G.R. No.

165338 November 28, 2011

MAKILITO B. MAHINAY, Petitioner,

vs.
HON. IRENEO LEE GAKO, JR., Presiding Judge, Regional Trial Court, Branch 5, Cebu City and JOCELYN B.
SORENSEN, Respondents.

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

G.R. No. 179375

JOCELYN B. SORENSEN, Petitioner,

vs.
MAKILITO B. MAHINAY, Respondent.

DECISION

DEL CASTILLO, J.:

These consolidated petitions pertain to a legal tug-of-war between persons trying to wrest possession of
a coveted Torrens certificate of title, and its collateral effect to the judge who heard their case.

In G.R. No. 165338, Makilito B. Mahinay (Mahinay), thru a petition for certiorari1 directly filed with this
Court, seeks to nullify the December 12, 2003 Resolution2 of the Regional Trial Court (RTC), Branch 5, Cebu
City in Civil Case No. CEB-16335. The questioned RTC Resolution denied Mahinay’s motion to compel
Jocelyn B. Sorensen (Sorensen) to produce and turn over to him the owner’s copy of Transfer Certificate
of Title (TCT) No. 117531.3 In the same petition, Mahinay also charges respondent Judge Ireneo Lee Gako,
Jr. (Judge Gako) with gross ignorance of the law, abdication of judicial duty, and failure to resolve a motion
within the period prescribed by law.

Mahinay likewise assails the July 20, 2004 Order4 of the RTC denying his Motion for Reconsideration.5

In G.R. No. 179375, Sorensen on the other hand seeks to reverse and set aside the April 24, 2007
Resolution6 of the Court of Appeals (CA) which dismissed her Petition for Certiorari7 in CA-G.R. CEB-SP No.
02193. Sorensen filed said certiorari petition after Judge Gako volte faced and issued an Order8 dated
September 1, 2006 ordering her to surrender to Mahinay TCT No. 117531.

Sorensen likewise challenges the August 3, 2007 Resolution9 of the CA denying her Motion for
Reconsideration.10

Factual Antecedents

Constantina H. Sanchez, Josefina H. Lopez and Susan Honoridez are the registered owners (the owners)
of a 406-square meter parcel of land known as Lot 5 located in Cebu City and covered by TCT No. 117531.
On July 25, 1994, Mahinay filed a complaint11 for specific performance (docketed as Civil Case No. CEB-
16335) against the owners and one Felimon Suarez (Suarez), to compel them to convey Lot 5 to him.

In said complaint, Mahinay alleged that in an earlier case12 he filed against the owners, the parties therein
arrived at a Compromise Agreement wherein the owners gave him preferential right to buy a 200-square
meter portion of Lot 5 on condition that he will withdraw said case. On February 8, 1993, the trial court
thus issued a Judgment13 based on said Compromise Agreement.
On November 9, 1993, however, the owners sold the entire Lot 5 to Suarez for ₱300,000.00 without first
offering the same to Mahinay. According to Mahinay, said transaction violated his preferential right to
buy as he was willing and capable of buying the property. To bolster his claim, Mahinay attached to his
second complaint the February 8, 1993 Judgment in the earlier case and a notarized Deed of Absolute
Sale14 dated November 9, 1993 between the owners and Suarez.

During the pendency of Civil Case No. CEB-16335, Mahinay filed an Ex-Parte Manifestation and Motion15
informing the RTC that he caused the annotation of an adverse claim and then a Notice of Lis Pendens 16
on TCT No. 117531 on August 17, 1994.

In traversing Mahinay’s allegations, the owners asserted that they did not violate Mahinay’s preferential
right to buy as the transaction between them and Suarez was actually an equitable mortgage, and not a
sale. In support of their defense of equitable mortgage, the owners averred that they remained the
occupants and registered owners of Lot 5 and that TCT No. 117531 has always been in their possession.
With regard to the execution of the alleged Deed of Absolute Sale, the owners explained that Suarez
merely imposed the same as one of the conditions before granting the loan application. To prove their
theory of defense, the owners submitted an Acknowledgement Receipt17 dated September 1, 1994
wherein Suarez declared that no sale between him and the owners actually pushed thru and a letter 18
dated September 20, 1994 wherein the owners asked the Bureau of Internal Revenue for the refund of
the capital gains and documentary stamp taxes they earlier paid.

Mahinay riposted, postulating that the Deed of Absolute Sale he attached to his Complaint sufficiently
confutes the owners’ defense of equitable mortgage. Besides, the owners and Suarez failed to deny under
oath the authenticity and due execution of said Deed of Absolute Sale. 19

On June 7, 1996, the RTC rendered a Decision20 debunking the owners’ theory of equitable mortgage. It
held that the notarized documents Mahinay presented, particularly the Deed of Absolute Sale, outweigh
the owners’ evidence consisting of private documents. Its dispositive portion reads:

WHEREFORE, this [C]ourt declares [Mahinay] as being entitled to redeem Lot No. 5 from defendant
Felimon Suarez.

Defendant Felimon Suarez, his heirs, successors and assigns are hereby directed to execute the Deed of
Conveyance, such papers and documents necessary for the transfer of the title of the said lot to [Mahinay]
upon the deposit before this Court of the same consideration as stated in the Deed of Absolute Sale of
the same lot between defendant Suarez and the other defendants.

No pronouncement as to costs.

SO ORDERED.21

The owners and Suarez moved for reconsideration.22 On November 22, 1996, however, the RTC denied
the same.23

Unhappy, they appealed to the CA.24 Finding no reversible error therefrom, the CA affirmed the ruling of
the RTC in a Decision25 dated December 29, 2000, which became final and executory on February 8,
2001.26
About a year later, Mahinay and Suarez filed a Joint Manifestation27 informing the RTC that in compliance
with its Decision, Suarez executed a Deed of Conveyance28 in favor of Mahinay, who, in turn, deposited
with the RTC the amount of ₱300,000.00.29

Thereafter, to pave the way for the complete implementation of the RTC’s final Decision and have Lot 5
registered in his name, Mahinay filed on February 7, 2002 an Omnibus Motion30 seeking to compel the
owners to vacate the property and turn over to him the owner’s copy of TCT No. 117531. On March 12,
2002, the RTC, then already presided by Judge Gako, issued a Resolution31 granting Mahinay’s motion.
Thus:

WHEREFORE, in view of the foregoing, defendants Susan Honoridez, Constantina Sanchez and Josefina
Lopez are directed to turn over the Owner’s Duplicate Copy of the Certificate of Title of Lot 5 to [Mahinay],
and to vacate the premises thereof in favor of the latter within thirty (30) days from receipt of this
resolution.32

Pursuant to said Resolution, the branch sheriff placed Mahinay in actual and physical possession of the
entire Lot 5. However, TCT No. 117531 could not be surrendered to him as the same was already in
possession of Sorensen by virtue of a Real Estate Mortgage executed by the owners subsequent to the
filing of Mahinay’s complaint.33

Whereupon, Mahinay filed a Motion to Issue an Order Directing Sorensen to Turn Over TCT No. 11753134
to him. This drew Sorensen’s Opposition,35 to which Mahinay tendered his Reply.36

On December 12, 2003, Judge Gako issued the assailed Resolution37 in G.R. No. 165338 denying Mahinay’s
motion, the pertinent portions of which read:

The court indeed believes that a mortgage lien is superior to a Notice of Lis Pendens pursuant to Article
2126 of the Civil Code, which provides that the mortgage directly and immediately subjects the property
upon which it is imposed to the fulfilment of the obligation for whose security it was constituted. Article
2129 also provides that the creditor may claim from a third person in possession of the mortgaged
property, the payment of the part of the credit secured by the property which said person possesses. In
short, not even a sale or transfer of the mortgaged property can affect or release the mortgage because
the purchasers are necessarily bound to acknowledge and respect the encumbrance of a recorded real
estate mortgage, whether the sale or transfer to them be with or without the consent of the mortgagee.

WHEREFORE, in view of the foregoing, [Mahinay’s] Motion to Direct Jocelyn B. Sorensen to turn over
Transfer Certificate of Title No. 117531 to the sheriff is hereby denied.

On January 12, 2004, Mahinay filed a Motion for Reconsideration38 of the December 12, 2003 Resolution
followed by a Supplemental Arguments in Support of the Motion for Reconsideration.39 Sorensen
opposed40 the motion and to which opposition, on January 20, 2004, Mahinay replied.41

Raring to end his decade long legal battle, Mahinay filed on April 19, 2004 an Ex-parte Motion for Early
Resolution.42 A month later, Mahinay filed a Second Ex-Parte Motion for Early Resolution,43 furnishing the
Court Administrator a copy thereof with express reservation of making the same as his formal
administrative complaint in the future.

On July 20, 2004, what seemed to be an interminable wait for Mahinay finally ended, albeit with unwanted
result on his part – Judge Gako came up with a one-page Order44 denying his Motion for Reconsideration.
Aggrieved yet still refusing to concede defeat, Mahinay directly went to this Court on October 8, 2004 by
filing a petition for certiorari under Rule 65 of the Rules of Court against Sorensen and Judge Gako. He
raises the following matters for consideration of this Court:

I.

RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION, AMOUNTING TO LACK OR EXCESS OF

JURISDICTION, IN ISSUING THE RESOLUTION AND ORDER DATED DECEMBER 12, 2003 AND JULY 20, 2004
(ANNEXES A AND B RESPECTIVELY), WHEREBY, ASIDE FROM REFUSING TO PERFORM A MINISTERIAL DUTY
TO IMPLEMENT THE FINAL AND EXECUTORY DECISION IN CEB-16335, HE AMENDED THE SAME AND MADE
ERRONEOUS CONCLUSIONS OF LAW, INDICATIVE OF GROSS IGNORANCE OF THE LAW CHARACTERIZED
WITH DISHONESTY, FRAUD AND BAD FAITH.

II.

RESPONDENT JUDGE IS GUILTY OF VIOLATING THE CONSTITUTIONAL PROVISION REQUIRING JUDGES TO

DECIDE PENDING INCIDENTS WITHIN NINETY (90) DAYS FROM DATE OF SUBMISSION.

III.

THAT PETITIONER HAS NO APPEAL [OR] OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY AGAINST THE
QUESTIONED RESOLUTION AND ORDER OF RESPONDENT COURT SOUGHT TO BE NULLIFIED IN THIS
PETITION.45

During the pendency of G.R. No. 165338, or on August 29, 2006, Mahinay filed with the RTC a Reiteratory
Motion to Compel Jocelyn "Joy" B. Sorensen to Surrender Owner’s Duplicate Copy of TCT No. 117531.46
In persuading Judge Gako to reconsider his earlier position, Mahinay alleged that in a related case47 filed
by the owners which eventually reached the Supreme Court and docketed as G.R. No. 153762,48 this Court
held that the Decision in Civil Case No. CEB-16335 had long become final and executory, thereby erasing
any doubt that the transaction between the owners and Suarez was indeed a contract of sale. For
Mahinay, this Court’s ruling in G.R. No. 153762 is a supervening event which would justify Judge Gako to
reconsider his earlier position on the matter of directing Sorensen to hand over to him the owner’s copy
of TCT No. 117531. He also suggested that if Judge Gako would grant his motion, the administrative charge
of gross ignorance of the law against the good judge would become moot.

Apparently persuaded by Mahinay’s formulations, Judge Gako granted his Reiteratory Motion on
September 1, 2006.49

It thus became Sorensen’s turn to file a Motion for Reconsideration.50 She contended that Mahinay
violated the rule against forum shopping as the relief sought in aforesaid Reiteratory Motion is the same
relief prayed for in G. R. No. 165338. She also pointed out that Judge Gako gravely abused his discretion
in granting said motion for he effectively pre-empted the action of the Supreme Court in G.R. No. 165338.
With regard to the Decision of this Court in G.R. No. 153762, Sorensen argued that the same is not
conclusive as to whether she cannot remain in possession of the disputed TCT.

After Mahinay filed his Opposition,51 Judge Gako issued an Order52 dated September 18, 2006 denying
Sorensen’s Motion for Reconsideration.
Sorensen thus filed with the CA a petition for certiorari53 assailing Judge Gako’s September 1, 2006 Order
granting Mahinay’s Reiteratory Motion. In said petition, she gave her version of the story as follows –

In October 1994, [the owners] approached [Sorensen] in order to obtain a loan from her. So the former
offered Lot No. 5, Block 68 of the Subdivision Plan, now subject of this case, as a security or collateral to
said loan. In procuring said loan, the said [owners] showed to [Sorensen] a true copy of their title over
said property, T.C.T. No. 11753.

After some negotiation[s], [Sorensen], in utmost good faith, relying on the fact that there [is] no adverse
annotation at the back of said title, agreed to extend to them a loan. As a matter of fact, [Sorensen]
released to said mortgagors a loan of ₱709,827.00. Thereafter, a real estate mortgage was executed by
said mortgagors in favor of [Sorensen] as mortgagee to said loan.

[Sorensen], in good faith, received the owner’s duplicate original copy of said T.C.T. No. 117531 from [the
owners] which when presented and shown to [Sorensen], the same did not contain any adverse claim
over the property to be mortgaged to her; and, until now, the said owner’s duplicate original copy of said
title is in actual custody of [Sorensen];

Upon default of [the owners] in the payment of said loan, [Sorensen] instituted an extra-judicial
foreclosure over the said mortgaged property.

During the public auction of said mortgaged property, [Sorensen] became the lone and highest bidder.
Consequently, the Court Sheriff issued the said certificate of sale dated November 12, 2004 in favor of
[Sorensen] stating therein that [Sorensen] was the lone and highest bidder over the land sold in public
auction for ₱3,362,633.00.

With the issuance of said certificate of sale, [Sorensen] became entitled to possess the mortgaged
property which she acquired in a public auction;

It is at this juncture, when [Mahinay] asked the Honorable public respondent Judge to compel [Sorensen]
to surrender the said owner’s duplicate original copy of T.C.T. 117531 but the latter in its order dated July
20, 2004 denied said motion. A motion for reconsideration was filed but the same was denied.

Subsequently, [Mahinay] filed a petition for certiorari dated September 21, 2004 with the Supreme Court
docketed as G.R. No. 165338 entitled "Makilito B. Mahinay vs. Hon. Ireneo Lee Gako, Jr., Presiding Judge
of RTC-Branch 5, Cebu City and Jocelyn B. Sorensen" questioning the propriety of the issuance of said
order dated January 6, 2004 which denied the motion to compel petitioner to surrender T.C.T No. 117531.

Despite the fact that the said petition for certiorari is still pending and not yet resolved by the Supreme
Court until the present, the Honorable public respondent Judge issued the questioned order dated
September 1, 2006 directing herein petitioner to surrender T.C.T. No. 117531 which virtually sets aside
his previous order dated January 6, 2004 which is now the subject of said petition for certiorari before the
Supreme Court. 541âwphi1

In a Resolution55 promulgated on April 24, 2007, however, the CA outrightly dismissed Sorensen’s petition
for her failure to state that the allegations in her petition are true and correct not only based on her
personal knowledge but also based on authentic records.
Sorensen filed a Motion for Reconsideration56 and to remedy the defect in her petition submitted an
Amended Petition57 with corrected verification. But the CA was not moved by Sorensen’s subsequent
compliance and, consequently, denied her motion in a Resolution58 dated August 3, 2007. Hence, the
petition for review on certiorari in G.R. No. 179375 where Sorensen advances the following arguments:

First Reason/Argument

THAT THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN DISMISSING
THE PETITION FOR CERTIORARI FOR FAILING TO STATE IN ITS VERIFICATION PORTION THE PHRASE ‘OR
BASED ON AUTHENTIC RECORDS’ AS REQUIRED IN SECTION 4, RULE 7 OF THE 1997 RULES ON CIVIL
PROCEDURE AS AMENDED BY AM NO. 00-2-10-SC [E]SPECIALLY SO WHEN PETITIONER HAD ALREADY
FILED AN AMENDED PETITION FOR CERTIORARI WITH THE CORRECTED VERIFICATION PORTION THIS TIME
CONTAINING THE PHRASE "BASED ON AUTHENTIC RECORDS";

Second Reason/Argument

THAT THE RESPONDENT COURT OF APPEALS FURTHER COMMITTED A GRAVE ABUSE OF DISCRETION IN
FAILING TO CONSIDER THAT THE RESOLUTION OF THE ISSUES INVOLVED IN THE DISMISSED PETITION FOR
CERTIORARI IS MORE THAN ENOUGH REASON TO LIBERALIZE THE STRINGENT REQUIREMENT OF
VERIFICATION OF A PETITION FOR CERTIORARI PURSUANT TO SECTION 4, RULE 7 OF THE 1997 RULES ON
CIVIL PROCEDURE AS AMENDED BY AM No. 00-2-10-SC;59

In a Resolution60 dated July 21, 2008, this Court ordered the consolidation of G.R. Nos. 165338 and
179375.

