause, the manner
in which the search and seizure was made, the place or thing searched, and the character
of the articles procured.34
In light of the enumerated exceptions, and applying the test of reasonableness laid down
above, is the warrantless search and seizure of the firearm and ammunition valid?
We answer in the negative.
For one, the warrantless search could not be justified as an incident to a lawful arrest.
Searches and seizures incident to lawful arrests are governed by Section 13, Rule 126 of
the Rules of Court, which reads:
SEC. 13. Search incident to lawful arrest. – A person lawfully arrested may be searched for
dangerous weapons or anything which may have been used or constitute proof in the
commission of an offense without a search warrant.
We would like to stress that the scope of the warrantless search is not without limitations. In
People v. Leangsiri,35People v. Cubcubin, Jr.,36 and People v. Estella,37 we had the
occasion to lay down the parameters of a valid warrantless search and seizure as an
incident to a lawful arrest.
When an arrest is made, it is reasonable for the arresting officer to search the person
arrested in order to remove any weapon that the latter might use in order to resist arrest or
effect his escape. Otherwise, the officer’s safety might well be endangered, and the arrest
itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and
seize any evidence on the arrestee’s person in order to prevent its concealment or
destruction.38
Moreover, in lawful arrests, it becomes both the duty and the right of the apprehending
officers to conduct a warrantless search not only on the person of the suspect, but also in
the permissible area within the latter’s reach.39Otherwise stated, a valid arrest allows the
seizure of evidence or dangerous weapons either on the person of the one arrested or
within the area of his immediate control.40 The phrase "within the area of his immediate
control" means the area from within which he might gain possession of a weapon or
destructible evidence.41 A gun on a table or in a drawer in front of one who is arrested can
be as dangerous to the arresting officer as one concealed in the clothing of the person
arrested.42
In the present case, Valeroso was arrested by virtue of a warrant of arrest allegedly for
kidnapping with ransom. At that time, Valeroso was sleeping inside the boarding house of
his children. He was awakened by the arresting officers who were heavily armed. They
pulled him out of the room, placed him beside the faucet outside the room, tied his hands,
and then put him under the care of Disuanco.43 The other police officers remained inside the
room and ransacked the locked cabinet44 where they found the subject firearm and
ammunition.45 With such discovery, Valeroso was charged with illegal possession of firearm
and ammunition.
From the foregoing narration of facts, we can readily conclude that the arresting officers
served the warrant of arrest without any resistance from Valeroso. They placed him
immediately under their control by pulling him out of the bed, and bringing him out of the
room with his hands tied. To be sure, the cabinet which, according to Valeroso, was locked,
could no longer be considered as an "area within his immediate control" because there was
no way for him to take any weapon or to destroy any evidence that could be used against
him.
The arresting officers would have been justified in searching the person of Valeroso, as well
as the tables or drawers in front of him, for any concealed weapon that might be used
against the former. But under the circumstances obtaining, there was no comparable
justification to search through all the desk drawers and cabinets or the other closed or
concealed areas in that room itself.46
It is worthy to note that the purpose of the exception (warrantless search as an incident to a
lawful arrest) is to protect the arresting officer from being harmed by the person arrested,
who might be armed with a concealed weapon, and to prevent the latter from destroying
evidence within reach. The exception, therefore, should not be strained beyond what is
needed to serve its purpose.47 In the case before us, search was made in the locked cabinet
which cannot be said to have been within Valeroso’s immediate control. Thus, the search
exceeded the bounds of what may be considered as an incident to a lawful arrest.48
Nor can the warrantless search in this case be justified under the "plain view doctrine."
The "plain view doctrine" may not be used to launch unbridled searches and indiscriminate
seizures or to extend a general exploratory search made solely to find evidence of
defendant’s guilt. The doctrine is usually applied where a police officer is not searching for
evidence against the accused, but nonetheless inadvertently comes across an incriminating
object.49
As enunciated in People v. Cubcubin, Jr.50 and People v. Leangsiri:51
Without the illegally seized firearm, Valeroso’s conviction cannot stand. There is simply no
sufficient evidence to convict him.56 All told, the guilt of Valeroso was not proven beyond
reasonable doubt measured by the required moral certainty for conviction. The evidence
presented by the prosecution was not enough to overcome the presumption of innocence as
constitutionally ordained. Indeed, it would be better to set free ten men who might probably
be guilty of the crime charged than to convict one innocent man for a crime he did not
commit.57

What the "plain view" cases have in common is that the police officer in each of them had a
prior justification for an intrusion in the course of which[,] he came inadvertently across a
piece of evidence incriminating the accused. The doctrine serves to supplement the prior
justification – whether it be a warrant for another object, hot pursuit, search incident to lawful
arrest, or some other legitimate reason for being present unconnected with a search
directed against the accused – and permits the warrantless seizure. Of course, the
extension of the original justification is legitimate only where it is immediately apparent to
the police that they have evidence before them; the "plain view" doctrine may not be used to
extend a general exploratory search from one object to another until something
incriminating at last emerges.52
With the foregoing disquisition, there is no more need to discuss the other issues raised by
Valeroso.
One final note. The Court values liberty and will always insist on the observance of basic
constitutional rights as a condition sine qua non against the awesome investigative and
prosecutory powers of the government.58
WHEREFORE, in view of the foregoing, the February 22, 2008 Decision and June 30, 2008
Resolution are RECONSIDERED and SET ASIDE. Sr. Insp. Jerry Valeroso is hereby
ACQUITTED of illegal possession of firearm and ammunition.

Indeed, the police officers were inside the boarding house of Valeroso’s children, because SO ORDERED.
they were supposed to serve a warrant of arrest issued against Valeroso. In other words,
the police officers had a prior justification for the intrusion. Consequently, any evidence that
they would inadvertently discover may be used against Valeroso. However, in this case, the
police officers did not just accidentally discover the subject firearm and ammunition; they
actually searched for evidence against Valeroso.

Clearly, the search made was illegal, a violation of Valeroso’s right against unreasonable
search and seizure. Consequently, the evidence obtained in violation of said right is
inadmissible in evidence against him.1avvphi1

Unreasonable searches and seizures are the menace against which the constitutional
guarantees afford full protection. While the power to search and seize may at times be
necessary for public welfare, still it may be exercised and the law enforced without
transgressing the constitutional rights of the citizens, for no enforcement of any statute is of
sufficient importance to justify indifference to the basic principles of government. Those who
are supposed to enforce the law are not justified in disregarding the rights of an individual in
the name of order. Order is too high a price to pay for the loss of liberty. 53

Because a warrantless search is in derogation of a constitutional right, peace officers who

