1. YU vs.

MAGPAYO
Facts:
It originally started in the City Court of Davao where appellant filed suit to
recover from defendant Emilio Mapayo the sum of P2,800, representing the
unpaid balance of the purchase price of a Gray Marine Engine sold by the
plaintiff to the defendant.
The answer admitted the transaction and the balance due but contended that
by reason of hidden defects of the article sold, the defendant had been
forced to spend P2,800 for repairs and labor.
The City Court, after trial, disallowed the defenses and ordered the defendant
to pay plaintiff P2,500.00.
Defendant Mapayo appealed to the CFI.
When the case is called for trial, defendants counsel asked again for another
postponement of the trial on the ground that defendant and his witnesses
were not able to come for lack of transportation, notwithstanding a stern
warning by the Court that it would not entertain further motion for
continuation of trial.

Yes. Since the answer admitted defendant's obligation as stated in the

complaint, albeit special defenses were pleaded, plaintiff had every
right to insist that it was for defendant to come forward with evidence
in support of his special defenses as provided by Section 2 of Revised
Rule of Court 129:
Sec. 2. Judicial admissions. Admissions made by the
parties in the pleadings, or in the course of the trial or other
proceedings do not require proof and cannot be contradicted
unless previously shown to have been made through
palpable mistake.
Trial judge's despotic and outrageous insistence that plaintiff should present
proof in support of allegations that were not denied but admitted by the
adverse party was totally unwarranted, and was made worse by the continual
interrupting of the explanations of counsel, in violation of the rules of Judicial
Ethics.
Defendant not having supported his special defenses, the dismissal of the
case was manifestly untenable and contrary to law.
WHEREFORE, the appealed order of dismissal is hereby revoked and set
aside, and the court below is directed to enter judgment in favor of plaintiff
and against the defendant for the sum of P2,800.00, plus attorney's fees.

Court ordered the plaintiff to present his evidence. Plaintiff's counsel refused
to comply with said order. Instead of calling his witnesses, he moved the
Court to present them after the defendant had presented their evidence.
The court dismissed the case for failure to prosecute on the part of counsel
for the plaintiff.
Finding defendant's counterclaim not meritorious, same is also dismissed.
Further motions to reconsider having proved futile, the plaintiff appealed.
ISSUE: W/N the plaintiff has the right to insist for the presentation of
defendants evidence.
HELD:

2. WASSMER vs. VELEZ

FACTS:
Francisco Velez and Beatriz Wassmer, decided to get married and set
September 4, 1954 as the big day. On September 2, Velez left a note stating
that they need to postpone the wedding by reason that his mother opposes it.
But the next day, September 3, he sent her a telegram stating that nothing
has changed and promise to return very soon.
Thereafter Velez did not appear nor was he heard from again.
Beatriz filed a suit for damages, Velez filed no answer and was declared in
default.

Plaintiff adduced evidence before the clerk of court and judgment was
rendered ordering defendant to pay plaintiff P2,000.00 as actual damages;
P25,000.00 as moral and exemplary damages; P2,500.00 as attorney's fees;
and the costs.
On 1955, defendant filed a "petition for relief from orders, judgment and
proceedings and motion for new trial and reconsideration." The court,
ordered the parties to appear before it to explore at this stage of the
proceedings the possibility of arriving at an amicable settlement.
Defendant failed to appear before court. On the following day, his counsel
filed a motion to defer for two weeks the resolution which the court granted.
Plaintiff manifested that the two weeks given by the court had expired on
September 8, 1955 but that defendant and his counsel had failed to appear.
Another chance for amicable settlement was given by the court in its order of
July 6, 1956 calling the parties and their attorneys to appear on July 13,
1956. This time. however, defendant's counsel informed the court that
chances of settling the case amicably were nil.
On July 20, 1956 the court issued an order denying defendant's aforesaid
petition. Defendant has appealed to this Court. In his petition of June 21,
1955 in the court a quo defendant alleged excusable negligence as ground to
set aside the judgment by default. Specifically, it was stated that defendant
filed no answer in the belief that an amicable settlement was being
negotiated.
A petition for relief from judgment on grounds of fraud, accident, mistake or
excusable negligence, must be duly supported by an affidavit of merits
stating facts constituting a valid defense. (Sec. 3, Rule 38, Rules of Court.)
Defendant's affidavit of merits attached to his petition of June 21, 1955
stated: "That he has a good and valid defense against plaintiff's cause of
action, his failure to marry the plaintiff as scheduled having been due to
fortuitous event and/or circumstances beyond his control." An affidavit of
merits like this stating mere conclusions or opinions instead of facts is not
valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10, 1951; Vaswani vs. P.
Tarrachand Bros., L-15800, December 29, 1960.)
Defendant, however, would contend that the affidavit of merits was in fact
unnecessary, or a mere surplusage, because the judgment sought to be set
aside was null and void, it having been based on evidence adduced before

the clerk of court. In Province of Pangasinan vs. Palisoc, L-16519, October

30, 1962, this Court pointed out that the procedure of designating the clerk of
court as commissioner to receive evidence is sanctioned by Rule 34 (now
Rule 33) of the Rules of Court. Now as to defendant's consent to said
procedure, the same did not have to be obtained for he was declared in
default and thus had no standing in court (Velez vs. Ramas, 40 Phil. 787;
Alano vs. Court of First Instance, L-14557, October 30, 1959).
In support of his "motion for new trial and reconsideration," defendant asserts
that the judgment is contrary to law. The reason given is that "there is no
provision of the Civil Code authorizing" an action for breach of promise to
marry. Indeed, our ruling in Hermosisima vs. Court of Appeals (L-14628,
Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30,
1960), is that "mere breach of a promise to marry" is not an actionable
wrong. We pointed out that Congress deliberately eliminated from the
draft of the new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts not
contrary to law may be perpetrated with impunity, is not limitless for
Article 21 of said Code provides that "any person who wilfully causes
loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage."
The record reveals that on August 23, 1954 plaintiff and defendant applied
for a license to contract marriage, which was subsequently issued (Exhs. A,
A-1). Their wedding was set for September 4, 1954. Invitations were printed
and distributed to relatives, friends and acquaintances (Tsn., 5; Exh. C). The
bride-to-be's trousseau, party drsrses and other apparel for the important
occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought.
Bridal showers were given and gifts received (Tsn., 6; Exh. E). And then, with
but two days before the wedding, defendant, who was then 28 years old,:
simply left a note for plaintiff stating: "Will have to postpone wedding My
mother opposes it ... " He enplaned to his home city in Mindanao, and the
next day, the day before the wedding, he wired plaintiff: "Nothing changed
rest assured returning soon." But he never returned and was never heard
from again.
Surely this is not a case of mere breach of promise to marry. As stated, mere
breach of promise to marry is not an actionable wrong. But to formally set a
wedding and go through all the above-described preparation and
publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably

contrary to good customs for which defendant must be held

answerable in damages in accordance with Article 21 aforesaid.

[G.R. No. L-17721. October 16, 1961.]

Defendant urges in his afore-stated petition that the damages awarded were
excessive. No question is raised as to the award of actual damages.
What defendant would really assert hereunder is that the award of
moral and exemplary damages, in the amount of P25,000.00, should be
totally eliminated.

GREGORIO APELARIO, doing business under the style "GREGORIO

TRADING," plaintiff-appellee,

Per express provision of Article 2219 (10) of the New Civil Code, moral
damages are recoverable in the cases mentioned in Article 21 of said Code.
As to exemplary damages, defendant contends that the same could not
be adjudged against him because under Article 2232 of the New Civil
Code the condition precedent is that "the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner." The argument
is devoid of merit as under the above-narrated circumstances of this
case defendant clearly acted in a "wanton ... , reckless [and] oppressive
manner." This Court's opinion, however, is that considering the
particular circumstances of this case, P15,000.00 as moral and
exemplary damages is deemed to be a reasonable award.
PREMISES CONSIDERED, with the above-indicated modification, the lower
court's judgment is hereby affirmed, with costs.

EN BANC

v.
INES CHAVEZ & COMPANY, LTD., doing business under the style
"FIDELITY MOTOR SUPPLY COMPANY, LTD., and INES CHAVEZ,
Defendants-Appellants.

Egnacio M. Orendain for Plaintiff-Appellee.

Mariano H. de Joya, for Defendants-Appellants.

SYLLABUS

1. JUDGMENT OF THE PLEADING; FAILURE OF DEFENDANT TO RAISE

MATERIAL ISSUES IN THE ANSWER; CASE AT BAR. The defendantsappellants admitted all the material allegations of the complaint concerning
the existence of the debt and its non-payment. The pleaded excuse, that they
had requested plaintiff to wait because appellants many accounts receivable
had not yet been collected, is no defense, for a debtor cannot delay payment
due just to suit its convenience, and the creditor is not an underwriter of his
debtors business unless so stipulated. The denial of the averment
concerning the stipulated fees of plaintiffs attorney tendered no genuine
issue, for even without such allegation, it was discretionary in the court to
allow reasonable attorneys fees by way of damages, if it found it just and
equitable to allow their recovery (Civil Code, Article 2208). Nor does the
denial of the complaints averments concerning the fraudulent removal and
disposition of defendants property constitute a bar to a judgment on the
pleadings, since the defendant neither claimed nor asked for any damages
on account of the issuance and levy of the writ of attachment. Under the
circumstances, judgment of the pleadings was proper.

DECISION

"defendants could not pay the plaintiff, because they have so many accounts
receivables which have not yet been paid to them, of which fact the
defendant, was duly informed by the plaintiff and thereby requested to wait a
while." (R. App. p. 27).

REYES, J.B.L., J.:

Appeal from a judgment on the pleadings rendered by the Court of First

Instance of Manila on June 8, 1959 in its Case No. 39822, and certified by
the Court of Appeals to this Court on the ground that only questions of law
are involved.

The record shows that on April 8, 1959, plaintiff Gregorio Apelario filed a
complaint against Ines Chavez & Company, Ltd., a limited partnership, and
its general partner, Ines Chavez. It was therein averred, in substance, that on
or about October 28, 1958, the defendant partnership had purchased on
credit from plaintiff ten sets of axle assemblies for the sum of P2,400.00 (par.
3); that on December 6, 1958, defendant delivered in payment to the plaintiff
two postdated cash checks for P1,200.00 each, drawn against the Philippine
Bank of Commerce (par. 4); that when the checks were presented for
payment, they were dishonored for lack of funds, whereupon the defendant
took back the checks and replaced them with two other checks, also
postdated, for the same amount as before (par. 5); that these checks were
also dishonored (par. 6); that the plaintiff, on February 23, 1959, demanded
payment in cash, but defendant refused to pay (par. 7); that because of such
malicious and willful refusal, plaintiff had to engage the services of counsel
for an agreed fee of P750.00 (par. 8); that defendant was about to remove
and dispose of its properties with intent to defraud the plaintiff, wherefore a
writ of attachment became necessary (par. 9); and prayer was made for
judgment in favor of plaintiff and against the defendant for the sum of
P2,400.00, with legal interest from the filing of the complaint, and for P750.00
attorneys fees, with expenses and costs. Plaintiff also moved and duly
obtained a writ of attachment.

Defendants obtained the lifting of the attachment by filing a counterbond on

April 14, 1959; and on May 7, 1959, they filed an answer admitting the
allegations of paragraphs 1 to 6 of the complaint; admitting that plaintiff had
demanded payment of P2,400, but pleaded that

Defendants further averred having no knowledge or information of the

allegations of paragraph 8 of the complaint concerning the attorneys fees;
denied having performed any act of removal or disposal of its property,
branding plaintiffs allegations in paragraph 9 to be false and malicious; and
prayed for dismissal of the complaint.

Upon motion of the plaintiff, and over the objection of defendants, the trial
court rendered judgment on the pleadings, sentencing defendants to pay
P2,400, plus legal interest from the filing of the complaint; and P500
attorneys fees.

Defendants appealed, and now claim that it was error for the lower court to
have rendered judgment on the pleadings, because the answer raised
material issues.

We find no merit in the appeal. As pointed out in the judgment

complained of, the defendants-appellants had admitted all the material
allegations of the complaint concerning the existence of the debt and
its non-payment. The pleaded excuse, that they had requested plaintiff
to, wait because appellants many accounts receivable had not yet been
collected, is clearly no defense, for a debtor can not delay payment due
just to suit its convenience, and the creditor is not an underwriter of his
debtors business unless so stipulated.

The denial of the averment concerning the stipulated fees of plaintiffs

attorney tendered no genuine issue, for even without such allegations,
it was discretionary in the court to allow reasonable attorneys fees by
way of damages, if it found just and equitable to allow their recovery
(Civ. Code, Art. 2208). In this case, allowance of such fees was justified since
defendant admitted having issued to the creditor checks without funds, not

once but twice. It is well to note that the P750 attorneys fees claimed by
plaintiff were reduced P500 only.

CAPITOL MOTORS CORPORATIONS, plaintiff-appellee,

vs.
NEMESIO I. YABUT, defendant-appellant.

Nor does the denial of the complaints averments concerning the fraudulent
removal and disposition of defendants property constitute a bar to a
judgment or the pleadings, since the defendant neither claimed nor asked for
any damages on account of the issuance and levy of the writ of attachment.

Jose A. David, Jr. for plaintiff-appellee.

WHEREFORE, the appealed judgment of the Court of First Instance is

affirmed. Costs against appellants.

VILLAMOR, J.:

R. Correa for defendant-appellant.

Appeal on a question of law from the judgment of the Court of First Instance
of Rizal in its Civil Case. No. Q-9869.

Republic of the Philippines

SUPREME COURT
Manila

On March 1, 1966, Capitol Motors Corporations filed a complaint against

Nemesio I. Yabut. It was therein averred that on April 24, 1965, the defendant
executed in favor of the plaintiff a promissory note (copy of which was
attached to the complaint) for the sum of P30,134.25, payable in eighteen
(18) equal monthly installments with interest at 12% per annum, the first
installment to become due on June 10, 1965, that it was stipulated in the
promissory note that should the defendant fail to pay two (2) successive
installments, the principal sum remaining unpaid would immediately become
due and demandable and the defendant would, by way of attorney's fees and
costs of collection, be obligated to the plaintiff for an additional sum
equivalent to 25% of the principal and interest due; that as of February 23,
1966, the sum remaining unpaid on the promissory note was P30,754.79,
including accrued interest; that the defendant defaulted in the payment of two
(2) successive installments, and likewise failed to pay the interest due on the
promissory note; and that in spite of demands by the plaintiff, the defendant
failed and refused to pay the said principal sum and interest due. Prayer was
made that the defendant be ordered to pay the plaintiff the sum of
P30,754.79, as well as the interest due thereon from February 23, 1966, and
an additional sum equivalent to 25% of the amount due, plus costs.
On April 27, 1966, and within the reglementary period, the defendant,
through his counsel, filed an answer which reads:

EN BANC

DEFENDANT through counsel alleges:

G.R. No. L-28140 March 19, 1970

1. Paragraph 1 of the complaint is admitted.

2. Paragraphs 2, 3, 4, 5, 6 and 7 of the complaint are

specifically denied for lack of knowledge sufficient to form a
belief as to the truth thereof.
WHEREFORE, it is respectfully prayed that the Complaint
be dismissed with costs against the plaintiff.
On June 16, 1966, the plaintiff filed a motion for judgment on the
pleadings, on the ground that the defendant, not having set forth in his
answer the substance of the matters relied upon by him to support his denial,
had failed to deny specifically the material allegations of the complaint,
hence, must be deemed to have admitted them. The defendant did not file an
opposition to the motion. On September 13, 1966, after hearing on the
motion, the court issued an order granting the said motion and considering
the case submitted for decision on the basis of the pleadings; and on
January 9, 1967, the court rendered judgment granting in toto the plaintiff's
prayer in its complaint.
In this appeal, defendant-appellant contends that the court a quo erred in
considering him as having failed to deny specifically the material allegations
of the complaint, and, consequently, in deciding the case on the basis of the
pleadings. Citing Moran, Comments on the Rules of Court, Vol. I, 1963 Ed.,
p. 281, he argues that since Section 10, Rule 8 of the Revised Rules of
Court, recognizes three (3) modes of specific denial, namely: (1) by
specifying each material allegation of fact in the complaint the truth of which
the defendant does not admit, and, whenever practicable, setting forth the
substance of the matters which he will rely upon to support his denial or (2)
by specifying so much of an averment in the complaint as is true and material
and denying only the remainder or (3) by stating that the defendant is without
knowledge or information sufficient to form a belief as to the truth of a
material averment in the complaint, which has the effect of a denial, and he
has adopted the third mode of specific denial, his answer tendered an issue,
and, consequently the court a quo could not render a valid judgment on the
pleadings.
This appeal is without merit.
We agree with defendant-appellant that one of the modes of specific denial
contemplated in Section 10, Rule 8, is a denial by stating that the defendant
is without knowledge or information sufficient to form a belief as to the truth
of a material averment in the complaint. The question, however, is whether
paragraph 2 of defendant-appellant's answer constitutes a specific denial

under the said rule. We do not think so. In Warner Barnes & Co., Ltd. vs.
Reyes, et al., G.R. No. L-9531, May 14, 1958 (103 Phil., 662), this Court said
that the rule authorizing an answer to the effect that the defendant has no
knowledge or information sufficient to form a belief as to the truth of an
averment and giving such answer the effect of a denial, does not apply
where the fact as to which want of knowledge is asserted, is so plainly and
necessarily within the defendant's knowledge that his averment of ignorance
must be palpably untrue. In said case the suit was one for foreclosure of
mortgage, and a copy of the deed of mortgage was attached to the
complaint; thus, according to this Court, it would have been easy for the
defendants to specifically allege in their answer whether or not they had
executed the alleged mortgage. The same thing can be said in the present
case, where a copy of the promissory note sued upon was attached to the
complaint. The doctrine in Warner Barnes & Co., Ltd. was reiterated in J. P.
Juan & Sons, Inc. vs. Lianga Industries, Inc., G.R. No. L-25137, July 28,
1969 (28 SCRA 807). And in Sy-quia vs. Marsman, G.R. No. L-23426, March
1, 1968 (22 SCRA 927), this Court said:
With regard to the plea of lack of knowledge or information
set up in paragraph 3 of the answer, this Court's decision
in Warner Barnes vs. Reyes, 103 Phil. 662, 665, is authority
for the proposition that this form of denial must be availed of
with sincerity and good faith, not for the purpose of confusing
the other party, nor for purposes of delay. Yet, so lacking in
sincerity and good faith is this part of the answer that
defendants-appellants go to the limit of denying knowledge
or information as to whether they (defendants) were in the
premises (Marsman Bldg.) on January 4, 1961, as averred in
paragraph 4 of the complaint. Yet whether such a fact was or
was not true could not be unknown to these defendants.
In National Marketing Corporation vs. De Castro, 106 Phil. 803 (1959), this
Court held:
Furthermore, in his answer to the appellee's complaint, he
merely alleged that 'he has no knowledge or information
sufficient to form a belief as to the truth of the matters
contained in paragraphs 3, 4, 5 and 6 so much so that he
denies specifically said allegations.' A denial is not specific
simply because it is so qualified. (Sections 6 and 7, Rule 9;
El Hogar Filipino vs. Santos Investments, Inc., 74 Phil. 79;
Baetamo vs. Amador, 74 Phil. 735; Dacanay vs. Lucero, 76
Phil. 139; Lagrimas vs. Lagrimas, 95 Phil. 113). Material

averments in a complaint, other than those as to the amount

of damage, are deemed admitted when not specifically
denied. (Section 8, Rule 9,) The court may render judgment
upon the pleadings if material averments in the complaint
are admitted. (Section 10, Rule 35; Baetamo vs.
Amador, supra, Lichauco vs. Guash, 76 Phil. 5; Lati vs.
Valmores, G.R. No. L-6877, 30 March 1954.)
It becomes evident from all the above doctrines that a mere allegation
of ignorance of the facts alleged in the complaint, is insufficient to raise
an issue; the defendant must aver positively or state how it is that he is
ignorant of the facts so alleged. (Francisco, The Revised Rules of Court in
the Philippines, Vol. I, p. 417, citing Wood vs. Staniels, 3 Code Rep. 152 and
Vassalt vs. Austin, 32 Cal. 597.)
Thus, in at least two (2) cases where this Court ruled that judgment on the
pleadings was not proper, it will be seen that the reason was that in each
case the defendants did something more than merely alleging lack of
knowledge or information sufficient to form a belief. In Arrojo vs. Caldoza, et
al., G.R. No. L-17454, July 31, 1963 (8 SCRA 547), the defendants, in their
answer to the complaint for recovery of possession of a parcel of land, did
not merely allege that they had no knowledge or information sufficient to form
a belief as to the truth of the material allegations in the complaint, but added
the following: "The truth of the matter is that the defendants have not
occupied or taken any property belonging to the plaintiff. They took
possession and ownership only of the land belonging to them, which
properties were possessed and owned originally by their predecessors-ininterest, who were the parents of the defendants ...." In Benavides vs.
Alabastro, G.R. No. L-19762, December 23, 1964 (12 SCRA 553), the
defendant's answer did not only deny the material allegations of the
complaints but also set up certain special and affirmative defenses the nature
of which called for presentation of evidence.
There are two other reasons why the present appeal must fail. First. The
present action is founded upon a written instrument attached to the
complaint, but defendant-appellant failed to deny under oath the
genuineness and due execution of the instrument; hence, the same are
deemed admitted. (Section 8, Rule 8 of the Revised Rules of Court; Songo
vs. Sellner, 37 Phil. 254; Philippine Commercial & Industrial Bank vs. ELRO
Development Corporation, et al., G.R. No. L-30830, August 22, 1969 [29,
SCRA 38]; J. P. Juan & Sons, Inc. vs. Lianga Industries, Inc., supra.) Second.
Defendant-appellant did not oppose the motion for judgment on the
pleadings filed by plaintiff appellee; neither has he filed a motion for

reconsideration of the order of September 13, 1966, which deemed the case
submitted for decision on the pleadings, or of the decision rendered on
January 9, 1967. In Santiago vs. Basilan Lumber Company, G.R. No. L15532, October 31, 1963 (9 SCRA 349), this Court said:
It appears that when the plaintiff moved to have the case
decided on the pleadings, the defendant interposed no
objection and has practically assented thereto. The
defendant, therefore, is deemed to have admitted the
allegations of the complaint, so that there was no necessity
for the plaintiff to submit evidence of his claim.
PREMISES CONSIDERED, the judgment appealed from is affirmed, with
cost against defendant-appellant

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-10884

March 31, 1959

PHILIPPINE NATIONAL BANK, plaintiff-appellee,

vs.
PHILIPPINE LEATHER CO. INC., ET AL., defendants-appellants.
Castao and Ampil for appellants.
Ramon B. de los Reyes for appellee.
PADILLA, J.:
In its complaint filed in the Court of First Instance of Manila, the plaintiff
alleges that on 1 September 1952 the defendant Philippine Leather Co., Inc.
applied for a commercial letter of credit in the sum of $14,814.80, in U.S.
currency, under the terms and conditions set forth in an application filed by
the defendants in favor of the Turner Tanning Machinery Co. of Peabody,
Massachusetts, U.S.A. to cover the full invoice value of certain machineries
and their accessories; that on 3 October 1952 the plaintiff approved the
application "subject to 30% deposit and the joint and several signatures of
Mr. Isidoro Tinoco and Mrs. Soledad L. Basa" which conditions were
complied with; that on 8 October 1952, the plaintiffs issued Letter of Credit
No. 51469 in favor of the Turner Tanning Machinery Company; that on 15
November 1952 the Turner Tanning Machinery Co., drew upon the letter of
credit the sum of $14,549.17, U.S. currency; that upon arrival in the
Philippines of the machineries and their accessories imported by the
defendants under a trust receipt, that on 23 January 1953 the plaintiff
presented to the defendants for payment the draft drawn by the Turner
Tanning Machinery Co., upon Letter of Credit No. 51469 which was accepted
by them; that after the draft had matured on 23 April 1953 the plaintiff made
numerous demands upon the defendants to pay the amount of the draft and
the charges due thereon but the defendants failed and refused to pay; and
that as of 15 October 1953, the outstanding balance of the defendants on the
draft is P22,787.79, Philippine currency, plus interest thereon at the rate of
P4.89135 daily until fully paid. It alleges further that on 30 January 1953 the
defendant Philippine leather Co., Inc., applied for a commercial letter of credit
in the sum of $2,587.50, U.S. currency, under the terms and conditions set

forth in an application filed by the defendants in favor of Bay State Chemical

Co., of Boston, Massachusetts, U.S.A., to pay for the importation of color
dye; that the plaintiff approved the application "subject to 30% deposit and
the joint and several signatures of Mr. Isidoro Tinoco and Mrs. Soledad L.
Basa," which conditions were complied with; that thereafter the plaintiff
issued Letter of Credit No. 53753 in favor of the Bay State chemical Co., that
on 12 March 1953 the Bay State Chemical Co., drew upon the letter of credit
the sum of $2,482.40, U.S. currency; that the draft drawn by the Bay State
Chemical Co., was presented by the plaintiff to the defendants for payment;
that the defendants failed and refused to pay the amount of the draft and the
charges due thereon; that because of the failure and refusal of the
defendants to pay their obligation, the plaintiff delivered the documents of the
shipment to the Luzon Brokerage Co., and requested it to claim and store the
shipment in its bonded warehouse, for which service and storage the
defendants are liable to the Luzon Brokerage Co.; that as of 15 October
1953; the outstanding balance of the defendants on the draft is P4,503.05,
Philippine currency, plus interest thereon at the rate of P.083569 daily until
fully paid.
The plaintiff prays that after hearing judgment be rendered ordering the
defendants to pay it the sum of P22,787.79, with daily interest thereon at the
rate of P4.89135 from 15 October 1953 until fully paid; 10% of the said
amount as attorney's fee; P4,503.05, with daily interest thereon at the rate of
P0.83569 from 15 October 1953 until fully paid; the amount of storage and
other charges that the Luzon Brokerage Co., would charge the plaintiff for the
handling and storage of the merchandise imported by the defendants under
Letter of Credit No. 53753; and the costs of the suit. The plaintiff further prays
that pending hearing and final judgment, a writ of attachment be issued
commanding the Sheriff of the City of Manila to levy upon attachment on the
properties of the defendants as security for the satisfaction of any judgment
that it may secure against them.

affidavit subscribed and sworn to by Ceferino Saavedra, Manager of the

Special Assets Department of the plaintiff, in charge of all outstanding
accounts of its debtors, stating the payments made by the defendants on
their account and the exact total amount due from them.
On 7 October 1954 the Court granted the plaintiff's motion and rendered
judgment ordering the defendants, jointly and severally, to pay
. . . the plaintiff in the first cause of action, the amount of P22,787.79,
with a daily interest of P4.89135 from October 15, 1953 up to full
payment thereof, and 10% of the amount due for attorney's fees. On
the second cause of action, defendants shall pay, jointly and
severally, the sum of P4,503.05, with a daily interest of P0.83569
from October 15, 1953 until full payment thereof.
Defendants shall also pay the costs.
The defendants appealed to the Court of Appeals. The latter certified
the case to this Court for the reason that only questions of law are
raised.
Rule 36 provides:
Section 1. Summary judgment for claimant. A party seeking to
recover upon a claim, counterclaim, or crossclaim or to obtain a
declaratory relief may, at any time after the pleading in answer
thereto has been served, move with affidavits for a summary
judgment in his favor upon all or any part thereof.

