G.R. No.
147623 December 13, 2005 Pulmonary Hypertension and Acute Psychotic Reaction and declared
STOLT-NIELSEN MARINE SERVICES, INC. (now STOLT-NIELSEN
TRANSPORTATION GROUP, INC.), Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
ARIEL C. SANTOS, RICARDO O. ATIENZA and RAMON
ALPINO, Respondents.
DECISION
GARCIA, J.:
Before the Court is this petition for review under Rule 45 seeking
the reversal of the decision1 dated March 29, 2000 of the Court of
Appeals in CA-G.R. No. 51046 and its Resolution dated March 2,
2001, denying petitioner's motion for reconsideration.
The assailed decision affirmed the resolution2 dated August 29, 1997
of the National Labor Relations Commission (NLRC) denying
petitioner’s Urgent Motion to Reduce or be Exempted from Filing an
Appeal Bond.
The factual background of the case may be stated, as follows:
In 1978, herein private respondent Ramon Alpino was employed as
motorman by petitioner Stolt Nielsen Marine Services, Inc., a
corporation based in Connecticut, U.S.A., for the latter’s vessel "M/T
Stolt Sincerity." Respondent’s employment with petitioner, albeit
not continuous, lasted until 1984 when he was repatriated to the
Philippines after being diagnosed with Cardiac Enlargement,
unfit for sea duty.
In early 1985, respondent filed a complaint before the Philippine
Overseas and Employment Agency (POEA), docketed as POEA Case
No. (M) 85-01-039, for  recovery of sickness and disability benefits
and claim for personal belongings and underpayment of
wages against petitioner. Petitioner offered to amicably settle the
money claims of respondent, which offer was accepted by
respondent’s sister and attorney-in-fact Anita Alpino by virtue of a
Special Power of Attorney (SPA). Thus, on March 21, 1985,
respondent, through his sister and attorney-in-fact, executed a
"Receipt and Release" whereby he acknowledged receipt of the sum
of ₱130,000.00 representing disability benefits, medical and
hospitalization expenses, and damages. On the basis of said
"Receipt and Release," POEA dismissed Case No. (M) 85-01-039.
In December 1987, another complaint against petitioner was lodged
by respondent before the POEA for the same causes of action
(recovery of sickness and disability benefits and claim for personal
belongings and underpayment of wages). The case, docketed as
POEA Case No. (M) 87-12-997, was dismissed by the POEA on
ground of res judicata.
On March 14, 1989, respondent filed another complaint against
petitioner, this time with the Regional Trial Court (RTC) at Quezon
City, docketed as Civil Case No. Q-89-2009, for the  Annulment of
the Receipt and Release. In his complaint, respondent alleged that
he was mentally incapacitated to execute the SPA in favor of his
sister Anita Alpino. In an Order dated July 16, 1993, the RTC
dismissed Civil Case No. Q-89-2009 for insufficiency of evidence.
Therefrom, respondent went to the Court of Appeals which
affirmed3 the RTC’s judgment of dismissal. In time, respondent
moved for a reconsideration but his motion was denied by the
appellate court.4
Undaunted, on July 26, 1994, respondent filed a case against
petitioner with the POEA for recovery of sickness and disability
benefits, allegedly arising from his sickness while under the latter’s
employ. The case was docketed as POEA Case No. (M) 94-07-2223.
By reason of the passage of Republic Act 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995,5 POEA Case
No. (M) 94-07-2223 was transferred to the NCR-Arbitration Branch
of the NLRC and assigned to herein public respondent, Labor Arbiter
Ariel Santos.
On May 6, 1997, Labor Arbiter Santos rendered a decision declaring
"invalid and ineffectual" the SPA executed by respondent in favor of
his sister Anita and the subsequent Receipt and Release  signed by
the latter in behalf of her brother. In resolving the case, Labor
Arbiter Santos ratiocinated as follows:
The principal issue to be resolved is whether or not the special
power of attorney executed by [respondent] in favor of [his] sister
and the subsequent Receipt and Release are valid documents to
forestall any claim by [respondent].
After a careful and judicious study of the respective pleadings and
pieces of evidence submitted by both parties, undersigned finds
that the documents adverted and relied upon by [petitioner] to
negate [respondent’s] claim are shot with loopholes that would
render it voidable and unenforceable.
First, it is to be noted that [petitioner] did not controvert the merit
of [respondent’s] claim for sickness and disability benefits but relied
mainly on the invalid Receipt and Release signed by [respondent’s]
sister as the basis for dismissing [respondent’s] claim.
A cursory look at the documents Receipt and Release and the
Special Power of Attorney marked as Annex "1" and Annex "2,"
respectively, would readily indicate that they were prepared with
haste and haphazardly to render it valid and lawful. Both documents
were prepared on the same day. In fact, the Receipt and Release
was not even executed under oath so that its due execution is put
under a cloud of doubt.
Secondly, even gratia argumenti that the documents adverted to
are valid and were entered into voluntarily, the consideration
thereof is oppressive, unreasonable and unconscionable. It is a
public policy that where the consideration in a public document is
disproportionately unconscionable to the claims of [respondent]
who was declared to be mentally unfit, the State should step in to
protect the rights of the aggrieved party and declare the same
document to be invalid and without force and effect.
Thirdly, the consideration of P130,000.00 paid by [petitioner] to
[respondent’s] attorney-in-fact corresponds only to [respondent’s]
claim for lost luggages and should not extinguish [respondent’s]
right to claim for sickness and disability benefits as recognized
under insurance health cover before any seaman can board any
foreign vessel.6
The dispositive portion of Labor Arbiter Santos’ decision states:
WHEREFORE, finding the subject documents Annex "1" and Annex
"2" of [petitioner’s] Answer to be invalid and ineffectual, [petitioner]
is hereby directed to pay [respondent’s] claim for sickness and
disability benefits.
The Research and Information Unit is hereby ordered to make the
proper computation which will become part and parcel of this
decision.
SO ORDERED.7 [Words in brackets added].
In compliance with the above directive, herein other public
respondent Ricardo Atienza, Acting Chief of Research and
Information Unit of NLRC, made a computation of respondent
Alpino’s claim for sickness and disability benefits as follows:
Sickness benefit for October 1979
(Payment for sickness & operation) = US$11,427.32
Injury and sickness for Sept. 1980
(Payment for last finger cut) = 5,568.42
Sickness benefit for March 1985
(Payment for sickness of
Acute Psychotic Reaction) = 28,810.60
TOTAL AWARD = US$45,806.348
On July 25, 1997, or seven days after its receipt of the
aforementioned Labor Arbiter’s decision, petitioner filed with the
respondent NLRC its Appeal with Attached Urgent Motion to Reduce
or be Exempted from Filing Appeal Bond.9 Petitioner argued therein
that the money claims of respondent Alpino were already barred by
prescription; that said claims should have been dismissed by the
Labor Arbiter on ground of res judicata; and that the validity of
the Receipt and Release and the Special Power of Attorney had
already been passed upon by the RTC of Quezon City in Civil Case
No. Q-89-2009 and affirmed by the Court of Appeals.
In a Resolution10 dated August 29, 1997, respondent NLRC affirmed
the Labor Arbiter’s decision and denied petitioner’s Urgent Motion
to Reduce or be Exempted from Filing an Appeal Bond  on account of
petitioner’s failure to post cash or surety bond within the
reglementary period. In so ruling, the NLRC reasoned:
The URGENT MOTION TO REDUCE OR BE EXEMPTED FROM FILING
APPEAL BOND is denied.
Sections 6 and 7, Rule VI of the New Rules of Procedure of the NLRC
provides:
"SECTION 6. BOND. – In case the decision of a Labor Arbiter, POEA
Administrator and Regional Director or his duly authorized hearing
officer involves a monetary award, an appeal by the employer shall
be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the Commission
or the Supreme Court in an amount equivalent to the monetary
award xxx."
"SECTION 7. NO EXTENSION OF PERIOD. – No motion or request for
the extension of the period within which to perfect an appeal shall
be allowed."
The aforequoted provisions are very clear, that all the requirements
for the perfection of an appeal must be made and complied with
within the reglementary period to appeal, that is: the filing of the
appeal and the posting of a cash or surety bond must be made
within the period of ten (10) days. The filing of a Motion to Reduce
Bond will not suspend the running of the ten (10) days period. If at
all, the movant should have secured the approval of the
Commission for the reduction of bond within the same period
allowed by law. Considering that the movant failed to comply with
the requirements for perfecting an appeal, said motion is therefore
denied.
The NLRC then decreed:
WHEREFORE, the URGENT MOTION TO REDUCE OR BE EXEMPTED
FROM FILING APPEAL BOND is DENIED for non-perfection of the
appeal.
Accordingly, the decision dated May 6, 1997 is AFFIRMED in toto.
Its motion for reconsideration having been denied by the NLRC in its
decision dated October 28, 199711 petitioner went to this Court via a
petition for  certiorari which this Court referred to the Court of
Appeals pursuant to its September 16, 1998 decision in St. Martin
Funeral Home vs. National Labor Relations Commission. 12
As stated at the threshold hereof, the appellate court, in its decision
of March 29, 2000, affirmed the judgment of the NLRC, thus:
The law is clear. An appeal, per article 223 of the Labor Code, shall
be perfected only upon posting of a cash or surety bond in cases
involving monetary award. On perfection of appeal, it is well
entrenched in this jurisdiction that perfection of an appeal within
the period and in the manner prescribed by law is jurisdictional and
non-compliance with such requirement is fatal and has the effect of
rendering the judgment final and executory.
In implementing article 223, respondent NLRC however laid down
the rule allowing reduction of the amount of bond which it can
approve in meritorious cases. There is a caveat however that the
filing of the motion to reduce bond does not stop the running of the
period to perfect appeal.
The plain import of article 223 of the Labor Code and the amended
section 6, Rule VI of the New Rules of Procedure is that the
reduction of the bond should be approved within the ten (10) day
appeal period and the appellant should exert its utmost diligence to
obtain the approval of respondent NLRC before the lapse of the
period or else there is a big risk that the appeal will be dismissed for
non-perfection of the appeal due to the absence of the appeal
bond. This is evident form the last sentence of Section 6, Rule VI
that "the filing xxx of the motion to reduce bond shall not stop the
running of the period to perfect appeal." Thus the present rule is
unequivocal that the filing of the motion does not toll the running of
the period of appeal and the logical implication and inevitable result
is the dismissal of the appeal if the reduction is denied. xxx. Thus
respondent NLRC correctly affirmed the decision of Arbiter Santos
since the appeal was not perfected due to lack of an appeal bond.
xxx xxx xxx
There being no capricious, arbitrary or whimsical exercise judgment
on the part of respondent NLRC, this petition perforce must fall.
With its motion for reconsideration having been denied by the
appellate court in its Resolution of March 2, 2001, petitioner is now
with us on the following grounds:
I.
IN DISMISSING PETITIONER’S PETITION FOR CERTIORARI, IN EFFECT,
AFFIRMING PUBLIC RESPONDENT NLRC, THE HONORABLE COURT
OF APPEALS, IN EFFECT, SANCTIONED THE DECISION DATED MAY 6,
1997 OF PUBLIC RESPONDENT LABOR ARBITER WHICH ON ITS FACE
WAS MANIFESTLY RENDERED IN EXCESS OF HIS JURISDICTION IN
THAT –
A. AS SHOWN IN THE UNILATERAL COMPUTATION OF PUBLIC
RESPONDENT ATIENZA WHICH FORMED PART OF PUBLIC
RESPONDENT LABOR ARBITER’S DECISION DATED MAY 6, 1997, THE
QUESTIONED AWARD IN THE AMOUNT OF US$45,806.34
ALLEGEDLY REPRESENTING DISABILITY AND SICKNESS BENEFITS FOR
OCTOBER 1979, SEPTEMBER 1980, AND MARCH 1985 IS CLEARLY
BARRED BY PRESCRIPTION AS PRIVATE RESPONDEN’S COMPLAINT
WAS FILED ONLY ON JULY 26, 2994;
B. THE ALLEGED MONEY CLAIM IS ALREADY BARRED BY RES
JUDICATA, NOT ONCE, BUT TWICE, AS THE SAME HAD ALREADY
BEEN RULED UPON BY THE POEA, THE QUASI-JUDICIAL BODY
WHICH THEN HAD THE JURISDICTION OVER SAID CLAIM IN ITS
ORDERS, TO WIT –
i. ORDER DATED APRIL 17, 1985 IN POEA CASE NO. (M) 85-01-039
DISMISSING THE CASE WITH PREJUDICE IN VIEW OF THE AMICABLE
SETTLEMENT ENTERED INTO BY THE PARTIES; AND
ii. ORDER DATED MAY 28, 1988 IN POEA CASE NO. (M) 87-12-997
DISMISSING THE CASE ON THE GROUND OF RES JUDICATA.
C. PUBLIC RESPONDENT LABOR ARBITER EXCEEDED HIS
JURISDICTION WHEN HE DECLARED AS ‘INVALID AND INEFFECTUAL’
THE RECEIPT AND RELEASE AND THE SPECIAL POWER OF ATTORNEY
THE VALIDITY OF WHICH HAD ALREADY BEEN PASSED UPON BY:
i. THE POEA, NOT ONCE BUT TWICE, IN POEA CASE NO. (M) 85-01-
039 AND SUBSEQUENTLY IN POEA CASE NO. (M) 87-12-997;
ii. THE REGIONAL TRIAL COURT, BRANCH 104 OF QUEZON CITY IN
ITS ORDER DATED SEPTEMBER 6, 1991 IN CIVIL CASE NO. Q-89-2009
DISMISSING PRIVATE RESPONDENT’S COMPLAINT FOR
INSUFFICIENCY OF EVIDENCE; AND
iii. THE HONORABLE COURT OF APPEALS ITSELF IN ITS DECISION
DATED JULY 16, 1993 IN CA-G.R. CV NO. 35954 AFFIRMING WITH
FINALITY THE AFOREMENTIONED ORDER OF THE REGIONAL TRIAL
COURT, BRNACH 104 OF QUEZON CITY.
II.