conduct it cannot invoke regularity in the performance of official functions. 54

The Bill of Rights is the bedrock of constitutional government. If people are stripped naked
of their rights as human beings, democracy cannot survive and government becomes
meaningless. This explains why the Bill of Rights, contained as it is in Article III of the
Constitution, occupies a position of primacy in the fundamental law way above the articles
on governmental power.55
G.R. No. 191215 February 3, 2014
THENAMARIS PHILIPPINES, INC. (Formerly INTERMARE MARITIME AGENCIES, INC.)/
OCEANIC NAVIGATION LTD. and NICANOR B. ALTARES, Petitioners,
vs.
COURT OF APPEALS and AMANDA C. MENDIGORIN (In behalf of her deceased
husband GUILLERMO MENDIGORIN), Respondents.
This Petition for Certiorari filed under Rule 65 of the Rules of Court assails the
Resolution1 dated November 20, 2009 of the Court of Appeals (CA) in CA-G.R. SP No.
110808 for allegedly having been issued with grave abuse of discretion amounting to lack or
excess of jurisdiction. The CA, through the said Resolution, entertained private respondent's
Petition for Certiorari2 despite having been filed 15 days late and allowed her to correct the
technical infirmities therein. Also assailed is the CA's February 10, 2010
Resolution3 denying petitioners' Motion for Reconsideration with Prayer to Dismiss4 and
giving private respondent another chance to cure the remaining deficiencies of the petition.
Factual Antecedents
This case stemmed from a complaint for death benefits, unpaid salaries, sickness
allowance, refund of medical expenses, damages and attorney’s fees filed by Amanda C.
Mendigorin (private respondent) against petitioner Thenamaris Philippines, Inc., formerly
Intermare Maritime Agencies, Inc./Oceanic Navigation Ltd., (Thenamaris), represented by
its general manager, Capt. Nicanor B. Altares (petitioner), filed with the Labor Arbiter (LA).
Private respondent is the widow of seafarer Guillermo M. Mendigorin (Guillermo) who was
employed by Thenamaris for 27 years as an oiler and eventually, as second engineer in the
latter’s vessels. Guillermo was diagnosed with and died of colon cancer during the term of
the employment contract between him and Thenamaris.
Ruling of the Labor Arbiter
Ultimately, the LA promulgated his Decision5 dated January 29, 2008 in favor of private
respondent. Thus:
WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the
complainant [herein private respondent] and finding respondents [herein petitioners] liable to
pay jointly and severally: (a) death benefits amounting to US $50,000.00 at its peso
equivalent at the time of actual payment; (b) reimbursement of medical expenses amounting
to ₱102,759.74; [(c)] moral and exemplary damages amounting to ₱100,000.00 and
₱50,000.00 respectively; and (d) attorney’s fees in the [amount of] ten percent (10%) of the
total monetary award.
All other claims are DENIED.6
Ruling of the National Labor Relations Commission (NLRC)
On appeal, the NLRC reversed7 the LA’s Decision.
Private respondent moved for reconsideration.8 In a Resolution9 dated June 29, 2009,
however, her motion was denied for lack of merit.
Private respondent, through counsel, received the June 29, 2009 Resolution of the NLRC
on July 8, 2009. Sixty-two days thereafter, or on September 8, 2009, she filed a Motion for
Extension of Time to File Petition for Certiorari 10before the CA. Private respondent alleged
that she had until September 7, 2009 (as September 6, 2009, the actual last day for filing,
fell on a Sunday) within which to file a petition for certiorari. However, as her counsel was
then saddled and occupied with equally important cases, it would be impossible for him to
file the petition on time, especially since the case involves voluminous documents
necessary in the preparation thereof. Accordingly, private respondent asked for an
extension of 15 days from September 7, 2009, or until September 22, 2009, within which to
file the petition.
On September 22, 2009, private respondent filed her Petition for Certiorari11 before the CA.
Action of the Court of Appeals
In a Resolution12 dated November 20, 2009, the CA noted that private respondent’s Petition
for Certiorari was filed 15 days late and suffers from procedural infirmities. Nonetheless, in
the interest of substantial justice, the CA entertained the petition and directed private
respondent to cure the technical flaws in her petition. Thus:
The Court, in the interest of justice, resolved to NOTE the petition for certiorari filed on
September 22, 2009, albeit the same was filed fifteen (15) days late.
A perusal of the instant petition reveals the following procedural infirmities, namely:
(1) The attached Verification/Certification of Non-Forum Shopping does not
conform with the requirements under Section 12, Rule II of the 2004 Rules of
Notarial Practice, as a Community Tax Certificate is no longer considered
competent evidence of an affiant’s identity; and
(2) Except for the copy of the Motion for Reconsideration filed with the National
Labor Relations Commission, no other copies of pertinent and relevant
pleadings/documents are attached therewith, such as petitioner’s Complaint,
respondent’s Memorandum of Appeal, petitioner’s Opposition to Respondent’s
Appeal, if any, all of which may aid this Court in judiciously resolving the issues
raised in the petition.
ACCORDINGLY, this Court, in line with the rule that cases should be determined on the
merits, after full opportunity to all parties for ventilation of their causes and defenses have
been given, rather than on technicality or some procedural imperfections, resolved to
DIRECT petitioner to submit anew a Verification/Certification of Non-Forum Shopping which
complies with the requirements of the rules, and clear and legible copies of the
aforementioned pleadings/documents, within ten (10) days from receipt of notice hereof.
SO ORDERED.13 (Emphasis in the original)
Petitioners filed a Motion for Reconsideration with Prayer to Dismiss,14 strongly opposing
private respondent’s Motion for Extension to File Petition for Certiorari for being an
absolutely prohibited pleading. Citing Laguna Metts Corporation v. Court of
Appeals,15 petitioners argued that A.M. No. 07-7-12-SC16 effectively rendered the 60-day
period for filing a petition for certiorari non-extendible after it deleted portions of Rule 65
pertaining to extension of time to file petition. Thus, as the rule now stands, petitions for
certiorari must be filed strictly within 60 days from notice of judgment or from the order
denying a motion for reconsideration.17
Petitioners also contended that even assuming that an extension is still allowable, private
respondent’s motion for extension is nevertheless a useless piece of paper as it was filed
beyond the 60-day period for filing a petition for certiorari.
Lastly, petitioners asserted that as private respondent’s motion for extension is a prohibited
pleading, as well as one filed outside of the reglementary period, then private respondent’s
Petition for Certiorari is a mere scrap of paper with no remedial value whatsoever.
Consequently, the Decision of the NLRC has become final and executory and is beyond the
ambit of judicial review.
In the meantime, private respondent submitted her Compliance 18 with the CA’s Resolution
of November 20, 2009. Nevertheless, she still failed to attach thereto copies of her
Complaint filed before the LA and Memorandum filed with the NLRC.
In a Resolution19 dated February 10, 2010, the CA denied petitioners’ motion and, instead,
gave private respondent one last opportunity to fully comply with its November 20, 2009
Resolution by submitting clear and legible copies of the still lacking pleadings within five
days from notice thereof.
Thus, the present Petition for Certiorari.
Entry of Judgment20 was already issued by the NLRC on August 13, 2009. Per NLRC
Rules, the June 29, 2009 Resolution became final and executory on July 18, 2009 and was
recorded in the Book of Entries of Judgment.
Issues
1. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
NOTED THE PETITION FOR CERTIORARI FILED BY THE PRIVATE
RESPONDENT INSTEAD OF DISMISSING IT OUTRIGHT FOR HAVING BEEN
FILED BEYOND THE MANDATORY AND JURISDICTIONAL 60-DAY PERIOD
REQUIRED BY SECTION 4, RULE 65 OF THE RULES OF COURT, AS
AMENDED BY A.M. NO. 07-7-12-SC.
2. THE PUBLIC RESPONDENT CA COMMITTED GRAVE ABUSE OF
DISCRETION WHEN, IN NOTING THE VERY LATE PETITION FILED BY THE
PRIVATE RESPONDENT, IT GROSSLY IGNORED THIS HONORABLE
COURT’S VERY RECENT RULING IN LAGUNA METTS CORPORATION v.
COURT OF APPEALS, ARIES C. CAALAM AND GERALDINE ESGUERRA (G.R.
NO. 185220, JULY 27, 2009), WHICH DISALLOWED ANY MOTIONS FOR
EXTENSION OF TIME TO FILE A PETITION FOR CERTIORARI UNDER RULE
65.21 (Underscoring and emphasis in the original)
Our Ruling
There is merit in the petition.
In Republic v. St. Vincent de Paul Colleges, Inc.22 we had the occasion to settle the
seeming conflict on various jurisprudence touching upon the issue of whether the period for
filing a petition for certiorari may be extended. In said case we stated that the general rule,
as laid down in Laguna Metts Corporation v. Court of Appeals, 23 is that a petition for
certiorari must be filed strictly within 60 days from notice of judgment or from the order
denying a motion for reconsideration. This is in accordance with the amendment introduced
by A.M. No. 07-7-12-SC24 where no provision for the filing of a motion for extension to file a
petition for certiorari exists, unlike in the original Section 4 of Rule 6525 which allowed the
filing of such a motion but only for compelling reason and in no case exceeding 15
days.26 Under exceptional cases, however, and as held in Domdom v. Third and Fifth
Divisions of the Sandiganbayan,27 the 60-day period may be extended subject to the court’s
sound discretion. In Domdom, we stated that the deletion of the provisions in Rule 65
pertaining to extension of time did not make the filing of such pleading absolutely prohibited.
"If such were the intention, the deleted portion could just have simply been reworded to
state that ‘no extension of time to file the petition shall be granted.’ Absent such a
prohibition, motions for extension are allowed, subject to the court’s sound discretion." 28
Then in Labao v. Flores,29 we laid down some of the exceptions to the strict application of
the 60-day period rule, thus:
[T]here are recognized exceptions to their strict observance, such as: (1) most persuasive
and weighty reasons; (2) to relieve a litigant from an injustice not commensurate with his
failure to comply with the prescribed procedure; (3) good faith of the defaulting party by
immediately paying within a reasonable time from the time of the default; (4) the existence
of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the rules; (7)
a lack of any showing that the review sought is merely frivolous and dilatory; (8) the other
party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable
negligence without appellant’s fault; (10) peculiar legal and equitable circumstances
attendant to each case; (11) in the name of substantial justice and fair play; (12) importance
of the issues involved; and (13) exercise of sound discretion by the judge guided by all the
attendant circumstances.1âwphi1 Thus, there should be an effort on the part of the party
invoking liberality to advance a reasonable or meritorious explanation for his/her failure to
comply with the rules.
In this case, counting 60 days from her counsel’s receipt of the June 29, 2009 NLRC
Resolution on July 8, 2009, private respondent had until September 7, 2009 to file her
petition or a motion for extension, as September 6, 2009, the last day for filing such
pleading, fell on a Sunday. However, the motion was filed only on September 8, 2009. 30 It is
a fundamental rule of remedial law that a motion for extension of time must be filed before
the expiration of the period sought to be extended; otherwise, the same is of no effect since
there would no longer be any period to extend, and the assailed judgment or order will have
become final and executory.31
Additionally, as cited earlier in Labao, there should be an effort on the part of the litigant
invoking liberality to satisfactorily explain why he or she was unable to abide by the
rules.32 Here, the reason offered for availing of the motion for extension is the heavy
workload of private respondent’s counsel, which is hardly a compelling or meritorious
reason as enunciated in Labao. Time and again, we have held that the excuse of "heavy
workload is relative and often self-serving. Standing alone, it is not a sufficient reason to
deviate from the 60-day rule."33
Thus, private respondent’s motion for extension should have been denied outright.
Notably, the CA’s November 20, 2009 Resolution refrained from ruling on the timeliness of
private respondent’s motion for extension. Instead, it directly ruled on the Petition for
Certiorari as seen by its statement "[t]he Court x x x resolved to NOTE the petition for
certiorari x x x, albeit the same was filed fifteen (15) days late." To our mind, the foregoing
pronouncement is an indirect acknowledgment on the part of the CA that the motion for
extension was indeed filed late. Yet it opted to still entertain and "note" the Petition for
Certiorari, justifying its action as being "in the interest of justice."
We do not approve of the CA’s ruling on the matter because, as the motion for extension
should have been denied outright, it necessarily follows that the Petition for Certiorari is, in
the words of petitioners, a "mere scrap of paper with no remedial value whatsoever."
In Negros Slashers, Inc. v. Teng,34 which likewise dealt with the late filing of a petition for
certiorari, we recognized that although procedural rules ought to be strictly enforced by
courts in order to impart stability in the legal system, we have, nonetheless, relaxed the rigid
application of the rules of procedure in several cases to afford the parties the opportunity to
fully ventilate their cases on the merits. This is because the ends of justice would be better
served if the parties were given the chance to argue their causes and defenses. We are
likewise constantly reminded that the general objective of procedure is to facilitate the
application of justice to the opposing claims of the competing parties and always be guided
by the principle that procedure must not hinder but, rather, promote the administration of
justice. Concomitant thereto:
Courts have the prerogative to relax procedural rules of even the most mandatory character,
mindful of the duty to reconcile both the need to speedily put an end to litigation and the
parties’ right to due process. In numerous cases, this Court has allowed liberal construction
of the rules when to do so would serve the demands of substantial justice and equity. x x x35
Here, even assuming that the late filing of the petition would merit relaxation of the rules, the
CA’s resolution would have only been acceptable had private respondent shown respect for
the rules by submitting a petition for certiorari which is sufficient in form. In contrast, what
private respondent filed was a petition plagued by several infirmities. Worse, when the CA
allowed petitioner to cure the deficiencies, she failed to fully comply such that she had to be
given, albeit undeservingly, one last chance to submit the still lacking copies of the pertinent
pleadings required of her by the CA.
More importantly, the CA should have dismissed the petition outright in view of the fact that
the June 29, 2009 Resolution of the NLRC denying private respondent’s Motion for
Reconsideration had already become final and executory as of July 18, 2009. 36 Thus, it has
no jurisdiction to entertain the petition, except to order its dismissal. In Labao, we held that:
The NLRC’s resolution became final ten (10) days after counsel’s receipt, and the
respondent’s failure to file the petition within the required (60)-day period rendered it
impervious to any attack through a Rule 65 petition for certiorari. Thus, no court can
exercise jurisdiction to review the resolution.
Needless to stress, a decision that has acquired finality becomes immutable and unalterable
and may no longer be modified in any respect, even if the modification is meant to correct
erroneous conclusions of fact or law and whether it will be made by the court that rendered
it or by the highest court of the land. All the issues between the parties are deemed resolved
and laid to rest once a judgment becomes final and executory; execution of the decision
proceeds as a matter of right as vested rights are acquired by the winning party. Just as a
losing party has the right to appeal within the prescribed period, the winning party has the
correlative right to enjoy the finality of the decision on the case. After all, a denial of a
petition for being time-barred is tantamount to a decision on the merits. Otherwise, there will
be no end to litigation, and this will set to naught the main role of courts of justice to assist in
the enforcement of the rule of law and the maintenance of peace and order by settling
justiciable controversies with finality.37
In sum, the CA committed grave abuse of discretion when it extended underserved and
unwarranted liberality to private respondent. "There is grave abuse of discretion when there
is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act
in contemplation of law as when the judgment rendered is not based on law and evidence
but on caprice, whim and despotism xx x."38 Such is present here as shown by the CA's
obstinate refusal to dismiss the case despite the late filing of the motion for extension and
the flimsy excuse for the extension sought, the late filing of the petition and the numerous
infirmities attending the same, and private respondent's continued defiance of its directive.
These circumstances serve to highlight private respondent's propensity to disregard the
very rules that the courts, the litigants and the lawyers are duty-bound to follow.
WHEREFORE, the petition is hereby GRANTED. The assailed Court of Appeals
Resolutions dated November 20, 2009 and February 10, 2010 are REVERSED and SET
ASIDE for having been issued with grave abuse of discretion amounting to lack or excess of
jurisdiction. The Petition for Certiorari filed by private respondent Amanda C. Mendigorim in
CA-G.R. SP No. 110808 is DISMISSED. SO ORDERED.
G.R. No. 191424 August 7, 2013
ALFEO D. VIVAS, ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF
EUROCREDIT COMMUNITY BANK, PETITIONER,
vs.
THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE
PHILIPPINE DEPOSIT INSURANCE CORPORATION, RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition for prohibition with prayer for the issuance of a status quo ante order or writ
of preliminary injunction ordering the respondents to desist from closing EuroCredit
Community Bank, Incorporated (ECBI) and from pursuing the receivership thereof. The
petition likewise prays that the management and operation of ECBI be restored to its Board
of Directors (BOD) and its officers.
The Facts
The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking institution
with principal office in Centro Sur, Sto. Niño, Cagayan. Record shows that the corporate life
of RBFI expired on May 31, 2005.1Notwithstanding, petitioner Alfeo D. Vivas (Vivas) and his
principals acquired the controlling interest in RBFI sometime in January 2006. At the
initiative of Vivas and the new management team, an internal audit was conducted on RBFI
and results thereof highlighted the dismal operation of the rural bank. In view of those
findings, certain measures calculated to revitalize the bank were allegedly introduced.2 On
December 8, 2006, the Bangko Sentral ng Pilipinas (BSP) issued the Certificate of Authority
extending the corporate life of RBFI for another fifty (50) years. The BSP also approved the
change of its corporate name to EuroCredit Community Bank, Incorporated, as well as the
increase in the number of the members of its BOD, from five (5) to eleven (11). 3
Pursuant to Section 28 of Republic Act (R.A.) No. 7653, otherwise known as The New
Central Bank Act, the Integrated Supervision Department II (ISD II) of the BSP conducted a
general examination on ECBI with the cut-off date of December 31, 2007. Shortly after the
completion of the general examination, an exit conference was held on March 27, 2008 at
the BSP during which the BSP officials and examiners apprised Vivas, the Chairman and
President of ECBI, as well as the other bank officers and members of its BOD, of the
advance findings noted during the said examination. The ECBI submitted its comments on
BSP’s consolidated findings and risk asset classification through a letter, dated April 8,
2008.4
Sometime in April 2008, the examiners from the Department of Loans and Credit of the BSP
arrived at the ECBI and cancelled the rediscounting line of the bank. Vivas appealed the
cancellation to BSP.5 Thereafter, the Monetary Board (MB) issued Resolution No. 1255,
dated September 25, 2008, placing ECBI under Prompt Corrective Action (PCA) framework
because of the following serious findings and supervisory concerns noted during the general
examination: 1] negative capital of ?14.674 million and capital adequacy ratio of negative
18.42%; 2] CAMEL (Capital Asset Management Earnings Liquidity) composite rating of "2"
with a Management component rating of "1"; and 3] serious supervisory concerns
particularly on activities deemed unsafe or unsound.6 Vivas claimed that the BSP took the
above courses of action due to the joint influence exerted by a certain hostile shareholder
and a former BSP examiner.7
Through its letter, dated September 30, 2008, the BSP furnished ECBI with a copy of the
Report of Examination (ROE) as of December 31, 2007. In addition, the BSP directed the
bank’s BOD and senior management to: 1] infuse fresh capital of ?22.643 million; 2] book
the amount of ?28.563 million representing unbooked valuation reserves on classified loans
and other risks assets on or before October 31, 2008; and 3] take appropriate action
necessary to address the violations/exceptions noted in the examination.8
Vivas moved for a reconsideration of Resolution No. 1255 on the grounds of non-
observance of due process and arbitrariness. The ISD II, on several instances, had invited
the BOD of ECBI to discuss matters pertaining to the placement of the bank under PCA
framework and other supervisory concerns before making the appropriate recommendations
to the MB. The proposed meeting, however, did not materialize due to postponements
sought by Vivas.9
In its letter, dated February 20, 2009, the BSP directed ECBI to explain why it transferred
the majority shares of RBFI without securing the prior approval of the MB in apparent
violation of Subsection X126.2 of the Manual of Regulation for Banks (MORB). 10 Still in
another letter,11 dated March 31, 2009, the ISD II required ECBI to explain why it did not
obtain the prior approval of the BSP anent the establishment and operation of the bank’s
sub-offices.
Also, the scheduled March 31, 2009 general examination of the books, records and general
condition of ECBI with the cut-off date of December 31, 2008, did not push through.
According to Vivas, ECBI asked for the deferment of the examination pending resolution of
its appeal before the MB. Vivas believed that he was being treated unfairly because the
letter of authority to examine allegedly contained a clause which pertained to the Anti-
Money Laundering Law and the Bank Secrecy Act. 12
The MB, on the other hand, posited that ECBI unjustly refused to allow the BSP examiners
from examining and inspecting its books and records, in violation of Sections 25 and 34 of
R.A. No. 7653. In its letter,13 dated May 8, 2009, the BSP informed ECBI that it was already
due for another annual examination and that the pendency of its appeal before the MB