In their answer filed on 28 December 1953 the defendants admit the

plaintiff's averments except as to the correctness of the amounts due on the
two drafts, the correctness of which they were still checking, and for that
reason lacking sufficient knowledge or information to form a belief as to the
truth and veracity of the amounts due on the two drafts, they deny the
amounts claimed by the plaintiff to be due from them.

SEC. 3. Motion and proceedings thereon. The motion shall be

served at least ten days before the time specified for the hearing.
The adverse party prior to the day of hearing may serve opposing
affidavits. The judgment sought shall be rendered forthwith if the
pleadings, depositions, and admissions or file, together with the
affidavits, show that, except as to the amount of damages, there is
no genuine issue as to any of the material fact and that the moving
party is entitled to a judgment as a matter of law.

On 25 June 1954 the plaintiff filed a motion for summary judgment on the
ground that since the defendants had admitted the material averments of its
complaint except as to the correctness of the amounts due, the defendant's
answer did not tender a genuine issue. The plaintiff attached to its motion an

SEC. 5. Form of affidavits. Supporting and opposing affidavits

shall be made on personal knowledge, shall set forth such facts as
would be admissible in evidence, and shall show affirmatively that
the affiant is competent to testify to the matters stated therein. Sworn

or certified copies of all papers of parts thereof referred to in an

affidavit shall be attached thereto or served therewith.
The defendant's answer that as to the first cause of action they
. . . are still checking on the correctness of the alleged balance
outstanding against them and in favor of the plaintiff; consequently,
for lack of knowledge or information sufficient to form a belief as to
the truth and veracity of the averments embodied in paragraph 7
thereof, they hereby specifically deny the allegations therein stated;
and that so to the second cause of action they
. . . are checking on the veracity and correctness of the balance
allegedly outstanding in favor of the plaintiff manifested in paragraph
6 of the same, they, by virtue thereof, specifically deny it for lack of
knowledge and belief as to the truth of the allegations embodied in
the aforestated paragraph.
does not tender a genuine issue. In fact they admit that they are indebted
to the plaintiff. As the affidavit subscribed and sworn to by the Manager of the
Special Assets Department of the plaintiff, in charge of all outstanding
accounts of its debtors, attached to the motion for summary judgment,
furnishes the Court with the payments made by the defendants on their
account and the amount due from them, which they failed to oppose by
counter affidavits, the plaintiff is entitled to summary judgment. 1

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-49668 November 14, 1989
POLICARPIO, LUCIO, JULIAN, CATALINO, BONIFACIO, CONRADA,
DOMINGO, PAQUITA, AND LILIA, ALL SURNAMED GALICIA, petitioners,
vs.
THE HON. WENCESLAO M. POLO, in his capacity as Presiding Judge,
CFI, Branch V, Samar (Calbayog City), ZOSIMA PALAJOS, TITING
LISTOJAS, ALFREDO PALAJOS, MANUELITO ROSIALDA, respondents.
Mateo M. Leanda for petitioners.
Zosimo Santiago for private respondents.

The judgment appealed from is affirmed, with costs against the appellants.
BIDIN, J.:
This is a petition for review on certiorari seeking to set aside the summary
judgment entered by the then Court of First Instance of Samar, Br. V in Civil
Case No. 758-CC entitled, "Policarpio, Lucio, Julian, Catalino, Bonifacio,
Conrada, Domingo, Paquita and Lilia, all surnamed Galicia v. Zosima
Palajos, Titing Listojas, Alfredo Palajos and Manuelito Rosialda" and to order
the trial court to try the above-cited case on the merits.
The facts are undisputed.
On December 15, 1973. a complaint for forcible entry (Civil Case No. 56)
entitled "Amancio Palajos v. Policarpio, Perfecto, Victorio Julian and

Eduardo, all surnamed Galicia," was filed in the Municipal Court of

Almagro, Samar, alleging that Amancio Palajos is the owner and in
actual possession of a parcel of land located at Bacjao, Almagro,
Samar, more particularly described as follows:
A parcel of land with an area of about 4-88-00 hectares,
more or less, assessed at P 360.00 as per Tax Declaration
No. 8547 in the name of Juan Palajos, it is, however,
14.2860 hectares as per approved survey plan, the
boundaries of which are: N Pedro Galicia and the
Poblacion of Barrio Bacjao; S Emilio Carpon, Magno
Suico and Teresa Subito; and W Bernardo Ballarante and
Cenon S. Aguilar.
which he acquired by way of donation from his father, Juan Palajos. It is
further alleged that defendants (petitioners herein) forcibly entered the
northeastern portion of the said property covering an area of about 1 1/2
hectares.
The trial of the case was set several times but was postponed at the instance
of defendants (petitioners herein). For the fifth time, i.e., on July 19, 1974,
neither the defendants nor counsel appeared. Accordingly, the court granted
a trial ex parte on motion of plaintiffs counsel (Rollo, p. 24).
Subsequently, the municipal trial court rendered judgment against
defendants (petitioners herein), the dispositive portion of which reads:
WHEREFORE, this Court hereby renders judgment ordering
defendants Policarpio Galicia, Perfecto Galicia, Victorio
Galicia, Julian Galicia and Eduarda Galicia to restore to
plaintiff Amancio Palajos the portion of land described in par.
4 of the plaintiffs complaint consisting of one and one-half
hectares and which is the northeastern portion of land under
Tax Dec. No. 8547 as described in paragraph 2 thereof,
ordering the defendants to pay to plaintiff a monthly rental in
the amount of FIFTY PESOS (P 50.00) on the premises in
question for its use and occupation from September, 1973,
up to the time when said premises is finally restored to the
plaintiff, and to pay the costs.
SO ORDERED.

On September 28, 1974, defendants filed a motion for reconsideration and to

grant a new trial but was denied in an Order dated October 24, 1974 (Rollo,
p. 28).
On November 12, 1974, defendants filed a notice of appeal but the same
was likewise denied by the trial court on the ground that it was filed beyond
the reglementary period of fifteen (15) days to perfect an appeal.
For failure of the defendants to pay the rentals adjudged in the forcible entry
case (CC No. 56), a writ of execution was issued and after levy, the deputy
sheriff of Calbayog City, on August 4, 1976, sold at public auction the real
property owned by petitioners' deceased father adjoining the land subject of
the forcible entry case more particularly described as follows:
A piece of real estate consisting of coconut and cornland
situated at Bo. Bacjao, Almagro, Samar, Philippines,
bounded on the NORTH, by Isabelo Palajos; on the SOUTH,
by Narciso Pajalino; and on the WEST, by Seashore,
containing an area of 2-60-00 hectares, more or less
assessed at P180.00, under Tax Declaration No. 12048, in
the name of Pedro Galicia (deceased); (Rollo, p. 30).
On October 10, 1977, or over 14 months after the execution sale, petitioners
filed a complaint for Ownership and Damages against herein respondents in
the then Court of First Instance of Samar, 13th Judicial District, Br. V,
docketed as Civil Case No. 758-CC, alleging that they are co-owners of a
certain parcel of agricultural land (subject of the auction sale) which they
inherited from their deceased father, Pedro Galicia, more particularly
described as follows:
A parcel of coconut and corn land located at Bacjao,
Almagro, Samar, Philippines, with an area of 26,000 sq. m.
and bounded on the NORTH, by Isabelo Palajos; SOUTH,
by Narciso Pauline; EAST, by Benedicto Paulino and WEST,
by Seashore covered by Tax Declaration No. 12048 in the
name of Pedro Galicia.
The complaint further alleged that pursuant to Civil Case No. 56 (forcible
entry case), respondents were able to take possession of the land in
question as said case was heard ex-parte; and that a decision was rendered
in respondents' favor and said decision was executed sometime in 1976
(Rollo, p. 36-37).

In their Answer, respondents (defendants below) countered that they were

able to take possession of the land described in the complaint by virtue of the
decision and later, execution of the decision in the forcible entry case, which,
by petitioners' (plaintiffs below) averment in their complaint is an admission of
an existing judgment that would constitute res judicata; that they are the
lawful owners of the disputed land the same having been subjected to levy
and execution in 1975 thru a sale in favor of respondents' predecessor-ininterest, Juan Palajos.
The issues having been enjoined, the case was set for pre-trial by
respondent judge Hon. Wenceslao M. Polo. At the pre-trial, counsel for
private respondents moved for time within which to file a motion for summary
judgment which was granted by respondent judge in his order dated June 28,
1978.

possession is settled, which would constitute as a bar to this

action.
xxx xxx xxx
With respect to the other portion of the land in dispute, the
plaintiffs admit that possession was transferred to the
defendant by virtue of a sale executed by the sheriff; the one
year period having elapsed without exercising their right of
redemption, as a result a final deed of sale was issued. The
legality of the sale not having been assailed by them, for all
intents and purposes, ownership on this land have been
vested on the defendants as heirs of Juan Palajos.
WHEREFORE, premises above considered, judgment is
hereby rendered ordering the dismissal of the plaintiffs'
complaint, without pronouncement as to cost."

Defendants' (private respondents herein) motion for summary judgment was

filed on July 7, 1978 (Rollo, p. 43) alleging that no genuine issue exists in the
case at bar after the pre-trial was conducted and admission of facts were had
(Rollo, p. 44), while plaintiffs (petitioners herein) filed their opposition to the
motion for summary judgment dated July 17, 1978 alleging among others,
that genuine issues exist (Rollo, pp. 45-47).

A motion to re-open the case for trial on the merits was filed by plaintiffs but
was denied in an order dated November 27, 1978 (Rollo, p. 62). Hence, this
instant petition.

On August 11, 1978, the court a quo rendered the assailed summary
judgment dismissing petitioners' complaint (Rollo, p. 48-53), the pertinent
portion of which reads:

Petitioners contend that the trial court erred when it decided Civil Case No.
758-CC by summary judgment when there are several genuine issues
involved therein which require a trial of these issues on the merits, such as:

As demonstrated by the parties, there is no question that the

land in dispute is that parcel described in paragraph 3 of the
complaint, a portion of which was a subject in a forcible entry
case before the Municipal Trial Court of Almagro Samar
(Exhibit 1, 2 and 3) with the defendants now as sucessors-ininterest of the plaintiff, and most of the herein plaintiffs as
defendants.

(A) WAS THE EXECUTION SALE CONDUCTED BY

DEPUTY PROVINCIAL SHERIFF EUFROCINO T.
OLIFERNES OF LOT NO. 1363 OF THE LATE PEDRO
GALICIA, PETITIONERS' FATHER, VALID TO CONFER
UPON THE DEFENDANTS IN SAID CASE A JUST TITLE
OVER SAID REALTY?

The pleadings also show that upon the death of the primitive
owner, Pedro Galicia, the plaintiffs as children and
grandchildren possessed and owned this land pro-indiviso,
until the possession of said portion was transferred to the
defendants when the decision in that forcible entry case was
executed in 1976 (Exhibit 7) such being the case, therefore,
with respect to this portion of the land in dispute, the

(B)
WERE
THE
UNDIVIDED
SHARES
AND
PARTICIPATIONS OF JULIAN GALICIA AND CATALINO
GALICIA WHO WERE TWO OF THE LEGITIMATE
CHILDREN OF PEDRO GALICIA NOT IMPLEADED AS
PARTIES IN CIVIL CASE NO. 56 IN THE MUNICIPAL
COURT OF ALMAGRO OVER LOT NO. 1363, AFFECTED
BY THAT EXECUTION SALE?

(C)
WERE
THE
UNDIVIDED
SHARES
AND
PARTICIPATIONS
OF
EDUARDA
GALICIA
AND
PERFECTO GALICIA OVER LOT NO. 1363, BUT WHO
WERE NOT IMPLEADED AS PARTIES IN CIVIL CASE NO.
758-CC OF THE COURT OF FIRST INSTANCE OF SAMAR
(CALBAYOG CITY) AFFECTED BY THE DECISION OF
THE LATTER COURT OF SUMMARY JUDGMENT? (Rollo,
p. 10).
The crucial issue in this case is whether or not the trial court erred when it
decided Civil Case No. 758-CC by summary judgment.
It is the contention of petitioners that the trial court erred in deciding their
complaint (CC No. 758-CC) by summary judgment when there are several
genuine issues involved therein which require a full trial on the merits. Among
other things, petitioners contend that the execution sale conducted by the
Deputy Provincial Sheriff was null and void and would have merited a trial on
the merits. Moreover, it is further contended that as between Civil Case No.
56 and Civil Case No. 758-CC, there can be no res judicata, considering that
there is no Identity of parties, cause of action and subject matter between the
two actions.
After a thorough review of the records, the Court finds no cogent reason to
disturb the summary judgment rendered by respondent judge.
The Rules of Court authorizes the rendition of summary judgment if the
pleadings, depositions and admissions on file together with the affidavits,
show that, except as to the amount of damages, there is no issue as to any
material fact and that the moving party is entitled to a judgment as a matter
of law (Sec. 3, Rule 34). Conversely, summary judgment is not proper where
the pleadings tender vital issues the resolution of which call for the
presentation of evidence (Villanueva v. NAMARCO, 28 SCRA 729 [1969];
Guevarra, et al., v. CA, et al., 124 SCRA 297 [1983]).
Summary judgment "is a device for weeding out sham claims or defenses at
an early stage of the litigation, thereby avoiding the expense and loss of time
involved in a trial. The very object is 'to separate what is formal or pretended
in denial or averment from what is genuine and substantial, so that only the
latter may subject a suitor to the burden of trial.' The test, therefore, of a
motion for summary judgment is-whether the pleadings, affidavits, and
exhibits in support of the motion are sufficient to overcome the opposing
papers and to justify a finding as a matter of law that there is no defense to

the action or the claim is clearly meritorious" (Estrada v. Hon. Consolacion, et

al., 71 SCRA 523 [1976]).
In addition, summary judgment is one of the methods sanctioned in the
present Rules of Court for a prompt disposition of civil actions wherein there
exists no serious controversy. The procedure may be availed of not only by
claimants, but also by defending parties who may be the object of unfounded
claims. A motion for summary judgment assumes that scrutinizing the facts
will disclose that the issues presented by the pleadings need not be tried
because they are so patently unsubstantial as not to be genuine issues, or
that there is no genuine issue as to any material facts or where the facts
appear undisputed and certain from the pleadings, depositions, admissions
and affidavits (Singleton v. Philippine Trust Co., 99 Phil, 91 [1956], cited in
Bayang v. CA, 148 SCRA 91 [1987]).
Examining petitioners' complaint, the Court finds that the disputed property is
the same parcel of land, which adjoins private respondents' lot which was the
subject of the forcible entry case and from which petitioners were ordered to
vacate. When petitioners (then defendants), failed to satisfy the rentals
adjudged in the forcible entry case, said adjoining parcel of land was sold at
public auction to Juan Palajos (respondents' predecessor-in-interest) as the
higher bidder in the execution sale to satisfy the monetary judgment
rendered therein. The property so described in petitioners' complaint (Rollo,
p. 36) squarely fits what has been levied upon and sold at public auction
(Rollo, p. 30), the owners of which are now private respondents upon the
demise of their predecessor-in-interest.
There is thus no question that issue of ownership of the disputed land subject
of the present petition has long been foreclosed in the forcible entry case
which culminated in the public auction sale of the parcel of land now sought
to be recovered. Having failed to redeem the property sold at the public
auction sale within the reglementary period of twelve (12) months (Sec. 30,
Rule 39 of the Rules of Court), petitioners cannot now claim that they still
own said property. Petitioners' complaint for Ownership and Damages is but
a belated and disguised attempt to revive a judgment debtors' right of
redemption which has long expired. There being no issue as to any material
fact raised in the pleadings, summary judgment may be rendered.
Neither can the issue of the validity of the execution sale help petitioners'
cause. Well-settled in this jurisdiction, is the rule that issues not raised and/or
ventilated in the lower court cannot be raised for the first time on appeal
(Rebodos v. WCC, 6 SCRA 717 [1962]; DBP v. CA, 116 SCRA 636 and a
long line of cases). A review of the records of the case shows that petitioners

failed to directly assail and raise as issue, the validity of the aforementioned
auction sale in their complaint. It was only when the respondent judge noted
such omission in his decision dismissing Civil Case No. 758-CC dated
August 11, 1978 (Rollo, p. 48-53) that petitioners later filed a separate action
for Annulment of Auction Sale and Damages on October 4, 1978 (Civil Case
No. 837-CC; Rollo, p. 31-35). The validity of the execution sale not having
been raised and/or litigated in the case subject of the present appeal, the
Court, at this stage, cannot pass upon the same for the purpose of
determining the propriety of the summary judgment. Objections to the
execution sale cannot be considered in the Supreme Court inasmuch as it
was not raised in the lower court (Ramiro v. Grano 54 Phil. 744 [1930]; citing
Tan Machan v. de la Trinidad, 3 Phil. 684 [1904] and U.S. v. Inductive, 40
Phil. 84 [1919]).

PUNO, J.:

WHEREFORE, the instant petition is hereby DENIED for lack of merit. Costs
against petitioners.

The Complaint prayed that defendants be ordered to pay, jointly and

severally, two hundred seventy thousand pesos (P270,000.00) as
compensatory damages, fifty thousand pesos (P50,000.00) each as moral
and exemplary damages, and attorney's fees, litigation expenses, and cost of
suit. 8

SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION

G.R. No. 106436 December 3, 1994

VIRGILIO
D.
IMSON, petitioner,
vs.
HON. COURT OF APPEALS, HOLIDAY HILLS STOCK AND BREEDING
FARM CORPORATION, FNCB FINANCE CORPORATION, respondents.
Polotan Law Office for petitioner.
Felix R. Solomon for private respondents.

The case at bench arose from a vehicular collision on December 11, 1983,
involving petitioner's Toyota Corolla and a Hino diesel truck registered under
the names of private respondents FNCB Finance Corporation and Holiday
Hills Stock and Breeding Farm Corporation. The collision seriously injured
petitioner and totally wrecked his car.
On January 6, 1984, petitioner filed with the RTC Baguio City 1 a Complaint
for Damages 2 Sued were private respondents as registered owners of the
truck; truck driver Felix B. Calip, Jr.; the beneficial owners of the truck,
Gorgonio Co Adarme, Felisa T. Co (also known as Felisa Tan), and Cirilia
Chua Siok Bieng, and the truck insurer, Western Guaranty Corporation.

Defendants driver and beneficial owners failed to answer and were declared
in default. 4 On May 29, 1987, however, petitioner and defendant insurer,
entered into a compromise agreement which provided, inter alia:
1. Defendant Western Guaranty Corporation (Western
Guaranty for short) admits that its total liability under the
laws and the insurance contract sued upon is P70,000.00;
2. In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall pay
plaintiff (herein petitioner) the amount of P70,000.00 upon
the signing of this compromise agreement;
3. This compromise agreement shall in no way waive nor
prejudice plaintiffs (herein petitioner's) rights to proceed
against the other defendants with respect the remainder of
his claims;
4. This compromise agreement shall be a full and final
settlement of the issues between plaintiff (herein petitioner)
and defendant Western Guaranty in their complaint and
answer and, from now on, they shall have no more right

against one another except the enforcement of this

compromise agreement.
In consequence of the compromise agreement, the trial court dismissed the
Complaint for Damages against Western Guaranty Corporation on June 16,
1987. 8 A copy of the Order of dismissal was received by private respondent
Holiday Hills Stock and Breeding Farm Corporation on July 13, 1987. Nearly
eighteen (18) months later, said private respondent moved to dismiss the
case against all the other defendants. It argued that since they are all
indispensable parties under a common cause of action, the dismissal of the
case against defendant insurer must result in the dismissal of the suit against
all of them. The trial court denied the motion.
Private respondent Holiday Hills Stock and Breeding Farm Corporation
assailed the denial order through a Petition for Certiorari, Prohibition
and Mandamus With Restraining Order filed with respondent Court of
Appeals. The Petition was docketed as CA-G.R. SP No. 17651. On July 10,
1992, the Court of Appeals, 7 through its Special Sixth Division, 8 reversed the
trial court, as it ruled:

pay or settle claims arising under its policy coverage, is untenable, for the
cited law perceives the existence of a just cause, and according to the
answer filed by the Western Guaranty Corporation . . . the proximate cause
of the accident was the fault of the plaintiff (herein petitioner), hence it was
not liable for damages. There is in fact a congruence of affirmative defense
among the answering defendants.
Moreover, it is undisputed that the injury caused is covered by the insurance
company concerned. Thus, when the said insurer settled its liability with the
private respondent (petitioner herein) . . . , the other defendants, as the
insured and indispensable parties to a common cause of action, necessarily
benefited from such settlement including the defaulted defendants, for as
stated in the aforecited cases, it is deemed that anything done by or for the
answering defendant is done by or for the ones in default since it is implicit in
the rule that default is in essence a mere formality that deprives them of no
more than to take part in the trial, but if the complaint is dismissed as to the
answering defendant, it should also be dismissed as to them. 9 (Citations
omitted.)
Petitioner now comes to this Court with the following assignments of error:

The petitioner (herein private respondent Holiday Hills Stock and Breeding
Farm Corporation) cites the doctrine laid down in Lim Tanhu v. Hon.
Ramolete, 66 SCRA 425, as applied later in Co v. Acosta, 134 SCRA 185, to
support its averment that the court a quo gravely abused its discretion in
refusing to dismiss the case.
Essentially, the doctrine adverted to essays that in a common cause of action
where all the defendants are indispensable parties, the court's power to act is
integral and cannot be split, such that it cannot relieve any of them and at the
same time render judgment against the rest.
We find applicability of the doctrine to the case at bar.
A cursory reading of the complaint . . . reveals that the cause of action was
the alleged bad faith and gross negligence of the defendants resulting in the
injuries complained of and for which the action for damages was filed. The
inclusion of Western Guaranty Corporation was vital to the claim, it being the
insurer of the diesel truck without which, the claim could be set for naught.
Stated otherwise, it is an indispensable party as the petitioner (herein private
respondent stock and breeding farm corporation) . . . . Private respondent's
(herein petitioner's argument that the said insurance company was sued on a
different cause of action, i.e., its bounden duty under the insurance law to

A.
RESPONDENT COURT OF APPEALS COMMITTED A
REVERSIBLE
ERROR
IN
RULING
THAT
THE
DEFENDANTS IN CIVIL CASE NO. 248-R ARE
INDISPENSABLE PARTIES;
B.
RESPONDENT COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR IN RULING THAT IN CIVIL CASE
NO. 248-R THERE IS A COMMON CAUSE OF ACTION
AGAINST THE DEFENDANTS THEREIN;
C.
RESPONDENT COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR IN RULING THAT IN CIVIL CASE
NO. 248-R THE RULING OF THIS HONORABLE COURT
IN LIM TAN HU VS. RAMOLETE IS APPLICABLE;

D.
RESPONDENT COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR IN RULING THAT THE DOCTRINE
OF ESTOPPEL AND LACHES ON MATTERS OF
JURISDICTION IS NOT APPLICABLE IN CIVIL CASE NO.
248-R.
There is merit to the petition,.
In the case of Lim Tanhu v. Ramolete, 66 SCRA 425, 458-459 (1975) this
court held that:
. . . (I)n all instances where a common cause of action is
alleged against several defendants, some of whom answer
and the others do not, the latter or those in default acquire a
vested right not only to own the defense interposed in the
answer of their co-defendant or co-defendants not in default
but also to expect a result of the litigation totally common
with them in kind and in amount whether favorable or
unfavorable. The substantive unity of the plaintiffs cause
against all the defendants is carried through to its adjective
phase as ineluctably demanded by the homogeneity and
indivisibility of justice itself. . . . The integrity of the common
cause of action against all the defendants and the
indispensability of all of them in the proceedings do not
permit any possibility of waiver of the plaintiffs right only as
to one or some of them, without including all of them, and so,
as a rule, withdrawal must be deemed to be a confession of
weakness as to all. . . . . Where all the defendants are
indispensable parties, for which reason the absence of any
of them in the case would result in the court losing its
competency to act validly, any compromise that the plaintiff
might wish to make with any of them must, as a matter of
correct procedure, have to await until after the rendition of
the judgment, at which stage the plaintiff may then treat the
matter of its execution and the satisfaction of his claim as
variably as he might please. Accordingly, in the case now
before Us together with the dismissal of the complaint
against the non-defaulted defendants, the court should have
ordered also the dismissal thereof as to petitioner (referring
to the defaulting defendants in the case).

In sum, Lim Tanhu states that where a complaint alleges a common cause of
action against defendants who are all indispensable parties to the case, its
dismissal against any of them by virtue of a compromise agreement with the
plaintiff necessarily results in the dismissal of the case against the other
defendants, including those in default. The ruling is rooted on the rationale
that the court's power to act in a case involving a common cause of action
against indispensable parties "is integral and cannot be split such that it
cannot relieve any of them and at the same time render judgment against the
rest. 10
For Lim Tanhu to apply to the case at bench, it must be established that: (1)
petitioner has common cause of action against private respondents and the
other defendants in Civil Case No. 248-R; and (2) all the defendants are
indispensable parties to the case.
Cause of action has a fixed meaning in this jurisdiction. It is the delict or
wrong by which the right of the plaintiff is violated by the defendant. 11 The
question as to whether a plaintiff has a cause of action is determined by the
averments in the pleadings pertaining to the acts of the defendant. Whether
such acts give him a right of action is determined by substantive law. 12
In the case at bench, it is clear that petitioner has different and separate
causes of action against the defendants in the case. The allegations in the
Complaint show that petitioner seeks to recover from the truck driver for his
wrong which caused injury to petitioner and his car. The cause of action
against him is based on quasi-delict under Article 2176 of the New Civil
Code. Quasi-delict, too, is the basis of the cause of action against
defendants beneficial and registered owners. But in their case, it is Article
2180 of the same Code which governs the rights of the parties.
However, with respect to defendant Western Guaranty Corporation,
petitioner's cause of action is based on contract. He seeks to recover from
the insurer on the basis of the third party liability clause of its insurance
contract with the owners of the truck. This is acknowledged by the second
paragraph of the compromise agreement between petitioner and defendant
insurer, thus:
2. In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall pay
plaintiff (herein petitioner) the amount of P70,000.00 upon
the signing of this compromise agreement.

Quite clearly then, Lim Tanhu will not apply to the case at bench for
there is no showing that petitioner has a common cause of action
against the defendants in Civil Case No. 248-R.
But this is not all. Defendants in Civil Case No. 248-R are not all
indispensable parties. An indispensable party is one whose interest will be
affected by the court's action in the litigation, and without whom no final
determination of the case can be had. The party's interest in the subject
matter of the suit and in the relief sought are so inextricably intertwined with
the other parties' that his legal presence as a party to the proceeding is an
absolute necessity. 13 In his absence there cannot be a resolution of the
dispute of the parties before the court which is effective, complete, or
equitable. 14

SO ORDERED.
Narvasa C.J., Regalado and Mendoza, JJ., concur.

Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISION
Conversely, a party is not indispensable to the suit if his interest in the
controversy or subject matter is distinct and divisible from the interest of the
other parties and will not necessarily be prejudiced by a judgment which
does complete justice to the parties in court. 15 He is not indispensable if his
presence would merely permit complete relief between him and those
already parties to the action, or will simply avoid multiple litigation. 16
It is true that all of petitioner's claims in Civil Case No. 248-R is premised on
the wrong committed by defendant truck driver. Concededly, the truck driver
is an indispensable party to the suit. The other defendants, however, cannot
be categorized as indispensable parties. They are merely proper parties to
the case. Proper parties have been described as parties whose presence is
necessary in order to adjudicate the whole controversy, but whose interests
are so far separable that a final decree can be made in their absence without
affecting them. 17 It is easy to see that if any of them had not been impleaded
as defendant, the case would still proceed without prejudicing the party not
impleaded. Thus, if petitioner did not sue Western Guaranty Corporation, the
omission would not cause the dismissal of the suit against the other
defendants. Even without the insurer, the trial court would not lose its
competency to act completely and validly on the damage suit. The insurer,
clearly, is not an indispensable party in Civil Case No. 248-R.
IN VIEW WHEREOF, the instant petition is GRANTED. The Decision, dated
July 10, 1992, of the Court of Appeals in CA-G.R. SP No. 17651 is
REVERSED AND SET ASIDE. The Complaint in Civil Case No. 248-R is
REINSTATED and REMANDED to the trial court for further proceedings. No
costs.

G.R. No. 85494 May 7, 1991

CHOITHRAM JETHMAL RAMNANI AND/OR NIRMLA V. RAMNANI and
MOTI
G.
RAMNANI, petitioners,
vs.
COURT OF APPEALS, SPOUSES ISHWAR JETHMAL RAMNANI, SONYA
JETHMAL RAMNANI and OVERSEAS HOLDING CO., LTD., respondents.
G.R. No. 85496 May 7, 1991
SPOUSES ISHWAR JETHMAL RAMNANI AND SONYA JET
RAMNANI, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ORTIGAS & CO., LTD.
PARTNERSHIP, and OVERSEAS HOLDING CO., LTD., respondents.
Quasha, Asperilla Ancheta, Pea and Nolasco for petitioners Ishwar Jethmal
Ramnani & Sonya Ramnani.
Salonga, Andres, Hernandez & Allado for Choithram Jethmal Ramnani,
Nirmla Ramnani & Moti Ramnani.
Rama Law Office for private respondents in collaboration with Salonga,
Andres, Hernandez & Allado.

Eulogio R. Rodriguez for Ortigas & Co., Ltd.

GANCAYCO, J.:p
This case involves the bitter quarrel of two brothers over two (2) parcels of
land and its improvements now worth a fortune. The bone of contention is the
apparently conflicting factual findings of the trial court and the appellate
court, the resolution of which will materially affect the result of the contest.
The following facts are not disputed.
Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are
brothers of the full blood. Ishwar and his spouse Sonya had their main
business based in New York. Realizing the difficulty of managing their
investments in the Philippines they executed a general power of attorney on
January 24, 1966 appointing Navalrai and Choithram as attorneys-in-fact,
empowering them to manage and conduct their business concern in the
Philippines. 1
On February 1, 1966 and on May 16, 1966, Choithram, in his capacity as
aforesaid attorney-in-fact of Ishwar, entered into two agreements for the
purchase of two parcels of land located in Barrio Ugong, Pasig, Rizal, from
Ortigas & Company, Ltd. Partnership (Ortigas for short) with a total area of
approximately 10,048 square meters.2 Per agreement, Choithram paid the
down payment and installments on the lot with his personal checks. A
building was constructed thereon by Choithram in 1966 and this was
occupied and rented by Jethmal Industries and a wardrobe shop called
Eppie's Creation. Three other buildings were built thereon by Choithram
through a loan of P100,000.00 obtained from the Merchants Bank as well as
the income derived from the first building. The buildings were leased out by
Choithram as attorney-in-fact of Ishwar. Two of these buildings were later
burned.
Sometime in 1970 Ishwar asked Choithram to account for the income and
expenses relative to these properties during the period 1967 to 1970.
Choithram failed and refused to render such accounting. As a consequence,
on February 4, 1971, Ishwar revoked the general power of attorney.
Choithram and Ortigas were duly notified of such revocation on April 1, 1971
and May 24, 1971, respectively. 3 Said notice was also registered with the
Securities and Exchange Commission on March 29, 1971 4 and was

published in the April 2, 1971 issue of The Manila Times for the information
of the general public. 5
Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all
rights and interests of Ishwar and Sonya in favor of his daughter-in-law,
Nirmla Ramnani, on February 19, 1973. Her husband is Moti, son of
Choithram. Upon complete payment of the lots, Ortigas executed the
corresponding deeds of sale in favor of Nirmla. 6 Transfer Certificates of Title
Nos. 403150 and 403152 of the Register of Deeds of Rizal were issued in
her favor.
Thus, on October 6, 1982, Ishwar and Sonya (spouses Ishwar for short) filed
a complaint in the Court of First Instance of Rizal against Choithram and/or
spouses Nirmla and Moti (Choithram et al. for brevity) and Ortigas for
reconveyance of said properties or payment of its value and damages. An
amended complaint for damages was thereafter filed by said spouses.
After the issues were joined and the trial on the merits, a decision was
rendered by the trial court on December 3, 1985 dismissing the complaint
and counterclaim. A motion for reconsideration thereof filed by spouses
Ishwar was denied on March 3, 1986.
An appeal therefrom was interposed by spouses Ishwar to the Court of
Appeals wherein in due course a decision was promulgated on March 14,
1988, the dispositive part of which reads as follows:
WHEREFORE, judgment is hereby rendered reversing and
setting aside the appealed decision of the lower court dated
December 3, 1985 and the Order dated March 3, 1986 which
denied plaintiffs-appellants' Motion for Reconsideration from
aforesaid decision. A new decision is hereby rendered
sentencing defendants- appellees Choithram Jethmal
Ramnani, Nirmla V. Ramnani, Moti C. Ramnani, and Ortigas
and Company Limited Partnership to pay, jointly and
severally, plaintiffs-appellants the following:
1. Actual or compensatory damages to the extent of the fair
market value of the properties in question and all
improvements thereon covered by Transfer Certificate of
Title No. 403150 and Transfer Certificate of Title No. 403152
of the Registry of Deeds of Rizal, prevailing at the time of the
satisfaction of the judgment but in no case shall such

damages be less than the value of said properties as

appraised by Asian Appraisal, Inc. in its Appraisal Report
dated August 1985 (Exhibits T to T-14, inclusive).
2. All rental incomes paid or ought to be paid for the use and
occupancy of the properties in question and all
improvements thereon consisting of buildings, and to be
computed as follows:
a) On Building C occupied by Eppie's
Creation and Jethmal Industries from 1967
to 1973, inclusive, based on the 1967 to
1973 monthly rentals paid by Eppie's
Creation;
b) Also on Building C above, occupied by
Jethmal Industries and Lavine from 1974 to
1978, the rental incomes based on then
rates prevailing as shown under Exhibit "P";
and from 1979 to 1981, based on then
prevailing rates as indicated under Exhibit
"Q";
c) On Building A occupied by Transworld
Knitting Mills from 1972 to 1978, the rental
incomes based upon then prevailing rates
shown under Exhibit "P", and from 1979 to
1981, based on prevailing rates per Exhibit
"Q";
d) On the two Bays Buildings occupied by
Sigma-Mariwasa from 1972 to 1978, the
rentals based on the Lease Contract, Exhibit
"P", and from 1979 to 1980, the rentals
based on the Lease Contract, Exhibit "Q",
and thereafter commencing 1982, to account for and turn
over the rental incomes paid or ought to be paid for the use
and occupancy of the properties and all improvements
totalling 10,048 sq. m based on the rate per square meter
prevailing in 1981 as indicated annually cumulative up to
1984. Then, commencing 1985 and up to the satisfaction of

the judgment, rentals shall be computed at ten percent

(10%) annually of the fair market values of the properties as
appraised by the Asian Appraisal, Inc. in August 1985
(Exhibits T to T-14, inclusive.)
3. Moral damages in the sum of P200,000.00;
4. Exemplary damages in the sum of P100,000.00;
5. Attorney's fees equivalent to 10% of the award herein
made;
6. Legal interest on the total amount awarded computed
from first demand in 1967 and until the full amount is paid
and satisfied; and
7. The cost of suit. 7
Acting on a motion for reconsideration filed by Choithram, et al. and Ortigas,
the appellate court promulgated an amended decision on October 17, 1988
granting the motion for reconsideration of Ortigas by affirming the dismissal
of the case by the lower court as against Ortigas but denying the motion for
reconsideration of Choithram, et al. 8
Choithram, et al. thereafter filed a petition for review of said judgment of the
appellate court alleging the following grounds:
1. The Court of Appeals gravely abused its discretion in
making a factual finding not supported by and contrary, to
the evidence presented at the Trial Court.
2. The Court of Appeals acted in excess of jurisdiction in
awarding damages based on the value of the real properties
in question where the cause of action of private respondents
is recovery of a sum of money.
ARGUMENTS
I
THE COURT OF APPEALS ACTED IN GRAVE ABUSE OF
ITS DISCRETION IN MAKING A FACTUAL FINDING THAT

PRIVATE RESPONDENT ISHWAR REMITTED THE

AMOUNT OF US $150,000.00 TO PETITIONER
CHOITHRAM IN THE ABSENCE OF PROOF OF SUCH
REMITTANCE.
II
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE
OF DISCRETION AND MANIFEST PARTIALITY IN
DISREGARDING THE TRIAL COURTS FINDINGS BASED
ON THE DIRECT DOCUMENTARY AND TESTIMONIAL
EVIDENCE PRESENTED BY CHOITHRAM IN THE TRIAL
COURT ESTABLISHING THAT THE PROPERTIES WERE
PURCHASED WITH PERSONAL FUNDS OF PETITIONER
CHOITHRAM AND NOT WITH MONEY ALLEGEDLY
REMITTED BY RESPONDENT ISHWAR.
III
THE COURT OF APPEALS ACTED IN EXCESS OF
JURISDICTION IN AWARDING DAMAGES BASED ON THE
VALUE OF THE PROPERTIES AND THE FRUITS OF THE
IMPROVEMENTS THEREON. 9
Similarly, spouses Ishwar filed a petition for review of said amended decision
of the appellate court exculpating Ortigas of liability based on the following
assigned errors
I
THE RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ERROR AND HAS DECIDED A
QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW
AND/OR WITH APPLICABLE DECISIONS OF THIS
HONORABLE COURT
A) IN PROMULGATING THE QUESTIONED
AMENDED DECISION (ANNEX "A")
RELIEVING
RESPONDENT
ORTIGAS
FROM LIABILITY AND DISMISSING
PETITIONERS' AMENDED COMPLAINT IN

CIVIL CASE NO. 534-P, AS AGAINST SAID

RESPONDENT ORTIGAS;
B) IN HOLDING IN SAID AMENDED
DECISION THAT AT ANY RATE NO ONE
EVER TESTIFIED THAT ORTIGAS WAS A
SUBSCRIBER TO THE MANILA TIMES
PUBLICATION OR THAT ANY OF ITS
OFFICERS READ THE NOTICE AS
PUBLISHED IN THE MANILA TIMES,
THEREBY ERRONEOUSLY CONCLUDING
THAT FOR RESPONDENT ORTIGAS TO
BE CONSTRUCTIVELY BOUND BY THE
PUBLISHED NOTICE OF REVOCATION,
ORTIGAS AND/OR ANY OF ITS OFFICERS
MUST BE A SUBSCRIBER AND/OR THAT
ANY OF ITS OFFICERS SHOULD READ
THE NOTICE AS ACTUALLY PUBLISHED;
C) IN HOLDING IN SAID AMENDED
DECISION THAT ORTIGAS COULD NOT
BE
HELD
LIABLE
JOINTLY AND
SEVERALLY WITH THE DEFENDANTSAPPELLEES CHOITHRAM, MOTI AND
NIRMLA RAMNANI, AS ORTIGAS RELIED
ON THE WORD OF CHOITHRAM THAT
ALL ALONG HE WAS ACTING FOR AND IN
BEHALF OF HIS BROTHER ISHWAR
WHEN IT TRANSFERRED THE RIGHTS
OF THE LATTER TO NIRMLA V. RAMNANI;
D) IN IGNORING THE EVIDENCE DULY
PRESENTED AND ADMITTED DURING
THE TRIAL THAT ORTIGAS WAS
PROPERLY NOTIFIED OF THE NOTICE
OF REVOCATION OF THE GENERAL
POWER OF ATTORNEY GIVEN TO
CHOITHRAM, EVIDENCED BY THE
PUBLICATION IN THE MANILA TIMES
ISSUE OF APRIL 2, 1971 (EXH. F) WHICH
CONSTITUTES NOTICE TO THE WHOLE
WORLD; THE RECEIPT OF THE NOTICE
OF SUCH REVOCATION WHICH WAS

SENT TO ORTIGAS ON MAY 22, 1971 BY

ATTY. MARIANO P. MARCOS AND
RECEIVED BY ORTIGAS ON MAY 24, 1971
(EXH. G) AND THE FILING OF THE
NOTICE WITH THE SECURITIES AND
EXCHANGE COMMISSION ON MARCH
29,1971 (EXH. H);
E) IN DISCARDING ITS FINDINGS
CONTAINED IN ITS DECISION OF 14
MARCH 1988 (ANNEX B) THAT ORTIGAS
WAS
DULY
NOTIFIED
OF
THE
REVOCATION OF THE POWER OF
ATTORNEY OF CHOITHRAM, HENCE
ORTIGAS ACTED IN BAD FAITH IN
EXECUTING THE DEED OF SALE TO THE
PROPERTIES IN QUESTION IN FAVOR OF
NIRMLA V. RAMNANI;
F)
IN
SUSTAINING
RESPONDENT
ORTIGAS
VACUOUS
REHASHED
ARGUMENTS IN ITS MOTION FOR
RECONSIDERATION THAT IT WOULD
NOT GAIN ONE CENTAVO MORE FROM
CHOITHRAM FOR THE SALE OF SAID
LOTS
AND
THE
SUBSEQUENT
TRANSFER OF THE SAME TO THE
MATTER'S
DAUGHTER-IN-LAW,
AND
THAT IT WAS IN GOOD FAITH WHEN IT
TRANSFERRED ISHWAR'S RIGHTS TO
THE LOTS IN QUESTION.
II
THE RESPONDENT HONORABLE COURT OF APPEALS
HAS SO FAR DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDING WHEN IT
HELD IN THE QUESTIONED AMENDED DECISION OF 17
NOVEMBER 1988 (ANNEX A) THAT RESPONDENT
ORTIGAS & CO., LTD., IS NOT JOINTLY AND SEVERALLY
LIABLE WITH DEFENDANTS-APPELLEES CHOITHRAM,
MOTI AND NIRMLA RAMNANI IN SPITE OF ITS ORIGINAL
DECISION OF 14 MARCH 1988 THAT ORTIGAS WAS

DULY NOTIFIED OF THE REVOCATION OF THE POWER

OF ATTORNEY OF CHOITHRAM RAMNANI. 10
The center of controversy is the testimony of Ishwar that during the latter part
of 1965, he sent the amount of US $150,000.00 to Choithram in two bank
drafts of US$65,000.00 and US$85,000.00 for the purpose of investing the
same in real estate in the Philippines. The trial court considered this lone
testimony unworthy of faith and credit. On the other hand, the appellate court
found that the trial court misapprehended the facts in complete disregard of
the evidence, documentary and testimonial.
Another crucial issue is the claim of Choithram that because he was then a
British citizen, as a temporary arrangement, he arranged the purchase of the
properties in the name of Ishwar who was an American citizen and who was
then qualified to purchase property in the Philippines under the then Parity
Amendment. The trial court believed this account but it was debunked by the
appellate court.
As to the issue of whether of not spouses Ishwar actually sent
US$150,000.00 to Choithram precisely to be used in the real estate
business, the trial court made the following disquisition
After a careful, considered and conscientious examination of
the evidence adduced in the case at bar, plaintiff Ishwar
Jethmal Ramanani's main evidence, which centers on the
alleged payment by sending through registered mail from
New York two (2) US$ drafts of $85,000.00 and $65,000.00
in the latter part of 1965 (TSN 28 Feb. 1984, p. 10-11). The
sending of these moneys were before the execution of that
General Power of Attorney, which was dated in New York, on
January 24, 1966. Because of these alleged remittances of
US $150,000.00 and the subsequent acquisition of the
properties in question, plaintiffs averred that they constituted
a trust in favor of defendant Choithram Jethmal
Ramnani. This Court can be in full agreement if the plaintiffs
were only able to prove preponderantly these
remittances. The entire record of this case is bereft of even a
shred of proof to that effect. It is completely barren. His
uncorroborated testimony that he remitted these amounts in
the "later part of 1965" does not engender enough faith and
credence. Inadequacy of details of such remittance on the
two (2) US dollar drafts in such big amounts is completely
not positive, credible, probable and entirely not in accord

with human experience. This is a classic situation, plaintiffs

not exhibiting any commercial document or any document
and/or paper as regard to these alleged remittances. Plaintiff
Ishwar Ramnani is not an ordinary businessman in the strict
sense of the word. Remember his main business is based in
New York, and he should know better how to send these
alleged remittances. Worst, plaintiffs did not present even a
scum of proof, that defendant Choithram Ramnani received
the alleged two US dollar drafts. Significantly, he does not
know even the bank where these two (2) US dollar drafts
were purchased. Indeed, plaintiff Ishwar Ramnani's lone
testimony is unworthy of faith and credit and, therefore,
deserves scant consideration, and since the plaintiffs' theory
is built or based on such testimony, their cause of action
collapses or falls with it.
Further, the rate of exchange that time in 1966 was P4.00 to
$1.00. The alleged two US dollar drafts amounted to
$150,000.00 or about P600,000.00. Assuming the cash price
of the two (2) lots was only P530,000.00 (ALTHOUGH he
said: "Based on my knowledge I have no evidence," when
asked if he even knows the cash price of the two lots). If he
were really the true and bonafide investor and purchaser for
profit as he asserted, he could have paid the price in full in
cash directly and obtained the title in his name and not thru
"Contracts To Sell" in installments paying interest and thru an
attorney-in fact (TSN of May 2, 1984, pp. 10-11) and, again,
plaintiff Ishwar Ramnani told this Courtthat he does not know
whether or not his late father-in-law borrowed the two US
dollar drafts from the Swiss Bank or whether or not his late
father-in-law had any debit memo from the Swiss Bank(TSN
of May 2, 1984, pp. 9-10). 11
On the other hand, the appellate court, in giving credence to the version of
Ishwar, had this to say
While it is true, that generally the findings of fact of the trial
court are binding upon the appellate courts, said rule admits
of exceptions such as when (1) the conclusion is a finding
grounded entirely on speculations, surmises and
conjectures; (2) when the inferences made is manifestly
mistaken, absurd and impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a

misapprehension of facts and when the court, in making its

findings, went beyond the issues of the case and the same
are contrary to the admissions of both appellant and
appellee (Ramos vs. Court of Appeals, 63 SCRA 33;
Philippine American Life Assurance Co. vs. Santamaria, 31
SCRA 798; Aldaba vs. Court of Appeals, 24 SCRA 189).
The evidence on record shows that the t court acted under a
misapprehension of facts and the inferences made on the
evidence palpably a mistake.
The trial court's observation that "the entire records of the
case is bereft of even a shred of proof" that plaintiffappellants have remitted to defendant-appellee Choithram
Ramnani the amount of US $ 150,000.00 for investment in
real estate in the Philippines, is not borne by the evidence
on record and shows the trial court's misapprehension of the
facts if not a complete disregard of the evidence,both
documentary and testimonial.
Plaintiff-appellant Ishwar Jethmal Ramnani testifying in his
own behalf, declared that during the latter part of 1965, he
sent the amount of US $150,000.00 to his brother Choithram
in two bank drafts of US $65,000.00 and US $85,000.00 for
the purpose of investing the same in real estate in the
Philippines. His testimony is as follows:
ATTY. MARAPAO:
Mr. Witness, you said that your attorney-infact paid in your behalf. Can you tell this
Honorable Court where your attorney-in-fact
got the money to pay this property?
ATTY. CRUZ:
Wait. It is now clear it becomes incompetent
or hearsay.
COURT:
Witness can answer.

A I paid through my attorney-in-fact. I am

the one who gave him the money.

ATTY. MARAPAO:
Your Honor, that is misleading.

ATTY. MARAPAO:
COURT;
Q You gave him the money?
Witness (may) answer.
A That's right.
A Yes, the first building was immediately put
up after the purchase of the two parcels of
land that was in 1966 and the finds were
used for the construction of the building from
the US $150,000.00 (TSN, 7 March 1984,
page 14; Emphasis supplied.)

Q How much money did you give him?

A US $ 150,000.00.
Q How was it given then?
A Through Bank drafts. US $65,000.00 and
US $85,000.00 bank drafts. The total
amount which is $ 150,000.00 (TSN, 28
February 1984, p. 10; Emphasis supplied.)
xxx xxx xxx

xxx xxx xxx

Q These two bank drafts which you
mentioned and the use for it you sent them
by registered mail, did you send them from
New Your?

ATTY. CRUZ:

A That is right.

Q The two bank drafts which you sent I

assume you bought that from some banks in
New York?

Q And the two bank drafts which were put in

the registered mail, the registered mail was
addressed to whom?

A No, sir.

A Choithram Ramnani. (TSN, 7 March 1984,

pp. 14-15).

Q But there is no question those two bank

drafts were for the purpose of paying down
payment and installment of the two parcels
of land?
A Down payment, installment and to put up
the building.
Q I thought you said that the buildings were
constructed . . . subject to our continuing
objection from rentals of first building?

On cross-examination, the witness reiterated the remittance of the money to

his brother Choithram, which was sent to him by his father-in-law, Rochiram
L. Mulchandoni from Switzerland, a man of immense wealth, which even
defendants-appellees' witness Navalrai Ramnani admits to be so (tsn., p. 16,
S. Oct. 13, 1985). Thus, on cross-examination, Ishwar testified as follows:
Q How did you receive these two bank
drafts from the bank the name of which you
cannot remember?
A I got it from my father-in-law.

Q From where did your father- in-law sent

these two bank drafts?
A From Switzerland.
Q He was in Switzerland.
A Probably, they sent out these two drafts
from Switzerland.
(TSN, 7 March 1984, pp. 16-17; Emphasis supplied.)
This positive and affirmative testimony of plaintiff-appellant
that he sent the two (2) bank drafts totalling US $
150,000.00 to his brother, is proof of said remittance. Such
positive testimony has greater probative force than
defendant-appellee's denial of receipt of said bank drafts, for
a witness who testifies affirmatively that something did
happen should be believed for it is unlikely that a witness will
remember what never happened (Underhill's Cr. Guidance,
5th Ed., Vol. 1, pp. 10-11).
That is not all. Shortly thereafter, plaintiff-appellant Ishwar
Ramnani executed a General Power of Attorney (Exhibit "A")
dated January 24, 1966 appointing his brothers, defendantsappellees Navalrai and Choithram as attorney-in-fact
empowering the latter to conduct and manage plaintiffsappellants'business affairs in the Philippines and specifically

No. 14. To acquire, purchase for us, real

estates and improvements for the purpose
of real estate business anywhere in the
Philippines and to develop, subdivide,
improve and to resell to buying public
(individual, firm or corporation); to enter in
any contract of sale in oar behalf and to
enter mortgages between the vendees and
the herein grantors that may be needed to
finance the real estate business being
undertaken.

Pursuant thereto, on February 1, 1966 and May

16, 1966, Choithram Jethmal Ramnani entered into
Agreements
(Exhibits "B' and "C") with
the
other
defendant. Ortigas and Company, Ltd., for the purchase of
two
(2)
parcels
of
land
situated
at
Barrio
Ugong, Pasig, Rizal, with said defendant-appellee signing
the Agreements in his capacity as Attorney-in-fact of Ishwar
Jethmal Ramnani.
Again, on January 5, 1972, almost seven (7) years after
Ishwar sent the US $ 150,000.00 in 1965, Choithram
Ramnani, as attorney-in fact of Ishwar entered into a
Contract of Lease with Sigma-Mariwasa (Exhibit "P") thereby
re-affirming the ownership of Ishwar over the disputed
property and the trust relationship between the latter as
principal and Choithram as attorney-in-fact of Ishwar.
All of these facts indicate that if plaintiff-appellant Ishwar had
not earlier sent the US $ 150,000.00 to his brother,
Choithram, there would be no purpose for him to execute a
power of attorney appointing his brothers as s attorney-infact in buying real estate in the Philippines.
As against Choithram's denial that he did not receive the US
$150,000.00 remitted by Ishwar and that the Power of
Attorney, as well as the Agreements entered into with Ortigas
& Co., were only temporary arrangements, Ishwar's
testimony that he did send the bank drafts to Choithram and
was received by the latter, is the more credible version since
it is natural, reasonable and probable. It is in accord with the
common experience, knowledge and observation of ordinary
men (Gardner vs. Wentors 18 Iowa 533). And in determining
where the superior weight of the evidence on the issues
involved lies, the court may consider the probability or
improbability of the testimony of the witness (Sec. 1, Rule
133, Rules of Court).
Contrary, therefore, to the trial court's sweeping observation
that 'the entire records of the case is bereft of even a shred
of proof that Choithram received the alleged bank drafts
amounting to US $ 150,000.00, we have not only testimonial
evidence but also documentary and circumstantial evidence

proving said remittance of the money and the fiduciary

relationship between the former and Ishwar. 12
The Court agrees. The environmental circumstances of this case buttress the
claim of Ishwar that he did entrust the amount of US $ 150,000.00 to his
brother, Choithram, which the latter invested in the real property business
subject of this litigation in his capacity as attorney-in-fact of Ishwar.
True it is that there is no receipt whatever in the possession of Ishwar to
evidence the same, but it is not unusual among brothers and close family
members to entrust money and valuables to each other without any
formalities or receipt due to the special relationship of trust between them.
And another proof thereof is the fact that Ishwar, out of frustration when
Choithram failed to account for the realty business despite his demands,
revoked the general power of attorney he extended to Choithram and
Navalrai. Thereafter, Choithram wrote a letter to Ishwar pleading that the
power of attorney be renewed or another authority to the same effect be
extended, which reads as follows:
June 25,1971
MR.
NEW YORK

ISHWAR

JETHMAL

(1) Send power of Atty. immediately, because the case has

been postponed for two weeks. The same way as it has
been send before in favor of both names. Send it
immediately otherwise everything will be lost unnecessarily,
and then it will take us in litigation. Now that we have gone
ahead with a case and would like to end it immediately
otherwise squatters will take the entire land. Therefore, send
it immediately.
(2) Ortigas also has sued us because we are holding the
installments, because they have refused to give a rebate of
P5.00 per meter which they have to give us as per contract.
They have filed the law suit that since we have not paid the
installment they should get back the land. The hearing of this
case is in the month of July. Therefore, please send the
power immediately. In one case DADA (Elder Brother) will
represent and in another one, I shall.