THE HONORABLE COURT OF APPEALS AND PUBLIC RESPONDENT
NLRC GROSSLY ERRED AND GRAVELY ABUSED THEIR DISCRETION
WHEN THEY STUBBORNLY IGNORED THE CURRENT POLICY OF THIS
HONORABLE COURT CALLING FOR LIBERAL INTERPREATTION OF
ARTICLE 223 OF THE LABOR CODE WITH RESPECT TO THE POSTING
OF AN APPEAL BOND AS A CONDITION FOR PERFECTING AN APPEAL
AND HOLDING THAT A MOTION TO REDUCE BOND BASED ON
MANIFESTLY MERITORIOUS GROUNDS IS A SUBSTANTIAL
COMPLIANCE THEREOF.
III.
THE HONORABLE COURT OF APPEALS GROSSLY ERRED AND
GRAVELY ABUSED ITS DISCRETION WHEN IT WITTINGLY AND
STUBBORNLY REFUSED TO CONSIDER THE SUBSTANTIAL MERITS OF
PETITIONER’S CASE WHICH IMPERATIVELY CALL FOR THE LIBERAL
APPLICATION OF ARTICLE 223 OF THE LABOR CODE AS THE VERY
FACTUAL BASIS AND GROUNS OF PETITIONER’S PETITION ARE
THEMSELVES RECOGNIZED BY THE HONORABLE COURT OF APPEALS
IN ITS DECISION OF MARCH 29, 2001.
IV.
TH HONORABLE COURT OF APPEALS MISERABLY ABDICATED ITS
JUDICIAL POWER OF REVIEW OVER PUBLIC RESPONDENTS AND
FAILED TO EXERCISE CANDOR IN THE DISPOSITION OF PETITIONER’S
PETITION.13
The petition lacks merit.
Time and again, it has been held that the right to appeal is not a
natural right or a part of due process, but merely a statutory
privilege and may be exercised only in the manner and in
accordance with the provisions of the law. The party who seeks to
avail of the same must comply with the requirements of the rules,
failing in which the right to appeal is lost.14
Article 223 of the Labor Code sets forth the rules on appeal from the
Labor Arbiter’s monetary award, thus:
Article 223. Appeal.— Decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of
such decisions, awards, or orders. xxx.
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from. (Emphasis ours)
Rule VI of the New Rules of Procedure of the NLRC15 implements the
aforequoted Article. The pertinent provisions of Rule VI which were
in effect when petitioner filed its appeal on July 25, 1997,
provides, inter alia,  as follows:
Section 1.  Periods of Appeal. - Decisions, awards or orders of
the Labor Arbiter and the POEA Administrator shall be final and
executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such
decisions, awards or orders of the Labor Arbiter or of the
Administrator, and in case of a decision of the Regional Director or
his duly authorized Hearing Officer within five (5) calendar days
from receipt of such decisions, awards or orders. If the 10th or 5th
day, as the case may be, falls on a Saturday, Sunday or a holiday, the
last day to perfect the appeal shall be the next working day. (As
amended on November 7, 1991)
xxx xxx xxx
Section 3.  Requisites for Perfection of Appeal. -  (a) The appeal shall
be filed within the reglementary period as provided in Section 1 of
this Rule; shall be under oath with proof of payment of the
required appeal fee and the posting of a cash or surety bond as
provided on Section 5 of this Rule; shall be accompanied by a
memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed
decision, order or award and proof of service on the other party of
such appeal.
A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting
an appeal.
xxx xxx xxx
Section 6.  Bond. -  In case the decision of a Labor Arbiter, POEA
Administrator and Regional Director or his duly authorized hearing
officer involves a monetary award, an appeal by the employer
shall be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the
monetary award, exclusive of moral and exemplary damages and
attorney's fees.
The employer as well as counsel shall submit a joint declaration
under oath attesting that the surety bond posted is genuine and
that it shall be in effect until final disposition of the case.
The Commission may, in meritorious cases and upon Motion of the
Appellant, reduce the amount of the bond. The filing, however, of
the motion to reduce bond shall not stop the running of the period
to perfect appeal. (As amended on November 5, 1996)
Section 7.  No Extension of Period. -  No motion or request for
extension of the period within which to perfect an appeal shall be
allowed.[Emphasis ours]
Evident it is from the foregoing that an appeal from rulings of the
Labor Arbiter to the NLRC must be perfected within ten (10)
calendar days from receipt thereof, otherwise the same shall
become final and executory. In a judgment involving a monetary
award, the appeal shall be perfected only upon (1) proof of
payment of the required appeal fee and (2) posting of a cash or
surety bond issued by a reputable bonding company and (3) filing of
a memorandum of appeal. A mere notice of appeal without
complying with the other requisites mentioned shall not stop the
running of the period for perfection of appeal.16
Here, petitioner received the decision of the Labor Arbiter on July
18, 1997. From July 18, 1997, petitioner has a limited period of ten
(10) days to perfect its appeal. Petitioner filed its memorandum of
appeal on July 25, 1997. However, in lieu of the required cash or
surety bond, petitioner filed a motion to reduce or be exempted
from filing an appeal bond.17 The NLRC denied the motion and
consequently dismissed the appeal for non-perfection. Petitioner
now insists that its Motion to Reduce Bond constitutes a substantial
compliance of the requirement for perfecting an appeal under
Article 223 of the Labor Code and the NLRC Rules of Procedure.
We disagree.
The requirement of a cash or surety bond for the perfection of an
appeal from the Labor Arbiter’s monetary award is not only
mandatory but jurisdictional as well, and non-compliance therewith
is fatal and has the effect of rendering the award final and
executory.18 The reason therefor is explained by the Court in this
language:
… [T]he obvious and logical purpose of an appeal bond is to insure,
during the period of appeal, against any occurrence that would
defeat or diminish recovery under the judgment if subsequently
affirmed; it also validates and justifies, at least prima facie, an
interpretation that would limit the amount of the bond to the
aggregate of the sums awarded other than in the concept of moral
and exemplary damages.19
The mandatory filing of a bond for the perfection of an appeal is
evident from the aforequoted provision of Article 223 of the Labor
Code which explicitly states that the appeal may be perfected only
upon the posting of cash or surety bond. The word "only" makes it
perfectly clear that the lawmakers intended the posting of a cash or
surety bond to be the exclusive means by which an employer’s
appeal may be perfected. This requirement is intended to dissuade
employers from using the appeal to delay, or even evade, their
obligation to satisfy their employee’s just and lawful claims.20
Further, the implementing rules of respondent NLRC are
unequivocal in saying that "the filing of the motion to reduce bond
shall not stop the running of the period to perfect appeal." Thus,
petitioner should have seasonably filed the appeal bond within the
ten-day reglementary period following its receipt of the decision of
Labor Arbiter Ariel Santos in order to forestall the finality of said
decision. Since petitioner failed to post an appeal bond within the
reglementary period, no appeal was perfected from the decision of
Labor Arbiter Santos, for which reason, the decision sought to be
appealed to the NLRC had become final and executory and
therefore immutable.
It is true that the requirement of posting a bond on appeals
involving monetary awards has been given a liberal interpretation in
certain cases.21 However, relaxation of this rule can only be done
where there was substantial compliance of the NLRC Rules of
Procedure or where the party involved, at the very least,
demonstrated willingness to abide by the rules by posting a partial
bond.22
Petitioner did not post a full or partial appeal bond within the
prescribed period. Petitioner could have even paid a moderate and
reasonable sum as premium for such bond as the law does not
require outright payment but merely the posting of a bond to
ensure that the award will be eventually paid should the appeal be
dismissed, but still, petitioner failed to do so. Hence, we find no
cogent reason to apply the same liberal interpretation in this case.
While, admittedly, Section 6, Rule VI of the NLRC Rules of Procedure
allows the reduction of the appeal bond upon motion of the
appellant, the exercise of the authority is not a matter of right on
the part of the movant but lies within the sound discretion of the
NLRC upon showing of meritorious grounds.23 Nevertheless, even
granting arguendo that petitioner has meritorious grounds to
reduce the appeal bond, the result would have been the same since
it failed to post cash or surety bond within the prescribed period.
As payment of the appeal bond is an indispensable and jurisdictional
requisite and not a mere technicality of law or procedure, we find
the challenged decision of the Court of Appeals in accordance with
law.
WHEREFORE, the petition is DENIED and the assailed decision of the
Court of Appeals in CA-G.R. No. 51046 AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 167412             February 22, 2006
JUANITA NAVAL, Petitioner,
vs.
COURT OF APPEALS, JUANITO CAMALLA, JAIME NACION,
CONRADO BALILA, ESTER MOYA and PORFIRIA
AGUIRRE, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the Decision1 of the Court of Appeals
dated December 14, 2004, in CA-G.R. SP No. 86736, which reversed
the Decision2 of the Regional Trial Court (RTC) of Naga City, Branch
26, in Civil Case No. 2004-0054 affirming the Decision3 of the
Municipal Circuit Trial Court (MCTC) of Magarao-Canaman,
Camarines Sur, as well as the Resolution4 dated February 17, 2005
denying petitioner’s motion for reconsideration.
The facts of the case are as follows:
On December 2, 1969, Ildefonso A. Naval sold a parcel of land
located in Sto. Tomas, Magarao, Camarines Sur, consisting of 858
sq. m. to Gregorio B. Galarosa. The sale was recorded in the Registry
of Property of the Registry of Deeds of Camarines Sur on December
3, 1969 pursuant to Act No. 3344, the law governing registrations of
all instruments on unregistered lands.5
Subsequently, Gregorio sold portions of the land to respondents
Conrado Rodrigo Balilla6 on November 4, 1976, Jaime Nacion7 on
January 10, 1977 and spouses Ireneo and Ester Moya8 in July 1977,
and Juanito Camalla9 on September 4, 1987. All buyers occupied the
portion they bought, built improvements thereon, and paid the
taxes due thereto.10
The controversy arose when petitioner Juanita Naval, the great
granddaughter of Ildefonso, was issued on April 1, 1975 by the
Register of Deeds of Camarines Sur an Original Certificate of Title
(OCT) No. RP-5386 (29791), covering 733 sq. m. of the subject
land.11 She claimed that she bought the subject land from Ildefonso
in 1972.12
On November 10, 1977, petitioner filed a complaint for recovery of
possession against Bartolome Aguirre, Conrado Balila,13 Ireneo
Moya, Jaime Nacion and Domingo Nacion, which was docketed as
Civil Case No. 306.14 However, the case was dismissed15 without
prejudice16 for failure to prosecute the action for an unreasonable
length of time.
Almost 20 years later, or on April 21, 1997, petitioner re-filed the
complaint for recovery of possession with damages before the
MCTC of Magarao-Canaman, Camarines Sur, against
Juanita17 Camalla, Diosdado Balila, Conrado Balila, Forferia18 Aguirre,
Jaime Nacion and Ester Moya. The case was docketed as Civil Case
No. 994.
After trial, the MCTC rendered its decision, the dispositive portion
reads as follows:
WHEREFORE, for all the foregoing consideration, decision is hereby
rendered in favor of the plaintiff and against defendants:
1) Declaring the plaintiff to be the legal owner of the land as
described in paragraph 2 of the complaint;
2) Ordering defendants Juanito Camalla, Diosdado Balila, Conrado
Balila, Porferia Aguirre and Jaime Nacion to vacate the property in
question and to deliver its possession to the plaintiff;
3) Ordering Ester Moya to vacate the fifty (50) square meters
occupied by her and to relinquish its possession to the plaintiff;
4) Dismissing the respective claims for damages of the parties.
Pronouncing no costs.
SO ORDERED.19
Aggrieved, respondents appealed the decision to the RTC of Naga
City, which affirmed in toto the assailed decision.20
Respondents thereafter elevated the case to the Court of
Appeals via Rule 42 of the Rules of Court. Finding the prior
registration of the deed of sale between Ildefonso and Gregorio
with the Register of Deeds as a constructive notice to subsequent
buyers, the appellate court reversed the decision of the RTC. Thus,
WHEREFORE, premises considered, the present petition is hereby
GRANTED. The appealed decision of the court a quo is hereby
REVERSED and SET ASIDE and a new judgment is hereby entered
dismissing respondent's complaint for recovery of possession with
damages. Petitioners' counterclaim for damages is likewise
dismissed for lack of legal and factual bases.
No pronouncement as to costs.
SO ORDERED.21
Hence, this petition assigning the following errors:
I
THE COURT OF APPEALS ERRED IN DECLARING THAT GREGORIO
GALAROSA HAS RIGHTFULLY ACQUIRED OWNERSHIP OVER THE LOT
COVERED BY OCT RP #5386 (29791) AND DECLARING HIM TO HAVE
POSSESSED THE LOT BEFORE THE ALLEGED SALES TO RESPONDENTS.
II
THE COURT OF APPEALS ERRED IN HOLDING THAT THE PAYMENT OF
TAXES BY RESPONDENTS WERE (sic) EVIDENCE OF LAWFUL
POSSESSION AND OWNERSHIP.
III
THE COURT OF APPEALS ERRED IN DECLARING THAT THE LOTS
CLAIMED BY THE RESPONDENTS HAVE BEEN POSSESSED BY THEM IN
GOOD FAITH DESPITE THEIR KNOWLEDGE OF THE EXISTENCE OF
OCT RP #5386(29791).22
Petitioner claims that she has superior rights over the subject land
because the sale between Ildefonso and Gregorio and the
subsequent registration thereof with the Register of Deeds had no
legal effect since the subject land was declared in the name of
Agrifina Avila while the tax declaration cancelled by Gregorio’s was
that of Gregorio Boñaga. Petitioner thus assails the right claimed by
Gregorio over the subject land from which the respondents derived
their respective claims.23
On the other hand, respondents contend that the registered sale by
Ildefonso to Gregorio in 1969 of the subject land, from whom they
derive their claims, vests them with better right than the petitioner;
that registration under Act No. 3344 served as constructive notice to
the whole world, including the petitioner, who claimed to have
purchased the subject land from Ildefonso in 1972, but failed to
present evidence to prove such acquisition.24
We deny the petition.