would not prevent the BSP from conducting another one as mandated by Section 28 of R.A.
No. 7653.
In view of ECBI’s refusal to comply with the required examination, the MB issued Resolution
No. 726,14 dated May 14, 2009, imposing monetary penalty/fine on ECBI, and referred the
matter to the Office of the Special Investigation (OSI) for the filing of appropriate legal
action. The BSP also wrote a letter,15 dated May 26, 2009, advising ECBI to comply with MB
Resolution No. 771, which essentially required the bank to follow its directives. On May 28,
2009, the ISD II reiterated its demand upon the ECBI BOD to allow the BSP examiners to
conduct a general examination on June 3, 2009.16
In its June 2, 2009 Letter-Reply,17 ECBI asked for another deferment of the examination due
to the pendency of certain unresolved issues subject of its appeal before the MB, and
because Vivas was then out of the country. The ISD II denied ECBI’s request and ordered
the general examination to proceed as previously scheduled.18
Thereafter, the MB issued Resolution No. 823,19 dated June 4, 2009, approving the
issuance of a cease and desist order against ECBI, which enjoined it from pursuing certain
acts and transactions that were considered unsafe or unsound banking practices, and from
doing such other acts or transactions constituting fraud or might result in the dissipation of
its assets.
On June 10, 2009, the OSI filed with the Department of Justice (DOJ) a complaint for Estafa
Through Falsification of Commercial Documents against certain officials and employees of
ECBI. Meanwhile, the MB issued Resolution No. 1164,20 dated August 13, 2009, denying
the appeal of ECBI from Resolution No. 1255 which placed it under PCA framework. On
November 18, 2009, the general examination of the books and records of ECBI with the cut-
off date of September 30, 2009, was commenced and ended in December 2009. Later, the
BSP officials and examiners met with the representatives of ECBI, including Vivas, and
discussed their findings.21 On December 7, 2009, the ISD II reminded ECBI of the non-
submission of its financial audit reports for the years 2007 and 2008 with a warning that
failure to submit those reports and the written explanation for such omission shall result in
the imposition of a monetary penalty.22 In a letter, dated February 1, 2010, the ISD II
informed ECBI of MB Resolution No. 1548 which denied its request for reconsideration of
Resolution No. 726.
On March 4, 2010, the MB issued Resolution No. 27623 placing ECBI under receivership in
accordance with the recommendation of the ISD II which reads:
On the basis of the examination findings as of 30 September 2009 as reported by the
Integrated Supervision Department (ISD) II, in its memorandum dated 17 February 2010,
which findings showed that the Eurocredit Community Bank, Inc. – a Rural Bank (Eurocredit
Bank) (a) is unable to pay its liabilities as they become due in the ordinary course of
business; (b) has insufficient realizable assets to meet liabilities; (c) cannot continue in
business without involving probable losses to its depositors and creditors; and (d) has
willfully violated a cease and desist order of the Monetary Board for acts or transactions
which are considered unsafe and unsound banking practices and other acts or transactions
constituting fraud or dissipation of the assets of the institution, and considering the failure of
the Board of Directors/management of Eurocredit Bank to restore the bank’s financial health
and viability despite considerable time given to address the bank’s financial problems, and
that the bank had been accorded due process, the Board, in accordance with Section 30 of
Republic Act No. 7653 (The New Central Bank Act), approved the recommendation of ISD II
as follows:
To prohibit the Eurocredit Bank from doing business in the Philippines and to place its
assets and affairs under receivership; and
To designate the Philippine Deposit Insurance Corporation as Receiver of the bank.
Assailing MB Resolution No. 276, Vivas filed this petition for prohibition before this Court,
ascribing grave abuse of discretion to the MB for prohibiting ECBI from continuing its
banking business and for placing it under receivership. The petitioner presents the following
ARGUMENTS:
(a)
It is grave abuse of discretion amounting to loss of jurisdiction to apply the general law
embodied in Section 30 of the New Central Bank Act as opposed to the specific law
embodied in Sections 11 and 14 of the Rural Banks Act of 1992.
(b)
Even if it assumed that Section 30 of the New Central Bank Act is applicable, it is still the
gravest abuse of discretion amounting to lack or excess of jurisdiction to execute the law
with manifest arbitrariness, abuse of discretion, and bad faith, violation of constitutional
rights and to further execute a mandate well in excess of its parameters.
(c)
The power delegated in favor of the Bangko Sentral ng Pilipinas to place rural banks under
receiverships is unconstitutional for being a diminution or invasion of the powers of the
Supreme Court, in violation of Section 2, Article VIII of the Philippine Constitution. 24
Vivas submits that the respondents committed grave abuse of discretion when they
erroneously applied Section 30 of R.A. No. 7653, instead of Sections 11 and 14 of the Rural
Bank Act of 1992 or R.A. No. 7353. He argues that despite the deficiencies, inadequacies
and oversights in the conduct of the affairs of ECBI, it has not committed any financial fraud
and, hence, its placement under receivership was unwarranted and improper. He posits
that, instead, the BSP should have taken over the management of ECBI and extended
loans to the financially distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353
because the BSP’s power is limited only to supervision and management take-over of
banks.
He contends that the implementation of the questioned resolution was tainted with
arbitrariness and bad faith, stressing that ECBI was placed under receivership without due
and prior hearing in violation of his and the bank’s right to due process. He adds that
respondent PDIC actually closed ECBI even in the absence of any directive to this effect.
Lastly, Vivas assails the constitutionality of Section 30 of R.A. No. 7653 claiming that said
provision vested upon the BSP the unbridled power to close and place under receivership a
hapless rural bank instead of aiding its financial needs. He is of the view that such power
goes way beyond its constitutional limitation and has transformed the BSP to a sovereign in
its own "kingdom of banks."25
 The Court’s Ruling
The petition must fail.
Vivas Availed of the Wrong Remedy
To begin with, Vivas availed of the wrong remedy. The MB issued Resolution No. 276,
dated March 4, 2010, in the exercise of its power under R.A. No. 7653. Under Section 30
thereof, any act of the MB placing a bank under conservatorship, receivership or liquidation
may not be restrained or set aside except on a petition for certiorari. Pertinent portions of
R.A. 7653 read:
Section 30. –
x x x x.
The actions of the Monetary Board taken under this section or under Section 29 of this Act
shall be final and executory, and may not be restrained or set aside by the court except on
petition for certiorari on the ground that the action taken was in excess of jurisdiction or with
such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for
certiorari may only be filed by the stockholders of record representing the majority of the
capital stock within ten (10) days from receipt by the board of directors of the institution of
the order directing receivership, liquidation or conservatorship.
x x x x. [Emphases supplied]
Prohibition is already unavailing
Granting that a petition for prohibition is allowed, it is already an ineffective remedy under
the circumstances obtaining. Prohibition or a "writ of prohibition" is that process by which a
superior court prevents inferior courts, tribunals, officers, or persons from usurping or
exercising a jurisdiction with which they have not been vested by law, and confines them to
the exercise of those powers legally conferred. Its office is to restrain subordinate courts,
tribunals or persons from exercising jurisdiction over matters not within its cognizance or
exceeding its jurisdiction in matters of which it has cognizance. 26 In our jurisdiction, the rule
on prohibition is enshrined in Section 2, Rule 65 of the Rules on Civil Procedure, to wit:
Sec. 2. Petition for prohibition - When the proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are
without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and praying that the
judgment be rendered commanding the respondent to desist from further proceedings in the
action or matter specified therein, or otherwise granting such incidental reliefs as the law
and justice require.
x x x x.
Indeed, prohibition is a preventive remedy seeking that a judgment be rendered which
would direct the defendant to desist from continuing with the commission of an act
perceived to be illegal.27 As a rule, the proper function of a writ of prohibition is to prevent
the doing of an act which is about to be done. It is not intended to provide a remedy for acts
already accomplished.28
Though couched in imprecise terms, this petition for prohibition apparently seeks to prevent
the acts of closing of ECBI and placing it under receivership. Resolution No. 276, however,
had already been issued by the MB and the closure of ECBI and its placement under
receivership by the PDIC were already accomplished. Apparently, the remedy of prohibition
is no longer appropriate. Settled is the rule that prohibition does not lie to restrain an act that
is already a fait accompli.29
The Petition Should Have Been Filed in the CA
Even if treated as a petition for certiorari, the petition should have been filed with the CA.
Section 4 of Rule 65 reads:
Section 4. When and where petition filed. — The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the sixty
(60) day period shall be counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a
lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also
be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction,
or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or
omissions of a quasi-judicial agency, unless otherwise provided by law or these Rules, the
petition shall be filed in and cognizable only by the Court of Appeals. [Emphases supplied]
That the MB is a quasi-judicial agency was already settled and reiterated in the case of
Bank of Commerce v. Planters Development Bank And Bangko Sentral Ng Pilipinas. 30
Doctrine of Hierarchy of Courts
Even in the absence of such provision, the petition is also dismissible because it simply
ignored the doctrine of hierarchy of courts. True, the Court, the CA and the RTC have
original concurrent jurisdiction to issue writs of certiorari, prohibition and mandamus. The
concurrence of jurisdiction, however, does not grant the party seeking any of the
extraordinary writs the absolute freedom to file a petition in any court of his choice. The
petitioner has not advanced any special or important reason which would allow a direct
resort to this Court. Under the Rules of Court, a party may directly appeal to this Court only
on pure questions of law.31 In the case at bench, there are certainly factual issues as Vivas
is questioning the findings of the investigating team.
Strict observance of the policy of judicial hierarchy demands that where the issuance of the
extraordinary writs is also within the competence of the CA or the RTC, the special action
for the obtainment of such writ must be presented to either court. As a rule, the Court will
not entertain direct resort to it unless the redress desired cannot be obtained in the
appropriate lower courts; or where exceptional and compelling circumstances, such as
cases of national interest and with serious implications, justify the availment of the
extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise
of its primary jurisdiction.32 The judicial policy must be observed to prevent an imposition on
the precious time and attention of the Court.
The MB Committed No Grave Abuse of Discretion
In any event, no grave abuse of discretion can be attributed to the MB for the issuance of
the assailed Resolution No. 276.
Vivas insists that the circumstances of the case warrant the application of Section 11 of R.A.
No. 7353, which provides:
Sec. 11. The power to supervise the operation of any rural bank by the Monetary Board as
herein indicated shall consist in placing limits to the maximum credit allowed to any
individual borrower; in prescribing the interest rate, in determining the loan period and loan
procedures, in indicating the manner in which technical assistance shall be extended to
rural banks, in imposing a uniform accounting system and manner of keeping the accounts
and records of rural banks; in instituting periodic surveys of loan and lending procedures,
audits, test-check of cash and other transactions of the rural banks; in conducting training
courses for personnel of rural banks; and, in general, in supervising the business operations
of the rural banks.
The Central Bank shall have the power to enforce the laws, orders, instructions, rules and
regulations promulgated by the Monetary Board, applicable to rural banks; to require rural
banks, their directors, officers and agents to conduct and manage the affairs of the rural
banks in a lawful and orderly manner; and, upon proof that the rural bank or its Board of
Directors, or officers are conducting and managing the affairs of the bank in a manner
contrary to laws, orders, instructions, rules and regulations promulgated by the Monetary
Board or in a manner substantially prejudicial to the interest of the Government, depositors
or creditors, to take over the management of such bank when specifically authorized to do
so by the Monetary Board after due hearing process until a new board of directors and
officers are elected and qualified without prejudice to the prosecution of the persons
responsible for such violations under the provisions of Sections 32, 33 and 34 of Republic
Act No. 265, as amended.
x x x x.
The thrust of Vivas’ argument is that ECBI did not commit any financial fraud and, hence, its
placement under receivership was unwarranted and improper. He asserts that, instead, the
BSP should have taken over the management of ECBI and extended loans to the financially
distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353 because the BSP’s power
is limited only to supervision and management take-over of banks, and not receivership.
Vivas argues that implementation of the questioned resolution was tainted with arbitrariness
and bad faith, stressing that ECBI was placed under receivership without due and prior
hearing, invoking Section 11 of R.A. No. 7353 which states that the BSP may take over the
management of a rural bank after due hearing.33 He adds that because R.A. No. 7353 is a
special law, the same should prevail over R.A. No. 7653 which is a general law.
The Court has taken this into account, but it appears from all over the records that ECBI
was given every opportunity to be heard and improve on its financial standing. The records
disclose that BSP officials and examiners met with the representatives of ECBI, including
Vivas, and discussed their findings.34 There were also reminders that ECBI submit its
financial audit reports for the years 2007 and 2008 with a warning that failure to submit them
and a written explanation of such omission shall result in the imposition of a monetary
penalty.35 More importantly, ECBI was heard on its motion for reconsideration. For failure of
ECBI to comply, the MB came out with Resolution No. 1548 denying its request for
reconsideration of Resolution No. 726. Having been heard on its motion for reconsideration,
ECBI cannot claim that it was deprived of its right under the Rural Bank Act.
Close Now, Hear Later
At any rate, if circumstances warrant it, the MB may forbid a bank from doing business and
place it under receivership without prior notice and hearing. Section 30 of R.A. No. 7653
provides, viz:
Sec. 30. Proceedings in Receivership and Liquidation. – Whenever, upon report of the head
of the supervising or examining department, the Monetary Board finds that a bank or quasi-
bank:
(a) is unable to pay its liabilities as they become due in the ordinary course of
business: Provided, That this shall not include inability to pay caused by
extraordinary demands induced by financial panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet
its liabilities; or
(c) cannot continue in business without involving probable losses to its depositors
or creditors; or
(d) has wilfully violated a cease and desist order under Section 37 that has
become final, involving acts or transactions which amount to fraud or a dissipation
of the assets of the institution; in which cases, the Monetary Board may summarily
and without need for prior hearing forbid the institution from doing business in the
Philippines and designate the Philippine Deposit Insurance Corporation as receiver
of the banking institution. [Emphases supplied.]
x x x x.
Accordingly, there is no conflict which would call for the application of the doctrine that a
special law should prevail over a general law. It must be emphasized that R.A .No. 7653 is a
later law and under said act, the power of the MB over banks, including rural banks, was
increased and expanded. The Court, in several cases, upheld the power of the MB to take
over banks without need for prior hearing. It is not necessary inasmuch as the law entrusts
to the MB the appreciation and determination of whether any or all of the statutory grounds
for the closure and receivership of the erring bank are present. The MB, under R.A. No.
7653, has been invested with more power of closure and placement of a bank under
receivership for insolvency or illiquidity, or because the bank’s continuance in business
would probably result in the loss to depositors or creditors. In the case of Bangko Sentral Ng
Pilipinas Monetary Board v. Hon. Antonio-Valenzuela,36 the Court reiterated the doctrine of
"close now, hear later," stating that it was justified as a measure for the protection of the
public interest. Thus:
The "close now, hear later" doctrine has already been justified as a measure for the
protection of the public interest. Swift action is called for on the part of the BSP when it finds
that a bank is in dire straits. Unless adequate and determined efforts are taken by the
government against distressed and mismanaged banks, public faith in the banking system
is certain to deteriorate to the prejudice of the national economy itself, not to mention the
losses suffered by the bank depositors, creditors, and stockholders, who all deserve the
protection of the government.37[Emphasis supplied]
In Rural Bank of Buhi, Inc. v. Court of Appeals,38 the Court also wrote that
x x x due process does not necessarily require a prior hearing; a hearing or an opportunity
to be heard may be subsequent to the closure. One can just imagine the dire consequences
of a prior hearing: bank runs would be the order of the day, resulting in panic and hysteria.
In the process, fortunes may be wiped out and disillusionment will run the gamut of the
entire banking community.39
The doctrine is founded on practical and legal considerations to obviate unwarranted
dissipation of the bank’s assets and as a valid exercise of police power to protect the
depositors, creditors, stockholders, and the general public.40 Swift, adequate and
determined actions must be taken against financially distressed and mismanaged banks by
government agencies lest the public faith in the banking system deteriorate to the prejudice
of the national economy.
Accordingly, the MB can immediately implement its resolution prohibiting a banking
institution to do business in the Philippines and, thereafter, appoint the PDIC as receiver.
The procedure for the involuntary closure of a bank is summary and expeditious in nature.
Such action of the MB shall be final and executory, but may be later subjected to a judicial
scrutiny via a petition for certiorari to be filed by the stockholders of record of the bank
representing a majority of the capital stock. Obviously, this procedure is designed to protect
the interest of all concerned, that is, the depositors, creditors and stockholders, the bank
itself and the general public. The protection afforded public interest warrants the exercise of
a summary closure.
In the case at bench, the ISD II submitted its memorandum, dated February 17, 2010,
containing the findings noted during the general examination conducted on ECBI with the
cut-off date of September 30, 2009. The memorandum underscored the inability of ECBI to
pay its liabilities as they would fall due in the usual course of its business, its liabilities being
in excess of the assets held. Also, it was noted that ECBI’s continued banking operation
would most probably result in the incurrence of additional losses to the prejudice of its
depositors and creditors. On top of these, it was found that ECBI had willfully violated the
cease-and-desist order of the MB issued in its June 24, 2009 Resolution, and had
disregarded the BSP rules and directives. For said reasons, the MB was forced to issue the
assailed Resolution No. 276 placing ECBI under receivership. In addition, the MB stressed
that it accorded ECBI ample time and opportunity to address its monetary problem and to
restore and improve its financial health and viability but it failed to do so.
In light of the circumstances obtaining in this case, the application of the corrective
measures enunciated in Section 30 of R.A. No. 7653 was proper and justified. Management
take-over under Section 11 of R.A. No. 7353 was no longer feasible considering the
financial quagmire that engulfed ECBI showing serious conditions of insolvency and
illiquidity. Besides, placing ECBI under receivership would effectively put a stop to the
further draining of its assets.
No Undue Delegation of Legislative Power
Lastly, the petitioner challenges the constitutionality of Section 30 of R.A. No. 7653, as the
legislature granted the MB a broad and unrestrained power to close and place a financially
troubled bank under receivership. He claims that the said provision was an undue
delegation of legislative power. The contention deserves scant consideration.
Preliminarily, Vivas’ attempt to assail the constitutionality of Section 30 of R.A. No. 7653
constitutes collateral attack on the said provision of law. Nothing is more settled than the
rule that the constitutionality of a statute cannot be collaterally attacked as constitutionality
issues must be pleaded directly and not collaterally. 41 A collateral attack on a presumably
valid law is not permissible. Unless a law or rule is annulled in a direct proceeding, the legal
presumption of its validity stands.42
Be that as it may, there is no violation of the non-delegation of legislative
power.1âwphi1 The rationale for the constitutional proscription is that "legislative discretion
as to the substantive contents of the law cannot be delegated. What can be delegated is the
discretion to determine how the law may be enforced, not what the law shall be. The
ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot
be abdicated or surrendered by the legislature to the delegate." 43
"There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz, the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate the only thing he will have to do is enforce it. Under
the sufficient standard test, there must be adequate guidelines or stations in the law to map
out the boundaries of the delegate's authority and prevent the delegation from running riot.
Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a power
essentially legislative."44