(3) In case if you do not want to give power then make one
letter in favor of Dada and the other one in my favor showing
that in any litigation we can represent you and your wife, and
whatever the court decide it will be acceptable by me. You
can ask any lawyer, he will be able to prepare these letters.
After that you can have these letters ratify before P.I.
Consulate. It should be dated April 15, 1971.
(4) Try to send the power because it will be more useful.
Make it in any manner whatever way you have confident in it.
But please send it immediately.
You have cancelled the power. Therefore, you have lost your
reputation everywhere. What can I further write you about it.
I have told everybody that due to certain reasons I have
written you to do this that is why you have done this. This
way your reputation have been kept intact. Otherwise if I
want to do something about it, I can show you that inspite of
the power you have cancelled you can not do anything. You
can keep this letter because my conscience is clear. I do not
have anything in my mind.
I should not be writing you this, but because my conscience
is clear do you know that if I had predated papers what could
you have done? Or do you know that I have many paper
signed by you and if had done anything or do then what can
you do about it? It is not necessary to write further about
this. It does not matter if you have cancelled the power. At
that time if I had predated and done something about it what
could you have done? You do not know me. I am not after
money. I can earn money anytime. It has been ten months
since I have not received a single penny for expenses from
Dada (elder brother). Why there are no expenses? We can
not draw a single penny from knitting (factory). Well I am not
going to write you further, nor there is any need for it. This
much I am writing you because of the way you have
conducted yourself. But remember, whenever I hale the
money I will not keep it myself Right now I have not got
anything at all.
I am not going to write any further.

Keep your business clean with Naru. Otherwise he will

discontinue because he likes to keep his business very
clean. 13
The said letter was in Sindhi language. It was translated to English by the
First Secretary of the Embassy of Pakistan, which translation was verified
correct by the Chairman, Department of Sindhi, University of Karachi. 14
From the foregoing letter what could be gleaned is that
1. Choithram asked for the issuance of another power of attorney in their
favor so they can continue to represent Ishwar as Ortigas has sued them for
unpaid installments. It also appears therefrom that Ortigas learned of the
revocation of the power of attorney so the request to issue another.
2. Choithram reassured Ishwar to have confidence in him as he was not after
money, and that he was not interested in Ishwar's money.
3. To demonstrate that he can be relied upon, he said that he could have
ante-dated the sales agreement of the Ortigas lots before the issuance of the
powers of attorney and acquired the same in his name, if he wanted to, but
he did not do so.
4. He said he had not received a single penny for expenses from Dada (their
elder brother Navalrai). Thus, confirming that if he was not given money by
Ishwar to buy the Ortigas lots, he could not have consummated the sale.
5. It is important to note that in said letter Choithram never claimed
ownership of the property in question. He affirmed the fact that he bought the
same as mere agent and in behalf of Ishwar. Neither did he mention the
alleged temporary arrangement whereby Ishwar, being an American citizen,
shall appear to be the buyer of the said property, but that after Choithram
acquires Philippine citizenship, its ownership shall be transferred to
Choithram.
This brings us to this temporary arrangement theory of Choithram.
The appellate court disposed of this matter in this wise
Choithram's claim that he purchased the two parcels of land
for himself in 1966 but placed it in the name of his younger
brother, Ishwar, who is an American citizen, as a temporary

arrangement,' because as a British subject he is disqualified

under the 1935 Constitution to acquire real property in the
Philippines, which is not so with respect to American citizens
in view of the Ordinance Appended to the Constitution
granting them parity rights, there is nothing in the records
showing that Ishwar ever agreed to such a temporary
arrangement.
During the entire period from 1965, when the US $
150,000. 00 was transmitted to Choithram, and until Ishwar
filed a complaint against him in 1982, or over 16
years, Choithram never mentioned of a temporary
arrangement nor can he present any memorandum or
writing evidencing such temporary arrangement, prompting
plaintiff-appellant to observe:
The properties in question which are located
in a prime industrial site in Ugong, Pasig,
Metro Manila have a present fair market
value of no less than P22,364,000.00
(Exhibits T to T-14, inclusive), and yet for
such valuable pieces of property, Choithram
who now belatedly that he purchased the
same for himself did not document in writing
or in a memorandum the alleged temporary
arrangement with Ishwar' (pp. 4-41,
Appellant's Brief).
Such verbal allegation of a temporary arrangement is simply
improbable and inconsistent. It has repeatedly been held
that important contracts made without evidence are highly
improbable.
The improbability of such temporary arrangement is brought
to fore when we consider that Choithram has a son (Haresh
Jethmal Ramnani) who is an American citizen under whose
name the properties in question could be registered, both
during the time the contracts to sell were executed and at
the time absolute title over the same was to be delivered. At
the time the Agreements were entered into with defendant
Ortigas & Co. in 1966, Haresh, was already 18 years old and
consequently, Choithram could have executed the deeds in
trust for his minor son. But, he did not do this. Three (3)

years, thereafter, or in 1968 after Haresh had attained the

age of 21, Choithram should have terminated the temporary
arrangement with Ishwar, which according to him would be
effective only pending the acquisition of citizenship papers.
Again, he did not do anything.
Evidence to be believed, said Vice
Chancellor Van Fleet of New Jersey, must
not only proceed from the mouth of a
credible witness, but it must be credible in
itselfsuch as the common experience and
observation of mankind can approve as
probable under the circumstances. We have
no test of the truth of human testimony,
except its conformity to our knowledge,
observation and experience. Whatever is
repugnant to these belongs to the
miraculous and is outside of judicial
cognizance. (Daggers vs. Van Dyek 37 M.J.
Eq. 130, 132).
Another factor that can be counted against the temporary
arrangement excuse is that upon the revocation on February
4, 1971 of the Power of attorney dated January 24, 1966 in
favor of Navalrai and Choithram by Ishwar, Choithram wrote
(tsn, p. 21, S. July 19, 1985) a letter dated June 25, 1971
(Exhibits R, R-1, R-2 and R-3) imploring Ishwar to execute a
new power of attorney in their favor.That if he did not want to
give power, then Ishwar could make a letter in favor of Dada
and another in his favor so that in any litigation involving the
properties in question, both of them could represent Ishwar
and his wife. Choithram tried to convince Ishwar to issue the
power of attorney in whatever manner he may want. In said
letter no mention was made at all of any temporary
arrangement.
On the contrary, said letter recognize(s) the existence of
principal and attorney-in-fact relationship between Ishwar
and himself. Choithram wrote: . . . do you know that if I had
predated papers what could you have done? Or do you
know that I have many papers signed by you and if I had
done anything or do then what can you do about it?'
Choithram was saying that he could have repudiated the

trust and ran away with the properties of Ishwar by predating

documents and Ishwar would be entirely helpless. He was
bitter as a result of Ishwar's revocation of the power of
attorney but no mention was made of any temporary
arrangement or a claim of ownership over the properties in
question nor was he able to present any memorandum or
document to prove the existence of such temporary
arrangement.
Choithram is also estopped in pais or by deed from claiming
an interest over the properties in question adverse to that of
Ishwar. Section 3(a) of Rule 131 of the Rules of Court states
that whenever a party has, by his own declaration, act, or
omission intentionally and deliberately led another to believe
a particular thing true and act upon such belief, he cannot in
any litigation arising out of such declaration, act or omission
be permitted to falsify it.' While estoppel by deed is a bar
which precludes a party to a deed and his privies from
asserting as against the other and his privies any right of title
in derogation of the deed, or from denying the truth of any
material fact asserted in it(31 C.J.S. 195; 19 Am. Jur. 603).
Thus, defendants-appellees are not permitted to repudiate
their admissions and representations or to assert any right or
title in derogation of the deeds or from denying the truth of
any material fact asserted in the (1) power of attorney dated
January 24, 1966 (Exhibit A); (2) the Agreements of
February 1, 1966 and May 16, 1966 (Exhibits B and C); and
(3) the Contract of Lease dated January 5, 1972 (Exhibit P).
. . . The doctrine of estoppel is based upon
the grounds of public policy, fair dealing,
good faith and justice, and its purpose is to
forbid one to speak against his own act,
representations, or commitments to the
injury of one to whom they were directed
and who reasonably relied thereon. The
doctrine of estoppel springs from equitable
principles and the equities in the case. It is
designed to aid the law in the administration
of justice where without its aid injustice
might result. It has been applied by court
wherever
and
whenever
special

circumstances of a case so demands'

(Philippine National Bank vs. Court of
Appeals, 94 SCRA 357, 368 [1979]).
It was only after the services of counsel has been obtained
that Choithram alleged for the first time in his Answer that
the General Power of attorney (Annex A) with the Contracts
to Sell (Annexes B and C) were made only for the sole
purpose of assuring defendants' acquisition and ownership
of the lots described thereon in due time under the law; that
said instruments do not reflect the true intention of the
parties (par. 2, Answer dated May 30, 1983), seventeen (17)
long years from the time he received the money transmitted
to him by his brother, Ishwar.
Moreover, Choithram's 'temporary arrangement,' by which
he claimed purchasing the two (2) parcels in question in
1966 and placing them in the name of Ishwar who is an
American citizen, to circumvent the disqualification provision
of aliens acquiring real properties in the Philippines under
the 1935 Philippine Constitution, as Choithram was then a
British subject, show a palpable disregard of the law of the
land and to sustain the supposed "temporary arrangement"
with Ishwar would be sanctioning the perpetration of an
illegal act and culpable violation of the Constitution.
Defendants-appellees likewise violated the Anti-Dummy Law
(Commonwealth Act 108, as amended),which provides in
Section 1 thereof that:
In all cases in which any constitutional or
legal provision requires Philippine or any
other specific citizenship as a requisite for
the exercise or enjoyment of a right,
franchise or privilege, . . . any alien or
foreigner profiting thereby, shall be punished
. . . by imprisonment . . . and of a fine of not
less than the value of the right, franchise or
privileges, which is enjoyed or acquired in
violation of the provisions hereof . . .

Having come to court with unclean hands, Choithram must

not be permitted foist his 'temporary arrangement' scheme
as a defense before this court. Being in delicto, he does not
have any right whatsoever being shielded from his own
wrong-doing, which is not so with respect to Ishwar, who
was not a party to such an arrangement.
The falsity of Choithram's defense is further aggravated by
the material inconsistencies and contradictions in his
testimony. While on January 23, 1985 he testified that he
purchased the land in question on his own behalf (tsn, p. 4,
S. Jan. 23, 1985), in the July 18, 1985 hearing, forgetting
probably what he stated before, Choithram testified that he
was only an attorney-in-fact of Ishwar (tsn, p. 5, S. July 18,
1985). Also in the hearing of January 23, 1985, Choithram
declared that nobody rented the building that was
constructed on the parcels of land in question (tsn, pp. 5 and
6), only to admit in the hearing of October 30, 1985, that he
was in fact renting the building for P12,000. 00 per
annum (tsn, p. 3). Again, in the hearing of July 19, 1985,
Choithram testified that he had no knowledge of the
revocation of the Power of Attorney (tsn, pp. 20- 21), only to
backtrack when confronted with the letter of June 25, 1971
(Exhibits R to R-3), which he admitted to be in "his own
writing," indicating knowledge of the revocation of the Power
of Attorney.
These inconsistencies are not minor but go into the entire
credibility of the testimony of Choithram and the rule is that
contradictions on a very crucial point by a witness, renders s
testimony incredible People vs. Rafallo, 80 Phil. 22). Not
only this the doctrine of falsus in uno, falsus in omnibus is
fully applicable as far as the testimony of Choithram is
concerned. The cardinal rule, which has served in all ages,
and has been applied to all conditions of men, is that a
witness willfully falsifying the truth in one particular, when
upon oath, ought never to be believed upon the strength of
his own testimony, whatever he may assert (U.S. vs. Osgood
27 Feb. Case No. 15971-a, p. 364); Gonzales vs. Mauricio,
52 Phil, 728), for what ground of judicial relief can there be
left when the party has shown such gross insensibility to the
difference between right and wrong, between truth and

falsehood? (The Santisima Trinidad, 7 Wheat, 283, 5 U.S. [L.

ed.] 454).
True, that Choithram's testimony finds corroboration from the
testimony of his brother, Navalrai, but the same would not be
of much help to Choithram. Not only is Navalrai an interested
and biased witness, having admitted his close relationship
with Choithram and that whenever he or Choithram had
problems, they ran to each other (tsn, pp. 17-18, S. Sept. 20,
1985), Navalrai has a pecuniary interest in the success of
Choithram in the case in question. Both he and Choithram
are business partners in Jethmal and Sons and/or Jethmal
Industries, wherein he owns 60% of the company and
Choithram, 40% (p. 62, Appellant's Brief). Since the
acquisition of the properties in question in 1966, Navalrai
was occupying 1,200 square meters thereof as a factory site
plus the fact that his son (Navalrais) was occupying the
apartment on top of the factory with his family rent free
except the amount of P l,000.00 a month to pay for taxes on
said properties (tsn, p. 17, S. Oct. 3, 1985).
Inherent contradictions also marked Navalrai testimony.
"While the latter was very meticulous in keeping a receipt for
the P 10,000.00 that he paid Ishwar as settlement in Jethmal
Industries, yet in the alleged payment of P 100,000.00 to
Ishwar, no receipt or voucher was ever issued by him (tsn, p.
17, S. Oct. 3, 1983). 15
We concur.
The foregoing findings of facts of the Court of Appeals which are supported
by the evidence is conclusive on this Court. The Court finds that Ishwar
entrusted US$150,000.00 to Choithram in 1965 for investment in the realty
business. Soon thereafter, a general power of attorney was executed by
Ishwar in favor of both Navalrai and Choithram. If it is true that the purpose
only is to enable Choithram to purchase realty temporarily in the name of
Ishwar, why the inclusion of their elder brother Navalrai as an attorney-infact?
Then, acting as attorney-in-fact of Ishwar, Choithram purchased two parcels
of land located in Barrio Ugong Pasig, Rizal, from Ortigas in 1966. With the
balance of the money of Ishwar, Choithram erected a building on said lot.

Subsequently, with a loan obtained from a bank and the income of the said
property, Choithram constructed three other buildings thereon. He managed
the business and collected the rentals. Due to their relationship of confidence
it was only in 1970 when Ishwar demanded for an accounting from
Choithram. And even as Ishwar revoked the general power of attorney on
February 4, 1971, of which Choithram was duly notified, Choithram wrote to
Ishwar on June 25, 1971 requesting that he execute a new power of attorney
in their favor. 16 When Ishwar did not respond thereto, Choithram
nevertheless proceeded as such attorney-in-fact to assign all the rights and
interest of Ishwar to his daughter-in-law Nirmla in 1973 without the
knowledge and consent of Ishwar. Ortigas in turn executed the
corresponding deeds of sale in favor of Nirmla after full payment of the
purchase accomplice of the lots.
In the prefatory statement of their petition, Choithram pictured Ishwar to be
so motivated by greed and ungratefulness, who squandered the family
business in New York, who had to turn to his wife for support, accustomed to
living in ostentation and who resorted to blackmail in filing several criminal
and civil suits against them. These statements find no support and should be
stricken from the records. Indeed, they are irrelevant to the proceeding.
Moreover, assuming Ishwar is of such a low character as Choithram
proposes to make this Court to believe, why is it that of all persons, under his
temporary arrangement theory, Choithram opted to entrust the purchase of
valuable real estate and built four buildings thereon all in the name of
Ishwar? Is it not an unconscious emergence of the truth that this otherwise
wayward brother of theirs was on the contrary able to raise enough capital
through the generosity of his father-in-law for the purchase of the very
properties in question? As the appellate court aptly observed if truly this
temporary arrangement story is the only motivation, why Ishwar of all
people? Why not the own son of Choithram, Haresh who is also an American
citizen and who was already 18 years old at the time of purchase in 1966?
The Court agrees with the observation that this theory is an afterthought
which surfaced only when Choithram, Nirmla and Moti filed their answer.
When Ishwar asked for an accounting in 1970 and revoked the general
power of attorney in 1971, Choithram had a total change of heart. He
decided to claim the property as his. He caused the transfer of the rights and
interest of Ishwar to Nirmla. On his representation, Ortigas executed the
deeds of sale of the properties in favor of Nirmla. Choithram obviously
surmised Ishwar cannot stake a valid claim over the property by so doing.

Clearly, this transfer to Nirmla is fictitious and, as admitted by Choithram,

was intended only to place the property in her name until Choithram acquires
Philippine citizenship. 17 What appears certain is that it appears to be a
scheme of Choithram to place the property beyond the reach of Ishwar
should he successfully claim the same. Thus, it must be struck down.
Worse still, on September 27, 1990 spouses Ishwar filed an urgent motion for
the issuance of a writ of preliminary attachment and to require Choithram, et
al. to submit certain documents, inviting the attention of this Court to the
following:
a) Donation by Choithram of his 2,500 shares of stock in
General Garments Corporation in favor of his children on
December 29, 1989; 18
b) Sale on August 2, 1990 by Choithram of his 100 shares in
Biflex (Phils.), Inc., in favor of his children; 19and
c) Mortgage on June 20, 1989 by Nirmla through her
attorney-in-fact, Choithram, of the properties subject of this
litigation, for the amount of $3 Million in favor of Overseas
Holding, Co. Ltd., (Overseas for brevity), a corporation which
appears to be organized and existing under and by virtue of
the laws of Cayman Islands, with a capital of only $100.00
divided into 100 shares of $1.00 each, and with address at
P.O. Box 1790, Grand Cayman, Cayman Islands. 20
An opposition thereto was filed by Choithram, et al. but no documents were
produced. A manifestation and reply to the opposition was filed by spouses
Ishwar.
All these acts of Choithram, et al. appear to be fraudulent attempts to remove
these properties to the detriment of spouses Ishwar should the latter prevail
in this litigation.
On December 10, 1990 the court issued a resolution that substantially reads
as follows:
Considering the allegations of petitioners Ishwar Jethmal
Ramnani and Sonya Ramnani that respondents Choithram
Jethmal Ramnani, Nirmla Ramnani and Moti G. Ramnani
have fraudulently executed a simulated mortgage of the

properties subject of this litigation dated June 20, 1989, in

favor of Overseas Holding Co., Ltd. which appears to be a
corporation organized in Cayman Islands, for the amount of
$ 3,000,000.00, which is much more than the value of the
properties in litigation; that said alleged mortgagee appears
to be a "shell" corporation with a capital of only $100.00; and
that this alleged transaction appears to be intended to
defraud petitioners Ishwar and Sonya Jethmal Ramnani of
any favorable judgment that this Court may render in this
case;
Wherefore the Court Resolved to issue a writ of preliminary
injunction enjoining and prohibiting said respondents
Choithram Jethmal Ramnani, Nirmla V. Ramnani, Moti G.
Ramnani and the Overseas Holding Co., Ltd. from
encumbering, selling or otherwise disposing of the properties
and improvements subject of this litigation until further orders
of the Court. Petitioners Ishwar and Sonya Jethmal Ramnani
are hereby required to post a bond of P 100,000.00 to
answer for any damages d respondents may suffer by way of
this injunction if the Court finally decides the said petitioners
are not entitled thereto.
The Overseas Holding Co., Ltd. with address at P.O. Box
1790 Grand Cayman, Cayman Islands, is hereby
IMPLEADED as a respondent in these cases, and is hereby
required to SUBMIT its comment on the Urgent Motion for
the Issuance of a Writ of Preliminary Attachment and Motion
for Production of Documents, the Manifestation and the
Reply to the Opposition filed by said petitioners, within Sixty
(60) days after service by publication on it in accordance
with the provisions of Section 17, Rule 14 of the Rules of
Court, at the expense of petitioners Ishwar and Sonya
Jethmal Ramnani.
Let copies of this resolution be served on the Register of
Deeds of Pasig, Rizal, and the Provincial Assessor of Pasig,
Rizal, both in Metro Manila, for its annotation on the transfer
Certificates of Titles Nos. 403150 and 403152 registered in
the name of respondent Nirmla V. Ramnani, and on the tax
declarations of the said properties and its improvements
subject of this litigation. 21

The required injunction bond in the amount of P 100,000.00 was filed by the
spouses Ishwar which was approved by the Court. The above resolution of
the Court was published in the Manila Bulletin issue of December 17, 1990 at
the expense of said spouses. 22 On December 19, 1990 the said resolution
and petition for review with annexes in G.R. Nos. 85494 and 85496 were
transmitted to respondent Overseas, Grand Cayman Islands at its address
c/o Cayman Overseas Trust Co. Ltd., through the United Parcel Services Bill
of Lading 23 and it was actually delivered to said company on January 23,
1991. 24
On January 22, 1991, Choithram, et al., filed a motion to dissolve the writ of
preliminary injunction alleging that there is no basis therefor as in the
amended complaint what is sought is actual damages and not a
reconveyance of the property, that there is no reason for its issuance, and
that acts already executed cannot be enjoined. They also offered to file a
counterbond to dissolve the writ.
A comment/opposition thereto was filed by spouses Ishwar that there is basis
for the injunction as the alleged mortgage of the property is simulated and
the other donations of the shares of Choithram to his children are fraudulent
schemes to negate any judgment the Court may render for petitioners.
No comment or answer was filed by Overseas despite due notice, thus it is
and must be considered to be in default and to have lost the right to contest
the representations of spouses Ishwar to declare the aforesaid alleged
mortgage nun and void.
This purported mortgage of the subject properties in litigation appears to be
fraudulent and simulated. The stated amount of $3 Million for which it was
mortgaged is much more than the value of the mortgaged properties and its
improvements. The alleged mortgagee-company (Overseas) was organized
only on June 26,1989 but the mortgage was executed much earlier, on June
20, 1989, that is six (6) days before Overseas was organized. Overseas is a
"shelf" company worth only $100.00. 25 In the manifestation of spouses
Ishwar dated April 1, 1991, the Court was informed that this matter was
brought to the attention of the Central Bank (CB) for investigation, and that in
a letter of March 20, 1991, the CB informed counsel for spouses Ishwar that
said alleged foreign loan of Choithram, et al. from Overseas has not been
previously approved/registered with the CB. 26
Obviously, this is another ploy of Choithram, et al. to place these properties
beyond the reach of spouses Ishwar should they obtain a favorable judgment

in this case. The Court finds and so declares that this alleged mortgage
should be as it is hereby declared null and void.
All these contemporaneous and subsequent acts of Choithram, et al., betray
the weakness of their cause so they had to take an steps, even as the case
was already pending in Court, to render ineffective any judgment that may be
rendered against them.
The problem is compounded in that respondent Ortigas is caught in the web
of this bitter fight. It had all the time been dealing with Choithram as attorneyin-fact of Ishwar. However, evidence had been adduced that notice in writing
had been served not only on Choithram, but also on Ortigas, of the
revocation of Choithram's power of attorney by Ishwar's lawyer, on May 24,
1971. 27 A publication of said notice was made in the April 2, 1971 issue
ofThe Manila Times for the information of the general public. 28 Such notice
of revocation in a newspaper of general circulation is sufficient warning to
third persons including Ortigas. 29 A notice of revocation was also registered
with the Securities and Exchange Commission on March 29, 1 971. 30
Indeed in the letter of Choithram to Ishwar of June 25, 1971, Choithram was
pleading that Ishwar execute another power of attorney to be shown to
Ortigas who apparently learned of the revocation of Choithram's power of
attorney. 31 Despite said notices, Ortigas nevertheless acceded to the
representation of Choithram, as alleged attorney-in-fact of Ishwar, to assign
the rights of petitioner Ishwar to Nirmla. While the primary blame should be
laid at the doorstep of Choithram, Ortigas is not entirely without fault. It
should have required Choithram to secure another power of attorney from
Ishwar. For recklessly believing the pretension of Choithram that his power of
attorney was still good, it must, therefore, share in the latter's liability to
Ishwar.
In the original complaint, the spouses Ishwar asked for a reconveyance of
the properties and/or payment of its present value and damages. 32 In the
amended complaint they asked, among others, for actual damages of not
less than the present value of the real properties in litigation, moral and
exemplary damages, attorneys fees, costs of the suit and further prayed for
"such other reliefs as may be deemed just and equitable in the
premises . 33 The amended complaint contain the following positive
allegations:
7. Defendant Choithram Ramnani, in evident bad faith and
despite due notice of the revocation of the General Power of

Attorney, Annex 'D" hereof, caused the transfer of the rights

over the said parcels of land to his daughter-in-law,
defendant Nirmla Ramnani in connivance with defendant
Ortigas & Co., the latter having agreed to the said transfer
despite receiving a letter from plaintiffs' lawyer informing
them of the said revocation; copy of the letter is hereto
attached and made an integral part hereof as Annex "H";
8. Defendant Nirmla Ramnani having acquired the aforesaid
property by fraud is, by force of law,considered a trustee of
an implied trust for the benefit of plaintiff and is obliged to
return the same to the latter:
9. Several efforts were made to settle the matter within the
family but defendants (Choithram Ramnani, Nirmla Ramnani
and Moti Ramnani) refused and up to now fail and still refuse
to cooperate and respond to the same; thus, the present
case;
10. In addition to having been deprived of their rights over
the properties (described in par. 3 hereof), plaintiffs, by
reason of defendants' fraudulent act, suffered actual
damages by way of lost rental on the property which
defendants (Choithram Ramnani, Nirmla Ramnani and Moti
Ramnani have collected for themselves; 34
In said amended complaint, spouses Ishwar, among others, pray for payment
of actual damages in an amount no less than the value of the properties in
litigation instead of a reconveyance as sought in the original complaint.
Apparently they opted not to insist on a reconveyance as they are American
citizens as alleged in the amended complaint.
The allegations of the amended complaint above reproduced clearly spelled
out that the transfer of the property to Nirmla was fraudulent and that it
should be considered to be held in trust by Nirmla for spouses Ishwar. As
above-discussed, this allegation is well-taken and the transfer of the property
to Nirmla should be considered to have created an implied trust by Nirmla as
trustee of the property for the benefit of spouses Ishwar. 35
The motion to dissolve the writ of preliminary injunction filed by Choithram, et
al. should be denied. Its issuance by this Court is proper and warranted
under the circumstances of the case. Under Section 3(c) Rule 58 of the

Rules of Court, a writ of preliminary injunction may be granted at any time

after commencement of the action and before judgment when it is
established:
(c) that the defendant is doing, threatens, or is about to do,
or is procuring or suffering to be done, some act probably in
violation of plaintiffs's rights respecting the subject of the
action, and tending to render the judgment ineffectual.
As above extensively discussed, Choithram, et al. have committed and
threaten to commit further acts of disposition of the properties in litigation as
well as the other assets of Choithram, apparently designed to render
ineffective any judgment the Court may render favorable to spouses Ishwar.
The purpose of the provisional remedy of preliminary injunction is to preserve
the status quo of the things subject of the litigation and to protect the rights of
the spouses Ishwar respecting the subject of the action during the pendency
of the Suit 36 and not to obstruct the administration of justice or prejudice the
adverse party. 37 In this case for damages, should Choithram, et al. continue
to commit acts of disposition of the properties subject of the litigation, an
award of damages to spouses Ishwar would thereby be rendered ineffectual
and meaningless. 38
Consequently, if only to protect the interest of spouses Ishwar, the Court
hereby finds and holds that the motion for the issuance of a writ of
preliminary attachment filed by spouses Ishwar should be granted covering
the properties subject of this litigation.
Section 1, Rule 57 of the Rules of Court provides that at the commencement
of an action or at any time thereafter, the plaintiff or any proper party may
have the property of the adverse party attached as security for the
satisfaction of any judgment that may be recovered, in, among others, the
following cases:
(d) In an action against a party who has been guilty of a
fraud in contracting the debt or incurring the obligation upon
which the action is brought, or in concealing or disposing of
the property for the taking, detention or conversion of which
the action is brought;

(e) In an action against a party who has removed or

disposed of his property, or is about to do so, with intent to
defraud his creditors; . . .
Verily, the acts of Choithram, et al. of disposing the properties subject of the
litigation disclose a scheme to defraud spouses Ishwar so they may not be
able to recover at all given a judgment in their favor, the requiring the
issuance of the writ of attachment in this instance.
Nevertheless, under the peculiar circumstances of this case and despite the
fact that Choithram, et al., have committed acts which demonstrate their bad
faith and scheme to defraud spouses Ishwar and Sonya of their rightful share
in the properties in litigation, the Court cannot ignore the fact that Choithram
must have been motivated by a strong conviction that as the industrial
partner in the acquisition of said assets he has as much claim to said
properties as Ishwar, the capitalist partner in the joint venture.
The scenario is clear. Spouses Ishwar supplied the capital of $150,000.00 for
the business. They entrusted the money to Choithram to invest in a profitable
business venture in the Philippines. For this purpose they appointed
Choithram as their attorney-in-fact.
Choithram in turn decided to invest in the real estate business. He bought the
two (2) parcels of land in question from Ortigas as attorney-in-fact of IshwarInstead of paying for the lots in cash, he paid in installments and used the
balance of the capital entrusted to him, plus a loan, to build two buildings.
Although the buildings were burned later, Choithram was able to build two
other buildings on the property. He rented them out and collected the rentals.
Through the industry and genius of Choithram, Ishwar's property was
developed and improved into what it is nowa valuable asset worth millions
of pesos. As of the last estimate in 1985, while the case was pending before
the trial court, the market value of the properties is no less than
P22,304,000.00. 39 It should be worth much more today.
We have a situation where two brothers engaged in a business venture. One
furnished the capital, the other contributed his industry and talent. Justice
and equity dictate that the two share equally the fruit of their joint investment
and efforts. Perhaps this Solomonic solution may pave the way towards their
reconciliation. Both would stand to gain. No one would end up the loser. After
all, blood is thicker than water.