Parties’ Arguments

In G.R. No. 165338, Mahinay argues that the final and executory Decision61 dated June 7, 1996 in Civil
Case No. CEB-16335 pronounced in no uncertain terms that the November 9, 1993 transaction between
the owners and Suarez was a contract of sale. Hence, said owners could not have validly mortgaged Lot 5
on November 27, 1994 as they are no longer the owners thereof at that time. Unfortunately, Judge Gako
not only failed to comprehend the implication of such pronouncement by still recognizing the mortgage,
he also effectively modified the final and executory judgment in Civil Case No. CEB-16335.

Mahinay also contends that Judge Gako committed serious and egregious error in ruling that the
mortgage is superior to the previously annotated adverse claim and Notice of Lis Pendens. He continues
that Judge Gako is guilty of gross ignorance of the law, evident bad faith, fraud, and dishonesty. Mahinay
asserts that it is an elementary rule which ought to be known by lawyers and judges that a final and
executory judgment is unalterable. However, Judge Gako deliberately ignored such basic rule and even
feigned ignorance of the common rules on adverse claim and lis pendens.

Lastly, Mahinay accuses Judge Gako of unjustifiably sitting on his Motion for Reconsideration. He claims
that he filed his Motion for Reconsideration on January 12, 2004 while Sorensen filed her opposition
thereto on January 20, 2004. The issues raised in said motion are not difficult to resolve, yet Judge Gako
issued his single-page Order denying said motion only on July 20, 2004. What is more, Judge Gako did not
report to the Supreme Court that he had a pending motion which remained unresolved beyond the
constitutionally mandated 90-day period for resolving motions.
For her part, Sorensen stands by the RTC and argues that a mortgage lien is superior to a notice of lis
pendens; that she is not bound by the Decision in Civil Case No. CEB-16335 as she is not a party thereto;
and, that she is an innocent mortgagee for value entitled to remain in possession of TCT No. 117531.
Sorensen also points out that the delay in the resolution of Mahinay’s motion only shows that Judge Gako
meticulously studied the case.

Sorensen claims that in filing his Reiteratory Motion, Mahinay violated the rule on exhaustion of
administrative remedies. She argues that the proper remedy to obtain unlawfully withheld duplicate
certificate of title is to file a case in accordance with Section 10762 of Presidential Decree (PD) No. 1529.63

Lastly, Sorensen calls our attention to the Comment/Manifestation64 Suarez

filed in G.R. No. 153762 wherein he affirmed that the transaction between him and the owners was a
mere mortgage; that he received the amount of ₱419,500.00 from Sorensen as redemption price for the
mortgaged property; and, that he in turn gave to her the owner’s duplicate copy of TCT No. 117531.

Our Ruling

The grant of Mahinay’s Reiteratory Motion rendered G.R. No. 165338 moot.

In G.R. No. 165338, Mahinay essentially seeks to nullify the December 12, 2003 Resolution65 of Judge Gako
which denied his motion to compel Sorensen to turn over to him TCT No. 117531. During the pendency
of G.R. No. 165338, however, Mahinay filed his Reiteratory Motion with the same objective – to compel
Sorensen to surrender to him the coveted TCT. On September 1, 2006, Judge Gako issued an Order66
granting Mahinay’s Reiteratory Motion and directing Sorensen to turn over to him subject TCT. Sorensen
moved for a reconsideration which Judge Gako denied until, eventually, Sorensen came to this Court. Such
a change of heart on the part of Judge Gako negated Mahinay’s contention that the honorable magistrate
committed grave abuse of discretion in denying his motion to compel Sorensen to turn over to him TCT
No. 117531. It also effectively mooted his petition. Thus, we have no other recourse but to dismiss G.R.
No. 165338. In Gancho-on v. Secretary of Labor and Employment,67 this Court pronounced that –

It is a rule of universal application, almost, that courts of justice constituted to pass upon substantial rights
will not consider questions in which no actual interests are involved; they decline jurisdiction of moot
cases. And where the issue has become moot and academic, there is no justiciable controversy, so that a
declaration thereon would be of no practical use or value. There is no actual substantial relief to which
petitioners would be entitled and which would be negated by the dismissal of the petition.

At this point it may not be amiss to add (though no longer contested in these petitions) that Mahinay
further continued to pursue his quest at the trial court level to have TCT No. 117531 in his possession. On
November 14, 2007, he filed a motion68 praying for the issuance of a writ of possession directing the
sheriff to take possession of the owner’s copy of TCT No. 117531. This was granted by the RTC in an Order69
dated March 26, 2008. After serving the writ, the sheriff made a return70 informing the RTC that Sorensen
refused to surrender the certificate of title.

Mahinay then changed tack and filed a motion to declare the title in Sorensen’s possession as null and
void and in lieu thereof to issue a new one under his name.71 In an Order72 dated September 5, 2008, the
RTC granted the motion, the dispositive portion of which reads:
WHEREFORE, the Motion to declare as null and void the owner’s duplicate copy of Transfer Certificate of
Title No. 117531, dated 5 August 2008, filed by plaintiff, is granted.

The title of Lot No. 5, Block 68, is ordered transferred to the name of plaintiff, MAKILITO B. MAHINAY,
pursuant to the Deed of Conveyance, attached as Annex "A" to the Motion, without the need of
surrendering the owner’s duplicate copy of the said title, TCT No. 117531.

The owner’s duplicate copy of TCT No. 117531 is declared null and void, and the Register of Deeds, Cebu
City, is ordered to issue a new owner’s duplicate containing a memorandum to this effect.

Notify all the parties concerned of this order and the Office of the Register of Deeds of Cebu City, for its
compliance.

SO ORDERED.73

This sequence of events which transpired during the pendency of G.R. No. 165338 all the more rendered
it moot.

The administrative charges of gross ignorance of the law and abdication of a judicial duty lack merit; the
administrative charge of failure to resolve a motion within the prescribed period should be referred to the
Office of the Court Administrator for appropriate action.

Mahinay accuses Judge Gako, among others, of gross ignorance of the law and abdication of judicial duty.
From the facts of these cases as set out above, however, it is quite obvious that Mahinay would not have
accused Judge Gako of such charges had the judge ruled in his favor. It should be recalled that Mahinay
first cocked the gun, so to speak, when he filed his Second Ex-Parte Motion for Early Resolution74
intimating to Judge Gako that he was contemplating on filing an administrative charge against the
magistrate before the Office of the Court Administrator. Then he filed his Rule 65 petition in G.R. No.
165338 incorporating therein aforesaid administrative charges against Judge Gako. Yet during the
pendency of said petition Mahinay filed with the RTC his Reiteratory Motion alleging that –

THE GRANT OF THIS REITERATORY MOTION, IT IS BELIEVED, WILL HAVE THE EFFECT OF RENDERING MOOT
AND ACADEMIC THE ADMINISTRATIVE CHARGE AGAINST THE PRESIDING JUDGE OF THIS HONORABLE
COURT IN G.R. No. 153762 [sic].75

Indubitably, Mahinay’s allegations of gross ignorance of the law and abdication of judicial duty are not
based on his sincere and strong belief that Judge Gako should be disciplined. They are mere ploys
calculated to induce Judge Gako to grant his motion. We cannot countenance such lamentable scheme of
Mahinay. It is settled that disciplinary proceedings against judges do not complement, supplement or
substitute judicial remedies. Administrative complaints are not intended to coerce judges to rule in
complainant’s favor. Fittingly, we reiterate our pronouncement in Atty. Flores v. Hon. Abesamis:76

Law and logic decree that "administrative or criminal remedies are neither alternative nor cumulative to
judicial review where such review is available, and must wait on the result thereof." Indeed, since judges
must be free to judge, without pressure or influence from external forces or factors, they should not be
subject to intimidation, the fear of civil, criminal or administrative sanctions for acts they may do and
dispositions they may make in the performance of their duties and functions; and it is sound rule, which
must be recognized independently of statute, that judges are not generally liable for acts done within the
scope of their jurisdiction and in good faith; and that exceptionally, prosecution of the judge can be had
only if "there be a final declaration by a competent court in some appropriate proceeding of the manifestly
unjust character of the challenged judgment or order, and also evidence of malice or bad faith, ignorance
or inexcusable negligence, on the part of the judge in rendering said judgment or order" x x x.

Indeed, unless it can be shown that their acts are tainted with bad faith, malice or corrupt purpose, judges
cannot be held administratively liable for rendering an erroneous judgment77 simply because they are not
infallible.78

Instead of threatening Judge Gako with administrative charges, Mahinay could have simply awaited the
resolution of G.R. No. 165338. Unfortunately, as earlier discussed, his own impatience mooted G.R. No.
165338.

With regard to Judge Gako’s alleged tardiness in resolving the Reiteratory Motion, it cannot escape our
attention, however, that he was never given a chance to comment or answer the complaint against him.
Thus, we cannot resolve the administrative charge of failing to resolve the motion on time without trifling
with his constitutionally enshrined right to due process.

The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted from
their jurisdiction. The violation of a party's right to due process raises a serious jurisdictional issue which
cannot be glossed over or disregarded at will. Where the denial of the fundamental right to due process
is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction.79

For the expeditious and orderly conduct of proceedings, therefore, we find it appropriate to refer said
administrative charge to the Office of the Court Administrator for appropriate action.

The Court of Appeals did not err in dismissing Sorensen’s petition for certiorari.

With regard to G.R. No. 179375, Sorensen admits that due to inadvertence she failed to state in the
verification portion of her petition that the allegations therein are true and correct based on authentic
records. Nonetheless, such omission, according to Sorensen, does not justify the outright dismissal of her
petition. She posits that the purpose of verification is simply to secure an assurance that the allegations
in the pleading are true and correct. Thus, "the requirement that a petition for certiorari be verified is not
an absolute necessity where the material facts alleged are a matter of records and all the questions raised
are mainly of law,"80 just like in her CA petition. After all, the absence of verification is a mere formal, not
jurisdictional, defect.

Sorensen misses the point.

The rule requiring certain pleadings to be verified is embodied in Section 4, Rule 7 of the Rules of Court.
It reads:

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be
under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein
are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief," or upon
"knowledge, information and belief," or lacks a proper verification, shall be treated as an unsigned
pleading.
Verification of pleading is not an empty ritual bereft of any legal importance. It is intended to secure an
assurance that the allegations contained in the pleading are true and correct; are not speculative or
merely imagined; and have been made in good faith.81 A pleading may be verified by stating that the
pleaders have read the allegations in their petition and that the same are true and correct based either
on their personal knowledge or authentic records, or based both on their personal knowledge and
authentic records. While the rule gives the pleaders several ways of verifying their pleading, the use of the
phrase personal knowledge or authentic records is not without any legal signification and the pleaders are
not at liberty to choose any of these phrases fancifully. Hun Hyung Park v. Eung Won Choi82 teaches us
when to properly use authentic records in verifying a pleading:

"[A]uthentic" records as a basis for verification bear significance in petitions wherein the greater portions
of the allegations are based on the records of the proceedings in the court of origin and/or the court a
quo, and not solely on the personal knowledge of the petitioner. To illustrate, petitioner himself could not
have affirmed, based on his personal knowledge, the truthfulness of the statement in his petition before
the CA that at the pre-trial conference respondent admitted having received the letter of demand,
because he (petitioner) was not present during the conference. Hence, petitioner needed to rely on the
records to confirm its veracity.

In her CA petition, Sorensen questioned the September 1, 2006 and September 18, 2006 Orders of Judge
Gako which respectively granted Mahinay’s Reiteratory Motion and denied her Motion for
Reconsideration. In addition to said Orders and Motions, and to support the allegations in her petition,
Sorensen also attached copies of the August 12, 2005 Decision of this Court in G.R. No. 153762 and other
material portions of the records of Civil Case No. CEB-16335. Quite obviously, Sorensen had no
participation in the preparation and execution of these documents although they constitute the main bulk
of her evidence. Hence, it was necessary for Sorensen to state in the verification that the allegations in
her petition are true and correct not only based on her personal knowledge but also based on the
information she gathered from authentic records.83 The CA is, therefore, correct in its observation that
Sorensen’s verification is insufficient.

Nonetheless, the Rules84 and jurisprudence on the matter have it that the court may allow such deficiency
to be remedied. In Altres v. Empleo,85 this Court pronounced for the guidance of the bench and the bar
that "non-compliance x x x or a defect [in the verification] does not necessarily render the pleading fatally
defective. The court may order its submission or correction or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be dispensed with in order that the needs
of justice may be served thereby."

Pitted against this test, we sustain the CA for not taking a liberal stance in resolving Sorensen’s petition
for certiorari as the dismissal thereof did not impair or affect her substantive rights.

No circumstances were present in Sorensen’s petition which would warrant the liberal application of the
rules to serve the needs of justice.

In claiming that the CA erred in dismissing her petition, Sorensen alleges that the appellate court glossed
over the merits of her certiorari petition. She maintains that as an innocent mortgagee for value, she has
the superior right to remain in custody of the owner’s copy of TCT No. 117531. She insists that she merely
relied on the four corners of said TCT which at the time of the transaction did not contain any annotation
of lis pendens.
We are not impressed. True, when a mortgagee relies upon what appears on the face of a Torrens title
and lends money in all good faith on the basis of the title in the name of the mortgagor, only thereafter
to learn that the latter’s title was defective, being thus an innocent mortgagee for value, his or her right
or lien upon the land mortgaged must be respected and protected.86 The rationale for this ruling is, if the
rule were otherwise public confidence in the certificate of title would be impaired as everyone dealing
with property registered under the Torrens system would have to inquire on the regularity of its issuance.

Such is not the case in the present controversy however. As borne out by the records, Mahinay’s Notice
of Lis Pendens was duly annotated on the original copy of TCT No. 117531 as early as August 17, 1994. On
the other hand, the Real Estate Mortgage upon which Sorensen based her alleged superior right was
executed only on October 27, 1994 and inscribed at the back of said title only on the following day,
October 28, 1994. The prior registration of Mahinay’s Notice of Lis Pendens bound the whole world,87
including Sorensen. It charged her with notice that the land being offered to her as security for the loan
is under litigation and that whatever rights she may acquire by virtue of the Real Estate Mortgage are
subject to the outcome of the case.88 More importantly, it also gave Mahinay a preferential right over
subsequent liens and encumbrances annotated on the title.89 "It is settled that in this jurisdiction the
maxim prior est in tempore, potior est in jure (he who is first in time is preferred in right) is followed in
land registration.90 Having registered his instrument ahead of Sorensen’s Real Estate Mortgage, Mahinay’s
Notice of Lis Pendens takes precedence over the said Real Estate Mortgage.

The claim of Sorensen that the owner’s copy of TCT No. 117531 does not contain any adverse annotation
at the time the owners transacted with her is of no moment. Being in the nature of involuntary
registration, the annotation of the Notice of Lis Pendens on the original copy of TCT No. 117531 on file
with the Registry of Deeds is sufficient to bind third parties. It affects the whole world even if the owner’s
copy does not contain the same annotation. The reason for this ruling was explained in Yu v. Court of
Appeals:91

The annotation of a notice of lis pendens at the back of the original copy of the certificate of title on file
with the Register of Deeds is sufficient to constitute constructive notice to purchasers or other persons
subsequently dealing with the same property. It is not required that said annotation be also inscribed
upon the owner's copy because such copy is usually unavailable to the registrant; it is normally in the
hands of the adverse party, or as in this case, in the hands of a stranger to the suit.

xxxx

Third persons like the respondent-spouses should not be satisfied with merely examining the owner's
copy of the certificate of title. They should examine the original on file with the Register of Deeds for they
are all constructively notified of pending litigations involving real property through notices of lis pendens
annotated therein.

WHEREFORE, the petition in G.R. No. 165338 is hereby DISMISSED for being moot. Let the administrative
charge of failure to resolve motion within the prescribed period against Judge Ireneo Lee Gako, Jr. be
referred to the Office of the Court Administrator for appropriate action.