In this case, under the two tests, there was no undue delegation of legislative authority in
the issuance of R.A. No. 7653. To address the growing concerns in the banking industry,
the legislature has sufficiently empowered the MB to effectively monitor and supervise
banks and financial institutions and, if circumstances warrant, to forbid them to do business,
to take over their management or to place them under receivership. The legislature has
clearly spelled out the reasonable parameters of the power entrusted to the MB and
assigned to it only the manner of enforcing said power. In other words, the MB was given a
wide discretion and latitude only as to how the law should be implemented in order to attain
its objective of protecting the interest of the public, the banking industry and the economy.

WHEREFORE, the petition for prohibition is DENIED.

SO ORDERED.

BF HOMES, INC. and THEPHILIPPINE WATERWORKS AND CONSTRUCTION CORP. v.
MANILA ELECTRIC COMPANY (G.R. No. 171624, December 6, 2010)
This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the
Decision[1] dated October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 82826,
nullifying and setting aside (1) the Order [2] dated November 21, 2003 of the Regional Trial
Court (RTC), Branch 202 of Las Pias City, in Civil Case No. 03-0151, thereby dissolving the
writ of injunction against respondent Manila Electric Company (MERALCO); and (2) the
Resolution[3] dated February 7, 2006 of the Court of Appeals denying the Motion for
Reconsideration of petitioners BF Homes, Inc. (BF Homes) and Philippine Waterworks and
Construction Corporation (PWCC).
MERALCO is a corporation duly organized and existing under Philippine laws
engaged in the distribution and sale of electric power in Metro Manila. On the other hand, BF
Homes and PWCC are owners and operators of waterworks systems delivering water to over
12,000 households and commercial buildings in BF Homes subdivisions in Paraaque City,
Las Pias City, Caloocan City, and Quezon City. The water distributed in the waterworks
systems owned and operated by BF Homes and PWCC is drawn from deep wells using
pumps run by electricity supplied by MERALCO.
On June 23, 2003, BF Homes and PWCC filed a Petition [With Prayer for the
Issuance of Writ of Preliminary Injunction and for the Immediate Issuance of Restraining
Order] against MERALCO before the RTC, docketed as Civil Case No. 03-0151.
In their Petition before the RTC, BF Homes and PWCC invoked their right to refund
based on the ruling of this Court in Republic v. Manila Electric Company[4]:
7. It is of judicial notice that on November 15, 2002, in G.R. No.
141314, entitled Republic of the Philippines vs. Manila Electric Company,
and G.R. No. 141369, entitled Lawyers Against Monopoly and Poverty
(LAMP) et al. vs. Manila Electric Compnay (MERALCO), (both cases shall
hereafter be referred to as MERALCO Refund cases, for brevity), the
Supreme Court ordered MERALCO to refund its customers, which shall be
credited against the customers future consumption, the excess average
amount of P0.167 per kilowatt hour starting with the customers billing
cycles beginning February 1998. The dispositive portion of the Supreme
Court Decision in the MERALCO Refund cases reads:
WHEREFORE, in view of the foregoing, the
instant petitions are GRANTED and the decision of the
Court of Appeals in C.A. G.R. SP No. 46888 is
REVERSED. Respondent MERALCO is authorized to
adopt a rate adjustment in the amount of P0.017
kilowatthour, effective with respect to MERALCOs billing
cycles beginning February 1994. Further, in accordance
with the decision of the ERB dated February 16, 1998,
the excess average amount of P0.167 per kilowatt hour
starting with the applicants billing cycles beginning
February 1998 is ordered to be refunded to MERALCOs
customers or correspondingly credited in their favor for
future consumption.
x x x x.
8. The Motion for Reconsideration filed by MERALCO in the
MERALCO Refund cases was DENIED WITH FINALITY (the uppercase
letters were used by the Supreme Court) in the Resolution of the Supreme
Court dated April 9, 2003.
9. The amount that MERALCO was mandated to refund to [BF
Homes and PWCC] pursuant to the MERALCO Refund cases is in the
amount of P11,834,570.91.[5]
BF Homes and PWCC then alleged in their RTC Petition that:
10. On May 20, 2003, without giving any notice whatsoever,
MERALCO disconnected electric supply to [BF Homes and PWCCs]
sixteen (16) water pumps located in BF Homes in Paraaque, Caloocan, and
Quezon City, which thus disrupted water supply in those areas.
11. On June 4, 2003, [BF Homes and PWCC] received by
facsimile transmission a letter from MERALCO, x x x, in which MERALCO
demanded to [BF Homes and PWCC] the payment of electric bills
amounting to P4,717,768.15.
12. [MERALCO] replied in a letter dated June 11, 2003, x x x,
requesting MERALCO to apply the P4,717,768.15 electric bill against
 the P11,834,570.91 that MERALCO was ordered to refund to [BF Homes
and PWCC] pursuant to the MERALCO Refund cases. x x x
13. Displaying the arrogance that has become its distinction,
MERALCO, in its letter dated June 16, 2003, x x x, denied [BF Homes and
PWCCs] request alleging that it has not yet come up with the schedule for
the refund of large amounts, such as those of [BF Homes and PWCC].
14. Even while MERALCO was serving its reply-letter to [BF
Homes and PWCC], MERALCO, again, without giving any notice, cut off
power supply to [BF Homes and PWCCs] five (5) water pumps located in
BF Homes Paraaque and BF Resort Village, in Pamplona, Las Pias City.
15. In its letter dated June 4, 2003 (Annex A), MERALCO
threatened to cut off electric power connections to all of [BF Homes and
PWCCs] water pumps if [BF Homes and PWCC] failed to pay their bills
demanded by MERALCO by June 20, 2003.[6]
BF Homes and PWCC thus cited the following causes of action for their RTC
Petition:
16. In refusing to apply [MERALCOs] electric bills against the
amounts that it was ordered to refund to [BF Homes and PWCC] pursuant
to the MERALCO Refund cases and in making the implementation of the
refund ordered by the Supreme Court dependent upon its own will and
caprice, MERALCO acted with utmost bad faith.
17. [BF Homes and PWCC] are clearly entitled to the remedies
under the law to compel MERALCO to consider [BF Homes and PWCCs]
electric bills fully paid by the amounts which MERALCO was ordered to
refund to [BF Homes and PWCC] pursuant to the MERALCO Refund
cases, to enjoin MERALCO to reconnect electric power to all of [BF Homes
and PWCCs] water pumps, and to order MERALCO to desist from further
cutting off power connection to [BF Homes and PWCCs] water pumps.
18. MERALCOs unjust and oppressive acts have cast dishonor
upon [BF Homes and PWCCs] good name and besmirched their reputation
for which [BF Homes and PWCC] should be indemnified by way of moral
damages in the amount of not less than P1,000,000.00.
19. As an example for the public good, to dissuade others from
emulating MERALCOs unjust, oppressive and mercenary conduct,
MERALCO should be directed to pay [BF Homes and PWCC] exemplary
damages of at least P1,000,000.00.
20. MERALCOs oppressive and inequitable conduct forced [BF
Homes and PWCC] to engage the services of counsel to defend their rights
and thereby incur litigation expenses in the amount of at least P500,000.00
for which [BF Homes and PWCC] should be indemnified.[7]
BF Homes and PWCC additionally prayed that the RTC issue a writ of preliminary injunction
and restraining order considering that:
21. As indicated in its letter dated June 4, 2003 (Annex A), unless
seasonably restrained, MERALCO will cut off electric power connections to
all of [BF Homes and PWCCs] water pumps on June 20, 2003.
22. Part of the reliefs herein prayed for is to restrain MERALCO
from cutting off electric power connections to [BF Homes and PWCCs]
water pumps.
23. Unless MERALCOS announced intention to cut off electric
power connections to [BF Homes and PWCCs] water pumps is restrained,
[BF Homes and PWCC] will suffer great and irreparable injury because they
would not [be] able to supply water to their customers.
24. [BF Homes and PWCC] therefore pray that a writ for
preliminary injunction be issued upon posting of a bond in an amount as
will be determined by this Honorable Court.
25. [BF Homes and PWCC] further pray that, in the meantime and
immediately upon the filing of the above captioned Petition, a restraining
order be issued before the matter of preliminary injunction can be heard.[8]
On August 15, 2003, MERALCO filed before the RTC its Answer with Counterclaims
and Opposition to the Application for Writ of Preliminary Injunction[9] of BF Homes and PWCC.
According to MERALCO:
2.2. Both petitioners BF Homes, Incorporated and Philippine
Waterworks Corporation are admittedly the registered customers of
[MERALCO] by virtue of the service contracts executed between them
under which the latter undertook to supply electric energy to the former for
a fee. The following twenty-three (23) Service Identification Nos. (SINs) are
registered under the name of BF Homes, Incorporated: x x x. While the
following twenty-one (21) Service Identification Nos. (SINs) are registered
under the name of Philippine Waterworks Construction Corporation: x x x
xxxx