Prefatorily, a perusal of the records reveals that during the trial,
petitioner vigorously asserted that the subject land was the
exclusive property of Ildefonso who sold it to her in
1972.25 However, in this appeal, petitioner assails the ownership not
only of Gregorio but also of Ildefonso by alleging that at the time
the latter sold the land to Gregorio, the same was declared in the
name of Agrifina Avila. When a party adopts a certain theory in the
court below, he is not allowed to change his theory on appeal, for to
allow him to do so would not only be unfair to the other party, but it
would also be offensive to the basic rules of fair play, justice and
due process.26
In this appeal, the issue for resolution is who has the superior right
to a parcel of land sold to different buyers at different times by its
former owner.
It is not disputed that the subject land belonged to Ildefonso and
that it was not registered under the Torrens System27 when it was
sold to Gregorio in 1969 and to the petitioner in 1972. Further, the
deed of sale between Ildefonso and Gregorio was registered with
the Register of Deeds of Camarines Sur pursuant to Act No. 3344, as
shown by Inscription No. 54609 dated December 3, 1969, Page 119,
Volume 186, File No. 55409 at the back thereof.
In holding that respondents have a better right to possess the
subject land in view of the bona fide registration of the sale with the
Register of Deeds of Camarines Sur by Ildefonso and Gregorio, the
Court of Appeals applied Article 1544 of the Civil Code, which
provides:
ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry
of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title,
provided there is good faith.
While we agree with the appellate court that respondents have
superior right over the petitioner on the subject property, we find
Article 1544 inapplicable to the case at bar since the subject land
was unregistered at the time of the first sale. The registration
contemplated under this provision has been held to refer to
registration under the Torrens System, which considers the act of
registration as the operative act that binds the land.28 Thus,
in Carumba v. Court of Appeals,29 we held that Article 1544 of the
Civil Code has no application to land not registered under Torrens
System.
The law applicable therefore is Act No. 3344, which provides for the
registration of all instruments on land neither covered by the
Spanish Mortgage Law nor the Torrens System. Under this law,
registration by the first buyer is constructive notice to the second
buyer that can defeat his right as such buyer in good faith.
Applying the law, we held in Bautista v. Fule30 that the registration
of an instrument involving unregistered land in the Registry of
Deeds creates constructive notice and binds third person who may
subsequently deal with the same property. We also held in Bayoca
v. Nogales31 that:
Verily, there is absence of prior registration in good faith by
petitioners of the second sale in their favor. As stated in the
Santiago case, registration by the first buyer under Act No. 3344 can
have the effect of constructive notice to the second buyer that can
defeat his right as such buyer. On account of the undisputed fact of
registration under Act No. 3344 by [the first buyers], necessarily,
there is absent good faith in the registration of the sale by the
[second buyers] for which they had been issued certificates of title
in their names. It follows that their title to the land cannot be
upheld. x x x.
Even if petitioner argues that she purchased and registered the
subject land in good faith and without knowledge of any adverse
claim thereto, respondents still have superior right over the
disputed property. We held in Rayos v. Reyes32 that:
"[T]he issue of good faith or bad faith of the buyer is relevant only
where the subject of the sale is registered land and the purchaser is
buying the same from the registered owner whose title to the land is
clean x x x in such case the purchaser who relies on the clean title of
the registered owner is protected if he is a purchaser in good faith
for value." Since the properties in question are unregistered lands,
petitioners as subsequent buyers thereof did so at their peril. Their
claim of having bought the land in good faith, i.e., without notice
that some other person has a right to or interest in the property,
would not protect them if it turns out, as it actually did in this case,
that their seller did not own the property at the time of the sale.
It is an established principle that no one can give what one does not
have, nemo dat quod non habet. Accordingly, one can sell only what
one owns or is authorized to sell, and the buyer can acquire no
more than what the seller can transfer legally.33 In the case at bar,
since Ildefonso no longer owned the subject land at the time of the
sale to the petitioner, he had nothing to sell and the latter did not
acquire any right to it.
Even if we apply Article 1544, the facts would nonetheless show
that respondents and their predecessors-in-interest registered first
the source of their ownership and possession, i.e., the 1969 deed of
sale, and possessed the subject land at the earliest time. Applying
the doctrine of "priority in time, priority in rights" or "prius
tempore, potior jure," respondents are entitled to the ownership
and possession of the subject land.34
True, a certificate of title, once registered, should not thereafter be
impugned, altered, changed, modified, enlarged or diminished
except in a direct proceeding permitted by law.35 Moreover, Section
32 of Presidential Decree No. 1529 provides that "[u]pon the
expiration of said period of one year, the decree of registration and
the certificate of title shall become incontrovertible."
However, it does not deprive an aggrieved party of a remedy in law.
What cannot be collaterally attacked is the certificate of title and
not the title or ownership which is represented by such certificate.
Ownership is different from a certificate of title.36 The fact that
petitioner was able to secure a title in her name did not operate to
vest ownership upon her of the subject land. Registration of a piece
of land under the Torrens System does not create or vest title,
because it is not a mode of acquiring ownership. A certificate of title
is merely an evidence of ownership or title over the particular
property described therein.37 It cannot be used to protect a usurper
from the true owner; nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich himself at
the expense of others.38 Its issuance in favor of a particular person
does not foreclose the possibility that the real property may be co-
owned with persons not named in the certificate, or that it may be
held in trust for another person by the registered owner.39
As correctly held by the Court of Appeals, notwithstanding the
indefeasibility of the Torrens title, the registered owner may still be
compelled to reconvey the registered property to its true owners.
The rationale for the rule is that reconveyance does not set aside or
re-subject to review the findings of fact of the Bureau of Lands. In
an action for reconveyance, the decree of registration is respected
as incontrovertible. What is sought instead is the transfer of the
property or its title which has been wrongfully or erroneously
registered in another person’s name, to its rightful or legal owner,
or to the one with a better right.40
Finally, the Court of Appeals correctly held that an action for
reconveyance does not prescribe when the plaintiff is in possession
of the land to be reconveyed, as in this case. Thus, in Leyson v.
Bontuyan:41
x x x [T]his Court declared that an action for reconveyance based on
fraud is imprescriptible where the plaintiff is in possession of the
property subject of the acts. In Vda. de Cabrera v. Court of Appeals,
the Court held:
... [A]n action for reconveyance of a parcel of land based on implied
or constructive trust prescribes in ten years, the point of reference
being the date of registration of the deed or the date of the
issuance of the certificate of title over the property, but this rule
applies only when the plaintiff or the person enforcing the trust is
not in possession of the property, since if a person claiming to be the
owner thereof is in actual possession of the property, as the
defendants are in the instant case, the right to seek reconveyance,
which in effect seeks to quiet title to the property, does not
prescribe. The reason for this is that one who is in actual possession
of a piece of land claiming to be the owner thereof may wait until
his possession is disturbed or his title is attacked before taking steps
to vindicate his right, the reason for the rule being, that his
undisturbed possession gives him a continuing right to seek the aid
of a court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his own title, which
right can be claimed only by one who is in possession.
Similarly, in the case of David v. Malay, the same pronouncement
was reiterated by the Court:
... There is settled jurisprudence that one who is in actual possession
of a piece of land claiming to be owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to
vindicate his right, the reason for the rule being, that his
undisturbed possession gives him a continuing right to seek the aid
of the court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his own title, which
right can be claimed only by one who is in possession. No better
situation can be conceived at the moment for Us to apply this rule
on equity than that of herein petitioners whose ... possession of the
litigated property for no less than 30 years and was suddenly
confronted with a claim that the land she had been occupying and
cultivating all these years, was titled in the name of a third person.
We hold that in such a situation the right to quiet title to the
property, to seek its reconveyance and annul any certificate of title
covering it, accrued only from the time the one in possession was
made aware of a claim adverse to his own, and it is only then that
the statutory period of prescription commences to run against such
possessor.
The paramount reason for this exception is based on the theory that
registration proceedings could not be used as a shield for fraud.
Moreover, to hold otherwise would be to put premium on land-
grabbing and transgressing the broader principle in human relations
that no person shall unjustly enrich himself at the expense of
another.
WHEREFORE, in view of the foregoing, the petition is DENIED. The
Decision of the Court of Appeals dated December 14, 2004, in CA-
G.R. SP No. 86736, dismissing petitioner’s complaint for recovery of
possession and respondents’ counterclaim for damages for lack of
legal and factual bases, and the Resolution dated February 17, 2005
denying the motion for reconsideration, are AFFIRMED.
SO ORDERED.
G.R. No. L-24392 February 28, 1979
ANACLETO ONDAP, plaintiff-appellee,
vs.
BONIFACIO ABUGAA, CRISTINA JANOLINO and NICOLAS
LABARES, defendant-appellants.
Nemesis G. Beltran for appellants.
Buenaventura H. Enghog for appellee.
FERNANDO, J.:
The appeal in this case was, by a Resolution of the First Division of
the Court of Appeals, endorsed to this Court pursuant to the
Judiciary Act, as only questions of law were raised. Defendants-
appellants assailed the validity of an order of the Court of First
Instance of Bukidnon that reads as follows. "Wherefore, finding the
judgment of the inferior court to have been issued properly and in
accordance with Rules, the appeal filed by the defendants is
dismissed, and the records of this case are hereby returned to the
Justice of the Peace Court of Kibawe for disposition, without special
pronounce as to costs. 1 It is the contention of defendants-
appellants that the lower court ought to have tried the case on the
merits instead of merely the decision of the Justice of the Peace
Court of Kibawe, Bukidnon which ordered defendants in an
ejectment case to vacate the premises and to pay plaintiff the sum
of P711.00, with costs.
It was a judgment on the pleadings, as defendants, who did not
even bother to file a written answer, merely denied at the trial
paragraphs 2 to 8 of the complaint filed with the Justice of the
Peace Court. Clearly then, they failed to deny specifically the
material allegations, a failure which in law amounted to an
admission. Nothing is better settled than that under the admitted
facts, a judgment on the pleadings was appropriate. So it was held
in  El Hogar Filipino v. Santos, 2 quoted extensively in the opinion of
Justice Ozaeta in Baetamo v. Hon. Amado P. Amador. 3 thus: "Upon
the first question, respondents contend that their answers were not
a general denial because, as counsel emphasized in his oral
argument, he was careful not to use the work "generally" but used
the word "specifically' in denying "each and every allegation
contained in each and every paragraph of the complaint." That is
naive if not puerile argument. A general denial does not become
specific by mereby calling it so, any more than stone can become
bread by applying the latter nomenclature to it. 4
Baetamo v. amador  was subsequently cited in the following
cases: Trias v. Court of Frist Instance,  5  Dacanay v. Lucero,  6  Pacho
v. Uy Ico  7 constantino v. Court of Appeals,  8  and National
Marketing Corporation v. De Castro. 9 Even more recent cases
adhered to the above well-settled doctrine. 10
An attempt was made by counsel for respondents to extricate his
clients from the untenabel position in which they found themselves.
the attempt, however, was not successful. As was pointed out in the
appealed decision, what was sought by them would amount to a
change of theory on appeal. So it was pointed out in an order of the
Court of First Instance: "For the reason stated in the motion to
strike out dated December 12, 1961, filed by counsel for the
plaintiff, the allegations in the answer of the defendants of October
24, 1961, insofar as they are at varriance with their original answer
before the justice of the peace court of origin, are hereby stricken
out from the records. 11 In dismissing the appeal, the court a
quo pointed out that "defendants filed a written answer ...
incorporating new matters therein." 12 That cannot be done. a host
of cases starting from Tan Machan v. Trinidad, 13 decided as far back
as 1904, attests to this. In the recent case of Arangco v.
Baloso, 14 twenty-two decisions were cited, where the same
principle was reiterated, the lates one being Zambales Chromite
Mining Co. v. Robles. 15 Arangco v. Baloso, it should be noted, was
followed in four subsequent decisions, Gonzaga v. Court of
Appeals, 16 Escay v. Court of Appeals, 17 Philippine Rabbit Bus Lines v.
Phil-American Forwarders, 18 and Lianga Lumber Co. v. North
Zambales Lumber Co. 19
Even from the equitable standpoint, defendants-appellants failed to
make out a case that would call for a different decision. The brief
merely mentioned that they had "a good and valid defense against
plaintiff-appellee's action." 20 No effort was made to explain the
matter further and justify why in the interests of justice their
marked deviation from authoritative doctrines hould not be held
against them. Under the circumstances and considering that the
case had been pending for such a long time, their brief having been
filed more than ten years ago, although the case was not
immediately submitted for decision and the resolution of the Court
of Appeals came later, it cannot be justly said that defendants-
appellants are still entitled to the relief prayed for.
WHEREFORE, the appealed decision is affirmed. No costs.
Barredo Antonio, Aquino, Concepcion, Jr., Santos and Abad Santos,
JJ., concur.
 G.R. No. L-32475 April 30, 1980
JESUS DAYAO, petitioner,
vs.
SHELL COMPANY OF THE PHILIPPINES, LTD. and HON. WALFRIDO
DE LOS ANGELES, as Presiding Judge of the Court of First Instance
of Rizal, Branch IV, Quezon City, respondents.
Jose W. Diokno for petitioner.
Lichauco & Associates for respondent.
MELENCIO-HERRERA, J.:
This special civil action for certiorari  and Prohibition with
Preliminary Injunction seeks to nullify the Orders of respondent
Judge dated March 30, 1968, admitting private respondent's
Amended Complaint, and that of April 1, 1968, granting the issuance
of a Writ of Preliminary Mandatory Injunction.
In its original Complaint for Ejectment filed against petitioner
(defendant in the case below) before the City Court of Quezon City,
Branch IV, on October 10, 1966, SHELL Company of the Philippines,
as plaintiff therein, alleged that it is a foreign corporation duly
licensed to do business in the Philippines; that it is a lessee of a
parcel of land situated at the corner of Aurora Boulevard Extension
and Illinois Street, Quezon City; that it had sub-leased the same to
petitioner together with the gasoline service station building,
equipments and other improvements thereon for an indefinite
period until terminated by either party upon written ninety days
notice; that on June 20, 1966, it notified petitioner in writing of the
termination of the sub-lease agreement but that notwithstanding
the lapse of the 90-day period on September 20, 1966 and despite
repeated demands, petitioner failed and refused to vacate. No copy
of the sub-lease contract is attached to the rollo.