The petition in G.R. No. 179375 is likewise DENIED and the Resolutions of the Court of Appeals dated April
24, 2007 and August 3, 2007 in CA-G.R. CEB-SP No. 02193 are AFFIRMED.

SO ORDERED
 GILBERT G. GUY, G.R. No. 174874

Petitioner,

Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,

- versus - CORONA,

AZCUNA, and

GARCIA, JJ.

Promulgated:

ASIA UNITED BANK,

Respondent. October 4, 2007

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

DECISION

GARCIA, J.:

In this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Gilbert G. Guy (Guy, for short) seeks to annul and set aside the Decision1[1] dated September
25, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 94361, reversing the Resolution2[2] dated April
20, 2006 of the Secretary of Justice3[3] in I.S. No. 05-01-00365 and I.S. No. 05-03-02371.

Undisputed are the following factual antecedents:

In 1993, herein respondent Asia United Bank (AUB) granted 3D Industries, Inc. (3D, hereafter) a loan in
the form of stand-by letter of credit (L/C) in the amount of P30 million. To guarantee the loan
accommodation, Guy, as then Vice President for Operations of 3D and a member of its Board of Directors,
and then 3D President Paulino Delfin Pe (Pe) executed on March 23, 1999 a Continuing Guaranty in AUBs
favor. Sometime between the months of July and September 2004, AUB issued several L/Cs for 3Ds
importations in the total amount of US$216,391.26 or the peso equivalent of P11,287,264.00, more or
less. For the import transactions, Pe signed several trust receipts in favor of AUB before the imported
goods were released to 3D. As specifically provided in the trust receipts thus signed, 3D shall sell the goods
for the account of, and, thereafter, remit the proceeds of the sale to, AUB not later than the fixed periods
therein stated, or to account for the same, if unsold.4[4]

The succeeding relevant events are summarized in the assailed CA Decision, as follows:

However, 3D failed to comply with its obligation as expressly specified in the trust receipts.
Consequently, [respondent] AUB sent [two] demand letters to 3D [and], to [petitioner] GUY, for the latter
to remit the proceeds of the goods in the total amount of P12, 148,816.90 covered by the subject trust
receipts. When said demands went unheeded, AUB filed with the Office of the City Prosecutor of Pasig
City two (2) complaints against GUY, as majority and controlling stockholder [of 3D] and by virtue of his
continuing guaranty, for estafa under Article 315 1(b) of the Revised Penal Code [RPC] in relation to P.D.
No. 115 or the Trust Receipts Law, docketed as I.S. No. 05-01-00365 and I.S. No. 05-03-02371,
respectively.

During the preliminary investigation, GUY alleged that PE, 3Ds former President, who executed
and signed the subject trust receipts, should have been charged instead of him because it was PE who
actively managed the business affairs of 3D at the time when the subject trust receipts were issued. He
claimed that being the majority and controlling stockholder of 3D did not automatically make him liable
for the offenses charged because he had no hand in the management of 3D.

[Petitioner] GUY further alleged that the goods [covered by] the trust receipts were subsequently
delivered [by 3D] to Northern Islands Company, Inc. (NICI), the exclusive distributor of 3D, for the sale and
distribution thereof. Thus, when the said goods or the proceeds of the sale thereof were not accounted
for by NICI after demands to account for the same were made by 3D, the latter filed several cases against
NICI. This circumstance purportedly prevented 3D from complying with the terms and conditions provided
for under the subject trust receipts.

xxx xxx xxx

On October 13, 2005, the Investigating Prosecutor, Emmanuel L. Obungen, came out with the Joint
Resolution, in I.S. No. 05-01-00365 and I.S. No. 05-03-02371, finding probable cause for the offenses
charged. Accordingly, he filed with the Regional Trial Court (RTC), Branch 67, Pasig City two (2)
Informations for estafa under Article 315 1(b) of the [RPC] in relation to P.D. No. 115, docketed as Criminal
Case Nos. 131883 and 131884.

Aggrieved, [Guy] filed with the DOJ [Department of Justice] a Petition for Review, to which [AUB
filed] a comment .

On December 22, 2005, [DOJ Secretary Raul] GONZALES issued a Resolution, denying the petition
for review .

[Petitioner] GUY admittedly received a copy of the December 22, 2005 Resolution on December 28, 2005.
On January 11, 2006, [he] filed a motion for reconsidered thereto.

[Respondent] AUB filed its its Comment/Manifestation [to the motion for reconsideration] on April 26,
2006.
xxx xxx xxx

On April 20, 2006, [DOJ Secretary] GONZALEZ, issued the assailed Resolution, in I.S. No. 05-01-00365 and
I.S. No. 05-03-02371, this time, granting the petition for review and reversing his December 22, 2005
Resolution, [disposing] as follows:

WHEREFORE, the Petition for Review filed by respondent-appellant Gilbert G. Guy is hereby GRANTED,
and the assailed Resolution dated October 13, 2005 of the Pasig City Prosecutors Office is hereby
REVERSED and SET ASIDE, and both complaints against respondent-appellant Gilbert G. Guy are hereby
DISMISSED. Further, the City Prosecutor of Pasig is hereby ordered to file the corresponding motion to
withdraw the Informations in the instant cases for the crime of Estafa under Article 315 (b) of the [RPC]
in relation to P.D. 115, and report the action taken thereon within five (5) days from receipt hereof

SO ORDERED. (Words in brackets added.)

In gist, the Secretary of Justice predicated his reversal order on the absence of evidence to prove (a) the
actual and direct participation of Guy in the trust receipts transactions; (b) Guys receipt of the goods
covered by the trust receipts; and (c) finally Guys misappropriation or conversion of the goods subject of
the trust receipts and/or the proceeds of the sale thereof.

On May 8, 2006, AUB went to the CA on a petition for certiorari under Rule 65 of the Rules of Court with
a prayer for preliminary injunctive relief. Docketed as CA-G.R. SP No. 94361, the petition ascribed grave
abuse of discretion on the part of the Department of Justice (DOJ) Secretary in issuing his resolution of
April 20, 2006, it being AUBs main posture that the former had already lost jurisdiction over Guys motion
for reconsideration subject of the resolution. AUB, as petitioner a quo, invoked two other grounds for
allowing certiorari.

By Resolution5[5] dated May 10, 2006, the CA directed Guy to file his comment and, at the same time,
issued a temporary restraining order to enjoin the enforcement of the DOJs April 20, 2006 resolution. On
May 19, 2006, Guy sought the inhibition of CA Associate Justices Vicente Q. Roxas and Juan Q. Enriquez
on grounds, inter alia, of alleged bias and prejudice against Guy as purportedly manifested by their ruling,
with Justice Roxas as ponente, in the related case, i.e., CA G.R. SP No. 87104, involving NICI, Guy and the
trust receipts-covered goods imported by 3D and subject of the estafa case adverted to above.6[6]
Eventually, on September 25, 2006, the former First Division of the CA rendered its assailed Decision7[7]
reversing the April 20, 2006 Resolution8[8] of the Secretary of Justice. The decretal portion of said decision
reads:

WHEREFORE, premises considered, the petition is hereby GRANTED. The April 20, 2006 Resolution of the
Secretary of Justice is hereby REVERSED and SET ASIDE. The October 13, 2005 Joint Resolution of the
Office of the City Prosecutor of Pasig City, which found probable cause for estafa against [petitioner Guy],
and the December 22, 2005 Resolution of the Department of Justice, which denied [Guys] petition for
review, are hereby REINSTATED.

SO ORDERED. (Words in brackets added; emphasis in the original.)

The CA confined and predicated its reversal action on the lone issue of loss of jurisdiction, as reflected on
the ensuing statements embodied in its challenged decision:

This decision is purely about the [DOJ Secretarys) loss of jurisdiction. It is basic that all [his] Resolutions
are void after his loss of jurisdiction. There is no weighing evidence nor any discretion at all when loss of
jurisdiction is the issue. The law is explicit that Resolutions rendered without jurisdiction produce no legal
effect whatsoever.

In this case, Secretary of Justice GONZALES acted without jurisdiction in issuing the April 20, 2006
Resolution which was issued long after his first December 22, 2005 Resolution that held that there was
probable cause against accused, had already become final and executory when no motion for
reconsideration or appeal filed thereto within the reglementary period of appeal. When GONZALES issued
his second April 20, 2006 Resolution that reversed his earlier finding and held that there was no probable
cause against accused, the DOJ had already lost jurisdiction over the case because [of the finality of the
December 22, 2005 Resolution]. Emphasis and words in brackets added.)
Hence, the instant petition for review on three (3) grounds. Under the second and what easily is his main
submission, petitioner alleged that the CA committed a grave error in finding that the DOJ Resolution
dated December 22, 2005 was already final and executory and that the Secretary of Justice, having
meanwhile lost jurisdiction over the case, is precluded from recalling or setting aside such resolution, and
directing the withdrawal of the Informations in question for estafa, as his April 20, 2006 resolution did.

How the CA arrived at its conclusion that the DOJ resolution the December 22, 2005 Resolution9[9] -
became final and executory and, hence, beyond the jurisdiction of the Secretary of Justice to set aside, is
made simple by a consideration of the following premises excerpted from the assailed CA decision, thus:

1. Petitioner Guy received a copy of the one-paged DOJ Resolution dated December 22, 2005 finding
a prima facie case against him for estafa on December 28, 2005.

2. Fourteen (14) days from such receipt, or on January 11, 2006, petitioner moved for
reconsideration;

3. Section 13 of the DOJ Circular No. 70, series of 2000, on the subject: National Prosecution Service
(NPS) Rule on Appeal, gives a party aggrieved by the decision of the DOJ Secretary in criminal investigation
cases ten (10) days from notice within which to file a motion for reconsideration; and

4 The motion of the petitioner for reconsideration was filed beyond the ten-day reglementary
period prescribed under the NPS Rule on Appeal and thus concluded that when Secretary Gonzales issued
the April 20, 2006 Resolution the DOJ had already lost jurisdiction over the case because the December
22, 2005 Resolution of the DOJ had already become final and executory and therefore the loss of
jurisdiction wrote finis to the case.

Petitioner admits to the belated filing, due to an inadvertent miscalculation of and

misapprehension on the period of filing, of his motion for reconsideration. Among others, he argues,
however, that it was proper for, and within the jurisdictional discretion of, the DOJ Secretary to resolve
the motion for reconsideration on the merits and set aside technicalities in the higher interest of justice.

Respondent counters that the DOJ Secretarys Resolution of April 20, 2006 is indeed void for the reason
set forth in the assailed CA decision. Furthermore, respondent would have the Court deny this petition
owing to what it perceives to be the formal defects thereof, such as lack of proper verification and false
certification against forum shopping. It is further alleged that the petition raises matters of facts which
are not proper in a review proceedings under Rule 45 of the Rules of Court.

The petition is impressed with merit.

First off, it should be stressed that the determination of probable cause to warrant prosecution
in court is, under our criminal justice system, entrusted at the first instance to public prosecutors and
finally to the Secretary of Justice as reviewer of the findings and resolutions of the prosecutors in
preliminary investigation cases.10[10] In this regard, the authority of the Secretary of Justice to review
and order the withdrawal of an information in instances where he finds the absence of a prima facie case
is not time-barred, albeit subject to the approval of the court if its jurisdiction over the accused has
meanwhile attached.11[11] And it is not prudent or even permissible for a court to compel the Secretary
of Justice or the fiscal, as the case may be, to prosecute a proceeding originally initiated by him on an
information, if he finds that the evidence relied upon by him is insufficient for conviction.12[12] Now,
then, if the Secretary of Justice possesses sufficient latitude of discretion in his determination of what
constitutes probable cause and can legally order a reinvestigation even in those extreme instances where
an information has already been filed in court, is it not just logical and valid to assume that he can take
cognizance of and competently act on a motion for reconsideration, belatedly filed it might have been,
dealing with probable cause? And is it not a grievous error on the part of the CA if it virtually orders the
filing of an information, as here, despite a categorical statement from the Secretary of Justice about the
lack of evidence to proceed with the prosecution of the petitioner? The answer to both posers should be
in the affirmative. As we said in Santos v. Go:13[13]

[C]ourts cannot interfere with the discretion of the public prosecutor in evaluating the offense
charged. He may dismiss the complaint forthwith, if he finds the charge insufficient in form or substance,
or without any ground. Or, he may proceed with the investigation if the complaint in his view is sufficient
and in proper form. The decision whether to dismiss a complaint or not, is dependent upon the sound
discretion of the prosecuting fiscal and, ultimately, that of the Secretary of Justice. Findings of the
Secretary of Justice are not subject to review unless made with grave abuse of discretion.

There can be no quibbling that the motion interposed by the petitioner for reconsideration of the
December 22, 2005 DOJ Resolution was filed beyond the 10-day reglementary period, or four days late to
be precise, prescribed by the NPS Rule on Appeal (DOJ Circular No. 70, s. of 2000) which pertinently
provides:

SEC. 13. Motion for reconsideration.- The aggrieved party may file a motion for reconsideration
within a non-extendible period of ten (10) days from receipt of the resolution on appeal with [the
Secretary of Justice] . No second or further motion for reconsideration shall be entertained. (Words in
bracket added.)

But to strike down the April 20, 2006 DOJ Secretarys Resolution as absolutely void and without
effect whatsoever, as the assailed CA decision did, for having been issued after the Secretary had
supposedly lost jurisdiction over the motion for reconsideration subject of the resolution may be reading
into the aforequoted provision a sense not intended. For, the irresistible thrust of the assailed CA decision
is that the DOJ Secretary is peremptorily barred from taking a second hard look at his decision and, in
appropriate cases, reverse or modify the same unless and until a motion for reconsideration is timely
interposed and pursued. The Court cannot accord cogency to the posture assumed by the CA under the
premises which, needless to stress, would deny the DOJ the authority to motu proprio undertake a review
of his own decision with the end in view of protecting, in line with his oath of office, innocent persons
from groundless, false or malicious prosecution. As the Court pointed out in Torres, Jr. v. Aguinaldo,14[14]
the Secretary of Justice would be committing a serious dereliction of duty if he orders or sanctions the
filing of an information based upon a complaint where he is not convinced that the evidence warrants the
filing of the action in court.

And lest it be overlooked, the DOJ Secretary, when he took cognizance of the petitioners motion
for reconsideration, effectively excepted such motion from the operation of the aforequoted Section 13,
supra, of DOJ Circular No. 70, s. 2000. This show of liberality is, to us, within the competence of the DOJ
Secretary to make, and the Court loathes to disturb the same absent compelling proof, as here, that he
acted out of whim and that the petitioner was out to delay the proceedings to the prejudice of AUB, as
private complainant in I.S. Nos. 05-01-00365 and 05-03-02371, when he (petitioner) interposed his motion
for reconsideration. While perhaps not in all fours, what the Court said in Yao v. Court of Appeals15[15]
augurs well for the petitioner:

In the interest of justice, procedural rules of the most mandatory character in terms of compliance
may be relaxed. In other words, if strict adherence to the letter of the law would result in absurdity and
manifest injustices, or where the merit of a partys cause is apparent and outweighs consideration of non-
compliance with certain formal requirements, procedural rules should definitely be liberally construed. 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 mere technicalities.

So does Amorganda v. Court of Appeals16[16] where the Court allowed the belated filing by
Amorganda of a motion for reconsideration in the CA so as not to prejudice the cause of movant-petitioner
Amorganda whom the Court determined not to have been motivated by an impulse to delay the
proceedings or obstruct the administration of justice. Citing Lagunsad v. Court of Appeals17[17] we went
on to state in Amorganda that in the absence of an indication of malice to delay the proceedings, the
Court would grant relief where a stringent application of the requirement of timeliness of pleadings would
deny a litigant, with a meritorious case, substantial justice.
 To reiterate what we said in Ginete v. Court of Appeals18[18] and other cases, the rules of
procedure should be viewed as mere instruments designed to facilitate the attainment of justice. They
are not to be applied with severity and rigidity when such application would clearly defeat the very
rationale for their conception and existence. Even the Rules of Court reflects this principle. The
peculiarities of this case impel us to sustain the validity the DOJ Secretarys taking cognizance of Guys
motion for reconsideration in question and eventually resolving the same on the merits.