2.4. The service contracts as well as the terms and conditions of
[MERALCOs] service as approved by BOE [Board of Energy], now ERC
[Energy Regulatory Commission], provide in relevant parts, that [BF Homes
and PWCC] agree as follows:
DISCONTINUANCE OF SERVICE:
The Company reserves the right to discontinue
service in case the customer is in arrears in the
payment of bills or for failure to pay the adjusted bills in
those cases where the meter stopped or failed to register
the correct amount of energy consumed, or for failure to
comply with any of these terms and conditions, or in case
of or to prevent fraud upon the Company. Before
disconnection is made in the case of, or to prevent fraud,
the Company may adjust the bill of said customer
accordingly and if the adjusted bill is not paid, the
Company may disconnect the same. (Emphasis
supplied)
2.5. This contractual right of [MERALCO] to discontinue electric
service for default in the payment of its regular bills is sanctioned and
approved by the rules and regulations of ERB (now the ERC). This right is
necessary and reasonable means to properly protect and enable
[MERALCO] to perform and discharge its legal and contractual obligation
under its legislative franchise and the law. Cutting off service for non-
payment by the customers of the regular monthly electric bills is the only
practical way a public utility, such as [MERALCO], can ensure and maintain
efficient service in accordance with the terms and conditions of its
legislative franchise and the law.
xxxx
2.14. Instead of paying their unpaid electric bills and before
[MERALCO] could effect its legal and contractual right to disconnect [BF
Homes and PWCCs] electric services, [BF Homes and PWCC] filed the
instant petition to avoid payment of [MERALCOs] valid and legal claim for
regular monthly electric bills.
2.15. [BF Homes and PWCCs] unpaid regular bills totaled
P6,551,969.55 covering the May and June 2003 electric bills. x x x
xxxx
2.17. [BF Homes and PWCC] knew that [MERALCO] is already in
the process of implementing the decision of the Supreme Court as to the
refund case. But this refund has to be implemented in accordance with the
guidelines and schedule to be approved by the ERC. Thus [BF Homes and
PWCCs] filing of the instant petition is merely to evade payment of their
unpaid electric bills to [MERALCO].[10]
Hence, MERALCO sought the dismissal of the RTC Petition of BF Homes and
PWCC on the following grounds:
3.1 The Honorable Court has no jurisdiction to award the relief
prayed for by [BF Homes and PWCC] because:
a) The petition is in effect preempting or defeating the power
of the ERC to implement the decision of the Supreme Court.
b) [MERALCO] is a utility company whose business activity is
wholly regulated by the ERC. The latter, being the regulatory
agency of the government having the authority over the
respondent, is the one tasked to approve the guidelines,
schedules and details of the refund.
c) The decision of the Supreme Court, dated November 15,
2002, clearly states that respondent is directed to make the
refund to its customers in accordance with the decision of the
ERC (formerly ERB) dated February 16, 1998. Hence,
[MERALCO] has to wait for the schedule and details of the
refund to be approved by the ERC before it can comply with
the Supreme Court decision.
3.2. [MERALCO] has the right to disconnect the electric
service to [BF Homes and PWCC] in that:
a) The service contracts between [MERALCO] and [BF Homes
and PWCC] expressly authorize the former to discontinue
and disconnect electric services of the latter for their failure
to pay the regular electric bills rendered.
b) It is [MERALCOs] legal duty as a public utility to furnish its
service to the general public without arbitrary discrimination
and, consequently, [MERALCO] is obligated to discontinue
and disconnect electric services to [BF Homes and PWCC]
for their refusal or failure to pay the electric energy actually
used by them.[11]
For its compulsory counterclaims, MERALCO prayed that the RTC orders BF Homes
and PWCC to pay MERALCO P6,551,969.55 as actual damages (representing the unpaid

electric bills of BF Homes and PWCC for May and June 2003), P1,500,000.00 as exemplary
damages, P1,500,000.00 as moral damages, and P1,000,000.00 as attorneys fees.
Lastly, MERALCO opposed the application for writ of preliminary injunction of BF
Homes and PWCC because:
I
[MERALCO] HAS THE LEGAL AND CONTRACTUAL RIGHT TO
DEMAND PAYMENT OF THE ELECTRIC BILLS AND, IN CASE OF NON-
PAYMENT, TO DISCONTINUE THE ELECTRIC SERVICES OF [BF
HOMES and PWCC]
II
[BF HOMES and PWCC] HAVE NO CLEAR RIGHT WHICH WARRANTS
PROTECTION BY INJUNCTIVE PROCESS
After hearing,[12] the RTC issued an Order on November 21, 2003 granting the application of
BF Homes and PWCC for the issuance of a writ of preliminary injunction. The RTC found that
the records showed that all requisites for the issuance of said writ were sufficiently satisfied
by BF Homes and PWCC. The RTC stated in its Order:
Albeit, this Court respects the right of a public utility company like
MERALCO, being a grantee of a legislative franchise under Republic Act
No. 9029, to collect overdue payments from its subscribers or customers
for their respective consumption of electric energy, such right must,
however, succumb to the paramount substantial and constitutional rights of
the public to the usage and enjoyment of waters in their community. Thus,
there is an urgent need for the issuance of a writ of preliminary injunction
in order to prevent social unrest in the community for having been deprived
of the use and enjoyment of waters flowing through [BF Homes and
PWCCs] water pumps.[13]
The RTC decreed in the end:
WHEREFORE, in the light of the foregoing, [BF Homes and PWCCs]
prayer for the issuance of a writ of preliminary injunction is hereby
GRANTED. Respondent Manila Electric Company is permanently
restrained from proceeding with its announced intention to cut-off electric
power connection to [BF Homes and PWCCs] water pumps unless
otherwise ordered by this Court. Further, [BF Homes and PWCC] are
hereby ordered to post a bond in the amount of P500,000 to answer for
whatever injury or damage that may be caused by reason of the preliminary
injunction.[14]
The Motion for Reconsideration of MERALCO of the aforementioned Order was denied by
the RTC in another Order issued on January 9, 2004. [15] The RTC reiterated its earlier finding
that all the requisites for the proper issuance of an injunction had been fully complied with by
BF Homes and PWCC, thus:
Records indubitably show that all the requisites for the proper
issuance of an injunction have been fully complied with in the instant case.
It should be noted that a disconnection of power supply would
obviously cause irreparable injury because the pumps that supply water to
the BF community will be without electricity, thereby rendering said
community without water.Water is a basic and endemic necessity of
life. This is why its enjoyment and use has been constitutionally
safeguarded and protected. Likewise, a community without water might
create social unrest, which situation this Court has the mandate to
prevent. There is an urgent and paramount necessity for the issuance of
the injunctive writ to prevent serious damage to the guaranteed rights of
[BF Homes and PWCC] and the residents of the community to use and
enjoy water.[16]
The RTC resolved the issue on jurisdiction raised by MERALCO, as follows:
As to the jurisdictional issue raised by respondent MERALCO, it
can be gleaned from a re-evaluation and re-assessment of the records that
this Court has jurisdiction to delve into the case. This Court gave both
parties the opportunity to be heard as they introduced evidence on the
propriety of the issuance of the injunctive writ. It is well-settled that no grave
abuse of discretion could be attributed to its issuance where a party was
not deprived of its day in court as it was heard and had exhaustively
presented all its arguments and defenses. (National Mines and Allied
Workers Union vs. Valero, 132 SCRA 578, 1984.)[17]

Aggrieved, MERALCO filed with the Court of Appeals a Petition for Certiorari under Rule 65
of the Rules of Court, docketed as CA-G.R. SP No. 82826. MERALCO sought the reversal of
the RTC Orders dated November 21, 2003 and January 9, 2004 granting a writ of preliminary
injunction in favor of BF Homes and PWCC. MERALCO asserted that the RTC had no
jurisdiction over the application of BF Homes and PWCC for issuance of such a writ.
In its Decision dated October 27, 2005, the Court of Appeals agreed with MERALCO that the
RTC had no jurisdiction to issue a writ of preliminary injunction in Civil Case No. 03-0151, as
said trial court had no jurisdiction over the subject matter of the case to begin with. It
ratiocinated in this wise:
For one, it cannot be gainsaid that the ERC has original and exclusive
jurisdiction over the case. Explicitly, Section 43(u) of Republic Act No.
9136, otherwise known as the Electric Power Industry Reform Act, (RA
9136), states that the ERC shall have the original and exclusive jurisdiction
over all cases contesting rates, fees, fines and penalties imposed by the
ERC in the exercise of its powers, functions and responsibilities and over
all cases involving disputes between and among participants or players in
the energy sector. Section 4(o) of Rule 3 of the Implementing Rules and
Regulations of RA 9136 likewise provides that the ERC shall also be
empowered to issue such other rules that are essential in the discharge of
its functions as an independent quasi-judicial body.
For another, the respondent judge, instead of presiding over the case,
should have dismissed the same and yielded jurisdiction to the ERC
pursuant to the doctrine of primary jurisdiction. It is plain error on the part
of the respondent judge to determine, preliminary or otherwise, a
controversy involving a question which is within the jurisdiction of an
administrative tribunal, especially so where the question demands the
exercise of sound administrative discretion.
Needless to state, the doctrine of primary jurisdiction applies where the
administrative agency, as in the case of ERC, exercises its quasi-judicial
and adjudicatory function. Thus, in cases involving specialized disputes,
the practice has been to refer the same to an administrative agency of
special competence pursuant to the doctrine of primary jurisdiction. The
courts will not determine a controversy involving a question which is within
the jurisdiction of the administrative tribunal prior to the resolution of that
question by the administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact, and a uniformity of ruling
is essential to comply with the premises of the regulatory statute
administered.
Verily, the cause of action of [BF Homes and PWCC] against [MERALCO]
originates from the Meralco Refund Decision as it involves the perceived
right of the former to compel the latter to set-off or apply their refund to their
present electric bill. The issue delves into the right of the private
respondents to collect their refund without submitting to the approved
schedule of the ERC, and in effect give unto themselves preferential right
over other equally situated consumers of [MERALCO]. Perforce, the ERC,
as can be gleaned from the afore-stated legal provisions, has primary,
original and exclusive jurisdiction over the said controversy.
Indeed, the respondent judge glaringly erred in enjoining the right of
[MERALCO] to disconnect its services to [BF Homes and PWCC] on the
premise that the court has jurisdiction to apply the provisions on
compensation or set-off in this case.Although [MERALCO] recognizes the
right of [BF Homes and PWCC] to the refund as provided in the Meralco
Refund Decision, it is the ERC which has the authority to implement the
same according to its approved schedule, it being a dispute arising from
the exercise of its jurisdiction.
Moreover, it bears to stress that the Meralco Refund Decision was brought
into fore by the Decision dated 16 February 1998 of the ERC (then Energy
Regulatory Board) granting refund to [MERALCOs] consumers. Being the
agency of origin, the ERC has the jurisdiction to execute the
same. Besides, as stated, it is empowered to promulgate rules that are
essential in the discharge of its functions as an independent quasi-judicial
body.[18]
The dispositive portion of the judgment of the appellate court reads:
WHEREFORE, the foregoing considered, the instant petition is
hereby GRANTED and the assailed Orders REVERSED and SET
ASIDE. Accordingly, the writ of injunction against [MERALCO] is
hereby DISSOLVED. No costs.[19]
In a Resolution dated February 7, 2006, the Court of Appeals denied the Motion for
Reconsideration of BF Homes and PWCC for failing to raise new and persuasive and
meritorious arguments.
Now, BF Homes and PWCC come before this Court via the instant Petition, raising
the following assignment of errors:

1. The Court of Appeals ERRED in saying that the respondent judge
committed grave abuse of discretion by issuing the disputed writ of
injunction pending the merits of the case including the issue of subject
matter jurisdiction.
2. The Court of Appeals ERRED in saying that the ERC under the
doctrine of primary jurisdiction has the original and EXCLUSIVE
jurisdiction to take cognizance of a petition for injunction to prevent
electrical disconnection to a customer entitled to a refund.
3. The Court of Appeals ERRED in NOT SAYING that the ERC as a
quasi-judicial body under RA 9136 has no power to issue any
injunctive relief or remedy to prevent disconnection.
4. The Court of Appeals ERRED in not resolving the issue as to the
violation of MERALCO of a standing injunction order while the case
remains undecided.[20]
At the core of the Petition is the issue of whether jurisdiction over the subject matter
of Civil Case No. 03-0151 lies with the RTC or the Energy Regulatory Commission (ERC). If
it is with the RTC, then the said trial court also has jurisdiction to issue the writ of preliminary
injunction against MERALCO. If it is with the ERC, then the RTC also has no jurisdiction to
act on any incidents in Civil Case No. 03-0151, including the application for issuance of a writ
of preliminary injunction of BF Homes and PWCC therein.
BF Homes and PWCC argued that due to the threat of MERALCO to disconnect
electric services, BF Homes and PWCC had no other recourse but to seek an injunctive
remedy from the RTC under its general jurisdiction. The merits of Civil Case No. 03-0151 was
not yet in issue, only the propriety of issuing a writ of preliminary injunction to prevent an
irreparable injury. Even granting that the RTC has no jurisdiction over the subject matter of
Civil Case No. 03-0151, the ERC by enabling law has no injunctive power to prevent the
disconnection by MERALCO of electric services to BF Homes and PWCC.
The Petition has no merit.
Settled is the rule that jurisdiction is conferred only by the Constitution or the
law.[21] Republic v. Court of Appeals[22] also enunciated that only a statute can confer
jurisdiction on courts and administrative agencies.
Related to the foregoing and equally well-settled is the rule that the nature of an
action and the subject matter thereof, as well as which court or agency of the government has
jurisdiction over the same, are determined by the material allegations of the complaint in
relation to the law involved and the character of the reliefs prayed for, whether or not the
complainant/plaintiff is entitled to any or all of such reliefs. A prayer or demand for relief is not
part of the petition of the cause of action; nor does it enlarge the cause of action stated or
change the legal effect of what is alleged. In determining which body has jurisdiction over a
case, the better policy is to consider not only the status or relationship of the parties but also
the nature of the action that is the subject of their controversy. [23]
In Manila Electric Company v. Energy Regulatory Board,[24] the Court traced the
legislative history of the regulatory agencies which preceded the ERC, presenting a summary
of these agencies, the statutes or issuances that created them, and the extent of the
jurisdiction conferred upon them, viz:
1. The first regulatory body, the Board of Rate Regulation (BRR),
was created by virtue of Act No. 1779. Its regulatory mandate under
Section 5 of the law was limited to fixing or regulating rates of every public
service corporation.
2. In 1913, Act No. 2307 created the Board of Public Utility
Commissioners (BPUC) to take over the functions of the BRR. By express
provision of Act No. 2307, the BPUC was vested with jurisdiction,
supervision and control over all public utilities and their properties and
franchises.
3. On November 7, 1936, Commonwealth Act (C.A.) No. 146, or
the Public Service Act (PSA), was passed creating the Public Service
Commission (PSC) to replace the BPUC. Like the BPUC, the PSC was
expressly granted jurisdiction, supervision and control over public services,
with the concomitant authority of calling on the public force to exercise its
power, to wit:
 SEC. 13. Except as otherwise provided herein,
the Commission shall have general supervision and
regulation of, jurisdiction and control over, all public
utilities, and also over their property, property rights,
equipment, facilities and franchises so far as may be
necessary for the purpose of carrying out the provisions
of this Act, and in the exercise of its authority it shall have
the necessary powers and the aid of the public force x x
x.
Section 14 of C.A. No. 146 defines the term public
service or public utility as including every individual, copartnership,
association, corporation or joint-stock company, . . . that now or hereafter
may own, operate, manage or control within the Philippines, for hire or
compensation, any common carrier, x x x, electric light, heat, power, x x
x, when owned, operated and managed for public use or service within
the Philippines x x x. Under the succeeding Section 17(a), the PSC has the
power even without prior hearing
(a) To investigate, upon its own initiative, or
upon complaint in writing, any matter concerning any
public service as regards matters under its jurisdiction;
to require any public service to furnish safe, adequate
and proper service as the public interest may require and
warrant, to enforce compliance with any standard, rule,
regulation, order or other requirement of this Act or of the
Commission, x x x.
4. Then came Presidential Decree (P.D.) No. 1, reorganizing the
national government and implementing the Integrated Reorganization
Plan. Under the reorganization plan, jurisdiction, supervision and control
over public services related to electric light, and power heretofore vested in
the PSC were transferred to the Board of Power and Waterworks (BOPW).
Later, P.D. No. 1206 abolished the BOPW. Its powers and
function relative to power utilities, including its authority to grant provisional
relief, were transferred to the newly-created Board of Energy (BOE).
5. On May 8, 1987, then President Corazon C. Aquino issued E.O.
No. 172 reconstituting the BOE into the ERB, transferring the formers
functions and powers under P.D. No. 1206 to the latter and consolidating
in and entrusting on the ERB all the regulatory and adjudicatory functions
covering the energy sector. Section 14 of E.O. No. 172 states that (T)he
applicable provisions of [C.A.] No. 146, as amended, otherwise known as
the Public Service Act; x x x and [P.D.] No. 1206, as amended, creating the
Department of Energy, shall continue to have full force and effect, except
insofar as inconsistent with this Order.[25]
Thereafter, on June 8, 2001, Republic Act No. 9136, known as the Electric Power
Industry Reform Act of 2001 (EPIRA), was enacted, providing a framework for restructuring
the electric power industry. One of the avowed purposes of the EPIRA is to establish a strong
and purely independent regulatory body. The Energy Regulatory Board (ERB) was abolished
and its powers and functions not inconsistent with the provision of the EPIRA were expressly
transferred to the ERC.[26]
The powers and functions of the ERB not inconsistent with the EPIRA were
transferred to the ERC by virtue of Sections 44 and 80 of the EPIRA, which read:
Sec. 44. Transfer of Powers and Functions. The powers and
functions of the Energy Regulatory Board not inconsistent with the
provisions of this Act are hereby transferred to the ERC. The foregoing
transfer of powers and functions shall include all applicable funds and
appropriations, records, equipment, property and personnel as may be
necessary.
Sec. 80. Applicability and Repealing Clause. The applicability
provisions of Commonwealth Act No. 146, as amended, otherwise known
as the Public Service Act. Republic Act 6395, as amended, revising the
charter of NPC; Presidential Decree 269, as amended, referred to as the
National Electrification Decree; Republic Act 7638, otherwise known as the
Department of Energy Act of 1992; Executive Order 172, as amended,
creating the ERB; Republic Act 7832 otherwise known as the Anti-
Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994;
shall continue to have full force and effect except insofar as they are
inconsistent with this Act.
The provisions with respect to electric power of Section 11(c) of
Republic Act 7916, as amended, and Section 5(f) of Republic Act 7227, are
hereby repealed or modified accordingly.
Presidential Decree No. 40 and all laws, decrees, rules and
regulations, or portions thereof, inconsistent with this Act are hereby
repealed or modified accordingly.
In addition to the foregoing, the EPIRA also conferred new powers upon the ERC
under Section 43, among which are:
 SEC. 43. Functions of the ERC. The ERC shall promote
competition, encourage market development, ensure customer choice and The right of BF Homes and PWCC to refund, on which their claim for off-setting
penalize abuse of market power in the restructured electricity industry. In
depends, originated from the MERALCO Refund cases. In said cases, the Court (1)
appropriate cases, the ERC is authorized to issue cease and desist order
after due notice and hearing. Towards this end, it shall be responsible for authorized MERALCO to adopt a rate adjustment in the amount of P0.017 per kilowatthour,
the following key functions in the restructured industry:
effective with respect to its billing cycles beginning February 1994; and (2) ordered
xxxx
(f) In the public interest, establish and enforce a methodology for MERALCO to refund to its customers or credit in said customers favor for future
setting transmission and distribution wheeling rates and retail rates for the
consumption P0.167 per kilowatthour, starting with the customers billing cycles that begin
captive market of a distribution utility, taking into account all relevant
considerations, including the efficiency or inefficiency of the regulated February 1998, in accordance with the ERB Decision dated February 16, 1998.
entities. The rates must be such as to allow the recovery of just and
reasonable costs and a reasonable return on rate base (RORB) to enable
the entity to operate viably. The ERC may adopt alternative forms of
internationally-accepted rate-setting methodology as it may deem It bears to stress that in the MERALCO Refund cases, this Court only affirmed the
appropriate. The rate-setting methodology so adopted and applied must February 16, 1998 Decision of the ERB (predecessor of the ERC) fixing the just and
ensure a reasonable price of electricity. The rates prescribed shall be non-
discriminatory. To achieve this objective and to ensure the complete reasonable rate for the electric services of MERALCO and granting refund to MERALCO
removal of cross subsidies, the cap on the recoverable rate of system
losses prescribed in Section 10 of Republic Act No. 7832, is hereby consumers of the amount they overpaid. Said Decision was rendered by the ERB in the
amended and shall be replaced by caps which shall be determined by the
ERC based on load density, sales mix, cost of service, delivery voltage and exercise of its jurisdiction to determine and fix the just and reasonable rate of power utilities
other technical considerations it may promulgate. The ERC shall determine such as MERALCO.
such form of rate-setting methodology, which shall promote efficiency. x x
x.

xxxx Presently, the ERC has original and exclusive jurisdiction under Rule 43(u) of the

(u) The ERC shall have the original and exclusive jurisdiction over
all cases contesting rates, fees, fines and penalties imposed by the ERC in
the exercise of the abovementioned powers, functions and responsibilities
and over all cases involving disputes between and among participants or
players in the energy sector.
All notices of hearings to be conducted by the ERC for the purpose
of fixing rates or fees shall be published at least twice for two successive
weeks in two (2) newspapers of nationwide circulation.
EPIRA over all cases contesting rates, fees, fines, and penalties imposed by the ERC in the
exercise of its powers, functions and responsibilities, and over all cases involving disputes
between and among participants or players in the energy sector. Section 4(o) of the EPIRA
Implementing Rules and Regulation provides that the ERC shall also be empowered to issue
such other rules that are essential in the discharge of its functions as in independent quasi-
judicial body.

A careful review of the material allegations of BF Homes and PWCC in their Petition Indubitably, the ERC is the regulatory agency of the government having the authority

before the RTC reveals that the very subject matter thereof is the off-setting of the amount of and supervision over MERALCO. Thus, the task to approve the guidelines, schedules, and
refund they are supposed to receive from MERALCO against the electric bills they are to pay details of the refund by MERALCO to its consumers, to implement the judgment of this Court

to the same company. This is squarely within the primary jurisdiction of the ERC. in the MERALCO Refund cases, also falls upon the ERC. By filing their Petition before the

RTC, BF Homes and PWCC intend to collect their refund without submitting to the approved
 That the Board shall immediately schedule and conduct a hearing thereon
schedule of the ERC, and in effect, enjoy preferential right over the other equally situated within thirty (30) days thereafter, upon publication and notice to all affected
parties.
MERALCO consumers.

Administrative agencies, like the ERC, are tribunals of limited jurisdiction and, as The aforequoted provision is still applicable to the ERC as it succeeded the ERB, by

such, could wield only such as are specifically granted to them by the enabling statutes. In virtue of Section 80 of the EPIRA. A writ of preliminary injunction is one such provisional relief

relation thereto is the doctrine of primary jurisdiction involving matters that demand the special which a party in a case before the ERC may move for.

competence of administrative agencies even if the question involved is also judicial in

nature. Courts cannot and will not resolve a controversy involving a question within the Lastly, the Court herein already declared that the RTC not only lacked the jurisdiction

jurisdiction of an administrative tribunal, especially when the question demands the sound to issue the writ of preliminary injunction against MERALCO, but that the RTC actually had

exercise of administrative discretion requiring special knowledge, experience and services of no jurisdiction at all over the subject matter of the Petition of BF Homes and PWCC in Civil

the administrative tribunal to determine technical and intricate matters of fact. The court Case No. 03-0151. Therefore, in addition to the dissolution of the writ of preliminary injunction

cannot arrogate into itself the authority to resolve a controversy, the jurisdiction of which is issued by the RTC, the Court also deems it appropriate to already order the dismissal of the

initially lodged with the administrative body of special competence. [27] Petition of BF Homes and PWCC in Civil Case No. 03-0151 for lack of jurisdiction of the RTC

over the subject matter of the same. Although only the matter of the writ of preliminary

Since the RTC had no jurisdiction over the Petition of BF Homes and PWCC in Civil injunction was brought before this Court in the instant Petition, the Court is already taking

Case No. 03-0151, then it was also devoid of any authority to act on the application of BF cognizance of the issue on the jurisdiction of the RTC over the subject matter of the

Homes and PWCC for the issuance of a writ of preliminary injunction contained in the same Petition. The Court may motu proprio consider the issue of jurisdiction. The Court has

Petition. The ancillary and provisional remedy of preliminary injunction cannot exist except discretion to determine whether the RTC validly acquired jurisdiction over Civil Case No. 03-

only as an incident of an independent action or proceeding. [28] 0151 since, to reiterate, jurisdiction over the subject matter is conferred only by

law. Jurisdiction over the subject matter cannot be acquired through, or waived by, any act or

Incidentally, BF Homes and PWCC seemed to have lost sight of Section 8 of omission of the parties. Neither would the active participation of the parties nor estoppel

Executive Order No. 172 which explicitly vested on the ERB, as an incident of its principal operate to confer jurisdiction on the RTC where the latter has none over a cause of

function, the authority to grant provisional relief, thus: action.[29] Indeed, when a court has no jurisdiction over the subject matter, the only power it

has is to dismiss the action.[30]

Section 8. Authority to Grant Provisional Relief. The Board may,
upon the filing of an application, petition or complaint or at any stage
WHEREFORE, the instant Petition for Review is DENIED. The Decision dated
thereafter and without prior hearing, on the basis of supporting papers duly
verified or authenticated, grant provisional relief on motion of a party in the October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 82826 is AFFIRMED with
case or on its own initiative, without prejudice to a final decision after
hearing, should the Board find that the pleadings, together with such the MODIFICATION that the Regional Trial Court, Branch 202 of Las Pias City,
affidavits, documents and other evidence which may be submitted in
support of the motion, substantially support the provisional order: Provided, is ORDERED to dismiss the Petition [With Prayer for the Issuance of Writ of Preliminary
Injunction and for the Immediate Issuance of Restraining Order] of BF Homes, Inc. and

Philippine Waterworks and Construction Corporation in Civil Case No. 03-0151. Costs against

BF Homes, Inc. and Philippine Waterworks and Construction Corporation.