In his Amended Answer, petitioner (as defendant in the Ejectment
suit) contended that under their Sub-lease and Dealership
Agreement, termination would occur only should any of the parties
violate any of the terms and conditions thereof; that the Complaint
does not allege that he had violated any of the terms and conditions
of their agreement, hence, SHELL had no cause of action against
him; that he has been up-to-date in the payment of his obligations;
that the true reason behind the action for Ejectment was his failure
to meet his quota for the purchase of gasoline; that he had invested
no less than P25,000.00 in the gasoline station, and if ejected, he
would suffer great damage. He then prayed for moral damages of
P5,000.00, P1,000.00 for attorney's fees and costs.
At the trial before the City Court, SHELL introduced testimony to the
effect that petitioner had violated the terms of their contract in that
he bought gasoline and other gasoline products from sources other
than SHELL's; that he used the service station for storage of cement
and other cement products; and that he failed to maintain the
station premises according to the standards called for under the
dealership agreement.
Notwithstanding petitioner's vigorous objection to the admission of
the foregoing testimony, he presented counter evidence to show
that SHELL had never charged him with violation of any of the
provisions of the contract such as the keeping of the premises in a
dilapidated condition and the usage of the gasoline station for
storage purposes; that petitioner's notice of termination was less
than one month, in violation of the 90-day period stipulated in the
contract; and that the cancellation of the contract was really
motivated by his unsatisfactory sales.
After trial on the merits, the City Court rendered a Decision on
November 7, 1967 dismissing SHELL's Complaint. The dispositive
portion of said judgment reads:
In view, hereof, there being no justifiable cause to eject the
defendant within the cause of action put up by the plaintiff in its
complaint, this case is hereby ordered dismissed and the plaintiff is
hereby ordered to pay attorney's fees to the defendant in the
amount of P300.00. The Court finds no cause for rendering
judgment for moral damages.
Dissatisfied, SHELL appealed to the Court of First Instance of Rizal,
Quezon City, Branch IV (CC No. Q-11921) on January 16, 1968.
Before said Court, SHELL filed a Motion to Admit Amended
Complaint for the purpose of "tendering the real issues in the
case" 1 SHELL also filed a Motion for Issuance of Writ of Preliminary
Mandatory Injunction to Restore Plaintiff (SHELL) in
Possession. 2 Petitioner opposed both Motions. 3
On March 30, respondent Judge issued the challenged Order
admitting the Amended Complaint and granting petitioner ten (10)
days, if he so elects, to file an Answer. On April 1, 1968, he also
authorized the turn-over of possession to SHELL through the
issuance of a Writ of Preliminary Mandatory Injunction upon
SHELL's filing of a bond in the amount of P5,000.00 to answer for
damages which may be suffered by petitioner. This is the other
Order impugned herein.
On April 15, 1968, petitioner filed a Motion for
Reconsideration, 4 and on April 18, 1968, a motion to Dissolve Writ
of Preliminary Mandatory Injunction. 5 SHELL claimed that it had not
been furnished with copies of these Motions and, apparently, the
Court of First Instance had not acted on them. On September 19,
1969, or approximately a year and a half after the issuance of the
challenged Orders, petitioner, through another counsel, filed an
Urgent Motion for Reconsideration of both the aforesaid Orders,
upon the allegation that the transfer of possession to SHELL was
working to petitioner's great prejudice. 6 Reconsideration was
denied by respondent Judge on December 18, 1969. 7
Hence, this Petition for certiorari and Prohibition filed on August 31,
1970, which this Court required SHELL to answer. 8 On September
29, 1970, upon petitioner's motion, we enjoined respondent Judge
from proceeding with the hearing of the case below. 9 The prayer
for a Writ of Preliminary Mandatory Injunction to restore to
petitioner possession of the service station was set for hearing,
together with the main case, which hearing, however, did not
materialize a the parties opted to submit Memoranda in lieu of oral
argument. 10
In this Petition, it is alleged that respondent Judge acted without or
in excess of jurisdiction or with grave abuse of discretion in
admitting SHELL's Amended Complaint and in issuing a Writ of
Preliminary Mandatory Injunction placing SHELL in possession of the
litigated premises. The following queries have been posed:
1. Can the respondent Shell company of the Philippines Ltd. whose
complaint for ejectment (unlawful detainer) was dismissed by the
City Court of Quezon City amend its complaint on appeal to the
Court of First Instance of Rizal?
2. Can the respondent Hon. Judge Malfrido de los Angeles issue a
writ of preliminary mandatory injunction in the unlawful detainer
case so as to deprive petitioner of his possession of the Shell Service
Station'?
Petitioner contend that ttie Ammended Complaint was based on
new causes of action as shown by the following amendments to the
original Complaint.
3. On March 15, 1965, plaintiff as lessee of a parcel of land situated
at the corner of Aurora Boulevard Extension and Illinois Streets,
Quezon City, sub-leased the same to the defendant together with
the gasoline service station building, equipments and other
improvements thereon for an indefinite period until terminated by
either party upon written ninety days notice of termination, or
until  terminated by the plaintiff without such ninety (90) days notice
in the event of violation of the terms and conditions of the sublease
agreement;
4. defendant, in violation of the sub-lease agreement, kept the
gasoline service station under dilapidated conditions, purchased
petroleum products from sources other than plaintiff and used the
premises for the storage of cement and hollow blocks.
xxx xxx xxx
6. Notwithstanding the lapse of the ninety (90) day period on
September 20, 1966 or lapse of a shorter period in view of the
violation of the terms and conditions of the Sublease Agreement  and
despite repeated demands, defendant failed and refused to vacate
the premises.
7. Under the terms of the Sublease Agreement, the fair rental value
of the property covered by the sublease is P580.73 per month. In the
event of failure of the sublessee to surrender possession of the
premises despite the lapse of the ninety (90) day period or shorter
period in case of violation of the terms and conditions of the
Sublease Agreement, he is bound to pay monthly rental in the
amount of P580.73 from the expiration of aforesaid period until the
surrender of premises to the plaintiff.  11
These causes of action, petitioner claims, were not pleaded at all in
the original Complaint, so that SHELL had changed its theory on
appeal, which is impermissible. In refutation, SHELL countered that
at the trial it presented proof of violation by petitioner of their
agreement, and that the latter, in turn, refuted such evidence.
The original Complaint in the City Court does show that SHELL's
cause of action was predicated on petitioner's failure to vacate the
premises after the lapse of the ninety day notice of termination. In
the Amended Complaint, SHELL added petitioner's failure to comply
with the terms and conditions of the Sublease and Dealer
Agreement. However, the Decision of the City Court discloses that
even during the trial thereat SHELL introduced evidence
substantiating the alleged violation by petitioner of the terms of
their agreement. Petitioner objected to its presentation, but
nonetheless introduced proof in contra. On this score, the City Court
had this to say:
Defendant through counsel vigorously objected to the admission of
any evidence regarding the matter of having illegally purchased
gasoline and gasoline products from other sources, the matter of
utilizing the Shell station for storage of cement and other cement
products and keeping it in substandard condition because these
matters are not alleged in the complaint. ...
The Court is aware that the presentation of the evidence on these
issues objected to by the defendant during the actual hearing
somehow prejudiced the defendant in maintaining his defense upon
the merits. But these issues were met ably by the defendant when
he presented his defense. 12
Under the foregoing circumstances, it cannot be successfully argued
that respondent Judge gravely abused his discretion when he
admitted the Amended Complaint during the pendency of the
appeal. Section 5, Rule 10 of the Rules of Court allows amendments
of pleadings to conform to the evidence presented, to be treated in
all respects as if they had been raised in the pleadings, at any time,
even after judgment. Thus:
SEC. 5. Amendment to conform to or authorize presentation of
evidence.  —
When issues not raised by the pleadings are tried by express or
implied consent of the parties, they shall be treated in all respects,
as if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure so to amend
does not affect the result of these issues. If evidence is objected to
at the trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and
shall do so freely when the presentation of the merits of the action
will be subserved thereby and the objecting party fails to satisfy the
court that the admission of such evidence would prejudice him in
maintaining his action or defense upon the merits. The court may
grant a continuance to enable the objecting party to meet such
evidence.
Pursuant to the foregoing provision and in view of the
evidence  pro and contra  submitted by the parties, the issue of
violation of the terms and conditions of the Agreement may be said
to have been tried with the express consent of the parties. In fact,
the City Court could have required the amendment of the pleadings
even while the case was pending before it.
And although SHELL filed its Motion to Admit Amended Complaint
only when the case was already on appeal in the Court of First
Instance, the amendments introduced did not raise questions for
the first time on appeal so that no unfairness has resulted to
petitioner. 13 The purpose behind the submittal of the amendments
was in order to make the pleadings conform to the evidence
presented before the City Court. Amendments to conform to the
proofs may be made on or after trial, after entry of judgment, and
even while the case is pending on appeal. 14 The questions on appeal
would not have been essentially distinct from those litigated upon
by the parties before the Court of origin. 15 Besides, it should be
recalled that since the appeal herein was interposed before the City
Court became a Court of record, appeal had to proceed by trial de
novo before the Court of First Instance.
Furthermore, under Article 1673 of the Civil Code, a lessor may
judicially eject a lessee for violation of any of the conditions agreed
upon on the contract. A lessor is not in law required to bring first an
action for rescission but could ask the Court to do so and
simultaneously seek the ejection of the lessee in a single action for
illegal detainer.16 When SHELL, therefore, added instances of
violation of the contract in its Amended Complaint, it did so merely
in amplication of its action for ejectment.
II
We come now to the issue of propriety of the issuance of the Writ
of Preliminary Mandatory Injunction.
Petitioner argues that such a Writ can only be issued in cases of
Forcible Entry, whereas the case below is actually one for Unlawful
Detainer. Petitioner relies on section 3, Rule 70 of the Rules of Court
taken from Article 539 of the Civil Code. To quote:
Sec. 3. Preliminary injunction. — The Court may grant preliminary
injunction, in accordance with the provisions of Rule 58 hereof, to
prevent the defendant from committing further acts of
dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry  may
within ten (10) days from the filing of the complaint present a
motion to secure from the competent court, in the action
for frcible entry, a writ of preliminary mandatory injunction to
restore him in his possession. The court shall decide the motion
within thirty (30) days from the filing thereof. (Emphasis supplied by
petitioner).
Art. 539.
xxx xxx xxx
A possessor deprived of his possession through forcible entry may
within ten days from the filing of the complaint present a motion to
secure from the competent court, in the action for forcible entry, a
writ of preliminary mandatory injunction to restore him in his
possession. ...
Petitioner then concludes that the statute does not confer
jurisdiction on the Court to grant a preliminary injunction in an
Unlawful Detainer case, citing principally Piit vs. de Lara and Velez,
58 Phil. 765, 766-767 (1933), and Sevilla vs. de los Santos, et al., 83
Phil. 686 (1949).
On the other hand SHELL, avers that the Writ of Preliminary
Mandatory Injunction is based not on the aforequoted section 3,
Rule 70, but on section 9 of the same Rule and on Article 1674 of
the Civil Code, providing thus:
Sec. 9. Mandatory injunction in case of appeal — Upon motion of
the lessor, within ten (10) days from the perfection of the appeal to
the Court of First Instance, the latter may issue a writ of preliminary
mandatory injunction to restore the lessor in possession if the court
is satisfied that the lessee's appeal is frivolous or dilatory, or that
the appeal of the lessor is prima facie meritorious. (Emphasis by
SHELL)
Art. 1674. In ejectment cases  where an appeal is taken, the remedy
granted in Article 539, second paragraph, shall also apply, if the
higher court is satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima facie  meritorious. The
period of ten days referred to in said article shall be counted from
the time the appeal is perfected. (Emphasis by SHELL).
We agree with SHELL that it is the foregoing provisions which are
applicable to the case at bar there being a pre-existing relationship
of lessor and lessee between the parties. Article 539, paragraph 2 of
the Civil Code refers to the issuance of the Writ of Preliminary
Mandatory Injunction in Forcible Entry cases in the original Court
while Article 1674 applies the same remedy in unlawful detainer or
ejectment cases in the appellate Court, 17 Which is precisely the
situation that confronts us here. The ruling laid down in Piit vs. De
Lara & Velez  (which held that a Justice of the Peace Court cannot
issue a Writ of Preliminary Injunction in Unlawful Detainer cases)
has not been superseded. In fact, said ruling was also upheld in Dikit
vs. Ycasiano, 89 Phil. 45 (1951). The case of Sevilla vs. de los
Santos  (holding that when the action is one for Unlawful Detainer
originating from a Justice of the Peace Court and retaining the same
nature during the pendency of the appeal in the Court of First
Instance, the issuance of preliminary injunction by the latter Court is
improper) appears to be contrary to Article 1674 and Section 9 of
Rule 70.
Article 1674 of the Civil Code was designed "to put, an end to the
present state of the law which unjustly allows the lessee to continue
in possession during an appeal". 18 It provides for an additional
ground for execution before final judgment. It authorizes the
issuance of a Writ of Preliminary Mandatory Injunction where a
lessor's appeal is prima facie meritorious.
In his assessment of SHELL's appeal before him, respondent Judge
found it prima facie meritorious and issued the Writ of Preliminary
Mandatory Injunction. He acted well within the purview of Article
1674 of the Civil Code, supra, and cannot be said to have committed
grave abuse of discretion. If at all, he committed an error of
judgment, which may be offset by the bond posted by SHELL to
answer for damages that may be suffered by petitioner should it be
finally decided that SHELL was not entitled thereto.
WHEREFORE, the Writ of certiorari prayed for is denied, and this
case hereby remanded to respondent Court for the determination
of the appeal in the merits and rendition of the corresponding
judgment.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and De
Castro, JJ., concur.
G.R. No. 26671           September 17, 1927
THE MUNICIPALITY OF ORION, plaintiff-appellee,
vs.
F. B. CONCHA, DOMINGA SAN JOSE and ANTERO
PEREYRA, defendants.
ANTERO PEREYRA, appellant.
Ramon Diokno for appellant.
No appearance for appellee.