In the light of the foregoing considerations, we rule that the Secretary of Justice has not, contrary
to the assailed holding of the CA, lost jurisdiction over I.S. No. 05-01-00365 and I.S. No. 05-03-02371 due
to the perceived finality of his December 22, 2005 Resolution when he issued his Resolution of April 20,
2006. Stated a bit differently, the Secretary of Justice had full power and authority to issue his subsequent
resolution dated April 20, 2006 granting petitioners motion for reconsideration and reversing his earlier
resolution of December 22, 2005. The said April 20, 2006 Resolution should, therefore, be considered
valid and fully enforceable.

Respondent AUBs claim respecting the flaw of the verification aspect of the instant petition is
clearly untenable. Respondent states that the verification attached to the petition is not a proper
verification because the petitioner, instead of stating that he has read the petition as required under Rule
7 (Sec. 4) of the Rules of Court, wrote that he has caused the preparation of the herein Petition x x x and
the allegations contained herein are true and correct to my personal knowledge, as well as on the basis of
the authentic records.

Respondent is wrong. For, the statement in the verification that the allegations in the petition are
true and correct of his [petitioners] own personal knowledge presupposes that the petitioner, as affiant,
has read the petition for he could not have had attested, in the first place, to the veracity of the allegations
if he has not first read the petition. It would perhaps be different had petitioner merely stated reading the
petition since a mere reading is not an assurance that the reader has understood what he had read. It is
in understanding what is written that one can logically say that the allegations in the petition are true and
correct of ones own personal knowledge.

In any event, the purpose of requiring a verification is to secure an assurance that the allegations
in the petition have been made in good faith, or are true and correct, not merely speculative.19[19] The
requirement is simply a condition affecting the form of pleadings and non-compliance therewith is neither
jurisdictional nor renders the pleading fatally defective.20[20] A perusal of the verification in question
shows sufficient compliance with the requirements of the Rules and the perceived defects, if that be the
case, are not so material as to justify the dismissal of the petition.

As in the perceived flaw in the verification, respondent also urges that the present petition be
expunged or summarily denied considering that it fails to comply with the requirements on forum
shopping. In the concrete, respondent alleges that the petition contains a false certification against forum
shopping, noting, in this regard that, while the petitioner attests that to (his) knowledge, there is no similar
action or proceedings involving the same issues pending in any tribunal or agency, he did not mention four
(4) such actions/cases, namely: People v. Gilbert G. Guy, Crim. Case No. PSG-131-883-84, pending before
the RTC of Pasig City, Branch 67; Asia United Bank v. Gilbert G. Guy, I.S. No. 05-12-11759 which resulted
in the filing of Criminal Case No. 133244 (People v. Gilbert G. Guy) now on appeal with the CA; and Asia
United Bank v. Hon. Raul Gonzales, CA-G.R. SP No. 97850, respondent AUBs petition for certiorari filed
with the CA. Respondent AUB asserts that these cases involve very similar issues as those raised in this
petition and stem from the same series of transactions, the only basic difference being in the trust receipts
subject thereof.

Respondents stance fails to persuade.

As it were, the petitioners failure to mention the cases immediately adverted to above did not in
any way detract from the correctness of the certification on non-forum shopping or breach the purpose
behind the rules on forum shopping. And as the petitioner aptly explained without controversion, People
v. Guy (Crim. Case No. 131-883-84) is the case filed pursuant to the December 22, 2005 DOJ resolution
before the same was reconsidered or reversed by the DOJ in its subsequent resolution of April 20, 2006,
which, in turn, AUB elevated to the CA in CA-G.R. SP No. 94361, whose decision thereon is now the subject
of the instant petition. The differing issues in Crim. Case No. 131-883-84 and the present petition need no
belaboring.

As to AUB v. Guy (I.S. No. 05-12-11759), petitioner claims that his defense of non-receipt of the
goods subject of the trust receipts involved therein was, among other defenses, found by the DOJ to be
tenable, which thus led to the issuance of DOJ resolution dated October 4, 2006 ordering the withdrawal
of the corresponding information earlier filed in court.
 People v. Guy (Criminal Case No. 133244), on the other hand, appears to have already been
withdrawn pursuant to aforementioned DOJ resolution of October 4, 2006 and, thus, there is not even an
issue to speak of in that terminated case.

And AUB v. Gonzales (CA-G.R. SP No. 97850) is another offshoot of I.S. No. 05-12-11759 filed by
respondent AUB, assailing the aforementioned DOJ resolution of October 4, 2006, by way of petition for
certiorari dated February 8, 2007, i.e., long after the filing of the instant petition on November 27, 2006.

Parenthetically, all four (4) cases were initiated by the respondent. And since it insists that all four
involve similar or identical issues as that presented in the present case, perhaps the accusing finger of
violating the rule against forum shopping ought to be pointed at respondent.

The essence of forum shopping is the filing of multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable
judgment,21[21] through means other than by appeal or certiorari.22[22] The rule thus does not apply to
cases that arise from an initiatory or original action which has been elevated by way of appeal or certiorari
to higher or appellate courts or authorities. This is so not only because the issues in the appellate courts
necessarily differ from those in the lower court, but also because the appealed cases are a continuation
of the original case and treated as only one case. For, it would be absurd to require, say in this instant
petition, to make mention in the certification against non-forum shopping the CA case that is being sought
to be reviewed in the petition at bench.

And while it is perhaps anti-climactic to so state as this juncture, a certificate of non-forum

shopping is not required or necessary in criminal cases and distinct causes of action.23[23] The absence
of a provision on non-forum shopping in the Revised Rules of Criminal Procedure, unlike in the Rules on
Civil Procedure, suggests as much.
 With the foregoing disquisitions, the question of whether or not the petition ought to be
summarily dismissed because it allegedly sets forth question of facts need not detain us long.

Reading the petition juxtaposed with the assailed ruling and the premises holding it together
wherein the CA stressed that its decision is purely about public respondents (DOJ Secretarys) loss of
jurisdiction, it is at once apparent that the principal, if not the only issue to be considered in this case, is
whether or not the DOJ Resolution of April 20, 2006 is, on jurisdictional ground, a nullity which, definitely
is a question of law rather than of fact. For, a question of law exists when a) the controversy concerns the
correct application of law and jurisprudence to a certain set of facts; b) the issue does not call for the
examination of the probative value of the evidence presented, the truth or falsity of the facts being
admitted.24[24] A question of fact, on the other hand, exists when the doubt or difference arises as to
the truth or falsity of facts or when the query invites calibration of the whole evidence and relevancy of
specific surrounding as well as those in relation to each other and to the whole, and the probability of the
situation.25[25] While the petitioner may have interspersed his arguments with matters which are factual
in nature, the desired dismissal of the petition cannot be granted on that basis. For the petition and the
core question pivoting on the DOJ Secretarys jurisdiction to issue his April 20, 2006 Resolution can very
well be resolved on the basis of operative facts already established or at least not disputed by the parties.

We must make it clear, however, that the withdrawal of the Informations against the petitioner
in Criminal Case Nos. 131883 and 131884 of Branch 67 of the RTC of Pasig City, as directed in the April 20,
2006 Resolution of the DOJ Secretary, is a matter addressed to the sole discretion of that court, consistent
with our ruling in Crespo v. Mogul.26[26]

WHEREFORE, the petition is GRANTED. Accordingly, the Decision of the Court of Appeals dated
September 25, 2006 in CA-G.R. SP No. 94361 is NULLIFED and SET ASIDE and the Resolution of the
Secretary of Justice dated April 20, 2006 is REINSTATED.

No pronouncement as to costs.
SO ORDERED.

G.R. No. 198172

REGULUS DEVELOPMENT, INC., Petitioner,

vs.

ANTONIO DELA CRUZ, Respondent.

DECISION

BRION, J.:

Before us is a petition for review on certiorari filed by petitioner Regulus Development, Inc. (petitioner)
to challenge the November 23, 2010 Decision1 and August 10, 2011 resolution2 of the Court of Appeals
(CA) in CA-G.R. SP No. 105290. CA Associate Justice Juan Q. Enriquez, Jr. penned the rulings, concurred in
by Associate Justices Ramon M. Bato, Jr. and Fiorito S. Macalino.

ANTECEDENT FACTS
The petitioner is the owner of an apartment (San Juan Apartments) located at San Juan Street, Pasay City.
Antonio dela Cruz (respondent) leased two units (Unit 2002-A and Unit 2002-B) of the San Juan
Apartments in 1993 and 1994. The contract of lease for each of the two units similarly provides a lease
period of one (1) month, subject to automatic renewals, unless terminated by the petitioner upon written
notice.

The petitioner sent the respondent a letter to terminate the lease of the two subject units. Due to the
respondent’s refusal to vacate the units, the petitioner filed a complaint3 for ejectment before the
Metropolitan Trial Court (MTC) of Pasay City, Manila, on May 1, 2001.

The MTC resolved the case in the petitioner’s favor and ordered the respondent to vacate the premises,
and pay the rentals due until the respondent actually complies.4

The respondent appealed to the Regional Trial Court (RTC). Pending appeal, the respondent consigned
the monthly rentals to the RTC due to the petitioner’s refusal to receive the rentals.

The RTC affirmed5 the decision of the MTC in toto and denied the motion for reconsideration filed by the
respondent.

CA-G.R. SP No. 69504: Dismissal of Ejectment Case

In a Petition for Review filed by the respondent, the CA reversed the lower courts’ decisions and dismissed
the ejectment case.6 On March 19, 2003, the dismissal of the case became final and executory.7

Orders dated July 25, 2003 and November 28, 2003 for payment of rentals due under lease contracts

The petitioner filed a motion (to withdraw funds deposited by the defendant-appellant as lessee)8 praying
for the withdrawal of the rentals consigned by the respondent with the RTC.

In an order dated July 25, 2003,9 the RTC granted the petitioner’s motion. The RTC explained that the
effect of the complaint’s dismissal would mean that there was no complaint filed at all. The petitioner,
however, is entitled to the amount of rentals for the use and occupation of the subject units, as provided
in the executed contracts of lease and on the basis of justice and equity.
The court denied the respondent’s motion for reconsideration10 in an order dated November 28, 2003.11

On the petitioner’s motion, the RTC issued a writ of execution on December 18, 2003, to cause the
enforcement of its order dated July 25, 2003.12

CA-G.R. SP No. 81277: Affirmed RTC Orders

The respondent filed a petition for certiorari under Rule 65 before the CA to assail the RTC Orders dated
July 25, 2003 and November 28, 2003 (RTC orders), which granted the petitioner’s motion to withdraw
funds.

The CA dismissed13 the petition and held that the assailed RTC Orders were issued pursuant to its equity
jurisdiction, in accordance with Section 5, Rule 39,14 and Rules 515 and 616 of Rule 135 of the Rules of
Court. The respondent’s motion for reconsideration was similarly denied.

G.R. SP No. 171429: Affirmed CA Ruling on RTC Orders

The respondent filed a petition for review on certiorari before this Court to assail the decision of the CA
in CA-G.R. SP No. 81277. In a resolution dated June 7, 2006,17 we denied the petition for insufficiency in
form and for failure to show any reversible error committed by the CA.

Our resolution became final and executory and an entry of judgment18 was issued.

Execution of RTC Orders

The petitioner returned to the RTC and moved for the issuance of a writ of execution to allow it to proceed
against the supersedeas bond the respondent posted, representing rentals for the leased properties from
May 2001 to October 2001, and to withdraw the lease payments deposited by respondent from November
2001 until August 2003.19 The RTC granted the motion.20

The RTC issued an Alias Writ of Execution21 dated April 26, 2007, allowing the withdrawal of the rental
deposits and the value of the supersedeas bond.
The petitioner claimed that the withdrawn deposits, supersedeas bond, and payments directly made by
the respondent to the petitioner, were insufficient to cover rentals due for the period of May 2001 to May
2004. Hence, the petitioner filed a manifestation and motion22 dated October 23, 2007, praying that the
RTC levy upon the respondent’s property covered by Transfer Certificate of Title (TCT) No. 136829 to
satisfy the judgment credit.

The RTC granted the petitioner’s motion in an order dated June 30, 2008.23 The respondent filed a motion
for reconsideration which was denied by the RTC in an order dated August 26, 2008.24

CA-G.R. SP No. 105290: Assailed the levy of the respondent’s property

On October 3, 2008, the respondent filed with the CA a Petition for Certiorari25 with application for
issuance of a temporary restraining order. The petition sought to nullify and set aside the orders of the
RTC directing the levy of the respondent’s real property. The CA dismissed the petition. Thereafter, the
respondent filed a motion for reconsideration26 dated November 3, 2008.

Pursuant to the order dated June 30, 2008, a public auction for the respondent’s property covered by TCT
No. 136829 was held on November 4, 2008,27 where the petitioner was declared highest bidder.
Subsequently, the Certificate of Sale28 in favor of the petitioner was registered.

Meanwhile, on January 7, 2010, the respondent redeemed the property with the RTC Clerk of Court,
paying the equivalent of the petitioner’s bid price with legal interest. The petitioner filed a motion to
release funds29 for the release of the redemption price paid. The RTC granted30 the motion.

On February 12, 2010, the respondent filed a manifestation and motion31 before the CA to withdraw the
petition for the reason that the redemption of the property and release of the price paid rendered the
petition moot and academic.

Thereafter, the petitioner received the CA decision dated November 23, 2010, which reversed and set
aside the orders of the RTC directing the levy of the respondent’s property. The CA held that while the
approval of the petitioner’s motion to withdraw the consigned rentals and the posted supersedeas bond
was within the RTC’s jurisdiction, the RTC had no jurisdiction to levy on the respondent’s real property.

The CA explained that the approval of the levy on the respondent’s real property could not be considered
as a case pending appeal, because the decision of the MTC had already become final and executory. As
such, the matter of execution of the judgment lies with the MTC where the complaint for ejectment was
originally filed and presented.

The CA ordered the RTC to remand the case to the MTC for execution. The petitioner filed its motion for
reconsideration which was denied32 by the CA.

THE PETITION

The petitioner filed the present petition for review on certiorari to challenge the CA ruling in CA-G.R. SP
No. 105290 which held that the RTC had no jurisdiction to levy on the respondent’s real property.

The petitioner argues: first, that the RTC’s release of the consigned rentals and levy were ordered in the
exercise of its equity jurisdiction; second, that the respondent’s petition in CA-G.R. SP No. 105290 was
already moot and academic with the conduct of the auction sale and redemption of the respondent’s real
property; third, that the petition in CAG. R. SP No. 105290 should have been dismissed outright for lack
of signature under oath on the Verification and Certification against Forum Shopping.

The respondent duly filed its comment33 and refuted the petitioner’s arguments. On the first argument,
respondent merely reiterated the CA’s conclusion that the RTC had no jurisdiction to order the levy on
respondent’s real property as it no longer falls under the allowed execution pending appeal. On the
second argument, the respondent contended that the levy on execution and sale at public auction were
null and void, hence the CA decision is not moot and academic. On the third argument, the respondent
simply argued that it was too late to raise the alleged formal defect as an issue.

THE ISSUE

The petitioner poses the core issue of whether the RTC had jurisdiction to levy on the respondent’s real
property.

OUR RULING

We grant the petition.

Procedural issue: Lack of notarial seal on the Verification and Certification against Forum Shopping is not
fatal to the petition.

The petitioner alleged that the assailed CA petition should have been dismissed since the notary public
failed to affix his seal on the attached Verification and Certification against Forum Shopping.

We cannot uphold the petitioner’s argument.

The lack of notarial seal in the notarial certificate34 is a defect in a document that is required to be
executed under oath.

Nevertheless, a defect in the verification does not necessarily render the pleading fatally defective. The
court may order its submission or correction, or act on the pleading if the attending circumstances are
such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be
served.35

Noncompliance or a defect in a certification against forum shopping, unlike in the case of a verification, is
generally not curable by its subsequent submission or correction, unless the covering Rule is relaxed on
the ground of "substantial compliance" or based on the presence of "special circumstances or compelling
reasons."36 Although the submission of a certificate against forum shopping is deemed obligatory, it is
not however jurisdictional.37

In the present case, the Verification and Certification against Forum Shopping were in fact submitted. An
examination of these documents shows that the notary public’s signature and stamp were duly affixed.
Except for the notarial seal, all the requirements for the verification and certification documents were
complied with.