SO ORDERED.
G.R. No. 174385 February 20, 2013
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
HON. RAMON S. CAGUIOA, Presiding Judge, Branch 74, Regional Trial Court, Third
Judicial Region, Olongapo City, META TRANS TRADING INTERNATIONAL
CORPORATION, and HUNDRED YOUNG SUBIC INTERNATIONAL, INC., Respondents.
DECISION
BRION, J.:
We resolve in this petition for certiorari and prohibition 1 (the present petition) the challenge
to the August 11, 2005 and July 5, 2006 orders2 of respondent Judge Ramon S. Caguioa,
Regional Trial Court (RTC) of Olongapo City, Branch 74, in Civil Case No. 102-0-05. The
August 11, 2005 order granted the motion to intervene filed by private respondents
Metatrans Trading International Corporation and Hundred Young Subic International, Inc.,
while the July 5, 2006 order denied the motion for reconsideration and the motion to
suspend the proceedings filed by the petitioner Republic of the Philippines (Republic).
The Factual Antecedents
On March 14, 2005,3 Indigo Distribution Corporation and thirteen other petitioners
(collectively referred to as lower court petitioners) filed before the respondent judge a
petition for declaratory relief with prayer for temporary restraining order (TRO) and
preliminary mandatory injunction4 against the Honorable Secretary of Finance, et al. The
petition sought to nullify the implementation of Section 6 of Republic Act (R.A.) No. 9334,
otherwise known as "AN ACT INCREASING THE EXCISE TAX RATES IMPOSED ON
ALCOHOL AND TOBACCO PRODUCTS, AMENDING FOR THE PURPOSE SECTIONS
131, 141, 142, 143, 144, 145 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED," as unconstitutional. Section 6 of R.A. No. 9334, in part, reads:
SEC. 6. Section 131 of the National Internal Revenue Code of 1997, as amended, is hereby
amended to read as follows:
SEC. 131. Payment of Excise Taxes on Imported Articles. –
(A) Persons Liable. – x x x.
xxxx
The provision of any special or general law to the contrary notwithstanding, the
importation of cigars and cigarettes, distilled spirits, fermented liquors and wines
into the Philippines, even if destined for tax and duty-free shops, shall be subject to
all applicable taxes, duties, charges, including excise taxes due thereon. This shall
apply to cigars and cigarettes, distilled spirits, fermented liquors and wines brought
directly into the duly chartered or legislated freeports of the Subic Special Economic
and Freeport Zone, created under Republic Act No. 7227; the Cagayan Special
Economic Zone and Freeport, created under Republic Act No. 7922; and the Zamboanga
City Special Economic Zone, created under Republic Act No. 7903, and such other
freeports as may hereafter be established or created by law: Provided, further, That
importations of cigars and cigarettes, distilled spirits, fermented liquors and wines made
directly by a government- owned and operated duty-free shop, like the Duty-Free
Philippines (DFP), shall be exempted from all applicable duties only[.] [emphasis ours;
italics supplied]
The lower court petitioners are importers and traders duly licensed to operate inside the
Subic Special Economic and Freeport Zone (SSEFZ).
By way of background, Congress enacted, in 1992, R.A. No. 7227, otherwise known as
"The BASES CONVERSION AND DEVELOPMENT ACT OF 1992," which provided, among
others, for the creation of the SSEFZ, as well as the Subic Bay Metropolitan
Authority (SBMA). Pursuant to this law, the SBMA granted the lower court petitioners
Certificates of Registration and Tax Exemption. The certificates allowed them to engage in
the business of import and export of general merchandise (including alcohol and tobacco
products) and uniformly granted them tax exemptions for these importations.
On January 1, 2005, Congress passed R.A. No. 9334. Based on Section 6 of R.A. No.
9334, the SBMA issued a Memorandum on February 7, 2005 directing its various
departments to require importers in the SSEFZ to pay the applicable duties and taxes on
their importations of tobacco and alcohol products before these importations are cleared
and released from the freeport. The memorandum prompted the lower court petitioners to
bring before the RTC their petition for declaratory relief (Civil Case No. 102-0- 05). The
petition included a prayer for the issuance of a writ of preliminary injunction and/or a TRO to
enjoin the Republic (acting through the SBMA) from enforcing the challenged memorandum.
On May 4, 2005,5 the respondent judge granted the lower court petitioners’ application for
preliminary injunction despite the Republic’s opposition, and on May 11, 2005, he issued the
preliminary injunction.
The Republic filed before this Court a petition for certiorari and prohibition – docketed in
this Court as G.R. No. 168584 – to annul the respondent judge’s order and the writ issued
pursuant to this order. The petition asked for the issuance of a TRO and/or a writ of
preliminary injunction. By motion dated July 21, 2005 filed before the lower court, the
Republic asked the respondent judge to suspend the proceedings pending the resolution of
G.R. No. 168584.
On August 5, 2005, the private respondents (in the present petition now before us) filed
before the respondent judge motions for leave to intervene and to admit complaints-in-
intervention. They also asked in these motions that the respondent judge extend to them the
effects and benefits of his May 4, 2005 order, in the lower court petitioners’ favor, and the
subsequently issued May 11, 2005 writ of preliminary mandatory injunction.
Without acting on the Republic’s motion to suspend the proceedings, the respondent judge
granted on August 11, 2005 the private respondents’ motions and complaints-in-
intervention. The respondent judge found the private respondents to be similarly situated as
the lower court petitioners; they stood, too, to be adversely affected by the implementation
of R.A. No. 9334.
The Republic moved to reconsider6 the respondent judge’s August 11, 2005 order, arguing
that it had been denied due process because it never received copies of the private
respondents’ motions and complaints-in-intervention.
On July 5, 2006, the respondent judge denied the Republic’s motion for reconsideration and
the previously filed motion to suspend the proceedings. The respondent judge held that all
of the parties in the case had been duly notified per the records. To justify the denial of the
motion to suspend the proceedings, the respondent judge pointed to the absence of any
restraining order in G.R. No. 168584. The Republic responded to the respondent judge’s
actions by filing the present petition.
The Petition
The present petition charges that the respondent judge acted with manifest partiality and
with grave abuse of discretion when he issued his August 11, 2005 and July 5, 2006 orders.
In particular, the Republic contends that the respondent judge violated its right to due
process when he peremptorily allowed the private respondents’ motions and complaints-in-
intervention and proceeded with their hearing ex parte despite the absence of any prior
notice to it. The Republic maintains that it never received any notice of hearing, nor any
copy of the questioned motions and complaints-in-intervention.7
Further, the Republic posits that the respondent judge abused his discretion when he
extended to the private respondents the benefits of the preliminary injunction earlier issued
to the lower court petitioners under the same ₱1,000,000.00 bond the lower court
petitioners posted. The Republic labels this action as a violation of Section 4, Rule 58 of the
Rules of Court, claiming at the same time that the bond is manifestly disproportionate to the
resulting damage the Republic stood to incur considering the number of the original and the
additional lower court petitioners.8
Finally, in support of its prayer for the issuance of a TRO and/or a writ of preliminary
injunction, the Republic stresses that the assailed orders continue to cause it multi-million
tax losses. It justifies its prayer for the respondent judge’s inhibition by pointing to the latter’s
act of continuously allowing parties to intervene despite the absence of notice and to the
inclusion of non-parties to the original case.
During the pendency of the present petition, the Court en banc partially granted the
Republic’s petition in G.R. No. 168584. By a Decision9 dated October 15, 2007, this Court
set aside and nullified the respondent judge’s order of May 4, 2005 and the subsequent May
11, 2005 writ of preliminary injunction. On January 15, 2008, the Court denied with finality
the lower court petitioners’ motion for reconsideration.10
The Respondent’s Position
In their defense, the private respondents point to the procedural defects in the petition,
specifically: first, the petition was filed out of time, arguing that the Republic only had 53
remaining days to file the petition from notice of the denial of its motion for reconsideration,
maintaining that the 60-day period within which to file the petition is counted from the notice
of the denial of the August 11, 2005 order; second, the petition did not comply with the rules
on proof of filing and service; third, the Republic failed to properly serve their counsel of
record a copy of the petition; and fourth, the Republic did not observe the hierarchy of
courts in filing the instant petition.11
The private respondents further contend that the respondent judge correctly allowed their
complaints-in-intervention as the matter of intervention is addressed to the courts’
discretion; as noted in the assailed orders, the records show that the notice of hearing was
addressed to all of the parties in the original case.12
Finally, on the Republic’s prayer for prohibition, the private respondents maintain that
prohibition is improper since this Court, in G.R. No. 168584, denied the Republic’s prayer
for a writ of prohibition, noting that the respondent judge had been suspended, pending
resolution of this petition.13
The Court’s Ruling
We resolve to PARTLY GRANT the petition.
Relaxation of procedural rules for compelling reasons
We disagree with the private respondents’ procedural objections.
First, we find that the present petition was filed within the reglementary period. Contrary to
the private respondents’ position, the 60- day period within which to file the petition
for certiorari is counted from the Republic’s receipt of the July 5, 2006 order denying the
latter’s motion for reconsideration. Section 4, Rule 65 of the Rules of Court is clear on this
point – "In case a motion for reconsideration or new trial is timely filed, whether such
motion is required or not, the sixty (60) day period shall be counted from notice of the
denial of said motion."14 We find too that the present petition complied with the rules on
proof of filing and service of the petition. Attached to the petition – in compliance with
Sections 12 and 13, Rule 13 of the Rules of Court – are the registry receipts and the
affidavit of the person who filed and served the petition by registered mail.
Second, while the principle of hierarchy of courts does indeed require that recourses should
be made to the lower courts before they are made to the higher courts, 15 this principle is not
an absolute rule and admits of exceptions under well-defined circumstances. In several
cases, we have allowed direct invocation of this Court’s original jurisdiction to issue writs
of certiorari on the ground of special and important reasons clearly stated in the
petition;16when dictated by public welfare and the advancement of public policy; when
demanded by the broader interest of justice; when the challenged orders were patent
nullities;17 or when analogous exceptional and compelling circumstances called for and
justified our immediate and direct handling of the case.18
The Republic claims that the respondent judge violated and continues to violate its right to
due process by allowing the private respondents and several others to intervene in the
case sans notice to the Republic; by extending to them the benefit of the original injunction
without the requisite injunction bond applicable to them as separate injunction applicants;
and by continuing to suspend the Republic’s right to collect excise taxes from the private
respondents and from the lower court petitioners, thus adversely affecting the government’s
revenues. To our mind, the demonstrated extent of the respondent judge’s actions and their
effects constitute special and compelling circumstances calling for our direct and immediate
attention.
Lastly, under our rules of procedure,19 service of the petition on a party, when that party is
represented by a counsel of record, is a patent nullity and is not binding upon the party
wrongfully served.20 This rule, however, is a procedural standard that may admit of
exceptions when faced with compelling reasons of substantive justice manifest in the
petition and in the surrounding circumstances of the case. 21 Procedural rules can bow to
substantive considerations through a liberal construction aimed at promoting their objective
of securing a just, speedy and inexpensive disposition of every action and proceeding. 22
The Republic has consistently and repeatedly maintained that it never received a copy of
the motions and complaints-in-intervention, as evidenced by the certification of the Docket
Division of the Office of the Solicitor General (OSG); it learned of the private respondents’
presence in this case only after it received copies of the assailed orders, and it even had to
inquire from the lower court for the private respondents’ addresses. Although their counsels
did not formally receive any copy of the petition, the private respondents themselves
admitted that they received their copy of the present petition. The records show that the
Republic subsequently complied with the rules on service when, after the private
respondents’ comment, the Republic served copies of its reply and memorandum to the
respondents’ counsel of record.
Under these circumstances, we are satisfied with the Republic’s explanation on why it failed
to initially comply with the rule on service of the present petition; its subsequent compliance
with the rule after being informed of the presence of counsels of record sufficiently warrants
the rule’s relaxed application.23 The lack of a proper service – unlike the situation when the
Republic was simply confronted with already-admitted complaints-in-intervention – did not
result in any prejudice; the private respondents themselves were actually served with, and
duly received, their copies of the present petition, allowing them to comment and to be
heard on the petition.
The Republic was denied due process; the respondent judge issued the assailed
orders with grave abuse of discretion
Due process of law is a constitutionally guaranteed right reserved to every
litigant.1âwphi1 Even the Republic as a litigant is entitled to this constitutional right, in the
same manner and to the same extent that this right is guaranteed to private litigants. The
essence of due process is the opportunity to be heard, logically preconditioned on prior
notice, before judgment is rendered.24
A motion for intervention, like any other motion, has to comply with the mandatory
requirements of notice and hearing, as well as proof of its service, 25 save only for those that
the courts can act upon without prejudice to the rights of the other parties. 26 A motion which
fails to comply with these requirements is a worthless piece of paper that cannot and should
not be acted upon.27 The reason for this is plain: a movant asks the court to take a specific
course of action, often contrary to the interest of the adverse party and which the latter must
then be given the right and opportunity to oppose.28 The notice of hearing to the adverse
party thus directly services the required due process as it affords the adverse party the
opportunity to properly state his agreement or opposition to the action that the movant asks
for.29 Consequently, our procedural rules provide that a motion that does not afford the
adverse party this kind of opportunity should simply be disregarded.30
The notice requirement is even more mandatory when the movant asks for the issuance of
a preliminary injunction and/or a TRO. Under Section 5, Rule 58 of the Rules of Court, no
preliminary injunction shall be granted without a hearing and without prior notice to the party
sought to be enjoined. The prior notice under this requirement is as important as the
hearing, as no hearing can meaningfully take place, with both parties present or
represented, unless a prior notice of the hearing is given.
Additionally, in the same way that an original complaint must be served on the defendant, a
copy of the complaint-in-intervention must be served on the adverse party with the requisite
proof of service duly filed prior to any valid court action. Absent these or any reason duly
explained and accepted excusing strict compliance, the court is without authority to act on
such complaint; any action taken without the required service contravenes the law and the
rules, and violates the adverse party’s basic and constitutional right to due process.
In the present case, records show that the OSG had never received – contrary to the private
respondents’ claim – a copy of the motions and complaints-in-intervention.31 The Republic
duly and fully manifested the irregularity before the respondent judge. 32 Thus, the mere
statement in the assailed orders that the parties were duly notified is insufficient on the face
of the appropriate manifestation made and the supporting proof that the Republic submitted.
In these lights, the motions and complaints-in-intervention cannot but be mere scraps of
paper that the respondent judge had no reason to consider; in admitting them despite the
absence of prior notice, the respondent judge denied the Republic of its right to due
process.
While we may agree with the private respondents’ claim that the matter of intervention is
addressed to the sound discretion of the court, 33 what should not be forgotten is the
requirement that the exercise of discretion must in the first place be "sound." In other words,
the basic precepts of fair play and the protection of all interests involved must always be
considered in the exercise of discretion. Under the circumstances of the present case, these
considerations demand that the original parties to the action, which include the Republic,
must have been properly informed to give them a chance to protect their interests. These
interests include, among others, the protection of the Republic’s revenue-generating
authority that should have been insulated against damage through the filing of a proper
bond. Thus, even from this narrow view that does not yet consider the element of fair play,
the private respondents’ case must fail; judicial discretion cannot override a party litigant’s
right to due process.

All told, the respondent judge acted with grave abuse of discretion warranting the issuance
of the corrective writ of certiorari. Grave abuse of discretion arises when a lower court or
tribunal violates the Constitution or grossly disregards the law or existing
jurisprudence.34 The term refers to such capricious and whimsical exercise of judgment
equivalent to lack of jurisdiction, as when the act amounts to an evasion of a positive duty or
to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law
.35 The respondent judge so acted so that the orders he issued should be declared void and
of no effect.

Petition for prohibition and prayer for inhibition are denied for having been mooted by
subsequent events

On November 9, 2006, the Republic filed an administrative case against the respondent
judge for gross ignorance of the law, manifest partiality and conduct prejudicial to the best
interest of the service. The case, docketed as A.M. No. RTJ-07-2063, is likewise related to
Civil Case No. 102-0-05 that underlie the present petition. By a decision dated June 26,
2009, and while this case was still pending, this Court found the respondent judge guilty of
gross ignorance of the law and conduct prejudicial to the best interest of the service. The
Court accordingly dismissed the respondent judge from the service.

In light of these supervening events, the Court sees no reason to resolve the other matters
raised in this petition for being moot.