However, the Court cannot just close its eyes to the devious machinations
and schemes that Choithram employed in attempting to dispose of, if not
dissipate, the properties to deprive spouses Ishwar of any possible means to
recover any award the Court may grant in their favor. Since Choithram, et al.
acted with evident bad faith and malice, they should pay moral and
exemplary damages as well as attorney's fees to spouses Ishwar.
WHEREFORE, the petition in G.R. No. 85494 is DENIED, while the petition
in G.R. No. 85496 is hereby given due course and GRANTED. The judgment
of the Court of Appeals dated October 18, 1988 is hereby modified as
follows:
1. Dividing equally between respondents spouses Ishwar, on the one hand,
and petitioner Choithram Ramnani, on the other, (in G.R. No. 85494) the two
parcels of land subject of this litigation, including all the improvements
thereon, presently covered by transfer Certificates of Title Nos. 403150 and
403152 of the Registry of Deeds, as well as the rental income of the property
from 1967 to the present.
2. Petitioner Choithram Jethmal Ramnani, Nirmla V. Ramnani, Moti C.
Ramnani and respondent Ortigas and Company, Limited Partnership (in G.R.
No. 85496) are ordered solidarily to pay in cash the value of said one-half
(1/2) share in the said land and improvements pertaining to respondents
spouses Ishwar and Sonya at their fair market value at the time of the
satisfaction of this judgment but in no case less than their value as appraised
by the Asian Appraisal, Inc. in its Appraisal Report dated August 1985
(Exhibits T to T-14, inclusive).
3. Petitioners Choithram, Nirmla and Moti Ramnani and respondent Ortigas
& Co., Ltd. Partnership shall also be jointly and severally liable to pay to said
respondents spouses Ishwar and Sonya Ramnani one-half (1/2) of the total
rental income of said properties and improvements from 1967 up to the date
of satisfaction of the judgment to be computed as follows:
a. On Building C occupied by Eppie's
Creation and Jethmal Industries from 1967
to 1973, inclusive, based on the 1967 to
1973 monthly rentals paid by Eppie's
Creation;
b. Also on Building C above, occupied by
Jethmal Industries and Lavine from 1974 to

1978, the rental incomes based on then

rates prevailing as shown under Exhibit "P";
and from 1979 to 1981, based on then
prevailing rates as indicated under Exhibit
"Q";
c. On Building A occupied by Transworld
Knitting Mills from 1972 to 1978, the rental
incomes based upon then prevailing rates
shown under Exhibit "P", and from 1979 to
1981, based on prevailing rates per Exhibit
"Q";
d. On the two Bays Buildings occupied by
Sigma-Mariwasa from 1972 to 1978, the
rentals based on the Lease Contract, Exhibit
"P", and from 1979 to 1980, the rentals
based on the Lease Contract, Exhibit "Q".
and thereafter commencing 1982, to account for and turn
over the rental incomes paid or ought to be paid for the use
and occupancy of the properties and all improvements
totalling 10,048 sq. m., based on the rate per square meter
prevailing in 1981 as indicated annually cumulative up to
1984. Then, commencing 1985 and up to the satisfaction of
the judgment, rentals shall be computed at ten percent
(10%) annually of the fair market values of the properties as
appraised by the Asian Appraisals, Inc. in August 1985.
(Exhibits T to T-14, inclusive.)
4. To determine the market value of the properties at the time of the
satisfaction of this judgment and the total rental incomes thereof, the trial
court is hereby directed to hold a hearing with deliberate dispatch for this
purpose only and to have the judgment immediately executed after such
determination.
5. Petitioners Choithram, Nirmla and Moti, all surnamed Ramnani, are also
jointly and severally liable to pay respondents Ishwar and Sonya Ramnani
the amount of P500,000.00 as moral damages, P200,000.00 as exemplary
damages and attorney's fees equal to 10% of the total award. to said
respondents spouses.

6. The motion to dissolve the writ of preliminary injunction dated December

10, 1990 filed by petitioners Choithram, Nirmla and Moti, all surnamed
Ramnani, is hereby DENIED and the said injunction is hereby made
permanent. Let a writ of attachment be issued and levied against the
properties and improvements subject of this litigation to secure the payment
of the above awards to spouses Ishwar and Sonya.
7. The mortgage constituted on the subject property dated June 20, 1989 by
petitioners Choithram and Nirmla, both surnamed Ramnani in favor of
respondent Overseas Holding, Co. Ltd. (in G.R. No. 85496) for the amount of
$3-M is hereby declared null and void. The Register of Deeds of Pasig, Rizal,
is directed to cancel the annotation of d mortgage on the titles of the
properties in question.
8. Should respondent Ortigas Co., Ltd. Partnership pay the awards to Ishwar
and Sonya Ramnani under this judgment, it shall be entitled to
reimbursement from petitioners Choithram, Nirmla and Moti, all surnamed
Ramnani.
9. The above awards shag bear legal rate of interest of six percent (6%) per
annum from the time this judgment becomes final until they are fully paid by
petitioners Choithram Ramnani, Nirmla V. Ramnani, Moti C. Ramnani and
Ortigas, Co., Ltd. Partnership. Said petitioners Choithram, et al. and
respondent Ortigas shall also pay the costs.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. 70895 May 30, 1986
HABALUYAS ENTERPRISES, INC. and PEDRO HABALUYAS, petitioners,
vs.

JUDGE MAXIMO M. JAPSON, Manila Regional Trial Court, Branch 36;

SHUGO NODA & CO., LTD., and SHUYA NODA, respondents.

However, the law and the Rules of Court do not expressly prohibit the filing of
a motion for extension of time to file a motion for reconsideration of a final
order or judgment.

Norberto J. Quisumbing for respondents.

FERIA, J.:

In the case of Gibbs vs. Court, of First Instance (80 Phil. 160), the Court
dismissed the petition for certiorari and ruled that the failure of defendant's
attorney to file the petition to set aside the judgment within the reglementary
period was due to excusable neglect, and, consequently, the record on
appeal was allowed. The Court did not rule that the motion for extension of
time to file a motion for new trial or reconsideration could not be granted.

Respondents have filed a motion for reconsideration of the Decision of the

Second Division of the Court promulgated on August 5, 1985 which granted
the petition for certiorari and prohibition and set aside the order of
respondent Judge granting private respondents' motion for new trial.

In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March
30, 1979, 89 SCRA 178), a division of the Court cited the Gibbs decision to
support a statement that a motion to extend the reglementary period for filing
the motion for reconsideration is not authorized or is not in order.

The issue in this case is whether the fifteen-day period within which a party
may file a motion for reconsideration of a final order or ruling of the Regional
Trial Court may be extended.

The Intermediate Appellate Court is sharply divided on this issue. Appeals

have been dismissed on the basis of the original decision in this case.

RESOLUTION

Section 39 of The Judiciary Reorganization Act, Batas Pambansa Blg. 129,

reduced the period for appeal from final orders or judgments of the Regional
Trial Courts (formerly Courts of First Instance) from thirty (30) to fifteen (15)
days and provides a uniform period of fifteen days for appeal from final
orders, resolutions, awards, judgments, or decisions of any court counted
from notice thereof, except in habeas corpus cases where the period for
appeal remains at forty- eight (48) hours. To expedite appeals, only a notice
of appeal is required and a record on appeal is no longer required except in
appeals in special proceedings under Rule 109 of the Rules of Court and in
other cases wherein multiple appeals are allowed. Section 19 of the Interim
Rules provides that in these exceptional cases, the period for appeal is thirty
(30) days since a record on appeal is required. Moreover Section 18 of the
Interim Rules provides that no appeal bond shall be required for an appeal,
and Section 4 thereof disallows a second motion for reconsideration of a final
order or judgment.
All these amendments are designed, as the decision sought to be
reconsidered rightly states, to avoid the procedural delays which plagued the
administration of justice under the Rules of Court which are intended to
assist the parties in obtaining a just, speedy and inexpensive administration
of justice.

After considering the able arguments of counsels for petitioners and

respondents, the Court resolved that the interest of justice would be better
served if the ruling in the original decision were applied prospectively from
the time herein stated. The reason is that it would be unfair to deprive parties
of their right to appeal simply because they availed themselves of a
procedure which was not expressly prohibited or allowed by the law or the
Rules. On the other hand, a motion for new trial or reconsideration is not a
pre-requisite to an appeal, a petition for review or a petition for review on
certiorari, and since the purpose of the amendments above referred to is to
expedite the final disposition of cases, a strict but prospective application of
the said ruling is in order. Hence, for the guidance of Bench and Bar, the
Court restates and clarifies the rules on this point, as follows:
1.) Beginning one month after the promulgation of this Resolution, the rule
shall be strictly enforced that no motion for extension of time to file a motion
for new trial or reconsideration may be filed with the Metropolitan or
Municipal Trial Courts, the Regional Trial Courts, and the Intermediate
Appellate Court. Such a motion may be filed only in cases pending with the
Supreme Court as the court of last resort, which may in its sound discretion
either grant or deny the extension requested.
2.) In appeals in special proceedings under Rule 109 of the Rules of Court
and in other cases wherein multiple appeals are allowed, a motion for

extension of time to file the record on appeal may be filed within the
reglementary period of thirty (30) days. (Moya vs. Barton, 76 Phil. 831; Heirs
of Nantes vs. Court of Appeals, July 25, 1983, 123 SCRA 753.) If the court
denies the motion for extension, the appeal must be taken within the original
period (Bello vs. Fernando, January 30, 1962, 4 SCRA 135), inasmuch as
such a motion does not suspend the period for appeal (Reyes vs. Sta. Maria,
November 20, 1972, 48 SCRA 1). The trial court may grant said motion after
the expiration of the period for appeal provided it was filed within the original
period. (Valero vs. Court of Appeals, June 28, 1973, 51 SCRA 467;
Berkenkotter vs. Court of Appeals, September 28, 1973, 53 SCRA 228).
All appeals heretofore timely taken, after extensions of time were granted for
the filing of a motion for new trial or reconsideration, shall be allowed and
determined on the merits.
WHEREFORE, the motion for reconsideration of, and to set aside, the
decision of August 5, 1985 is granted and the petition is dismissed. No costs.
SO ORDERED.
Republic
SUPREME
Manila

of

the

Philippines
COURT

G.R. No. L-34007 May 25, 1979

MARCELINO BELAMIDE, ALFREDO BELAMIDE (deceased and herein
substituted by his children Rodolfo, Reynaldo, Lilian and Alfredo, Jr., all
surnamed Belamide), JOSE BELAMIDE, ANTONIO BELAMIDE, MARIA
BELAMIDE, LEONISA BELAMIDE and SALUD BELAMIDE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and BIENVENIDO MONTOYA,
FRANCISCA MONTOYA and GREGORIO MONTOYA, respondents.
Beltran Beltran & Beltran for petitioners.
Fortunato Jose for private respondents.

DE CASTRO, J.:

This is a petition for certiorari to review the decision of the Court of Appeals
(4th Division) promulgated on June 9, 1971, affirming the amended decision
of the Court of First Instance of Cavite City the dispositive portion of which
reads:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the
Court hereby adjudicates the parcel of land described in
Plan Psu-18949 situated in the poblacion of Silang, Cavite,
in favor of the applicants (Marcelino Belamide, of legal age,
Filipino, married to Patrocinia de Castro, and resident of
Silang Cavite; Alfredo Belamide, of legal age, Filipino,
married to Anita Velez, and resident of Silang, Cavite; Jose
Belamide, of legal age, Filipino, married to Elisea Quiamzon
and resident of Silang Cavite; Antonio Belamide, of legal
age, Filipino, single, and resident of Silang, Cavite; Maria
Belamide, Filipino, of legal age, married to Sofronio Bayla
and resident of Silang, Cavite; Leonisa Belamide, of legal
age, married to Fulgencio Reyes, and resident of Silang,
Cavite; and Salud Bede of legal age, Filipino, married to
Conrado Menchavez and resident of Silang, Cavite) and the
oppositors (Bienvenido Montoya, Gregorio Montoya and
Francisco Montoya, Filipinos, of legal age, married and
residents of Silang, Cavite) in the following proportions:
Three-fourths (3/4) undivided share belongs to the
applicants, and one-fourth (1/4) undivided share belongs to
the oppositors.
Once this decision becomes final, let the corresponding
decree of registration be issued upon proof that the
corresponding estate and inheritance taxes have been paid,
or certificate of tax exemption has been issued.
Petitioners herein were the applicants for the registration of the parcel of land
involved in this case The private respondents were the oppositors allowed on
Motion for a New Trial, to file an opposition even after a decision has already
been rendered by then Judge Felix V. Makasiar, after hearing, following the
issuance of a general default order. (par. 1-3, Petition).
From the amended decision rendered after the new trial both parties
appealed to the Court of Appeals which found the essential facts as narrated

in the decision appealed thereto as duly established by the evidence, and

quoted the same approvingly as follows:
The next question that presents itself is when and by whom
was the land in question acquired. The oppositors allege that
the acquisition was made during the first marriage of Vicente
Montoya to Martin Montoya, whereas the applicants maintain
that such land was acquired during the marriage (second
marriage) of Vicente Montoya to Jose Velardo Both
contentions are not supported by any document. However,
the fact that Susana Velardo Belamide sold a portion of the
land in question (Exh. 6) to the Municipality of Silang, Cavite
(for widening of the street) on May 1933 without the
intervention of, or opposition from, Hilarion Montoya who
died on December 2, 1955 (Exh. 3), coupled with the fact
that Susana Velardo Belamide has possession of the
property since the death of her mother Vicenta Montoya) in
1931 after she sold the same to the herein applicants on July
20, 1951 (Exh. B), convince the Court that said property was
acquired during the coverture of Jose Velardo and Vicenta
Montoya. Consequently, upon the death of Jose Velardo in
1888, the one-half () undivided portion of the property
passed by inheritance to Susana Velardo Belamide and the
other one-half () undivided portion went to Vicenta
Montoya as her share of the conjugal estate. Upon the death
of the latter on February 28, 1931, her undivided one half
() share of the property should be divided equally between
Susana Velardo Belamide and Hilarion Montoya, that is,
each is entitled to one- fourth (1/4) undivided share. Hence,
Susana Velardo Belamide's share is three-fourths (3/4) while
Hilarion Montoya's share passed by inheritance to his
children, the herein oppositor. For this reason, the sale made
by Susana Velardo Belamide in favor of the applicants (Exh.
B) is null and void only with respect to the one-fourth (1/4)
undivided portion of the property (the share of the herein
oppositors) who did not consent to the sale).
As earlier stated, the Court of Appeals affirmed the amended decision of the
Court of First Instance, this time rendered by Hon. Jose P. Alejandro, and
denied a Motion for Reconsideration filed by the petitioners herein on June
29, 1971 (Annex E to Petition), as well as a Motion for a New Trial (Annex F
to Petition). The ground for the Motion for New Trial was that Exhibit 8 of the
oppositors (private respondents herein) which was allegedly relied upon by

both the Court of First Instance and the Court of Appeals is a falsified
document, As recited in the petition, par. 12 thereof (p. 8, Reno the
falsification consists of the following:
According to tie official records of the Civil Registrar of
Silang, Cavite, the name of the father of Hilarion Montoya in
the marriage column is in blank. But according to Exhibit 8,
the name of the father of Hilarion Montoya is Martin
Montoya. Thus, whale the official record of the civil registrar
shows that oppositors' father, Hilarion, had an unknown
father, thru falsification, Hilarion father wasmade to appear
in Exhibit 8 as Martin Montoya. The latter false. ly became
husband of Vicente Montoya, thereby enabling private
respondents to inherit 1/4 of the land in dispute from Vicente
Montoya.
It is the denial of the Motion for New Trial by the Court of Appeals which
petitioners allege to be in grave abuse of discretion, and their allegation that
the Court of First Instance, as a land registration court, has no jurisdiction to
declare who are the heirs of Vicente Montoya and partition the property by
adjudicating 1/4 pro-indiviso to private respondents as children of Hilarion
Montoya, allegedly an unacknowledged natural child of Vicenta Montoya,
and that as a consequence, the Court of Appeals, likewise, is without
jurisdiction, or acted in grave abuse of discretion, in affirming the decision of
the lower court, that petitioners came to this Court with the present petition.
1. There can be no grave abuse of discretion by the Court of Appeals in
denying petitioners' Motion for New Trial. The document alleged to be
falsified (Exh. 8) was presented in the trial in the lower court. Petitioners
should have attacked the same as falsified with competent evidence, which
could have been presented, if they had exercised due diligence in obtaining
said evidence, which is Annex "A" 1 to the Motion for New Trial (Annex F to
Petition). 2 It is, therefore, not a newly discovered evidence that could justify
a new trial (Rule 37 [1-b], Rules of Court).
The new evidence would neither change the result as found by the decision.
It might prove that Hilarion Montoya was registered at birth without his father
having been given, but from the testimony of Marcelino Belamide, one of the
applicants (now petitioners), Vicente Montoya was married twice, although
he did not know the first husband. Likewise, in the opposition of private
respondents (pp. 30-31, Record on Appeal) 3, it is there alleged that the land
originally belonged to the spouses Martin Montoya and Vicente
Montoya. This allegation was never contradicted. The document sought to be

presented by petitioners, as stated in their Motion for New Trial in the Court
of Appeals, cannot effectively destroy this allegation, first, because the
marriage between Martin Montoya and Vicenta Montoya could have taken
place after the birth of Hilarion Montoya who was thus legitimized, and
second, Martin Montoya and Vicente Montoya evidently lived together as
husband and wife, and are, therefore, presumed to have been legally married
(Section 5, par. [bb] Rule 131, Rules of Court). This Court held that a man
and a woman who are living under the same roof are presumed to be
legitimate spouses (Que Quay vs. Collector of Customs, 33 Phil. 128), and in
the instant case, no less than one of the herein petitioners, Marcelino
Belamide, testified that Vicenta Montoya married twice. The records suggest
no other husband by the first marriage than Martin Montoya, who then could
have been the father of Hilarion Montoya who, undisputedly, is the son of
Vicente Montoya.
With the law and the evidence showing with reasonable sufficiency that
Hilarion Montoya from whom private respondents would derive hereditary
rights over the land in question, is the legitimate son of Vicenta Montoya, the
adjudication of said land by the lower court, as specified in its decision, is in
accordance with law.
2. The jurisdiction of the lower court as a land registration court to adjudicate
the land for purposes of registration cannot, as petitioners try to do, be
questioned. The applicants and oppositors both claim rights to the land by
virtue of their relationship to the original owner, the late Vicente Montoya. The
Court is thus necessary impelled to determine the truth of their alleged
relationship, and on the basis thereof, to adjudicate the land to them as the
law has prescribed to be their successional rights. The law does not require
the heirs to go to the probate court first before applying for the registration of
the land, for a declaration of heirship. This would be a very cumbersome
procedure, unnecessarily expensive and unreasonably inconvenient, clearly
averse to the rule against multiplicity of suits.
Furthermore, petitioners Should not now be heard to complain after they
have themselves gone to the lower court to have their title to the land
registered in their names without having had a previous declaration of their
heirship by the probate court. In filing their opposition to the application,
private respondents merely went to the same court invoking its jurisdiction in
exactly the same fashion as did the petitioners. In effect, there was unanimity
among the parties in consenting to, or acquiescing in, the exercise of the
jurisdiction of the land registration court, no matter whether Same is a limited
one. With this premise, and with the full opportunity given both parties to air
their sides with the presentation of all evidence as they may desire in support

thereof, as fully as could be done in the ordinary court with general

jurisdiction, the decision of the lower court, sitting as a land court, supported
as it is with sufficient evidence, may no longer be questioned on jurisdictional
grounds. (See Martin Aglipay vs. Hon. Isabelo delos Reyes, Jr., G. R. No. L12776, March 23, 1960; Franco vs. Monte de Piedad and Savings Bank, L17610, April 22, 1963, 7 SCRA 660; City of Tarlac vs. Tarlac Development
Corporation, L-24557, July 31, 1968, 24 SCRA 466; City of Manila vs. Manila
Lodge No. 761, L-24469, July 31, 1968, 24 SCRA 466; City of Manila vs.
Army and Navy Club of Manila, L-24481, 24 SCRA 466; Demetrio Manalo vs.
Hon. Herminio C. Mariano, et. al., L-33850, January 22, 1976, 69 SCRA, 80).
For all the foregoing, the instant petition is hereby dismissed for lack of merit.
Costs against petitioners.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISION

G.R. No. 112795 June 27, 1994

AUGUSTO
CAPUZ, petitioner,
vs.
THE COURT OF APPEALS and ERNESTO BANEZ, respondents.
Nony R. Rivera for petitioner.
Semproniano S. Ochoco for private respondent.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules
of Court to reverse and set aside the decision of the Court of Appeals in CAG.R. SP No. 30030, which affirmed the judgment by default of the Regional
Trial Court, Branch 130, Kalookan City in Civil Case No. C-15501.

On November 13, petitioner received a copy of the Order dated October 23,
1992 and the Decision dated November 6, 1992.
On November 23, petitioner filed a verified motion to lift the order of default
and to set aside the decision.

We grant the petition.

In said motion, petitioner averred that:
I
On July 15, 1992, private respondent filed a complaint for a sum of money
against petitioner with the Regional Trial Court, Branch 130, Kalookan City
(Civil Case No. C-15501).
On September 5, petitioner was served with summons.
After petitioner failed to file any answer, private respondent filed on
September 25, an Ex parte Motion to Declare Defendant in Default.
On October 23, the trial court issued an order declaring petitioner in default
and authorizing private respondent to present his evidence ex parte.
On October 28, private respondent presented his evidence ex parte.
On November 6, the trial court rendered a decision, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff ERNESTO BANEZ against the defendant AUGUSTO
CAPUZ ordering the defendant to pay the following:
1. The principal amount of
P90,000.00
plus
12%
interest per annum from
June 13, 1992, the date of
the written demand, until
fully paid;
2. P10,000.00 as attorney's
fees;
3. P1,000.00 as litigation
expenses and the costs
(Rollo, p. 11).

1. Defendant's failure to file his responsive pleading is due to

fraud, mistake, accident and/or excusable neglect, and that
when defendant received a copy of the summons and the
complaint on September 5, 1992, defendant wasted no time
in seeing the plaintiff and confronted him about his receipt
(payment of the subject obligation), plaintiff assured the
defendant that he (plaintiff) will instruct his lawyer to
withdraw the complaint, and not to worry anymore.
Defendant took the word of his "compadre" the plaintiff.
Hence, defendant did not file his answer to the complaint
(Rollo, p. 11).
On December 7, the trial court issued an order, denying petitioner's verified
urgent motion, the pertinent portion of which reads:
The filing of the motion to lift order of default did not stop the
running of the period of appeal, for his only right at the
moment is to receive notice of further proceedings
regardless of whether the order of default is set aside or not.
On the other hand, defendant could have appealed the
Decision before the expiration of the period to appeal, for he
is granted that right by the Rules. Since he failed to make a
timely appeal, the decision rendered in this case has
became (sic) final (Rollo, p. 12).
On December 23, petitioner filed an urgent motion asking for the
reconsideration of the Order dated December 7, 1992, claiming: (1) that the
said order was prematurely issued; (2) that the trial court erred in holding that
the decision had become final; and (3) that the said order was contrary to law
and jurisprudence.
On January 6, 1993, the trial court issued an order, denying petitioner's
motion for reconsideration.

Petitioner filed a petition for certiorari under Rule 65 of the Revised Rules of
Court with the Court of Appeals.
On November 18, the Court of Appeals dismissed the petition for lack of
merit, holding: (1) that petitioner's motion to lift the order of default and set
aside the judgment was improper because there was already a judgment by
default rendered when it was filed; (2) that having discovered the order of
default after the rendition of the judgment, the remedy of petitioner was either
to appeal the decision or file a motion for new trial under Rule 37; and (3)
that the said motion could not be considered as a motion for new trial under
Rule 37 because it was not accompanied by an affidavit of merit.
II
In the instant petition, petitioner argues that the motion to lift the order of
default and to set aside the decision could be treated as a motion for new
trial under Rule 37 and that a separate affidavit of merit need not be
submitted considering that the said motion was verified.
We agree that the verified motion of petitioner could be considered as a
motion for new trial. The grounds alleged by petitioner in his motion are the
same as the grounds for a motion for new trial under Rule 37, which are: (1)
that petitioner's failure to file his answer was due to fraud, mistake, accident
or excusable negligence; and (2) that he was a meritorious defense.
Petitioner explained that upon receiving the summons, he immediately saw
private respondent and confronted him with the receipt evidencing his
payment. Thereupon, private respondent assured him that he would instruct
his lawyer to withdraw the complaint. The prior payment of the loan sought to
be collected by private respondent is a good defense to the complaint to
collect the same loan again.
The only reason why respondent court did not consider the motion of
petitioner as a motion for new trial was because the said motion did not
include an affidavit of merit.
The allegations contained in an affidavit of merit required to be attached to a
motion to lift an order of default or for a new trial need not be embodied in a
separate document but may be incorporated in the petition itself. As held
in Tanhu v. Ramolete, 66 SCRA 425 (1975):
Stated otherwise, when a motion to lift an order of default
contains the reasons for the failure to answer as well as the

facts constituting the prospective defense of the defendant

and it is sworn to by said defendant, neither a formal
verification nor a separate affidavit of merit is necessary.
Speaking for the Court in Circle Financial Corporation v. Court of Appeals,
196 SCRA 166 (1991), Chief Justice Andres R. Narvasa opined that the
affidavit of merit may either be drawn up as a separate document and
appended to the motion for new trial or the facts which should otherwise be
set out in said separate document may, with equal effect, be alleged in the
verified motion itself.
Respondent court erred when it held that petitioner should have appealed
from the decision, instead of filing the motion to lift the order of default,
because he still had two days left within which to appeal when he filed the
said motion. Said court must have in mind paragraph 3 of Section 2, Rule 41
of the Revised Rules of Court, which provides that: "a party who has been
declared in default may likewise appeal from the judgment rendered against
him as contrary to the evidence or to the law, even if no petition for relief to
set aside the order of default has been presented by him in accordance with
Rule 38."
Petitioner properly availed of the remedy provided for in Section 1, Rule 65 of
the Revised Rules of Court because the appeal under Section 2, Rule 41
was not, under the circumstances, a "plain, speedy and adequate remedy in
the ordinary course of law." In an appeal under Section 2, Rule 41, the party
in default can only question the decision in the light of the evidence on
record. In other words, he cannot adduce his own evidence, like the receipt
to prove payment by petitioner herein of his obligation to private respondent.
WHEREFORE, the petition is GRANTED. The challenged decision of the
Court of Appeals is REVERSED and the judgment dated November 6, 1992
of the Regional Trial Court, Branch 130, Kalookan City is SET ASIDE. Let
this case be remanded to the court of origin for further proceedings. No
pronouncements as to costs.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION
G.R. No. L-62896 August 21, 1989
SPOUSES CARLOS DAVID and TERESITA DAVID, and JESUS B.
PASION petitioners,
vs.
HON. OSCAR C. FERNANDEZ in his capacity as Presiding Judge of the
Court of First Instance of Bulacan, Branch IV, Baliuag, Bulacan, (now
the Regional Trial Court, Baliuag Branch), FRANCISCA LAGMAN
MANANGHAYA, in her own behalf and as natural guardian of her minor
children
NOEL,
NOLLY
and
JOY,
all
surnamed
MANANGHAYA, respondents.
Porfirio C. Pineda for petitioners.
Citizens Legal Assistance Office for private respondents.