JOHNSON, J.:
The question presented by this appeal is, whether or not an appeal
by one of several persons against whom a judgment has been
rendered, requiring them jointly and severally to pay a sum of
money and which appeal results in declaring that the appellant is
not liable under such judgment, affects the liability of those who did
not appeal. Putting the same question in another form: Will the
appeal of one of several persons who have been declared jointly
and severally liable for the payment of a sum of money affect the
liability of his cojudgment debtors in case of the appeal results in
modifying the judgment of the lower court as to the appellant?
That question is now presented for decision. It arose out of the
following undisputed facts:
(a) That on or about the 9th day of May, 1923, the defendant F. B.
Concha entered into a contract with the municipality of Orion for
the construction of a schoolhouse to be called the "Arellano
Memorial School" in said municipality, of the Province of Bataan.
(b) That the cost of the construction of said memorial school under
said contract was to be P18,000 with the condition that said building
was to be completed within the period of 112 days from the 8th day
of June, 1923.
(c) That the contractor F. B. Concha was required to give a bond in
the sum of P6,000 for the faithful performance of said contract. (d)
That in accordance with the requirements of said contract the said
F. B. Concha did on the 15th day of May, 1923 (Exhibit D) execute
and deliver a bond for the faithful performance of said contract in
the sum of P6,000, with his codefendants Dominga San Jose and
Antero Pereyra as bondsmen.
(e) That the said F. B. Concha not having completed the construction
of said memorial school in accordance with the terms of his
contract, an action was commenced by the municipality of Orion
against him and his cosureties on the 20th day of June, 1924, for the
purpose of recovering damages for his nonperformance, and prayed
for a judgment against him and his cosureties for the alleged
damages. To the complaint filed in that action Dominga San Jose on
the 14th day of July, 1924, presented her answer, interposing a
general and special defense.
(f) That on the 16th day of July, 1924, the said Antero Pereyra
answered the complaint, and simply denied each and all of the
allegations contained therein. Upon the issue thus presented the
Honorable Jose M. Quintero, judge, in a carefully prepared opinion,
on the 25th day of February, 1925, found the defendants liable for
the damages occasioned by the non-performance of the contract by
F. B. Concha, and rendered a judgment against him for the sum of
P9,245.71, as damages suffered by said municipality, with legal
interest from the commencement of said action on the 20th day of
June, 1924, and also a judgment jointly and severally against the
bondsmen Dominga San Jose and Antero Pereyra upon their bond,
as a part of said damages, in the sum of P6,000 in favor of the said
municipality. From that judgment the said Dominga San Jose, after
presenting a motion for new trial and excepting to said judgment,
perfected an appeal to the Supreme Court.
(g) That upon consideration of the appeal of Dominga San Jose the
Supreme Court reversed the judgment rendered by the court a
quo  and absolved her from all liability under the complaint upon the
ground and for the reason that the said municipality had extended
the time to the said F. B. Concha for the performance of the said
contract, without her knowledge or consent, thereby relieving her
from all liability under her bond, without special finding as to costs.1
(h) That on the 9th day of April, 1926, a final judgment was
rendered and the record was remanded to the court a quo.
(i) On the 14th day of April, 1926, the prosecuting attorney of the
Province of Bataan presented a motion in the Court of First Instance
of, asking that a writ of execution be issued on said judgment
against the defendants F. B. Concha and Antero Pereyra, which
motion was opposed by the said Antero Pereyra, upon the special
ground that the said appeal of Dominga San Jose which resulted in
absolving her from all liability under the complaint had the effect
also of relieving him from his liability under said judgment. The
objection was denied. Against that ruling of the court Antero
Pereyra took an exception and perfected the present appeal in due
form.
In his only assignment of error the appellant contends that the
lower court committed an error in declaring that the judgment
against him was still valid and enforcible, notwithstanding the
revocation by the Supreme Court of the decision of the lower court
against cosurety Dominga San Jose.
The appellant attempts to show by the citation of numerous
authorities that" where there has been a joint judgment or decree
against several persons, the effect of an appeal or writ of error by
one or more of them, when it is permitted, without the concurrence
of the other coparties, is to carry up the whole case and a reversal
will inure to the benefit of all. It is otherwise where the judgment is
several, so that it will be reversed only as to the party appealing."
The appellant has evidently overlooked in his citations the
difference between a "joint judgment" and a several judgment",
which is a clearly seen in his own quotation.
In the present case there was a several judgment against the
defendants. The judgment was joint and several, which means that
they are severally liable. We have made a careful examination of
numerous authorities and believe that we are correct in saying that
the effect of the appeal by one judgment debtor upon the
codebtors depends upon the particular facts and conditions in each
case. The difference in the apparently conflicting opinions may be
well illustrated in this very case.
Suppose, for example, that F. B. Concha, the contractor, had
appealed from the judgment of the lower court upon the ground
that he had either completed his contract within time or that the
municipality had suffered no damages whatever, and the Supreme
Court had reversed the judgment of the lower court of his appeal.
Certainly that judgment would have the effect of relieving the
bondsmen from any liability whatever, for the reason that their
liability was consequent upon the liability of the contractor; and the
court having declared that no liability for damages had resulted
from the execution of said contract, then certainly the bondsmen
would have been relieved because their liability depended upon the
liability of the principal. That example gives us a clear case showing
that the effect of the appeal of one of the judgment debtors would
necessarily have the effect of releasing his cojudgment debtors.
Upon the other hand, and even in the trial court a judgment might
have been rendered against Dominga San Jose for damages and not
against Antero Pereyra. Suppose that the municipality had granted
the contractor additional time with the consent of the surety Antero
Pereyra, and damages had resulted from a failure to complete the
contract. In that case the defense of extension of time could not be
taken advantage of by Antero Pereyra. It may be also said that if the
extension of time had been made against the consent and without
the knowledge of Dominga San Jose, then her defense upon that
ground would be available and would be sufficient to relieve her
from liability. In the supposed cases the result would be a judgment
against Antero Pereyra and in favor of Dominga San Jose. Now, if a
judgment might have been rendered against one  and in favor of the
other in the Court of First Instance, then certainly an appeal by the
judgment debtor could have no effect upon those who did not
appeal.
And, moreover, suppose the sureties had both appealed from the
judgment of the lower court and during the appeal it had been
proved conclusively that an extension of time had been given
without the consent of one, and with the consent of the other. In
that case the Supreme court would be justified in rendering a
judgment against the one who gave his consent and in reversing the
judgment as to the other. These examples clearly demonstrate that
the reversal of a judgment in favor of several judgment debtors in
the same case does not necessarily affect the judgment against the
cojudgment debtors in cases where their liability is several.
As we have already said, whether an appeal by one of several
judgment debtors will affect the liability of those who did not
appeal must depend upon the facts in each particular case. If the
judgment can only be sustained upon the liability of the one who
appeals and the liability of the other cojudgment debtors depends
solely upon the question whether or not the appellant is liable, and
the judgment is revoked as to that appellant, then the result of his
appeal will inure to the benefit of all. In the present case the liability
of the principal judgment debtor is admitted by him. He did not
appeal. The judgment against his codefendants was several. They
are therefore individually liable.
The rule is quite general that a reversal as to parties appealing does
not necessitate a reversal as to parties not appealing, but that the
judgment may be affirmed or left undisturbed as to them. An
exception to the rule exists, however, where a judgment cannot be
reversed as to the party appealing without affecting the rights of his
codebtors. (4 C. J., 1184.)
A reversal of a judgment on appeal is binding on the parties to the
suit, but does not inure to the benefit of parties against whom
judgment was rendered in the lower court who did not join in the
appeal, unless their rights and liabilities and those of the parties
appealing are so interwoven and dependent as to be inseparable, in
which case a reversal as to one operates as a reversal as to all. (4 C.
J., 1206; Alling vs. Wenzel, 133 Ill., 264-278.)
In the case of Brashear vs. Carlin, Curator  (19 La., 395) a judgment
was rendered in the lower court against the  principal debtor  and his
surety to pay damages. The principal debtor alone appealed and the
judgment was reversed.
When the question of the liability of the surety under the judgment
of the lower court was raised, the court said:
It is obvious, that the judgment of the inferior court could not be
reversed as to the principal debtor in this case, and continue in
force against the surety. The latter could not remain bound, after
the former had been released; although the surety had not joined in
the appeal, the judgment rendered in this court ensured to his
benefit. The obligation of a surety is so defendant on that of the
principal debtor, that he is considered in law as being the same
party as the debtor in relation to whatever is adjudged, touching the
obligations of the latter; provided it be not on grounds personal to
such principal debtor; it is for this reason, that a judgment in favor
of the principal debtor can be invoked as res judicata  by the surety.
In the case of Schoenberger vs. White  (75 Co., 605) a joint judgment
was rendered against husband and wife for a sum of money in an
action ex contractu. The wife appealed. As to the effect of the
appeal of the wife upon the liability of both the court said:
Such a judgment is an entirety, and upon appeal to this court must
be affirmed or set aside in toto.
That the husband was not so made a party does not vary this rule.
After the filing of the notice of appeal, he had the right to be heard
in this court as to all the questions brought upon for review. As he
has not exercised this right, it may be assumed that he is content
with the judgment against him as it stands; but he might complaint
of it, were we to modify it by reducing the amount which it requires
his wife to pay, and thus reducing the amount of the contribution
which he might be able to call upon her to make, in case he paid all
that it requires of him.
After a full consideration of all of the facts and the law applicable
thereto in relation with the fact that the liability of the present
appellant is several liability, and considering that the principal
debtor has not appealed and the judgment against him has not
been modified, we are of the opinion and so decide, that the appeal
of Dominga San Jose and the result of that appeal has not affected
the several liability of the appellant. Therefore, the judgment
appealed from is hereby affirmed, with costs. So ordered.
Avanceña, C.J., Street, Malcolm, Villamor, Johns, Romualdez and
Villa-Real, JJ., concur.
G.R. No. L-27863             August 29, 1969
LUZON METAL AND PLUMBING WORKS CO., INC., plaintiff-
appellee,
vs.
THE MANILA UNDERWRITERS INSURANCE CO., INC., defendant-
appellant.
Magsalin and Herrera for plaintiff-appellee.
Remigio M. Tividad for defendant-appellant.
CONCEPCION, C.J.:
This case has been certified to Us by the Court of Appeals, pursuant,
presumably, to Section 31 of Republic Act No. 296.
On February 24, 1961, Roda Construction Company, hereinafter
referred to as the Lessee, entered into a written contract with the
Luzon Metal and Plumbing Works Company, hereinafter referred to
as the lessor, whereby the Lessee rented and hired from the Lessor
specified tools and machineries, at a given weekly rental, for a
period of four (4) months, at the expiration of which the tools and
machineries would be returned to the Lessor "in the same good
working and satisfactory conditions they were taken," with the
obligation, inter alia, on the part of the Lessee, that, "in case there
are defects" in said tools and machinery, to cause them to "be
repaired, if repairable, and if not" to secure new ones to replace
those damaged, all at the expense of the Lessee. The latter, also,
agreed to file a performance bond in the sum of P2,000 "to
guarantee the full payment of the value of the above-mentioned
tools and machineries in case of breakage, damage or loss, as well
as the weekly rentals for the use of said tools and machineries." On
the same date, the Lessee and the Manila Underwriters Insurance
Co., Inc., executed, the former as principal and the latter as
guarantor, a surety bond in said sum of P2,000, to "secure" the
performance and fulfillment of "all the undertakings, covenants,
terms, conditions and agreements stipulated in said contract"
between the Lessor and the Lessee.
Subsequently, or on November 7, 1962, the Lessor commenced the
present action, in the municipal court of Manila, against the Lessee
and the Guarantor, to recover the sums of P73.25, as balance of the
weekly rentals said to be due from the Lessee, under its
aforementioned contract with the Lessor, from May 18 to June 12,
1961, and P1,005.50, as value of the damages allegedly caused on
the leased tools and machineries, plus P300, as attorney's fees,
apart from the costs. After declaring the Lessee in default, said court
rendered, in due course, a decision, on October 4, 1962, the
dispositive part of which reads:
JUDGMENT is hereby rendered for the plaintiff and against the
defendants (Roda Construction Co. by default), ordering the latter
to pay the former, jointly and severally, the sum of P73.25 as the
unpaid weekly rentals for the period from May 18, 1961 to June 12,
1961; to pay plaintiff, jointly and severally, the sum of P1,005.50 as
damages sustained by the plaintiff in having the tools and
machineries; plus the sum of P100.00 for attorney's fees, aside from
the costs of the suit.
From this decision, only the Guarantor appealed to the Court of First
Instance of Manila, in which said appellant reproduced its answer in
the municipal court, admitting the allegations of the complaint,
regarding the capacity of the parties and execution of the
aforementioned two (2) contracts, and the demands made by the
Lessor for the payment of the sums above referred to and the
refusal of the defendants to heed said demands, but denying their
liability under said contracts and alleging lack of knowledge or
information sufficient to form a belief as to the truth of the
allegations relative to the delivery of the tools and machinery in
question to the Lessee, the condition thereof at the time of said
delivery, the agreement of the Lessee to return said tools and
machinery in good working and satisfactory condition, the amount
of unpaid rentals due from the Lessee, the damaged condition of
the tools and machinery at the time of the return thereof to the
Lessor and the all bad faith of the Lessee and the Guarantor in not
satisfying the claims of the Lessor.
On motion of the latter, supported by the requisite affidavit, and
over the Guarantor's objection, the court of first instance
subsequently rendered a summary judgment against the Guarantor,
the dispositive part of which judgment is substantially identical to
that of the municipal court. A reconsideration of this decision having
been denied, the Guarantor interposed the present appeal, in which
it raises several questions, the gist of which is that said court erred:
1) in holding that the decision of the municipal court had become
final and executory, insofar as the Lessee is concerned, despite the
appeal taken by the Guarantor; (2) in rendering a summary
judgment without any evidence on the amount of damages
collectible by the Lessor.