The rule is that courts should not be unduly strict on procedural lapses that do not really impair the proper
administration of justice. The higher objective of procedural rules is to ensure that the substantive rights
of the parties are protected. Litigations should, as much as possible, be decided on the merits and not on
technicalities. Every party-litigant must be afforded ample opportunity for the proper and just
determination of his case, free from the unacceptable plea of technicalities.38

The CA correctly refused to dismiss and instead gave due course to the petition as it substantially complied
with the requirements on the Verification and Certification against Forum Shopping.
An issue on jurisdiction prevents the petition from becoming "moot and academic."

The petitioner claims that the assailed CA petition should have been dismissed because the subsequent
redemption of the property by the respondent and the release of the price paid to the petitioner rendered
the case moot and academic.

A case or issue is considered moot and academic when it ceases to present a justiciable controversy
because of supervening events, rendering the adjudication of the case or the resolution of the issue
without any practical use or value.39 Courts generally decline jurisdiction over such case or dismiss it on
the ground of mootness except when, among others, the case is capable of repetition yet evades judicial
review.40

The CA found that there is an issue on whether the RTC had jurisdiction to issue the orders directing the
levy of the respondent’s property. The issue on jurisdiction is a justiciable controversy that prevented the
assailed CA petition from becoming moot and academic.

It is well-settled in jurisprudence that jurisdiction is vested by law and cannot be conferred or waived by
the parties. "Even on appeal and even if the reviewing parties did not raise the issue of jurisdiction, the
reviewing court is not precluded from ruling that the lower court had no jurisdiction over the case."41

Even assuming that the case has been rendered moot due to the respondent’s redemption of the
property, the CA may still entertain the jurisdictional issue since it poses a situation capable of repetition
yet evading judicial review.

Under this perspective, the CA correctly exercised its jurisdiction over the petition.

Equity jurisdiction versus appellate jurisdiction of the RTC

The appellate jurisdiction of courts is conferred by law. The appellate court acquires jurisdiction over the
subject matter and parties when an appeal is perfected.42

On the other hand, equity jurisdiction aims to provide complete justice in cases where a court of law is
unable to adapt its judgments to the special circumstances of a case because of a resulting legal
inflexibility when the law is applied to a given situation. The purpose of the exercise of equity jurisdiction,
among others, is to prevent unjust enrichment and to ensure restitution.43

The RTC orders which allowed the withdrawal of the deposited funds for the use and occupation of the
subject units were issued pursuant to the RTC’s equity jurisdiction, as the CA held in the petition docketed
as CA-G.R. SP No. 81277.

The RTC’s equity jurisdiction is separate and distinct from its appellate jurisdiction on the ejectment case.
The RTC could not have issued its orders in the exercise of its appellate jurisdiction since there was nothing
more to execute on the dismissed ejectment case. As the RTC orders explained, the dismissal of the
ejectment case effectively and completely blotted out and cancelled the complaint. Hence, the RTC orders
were clearly issued in the exercise of the RTC’s equity jurisdiction, not on the basis of its appellate
jurisdiction.

This Court takes judicial notice44 that the validity of the RTC Orders has been upheld in a separate petition
before this Court, under G.R. SP No. 171429 entitled Antonio Dela Cruz v. Regulus Development, Inc.

The levy of real property was ordered by the RTC in the exercise of its equity jurisdiction.

The levy of the respondent’s property was made pursuant to the RTC orders issued in the exercise of its
equity jurisdiction, independent of the ejectment case originally filed with the MTC.

An examination of the RTC order dated June 30, 2008, directing the levy of the respondent’s real property
shows that it was based on the RTC order dated July 25, 2003. The levy of the respondent’s property was
issued to satisfy the amounts due under the lease contracts, and not as a result of the decision in the
ejectment case.

The CA erred when it concluded that the RTC exercised its appellate jurisdiction in the ejectment case
when it directed the levy of the respondent’s property.

Furthermore, the order to levy on the respondent’s real property was consistent with the first writ of
execution issued by the RTC on December 18, 2003, to implement the RTC orders. The writ of execution
states that:
xxx In case of [sic] sufficient personal property of the defendant cannot be found whereof to satisfy the
amount of the said judgment, you are directed to levy [on] the real property of said defendant and to sell
the same or so much thereof in the manner provided by law for the satisfaction of the said judgment and
to make return of your proceedings together with this Writ within sixty (60) days from receipt hereof.
(emphasis supplied)

The subsequent order of the RTC to levy on the respondent’s property was merely a reiteration and an
enforcement of the original writ of execution issued.1âwphi1

Since the order of levy is clearly rooted on the RTC Orders, the only question that needs to be resolved is
which court has jurisdiction to order the execution of the RTC orders.

The RTC, as the court of origin, has jurisdiction to order the levy of the respondent's real property.

Execution shall be applied for in the court of origin, in accordance with Section 1,45 Rule 39 of the Rules
of Court.

The court of origin with respect to the assailed RTC orders is the court which issued these orders. The RTC
is the court with jurisdiction to order the execution of the issued RTC orders.

Hence, the petitioner correctly moved for the issuance of the writ of execution and levy of the
respondent's real property before the RTC as the court of origin.

WHEREFORE, we hereby GRANT the petition for review on certiorari. The decision dated November 23,
2010, and the resolution dated August 10, 2011, of the Court of Appeals in CA-G.R. SP No. 105290 are
hereby REVERSED and SET ASIDE. The orders dated June 30, 2008, and August 26, 2008, of Branch 108 of
the Regional Trial Court of Pasay City, are hereby REINSTATED. Costs against respondent Antonio dela
Cruz.

SO ORDERED.
SPOUSES DAISY and SOCRATES M. AREVALO,

Petitioners,

- versus

PLANTERS DEVELOPMENT BANK and THE REGISTER OF DEEDS OF PARAAQUE CITY,

Respondents.

G. R. No. 193415

April 18, 2012

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

DECISION

SERENO, J.:

This is a Rule 45 Petition for Review, which seeks to reverse the Decision dated 24 March 2010[1] and
Resolution dated 05 August 2010[2] of the Court of Appeals (CA) in CA-G.R. SP No. 110806. The CA
affirmed the trial courts Decision not to grant petitioners application for a writ of preliminary injunction.

As stated, this case involves the trial courts refusal to issue a writ of preliminary injunction in favor of
petitioner Spouses Daisy and Socrates M. Arevalo (Spouses Arevalo) based on their failure to comply with
Section 2 of the Procedure in Extra-Judicial or Judicial Foreclosure of Real Estate Mortgages (Procedure
on Foreclosure)[3] issued by this Court. This procedure required them to pay twelve percent (12%) per
annum interest on the amount of the principal obligation, as stated in the application for foreclosure sale,
before an injunctive writ may issue against the extra-judicial foreclosure of real estate mortgage.[4]

We deny the instant Petition for the following reasons: (1) the Petition is moot, because the trial court
has already dismissed the Complaint dated 07 April 2009 (the First Complaint),[5] upon which petitioners
application for the provisional remedy of preliminary injunction was based; and (2) petitioners are guilty
of forum-shopping.

The conflict between the parties arose from a Loan Agreement[6] petitioners executed with respondent
Planters Development Bank (Bank). Petitioners obtained from respondent Bank a ₱2,100,000 loan secured
by a mortgage on their property situated in Muntinlupa. Due to their failure to pay the loaned amount,
the Bank undertook to extra-judicially foreclose the mortgage. The Clerk of Court issued a Notice of
Sheriffs Sale and set the auction sale on 21 and 28 April 2009.[7]

Petitioners thereafter filed the First Complaint wherein they asked for the nullification of interests,
penalties and other charges, as well as for specific performance with an application for a temporary
restraining order (TRO) and writ of preliminary injunction to enjoin the then impending auction sale of
their Muntinlupa property. They alleged that it was respondent Bank who breached its obligations under
the loan agreement; and that the auction sale was premature, arbitrary and confiscatory, as their inability
to pay the loan was caused and aggravated by the Banks illegal schemes.[8]

During the hearing of petitioners application for preliminary injunction, the trial court ruled that, as a
precondition for the issuance of the writ and pursuant to the Procedure on Foreclosure, petitioners were
directed to pay 12% per annum interest on the principal obligation as stated in the application for
foreclosure sale. Otherwise, the writ shall not issue. [9] The trial court further ruled that the evidence in
support of their application was evidentiary in nature and should thus be presented during trial.[10]

Petitioner Spouses Arevalo sought to clarify the trial courts Order,[11] inquiring whether they should be
required to pay 12% per annum interest. They argue that the rule requiring the payment of 12% interest
as a condition for the issuance of an injunctive writ against an impending foreclosure sale was applicable
only when applicant alleges that the interest rate is unconscionable.[12] According to petitioners,
nowhere in the Complaint did they allege that the interest charges were unconscionable.[13] Instead,
what they raised in the First Complaint as their principal cause of action was the Banks deliberate
withholding of loan releases on various pretexts and the propriety of the acts of the Bank charging them
with interests and penalties due to the delay caused by the Bank itself.[14] The trial court, however,
affirmed its earlier ruling.[15]
Petitioners moved for reconsideration,[16] but their motion was denied.[17] Consequently, they did not
pay the required interest; thus, no writ of preliminary injunction was issued in their favor.

Aggrieved, petitioner Spouses Arevalo filed a Rule 65 Petition[18] with the CA to assail the Orders of the
trial court involving the non-issuance of the injunctive writ.[19]

Meanwhile, proceedings for the First Complaint ensued at the trial court. Acting on the Motion to Dismiss
filed by respondent Bank, the trial court granted the motion and dismissed the First Complaint for lack of
cause of action.[20] Petitioner Spouses Arevalo then proceeded again to the CA to appeal[21] the
dismissal of the main case. The record does not reveal the status of the case.

With regard to the Rule 65 Petition to the CA questioning the non-issuance of the writ, respondent Bank
filed its Comment[22] thereon. Subsequently, the CA rendered the present assailed Decision dated 24
March 2010, affirming the applicability of Section 2 of the Procedure on Foreclosure. It ruled that the trial
court was correct in refusing to issue the writ due to petitioners inexplicable failure and even stubborn
refusal to pay the accrued interest at 12% per annum.[23] The CA held that the words used by petitioners
in their First Complaint, such as manifestly unjust, purely potestative condition, void ab initio, clearly
contravenes morals, good customs and public policy, whimsical, capricious violation of the legal and
inherent principles of mutuality of contracts, illegal, invalid, unilateral impositionsall of which pertained
to interest imposed by the Bankundeniably meant that petitioners were challenging the interest for being
unconscionable, while opting to use other words of similar import.[24]

Petitioners moved for reconsideration, but the CA denied their motion.[25]

Aggrieved, they filed the instant Rule 45 Petition to assail the Decision of the CA affirming the non-issuance
of the injunctive writ.

There are thus two (2) cases arising from similar facts and circumstances; more particularly, the instant
Rule 45 Petition and the appeal of the dismissal of the main case with the CA.[26] It appears on record
also that on 12 November 2010, petitioners filed yet another Complaint dated 11 November 2010[27]
(Second Complaint) with the trial court. This time, they prayed for the nullification of the real estate
mortgage, the extra-judicial foreclosure sale, and the subsequent proceedings, with a prayer for
preliminary injunction and TRO.

With regard to the instant Rule 45 Petition, petitioners assail the Decision and Resolution of the CA based
on the following grounds:[28] (1) they were deprived of the opportunity to present evidence on their
application for a writ of preliminary injunction; and (2) the CA erred when it required them to pay 12%
interest per annum based on Section 2 of the Procedure on Foreclosure, when the core of their First
Complaint was not excessiveness of the interest but the Banks supposed breach of their obligations in the
loan agreement.[29]

Respondent Bank, on the other hand, countered as follows:[30] (1) petitioner Spouses Arevalo were not
denied due process, since they were accorded several opportunities to be heard on their application for
the issuance of an injunctive writ; (2) the CA correctly required petitioners to pay the interest; and (3)
petitioner Spouses Arevalo were guilty of forum-shopping when they filed their Second Complaint. For
forum-shopping, respondent Bank likewise moved to hold them in contempt,[31] arguing that they had
sought similar reliefs in their Second Complaint with the trial court as in the present Petition.

Petitioners filed their Reply[32] and Comment[33] to the charges on contempt.

Based on the parties submissions, the following issues are presented for the resolution of this Court:

1. Whether the requirement to pay 12% interest per annum before the issuance of an injunctive writ to
enjoin an impending foreclosure sale is applicable to the instant case; and

2. Whether petitioner Spouses Arevalo are guilty of forum-shopping and should consequently be
punished for contempt.

RULING OF THE COURT

I. The issue of the applicability to this case of the requirement to pay 12% interest per annum
before the issuance of an injunctive writ to enjoin an impending foreclosure sale is moot.

The Court rules that upon dismissal of the First Complaint by the trial court on 27 October 2009,[34] the
issue of whether the writ of injunction should issue has become moot. Although both parties failed to
raise this particular argument in their submissions, we deny the instant Petition on this ground.

A case becomes moot and academic when there is no more actual controversy between the parties or
useful purpose that can be served in passing upon the merits.[35]
There remains no actual controversy in the instant Petition because the First Complaint has already been
dismissed by the trial court. Upon its dismissal, the question of the non-issuance of a writ of preliminary
injunction necessarily died with it.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an adjunct of, and subject to the
outcome of the main case.[36] Thus, a writ of preliminary injunction is deemed lifted upon dismissal of
the main case, any appeal therefrom notwithstanding,[37] as this Court emphasized in Buyco v.
Baraquia[38] from which we quote:

The writ is provisional because it constitutes a temporary measure availed of during the pendency of the
action and it is ancillary because it is a mere incident in and is dependent upon the result of the main
action.

It is well-settled that the sole object of a preliminary injunction, whether prohibitory or mandatory, is to
preserve the status quo until the merits of the case can be heard. It is usually granted when it is made to
appear that there is a substantial controversy between the parties and one of them is committing an act
or threatening the immediate commission of an act that will cause irreparable injury or destroy the status
quo of the controversy before a full hearing can be had on the merits of the case.

xxxxxxxxx

The present case having been heard and found dismissible as it was in fact dismissed, the writ of
preliminary injunction is deemed lifted, its purpose as a provisional remedy having been served, the
appeal therefrom notwithstanding.

Unionbank v. Court of Appeals enlightens:

xxx a dismissal, discontinuance or non-suit of an action in which a restraining order or temporary

injunction has been granted operates as a dissolution of the restraining order or temporary injunction,
regardless of whether the period for filing a motion for reconsideration of the order dismissing the case
or appeal therefrom has expired. The rationale therefor is that even in cases where an appeal is taken
from a judgment dismissing an action on the merits, the appeal does not suspend the judgment, hence
the general rule applies that a temporary injunction terminates automatically on the dismissal of the
action. (Emphases supplied.)[39]
There will be no practical value in resolving the question of the non-issuance of an injunctive writ in this
case. Setting aside the assailed Orders is manifestly pointless, considering that the First Complaint itself
has already been dismissed, and there is nothing left to enjoin. The reversal of the assailed Orders would
have a practical effect only if the dismissal were set aside and the First Complaint reinstated.[40] In this
case, however, petitioner Spouses Arevalo admitted to the impossibility of the reinstatement of the First
Complaint when they filed their Second Complaint.[41]

Even petitioners plea that this Court give due course to the Petition for a ruling on the proper application
of the Procedure on Foreclosure[42] cannot compel us to resolve this issue.

The Constitution provides that judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable.[43] The exercise of judicial
power requires an actual case calling for it. The courts have no authority to pass upon issues through
advisory opinions, or to resolve hypothetical or feigned problems or friendly suits collusively arranged
between parties without real adverse interests.[44] Furthermore, courts do not sit to adjudicate mere
academic questions to satisfy scholarly interest, however intellectually challenging.[45] As a condition
precedent to the exercise of judicial power, an actual controversy between litigants must first exist.[46]
An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial resolution, as distinguished from a hypothetical or abstract difference or
dispute.[47] There must be a contrariety of legal rights that can be interpreted and enforced on the basis
of existing law and jurisprudence.[48]

This Court cannot issue a mere advisory opinion in relation to the applicability of the provisions of the
Procedure on Foreclosure.

II. Petitioners are guilty of forum-shopping.

Petitioners have committed two distinct acts of forum-shopping,[49] namely: (1) petitioners willfully and
deliberately went to different courts to avail themselves of multiple judicial remedies founded on similar
facts and raising substantially similar reliefs, and (2) they did not comply with their undertaking to report
the filing of the Second Complaint within five days from its filing.