FERNAN, C .J.:
On March 7, 1980, a gravel and sand truck driven by petitioner Jesus B.
Pasion and owned and operated by his co-petitioners, Spouses Carlos David
and Teresita David, hit Paulino Mananghaya in front of Mantrade Building,
Epifanio de los Santos Avenue, Makati, Metro Manila, resulting in the latter's
death. Subsequently on May 25, 1980, Paulino's wife, Francisca Lagman
Mananghaya, in her own behalf and as natural guardian of her minor children
Noel, Nolly and Joy, (hereinafter private respondents) filed before the then
Court of First Instance (CFI) of Bulacan an action for damages docketed as
Civil Case No. 1136-B against petitioners.
For failure to file their answer despite service of summons, petitioners as
defendants in said Civil Case No. 1136-B were declared in default. Private
respondents as plaintiffs were allowed to present their evidence ex-parte,
after which a decision was rendered on April 10, 1981 1 ordering petitioners

to pay private respondents jointly and severally the amount of P100,000.00

as moral damages; P80,000.00 as exemplary damages; P100,000.00 as
actual and compensatory damages; P10,000.00 as attorney's fees plus
costs. A copy of said decision was received by petitioners on April 24, 1981.
Petitioners filed a motion for new trial, which was denied in the lower court's
order of June 5, 1981 2 for having been filed one day late. In the same Order,
the court granted private respondents' prayer for the issuance of a writ of
execution. A Writ of Execution 3 dated June 10, 1981 was correspondingly
issued directing the Provincial Sheriff of San Fernando, Pampanga to cause
to be made of the goods and chattels of petitioners the sums awarded to
private respondents in respondent court's decision of April 10, 1981.
Consequently, some personal properties of the spouses David were levied
upon and sold at public auction, the proceeds of which amounting to
P12,000.00 were subsequently delivered to private respondents.
Having received a copy of the Order of June 5, 1981 only on September 1,
1981, petitioners filed on the same day a motion for reconsideration of the
June 5, 1981 Order and a motion to quash the writ of execution dated June
10, 1981, calling the attention of the lower court to the fact that the 30th day
of the reglementary period for the filing of an appeal fell on a Sunday so that
the filing of the motion on the 31st day was nevertheless still within the
reglementary period for appeal. On February 8, 1982, the lower court issued
an order 4 reconsidering its previous order of June 5, 1981, granting
petitioners' motion for new trial and recalling the writ of execution dated June
10, 1981.
Resultantly, petitioners were allowed to file their Answer with Counterclaim
for damages against private respondents, who countered with a Motion to
Dismiss Counterclaim and Reply to Answer. The latter's motion to dismiss
was denied by the lower court. On June 5, 1982, petitioners filed a Motion for
Restitution which was resolved by respondent lower court in its assailed
Order dated June 8, 1982, 5 reading thus:
ORDER
Defendants' properties levied in execution are hereby
ordered to be returned to them pending new trial.
In the event that this could not be done, defendants may, in
the event of favorable judgment, go after plaintiffs' bond.

SO ORDERED.

of a favorable judgment go after Private Respondents' bond,

because there is no bond filed by Private Respondents in
said Civil Case No. 1136-B since said personal properties of
Baliuag, Bulacan, June 8,1982.
Petitioners Spouses were taken by the Sheriff from them by
OSCAR C. FERNANDEZvirtue
J u d of
g ea writ of execution (Annex G) and said writ of
execution was set aside and declared null and void by Hon.
Respondent Court in its Order of February 8,1982 (Annex L).
In their motion for reconsideration of the aforequoted Order, petitioners
manifested that they are in accord with the first paragraph of said order but
2. The Hon. Respondent Court acted without or in excess of
seek a reconsideration of the second paragraph by setting the same aside
its jurisdiction and/or with grave abuse of discretion
and ordering the return of the proceeds of P12,000.00 obtained from the sale
amounting to lack of jurisdiction when it issued its order of
of their personal properties considering that private respondents have not
December 1, 1982 denying Petitioners' Motion for
posted a bond as a condition precedent to the taking of said properties as the
Reconsideration of Said Order of June 8, 1982, for being
same was done pursuant to a decision believed by the private respondents
contrary to law, established jurisprudence on the matter and
to be final and executory but which later turned out not to be so in view of the
an outright denial of substantial justice to Petitioners. 6
allowance of petitioners' motion for new trial by the respondent lower court.
Respondent court denied petitioners' aforesaid motion for reconsideration in
its second assailed Order dated December 1, 1982 on the ground that a new
trial had been ordered as early as February 8, 1982.
Hence this petition seeking to annul and set aside the two aforementioned
Orders of respondent judge, namely: the Order dated June 8, 1982 which
required the return of the properties of the petitioners levied upon in
execution or, in the event that this could not be done, for petitioners to go
after private respondents' bond in case of a favorable judgment; and the
Order dated December 1, 1982 denying petitioners' motion for
reconsideration of the June 8, 1982 order. In addition, petitioners seek to
enjoin respondent court from further proceeding with Civil Case No. 1136-B
except to issue a corresponding order setting aside the herein assailed
Orders of June 8, 1982 and December 1, 1982 and ordering private
respondents to return to Spouses Carlos David and Teresita David the
proceeds of the public auction sale of their personal properties in the sum of
P 12,000.00.
Petitioners submit that:
1. The Hon. Respondent Court acted without or in excess of
its jurisdiction and/or with grave abuse of its discretion
amounting to lack of jurisdiction when it issued the Order of
June 8,1982 directing that in the event return of the personal
properties of Petitioners Spouses could not be done by
Private Respondents, Petitioners spouses may, in the event

Petitioners maintain that the setting aside of the writ of execution by the
lower court naturally entitled them to recover from private respondents their
personal properties which were prematurely and improvidently levied upon
on execution, or to the reimbursement by private respondents of the
proceeds of the auction sale in the sum of P12,000.00 pending the hearing
on the merits of Civil Case No. 1136-B. They contend that in providing for an
alternative in its assailed order in the event restitution is not possible, the
lower court unduly deprived them of their substantial right without due
process as there was no bond to speak of in the first place.
On the other hand, private respondents submit that the lower court, under the
circumstances obtaining in this case, was merely exercising its sound judicial
discretion in not ordering restitution it appearing that the personal properties
levied upon on execution were already sold at public auction and the
proceeds thereof given to them, who, due to the untimely demise of the sole
breadwinner in their family were left orphaned and destitute. Furthermore,
petitioners are barred by laches for not taking their legal option to oppose the
levy and public sale of their personal properties which took place while their
motion for new trial was still pending resolution by the lower court and it was
only on June 5, 1982 or almost a year after the levy was made, that they
moved for the return of the properties levied upon.
We rule for the petitioners. Although the Court is aware of private
respondents' sad plight, having suffered the untimely loss of the alleged sole
breadwinner of the family, nevertheless, the Court must go by the precepts of
substantive as well as procedural law in resolving the controversy at bar for
to do otherwise would be tantamount to pre-empting the lower court in its

judgment in Civil Case No. 1136-B wherein a new trial had been ordered as a
result of the granting of petitioners' motion for new trial therein.

proceeds of the public auction sale of their personal properties in the sum of
P12,000.00

As provided under Section 5 of Rule 37 of the Revised Rules of Court: "If a

new trial be granted in accordance with the provisions of its rule, the original
judgment shall be vacated, and the action shall stand for trial de novobut the
recorded evidence taken upon the former trial so far as the same is material
and competent to establish the issues, shall be used at the new trial without
retaking the same."

SO ORDERED.

The law is unmistakably clear that once a new trial is granted under aforesaid
Rule, the original judgment is vacated. The phrase "to vacate" applied to a
judgment means "to annul, to render void. 7

Republic
SUPREME
Manila

As petitioners' motion for new trial was subsequently granted by the

respondent court, this resulted in the nullification of its judgment by default
dated April 10, 1981 against petitioners in said civil case, including all the
consequential effects thereof, to wit: the Writ of Execution, the corresponding
levy on the personal properties of petitioners and the public auction sale.

EN BANC

The Court thus finds validity and strength in petitioners' claim for restitution of
the P12,000.00 proceeds of the sale on execution of petitioners' personal
properties levied upon pursuant to a writ of execution which was
subsequently recalled due to the granting of a new trial in the subject civil
case. Considering that the motion for restitution was filed while the subject
civil case was still undergoing trial, a stage wherein the rights and obligations
of the parties have not yet begin determined, it would be unfairly enriching
the private respondents, even temporarily, if they are allowed to keep
possession of the proceeds of the sale of petitioners' personal properties in
the amount of P12,000.00. As Civil Case No. 1136-B then stood, there has
yet been no adjudication of rights and obligations between the parties.
Furthermore, there was never a plaintiff s bond to speak of in the first place
against which petitioners may proceed in case of a favorable judgment since
the writ of execution was issued pursuant to a judgment then thought to be
final and executory.

MARIKINA VALLEY DEVELOPMENT CORPORATION, ISIDORO

LIAMZON, JR., SPS. BERNARDO AND DELIA ROSARIO, SPS. MANUEL
AND NORMA SANCHEZ, SPS. RUFINO AND MILAGROS JAVIER, SPS.
RODOLFO AND SONIA OCAMPO, SPS. LAZARO AND JULIETA
SANTOS, SPS. TEODORO AND ZENAIDA BAUTISTA, SPS. CHARLES
AND MA. CORAZON MILLER, SPS. EDGARDO AND CRISTINA
VALENZUELA, FRANCISCO LIAMZON, MARIETTA LIAMZON, ROMEO
THADEUS LIAMZON, MICHAEL RAYMOND LIAMZON, ROBERTO
ANTONIO LIAMZON, ROSABELLE THERESA LIAMZON, RONALDO
ISIDORO LIAMZON and RODRIGO JESUS LIAMZON, petitioners,
vs.
HON. NAPOLEON R. FLOJO, Presiding Judge of Branch 2, RTC Manila;
BASILIO SYTANGCO, as representative of the heirs of JOSE REYES
SYTANGCO; and THE HON. COURT OF APPEALS, respondents.

WHEREFORE, in view of the foregoing considerations, the second

paragraph of the Order of respondent court dated June 8, 1982 allowing
petitioners as defendants therein in case of a favorable judgment to go after
the plaintiffs' bond if restitution was not effected; and the Order of December
1, 1982 are hereby SET ASIDE. Private respondents are hereby ORDERED
to return to petitioners Spouses Carlos David and Teresita David the

of

the

Philippines
COURT

G.R. No. 110801 December 8, 1995

FELICIANO, J.:
Jose Reyes Sytangco instituted a complaint for reconveyance of a piece of
land situated along Espaa Street, Manila, against petitioner Marikina Valley
Development Corporation ("Marikina Valley") and Milagros Liamzon. In his

complaint, Jose Reyes Sytangco alleged that he and his wife, Aurelia
Liamzon-Sytangco had entrusted some funds to Milagros Liamzon, sister-inlaw of Aurelia, in order to purchase the Espaa Street property from its
former owners. The Sytangco spouses had years ago built their house on
that parcel of land then leased from the original owners with whom they
negotiated for purchase of that land. Milagros Liamzon, however, in alleged
violation of the trust reposed upon her, purchased the Espaa Street property
in her own name and had title to the same registered in her name.
Thereafter, she transferred title over that property to petitioner Marikina
Valley, a closed corporation owned by the Liamzon family.
In their answer, petitioner denied the allegations of Jose Reyes Sytangco and
claimed that Milagros Liamzon had purchased the Espaa Street property by
and for herself, with funds coming from petitioner Marikina Valley. For her
part, Milagros Liamzon insisted, among other things, that the Reyes
Sytangco spouses had waived in her favor their right to buy the property in
question.
During the trial in the court below, Jose Reyes Sytangco died and he was
substituted by his heirs, who are private respondents herein. After trial, the
trial court ruled in favor of private respondent heirs in a decision dated 11
October 1991. The trial court directed petitioner Marikina Valley to execute a
Deed of Conveyance covering the property involved in favor of private
respondents.
On 28 October 1991, Marikina Valley and the other petitioners heirs of
Milagros Liamzon (Milagros having, in the meantime, passed away)
received a copy of the decision of the trial court. Petitioners moved for
reconsideration on 7 November 1991.
The Reyes Sytangco heirs opposed petitioners' motion for reconsideration
upon the ground that it was a pro forma one. The heirs contended that the
allegations of insufficiency of evidence were couched in very general terms,
contrary to the requirements of Section 2, Rule 37 of the Rules of Court.
On 21 November 1991, the trial court denied petitioners' motion for
reconsideration for lack of merit. The trial court said:
The defendant anchors his motion on the assertion that:
1. There is no sufficient evidence to show that the down
payment for the property came from the plaintiff;

2. That the money used for the property did not come from
the plaintiff, hence, no implied trust could have been created
between Milagros Liamzon and Aurelia Liamson;
3. That piercing the veil of corporate entity is not applicable
to this case.
After a perusal of the arguments posed in support of these
grounds, the court finds that these arguments had been
discussed and resolved in the decision. There being [no]
other matter of consequences asserted which has not been
considered in the decision, the Court resolves to deny the
same.
WHEREFORE, the Motion for Reconsideration is DENIED
for lack of merit. 1 (Emphasis supplied)
Petitioners received a copy of the above order on 22 November
1991. On 25 November 1991, they filed a notice of appeal with the
trial court.
In the meantime, private respondent heirs moved for execution of the
decision of 11 October 1991. They insisted that petitioners had failed to
perfect an appeal within the reglementary period.
In its order dated 25 November 1991, the trial court dismissed the notice of
appeal filed by petitioners for having been filed beyond the reglementary
period to perfect an appeal. The trial judge reasoned that petitioners' motion
for reconsideration was pro forma and hence did not stop the running of the
reglementary period. Thereupon, the trial judge granted private respondents'
motions for execution.
Petitioners went to the Court of Appeals on certiorari and injunction. They
denied that their motion for reconsideration was merely pro forma and
claimed that they had filed their notice of appeal seasonably. They also
challenged the validity of subsequent orders of the trial court directing
execution.
The Court of Appeals dismissed the petition, declaring that petitioners' motion
for reconsideration was indeed pro forma and, "therefore, clearly without
merit." The appellate court went on to say that:

[w]here a motion for reconsideration merely submits,

reiterates, repleads, repeats, or reaffirms the same
arguments that had been previously considered and
resolved in the decision, it is pro forma.
The Court of Appeals concluded that petitioners' pro forma motion for
reconsideration had not stopped the running of the period to perfect
an appeal and that, accordingly, the judgment had become final and
private respondents were entitled to execution as a matter of right.
Petitioners sought reconsideration of the Court of Appeals' decision,
without success.
In their present Petition for Review on Certiorari, petitioners aver once more
that their motion for reconsideration filed before the trial court was sufficient
in form and substance and was not pro forma. They reiterate that their
motion had effectively suspended the running of the reglementary period,
and that their notice of appeal filed three (3) days from receipt of the order
denying their motion for reconsideration had been filed well within the
remaining period to perfect an appeal.
The rule in our jurisdiction is that a party aggrieved by a decision of a trial
court may move to set aside the decision and reconsideration thereof may be
granted when (a) the judgment had awarded "excessive damages;" (b) there
was "insufficiency of the evidence to justify the decision;" or (c) "the decision
was against the law." 2
A motion for reconsideration based on ground (b) or (c) above must
point out specifically the findings and conclusions of the
judgment which are not supported by the evidence or which
are contrary to law, making express reference to the
testimonial or documentary evidence or to the provisions of
law alleged to be contrary to such findings and conclusions. 3
A motion for reconsideration, when sufficient in form and substance that
is, when it satisfies the requirements of Rule 37 of the Rules of Court
interrupts the cunning of the period to perfect an appeal. 4 A motion for
reconsideration that does not comply with those requirements will, upon the
other hand, be treated as pro forma intended merely to delay the
proceedings and as such, the motion will not stay or suspend the
reglementary period. 5 The net result will be dismissal of the appeal for
having been unseasonably filed.

The question in every case is, therefore, whether a motion for

reconsideration is properly regarded as having satisfied the requirements,
noted above, of Rule 37 of the Rules of Court. As already pointed out, the
Court of Appeals took the position that where a motion for reconsideration
merely "reiterates" or "repleads" the same arguments which had been
previously considered and resolved in the decision sought to be
reconsidered, the motion is a pro forma one. In taking this position, the
appellate court quoted at some length from a prior decision of this Court:
. . . Said the Supreme Court in "Dacanay v. Alvendia, et al.,"
30 SCRA 31, to wit:
In Estrada v. Sto. Domingo, recently decided by this Court,
we once again called the attention of the bar and litigants to
the "principle already forged by this Court . . . that a motion
for reconsideration which has no other purpose than to gain
time is pro forma and does not stop the period of appeal
from slipping away." Mr. Justice Dizon pointed out in his
concurring opinion that "The motion aforesaid is pro
forma on yet another ground, in substance it was but
a reiteration of reasons and arguments previously set forth in
respondent Sto. Domingo's memorandum submitted to the
trial court and which the latter had already considered,
weighed and resolved adversely to him when it rendered its
decision on the merits." And earlier in Lonaria v. De Guzman,
we held that "[T]he filing of the second motion on January
22, 1963 did not suspend the running of the period, first,
because it was " pro forma based on grounds already
existing at the time of the first motion." 6 (Emphasis partly in
the original and partly supplied)
It should, however, be noted that the circumstance that a motion for
reconsideration deals with the same issues and arguments posed and
resolved by the trial court in its decision does not necessarily mean that the
motion must be characterized as merely pro forma. More than two (2)
decades ago, Mr. Justice J.B.L. Reyes had occasion, in Guerra Enterprises
Company, Inc. v. Court of First Instance of Lanao del Sur, 7 to point out that a
pleader preparing a motion for reconsideration must of necessity address the
arguments made or accepted by the trial court in its decision:
. . . . Among the ends to which a motion for reconsideration
is addressed, one is precisely to convince the court that its
ruling is erroneous and improper, contrary to the law or the

evidence (Rule 37, Section 1, subsection [c]); and in doing

so, the movant has to dwell of necessity upon the issues
passed upon by the court. If a motion for reconsideration
may not discuss these issues, the consequence would be
that after a decision is rendered, the losing party would be
confined to filing only motions for reopening and new trial.
We find in the Rules of Court no warrant for ruling to that
effect, a ruling that would, in effect eliminate subsection (c)
of Section 1 of Rule 37. 8 (Emphases supplied)
The movant is very often confined to the amplification or further
discussion of the same issues already passed upon by the trial court.
Otherwise, his remedy would not be a reconsideration of the
decision, but a new trial or some other remedy. 9
The kinds of motions for reconsideration which have been regarded as
merely pro forma are illustrated byCrisostomo v. Court of Appeals, 10 where a
one sentence motion for reconsideration, which read thus:
COMES NOW the petitioners-appellants in the aboveentitled case and to this Honorable Court respectfully move
for reconsideration of the decision promulgated on
November 8, 1966, copy of which was received by the
undersigned on November 9, 1966, on the ground that the
same is contrary to law and evidence. (Emphasis supplied)
was considered a pro forma motion for total failure to specify the
findings or conclusions in the trial court's decision which were
supposedly not supported by evidence or were contrary to law.
Similarly,
in Villarica
v.
Court
of
Appeals, 11 a motion for reconsideration which no more than alleged
the following:
1. that the order is contrary to law; and
2. that the order is contrary to the facts of the case,
did not suspend the running of the period for appeal, being a pro
forma motion merely. These kinds of motion present no difficulty at
all.

A motion for reconsideration which is not as starkly bare as

in Crisostomo and in Villarica, but which, as it were, has some flesh on its
bones, may nevertheless be rendered pro forma where the movant fails to
make reference to the testimonial and documentary evidence on record or
the provisions of law said to be contrary to the trial court's conclusions. In
other
words,
the
movant
is
also
required
to
point
out
succinctly why reconsideration is warranted. In Luzon Stevedoring Company
v. Court of Industrial Relations, 12 the Supreme Court declared that:
it is not enough that a motion for reconsideration should
state what part of the decision is contrary to law or the
evidence; it should also point out why it is so. Failure to
explain why will render the motion for reconsideration pro
forma. (Emphasis supplied)
Where a substantial bonafide effort is made to explain where and
why the trial court should be regarded as having erred in its main
decision, the fact that the trial court thereafter found such argument
unmeritorious or as inadequate to warrant modification or reversal of
the main decision, does not, of course, mean that the motion for
reconsideration should have been regarded, or was properly
regarded, as merely pro forma.
It is important to note that the above case law rests upon the principle that a
motion for reconsideration which fails to comply with the requirements of
Sections 1 (c) and 2 of Rule 37 of the Rules of Court, and is therefore pro
forma merely, has no other purpose than to gain time. It is intended to delay
or impede the progress of proceedings and the rule that such motion for
reconsideration does not stop the period of appeal from "slipping away"
reflects both poetic and substantial justice. In Estrada, et al. v. Sto. Domingo,
et al., 13 the Court underlined.
[T]he principle [previously] forged by this Court that a
motion for reconsideration which has no other purpose than
to gain time is pro forma and does not stop the period of
appeal from slipping away. It is in recognition of this
doctrine that we hold that where a motion for reconsideration
in an election case is taken advantage of for purposes of
delay to the prejudice of the adverse party orwhere such
motion forms part of a matrix delay, that motion does not
stop running of the five-day period for appeal. 14 (Emphasis
supplied)

Where the circumstances of a case do not show an intent on the part of the
movant merely to delay the proceedings, our Court has refused to
characterize the motion as simply pro forma. Thus, in the Guerra
Enterprises case, the Court took note of the fact that the motion for
reconsideration had been filed within barely twelve (12) days (the
reglementary period was then thirty [30] days) after receipt by the counsel for
the movant party, which fact negated the suggestion that the motion had
been used as "a mere delaying tactic." 15 Dacanay v. Alvendia, 16 on which
the Court of Appeals had relied, is not in fact in conflict with the cases we
have above referred to. InDacanay, the motion for reconsideration was in
effect a fourth motion for reconsideration: the "reasons and arguments" set
out in the motion for reconsideration had on three previous occasions been
presented to the trial court and each time considered and rejected by the trial
court. In Lonario v. De Guzman, 17 the motion for reconsideration which the
Court characterized as pro forma was in fact a second motion for
reconsideration based on grounds already existing at the time the first motion
for reconsideration was filed. Further, at the time of the filing of the second
motion, the period to appeal had already lapsed. This Court dismissed the
case for having been appealed beyond the reglementary period. In Samudio
v. Municipality of Gainza, Camarines Sur, 18 the Court had before it a "socalled motion for new trial based exactly on the very ground alleged in
[defendant's] first motion for reconsideration dated October 17, 1952" and
accordingly, held that the motion for new trial did not suspend the period for
perfecting an appeal "because it [was] mere repetition of the [first] motion for
reconsideration of October 17, 1952." 19 (Emphasis supplied)
We turn then to the application of the above standards to the motion for
reconsideration in the case at bar. The text of petitioners' motion for
reconsideration dated 7 November 1991 is quoted below:
(a) There [was] no sufficient evidence introduced to prove
the alleged fact that the down-payment for the property in
question came from Jose Sytangco. Private transactions are
presumed to be fair and regular (citations omitted). The
regularity of defendant Liamzon's transaction with the Prietos
for the sale of the property implies that the consideration
came from her and not from plaintiff. This presumption
cannot be rebutted by the bare testimony of abiased witness;
(b) The money used to pay for the property not belonging to
the plaintiff, there could never be a trust between him and
defendant Liamzon. Even then, plaintiff merely claimed that
what belong to him was only the down-payment, not the total

amount used to purchase the property, that the defendant

Liamzon was the one paying the installments can be
gleaned from the fact that while plaintiff allegedly authorized
defendant Liamzon to purchase the property sometime in
1968, it was only in 1981 that he came to know that the
property was titled in the name of defendant corporation.
Plaintiff's (Jose Reyes Sytangco) total lack of knowledge
about the transactions regarding the property for 13 long
years, meant that he had no contract with the Prietos, the
seller during this period. Assuming without admitting that the
down-payment belonged to plaintiff, he is only entitled to
reimbursement but not title to the property;
(c) Piercing the veil of corporate fiction applies only to cases
where the corporation was created for purposes of fraud,
usually in tax cases; fraud, however, being the exception
rather than the rule should be proven by convincing
evidences. That defendant Liamzon is a director of
defendant Corporation is not indicative of fraud. The money
used to buy the property being advances from defendant
corporation, there is nothing wrong to have said property be
titled in the name of the corporation to offset said advances;
(d) It may be mentioned that the ejectment counterpart of
this case had already been decided with finality in favor of
defendant corporation. 20
In paragraph (a) of their motion, petitioners claimed that the evidence
submitted was insufficient to show that the downpayment for the purchase of
the Espaa Street property had in fact come from private respondents'
predecessor-in-interest Jose Reyes Sytangco. In effect, petitioners here aver
that the presumption of regularity of private transactions carried out in the
ordinary course of business had not been overturned by the testimony of
Jose Reyes Sytangco himself. This reflected petitioners' appraisal of the trial
court's conclusion that Jose and Aurelia Reyes Sytangco had handed over to
Milagros Liamzon the amount of P41,000.00 to complete the downpayment
of the Reyes Sytangco spouses on the Espaa lot. The trial court had not
discussed the presumption of regularity of private transactions invoked by
petitioners.
In paragraph (b) of their motion, petitioners, building upon their paragraph
(a), argued that since the money used to pay the property did not belong to
the plaintiff, no constructive trust arose between Jose Reyes Sytangco and

Milagros Liamzon. Petitioners further argue that assuming that the money for
the downpayment had really come from the Reyes Sytangco spouses, the
rest of the payments on the Espaa property had been made by Milagros
Liamzon. Accordingly, they argue that the Reyes Sytangco spouses would be
entitled only to reimbursement of the downpayment and not to reconveyance
of the property itself. The trial court had not addressed this argument in its
decision; the trial judge had found Milagros Liamzon's testimony concerning
whose money had been used in the purchase of the lot as "filled with
contradictions" which seriously impaired her credibility. 21
The third argument of petitioners in their motion assailed the reliance of the
trial court upon the doctrine of piercing the corporate veil by asserting that
that doctrine was available only in cases where the corporation itselfhad
been created for purposes of fraud. Implicitly, petitioners argue that no
evidence had been submitted to show that Marikina Valley had been created
precisely "for purposes of fraud." The trial court had not touched on this
argument. In paragraph (d) of their motion, petitioners aver that the ejectment
suit instituted by them had been decided in their favor. The trial court's
decision had not mentioned such an ejectment suit.
We are, therefore, unable to characterize the motion for reconsideration filed
by petitioners as simply pro forma. That motion for reconsideration, it may be
noted, had been filed no more than ten (10) days after receipt of the trial
court's decision by petitioner Marikina Valley.
It is scarcely necessary to add that our conclusion that petitioners' motion
was not pro forma, should not be regarded as implying however indirectly
that that motion was meritorious.
We note finally that because the doctrine relating to pro forma motions for
reconsideration impacts upon the reality and substance of the statutory right
of appeal, that doctrine should be applied reasonably, rather than literally.
The right to appeal, where it exists, is an important and valuable right. Public
policy would be better served by according the appellate court an effective
opportunity to review the decision of the trial court on the merits, rather than
by aborting the right to appeal by a literal application of the procedural rule
relating to pro forma motions for reconsideration.
WHEREFORE, for all the foregoing, (a) the Orders of the trial court dated 27
November 1991, 12 December 1991 and 22 January 1992 and (b) the
Decision of the Court of Appeals dated 8 December 1992, are hereby
REVERSED and SET ASIDE. The case is REMANDED to the trial court

which is hereby DIRECTED to GIVE DUE COURSE to petitioners' notice of

appeal. No pronouncement as to costs.
SO ORDERED.