It is urged by the Guarantor that its appeal from the decision of the
municipal court had the effect of vacating the same in its entirety,
even insofar as the Lessee is concerned, notwithstanding the fact
that the latter had not appealed from said decision. This pretense is
manifestly devoid of merit. To be sure, the appeal of the Guarantor
vacated said decision of the municipal court, but, as regards said
appellant only. It could not and did not affect the decision against
the  Lessee, which, in view of its failure to appeal, became final and
could have been enforced by writ of execution. 1 In the language
of Singh v. Liberty:2
It is true, as appellant claims, that an appeal from the decision of an
inferior court operates to vacate said decision, thereafter the case
to stand trial de novo in the Court of First Instance, but it seems
obvious that this applies only to the party who had taken the
appeal. As against other parties, adversely affected by the decision
who did not appeal, the decision must be deemed to have become
final and executory. A contrary view would lead to indefensible
results.
In Municipality of Orion V. Concha, 3 the question: "(w)ill the appeal
of one of several persons who have been declared jointly and
severally liable for the payment of a sum of money affect the
liability of his co-judgment debtors in case the appeal results in
modifying the judgment of the lower court as to the appellant?"
was resolved in the negative. That case involved a performance
bond to guarantee a construction contract. The bond was executed
by the contractor and two (2) bondsmen. Judgment having been
rendered against all of them, by the Court of First Instance, holding
them jointly and severally liable for the amount of the bond, an
appeal was taken by one of the bondsmen, who was absolved by
the appellate court, upon the ground that the creditor had granted
the contractor, without the knowledge or consent of the appellant,
an extension of the stipulated time to complete the construction,
thereby relieving said appellant from liability under the bond. It was
held that this result did not inure to the benefit of the other
bondsmen who had not appealed, "considering that the principal
debtor has not appealed and the judgment against him has not
been modified ... ."
The foregoing view was quoted with approval in Unsay, Basilio et al.
v. Muñoz-Palma 4 and applied in Gutierrez v. Court of Appeals. 5
In the case at bar, the liability of the Lessee does not depend upon
that of the Guarantor. The latter's liability is the one dependent
upon that of the former, which is principal, without which its
accessory — the contract of guaranty — cannot exist. 6
As regards the propriety of a summary judgment rendered by the
court of first instance without receiving therein any evidence on the
amount of damages due to the Lessor, it should be noted that the
performance bond in its favor guaranteed that the Lessee "shall well
and truly perform and fulfill all the undertakings, covenants, terms,
conditions and agreements stipulated" in the contract of lease,
which, in turn, provided that said bond shall "guarantee the  full
payment of the value of the above-mentioned tools and machineries
in case of ... damage ... as well as the weekly rentals for the use of
said tools and said machineries." Upon the other hand, the breach
of said contract of lease by the Lessee and the amount of its liability
thereunder have been definitely settled and fixed in the decision of
the municipal court against said Lessee, which is final and executory.
That decision, which formed part of the record of this case in the
court of first instance, is conclusive proof, not only of the
aforementioned breach, but, also, of the amount  of the liability of
the Lessee arising therefrom. Hence, said court needed no further
evidence thereof. Indeed, it has been held:
It is too well settled not to admit of any discussion that a surety on
an eventual condemnation money bond in an action of trover is
bound by the judgment against his principal, and will not be heard,
after judgment, to raise any question which could have been raised
by his principal before judgment. Jackson v. Guilmartin, 61 Ga. 544;
Crawford v. Jones, 65 Ga. 523 (2); Thomas v. Price, 88 Ga. 533; 15
S.E. 11 (2); Hogans v. Dizon, 105 Ga. 171, 31 S.E. 422 (1); Holmes v.
Langston, 110 Ga. 869, 36 S.E. 255. In the case last cited it was said:
"After becoming securities on the bond, they must remain silent
witnesses to the conflict between the parties to the suit, standing
ready to fulfill at the end of the litigation the obligation they have
undertaken, ... ."7
... . After judgment against his principal, the surety cannot "raise any
question which could have been raised by the principal before
judgment." Waldrop v. Wolff, 114 Ga. 610 (7), 620, 40 S.E. 830."8
The surety on a bond given by the defendant in an action of trover
for the eventual condemnation money is bound by the judgment
against the defendant, and cannot, after judgment, raise any
question which could have been raised by the principal before
judgment. ... .9
... . The judgment of the trial court is final as to these principals, and
since the latter cannot now question the correctness of the
judgment rendered against them, the sureties cannot. 10
... . Many authorities held that a judgment against the principal, ...
absent fraud, collusion, or clerical error in its entry is conclusive on
the sureties. ... ." 11
Inasmuch as the Guarantor's answer to the complaint herein set up
no affirmative or special defense of any kind whatsoever, and
limited itself to a general denial of said liability and to asserting  lack
of knowledge or information sufficient to form a belief as to the
truth of the allegations in said complaint regarding the amount of
rentals unpaid by the Lessee and the amount of damages due
therefrom, it follows that the court of first instance has properly
rendered its summary judgement relying upon the determination of
such amounts in the decision rendered by the municipal court
against said Lessee.
WHEREFORE, the decision appealed from should be, as it is hereby
affirmed, with costs against the guarantor, Manila Underwriters
Insurance Co., Inc. It is so ordered.
Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano,
Teehankee and Barredo, JJ., concur.
1äwphï1.ñët  Reyes, J.B.L., J., is on leave.
G.R. No. L-46000 March 18, 1985
GLICERIO AGUSTIN (Deceased) as Administrator of the Intestate
Estate of Susana Agustin, petitioner-plaintiff-appellant,
vs.
LAUREANO BACALAN and the PROVINCIAL SHERIFF OF
CEBU, respondents-defendants-appellees.
GUTIERREZ, JR., J.:
The precursor of this case was a complaint for ejectment with
damages filed by plaintiff-appellant Agustin, as adininistrator of the
Intestate Estate of Susana Agustin, against defendant-appellee
Bacalan, before the City Court of Cebu.
Bacalan is a lessee of a one-door ground floor space in a building
owned by the late Susana Agustin. Due to nonpayment of rentals
despite repeated demands an action to eject him was filed.
In his complaint, the plaintiff-appellant prayed that the defendant-
appellee be ordered to immediately vacate the place in question, to
pay plaintiff-appellant the sum of P2,300.00 representing arrearages
in rentals plus the corresponding rentals until he actually vacates
the place, attorney's fees, expenses, and costs.
In his answer, the defendant-appellee included a counter-claim
alleging that the present action was "clearly unfounded and devoid
of merits, as it is tainted with malice and bad faith on the part of the
plaintiff for the obvious reason that plaintiff pretty well knows that
defendant does not have any rentals in arrears due to the estate of
Susana Agustin, but notwithstanding this knowledge, plaintiff filed
the present action merely to annoy, vex, embarrass and
inconvenience the defendant." He stated, "That by virtue of the
unwarranted and malicious filing of this action by the plaintiff
against the defendant, the latter suffered, and will continue to
suffer, actual and moral damages in the amount of no less than
P50,000.00; P10,000.00 in concept of exemplary damages. In
addition, defendant has been compelled to retain the services of
undersigned counsel to resist plaintiffs' reckless, malicious and
frivolous claim and to protect and enforce his rights for which he
obligated himself to pay the further sum of P3,500.00 as attorney's
fees."
The City Court of Cebu subsequently rendered judgment dismissing
the counterclaim and ordering the defendant to vacate the
premises in question and to pay the plaintiff the sum of P3,887.10
as unpaid back rentals and the sum of P150.00 as attorney's fees'
From this decision, the defendant filed an appeal with Branch Ill of
the Court of First Instance of Cebu. The case was designated as Civil
Case No. R-12430.
Availing of Republic Act 6031 which does away with trials de novo in
appeals before it, the Court of First Instance rendered a decision,
the dispositive portion of which reads:
WHEREFORE, based on all the foregoing considerations, the
appealed judgment is hereby set aside. Judgment is hereby required
in favor of the defendant—
1. Ordering the plaintiff to pay.
a) P10,000.00 as moral damages;
b) P5,000.00 as exemplary damages;
c) P1,000.00 as attorney's fees; and
2. With costs against plaintiff.
JUDGMENT REVERSED.
No appeal was taken by the plaintiff-appellant. The decision lapsed
into finality and became executory. A writ of execution was issued
by virtue of which a notice to sell at public auction real properties
belonging to the estate of Susana Agustin was issued by the Deputy
Sheriff to satisfy judgment in the case. Plaintiff's counsel filed a
motion for reconsideration, confessing his fault and giving the
reason why he failed to perfect the appeal on time. The motion was
denied.
Thereafter, with the aid of new counsel, the plaintiff-appellant filed
a complaint with Branch V, Court of First Instance of Cebu, against
the defendant and the Deputy Sheriff of Cebu for the declaration of
the nullity of the above-cited decision of Branch III, Court of First
Instance of Cebu in the ejectment case on the ground that the
exercise of its appellate jurisdiction was null and void from the
beginning for the following reasons:
(a) It grants relief in the total sum of P16,000.00 (exclusive of costs)
distributed thus:
P10,000.00 as moral damages
P5,000.00 as exemplary damages
P1,000.00 as attorney's fees
which is clearly beyond the jurisdiction of the City Court of Cebu;
Section 88 of the Judiciary Act of 1948, as amended by Rep. Acts
Nos. 2613 and 3828, limits the jurisdiction of the city courts in civil
cases to P10,000.00 as the maximum amount of the demand
(exclusive of interest and costs);
(b) Moreover, said Decision (Annex "G") grants moral damages to
the defendant in the sum of P10,000.00 which constitutes a grave
abuse of discretion amounting to lack of jurisdiction, there being no
evidence to support it and the subject matter of the suit in Civil Case
No. R-13504 being purely contractual where moral damages are not
recoverable.
A motion to dismiss was filed by the defendant on the grounds that
the plaintiff has no cause of action and that the court lacks
jurisdiction to declare the nullity of a decision of another branch of
the Court of First Instance of Cebu.
While rejecting the second ground for the motion to dismiss, the
court sustained the defendant and ruled:
Clearly from a reading of the complaint, the plaintiff seeks the
annulment of the decision rendered by the Third Branch of this
Court because the award exceeded the jurisdiction amount
cognizable by the City Court of Cebu and the said Branch III of this
Court has no jurisdiction to award the defendants herein (plaintiff in
Civil Case No. 12430) an amount more than P10,000.00;
It is the considered opinion of this Court that this allegation of the
herein plaintiff cannot be availed of as a ground for annulment of a
judgment. It may perhaps, or at most, be a ground for a petition for
certiorari. But then, the remedy should be availed of within the
reglementary period to appeal. Nevertheless, even if the plaintiff
did take his cause by certiorari, just the same, it would have been
futile....
xxx xxx xxx
In fine, this Court believes that the present complaint fails to allege
a valid cause of action as the same is only a clear attempt at utilizing
the remedy for the annulment of the judgment rendered by this
Court in Civil Case No. 12430 to offset the adverse effects of failure
to appeal.
Plaintiff-appellant's motion for reconsideration was denied,
prompting him to file an appeal before the Court of Appeals, which,
in a resolution, certified the same to us on the ground that it
involves pure questions of law.
We ruled in Macabingkil v. People's Homesite and Housing
Corporation  (72 SCRA 326, citing Reyes v. Barretto-Datu, 94 Phil.
446, 448-449)-
Under our rules of procedure, the validity of a judgment or order of
the court, which has become final and executory, may he attacked
only by a direct action or proceeding to annul the same, or by
motion in another case if, in the latter case, the court had no
jurisdiction to enter the order or pronounce the judgment (section
44, Rule 39 of the Rules of Court). The first proceeding is a direct
attack against the order or judgment, because it is not incidental to,
but is the main object of, the proceeding. The other one is the
collateral attack, in which the purpose of the proceedings is to
obtain some relief, other than the vacation or setting aside of the
judgment, and the attack is only an incident. (I Freeman on
Judgments, sec. 306, pages 607-608.) A third manner is by a petition
for relief from the judgment order as authorized by the statutes or
by the rules, such as those expressly provided in Rule 38 of the
Rules of Court, but in this case it is to be noted that the relief is
granted by express statutory authority in the same action or
proceeding in which the judgment or order was entered ...
The question is thus poised, whether or not the present action for
the annulment of the judgment in the ejectment case is the proper
remedy after it has become final and executory.
To this procedural dilemma, the solution lies in the determination of
the validity of the judgment sought to be annulled, for against a
void judgment, plaintiff-appellant's recourse would be proper.
There is no question as to the validity of the court's decision with
respect to the issue of physical possession of property, the
defendant-appellee's right to the same having been upheld.
However, the plaintiff-appellant assails the money judgment
handed down by the court which granted damages to the
defendant-appellee. By reason thereof, he seeks the declaration of
the nullity of the entire judgment.
It is the plaintiff-appellant's contention that moral damages may not
properly be awarded in ejectment cases, the only recoverable
damages therein being the reasonable compensation for use and
occupancy of the premises and the legal measure of damages being
the fair rental value of the property.
Plaintiff-appellant loses sight of the fact that the money judgment
was awarded the defendant-appellee in the concept of a
counterclaim. A defending party may set up a claim for money or
any other relief which he may have against the opposing party in a
counterclaim (Section 6, Rule 6, Revised Rules of Court). And the
court may, if warranted, grant actual, moral, or exemplary damages
as prayed for. The grant of moral damages, in the case at bar, as a
counterclaim, and not as damages for the unlawful detention of
property must be upheld. However, the amount thereof is another
matter.
Plaintiff-appellant raises the issue of whether or not the Court of
First Instance may, in an appeal, award the defendant-appellee's
counterclaim in an amount exceeding or beyond the jurisdiction of
the court of origin.
It is well-settled that a court has no jurisdiction to hear and
determine a set-off or counterclaim in excess of its jurisdiction
(Section 5, Rule 5, Revised Rules of Court; Ago v. Buslon, 10 SCRA
202). A counterclaim beyond the court's jurisdiction may only be
pleaded by way of defense, the purpose of which, however, is only
to defeat or weaken plaintiff's claim, but not to obtain affirmative
relief (Section 5, Rule 5, Revised Rules of Court). Nevertheless, the
defendant-appellee, in the case at bar, set up his claim in excess of
the jurisdiction of the city court as a compulsory counterclaim.
What is the legal effect of such a move?