A. Petitioners filed multiple suits based on similar facts while seeking similar reliefsacts proscribed by the
rules on forum-shopping.
We rule that petitioners were guilty of willful and deliberate forum-shopping when they filed their Second
Complaint with the trial court insofar as they undertook to obtain similar reliefs as those sought in the
instant Petition.

Respondent Bank argues that the rights asserted by petitioners, as well as the reliefs petitioners seek in
the instant Petition, are identical to those raised in their Second Complaint.[50]

Petitioners, on the other hand, counter that the disparity between the two cases lies in the issue to be
resolved. More particularly, they allege that the issue in this Petition is the summary application of the
payment of 12% interest per annum as a precondition for the issuance of a writ, as opposed to the issue
in the Second Complaint involving the validity of the real estate mortgage and compliance with the rules
on the holding of the extrajudicial foreclosure sale.[51]

Forum shopping is the act of litigants who repetitively avail themselves of multiple judicial remedies in
different fora, simultaneously or successively, all substantially founded on the same transactions and the
same essential facts and circumstances; and raising substantially similar issues either pending in or already
resolved adversely by some other court; or for the purpose of increasing their chances of obtaining a
favorable decision, if not in one court, then in another.[52] The rationale against forum-shopping is that
a party should not be allowed to pursue simultaneous remedies in two different courts, for to do so would
constitute abuse of court processes which tends to degrade the administration of justice, wreaks havoc
upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of the
courts.[53]

In Yu v. Lim,[54] this Court enumerated the requisites of forum-shopping, as follows:

Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in one
case will amount to res judicata in another. Litis pendentia requires the concurrence of the following
requisites: (1) identity of parties, or at least such parties as those representing the same interests in both
actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts;
and (3) identity with respect to the two preceding particulars in the two cases, such that any judgment
that may be rendered in the pending case, regardless of which party is successful, would amount to res
judicata in the other case.[55]

What is essential in determining the existence of forum-shopping is the vexation caused the courts and
litigants by a party who asks different courts and/or administrative agencies to rule on similar or related
causes and/or grant the same or substantially similar reliefs, in the process creating the possibility of
conflicting decisions being rendered upon the same issues.[56]

A comparison of the reliefs sought by petitioners in the instant Petition and in their Second Complaint
confirms that they are substantially similar on two points: (1) revocation and cancellation of the Certificate
of Sale and (2) permanent injunction on any transfer and/or consolidation of title in favor of respondent
Bank. These similarities undoubtedly create the possibility of conflicting decisions from different courts:

Instant Petition

Second Complaint

WHEREFORE, it is most respectfully prayed that immediately upon filing of this petition, the same be given
due course, and an order issue, ex parte:

(1) A Resolution be issued directing the Ex-Officio Sheriff and his Assisting Sheriff to undo, cancel,
revoke the Certificate of Sale they issued;

(2) Enjoining the Register of Deeds of Paranaque (or any of her subordinates, agents,
representatives and persons acting in their behalf to cease and desist from allowing any transfer and/or
consolidation of respondents banks title to the property in question and an order be issued directing the
Register of Deeds to undo, cancel and revoke the registration of the Certificate of Sale on November 13,
2009 and other proceedings had thereafter, the petition be given due course and judgment be rendered
as follows:

1. Making the injunction permanent.

2. Issuing a writ of mandatory injunction for the respondent Ex-Officio Sheriff to undo, revoke
and cancel the Certificate of Sale issued and/or directing the Register of Deeds to undo, revoke and cancel
the registration of the Certificate of Sale and/or defer any consolidation of title in favor of respondent
bank pending final resolution of this petition.

3. Reversing and setting aside the Decision of the Court of Appeals dated March 24, 2010 and
Resolution dated August 5, 2010.[57] (Emphasis supplied.)

WHEREFORE, it is respectfully prayed of the Honorable Court that pending consideration and hearing on
the principal reliefs herein prayed for, a Temporary Restraining order (TRO) and/or Writ of Preliminary
Injunction be issued immediately restraining and/or stopping the defendants Ex-Officio Sheriff Atty. Jerry
R. Toledo and Deputy Sheriff Paulo Jose N. Cusi from executing and issuing a final deed of sale in favor of
the defendant bank and further ordering the defendant Registrar of Deeds of Paranaque City to hold in
abeyance the registration of the final deed of sale and other documents of consolidation pending
resolution of this Honorable Court. Plaintiffs pray for the following additional reliefs:

1. After hearing on the merits, the Real Estate Mortgage be declared and rescinded and/or null and
void;

2. The Certificate of Sale [dated November 4, 2009] issued by the defendant Sheriffs and its
subsequent registration on November 13, 2009 with the Registry of Deeds be declared null and void;
3. After due hearing, the preliminary injunction be declared permanent. x x x[58] (Emphases supplied.)

As illustrated above, there is a clear violation of the rules on forum-shopping, as the Court is being asked
to grant substantially similar reliefs as those that may also be granted by the trial court, in the process
creating a possibility of conflicting decisions.

We emphasize that the grave evil sought to be avoided by the rule against forum-shopping is the rendition
by two competent tribunals of two separate and contradictory decisions.[59] To avoid any confusion, this
Court adheres strictly to the rules against forum shopping, and any violation of these rules results in the
dismissal of a case.[60] The acts committed and described herein can possibly constitute direct
contempt.[61]

B. Petitioners did not report the filing of their Second Complaint within five (5) days, in violation of their
undertaking to do so.

Aside from the fact that petitioners sought substantially similar reliefs from different courts, they likewise
failed to disclose to this Court the filing of their Second Complaint within five (5) days from its filing, in
violation of their previous undertaking to do so.[62]

Every litigant is required to notify the court of the filing or pendency of any other action or such other
proceeding involving the same or similar action or claim within five (5) days of learning of that fact.[63]
Petitioners claim that it was merely due to inadvertence that they failed to disclose the said filing within
five (5) days, contrary to their undertaking. [64]

This Court is not inclined to accept this self-serving explanation. We cannot disregard the glaring fact that
respondents had to call the attention of petitioners to the said requirement before the latter admitted
that they had indeed filed their Second Complaint.

As previously established, petitioners have violated two (2) components of forum-shopping, more
particularly: (1) petitioners willfully and deliberately went to different courts to avail themselves of
multiple judicial remedies founded on similar facts and raising substantially similar reliefs, an act which
may be punishable as direct contempt;[65] and (2) they did not comply with their undertaking to report
the filing of the Second Complaint within five days from its filing. The latter action may also possibly be
construed as a separate count for indirect contempt.
While in a limited sense, petitioners have already been given the chance to rebut the prayer to hold them
in contempt, We hereby provide sufficient avenue for them to explain themselves by requiring them to
show cause, within fifteen (15) days, why they should not be held in direct and indirect contempt of court.

WHEREFORE, the instant Petition for Review filed by Spouses Daisy Arevalo and Socrates M. Arevalo is
hereby DENIED. The Decision dated 24 March 2010 and Resolution dated 05 August 2010 issued by the
Court of Appeals in CA-G.R. SP No. 110806 are AFFIRMED.

Accordingly, petitioners are required to SHOW CAUSE, within fifteen (15) days from receipt of this
Decision, why they should not be held in contempt; more specifically: (a) for direct contempt of courtfor
availing of multiple judicial remedies founded on similar facts and raising substantially similar reliefs from
different courts; and (b) for indirect contempt of courtfor not complying with their undertaking to report
the filing of the Second Complaint within five days from its filing.

SO ORDERED.

G.R. No. 178611 January 14, 2013

ESTRELLA ADUAN ORPIANO, Petitioner,

vs.
SPOUSES ANTONIO C. TOMAS and MYRNA U. TOMAS, Respondents.

DECISION

DEL CASTILLO, J.:

Considerations of expediency cannot justify a resort to procedural shortcuts. The end does not justify the
means; a meritorious case cannot overshadow the condition that the means employed to pursue it must
be in keeping with the Rules.

Assailed in this Petition for Review on Certiorari1 are the May 7, 2007 Decision2 of the Court of Appeals
(CA) which dismissed the petition in CA-G.R. SP No. 97341, and its June 28, 2007 Resolution3 denying
petitioner's motion for reconsideration.

Factual Antecedents

Petitioner Estrella Aduan Orpiano (Estrella) is the widow of Alejandro Orpiano (Alejandro). Part of their
conjugal estate is an 809.5-square meter lot in Quezon City covered by Transfer Certificate of Title (TCT)
No. RT-23468 (the lot).

In 1979, a Decision was rendered by the defunct Juvenile and Domestic Relations Court (JDRC) of Quezon
City declaring Estrella an absent/absentee spouse and granting Alejandro the authority to sell the lot. The
JDRC Decision was annotated on the back of TCT No. RT-23468.

On March 19, 1996, Alejandro sold the lot on installment basis to respondent spouses Antonio and Myrna
Tomas (the Tomas spouses) for ₱12,170,283.00. That very same day, a new title – TCT No. N-152326 –
was issued in the name of the Tomas spouses despite the fact that the purchase price has not been paid
in full, the spouses having been given until December of that same year to complete their payment.

On October 28, 1996, Alejandro filed Civil Case No. Q-96-29261 (the collection case) in the Regional Trial
Court (RTC) of Quezon City, Branch 226 (the collection court), seeking collection of the balance of the price
in the amount of ₱4,314,100.00 supposedly left unpaid by the Tomas spouses, with damages.[4]

During the pendency of the collection case, Alejandro passed away. His heirs, Estrella included, were
substituted in his stead in the collection case. Estrella moved to amend the Complaint to one for
rescission/annulment of sale and cancellation of title, but the court denied her motion. She next moved
to be dropped as party plaintiff but was again rebuffed.

On June 11, 2005, Estrella filed Civil Case No. Q-05-56216 (the annulment case) for annulment of the
March 1996 sale and cancellation of TCT No. N-152326, with damages, against the Tomas spouses and the
Register of Deeds of Quezon City which was impleaded as a nominal party.5 The case was raffled to Branch
97 of the Quezon City RTC (the annulment court). In her Complaint, Estrella claimed that the 1979
declaration of her absence and accompanying authority to sell the lot were obtained by Alejandro through
misrepresentation, fraud and deceit, adding that the May 1979 JDRC Decision was not published as
required by law and by the domestic relations court. Thus, the declaration of absence and Alejandro’s
authority to sell the lot are null and void. Correspondingly, the ensuing sale to the Tomas spouses should
be voided, and TCT No. N-152326 cancelled.

In their Answer to the annulment Complaint, the Tomas spouses prayed for the dismissal thereof on the
ground of forum shopping, arguing that the filing of the annulment case was prompted by the denial of
Estrella’s motion initiated in the collection case to amend the Complaint to one for annulment of sale. The
annulment case is Estrella’s attempt at securing a remedy which she could not obtain in the collection
case. The Tomas spouses added that the dismissal of the annulment case would preclude the possibility
that the two courts might render conflicting decisions.

After pre-trial in the annulment case, the court proceeded to tackle the issue of forum shopping. The
parties submitted their respective memoranda touching on the sole issue of whether Estrella is guilty of
forum shopping.

Ruling of the Regional Trial Court

On September 25, 2006, the trial court issued an Order6 dismissing the annulment case. It sustained the
view taken by the Tomas spouses that Estrella filed the annulment case only because the collection court
denied her motion to amend the case to one for annulment of the sale, and thus the annulment case was
Estrella’s attempt at obtaining a remedy which she could not secure in the collection case. It added that
because the two cases involve the same subject matter, issues, and parties, there indeed is a possibility
that conflicting decisions could be rendered by it and the collection court, the possibility made even
greater because the two cases involve antithetical remedies.

Estrella moved for reconsideration but the court was unmoved.

Ruling of the Court of Appeals

On December 27, 2006, Estrella filed with the CA a Petition for Certiorari7 questioning the September 25,
2006 Order of the annulment court. The appellate court, however, could not be persuaded. Finding no
grave abuse of discretion in the annulment court's dismissal of the annulment case, the CA found that
Estrella was indeed guilty of forum shopping in filing the annulment suit while the collection case was
pending. Applying the test articulated in a multitude of decided cases – that where a final judgment in
one case will amount to res judicata in another – it follows that there is forum shopping. The CA held that
a final judgment in the collection case ordering the Tomas spouses to pay the supposed balance of the
price will necessarily result in a finding that the sale between Alejandro and the Tomas spouses is a valid
sale. This then would prevent a declaration of nullity of the sale in the annulment case.

Accordingly, the CA dismissed Estrella’s Petition for Certiorari. Her Motion for Reconsideration was
likewise denied, hence the present Petition.

Issue

The sole issue to be resolved in this case is whether there is indeed forum shopping.

Petitioner’s Arguments

Estrella argues that it was Alejandro and not she who initiated the collection case, and that she, their two
children, and Alejandro’s four illegitimate children were merely substituted in the case as his heirs by
operation of law; thus, she should not be bound by the collection case. She claims that in the first place,
she was not privy to Alejandro’s sale of the lot to the Tomas spouses. Having been unwillingly substituted
in the collection case, she forthwith moved to amend the Complaint in order to include, as one of the
remedies sought therein, annulment of the sale insofar as her conjugal share in the lot is concerned. But
the court denied her motion. Next, she moved to be dropped or stricken out as plaintiff to the collection
case, but again, the trial court rebuffed her.

Estrella maintains that on account of these repeated denials, she was left with no other alternative but to
institute the annulment case. She claims that since the collection case does not further her interest —
which is to seek annulment of the sale and recover her conjugal share — and the collection court would
not grant her motions to amend and to be dropped or stricken out as party plaintiff therein, she thus has
a right to maintain a suit to have the sale annulled. It is therefore erroneous for the CA to state that she
initiated the annulment suit only for the purpose of obtaining a favorable ruling in said court, which she
could not achieve in the collection court.

She further adds that there is obviously no identity of parties, cause of action, or reliefs prayed for
between the collection and annulment cases; the two involve absolutely opposite reliefs. She stresses the
fact that she is seeking annulment of the sale with respect only to her conjugal share, and not those of
her co-heirs.

Respondents’ Arguments

The Tomas spouses, apart from echoing the trial court and the CA, emphasize that the rule prohibiting
forum shopping precisely seeks to avoid the situation where the two courts – the collection court and the
annulment court – might render two separate and contradictory decisions. If the annulment case is
allowed to proceed, then it could result in a judgment declaring the sale null and void, just as a decision
in the collection case could be issued ordering them to pay the balance of the price, which is tantamount
to a declaration that the sale is valid.
They add that Estrella could no longer question the 1979 JDRC Decision, having failed to challenge the
same immediately upon obtaining notice thereof; she did not even bother to have her declaration of
absence lifted. They claim that after the lapse of 26 years, prescription has finally set in. They likewise
argue that if both cases are allowed to remain pending, a ridiculous situation could arise where, after
having paid the balance as ordered by the collection court, they could lose not only the lot but also their
payments in case a decision in the annulment court is rendered nullifying and canceling the sale and
ordering the return of the lot to Alejandro’s heirs, Estrella included.

Our Ruling

The petition must be denied.

"Forum shopping is defined as an act of a party, against whom an adverse judgment or order has been
rendered in one forum, of seeking and possibly getting a favorable opinion in another forum, other than
by appeal or special civil action for certiorari. It may also be the institution of two or more actions or
proceedings grounded on the same cause on the supposition that one or the other court would make a
favorable disposition. x x x It is expressly prohibited x x x because it trifles with and abuses court processes,
degrades the administration of justice, and congests court dockets. A willful and deliberate violation of
the rule against forum shopping is a ground for summary dismissal of the case, and may also constitute
direct contempt."8

Although the Court believes that Estrella was not prompted by a desire to trifle with judicial processes,
and was acting in good faith in initiating the annulment case, still the said case should be dismissed
because it produces the same effect which the rule on forum shopping was fashioned to preclude. If the
collection case is not dismissed and it, together with the annulment case, proceeds to finality, not only do
we have a possibility of conflicting decisions being rendered; an unfair situation, as envisioned by the
Tomas spouses, might arise where after having paid the balance of the price as ordered by the collection
court, the cancellation of the TCT and return of the property could be decreed by the annulment court.
Besides, allowing the two cases to remain pending makes litigation simply a game of chance where parties
may hedge their position by betting on both sides of the case, or by filing several cases involving the same
issue, subject matter, and parties, in the hope of securing victory in at least one of them. But, as is already
well known, the "trek to justice is not a game of chance or skill but rather a quest for truth x x x."9

Moreover, allowing Estrella to proceed with the annulment case while the collection case is still pending
is like saying that she may accept the deed of sale and question it at the same time. For this is the
necessary import of the two pending cases: joining as plaintiff in the collection case implies approval of
the deed, while suing to declare it null and void in the annulment court entails a denunciation thereof.
This may not be done. "A person cannot accept and reject the same instrument"10 at the same time. It
must be remembered that "the absence of the consent of one (spouse to a sale) renders the entire sale
null and void, including the portion of the conjugal property pertaining to the spouse who contracted the
sale."11

The Court realizes the quandary that Estrella — motivated by the solitary desire to protect her conjugal
share in the lot from what she believes was Alejandro’s undue interference in disposing the same without
her knowledge and consent — finds herself in. While raring to file the annulment case, she has to first
cause the dismissal of the collection case because she was by necessity substituted therein by virtue of
her being Alejandro’s heir; but the collection court nonetheless blocked all her attempts toward such end.
The collection court failed to comprehend her predicament, her need to be dropped as party to the
collection case in order to pursue the annulment of the sale.