Republic
SUPREME
Manila
EN BANC

of

the

Philippines
COURT

November 8, 1942
G.R.
No.
48859
EMILIANO
J.
VALDEZ, petitioner,
vs.
FERNANDO JUGO, Judge of First Instance of Manila, ET
AL., respondents.
Felix
B.
Bautista
for
petitioner.
Gregorio Perfecto for respondent Central Luzon Milling Co.
P.J. Dayrit and Bengson and Magsanoc for other respondents.
No appearance for respondent judge.
MORAN, J.:
1. APPEAL AND ERROR; "PRO-FORMA" MOTION FOR NEW TRIAL IS
OFFENSIVE TO NEW RULES OF COURT AND DOES NOT INTERRUPT
PERIOD FOR APPEAL; NECESSITY OF SPECIFICALLY SETTING OUT
REASONS IN SUPPORT OF MOTION OF NEW TRIAL. Petitioner's
motion for new trial did not and could not interrupt the period for appeal, it
having failed to state in detail as required by the rules, the reasons in support
of the grounds alleged therein. Under Rule 37, section 2, third paragraph, it is
now required to "point out specifically the findings or conclusions of the
judgment which are not supported by the evidence or which are contrary to
law, making express reference to the testimonial or documentary evidence or
to the provisions of law alleged to be contrary to such findings or
conclusions." And when, as in the instant case, the motion fails to make the
specification thus required, it will be treated as a motion pro-formaintended
merely to delay the proceedings, and as such, it shall be stricken out as
offensive to the new rules.
2. ID.; ID.; ID.; DELIBERATE ATTEMPT TO DELAY PROCEEDINGS.
Petitioner's case justifies indeed the full rigor of the new rules, there being
circumstances showing a deliberate attempt on his part to delay the
proceedings for his own convenience. He filed his motion for new trial on
November 22, 1941, and set it for hearing almost one month thereafter, i. e.,

on December 20, 1941. The reason he gave in his oral argument to justify
such delayed hearing was that he wanted to have time to study the transcript
of the testimony of witnesses and find out reasons in support of the grounds
alleged in his motion. Unquestionably, therefore, he filed his motion without
knowing whether the grounds therefor were or were not good, and wanted to
delay the proceedings to gain time for study. Again, asked as to why, when
he was already in Manila and the Manila courts were already open, he failed
to inquire as to the result of his motion for new trial, he candidly answered
that he was not interested in speeding up the proceedings because he was
the defeated party. With such an attitude this Court cannot be moved to grant
an equitable relief.

filed their answer unequivocally adopting and incorporating the allegations of

Casolita in his answer to the complaint. They further asserted that they were
not squatters on the land as they occupied the same in open, public,
adverse and continuous possession for more than ten years invoking Article
1134 of the Civil Code in relation to the existing land reform code.
Thereafter, trial ensued. On August 5, 1993, the lower court[2] rendered a
decision[3] in favor of ATROP, INC., ordering the defendants to vacate the
premises, to remove the structures they built, and to pay compensation for
the use of the land, attorneys fees and costs. Atty. Aguilar received a copy
of the decision but failed to file a notice of appeal. On the other hand, Atty.
Gatpatan Jr. filed a notice of appeal on August 23, 1993.

THIRD DIVISION

In its omnibus motion to dismiss the appeal and for the issuance of a writ of
execution, dated September 29, 1993, ATROP INC., argued that as far as
petitioner Casolita was concerned, the decision had become final and
executory for his counsel, Atty. Aguilar, received a copy thereof without filing
a notice of appeal. As to the other petitioners, ATROP INC., observed that
while they timely filed the notice of appeal the notice was fatally defective for
they did not serve the same to the counsel of ATROP, INC. In its October 18,
1993 Order, the lower court[4] granted the omnibus motion to dismiss and
ordered the issuance of a writ of execution.[5]

[G.R. No. 115703. July 8, 1997]

EPIFANIO L. CASOLITA, SR., ARTHUR AQUINO, BENITO GATPATAN, JR.,

HENRY RELOSA, EDGAR LA TORRE, BERNARDO OCAG and CECILIA
VIERNES, petitioners, vs. THE COURT OF APPEALS, THE REGIONAL
TRIAL COURT OF MANILA, NATIONAL CAPITAL REGION, BRANCH 34,
Presided by Judge Romulo A. Lopez, and ATROP, INC., respondents.
RESOLUTION
FRANCISCO, J.:

On March 28, 1990, private respondent ATROP, INC., a domestic

corporation, filed a complaint against herein petitioners with the Regional
Trial Court of Manila, for recovery of possession of a parcel of land located at
#731 Magallanes cor. Victoria Street, Intramuros, Manila. ATROP, INC.
claimed ownership, in fee simple, of said parcel of land under TCT No. 68927
of the Registry of Deeds of Manila.[1] In answer thereto, petitioner Casolita
through his counsel, Atty. Jose L. Aguilar, alleged that he and his family had
been in continuous possession of the land since 1953, having been
designated as caretaker by the supposed real owners Ramon LeQuina and
Portia Pueo. The other petitioners, represented by Atty. Benito Gatpatan, Jr.

Atty. Alfredo C. Baylon, Jr. thereafter filed a notice of appearance as counsel

for all the defendants[6] and moved for reconsideration of the October 18,
1993 Order alleging that the dismissal of the notice of appeal and the
issuance of the writ of execution x x x is repugnant to the principle of due
process as it amounted to denial of justice, citing Alonzo vs. Villamor.[7] He
contended that petitioners Casolita, et. al., were not properly notified of the
August 5, 1993, decision since Atty. Aguilar had withdrawn as counsel due
to poor health; hence, the decision had not become final and executory. As
a last ditch effort, said counsel, for the first time, alleged that the issuance of
the writ of execution x x x would be violative of Article VII of the Urban
Development and Housing Act of 1992, particularly Section 28, paragraph 2
thereof, without, however, elaborating why. On November 10, 1993, the
lower court denied the motion for reconsideration and the motion to admit
appeal. Thus:

There are two Notices of Appeal submitted by two different lawyers without
particularizing which among the defendants they represent. The Notice

submitted by Atty. Gatpatan, Jr. was received on August 23, 1993 and
records show that Atty. Gatpatan, Jr. received the copy of the decision on
August 17, 1993, hence, well within the period of fifteen-day to interpose an
Appeal. Said lawyer represented at the trial the following defendants:
himself, Arthur Aquino, Carlito Santosm, Henry Relosa, Edgar La Torre,
Bernardo Ocag and Cecilia Viernes, leaving defendant Epifanio Casolita who
was represented by Atty. Aquilar. Another Notice of Appeal was filed by a
certain Atty. Alfredo C. Bayhon, Jr. [should be Baylon], who at the trial was
not a counsel of records for any defendant. Atty. Bayhon, Jr. formally
appeared only, per his appearance received by this Court on November 3,
1993, long after the lapse of fifteen-day period to Appeal, computed from the
time Atty. Aguilar received a copy of the decision on August 25, 1993. This
Court presupposes that Atty. Bayhyon, Jr. represents the defendant Casolita
only. The records, however, does not show that Atty. Aguilar ever withdrew
from the case, hence, the appearance of Atty. Bayhon, Jr. is improper and
cannot be recognized by this Court, there being no showing that Atty. Aguilar
withdrew from the case.

When the plaintiff [herein private respondent] submitted a Motion to Dismiss

Appeal and for Issuance of a Writ of Execution on the ground that the Notice
of Appeal is defective not having been served either on plaintiff or its counsel,
no opposition was filed. That was why the Court granted the motion and
issued the Writ prayed for.

The records show likewise, that Atty. Bayhon, Jr. submitted a Motion for
Reconsideration of the Order of this Court dismissing the Appeal of Atty.
Gatpatan, Jr., and granting execution. The motion for reconsideration
deserves scant consideration, because the lawyer who filed it has no
personality in the case. Moreover, the notice to the adverse counsel of the
Notice of Appeal is a mandatory requirement for perfecting an Appeal.

WHEREFORE, there being no merit to the motion, the same is hereby

denied, and this denial is final.

The Motion to Admit Appeal filed by Atty. Bayhon, Jr. is denied likewise.

SO ORDERED.[8] (Emphasis Added)

A notice to vacate the premises having been made, the petitioners through
Atty. Baylon filed before respondent Court of Appeals a petition via Rule 65 of
the Rules of Court and Section 9 of Batas Pambansa Blg. 129 seeking the
annulment of the October 18, 1993 and November 10, 1993 Orders of the
lower court.[9] On May 27, 1994, the Court of Appeals dismissed the petition.
Hence, this petition. The Court gave due course to this petition and required
the parties to submit their respective memoranda.

Petitioners contend that the Court of Appeals committed grave abuse of

discretion tantamount to lack of jurisdiction in denying their petition for
certiorari based on their failure to furnish private respondent with a copy of
the notice of appeal. Such omission, they insist, was a mere technicality
which should be cast aside to attain substantial justice. The contention lacks
merit.

Under the previous rule, an appeal may be taken by serving upon the
adverse party and filing with the trial court within thirty (30) days from notice
of order or judgment, a notice of appeal, an appeal bond, and a record on
appeal. This provision was amended by Batas Pambansa Blg. 129,
particularly Section 39 thereof, by deleting the need to file an appeal bond
and record on appeal, except in multiple appeals and in special proceedings,
and by fixing the period of appeal to fifteen (15) days. The entire original
record of the case instead is transmitted to the appellate court. Appeals from
final judgments or orders of the Regional Trial Court are now taken to public
respondent Court of Appeals by simply filing a notice of appeal.[10] The
simplification of the procedure for elevating to a higher court final judgments
or orders of the lower courts correspondingly underscored the importance of
the notice of appeal. The adverse party may only be apprised initially of the
pendency of an appeal by the notice of appeal. To deprive him of such
notice is tantamount to depriving him of his right to be informed that the
judgment in his favor is being challenged. This requirement should be
complied with so that he may be afforded the opportunity to register his
opposition to the notice of appeal if he so desires.[11] And service of the
notice of appeal upon him may not be dispensed with on the basis of the
appellants whims and caprices, as in this case. We quote with approval, in
this connection, respondent courts ruling, thus:

The judicial position on the requirement that a notice of appeal be served

upon the adverse party is articulated in the early case of Philippine
Resources Development Corp. vs. Narvasa, 4 SCRA 414 (1962), when the
Supreme Court stated:

Under Section 3, Rule 41, of the Rules of Court, an appeal may be taken by
serving upon the adverse party and filing with the trial court within 30 days
from notice of the judgment a notice of appeal, appeal bond, and a record on
appeal. This section clearly requires that not only shall the three documents
be filed with the court within the period of 30 days but that copies thereof
shall be served upon the adverse party. This requirement is made in order
that the adverse party may not only be notified of the intention of the
appellant to take the case to the appellate court, but also to afford him an
opportunity to register his opposition to any of them if he desires to do so.

As posited and as aptly argued in the private respondents brief, the

requirement is not a mere technicality but goes into procedural due process
which, in the absence of opposition from the petitioners (Annex A, Petition),
despite proper notice and opportunity to do so (Annexes 2 and 3
Comment), cannot be countenanced as basis for alleged grave abuse of
discretion. Moreover, the motion to reconsider the order of dismissal was
filed by counsel not of record, no proper substitution having been made.[12]
(Emphasis supplied)

Petitioners additionally aver that respondent court also abused its discretion
amounting to lack of jurisdiction when it held that Atty. Baylon had no
personality in this case despite his formal appearance as counsel for
petitioner Casolita. We hold, however, that respondent court neither
committed an error nor abused its discretion in upholding the lower courts
denial of Casolitas motion for reconsideration, motion to admit appeal and
notice of appeal on the ground that Atty. Baylon was not Casolitas counsel of
record. The records show that Atty. Aguilar was petitioner Casolitas counsel
of record. Even Atty. Gatpatan Jr. impliedly recognized his separate
representation when he adopted the allegations in the answer filed for said
petitioner by Atty. Aguilar. That Atty. Aguilar was the counsel of petitioner
Casolita was noted by the lower court in its Order of November 10, 1993.
This was buttressed by the fact that Casolita was furnished a copy of the
decision through said counsel of record. The failure of Atty. Aguilar to file a
notice of appeal binds Casolita which failure the latter can not now disown on

the basis of his bare allegation and self-serving pronouncement that the
former was ill. A client is bound by his counsels mistakes and negligence.
[13] And neither may Atty. Baylons unsupported claim that petitioner Casolita
was in Cavite at the time the decision of the lower court can be given
credence. Indeed, the unrebutted observation of private respondent cast
serious doubt over Atty. Baylons unsubstantiated claims. Thus:

It is noteworthy that the Motion for Reconsideration, (wherein this alleged

withdrawal of Aguilar, etc., are raised for the first time by Baylon) is not
verified (under oath) by either Casolita or Aguilar.

More, it is difficult to conceive that Casolita, did not learn of the adverse
judgment, when copy thereof was received by Gatpatan. Gatpatan has been
collaborating with Aguilar, in the instant case, and is a personal friend of
Casolita. In fact, Gatpatan is a neighbor of Casolita. In fact, Gatpatan,
Aguilar, and Casolita had been acting in unison, all throughout the lengthy
trial of the instant case.

How can Casolita claim that he was unaware of the adverse decision, until
October 23, 1993 (when Gatpatan received [the] same, as early as August
19, 1993?) [14]

It is a settled rule that a lawyer may not simply withdraw his appearance in a
case without a formal petition filed in the case. Substitution of counsel must
be made in accordance with Rule 138 of the Rules of Court, to wit:

Sec. 26. Change of Attorneys. - An attorney may retire at any time from any
action or special proceeding, by the written consent of his client filed in court.
He may also retire at any time from an action or special proceeding, without
the consent of the client, should the court, on notice to the client and
attorney, and on hearing, determine that he ought to be allowed to retire. In
case of substitution, the name of the attorney newly employed shall be
entered on the docket of the court in place of the former one, and written
notice of the change shall be given to the adverse party. x x x .

There having no proper substitution of counsel, Atty. Baylon, as correctly

noted by the lower court, has no personality in the case.

SECOND DIVISION
G.R. No. 83720 October 4, 1991

Procedural rules, we reiterate, are tools designed to facilitate the

adjudication of cases. While the Court, in some instances, allows a
relaxation in the application of the rules, this, we stress, was never intended
to forge a bastion for erring litigants to violate the rules with impunity. The
liberality in the interpretation and application of the rules applies only in
proper cases and under justifiable causes and circumstances. While it is true
that litigation is not a game of technicalities, it is equally true that every case
must be prosecuted in accordance with the prescribed procedure to insure
an orderly and speedy administration of justice. The instant case is no
exception to this rule.[15]

As regards petitioners residual contention that the decision of the lower court
and the notice to vacate contravened the provisions of Republic Act No.
7279, otherwise known as the Urban Development and Housing Act of 1992,
which petitioners addressed for the first time in their memorandum, the same
does not deserve serious consideration. It is a rule that issues not properly
brought and ventilated below may not be raised for the first time on appeal,
[16] save in exceptional circumstances none of which, however, obtain in this
case.

WHEREFORE, the instant petition is hereby DENIED.

FELICITAS
ENRIQUEZ, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPS. REYNALDO SANTOS
and NATIVIDAD SANTOS, respondents.
Santiago, Sipin, Santiago & Associates for petitioner.
Bernardo, Damasen & Associates Law Office for private respondents.

PADILLA, J.:p
This is a special civil action of certiorari filed under Rule 65 of the Rules of
Court, wherein petitioner assails the decision * of respondent Court of
Appeals, dated 27 August 1987, rendered in CA-G.R. CV No. 05806, which
set aside the decision of the Regional Trial Court of Caloocan City, Branch
126, dated 26 November 1984 rendered in Civil Case No. C-10837, entitled
"Felicitas Enriquez vs. Sps. Reynaldo Santos and Natividad Santos, et al.".
The said decision of the trial court ordered herein private respondents to sell
to petitioner the ninety (90) square meters of land occupied by the latter's
house at 106 Laon Laan St., Caloocan City, at the price of P100.00 per
square meter, and to pay damages and attorney's fees.
The facts of this case are as follows:
1.
Petitioner
and
private
respondent-spouses
were
long-time
occupants/tenants of neighboring lots, where their respective houses which
they owned were built, located at Laon Laan St., Caloocan City, the lots
being parts of a large tract of land owned by spouses Atty. Justo de Dios and
Basilia Manotoc.

Republic
SUPREME
Manila

of

the

Philippines
COURT

2. On 23 November 1976, private respondents purchased from the said land

owners a two hundred (200) square meters portion of the tract of land
mentioned. Consequently, Transfer Certificate of Title No. C-2892 was issued
in favor of private respondents over said acquired portion.

3. In 1978, it was discovered that petitioner's house was located within the
200-square meter lot sold to private respondents. Consequently, petitioner
was informed that her monthly rental should be paid to private respondents.
Thus she started paying her monthly rental to private respondents. On 11
February 1981, petitioner filed a case for consignation with the city court of
Caloocan City, after private respondents allegedly refused to accept her
rental payments beginning November 1980; but the case was later dismissed
when respondent Reynaldo Santos manifested to the court that he was
willing to receive the rental payments of petitioner.
4. On 9 September 1982, private respondents filed an ejectment suit against
petitioner, with the Metropolitan Trial Court of Caloocan City, Branch 52,
docketed as Civil Case No. 15302, on the grounds of non-payment of lease
rentals from October 1981 and the need of respondent-owners of the subject
premises. On 1 July 1983, the Caloocan City Court rendered judgment in
Civil Case No. 15302 ordering the petitioner-defendant to vacate and remove
the house from the lot at Laon Laan St., Caloocan City covered by TCT No.
C-2892 of the private respondents. The decision in Civil Case No. 15302 was
appealed by petitioner to the Regional Trial Court of Caloocan City, Branch
CLIII (153), the appeal being docketed as Civil Case No. C-10963. In due
course, the latter court affirmed the appealed city court decision.
5. In January 1983, petitioner filed against private respondents a complaint
(for: annulment of deed of sale, and damages), with the Regional Trial Court
of Caloocan, Branch CXXVIII (128), the case being docketed as Civil Case
No. 10583. However, in March 1983, the trial court dismissed Civil Case No.
10583 without prejudice to the filing of an action purely for damages. In June
1983, petitioner filed another action, this time for damages, against the same
private respondents, which case was assigned to Regional Trial Court of
Caloocan, Branch CXXVI (126), and docketed as Civil Case No. C-10837.
6. On 26 November 1984, the Regional Trial Court of Caloocan, Branch 126,
rendered a decision in Civil Case No. C-10837 in favor of petitioner-plaintiff,
the dispositive portion of which reads:
WHEREFORE, the Court renders judgment ordering
defendants Reynaldo Santos and Natividad Santos to sell to
plaintiff Felicitas Enriquez that 90-square meter, more or
less, of land occupied by the latter's house at 106 Laon Laan
St., Caloocan City and part of that parcel of land registered
in their names under Transfer Certificate of Title No. C-2892
of the Office of the Register of Deeds for District III of Metro
Manila at the price of P100 per square meter, the costs of

segregating said portion from the title of the defendants

Santoses, as well as the transfer costs, to be paid by
plaintiff.
Defendant Reynaldo Santos is likewise ordered to pay
plaintiff Felicitas Enriquez moral damages in the amount of
P10,000, exemplary damages in the amount of P5,000, and
attorney's fees in the amount of P3,000.
Costs against defendants Reynaldo Santos and Natividad
Santos. 1
7. Respondent-spouses Santos filed a petition for certiorari under Rule 65 of
the Rules of Court before the Intermediate Court of Appeals (IAC), docketed
as IAC G.R. SP No. 05318 assailing the decision in Civil Case No. C-10837.
Acting on the said petition, the appellate court issued its resolution dated 28
February 1985, referring the case to the raffle division for raffling to the civil
cases division of the court, for the reason that the petition was properly an
appeal. The petition, treated as an appeal, was re-docketed as AC-G.R. CV
No. 05806. However, in the resolution dated 13 November 1985, the
appellate court dismissed private respondents' appeal on the ground that
their motion for reconsideration and notice of appeal filed before the Regional
Trial Court of Caloocan City, Branch 126, were filed out of time.
8. Acting on private respondents' motion for reconsideration of the resolution
dated 13 November 1985 (dismissing the appeal), the appellate court, in its
resolution dated 15 April 1986 (in AC-G.R. CV No. 05806), set aside the
earlier resolution, and reinstated the appeal, after finding that the late filing of
the notice of appeal was due to accident and/or excusable negligence.
9. On 27 August 1987, the Court of Appeals, finding merit in the private
respondents' appeal, rendered the (now assailed) decision in AC-G.R. CV
No. 05806, setting aside the appealed decision of the Regional Trial Court,
Caloocan City, Branch 126 (in Civil Case No. C-10837). On 30 September
1987, petitioner Enriquez filed her motion for reconsideration of the decision.
The Court of Appeals denied petitioner's motion, in a resolution dated 26
January 1988. On 3 February 1988, the assailed decision was entered as
final and executory per entry of judgment in AC-G.R. CV No. 05806, dated 15
April 1988 in the records of the appellate court.
10. On 22 June 1988, the present special civil action was filed under Rule 65
of the Rules of Court.

Private respondents principally contend that the questioned decision having

become final and executory, as shown by the Entry of Judgment of the Court
of Appeals, dated 15 April 1988, the petition at bar is without merit and that to
disturb the finality of decisions (like the one at bar) would open the gates to
endless litigations.

Petitioner, on the other hand, contends that she has filed the present case
under Rule 65 of the Rules of Court, instead of an appeal by certiorari under
Rule 45 of the Rules of Court, on the ground that certiorari is proper, if the
remedy of appeal is lost or has become impossible.

We find no merit in the petition.

We find petitioner's contention devoid of merit. Once a decision attains

finality, it becomes the law of the case whether or not said decision is
erroneous. 4 Moreover, as ruled in San Juan vs. Cuento, 5 a judgment which
has become final and executory, absent an appeal therefrom, is the law of
the case and any error in the judgment can no longer be annulled by a
special civil action of certiorari. Besides, certiorari can not take the place of a
lost appeal, 6 except in certain cases where the appeal would be inadequate,
slow, insufficient, and will not promptly relieve a party from the injurious
effects of the judgment complained of, to avoid future litigations. 7 However,
the records before us do not show that petitioner's case falls within any of the
above-mentioned exceptional instances.

The assailed decision of the respondent appellate court having become final
and executory and entry thereof having been made, this Court will not disturb
the same.
WHEREFORE, the petition is DISMISSED. Costs against petitioner.
SO ORDERED.

The records of this case show that the entry of judgment dated 15 April 1988,
issued by the Court of Appeals states that the questioned decision dated 27
August 1987, rendered in CA-G.R. CV No. 05806 became final and
executory on 3 February 1988.
SECOND DIVISION
Indeed, the assailed decision became final on 3 February 1988 as indicated
in the said entry. 2 As a settled rule, once a judgment has become final, the
issues therein should be laid to rest. 3

Petitioner contends that she has filed the present case in accordance with
Rule 65 of the Rules of Court as there is no appeal or any speedy and
adequate remedy in the ordinary course of law except the present petition;
and that respondent appellate court committed reversible error in rendering
its presently assailed decision setting aside the decision of the trial court.