WHEREFORE, under these premises, we PARTIALLY GRANT the petition. We GRANT the
writ of certiorari and accordingly SET ASIDE the orders dated August 11, 2005 and July 5,
2006 of respondent Judge Ramon S. Caguioa in Civil Case No. 102-0-05 for being NULL
and VOID. We DISMISS the prayer for writ of prohibition on the ground of mootness. Costs
against Metatrans Trading International Corporation and Hundred Young Subic
International, Inc.

SO ORDERED.
G.R. No. 193706 March 12, 2013
EBRENCIO F. INDOYON, JR., Municipal Treasurer, Lingig, Surigao del Sur, Petitioner,
vs.
COURT OF APPEALS, Twenty-Second Division, Cagayan de Oro City, Respondent.
DECISION
SERENO, CJ.:
This is a Petition for Certiorari filed under Rule 65 of the Revised Rules of Court asking this
Court to determine once again whether the Court of Appeals, Cagayan de Oro City (CA)
committed grave abuse of discretion in dismissing petitioner's Rule 43 Petition for Review
on Certiorari. The Petition assails the 05 June 2009 and 16 July 2010 Resolutions in CA-
G.R.
SP No. 02855-MIN of the CA.1
FACTS
Petitioner Ebrencio F. Indoyon, Jr., was the municipal treasurer of the Municipality of Lingig,
Surigao del Sur, with Salary Grade 24.2 On 8 August 2005, upon examination of his cash
and accounts covering the period 22 June 2005 to 8 August 2005, the Commission on Audit
(COA) - through State Auditor III Lino A. Baustista (Auditor Bautista) - discovered that
petitioner had incurred a cash shortage in the amount of ₱1,222,648.42. 3
In an undated letter to petitioner, Auditor Bautista demanded the immediate production of
the missing funds and the submission of a written explanation of the shortage. 4
On 19 September 2005, petitioner replied with a letter addressed to the provincial auditor of
Surigao del Sur, admitting therein that the former had personally used the amount of
₱652,000 to put up a project to supplement his income, and that he had allowed other
municipal officials and employees to use as cash advances his collections as municipal
treasurer.5
On 15 March 2006, a Formal Charge for Violation of COA Rules and Regulations was filed
against petitioner before the Bureau of Local Government Finance, Department of Finance
(BLGF-DOF), CARAGA Administrative Region, Butuan City. The case was docketed as
ADM Case No. BLGF-08-0108.6
Meanwhile, a letter-complaint dated 6 December 2006 was sent by the Regional Legal and
Adjudication-Commission on Audit to the Deputy Ombudsman, Office of the Ombudsman-
Mindanao (Ombudsman). It recommended the filing of a criminal case for malversation and
an administrative case for dishonesty and grave misconduct against petitioner. 7
In its Decision dated 2 October 2008, the BLGF-DOF found petitioner guilty of "simple
neglect of duty." The dispositive portion of the Decision reads:
PREMISES CONSIDERED, respondent Indoyon is hereby found guilty of Simple Neglect of
Duty. Considering the evidence that Respondent has taken undue advantage of his
position, the penalty imposed is the maximum period which is six (6) months suspension
from the service without pay. Let copies hereof be furnished the parties concerned and this
Bureau advised accordingly.
Let the copies hereof be furnished the parties concerned and this Bureau advised
accordingly.
SO ORDERED.8 (Emphasis supplied)
On 27 November 2008, petitioner filed a Request for Reconsideration of the BLGF-DOF
Decision seeking a modification of the administrative penalty by the reduction thereof from
suspension to the imposition of a fine.9 The request was partially granted in a Resolution
dated 2 February 2009. Thus, instead of a six-month suspension, a fine in an amount
equivalent to the six-month salary of petitioner was imposed on him.10
Meanwhile, on 30 April 2008, the Ombudsman rendered a Decision in Case No. OMB-M-A-
07-024-A finding petitioner guilty of serious dishonesty and grave misconduct and imposing
upon him the penalty of dismissal from the service. 11 On 13 March 2009, he filed a Motion
for
Reconsideration of the Decision, alleging that the jurisdiction over the same administrative
Complaint filed before the Ombudsman had first been acquired by the BLGF-
DOF.12 Petitioner alleged that the two administrative cases were one and the same because
of their identity of issues, facts and parties. The Ombudsman, however, maintained that the
two cases were not identical and accordingly denied petitioner’s Motion for
Reconsideration.13
To enjoin the implementation of the Ombudsman’s Decision, petitioner filed a Petition for
Review on Certiorari under Rule 43 with Prayer for the Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction before the CA. The case was docketed as CA-
G.R.
SP No. 02855-MIN.14 In a Resolution dated 5 June 2009, the Petition was dismissed on the
ground that it suffered not just one technical infirmity, but several technical infirmities that
violated various circulars and issuances of this Court. 15
Petitioner’s Motion for Reconsideration,16 praying for the relaxation of the procedural rules in
the interest of substantial justice, was denied by the CA in a Resolution dated 16 July
2010.17
In the meantime, on 24 February 2010, the BLGF-DOF sent a letter to the ICO-Regional
Director, BLGF-DOF, Caraga, directing the implementation of the Ombudsman’s Decision
dated 30 April 2008 dismissing petitioner from the service.18
Hence this Petition.
The Solicitor General filed his Comment on 21 February 2011 and petitioner his Reply on 29
March 2011.
ISSUE
The issue for resolution is whether the CA committed grave abuse of discretion in
dismissing petitioner’s Rule 43 Petition for Review on Certiorari on the ground of
noncompliance with the Rules of Court and Supreme Court circulars.
THE COURT’S RULING
The Petition is dismissed for being devoid of merit.
Discussion
This Petition invokes the liberality of the Court and considerations of substantial justice in
seeking to overturn the Resolutions of the CA. For noncompliance with the Rules of Court
and Supreme Court circulars, the Petition filed by petitioner with the CA was properly
dismissed. And yet, in the instant Petition, he once again ignores the Rules of Court and a
circular issued by this Court.
Under Section 1, Rule 45 of the Rules of Court, the proper remedy to question the CA’s
judgment, final order or resolution, as in the present case, is a petition for review on
certiorari. The petition must be filed within fifteen (15) days from notice of the judgment, final
order or resolution appealed from; or of the denial of petitioner’s motion for reconsideration
filed in due time after notice of the judgment.
By filing a special civil action for certiorari under Rule 65, petitioner therefore clearly availed
himself of the wrong remedy. Under Supreme Court Circular 2-90,19 an appeal taken to this
Court or to the CA by a wrong or an inappropriate mode merits outright dismissal.20 On this
score alone, the instant Petition may be dismissed.
In Ybanez v. Court of Appeals,21 we have said that the Court cannot tolerate this ignorance
of the law on appeals. It has in fact reproached litigants who have sought to delegate to this
Court the task of determining under which rule their petitions should fall. In the cited case,
we emphasized that paragraph 4(e) of Supreme Court Circular 2-90 specifically warns
litigants’ counsels to follow to the letter the requisites prescribed by law on appeals. This
provision reads:
Duty of counsel. — It is therefore incumbent upon every attorney who would seek review of
a judgment or order promulgated against his client to make sure of the nature of the errors
he proposes to assign, whether these be of fact or law; then upon such basis to ascertain
carefully which Court has appellate jurisdiction; and finally, to follow scrupulously the
requisites for appeal prescribed by law, ever aware that any error or imprecision in
compliance may well be fatal to his client’s cause.
The inexcusability of this disregard for the rules becomes even more glaring, considering
that petitioner has previously shown grave indifference to technical rules before the CA. As
already explained above, the assailed CA Resolution properly dismissed his Petition for
failure to comply with procedural rules. He should have learned his lesson from that
experience instead of repeating the same disregard for the rules before this Court.
We reiterate that under Supreme Court Circular 2-90, the filing of an improper remedy of
special civil action for certiorari under Rule 65, when the proper remedy should have been
to file a petition for review on certiorari under Rule 45, merits the outright dismissal of a
Petition such as this one.
We remind petitioner, as we have consistently reminded countless other litigants, that the
invocation of substantial justice is not a magic potion that will automatically compel this
Court to set aside technical rules.22 This principle is especially true when a litigant, as in the
present case, shows a predilection for utterly disregarding the Rules.
In any event, even if we were to be liberal and overlook our own Circular 2-90, we rule that
there was no grave abuse of discretion on the part of the CA in dismissing, for technical
infirmities, the Petition for Review on Certiorari filed by petitioner under Rule 43.
At the outset, we emphasize that a writ of certiorari is an extraordinary prerogative writ that
is never demandable as a matter of right.23 To warrant the issuance thereof, the abuse of
discretion must have been so gross or grave, as when there was such capricious and
whimsical exercise of judgment equivalent to lack of jurisdiction; or the exercise of power
was done in an arbitrary or despotic manner by reason of passion, prejudice, or personal
hostility. The abuse must have been committed in a manner so patent and so gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law.24
Applying the above definition to the instant case, we find that there is no basis to ask this
Court to hold the CA guilty of grave abuse of discretion when the latter was simply
implementing the rules that we ourselves have set forth in several circulars. We quote
hereunder the pertinent part of the assailed CA Resolution:
However, the Petition suffers from several infirmities rendering the Petition fatally defective.
First, no Affidavit of Service was attached to the Petition, in violation of Supreme Court
Revised Circular Nos. 1-88 and 19-91, and of Section 13 of Rule 13 of the Rules of Court.
They respectively read:
Supreme Court Revised Circular Nos. 1-88:
"(2) Form and Service of petition
A petition file (under) Rule 45, or under Rule 65, or in a motion for extension may be denied
outright if it is not clearly legible, or there is no proof of service on the lower court, tribunal,
or office concerned and on the adverse party in accordance with Section 3, 5 and 10 of
Rule 13, attached to the petition or motion for extension when filed." (Emphasis in the
original)
Supreme Court Revised Circular Nos. 19-91:
"Effective September 15, 1991, henceforth, a petition or motion for extension filed before
this Court shall be dismissed/ denied outright if there is no such proof of service in
accordance with Sections 3 and 5 in relation to Section 10 of Rule 13 of the Rules of Court
attached to the petition/motion when filed." (Emphasis in the original)
Section 13 of Rule 13 of the Rules of Court:
"Sec. 13. Proof of Service.
Proof of personal service shall consist of a written admission of the party served, or the
official return of the server, or the affidavit of the party serving, containing a full statement of
the date, place and manner of service. If the service is by ordinary mail, proof thereof shall
consist of an affidavit of the person mailing of facts showing compliance with section 7 of
this Rule. If service is made by registered mail, proof shall be made by such affidavit and
the registry receipt issued by the mailing office. The registry return card shall be filed
immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together
with the certified or sworn copy of the notice given by the postmaster to the addressee."
(Emphasis in the original)
Second, The office of the Ombudsman is impleaded as nominal party in the Petition for
Review, which is not in accordance with Section 6 of Rule 43 of the Rules of Court, stating
as follows:
"SEC. 6 Contents of the Petition.-The petition for review shall (a) state the full names of the
parties to the case, without impleading the court or agencies either as petitioners or
respondents." (Emphasis in the original)
Last, the Court of Origin, as well as the Case Number and the Title of the action are not
indicated in the Caption of the Petition. This is in contravention of Supreme Court Circular
No. 28-91, which requires that:
"1. Caption of petition or complaint.1âwphi1 The caption of the petition or complaint must
include the docket number of the case in the lower court of quasi-judicial agency whose
order or judgment is sought to be reviewed.
xxx xxx xxx
"3. Penalties.
(a) Any violation of this Circular shall be a cause for the summary dismissal of the, multiple
petition or complaint; x x x.
IN VIEW OF ALL THESE, the Petition is DISMISSED.
SO ORDERED."25 (Emphasis in the original)
There is no question that the CA was simply applying the rules laid down by this Court. In
fact, petitioner does not question the proper application of the technical rules by the CA. It is
precisely for this reason that he is merely invoking the liberal application of those rules. We
also note that not only one but several rules have not been complied with.
We emphasize that an appeal is not a matter of right, but of sound judicial
discretion.1âwphi1 Thus, an appeal may be availed of only in the manner provided by law
and the rules.26 Failure to follow procedural rules merits the dismissal of the case, especially
when the rules themselves expressly say so, as in the instant case. While the Court, in
certain cases, applies the policy of liberal construction, this policy may be invoked only in
situations in which there is some excusable formal deficiency or error in a pleading, but not
when the application of the policy results in the utter disregard of procedural rules, as in this
case.27 We dread to think of what message may be sent to the lower courts if the highest
Court of the land finds fault with them for properly applying the rules. That action will surely
demoralize them. More seriously, by rendering for naught the rules that this Court itself has
set, it would be undermining its own authority over the lower courts.
Finally, we note that for a proper invocation of the remedy of certiorari under Rule 65 of the
Revised Rules of Court, one of the essential requisites is that there be no appeal or any
plain, speedy, and adequate remedy in the ordinary course of law.
As already discussed earlier, the proper remedy of petitioner should have been to file a
petition for review on certiorari. We cannot help but suspect that his failure to avail himself
of that remedy within the reglementary period of 15 days was the reason he filed, instead,
the present special civil action. A special civil action provides for a longer period of 60 days
from notice of the assailed judgment, order or resolution. We note that the instant Petition
was filed 35 days after that notice, by which time petitioner had therefore lost his appeal
under Rule 45. In Republic of the Philippines v. Court of Appeals, 28 we dismissed a Rule 65
Petition on the ground that the proper remedy for the petitioner therein should have been an
appeal under Rule 45 of the Rules of Court. In that case, we stressed how we had time and
again reminded members of the bench and the bar that a special civil action for certiorari
under Rule 65 lies only when there is no appeal or any plain, speedy and adequate remedy
in the ordinary course of law. Thus, certiorari cannot be allowed when a party to a case fails
to appeal a judgment despite the availability of that remedy. Certiorari is not a substitute for
a lost appeal.29

WHEREFORE, premises considered, the instant Petition is DISMISSED. The 05 June 2009
and 16 July 2010 Resolutions of the Court of Appeals, Cagayan de Oro City in CA-G.R. SP
No. 02855-MIN are hereby AFFIRMED.

SO ORDERED.