As plaintiff in the collection case, Estrella – though merely succeeding to Alejandro’s rights – was an
indispensable party, or one without whom no final determination can be had in the collection case.12
Strictly, she may not be dropped from the case. However, because of her dual identity, first as heir and
second as owner of her conjugal share, she has been placed in the unique position where she has to
succeed to her husband’s rights, even as she must protect her separate conjugal share from Alejandro’s
perceived undue disposition. She may not seek to amend the cause of action in the collection case to one
for annulment of sale, because this adversely affects the interests of her co-heirs, which is precisely to
obtain payment of the supposed balance of the sale price.

Nor may Estrella simultaneously maintain the two actions in both capacities, as heir in the collection case
and as separate owner of her conjugal share in the annulment case. This may not be done, because, as
was earlier on declared, this amounts to simultaneously accepting and rejecting the same deed of sale.
Nor is it possible to prosecute the annulment case simultaneously with the collection case, on the premise
that what is merely being annulled is the sale by Alejandro of Estrella’s conjugal share. To repeat, the
absence of the consent of one spouse to a sale renders the entire sale null and void, including the portion
of the conjugal property pertaining to the spouse who contracted the sale.

Undoubtedly, Estrella had the right to maintain the annulment case as a measure of protecting her
conjugal share. There thus exists a just cause for her to be dropped as party plaintiff in the collection case
so that she may institute and maintain the annulment case without violating the rule against forum
shopping. Unless this is done, she stands to lose her share in the conjugal property. But the issue of
whether the sale should be annulled is a different matter altogether.1âwphi1

Under the Rules, parties may be dropped or added by order of the court on motion of any party or on its
own initiative at any stage of the action and on such terms as are just.13 Indeed, it would have been just
for the collection court to have allowed Estrella to prosecute her annulment case by dropping her as a
party plaintiff in the collection case, not only so that she could protect her conjugal share, but also to
prevent the interests of her co-plaintiffs from being adversely affected by her conflicting actions in the
same case. By seeking to be dropped from the collection case, Estrella was foregoing collection of her
share in the amount that may be due and owing from the sale. It does not imply a waiver in any manner
that affects the rights of the other heirs.

While Estrella correctly made use of the remedies available to her – amending the Complaint and filing a
motion to drop her as a party – she committed a mistake in proceeding to file the annulment case directly
after these remedies were denied her by the collection court without first questioning or addressing the
propriety of these denials. While she may have been frustrated by the collection court’s repeated
rejection of her motions and its apparent inability to appreciate her plight, her proper recourse
nevertheless should have been to file a petition for certiorari or otherwise question the trial court’s denial
of her motion to be dropped as plaintiff, citing just reasons which call for a ruling to the contrary. Issues
arising from joinder or misjoinder of parties are the proper subject of certiorari.14

In fine, we reiterate that considerations of expediency cannot justify a resort to procedural shortcuts. The
end does not justify the means; a meritorious case cannot overshadow the condition that the means
employed to pursue it must be in keeping with the Rules.
WHEREFORE, premises considered, the Petition is DENIED for lack of merit.

SO ORDERED.

MAKING ENTERPRISES, INC. AND SPOUSES G.R. No. 152239

JOAQUIN TAMANO AND ANGELITA TAMANO,

Petitioners,
Present:

CORONA, C.J.,

Chairperson,
- versus -
LEONARDO-DE CASTRO,

BERSAMIN,

DEL CASTILLO, and

VILLARAMA, JR., JJ.

JOSE MARFORI AND EMERENCIANA MARFORI, Promulgated:

Respondents.

August 17, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari assailing the July 24, 2000 Decision27[1]of the Court of
Appeals (CA) in CA-G.R. SP No. 43076. The CA had ordered the issuance of writs of certiorari and
prohibition permanently enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660 to
170676 before the Metropolitan Trial Court (MeTC) of Caloocan City, and ordered the appointment of a
receiver in Civil Case No. 94-70092, pending before the Regional Trial Court (RTC) of Manila. Likewise
assailed is the appellate courts Resolution28[2]dated February 12, 2002, denying petitioners motion for
reconsideration.

The antecedent facts follow:

On June 4, 1984, Jose F. Marfori acquired a five-storey commercial building, known as the Marsman
Building, from the Development Bank of the Philippines. As the land on which the building stood was
owned by the Philippine Ports Authority (PPA), Marfori entered into a contract of lease of the said lot with
the PPA. The contract was for a period of twenty-five (25) years, renewable for a similar period, and was
subject to the condition that upon the expiration of lease, the building and all other improvements found
on the leased premises shall become the PPAs sole property. Marfori then incurred huge expenses for the
rehabilitation of the building and leased some portions of the building to the PPA.

Thereafter, on April 10, 1987, Marfori executed a dacion en pago and assignment of rights transferring
the ownership of the Marsman Building to Making Enterprises, Inc. (Making), on the condition that Making
would assume all of Marforis obligations.29[3] Making was represented by its General Manager, Cristina
Lee, and Executive Vice-President, Angelita Ma. Tamano, in the said transaction.

Marforis wife, Emerenciana, alleged that she did not consent to the transfer of the Marsman Building to
Making. She claimed that the building is part of their conjugal property as it was acquired during their
marriage.30[4] On April 12, 1994, she filed with the RTC of Manila a complaint against Making, the spouses
Joaquin and Angelita Tamano, the spouses Lester and Cristina Lee, and the PPA for Recovery of
Ownership, Annulment of Contract with Damages, Receivership, Accounting and Preliminary Injunction
with Prayer for Restraining Order.31[5] She sought, among others, to annul the dacion en pago and
assignment of rights and prayed for the appointment of a receiver to preserve the rentals of the building.
She also prayed for the issuance of a writ of preliminary injunction to enjoin the PPA from paying its rentals
to Making and from approving the transfer of the Marsman Building.

In an Order32[6]dated October 18, 1995, Judge Catalino Castaeda, Jr. of the RTC, Branch 17, of Manila
denied the prayer for the issuance of a writ of preliminary injunction and the application for receivership.

The RTC noted that in 1987, Emerencianas complaint for the same cause of action was dismissed by the
RTC, Branch 51, of Manila for improper venue.33[7] The RTC was not convinced that she would indeed
suffer grave injustice and irreparable damages if a writ of injunction enjoining the PPA from paying rentals
to Making and approving the transfer of the Marsman Building is not issued considering that she re-filed
her complaint only on April 12, 1994, or more than six years after her first complaint was dismissed. As
regards her prayer for the appointment of a receiver, the RTC held that the appointment of a receiver is
an equitable relief and a court of equity will not ordinarily appoint a receiver where the rights of the
parties depend on the determination of adverse claims of legal title to real property and one party is in
possession.

Emerenciana moved for reconsideration of the order. However, the RTC denied the motion.34[8]

Not satisfied, Emerenciana filed before the CA a petition for certiorari and receivership with prayer for
preliminary injunction, which was docketed as CA-G.R. SP No. 39161. On March 29, 1996, however, the
CA dismissed the petition for being insufficient in form and substance.35[9] Reconsideration of the dismissal
was likewise denied in a Resolution dated November 29, 1996.36[10]

Meanwhile, with regard to the criminal cases mentioned at the outset, records show that in 1987,
Marfori issued twenty-two (22) checks in favor of Cristina Lee. Lee deposited the checks to her account
with the Philippine Bank of Communications, but the same were dishonored for the reason of Account
Closed. Thus, she filed complaints against Marfori for estafa and violation of Batas Pambansa Blg. 22 with
the Prosecutor's Office of Caloocan City.37[11]

Before he could be arraigned, Marfori sought reinvestigation of the criminal cases against him,
arguing that he was not given the opportunity to present controverting evidence to prove that the checks
were already paid or liquidated.38[12]The RTC granted Marforis motion and ordered the Office of the City
Prosecutor to conduct a reinvestigation. Upon reinvestigation, Assistant City Prosecutor Afable E. Cajigal
rendered a joint resolution,39[13]which was later approved by City Prosecutor Gabriel N. Dela Cruz, finding
cause to dismiss the criminal complaints against Marfori. On August 11, 1995, Asst. City Prosecutor Cajigal
filed a motion to dismiss before the RTC of Caloocan City, which motion was granted by Judge Emilio L.
Leachon, Jr. on the same date.40[14]

Claiming that she was not notified of the order for reinvestigation, Angelita Ma. Tamano moved to set
aside the joint resolution.41[15]Prosecutor Cajigal then reversed his previous findings and recommended
the setting aside of the joint resolution and dismissal order.42[16]Said resolution was approved by 1st
Assistant City Prosecutor Rosauro Silverio. Thus, Asst. City Prosecutor Cajigal filed seventeen (17)
informations for violation of B.P. 22 against Marfori before the MeTC of Caloocan City.43[17] Warrants for
Marforis arrest were also issued by Judge Marcelino L. Sayo.
Aggrieved, Marfori filed with the Caloocan City RTC a petition44[18] for certiorari and injunction with
prayer for temporary restraining order against Judge Sayo; Asst. City Prosecutors Cajigal, Silverio and Dela
Cruz; and Making, who was represented by Tamano. Marfori maintained that all the checks were drawn
in favor of Cristina Lee, but the prosecutors deliberately made it appear in the new informations that the
checks were drawn in favor of Making. He prayed that Judge Sayo be enjoined from proceeding with the
trial of the criminal cases and that the informations for violation of B.P. 22, as well as the warrants of
arrest, be declared void.

Making, represented by Tamano, filed a motion to dismiss arguing that the general rule is that a criminal
prosecution may not be restrained by injunction.45[19]

In an Order dated April 18, 1997, the RTC granted Makings motion and dismissed Marfori's petition.46[20]

Meanwhile, on November 27, 1996, Marfori and his wife had filed with this Court a Consolidated
47[21]
Petition docketed as G.R. No. 126841 asking among others, for the appointment of a receiver to
preserve the rentals collected from the Marsman Building and the issuance of an injunction to enjoin the
implementation of the warrants of arrest issued against him. Respondents argued that the filing of the
criminal cases against Marfori had no factual and legal justification and hence, should be enjoined.

The Court, after finding no special and important reasons for it to take cognizance of the case in
the first instance, referred the petition to the CA for consideration and adjudication on the merits.48[22]

On February 16, 1998, respondents filed an Amended Consolidated Petition49[23]with the CA. They added
that Judge Castaeda, Jr. likewise erred in denying in Civil Case No. 94-70092 their motion to present crucial
documents wherein Tamano allegedly made a declaration against her interest. They likewise reiterated in
their amended petition their prayer for the appointment of a receiver to take over, manage, and
administer the Marsman Building.

In their Comment, petitioners countered that respondents had lost all their rights to the building after
they ceded it to Making in 1987. Petitioners also charged respondents with forum shopping.50[24]They
argued that when Emerencianas application for a writ of preliminary injunction and receivership was
denied by the RTC, she appealed the denial to the CA. When she failed to obtain a favorable action, she
and her husband filed a petition with the Supreme Court involving the same subject matter and the same
issues as in Emerencianas earlier petition in CA-G.R. SP No. 39161. Petitioners alleged that respondents
hid the real purpose of their action by cleverly lumping together the civil and the criminal cases in their
Consolidated Petition.

On July 24, 2000, the CA rendered the assailed Decision, to wit:

WHEREFORE, premises considered, the petition filed by petitioners Jose and Emerenciana Marfori is
hereby GRANTED, and judgment rendered as follows:

1) That writs of certiorari and prohibition be issued permanently enjoining the further prosecution of
Criminal Case Nos. 170660 to 170676, inclusive, against petitioner Jose Marfori; and

2) That, after posting of a bond in an amount to be determined by the Trial Court, let a receiver be
appointed in Civil Case No. 94-70092, to take custody, manage, and administer the Marsman Building and
all rents collected therefrom, during the pendency of the proceedings.

SO ORDERED.51[25]

The CA brushed aside petitioners' argument that respondents were guilty of forum shopping,
holding that technical rules of procedure must be relaxed in the interest of substantial justice.

As to the order granting the prayer for the appointment of a receiver, the CA ruled that respondents have
sufficiently proven their interest in the Marsman Building. The CA found that unless a receiver is
appointed, there is a danger of loss or material injury considering that petitioners possess absolute control
of the building.

Meanwhile, as to the criminal cases, the CA ruled that the public prosecutors gravely abused their
discretion when they set aside the earlier resolution recommending the dismissal of the criminal cases
against Marfori based solely on the ground that Tamano was not given the chance to comment on
Marforis motion for reinvestigation. The CA noted that in the joint resolution, the prosecutors thoroughly
studied the case and concluded that the checks subject of the criminal cases were not issued with valuable
consideration since it was impossible for Marfori to have been indebted or for petitioners to lend the
amount of P4,051,518.08 stated in the checks because the complainants/Making Enterprises only earned
P49,352.95 in 1987.

Petitioners filed motions for reconsideration questioning the appointment of a receiver52[26]and

the order permanently enjoining the further prosecution of Marfori in Criminal Case Nos. 170660 to
170676.53[27] However, the CA denied both motions in its Resolution of February 12, 2002 as follows:

WHEREFORE, the motions are hereby DENIED. However, in order to ensure that the objectives of
Sec. 1 (a) Rule 59, the basis of Our decision, will be carried out effectively, the trial court is DIRECTED to
appoint [as] a receiver, after compliance of the bond requirement, a private banking institution which
shall exercisepowers as such pursuant to Sec. 6, Rule 59 of the Rules of Court.

SO ORDERED.54[28]

Hence, the present petition.

Essentially, petitioners present the following issues: (1) Whether the CA erred in granting the
application for the appointment of a receiver for the Marsman Building; and (2) Whether the CA erred in
permanently enjoining the criminal prosecution of Jose Marfori.

We grant the petition.

At the outset, we note that the CA erred in taking cognizance of respondents consolidated petition as
respondents are guilty of deliberate forum shopping. We note that the petition for appointment of a
receiver for the Marsman Building was originally filed by Emerenciana before the RTC of Manila in Civil
Case No. 94-70092. The RTC denied the prayer for the issuance of a writ of preliminary injunction and the
application for receivership. Emerenciana filed a motion for reconsideration, which was denied by the
RTC. She then filed a petition for certiorari and receivership with prayer for preliminary injunction before
the CA docketed as CA-G.R. SP No. 39161. In a Resolution dated March 29, 1996, the petition was
dismissed for being insufficient in form and substance. She sought reconsideration of the dismissal, and
her motion was likewise denied by the CA on November 29, 1996.