Pertinent to our disposition of this question is our pronouncement
in the case of Hyson Tan, et al. v. Filipinas Compania de Seguros, et
al.,  (G.R. No. L-10096, March 23, 1956) later adopted in Pindangan
Agricultural Co., Inc. v. Dans  (6 SCRA 14) and the later case of
One Heart Club, Inc. v. Court of Appeals  (108 SCRA 416) to wit:
xxx xxx xxx
... An appellant who files his brief and submits his case to the Court
of Appeals for decision, without questioning the latter's jurisdiction
until decision is rendered therein, should be considered as having
voluntarily waives so much of his claim as would exceed the
jurisdiction of said Appellate Court; for the reason that a contrary
rule would encourage the undesirable practice of appellants
submitting their cases for decision to the Court of Appeals in
expectation of favorable judgment, but with intent of attacking its
jurisdiction should the decision be unfavorable. ...
Thus, by presenting his claim voluntarily before the City Court of
Cebu, the defendant-appellee submitted the same to the
jurisdiction of the court. He became bound thereby. The amount of
P10,000.00 being the jurisdictional amount assigned the City Court
of Cebu, whose jurisdiction the defendant-appellee has invoked, he
is thereby deemed to have waived the excess of his claim beyond
P10,000.00. It is as though the defendant-appellee had set up a
counterclaim in the amount of P10,000.00 only. May the Court of
First Instance then, on appeal, award defendant-appellee's
counterclaim beyond that amount?
The rule is that a counterclaim not presented in the inferior court
cannot be entertained in the Court of First Instance on appeal
(Francisco, The Revised Rules of Court in the Philippines, Vol. III, p.
26, citing the cases of Bernardo v. Genato, 11 Phil. 603 and Yu Lay v.
Galmes, 40 Phil. 651). As explained in Yu Lay v. Galmes— "Upon an
appeal to a court of first instance from the judgment of a justice of
the peace, it is not possible, without changing the purpose of the
appeal, to alter the nature of the question raised by the complaint
and the answer in the original action. There can be no doubt,
therefore, of the scope of the doctrine laid down in the several
decisions of the Court. Consequently, We hold that, upon an appeal
to the Court of First Instance, the plaintiff as well as the defendant
cannot file any pleading or allegation which raises a question
essentially distinct from that raised and decided in the justice of the
peace court. "This rule was reiterated in cases from Ng Cho Cio v.
Ng Diong  (1 SCRA 275) to Development Bank of the Philippines v.
Court of Appeals  (116 SCRA 636).
Thus, the defendant-appellee's counterclaim beyond P10,000.00,
the jurisdictional amount of the city Court of Cebu, should be
treated as having been deemed waived. It is as though it has never
been brought before trial court. It may not be entertained on
appeal.
The amount of judgment, therefore, obtained by the defendant-
appellee on appeal, cannot exceed the jurisdiction of the court in
which the action began. Since the trial court did not acquire
jurisdiction over the defendant's counterclaim in excess of the
jurisdictional amount, the appellate court, likewise, acquired no
jurisdiction over the same by its decisions or otherwise. Appellate
jurisdiction being not only a continuation of the exercise of the
same judicial power which has been executed in the court of
original jurisdiction, also presupposes that the original and appellate
courts are capable of participating in the exercise of the same
judicial power (See 2 Am. Jur. 850; Stacey Cheese Company v. R.E.
Pipkin, Appt. 155 NC 394, 71 S.E. 442, 37 LRA 606) It is the essential
criterion of appellate jurisdiction that it revises and corrects the
proceedings in a cause already instituted, and does not create that
cause (See 2 Am. Jur 850 citing Marbury v. Madison, 1 Cranch US,
137, 2 L. ed. 60).
It is, of course, a well-settled rule that when court transcends the
limits prescribed for it by law and assumes to act where it has no
jurisdiction, its adjudications will be utterly void and of no effect
either as an estoppel or otherwise (Planas v. Collector of Internal
Revenue, 3 SCRA 395; Parades v. Moya, 61 SCRA 526). The Court of
First Instance, in the case at bar, having awarded judgment in favor
of the defendant-appellee in excess of its appellate jurisdiction to
the extent of P6,000.00 over the maximum allowable award of
P10,000.00, the excess is null and void and of no effect. Such being
the case, an action to declare the nullity of the award as brought by
the plaintiff-appellant before the Court of First Instance of Cebu,
Branch V is a proper remedy.
The nullity of such portion of the decision in question, however, is
not such as to affect the conclusions reached by the court in the
main case for ejectment. As held in Vda. de Pamintuan v. Tiglao  (53
Phil. 1) where the amount set up by the defendant was not proper
as a defense and it exceeded the inferior court's jurisdiction, it
cannot be entertained therein, but the court's jurisdiction over the
main action will remain unaffected. Consequently, the decision over
the main action, in the case at bar, must stand, best remembering
that a counter-claim, by its very nature, is a cause of action separate
and independent from the plaintiff's claim against the defendant.
WHEREFORE, the decision of the Court of First Instance of Cebu,
Branch III in Civil Case No. R-12430 for ejectment is hereby
DECLARED NULL AND VOID insofar as it awards damages on the
defendant-appellee's counterclaim in excess of P6,000.00 beyond its
appellate jurisdiction. The decision in all other respects is
AFFIRMED. The order of the Court of First Instance of Cebu, Branch
V dismissing Civil Case No. R-13462 for declaration of nullity of
judgment with preliminary injunction is hereby MODIFIED, Civil Case
No. R-13462 is ordered DISMISSED insofar as the decision sought to
be annulled upholds the defendant's right to possession of the
disputed property. The defendant's counterclaim for damages is
GRANTED to the extent of TEN THOUSAND (P10,000.00) PESOS. The
grant of SIX THOUSAND (P6,000.00) PESOS in excess of such amount
is hereby declared NULL and VOID, for having been awarded beyond
the jurisdiction of the court.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la
Fuente and Alampay, JJ., concur.
G.R. No. L-19460      December 28, 1966
ROQUE BAIRAN, petitioner,
vs.
AGUSTIN TAN SIU LAY, FRANCISCO TAN, executor and HON.
ANTONIO CAÑIZARES, Presiding Judge of Branch IV, Court of First
Instance of Manila, respondents.
Paredes Gaw and Associates and Alfredo G. Palacol for petitioner.
Lucio T. Ildefonso, Jr. for respondents.
DIZON, J.:
Original petition for certiorari  filed by Roque Bairan, with a prayer
for the issuance of a writ of preliminary injunction, to set aside the
following orders of the Hon. Antonio Cañizares, as judge of the
Court of First Instance of Manila, in Special Proceedings No. 31360:
(1) order of January 4, 1961 requiring petitioner to post a surety
bond in the sum of P 100,000.00; (2) order dated February 9, 1961
denying petitioner's motion for reconsideration thereof; (3) order
dated June 8, 1961 to the effect that the order of January 4, 1961
was interlocutory and, therefore, not appealable; (4) order of June
17, 1961 requiring petitioner to surrender and deliver to the
executor the possession of all the estate properties in his hands for
failure to file the aforementioned bond; (5) order dated July 31,
1961 likewise declaring the order of June 17, 1961 to be merely
interlocutory and, therefore, not appealable, and (6) the order
dated August 12, 1961 denying petitioner's motion for
reconsideration.
On October 13, 1947, respondent Francisco Tan was appointed by
his father, Tan Chiong Pun (now deceased), as his attorney-in-fact,
to administer, supervise, control and to sell on installment basis a
certain real property, otherwise known as the "Mabuhay
Subdivision", covered by Transfer Certificate of Title No. 20912 of
the Register of Deeds of Rizal. On October 22, 1954 said
respondent, with the knowledge and consent of his principal,
entered into an agreement with petitioner whereby the latter was
appointed as his substitute attorney-in-fact, to administer,
supervise, control and to sell on installment basis the
abovementioned property, the contract to last "during and while
there are lots left to be sold or there are still pending collections of
prices or considerations of lots or portions thereof sold".
When Tan Chiong Pun died on November 25, 1956, testate
proceedings for the settlement of his estate were instituted in the
Court of First Instance of Manila, then presided by the herein
respondent judge (Special Proceedings No. 31360), and Francisco
Tan was appointed executor of the estate.
On March 15, 1960, the other respondent, Agustin Tan Siu Lay, one
of the heirs of the deceased, filed a petition with the probate court
to require petitioner to post a bond of P250,000.00 in connection
with his administration of the subdivision mentioned heretofore,
alleging: that on September 9, 1957, the executor, Francisco Tan,
had filed a motion praying that Bairan be allowed to collect the
outstanding accounts pertaining to the Mabuhay Subdivision and
for the approval of the basic contract of administration dated
October 22, 1954 (Agreement for the appointment of Bairan as
Substitute Attorney-In-Fact, etc.), but resolution thereof was held in
abeyance by the court pending examination of petitioner in
connection with his report and accounting covering the period from
October 22, 1954, when he took over the administration of the said
property, up to and including May 31, 1959; that out of the amounts
collected by petitioner from the sale on installment of the lots
comprising the subdivision, the latter, without court authority, had
been retaining as deductions alleged administration and other
expenses, in the total amount of P120,000.00; that the outstanding
collectible amount covering the period from June 1959 to February,
1960, was around P200,000, from which amount petitioner would
continue to deduct the sums authorized under the contract of
October 22, 1954; and that, unless he was required to post a bond
of P250,000.00, the estate would have no assurance that petitioner
will be able to make good any liability he may incur as trustee of the
deceased.
Despite petitioner's objection, the respondent Judge issued the
order of January 4, 1961, requiring him to post a surety bond of
P100,000.00 in favor of the estate "conditioned upon the payment
by said Roque Bairan to the estate of any amount or amounts that
may be found due from him in his individual capacity and/or as
attorney-in-fact administering the estate property covered by
Transfer Certificate of Title No. 20912 (Now Transfer Certificate of
Title No. 27613) of the Office of the Register of Deeds of Rizal".
Petitioner's motion for reconsideration was denied on February 9,
1961.
On February 21 of the same year, petitioner filed a notice of appeal,
appeal bond and record on appeal in connection with the order of
January 4, 1961 requiring him to file a bond in the sum of
P100,000.00, but the respondent judge, in his order of June 8, 1961,
ruled that said order was interlocutory and unappealable.
Meanwhile, upon motion of petitioner, the respondent judge issued
an order dated November 12, 1961 allowing him "to surrender and
deliver to the executor whatever property or properties he desires
to so surrender and deliver; and the executor is hereby directed to
accept the same under proper inventory, subject to the condition
that such delivery to and acceptance by the executor will not in any
way impede or hinder the continuation of the hearing before
Commissioner Antillon on the above-mentioned reports and
accounts".
On February 24, 1961, respondent Francisco Tan filed a report and
motion with the court praying that Bairan be required to deliver
and/or turn over all his collections as Administrator of the
"Mabuhay Subdivision", covering the period between the month of
September, 1960 and January, 1961, inclusive, and the collections
from February 1961 and successively thereafter until these
proceedings are terminated, without prejudice to the delivery of
those already collected by him, together with all the unauthorized
deductions made, all of which were covered by his accounts then
pending hearing in Court, and were objected to by the Executor and
all the heirs to testate estate. On June 17, 1961, the respondent
judge issued the following order:
After a consideration of the report and motion filed on February 24,
1961, by the Executor, the answer thereto filed on March 2, 1961,
by Roque Bairan, the counter-reply filed by Roque Bairan, the
compliance filed on March 20, 1961 by the executor, and it
appearing from the record of this proceeding that said Roque Bairan
has not up to now filed the bond called for in the order of January 4,
1961, that the surrender and delivery of the estate properties (cash
or otherwise) have not as yet been effected by him despite the
order of November 12, 1960, and despite, further the willingness of
the Executor to take delivery thereof under proper inventory, and
that, in the meantime, large sums of money belonging to the estate
are accumulating in his hands without any security against loss, the
Court hereby orders said Roque Bairan to surrender and deliver to
the executor, within five (5) days from the notice of this order, the
possession of all the estate properties in his hands, and the executor
shall take delivery thereof under proper inventory in accordance
with the terms of the aforementioned order of November 12, 1960.
On July 6, 1961, petitioner filed a notice of appeal from the above-
quoted order and on the following day he also filed an appeal bond
and record on appeal, but on July 31 of the same year, the
respondent judge likewise ruled that said order was interlocutory
and, therefore, not appealable, and on August 12, 1961, denied
petitioner's motion for reconsideration thereof. Finally, on July 31,
1961, the respondent judge issued an order threatening to hold
petitioner in contempt and have him arrested should he fail to
comply with his order of June 17, 1961, on or before August 15,
1961.
The principal orders involved in this appeal are that of January 4,
1961 — which requires petitioner to file a surety bond in the sum of
P100,000.00 — and the order of January 17 of the same year —
which requires him to surrender and deliver to the executor the
possession of all the properties of the estate found in his hands.
Petitioner attempted to appeal from both but the respondent judge
refused to give due course to his appeals upon the ground that said
orders were merely of an interlocutory character.
We disagree with the view adopted by the respondent judge.
It is settled that a court order is final in character if it puts an end to
the particular matter resolved, leaving thereafter no substantial
proceeding to be had in connection therewith except its execution;
and, contrary wise, that a given court order is merely of an
interlocutory character if it is provisional and leaves substantial
proceeding to be had in connection with its subject in the court by
whom it was issued.
It will be noted that in connection with the order of January 4, 1961,
the court decided, over petitioner's objection, that the latter must
file a surety bond as prayed by his adversary. Thus, upon the
question of whether or not petitioner should file a bond, there was
nothing left to be done except to have the order aforesaid carried
out. It is clear, therefore, that said is final in character and, as such,
is appealable within the period of appeal provided by law.
On the other hand, the order of June 17, 1961 similarly determined
with finality the question of whether petitioner should or should not
surrender and deliver to the executor the possession of all estate
properties found in his possession. Obviously, after the court's
affirmative ruling on the matter, there was nothing left to be done
in the premises except to carry out the order of the court. It is
similarly clear, therefore, that said order is final in character and,
therefore, appealable within whatever period is provided by law for
the purpose.
But while we believe that petitioner's contention on the matter of
the nature of the two orders mentioned heretofore is correct, we
have come to the conclusion that it is unnecessary to issue the writs
prayed for because the orders from which petitioner attempted to
appeal are correct and right.