However, records show that two days earlier, or on November 27, 1996, while her motion for
reconsideration of the CA resolution dismissing her petition was still pending resolution before the CA,
she and her husband filed with this Court a consolidated petition, praying for the appointment of a
receiver over the Marsman Building. Clearly, CA-G.R. SP No. 39161 was still pending with the CA when
respondents filed their consolidated petition with this Court.
Moreover, we note that respondents were not candid when they stated in their certification of non-forum
shopping that there is no other action or proceeding involving the same issues that is pending before this
Court, the CA, or any other tribunal or agency.55[29]

There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation

thereof, a party seeks a favorable opinion in another forum through means other than appeal or certiorari.
Forum-shopping exists when two or more actions involve the same transactions, essential facts, and
circumstances; and raise identical causes of action, subject matter, and issues. Forum-shopping exists
when the elements of litis pendentia are present or where a final judgment in one case will amount to res
judicata in the other.56[30] Thus, there is forum-shopping when, between an action pending before this
Court and another one, there exist: (1) identity of parties, or at least such parties as represent the same
interests in both actions, (2) identity of rights asserted and relief prayed for, the relief being founded on
the same facts, and (3) the identity of the two preceding particulars is such that any judgment rendered
in the other action will, regardless of which party is successful, amount to res judicata in the action under
consideration; said requisites also constitutive of the requisites for auter action pendant or lis
pendens.57[31]

Applying the above test, there is no question that there is identity of parties, cause of action and
reliefs sought between the consolidated petition in G.R. No. 126841 and the petition in CA-G.R. SP No.
39161. For resorting to forum shopping, the consolidated petition of the spouses Marfori should have
been dismissed with prejudice.

But even on the merits, the application for an appointment of a receiver must be denied.

An application for the appointment of a receiver under Section 1(a), Rule 59 of the 1997 Rules of
Civil Procedure, as amended, requires that the property or fund subject of the action is in danger of being
lost, removed, or materially injured, necessitating its protection or preservation. Section 1 provides,

SECTION 1. Appointment of receiver.Upon a verified application, one or more receivers of the

property subject of the action or proceeding may be appointed by the court where the action is pending,
or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following cases:

(a) When it appears from the verified application, and such other proof as the court may require,
that the party applying for the appointment of a receiver has an interest in the property or fund which is
the subject of the action or proceeding, and that such property or fund is in danger of being lost, removed,
or materially injured unless a receiver be appointed to administer and preserve it;

xxxx
 Here, respondents submit that they have satisfactorily established their legal right over the
Marsman Building. They alleged that the building and the income and rentals thereof are in danger of
being lost, removed or materially injured by the apathy, neglect and fraudulent design of petitioners
thereby rendering the appointment of a receiver both urgent and imperative.58[32] However, they failed
to show how the building as well as the income thereof would disappear or be wasted if not entrusted to
a receiver. They were not able to prove that the property has been materially injured, necessitating its
protection and preservation. Because receivership is a harsh remedy that can be granted only in extreme
situations,59[33] respondents must prove a clear right to its issuance. This they failed to do.

We furthermore observe that in granting the appointment of a receiver, the CA merely concluded that
respondents have sufficiently proven that they have an interest in the Marsman Building. It further held
that unless a receiver is appointed, there is a danger of loss or material injury, considering that petitioners
presently possess absolute control of the building and the rentals accruing thereof. However, there was
no justification on how the CA arrived at its conclusion.

It must be stressed that the issue of the validity of the dacion en pago and assignment of rights executed
by Marfori in favor of Making still has to be resolved in Civil Case No. 94-70092. Until the contract is
rescinded or nullified, the same remains to be valid and binding. Thus, we agree with the RTC when it held
that courts of equity will not ordinarily appoint a receiver where the rights of the parties depend on the
determination of adverse claims of legal title to real property and one party is in possession.

As regards the second issue, the Court finds no longer necessary to pass upon the correctness of
the order of the CA permanently enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660
to 170676 before the MeTC of Caloocan City. The Court notes that during the pendency of this petition,
Jose Marfori passed away on October 2, 2004.60[34]Pursuant to Article 89, paragraph 161[35] of the Revised
Penal Code, as amended, the death of Marfori totally extinguished his criminal liability. Because Marfori
died even before arraignment and trial, there is no relevance in declaring the extinction as well of civil
liability that was based exclusively on the crime for which an accused is convicted (i.e., ex delicto). Only
civil liability predicated on a source of obligation other than the delict, if any, survived the death of the
accused, which the offended party can recover by means of a separate civil action.62[36]
WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The July 24, 2000 Decision and
February 12, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 43076, insofar as they ordered the
appointment of a receiver in Civil Case No. 94-70092, are hereby REVERSED and SET ASIDE. In view of the
death of Jose Marfori, Criminal Case Nos. 170660 to 170676 before the Metropolitan Trial Court of
Caloocan City are hereby ordered DISMISSED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 80863 April 27, 1989

ANTONIO M. VILLANUEVA and FULGENCIO B. LAVAREZ, petitioners,

vs.
HONORABLE ABEDNEGO O. ADRE, Presiding Judge, Regional Trial Court, Branch 22, 11th Judicial Region,
and LUCIO VELAYO, respondents.

SARMIENTO, J.:
The central question in the petition at bar is whether or not the regular courts may stay an execution
decreed by the labor arbiters and what the consequences are of such a recourse to the courts.

The case began from a complaint, dated January 6, 1977, for recovery of unpaid thirteenth-month pay
filed by the Sarangani Marine and General Workers Union-ALU with the Department of Labor (Regional
Office No. XI, General Santos City) against the South Cotabato Integrated Port Services, Inc. (SCIPSI), a
Philippine corporation. Later, thirty-seven SCIPSI employees, non-union members apparently, filed their
own complaint. The labor arbiter consolidated the twin complaints and after hearing, ordered a dismissal
on December 29, 1977. On appeal, however, the National Labor Relations Commission, on June 9, 1981,
reversed and accordingly, ordered the private respondents, SCIPSI and its president and general, Lucio
Velayo, to pay the thirteenth-month pays demanded. The private respondents' motion for
reconsideration was denied, and the decision has since attained finality.

Thereafter, the parties, on orders of the labor arbiter, were made to appear before a corporate auditing
examiner to determine the private respondents' exact liability. On October 24, 1986, the corporate
auditing examiner submitted an accounting and found the private respondents liable in the total sum of
Pl,134,000.00. Thereupon, the private respondents interposed an objection and prayed for a revision. It
appears, however, that the private respondents never pursued their exceptions.1

On January 16,1987, the union moved for execution and pursuant thereto, the labor arbiter issued a writ
of execution. As a result, the sheriff levied on two parcels of land, both registered in Lucio Velayo's name,
with an area of 400 and 979 square meters.

On February 14, 1987, both SCIPSI and Velayo petitioned this Court 2 on certiorari with injunction on the
ground, fundamentally that the Department of Labor's examiner erred in her determination of the private
respondents pecuniary liabilities.

On February 16,1987, Velayo alone filed a petition with the respondent court (Special Case No. 227) on a
cause of action based on an alleged irregular execution, on the ground that he "was never a party to the
labor case" 3 and that "a corporation (that is, SCIPSI has a separate and distinct personality from this
incorporators, stockholders and officers." 4

On February 17, 1987, the respondent court issued a temporary restraining order enjoining execution of
the judgment in the aforementioned labor cases. On March 5, 1987, the petitioner moved for dismissal
for lack of jurisdiction and litis pendentia.

On the strength of this Court's decision in National Mines Allied Workers Union v. Vera,5 the trial judge
denied the motion to dismiss. Reconsideration having been likewise denied, the union as well as the labor
arbiter (Antonio Villanueva) and the sheriff (Fulgencio Lavarez) themselves, on October 22, 1987,
instituted these certiorari proceedings. 6

Meanwhile, on April 27,1988, the parties (in G.R. Nos. 7730001) submitted a Compromise Agreement
whereby the private respondents agreed to pay, in installments, the reduced sum of P637,400.00 to the
workers. On May 11, 1988, we issued a Resolution approving the Compromise Agreement, and
considering the cases (G.R. Nos. 77300-01) closed and terminated. 7

At the same time, we issued (in this petition) a Resolution requiring the private respondents and/or
counsel, Atty. Oscar Dinipol, to show cause why they should not be held in contempt for forum-shopping.
On December 9,1988, Atty. Dinopol filed a manifestation praying for dismissal "not because it has become
moot and academic in view of the compromise agreement executed by the parties in G.R. Nos. 77300-01
(but because) the subject or cause of action (thereof) is totally different from the cause of action in the
above-entitled case." 8

On whether or not this case has become moot and academic in view of the compromise reached in G.R.
Nos. 77300-01, the Court rules in the affirmative. It should be noted that the instant petition has been
brought as a result of the execution of the judgment rendered below, and since the parties, by virtue of
the compromise, have spelled out the manner by which payment shall be made, execution by means of
levy, the question confronting the court herein, may no longer be carried out. Nevertheless, because of
the ethical implications of the acts of the private respondents, the Court is constrained to render its
judgment if only to forestall future similar acts and for the guidance of the bench and the bar.

We likewise render judgment notwithstanding Atty. Oscar Dinopol's pending prayer for extension of time
to file his comment to our show cause Resolution of November 7, 1988. We consider his manifestation,
dated November 29,1988, urging us not to dismiss this case for having became moot and academic but
because the petition lacks merit as his comment. We do so for one because it has been the position of the
private respondents that Special Case No. 227 and G.R. Nos. 77300-01 could stand together and for
another, because of the compelling need to dispose of labor cases with utmost dispatch. We take this as
his defense to that show-cause Resolution. Parenthetically, we find him mistaken for supposing that our
Resolution is based on the simultaneous commencement of Special Case No. 227 and G.R. Nos. 77300-01.
This is not the act that forced suspicions on our part of efforts by the private respondents to "shop for a
friendly forum". Rather, it is the institution of Special Case No. 227, despite the pendency of the labor
proceedings below, that led us to those suspicions. G.R. Nos. 77300-01, on the other hand, were brought
primarily on the question of the exact amount SCIPSI is liable to pay. It is on its face, a legitimate ground
for certiorari, and for this reason we accepted the parties compromise reached there, instead of
dismissing it.

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with
respect to suits filed in the courts but also in connection with litigations commenced in the courts while
an administrative proceeding is pending, as in this case, in order to defeat administrative processes and
in anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as
in this case, where the court in which the second suit was brought, has no jurisdiction.

Accordingly, the respondent court must be held to be in error assuming jurisdiction over Special Case No.
227. It is well-established that the courts cannot enjoin execution of judgment rendered by the National
Labor Relations Commission. 9

The respondent Lucio Velayo's reliance upon National Mines and Allied Workers Union v. Vera10 is not
well-taken. In that case, the properties involved belonged to third persons, a development that provided
a civil dimension to the labor case, and a development that gave the courts the jurisdiction. In the case at
bar, however, Velayo cannot be said to be a stranger to the proceedings for a number of reasons. First,
and as pointed out by the Solicitor General, and as the records will amply show, he, Velayo, was a party
to the proceedings below where he took part actively in defense of his case. We quote:
... It is not true that Lucio Velayo was not a party in the labor cases. The caption of the labor cases shows
he was a respondent. The records of the labor cases show that he participated in the proceedings therein,
without raising the issue that he was not a party nor the employer of the complainants. Thus, the Motion
for Reconsideration dated August 7, 1981 attached to the Petition as Annex B was filed by both SCIPS and
Lucio Velayo. SCIPS and Velayo discussed the merits of the cases in said motion and there was nary a
mention of the allegation of Velayo now that he not not a party in the cases nor an employer of the
complainants. Likewise, the Exception and/or Opposition to Report of Examiner dated November 13,
1986, attached to the Petition as Annex F, was also filed by both SCIPS and Velayo and, like the Motion
for Reconsideration aforementioned, it does not mention anything about Velayo not being a party and
not being an employer of complainants. 11

Certainly, he cannot now be heard to say that he was no party to the controversy.

The fact that he was never mentioned in the pleadings before the petitioner-labor arbiter is of no
moment.The fact is that he himself had questioned the findings of the corporate auditor (in G.R. Nos.
77300-01) and this is enough evidence that he admits personal liability, although he does not agree with
the amount supposedly due from him. His remonstrances came too late in the day.

But other than estoppel, the law itself stands as a formidable obstacle to Velayo's claims. In A.C. Ransom
Labor Union-CCLU v. NLRC 12 we held that in case of corporations. It is the president who responds
personally for violation of the labor pay laws. We quote:

Article 273 of the Code provides that:

Any person violating any of the provisions of Article 265 of this Code shall be punished by a fine of not
exceeding five hundred pesos and/or imprisonment for not less than one (1) day nor more than six (6)
months.

(b) How can the foregoing provisions be implemented when the employer is a corporation? The answer
is found in Article 212 (c) of the Labor Code which provides:

(c) 'Employer' of the Labor Code which provides: which 'Employer' includes any person acting in the
interest of an employer, directly or indirectly. The term shall not include any labor organization or any of
its officers or agents except when acting as employer.

The foregoing was culled from Section 2 of RA 602, the Minimum Wage Law. Since RANSOM is an artificial
person, it must have an officer who can be presumed to be the employer, being "the person acting in the
interest of (the) employer" RANSOM. The corporation, only in the technical sense, is the employer.

The responsible officer of an employer corporation can be held personally, not to say even criminally,
liable for non-payment of back wages. That is the policy of the law. In the Minimum Wage Law, Section
15(b) provided:

(b) If any violation of this Act is committed by a corporation, trust, partnership or association, the manager
or in his default, the person acting as such when the violation took place, shall be responsible. In the case
of a government corporation, the managing head shall be made responsible, except when shown that the
violation was due to an act or commission of some other person, over whom he has no control, in which
case the latter shall be held responsible.
In PD 525, where a corporation fails to pay the emergency allowance therein provided, the prescribed
penalty shall be imposed upon the guilty officer or officers of the corporation.

(c) If the policy of the law were otherwise, the corporation employer can have devious ways for evading
payment of back wages. In the instant case, it would appear that RANSOM, in 1969, foreesing the
possibility or probability of payment of back wages to the 22 strikers, organized ROSARIO to replace
RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually
ceased operations on May 1, 1973 after the December 19, 1972 Decision of the Court of Industrial
Relations was promulgated against RANSOM.

(d) The record does not clearly Identify the "officer or officers" of RANSOM directly responsible for failure
to pay the back wages of the 22 strikers. In the absence of definite proof in that regard, we behave it
should be presumed that the responsible officer is the President of the corporation who can be deemed
the chief operation officer thereof. Thus, in RA 602, criminal responsibility is with the "Manager or in his
default, the person acting as such." In RANSOM, the President appears to be the Manager.

(e) Considering that non-payment of the back wages of the 22 strikers has been a continuing situation, it
is our opinion that the personal liability of the RANSOM President, at the time the back wages were
ordered to be paid should also be a continuing joint and several personal liabilities of all who may have
thereafter succeeded to the office of president; otherwise, the 22 striken may be deprived of their rights
by the election of a president without leviable assets.13

Accordingly, Velayo cannot be excused from payment of SCIPSI's liability by mere reason of SCIPSI's
separate corporate existence. The theory of corporate entity, in the first place, was not meant to promote
unfair objectives or otherwise, to shield them. This Court has not hesitated in penetrating the veil of
corporate fiction when it would defeat the ends envisaged by law, 14 not to mention the clear decree of
the Labor Code.

And if Velayo truly had a valid objection (to the levy on his properties), he could have raised it at the
earliest hour, and in the course of the labor proceedings themselves. But, as we earlier indicated, he raised
nary a finger there, and he cannot raise it now, much less in a separate proceeding. He is not only
estopped, litis pendencia is a bar to such a separate action.15

While the instant case has been rendered moot and academic by reason of the out-of-court settlement
between the parties, that development will not absolve Velayo and/or his counsel, Atty. Oscar Dinopol 16
from charges of forum-shopping. In Buan v. Lopez, Jr., supra, we declared that forum- shopping is an act
of malpractice that constitutes contempt of court.

In this connection, we reject Atty. Dinopol's pretense that no Identity exists between Special Case No. 227
and the labor case that had precipitated it. The fact remains that in Special Case No. 227, he assails the
execution of the judgment of the National Labor Relations Commission, the same relief he could have
asked for in the very labor proceeding. The fact that he likewise prayed for damages therein will not alter
the essence of the petition- to stay execution-and in which the claim for damages is but an incidental
relief.

Clearly, both Velayo and Atty. Dinopol must account for forum-shopping.
WHEREFORE, judgment is rendered: (1) DISMISSING the petition for having become moot and academic;
(2) ORDERING the respondent judge to dismiss Special Case No. 227; (3) DECLARING the respondent, Lucio
Velayo and Atty. Oscar Dinopol IN CONTEMPT and ORDERING them to pay a fine of Pl,000.00 each within
five (5) days from notice; and (4) SUSPENDING Atty. Oscar Dinopol, for a period of three (3) months
effective from notice, from the practice of law. Let a copy of this Decision be entered in his record.

THIS DECISION IS IMMEDIATELY EXECUTORY.

IT IS SO ORDERED.