Considering the fact that petitioner, in accordance with his
agreement with the executor of the estate, was in possession of
estate properties; that in connection with the sale thereof on
installment he had authority to collect considerable sums of money,
and that, as a matter of fact, the estate had made claims against
him for amounts that he had deducted from the proceeds of the
sales actually collected by him, it was perfectly within the
jurisdiction of the respondent judge to require him to file a surety
bond for the protection of the estate. In doing so it seems clear that
his Honor did not commit a grave abuse of discretion.
It appears in connection with the order of June 17, 1961 that
petitioner himself had made the respondent judge understand that
he was willing, if not anxious, to surrender to the executor the
possession of the properties of the estate found in his hands, and
that the aforesaid order — now complained of — was issued
precisely in connection with a motion of his own where he had
expressed such willingness. Consequently, in ordering him to deliver
said properties to the executor, the respondent judge did not
commit a grave abuse of discretion. As a matter of fact, it does not
seem proper, generally speaking, for a probate court to allow estate
properties to be or to continue in possession of parties other than
the executor, who is the one entitled to have full possession
thereof.
WHEREFORE, the writs prayed for are denied and the petition under
consideration is dismissed, with costs. The writ of preliminary
injunction issued herein is hereby set aside.
Concepcion, C.J., Reyes, J.B.L., Regala, Makalintal, Bengzon, J.P.,
Zaldivar, Sanchez and Castro, JJ., concur.
G.R. No. L-22737             November 28, 1924
Estate of the deceased Antonio Tanpoco. VICENTE
GOTAMCO, administrator,
vs.
CHAN SENG, guardian of Tan Kim Choo, opponent-appellee;
JOSE RAZON, guardian ad litem of the minor Tan Kim
Hong, appellant.
Eiguren and Razon for appellant.
Gibbs & McDonough for appellee.
STATEMENT
Antonio Tanpoco died in the year 1920 and left a will dividing his
estate of over P300,000 among four sons, one-half of which he
bequeathed to Tan Kim Hong, the claimant, whom he described in
his will as his legitimate son, and the other half he left in equal
shares to his three adopted sons, Tan Kimco. Tan Kimbio and Tan
Kim Choo, and appointed Go Siu San, a resident of Manila, as
executor of his will, which provided that no bond should be
required.
November 22, 1920, two Chinese named Tan Kim Lay and Te Sue,
one of Tarlac and the other of Manila, were appointed and qualified
as commissioners, and later they published the usual notice to
creditors to present their claims within six months at the office of
Attorney M. G. Goyena, of Manila.
June 29, 1921, the commissioners presented their report to the
court in which, among others, they reported the allowance of the
claim here in question.
At the time all of the heirs, including Tan Kim Hong, were minors
and had lived in China since the death of Antonio Tanpoco, as also
had the widow of the deceased.
On June 29, 1921, the date the commissioners' report was filed, the
executed filed a motion asking for the appointment of an attorney
of his own choice as curador ad litem for the minor heirs which,
among other things, recites as follows:
2. That the heirs who are interested in the estate of the above
entitled action are all minors, to wit: Tan Kimco, age 20; Tan Kim
Hong, age 12; Tan Kimbio, age 11; and Tan Kim Choo, age 4; and
that all the above heirs are now in China, and the day of their return
to the Islands is unknown to the administrator of the estate.
The court ignored request of the executor, and on July 2, 1921,
upon its own motion, appointed Mr. Felipe Canillas, who treated his
appointed as a formality and did not make any investigation of the
facts, and hence the report of the commissioners was approved on
July 14, 1922.
During all of this time the minor heirs were still in China. In
September, 1922, they arrived in Manila and employed counsel to
represent and protect their interest, and it was then that Chan Seng
learned for the first time of the allowance of the claim in favor of
Tan Kim Hong. Upon her motion, on November 27, 1922, Judge
Harvey ordered an investigation of the administration of Go Siu San
as executor, which was made by Mr. Felipe Canillas, who still held
the position of curador ad litem of all the minor heirs, including the
claimant, who made a written report to the court, the material
portion of which is as follows:
In the salary ledger of 1920 there appears to have been credited,
without expressing their origin, in favor of Tan Kim Hong the
following sums:
January 25 .........................................
February 7 .........................................
February 13 ........................................
Total ..............................................
and in the salary ledger of 1921 this amount was reduced to the
sum of P38,766.69 (P33,766.69) which is exactly the amount of the
claim which is said to have been presented and admitted against the
estate (see the report of the commissioners). Now, who is this Tan
Kim Hong? He is just one of the children of the deceased, a minor
who is now 13 years old and who has been made the heir to one-
half of all the property mentioned in clause "A" of the will of the
deceased. Insofar as the basis of this claim is concerned and insofar
as the person who pretends to have represented the minor in the
presentation of the claim is concerned nothing is explained in the
record nor in the books of the administrator. Therefore, this claim
should be discarded by reason of its illegality and nullity and the
administrator required to explain its presentation and admission. If,
as the administration pretends, this sum was credited in the books
by the deceased himself in favor of his boy Tan Kim Hong and
reason of his being a favorite son, and if the latter legally accepted
the donation, such an act could only amount to a donation "inter
vivos" and the authority to determine the rights of the donee are
not within the attributes of commissioners on valuation and claims.
The report concluded with a recommendation for the removal of
P20,000.00
the executor for gross misconduct and fraud, and the annulment of
the claim of Tan Kim Hong.
10,000.00
After the report was filed, a hearing was had and testimony was
10,000.00 taken, and Judge Harvey removed Go Siu San as executor, and in his
order of removal, among other things, said:
The commissioners Te Sue and that he had not received any claim;
40,000.00 that the claims which appears in the report were taken from the
books of the business of the deceased, Antonio Tanpoco (p. 16, s.
n.); nevertheless, the claim of Tan Peng Sue does not appear in the
report of these commissioners on claims although it appears in the
books and was afterwards accepted by the commissioners last
appointed. In the report of the first commissioners on valuation and
claims there appears a claim of Tan Kim Ho (Tan Kim Hong) for the
sum of P38,766.69 without any voucher (pp. 11-12, s. n.). This
claimant is a minor and was not represented by any guardian
or curador. The commissioner Te Sue testified that he had gone to
Tarlac but once and in the year 1922 to attend the claims, but the
report of the commissioners bears date previous to that time which
demonstrates evidently that the administrator Go Siu San was the
person who furnished the data upon which the supposed claims
which appear in the report of the commissioners were based
notwithstanding the fact that they received no claims."
After such proceedings, nothing was further done until November
14, 1923, when the present administrator applied to the court for
authority, among other things, to pay the claim in question, to
which the appellee appeared and objected. The court denied the
application of the present guardian to the claimant to require the
administrator to pay the claim in question upon the ground that it
was void and fictitious, from which Tan Kim Hong appeals,
contending that the lower court erred in hearing and sustaining the
objections to the allowance of the claim, and in denying the motion
of the administrator for authority to pay the claim.
JOHNS, J.:
The appellant cites and relies upon section 773, 774 and 775 of the
Code of Civil Procedure as follows:
SEC. 773. An appeal from allowance or disallowance of claim. — Any
executor or administrator may appeal to the Court of First Instance
from the allowance of any claim against the estate by the
committee appointed for the purpose of allowing claims against the
estate of deceased persons, or from the disallowance, in whole or in
part, of any offset presented by the executor or administrator to
such claim; any creditor may appeal to the Court of First Instance
from the disallowance of the whole or any part of his claim by such
committee, or the allowance of the whole or a part of any claim in
offset to his claim against the estate by such committee.
SEC. 774. If administrator does not appeal, heir or creditor may. — If
the executor or administrator does not appeal from the allowance
of any claim against the estate by the committee, or the
disallowance in whole or in part by it of any offset in behalf of the
estate against such claim, any heir or creditor may appeal to the
Court of First Instance from such allowance or disallowance, and
prosecute the appeal in the name of the executor or administrator,
upon filing in court a bond to the administrator or executor, to be
approved by the court, conditioned that he will prosecute the
appeal to effect, and indemnify the administrator of executor
against all costs and expenses, by reason of the appeal, and will
likewise pay to the claimant such costs as may be ultimately
awarded to him by reason of such appeal. The bond shall be
available for such claimant as well as for the executor or
administrator.
SEC. 775. Perfecting appeal. — The appeal provided in the two
preceding section shall be perfected by filing with the clerk of the
Court of First Instance that has jurisdiction of the estate, within
twenty-five days after the committee's reports is filed therein, a
statement that the person so appealing is dissatisfied with the
action of the committee in respect to the item or items complained
of, and appeals therefrom to the court.
He points out that the report of the committee allowing the claim
was made and filed on June 29, 1921, and contends that it became
automatically final on July 14, 1921; that the opponent should have
made her opposition within the time specified in the Code, and that
her failure to take the statutory appeal is a bar to all defenses, citing
and relying upon the case of De los Santos vs. Reyes  (37 Phil. 104),
the syllabus of which is as follows:
1. DESCENT AND DISTRIBUTION; CLAIMS AGAINST ESTATES OF
DECEASED PERSONS. — It is not sufficient to plead on the part of an
objector, to the allowance by the committee of appraisal of a credit
against a testate or intestate succession, that he had a good
defense, but he must plead it in due time and set forth the facts and
grounds on which he intends to rest it, especially when the credit
allowed appears to have been proven at trial by means of
documents which were neither contradicted nor assailed as false,
criminally or civilly.
2. ID.; ID. — Any error, fraud, credit, defect, or vice, or a substantial
nature and productive of annulment, found in the committee's
report, may serve as a ground for appeal, be pleaded in the trial had
in the Court of First Instance, and be a subject-matter of the final
judgment rendered in the proceedings, provided that the person
who believed himself to have been prejudiced shall have appealed
from the report of the commissioners and from the order approving
it, for, if he does not do so, after the lapse of the period fixed by
law, all claims made for reasons of the annulment of the
proceedings had, will be valid."
On page 113 of the opinion in that case, the court says:
From the careful examination made of the record in this case it
appears that the proceedings had by the trial court, as well as those
by the committee of appraisal and claims, were in accordance with
law, as the preinserted provisions and other of the Code of Civil
Procedure were substantially complied with, and it cannot be
affirmed on good grounds that the irregularities complained of by
counsel for the minor Alfredo Ocampo were essentially such or that
they in any manner prejudiced his rights and interests, for both he
and his mother Gervasia de los Santos, as well as their attorneys,
knew positively and certainly that two commissioners of appraisal
had been appointed, had commenced to discharge their duties, had
published notices, by means of edicts posted in public places;
including the pueblo of Biñan, and by publications in the
newspaper La Vanguardia, calling the creditors of the estate of the
decedent Ramon Ocampo. If the mother of the minor Ocampo had
actually had justifiable grounds whereupon to oppose by a just and
good defense the claim presented by the administrator of the estate
of the deceased wife of the decedent Ocampo, in behalf of the
rights and interests of her minor son, she would have filed her
objections opportunely during the period of the six months fixed by
the commissioners and on the day and hour set by them. . . . (37
Phil., 113.)
In other words, the court found as a fact that in the De los Santos
vs. Reyes  case, supra, there was a substantial compliance with all of
the statutory requirements, and the decision in that case was based
upon that fact. But there is a marked distinction between the facts
there and those in the instant case. Here, all of the parties in
interest were minors. The evidence is conclusive that at the time the
alleged claim was allowed, Tan Kim Hong was only twelve years of
age, and that all of the other parties were minors. There is no claim
or pretense that Tan Kim Hong had a guardian or that anyone had
the legal authority to appear for and present his claim or to
represent him, or that his claim was ever presented. There is no
claim or pretense that any of the parties in interest had any
knowledge of the fact that the claim was presented and allowed
before they came to Manila from China in September, 1922. As a
matter of fact, there is no evidence that the claim in question in any
manner, shape or form was ever presented to the commissioners by
anyone. For aught that appears in the record, the claim was allowed
by the commissioners on their own motion and of their own
volition. It also appears that the entries which were made in the
books of the deceased were made by his bookkeeper, and there is
nothing to show that they were made by the authority of the
deceased. It is very significant that the will of the deceased was
made sometime after the entries were made, and that no reference
whatever is made in the will to the claim in question.
The authorities cited by the appellant upon the question of res
judicata  are good law, but are not in point. Here, there was no claim
presented to the commissioners. Hence, there was nothing for them
to adjudicate. Neither the claimant nor anyone on his behalf made
or presented a claim. Hence, it must follow that the commissioners
did not have any authority to allow or reject the claim, and that they
were without jurisdiction to act in the premises. Neither is the
evidence in the record sufficient to sustain the claim. Outside of the
fact that the above entries were made in the books of the deceased
by the his bookkeeper, there is nothing in the record upon which to
base the claim, and it does not even appear that such entries were
authorized by the deceased.
Giving full force and effect to the provisions of the Code of Civil
Procedure above quoted, all of the prerequisites and essential
elements of a judgment are wanting.
Ruling Case Law, volume 15, page 569, says:1awphil.net
A judgment is the law's last word in a judicial controversy. It may
therefore be defined as the final consideration and determination of
a court of competent jurisdiction upon the matters submitted to it
in an action or proceeding. A more precise definition is that a
judgment is the conclusion of the law upon the matters contained in
the record, or the application of the law to the pleadings and to the
facts, as found by the court or admitted by the parties, or deemed
to exist upon their default in a course of judicial proceedings. It
should be noted that only is a judgment which is pronounced
between the parties to an action upon the matters submitted to the
court for decision. . . .
In the instant case there was not claim made, filed or presented by
anyone. Legally speaking, the allowance of the claim would be like
rendering a judgment without the filing of a complaint, or even the
making or presentment of a claim.
Upon the facts shown, to legalize the allowance of the claim with all
of the formalities and requisites of a final judgment, would be a
travesty upon justice. It appears from the record before us that the
commissioners did not have any jurisdiction to allow the claim; that
as to the claim in question their proceedings were null and void ab
initio, and hence they were not res judicata, and in addition to that,
it clearly appears that the allowance of the claim was a fraud upon
the appellee.

The judgment of the lower court is affirmed, with costs. So ordered.

Street, Malcolm, Avanceña, Villamor, Ostrand and Romualdez, JJ.,

concur.