[G.R. No. 137391. December 14, 2001]

JUAN ENRIQUEZ, RENATO V. HERNANDEZ, RAUL DOMO, GREGORIO
MANGILA, AURORA BRUSOLA, CELIA C. CAYLAO, CARDO L.
TANADA, JOSE ANCAJAS, JR., EUFEMIA NAVARRA, ALFONSO
D. NADUNZA, CORAZON D. DAVID, PAQUITO P. PALADIN,
IRASMO P. TABALANZA, ALEJANDRO P. PARTOSA, CARLINA
MALLILLIN, ESTIPANIA F. ANDRES, ELPIDIO N. BURLAOS,
REDENTOR T. TEPECO, LORENZA S. JESALVA, PILAR CRUZ
ABAYA, LOURDES N. PANES, LORETO PALADIN, VIRGINIA R.
BALRAZAR, FLORENCIA R. OCOP, ANGEL BONGAYAN, NATY
CORAZON EMA, RESTITUTA C. TOCA, VIRGILIO ALINTEJO,
YOLANDA SEBASTIAN, ELISEO CAGUNGON, LOPE GELLANA,
LORETA DOMIQUIL, VIRGINIA SANCHEZ, JOSE AFABLE,

SERAFIN BERMUDO, ONOFRE SANTOS, NORA SABAYLE,

LYDIA VALDEZ, LAURA TENEFERE, MA. ERLINDA DE CHAVEZ,
FRANCISCO HILARIO, RODRIGO MINION, TERESITA PANA,
EVELYN OREBIADA, GLORIA SANTOS, JUAN MIRASOL,
SALOME
MAGALLANES,
GERMINIO
CALNEA,
EMILIO
SANTILICES, PABLO GALAYAN, RAMON LOZADA, CALIXTA
CAYLAO and MANUEL MADRILEJO, petitioners, vs. HON.
COURT OF APPEALS, PABLO ESPORLAS, SALUD ESPORLAS,
ADRIANO ESPORLAS, TOMASA ISLA, SEBASTIAN ISLA,
CIRILO ESPORLAS, CONSOLACION ESPORLAS, and The HON.
PRESIDING JUDGE of BRANCH 256 of the REGIONAL TRIAL
COURT of MUNTINLUPA CITY, respondents.
DECISION
QUISUMBING, J.:
This petition seeks to annul and set aside the Court of Appeals decision
dated December 21, 1998 in CA-G.R. No. 48743, dismissing petitioners
petition for review, and resolution dated February 8, 1999 denying the motion
for reconsideration.[1]
On January 5, 1987, the Metropolitan Trial Court of Muntinlupa City
rendered a decision in an unlawful detainer case, docketed as Civil Case No.
1355, favoring private respondents and ordering petitioners to vacate, restore
the premises to private respondents, and pay the accrued rentals, P5,000
attorneys fees and cost of suit. The decision likewise dismissed petitioners
counterclaim.[2]
Respondents failed to enforce the judgment by motion within the fiveyear period from its entry. They then filed an action to revive the judgment
pursuant to Section 6, Rule 39 of the then Rules of Court. [3]
Petitioners answered that respondents were not the owners of the land
subject of the unlawful detainer case and that the supervening death of some
of the parties brought changes in their relationship that would
render enforcement of the judgment unjust and inequitable.
After respondents presented evidence, petitioners filed a motion to
dismiss in a demurrer to evidence which was denied. Likewise, the motion
for reconsideration was also denied. Petitioners elevated the case to the
Regional Trial Court by way of a special civil action for certiorari. Meanwhile,

the Metropolitan Trial Court set the main case for presentation of
evidence. Petitioners moved for abeyance pending resolution of their
petition. The Metropolitan Trial Court denied the motion and considered the
case submitted for decision. The RTC eventually dismissed the action
for certiorari.
On August 1, 1997, the Metropolitan Trial Court rendered its decision
directing the enforcement of the judgement in Civil Case No. 1355. It
declared that the issue of ownership is immaterial in an ejectment suit; that
Civil Case No. 2957 was not an ejectment case but an action to enforce the
final and executory judgment in the previous ejectment case; and that an
ejectment case survives the death of the party. The judgment therein can be
enforced not only against members of the defendants family but also against
relatives or privies who derive their possession from the defendant. [4]
Petitioners appealed to the RTC of Muntinlupa City which affirmed the
MTC. Thereafter, petitioners elevated the case to the Court of Appeals where
they reiterated their arguments in the lower courts.
The Court of Appeals denied the petition.
Hence this petition for review where petitioners averred that the Court of
Appeals:
I
...HAS DECIDED A QUESTION OF SUBSTANCE
DETERMINED BY THE SUPREME COURT.

NOT

YET

II
...GRAVELY ERRED WHEN IT SANCTIONED THE GRAVE ERROR
COMMITTED BY THE REGIONAL TRIAL COURT WHEN IT IGNORED
COMPLETELY THE FOLLOWING VITAL ISSUES ASSIGNED AS
GRAVE ERRORS COMMITTED BY THE METROPOLITAN TRIAL
COURT:
(A) WHETHER OR NOT THE METC WAS JUSTIFIED IN
DENYING DEFENDANTS MOTION TO HOLD IN ABEYANCE THE
PRESENTATION OF DEFENDANTS EVIDENCE FOR CERTIORARI
FILED BEFORE THE RTC QUESTIONING THE ORDER OF THE

COURT DENYING THE MOTION TO DISMISS IN DEMURRER TO

EVIDENCE;
(B) WHETHER OR NOT THE METC WAS JUSTIFIED WHEN IT
ORDERED THAT DEFENDANTS (HEREIN PETITIONERS) ARE
DEEMED TO HAVE WAIVED THEIR RIGHT TO PRESENT THEIR
EVIDENCE AND THE CASE SUBMITTED FOR DECISION INSPITE
OF THE PENDENCY OF THE PETITION FOR CERTIORARI WHICH
WAS DULY APPEALED;
(C) WHETHER OR NOT THE METC WAS JUSTIFIED WHEN IT
REGARDED THE REGULAR ACTION FOR ENFORCEMENT OF
JUDGMENT AS IF IT WERE AN EJECTMENT CASE; AND

Petitioners further alleged that respondents are not the owners of the
subject premises, hence the action must fail. An action to revive judgment is
not meant to retry the case all over again. [8] Its cause of action is the
judgment itself and not the merits of the original action. [9] The non-ownership
by private respondents refer to the merits of the first civil case which has long
been decided with finality and thus become conclusive between the parties.
WHEREFORE, the petition is DENIED. The decision and resolution of
the Court of Appeals are AFFIRMED.
Costs against petitioners.
SO ORDERED.

(D) WHETHER OR NOT THE METC WAS JUSTIFIED IN

FAILING TO CONSIDER THAT THE PLAINTIFFS (HEREIN PRIVATE
RESPONDENTS) MUST PROVE THAT THE SUBJECT DECISION IS
STILL ENFORCEABLE AFTER THE LAPSE OF FIVE (5) YEARS.[5]
SECOND DIVISION
Petitioners contend that they were denied the opportunity to
present evidence when the Metropolitan Trial Court of Muntinlupa City
decided Civil Case No. 2957 without hearing them. They aver that the proper
time to present evidence is after the private respondents have proven that
the plaintiffs in the ejectment case can still enforce the decision against the
defendants. Proof of mere existence of the decision is not enough after the
lapse of the 5-year period from the judgments finality.
The core issue is on the requisites for an action to revive judgment. Did
private respondents have to prove the enforceability of the judgment?
Sec. 6 Rule 39 of the Rules of Court states that an action to revive
judgment only requires proof of a final judgment which has not prescribed
and has remained unexecuted after the lapse of five (5) years but not more
than ten (10) years from its finality.[6] Nowhere does the rule require proof that
the judgment is still enforceable by and against the original parties who have
died. While the action is still subject to defenses and counterclaims which
arose after the judgment became effective, proof of the death of some of the
parties is not required because the judgment can still be enforced by the
executor, administrator or successor-in-interest of the judgement creditor
against the judgment debtor.[7]

[G.R. No. 140473. January 28, 2003]

MELBA MONCAL ENRIQUEZ, petitioner, vs. HON. COURT OF APPEALS
and VICTORINA TIGLE, respondents.
RESOLUTION
QUISUMBING, J.:
This is a petition to review the decision [1] of the Court of Appeals dated
July 20, 1999, in CA-G.R. SP No. 50360, affirming the orders of the Regional
Trial Court of Dumaguete City, Branch 31, in Civil Case No. 12044. In its
order[2] dated October 6, 1998, the RTC dismissed herein petitioners appeal
from the decision of the Municipal Circuit Trial Court (MCTC) of BayawanBasay, Negros Oriental in Civil Case No. 1062 for ejectment, and denied
petitioners motion for reconsideration in its order [3] dated October 30, 1998.
Petitioner also assails the resolution[4] of the appellate court dated September
24, 1999, denying her motion for reconsideration.
The factual antecedents of this petition are as follows:

On February 29, 1996, herein respondent Victorina Tigle filed an action

for unlawful detainer against herein petitioner Melba Moncal Enriquez before
the MCTC of Bayawan-Basay, Negros Oriental. Tigles complaint, which was
docketed as Civil Case No. 1062, alleged inter alia, that on December 14,
1994, she bought a parcel of land known as Lot No. 377, located at Tinego,
Bayawan, Negros Oriental from Engracia Macaraya. Prior to the sale,
Enriquez was staying at said lot by mere tolerance of Macaraya. Enriquez
was given an option to buy said lot but she refused to exercise it. After the
sale, Tigle then made demands on Enriquez to vacate the property, but
Enriquez adamantly refused.

4. Ordering defendant MELBA MONCAL ENRIQUEZ to pay to plaintiff the

sum of P3,000.00 by way of litigation expenses;

In her Answer with Counterclaim filed before the MCTC, Enriquez

averred that the subject property is owned in common by the heirs of Felix
Moncal and any sale by Macaraya (one of the heirs of Felix Moncal) could
only refer to Macarayas undivided 1/7 share of the lot. Since said 1/7 share
of Macaraya is still unidentified, the same cannot be a subject of ejectment
pursuant to Article 434[5] of the Civil Code.

7. On the other hand, moral and exemplary damages are not allowed in
ejectment cases;

In its decision dated June 2, 1997, the MCTC of Bayawan-Basay,

decreed:
ACCORDINGLY, in the light of the foregoing considerations, this Court
hereby renders judgment in favor of the plaintiff to be in physical, actual, and
prior possession of the parcel of land described in Paragraph 3 of the
Complaint unlawfully occupied by defendant MELBA MONCAL ENRIQUEZ,
and plaintiff is entitled to the reliefs prayed for in the Complaint as follows:
1. Declaring plaintiff VICTORINA TIGLE to be in actual, physical and prior
possession of the premises of the parcel of land mentioned in Paragraph 3 of
the Complaint consisting of ONE HUNDRED SEVENTY NINE (179) square
meters, more or less, or SUB-LOT NO. 2-A, of LOT NO. 2, mentioned in Par.
5, Page 2 of EXH. B;
2. Ordering defendant MELBA MONCAL ENRIQUEZ, her agents,
representatives, and all other persons acting in her behalf to immediately
vacate the premises of the parcel of land mentioned in Par. 5, Page 2, EXH.
B, otherwise known as SUB-LOT NO. 2-A of LOT NO. 2;
3. To remove and/or demolish all workings, constructions and improvements
illegally built and/or constructed in the parcel of land mentioned in Par. 5,
Page 2, of EXH. B, otherwise known as SUB-LOT NO. 2-A of LOT NO.2;

5. Ordering the defendant MELBA MONCAL ENRIQUEZ to pay to plaintiff the

sum of P10,000.00 by way of attorneys fees;
6. However, for failure to allege and pray for reasonable compensation and
fair rental value for the use and occupation of the premises of the parcel of
land mentioned in land mentioned in Par. 5, Page 2, of EXH. B, known as
SUB-LOT NO. 2-A of LOT NO.2, the same is deemed waived;

8. Any allegations by way of Counterclaim are dismissed for lack of sufficient

basis.
SO ORDERED.[6]
Enriquez seasonably appealed to the RTC of Dumaguete City. In its
order of February 16, 1998, the RTC directed respective counsel for the
parties to submit within fifteen (15) days from receipt of this order their
respective memoranda and/or briefs.[7] The RTC stated that upon expiration
of the period to submit memoranda, it shall decide the case on the basis of
the entire record of the proceedings in the court of origin and/or such brief(s)
as may have been filed.[8]
The counsel for Enriquez failed to comply with the order to submit a
memorandum. On October 6, 1998, the RTC issued the following order:
For failure of defendant-appellant to file and submit a memorandum within
the reglementary period as required by Rule 40, Section 7 (b), [9] her appeal is
dismissed.
Upon finality of this order, the Clerk of Court is hereby directed to remand the
records of this case to the lower court for execution of judgment.
SO ORDERED.[10]
Enriquez then moved for reconsideration, manifesting that she was
adopting her position paper in the MCTC as her memorandum.

On October 30, 1998, the RTC denied Enriquezs motion on the ground
that the records does (sic) not show of such manifestation. [11]

PETITIONER THE MONETARY COUNTERCLAIMS INTERPOSED IN THE

ANSWER WITH COUNTERCLAIM (ANNEXES D TO D-7)?[15]

Enriquez then elevated the matter to the Court of Appeals, which

docketed her petition as CA-G.R. SP No. 50360. The appellate court found
the primary issue to be procedural in character, namely: the correctness of
the order of the RTC dismissing herein petitioners appeal for failure to file
her memorandum on appeal.

Stated simply, the sole issue for our resolution is: Did the Court of
Appeals commit a reversible error in sustaining the order of the RTC which
dismissed petitioners appeal for failure to file memorandum on appeal?

On July 20, 1999, the appellate court decided CA-G.R. SP No. 50360 as
follows:
WHEREFORE, premises considered, the instant petition is hereby
DISMISSED for lack of merit.
SO ORDERED.

[12]

The appellate court held that under Section 7, Rule 40 of the 1997
Rules of Civil Procedure (the filing of a memorandum) is a mandatory
obligation on the part of the appellant, such that, the failure to do so warrants
a concomitant dismissal of the appeal.[13]
Enriquez moved for reconsideration of the appellate courts decision, but
this was denied by the Court of Appeals in its order of September 24, 1999. [14]
Hence, the instant petition before us. Petitioner raises the following
issues:
1. HAS THE HONORABLE COURT OF APPELAS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION OR
ARE ITS DECISION (ANNEX N) AND RESOLUTION (ANNEX P)
APPEALED FROM NOT IN ACCORD WITH THE RULES AND APPLICABLE
DECISIONS OF THIS HONORABLE SUPREME COURT?
2. AND, THAT IN ORDER TO SERVE THE ENDS OF JUSTICE AND
PREVENT MISCARRIAGE OF JUSTICE, SHOULD THE ORDER DATED
OCTOBER 6, 1998 (ANNEX I); ORDER DATED OCTOBER 30, 1998
(ANNEX K); THE DECISION (ANNEX N) AND RESOLUTION (ANNEX
P), BE ALL PLEASE SET ASIDE AND THE COMPLAINT FILED IN THE
MCTC OF BAYAWAN-BASAY (ANNEXES C TO C-3) BE PLEASE
ORDERED TERSELY DISMISSED WITH COSTS AGAINST THE
RESPONDENT AND THE RESPONDENT BE ORDERED TO PAY TO THE

Petitioner faults the appellate court with grave error of law when it failed
to rule that the RTC should have decided her appeal before it in accordance
with Rule 40, Section 7 (c) [16] of the 1997 Rules of Civil Procedure. She avers
that the appellate court erred when it did not rule that the RTC should have
decided the case, based on the record of the MCTC proceedings, instead of
sustaining the order to dismiss for failure to file memorandum.
Private respondent counters that an appellants failure to file the
memorandum required under Rule 40, Section 7, compelled the RTC to
dismiss the case. She points out that an appealed case cannot be decided
on the merits without an appellants memorandum, as the assignment of
errors by the appellant is vital to the decision of the case. This is different
from the situation where it is the appellee who fails to file his memorandum,
as in this instance, the RTC may decide the case based on the records of the
proceedings in the court of origin and the appellants memorandum.
Moreover, the failure to file a memorandum by the appellant manifests lack of
interest to pursue her appeal.
Rule 40, Section 7 of the 1997 Rules of Civil Procedure is a new
provision. Said section is based on Section 21 (c) and (d) [17] of the Interim
Rules Relative to the Implementation of the Judiciary Reorganization Act of
1980 (B.P. Blg. 129) with modifications. These include the following changes:
(a) the appellant is required to submit a memorandum discussing the errors
imputed to the lower court within fifteen (15) days from notice, and the
appellee is given the same period counted from receipt of the appellants
memorandum to file his memorandum; (b) the failure of the appellant to file a
memorandum is a ground for the dismissal of the appeal. [18]
Rule 40, Section 7 (b) provides that, it shall be the duty of the appellant
to submit a memorandum and failure to do so shall be a ground for
dismissal of the appeal. The use of the word shall in a statute or rule
expresses what is mandatory and compulsory.[19] Further, the Rule imposes
upon an appellant the duty to submit his memorandum. A duty is a legal or
moral obligation, mandatory act, responsibility, charge, requirement, trust,
chore, function, commission, debt, liability, assignment, role, pledge, dictate,

office, (and) engagement.[20] Thus, under the express mandate of said Rule,
the appellant is duty-bound to submit his memorandum on appeal. Such
submission is not a matter of discretion on his part. His failure to comply with
this mandate or to perform said duty will compel the RTC to dismiss his
appeal.
In rules of procedure, an act which is jurisdictional, or of the essence of
the proceedings, or is prescribed for the protection or benefit of the party
affected is mandatory.[21] As private respondent points out, in appeals from
inferior courts to the RTC, the appellants brief is mandatory for the
assignment of errors is vital to the decision of the appeal on the merits. This
is because on appeal only errors specifically assigned and properly argued in
the brief or memorandum will be considered, except those affecting
jurisdiction over the subject matter as well as plain and clerical errors.
[22]
Otherwise stated, an appellate court has no power to resolve an
unassigned error, which does not affect the courts jurisdiction over the
subject matter, save for a plain or clerical error.[23]
It is true that the Rules should be interpreted so as to give litigants
ample opportunity to prove their respective claims and that a possible denial
of substantial justice due to legal technicalities should be avoided. [24] But it is
equally true that an appeal being a purely statutory right, an appealing party
must strictly comply with the requisites laid down in the Rules of Court. [25] In
other words, he who seeks to avail of the right to appeal must play by the
rules.[26] This the petitioner failed to do when she did not submit her
memorandum of appeal in Civil Case No. 12044 as required by Rule 40,
Section 7 of the 1997 Rules of Civil Procedure. That she lost her case is not
the trial courts fault but her own.
In sum, we find that the Court of Appeals committed no reversible error
of law when it upheld (a) the order of the RTC dismissing herein petitioners
appeal in Civil Case No. 12044, and (b) its order denying reconsideration.
WHEREFORE, the instant petition is DENIED, and the assailed decision
and resolution of the Court of Appeals in CA-G.R. SP No. 50360
are AFFIRMED.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION

G.R. No. 97535 August 4, 1995

MANILA
ELECTRIC
COMPANY, petitioner,
vs.
LA CAMPANA FOOD PRODUCTS, INC., Judge BENIGNO T. DAYAW,
Presiding Judge, RTC, Branch 80, Quezon City, and Deputy Sheriff
JOSE MARTINEZ, RTC, Branch 96, Quezon City, respondents.

ROMERO, J.:
A complaint was filed on August 21, 1990, by private respondent La
Campana Food Products, Inc. (hereinafter La Campana) against petitioner
Manila Electric Company (hereinafter Meralco) for recovery of a sum of
money with preliminary injunction after it was served a notice of
disconnection by the latter for alleged non-payment of the following billings:
(a) the differential billing in the sum of P65,619.26, representing the value of
electric energy used but not registered in the meter due to alleged tampering
of the metering installation discovered on September 22, 1986; and (b) the
underbilling in the sum of P169,941.29 (with a balance of P28,323.55)
rendered from January 16, 1987, to December 16, 1987, due to meter
multiplier failure.
Summons and a copy of the complaint were duly served upon Meralco on
August 23, 1990.
The case, docketed as Civil Case No. Q-90-6480, was initially assigned on
August 21, 1990 to Branch 78 of the Regional Trial Court of Quezon City
presided over by Judge Percival M. Lopez, but was re-raffled on September
25, 1990 to Branch 80, presided over by public respondent Judge Benigno T.
Dayaw, after Judge Lopez inhibited himself from hearing the case upon
Meralco's oral motion.

On September 7, 1990, Meralco filed a motion for extension of time of fifteen

days from said date within which to file an answer to the complaint at the
Office of the Clerk of Court after the clerk of Branch 78 allegedly refused to
receive the same because the case had already been re-raffled. The motion
however, was not acted upon because it did not contain a notice of hearing
as required by Sections 4 and 5, Rule 15 of the Rules of Court.
Meralco's "Answer With Counterclaim" was actually received at Branch 78
only on September 21, 1990 which is beyond the period to answer but within
the requested extension.
On account of Meralco's failure to file an answer to the complaint within the
reglementary period which expired on September 7, 1990, La Campana filed
on September 28, 1990 an "Ex-Parte Motion, to Declare Defendant in
Default," which Judge Dayaw granted in an order of default dated October 8,
1990.
After hearing and receiving La Campana's evidence ex parte, the court a
quo rendered a decision dated November 20, 1990, the decretal portion of
which reads thus:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
as against the defendant, ordering:
1) Defendant to reconnect within twenty-four (24) hours from receipt
of a copy of this decision the disconnected electric service in
plaintiff's building situated at No. 13 Serrano Laktaw St., Quezon City
under Account No. 05373-0470-17 and/or plaintiff is hereby
authorized to engage the services of a duly licensed electrician to
reconnect the said electric service at the expense of the defendant;
2) Defendant to return the amount of P141,617.74 with 12%
interest per annum from the time that the same was paid by plaintiff
to defendant, until the same is fully reimbursed; [and]
3) [Defendant] To pay attorney's fees in the amount of P50,000.00
plus costs of suit.
SO ORDERED.
Instead of appealing the said decision to the Court of Appeals under Section
2, Rule 41 of the Rules of Court, Meralco filed on December 3, 1990, a

"Motion to Set Aside Judgment by Default and/or for New Trial" on the
ground that it filed an answer to the complaint and that the judgment by
default was obtained by fraud.
In an order dated January 10, 1991, Judge Dayaw denied the said motion
and opined that Meralco cannot presume that its motion for extension will be
granted by the court, especially in this case where its motion for extension
was defective in that it did not contain any notice of date and place of
hearing. He also stated that the motion to set aside judgment by default
and/or for new trial was a pro forma motion because it did not set forth the
facts and circumstances which allegedly constituted the fraud upon which the
motion was grounded.
On January 28, 1991, Meralco filed a notice of appeal. This was opposed by
La Campana on the ground that it was filed out of time since the motion to
set aside judgment by default and/or for new trial did not stop the running of
the period to appeal, which expired on December 14, 1990, or fifteen days
from the time Meralco received the decision on November 29, 1990.
The trial court, in an order dated February 22, 1991, denied Meralco's notice
of appeal and granted the motion for execution earlier filed by La Campana.
On March 11, 1991, respondent Judge appointed respondent Deputy Sheriff
Jose Martinet of Branch 96 of the same court as special sheriff to
enforce/implement the writ of execution which was issued on March 12,
1991.
Meralco filed the instant petition for certiorari and prohibition with prayer for
the issuance of a restraining order and/or preliminary injunction on March 15,
1991, claiming that Judge Dayaw committed grave abuse of discretion in
rendering his decision dated November 20, 1990. On March 20, 1991, the
Court's First Division issued a temporary restraining order in favor of
Meralco.
After examining the trial court's assailed decision and orders, as well as the
pleadings and evidence presented below, we are convinced that respondent
Judge committed no abuse of discretion, much less grave abuse of
discretion, in the proceedings below.
The attention of Meralco is drawn to the fact that it indeed failed to indicate in
its motion for extension of time to file an answer a notice of place and date of
hearing, an omission for which it could offer no explanation. As we declared
in the case of Gozon, et al. v. Court of Appeals: 1

It is well-entrenched in this jurisdiction that a motion which does not

meet the requirements of Sections 4 and 5 of Rule 15 of the Rules of
Court is considered a worthless piece of paper which the clerk has
no right to receive and the court has no authority to act upon.
Meralco was aware of the importance of such a notice since it insisted in its
motion to set aside judgment by default and/or for new trial that it should
have received notice of hearing of the motion to declare it in default which La
Campana filed ex parte. La Campana correctly rebutted this argument by
citing the early case of Pielago v. Generosa 2 where the Court, in applying
Section 9, Rule 27 of the old Rules of Court (now covered by Section 9 of
Rule 13), laid down the doctrine that a defendant who fails to file an answer
within the time provided by the Rules of Court is already in default and is no
longer entitled to notice of the motion to declare him in default.
Thus, when it filed in Branch 78 its answer with counterclaim on September
21, 1990, fourteen days after the expiration of the period within which to file
an answer, Meralco was already in default and, naturally, it had to bear all the
legal consequences of being in default.
The judgment by default of November 20, 1990 was based solely on the
evidence presented by La Campana. No abuse of discretion attended such
decision because, as stated above, Meralco was already in default.
The records indicate that Meralco was not certain at this juncture what
remedy to adopt: a motion to set aside the judgment by default or a motion
for new trial? Meralco chose to play it safe by using the "and/or" option.
It must be clarified that under the Rules, what an aggrieved party seeks to
set aside is the order of default, an interlocutory order which is, therefore, not
appealable, and not the judgment by default, which is a final disposition of
the case and appealable to the Court of Appeals. Notice that in the following
pertinent provisions, the Rules expressly state that what may be set aside is
the order of default, while the judgment itself may be appealed to a higher
court:
Sec. 3. Relief from order of default. A party declared in default
may at any time after discovery thereof and before judgment file a
motion under oath to set aside the order of default upon proper
showing that his failure to answer was due to fraud, accident,
mistake or excusable neglect and that he has a meritorious defense.
In such case the order of default may be set aside on such terms

and conditions as the judge may impose in the interest of justice.

[Rule 18]
Sec. 9. Service upon party in default. No service of papers other
than substantially amended or supplemental pleadings and final
orders or judgments shall be necessary on a party in default unless
he files a motion to set aside the order of default, in which event he
shall be entitled to notice of all further proceedings regardless of
whether the order of default is set aside or not. [Rule 13]
Sec. 2. Judgments or orders subject to appeal.
xxx xxx xxx
A party who has been declared in default may likewise appeal from
the judgment rendered against him as contrary to the evidence or to
the law, even if no petition for relief to set aside the order of default
has been presented by him in accordance with Rule 38. [Rule 41]
[Emphasis supplied]
Granting arguendo that the motion to set aside judgment by default was
proper, it was still correctly denied by respondent Judge for failure to show
that Meralco's omission to answer was due to any of the causes mentioned
in Section 3 of Rule 18. At best, the motion only stressed that it was filed on
September 21, 1990, within the requested period of extension, which, as
earlier discussed, cannot be presumed to be granted.
On the other hand, as a motion for new trial grounded on fraud, Meralco's
motion likewise fails to convince. The fraud it claims is in the ex-parte motion
of La Campana to declare it in default. Meralco claims that the reason for
the ex-parte motion was "to deprive the defendant of the opportunity to
oppose it, knowing that defendant actually filed its answer." But how could La
Campana have known about the answer with counterclaim when it was
actually received only on October 8, 1990, as evidenced by the registry
return receipt attached to Meralco's Annex "H," 3while the ex-parte motion to
declare Meralco in default was filed much earlier on September 27, 1990?
"Fraud, as a ground for new trial, must be extrinsic or collateral, that is, it is
the kind of fraud which prevented the aggrieved party from having a trial or
presenting his case to the court, or was used to procure the judgment without
fair submission of the controversy." 4Meralco's failure to go to trial in this case
is solely attributable to its failure to comply with the Rules of Court.

We agree with respondent Judge that Meralco's motion to set aside judgment
by default and/or for new trial is a mere pro forma motion inasmuch as it
does not specify the facts constituting the alleged fraud which under the
Rules must be alleged with particularity. 5 Being a pro forma motion, it did not
interrupt the running of the period to appeal. Accordingly, having received the
decision on November 29, 1990, Meralco had until December 14, 1990,
within which to file a notice of appeal. The notice of appeal which it filed on
January 28, 1991, was clearly filed out of time.
Having lost its right to appeal, Meralco cannot take refuge in the instant
petition for certiorari and prohibition. The Court has always maintained that
the special civil action of certiorari cannot be a substitute for a lost appeal,
and there appears to be no cogent reason why such policy should be waived
in this case.

G.R. No. 82220 July 14, 1995

PABLITO
MENESES
and
LORENZO
MENESES, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, EDUARDO QUISUMBING,
NORBERTO QUISUMBING, HEIRS OF EMILIO QUISUMBING (Carlos,
Manuel and Paz, all surnamed Quisumbing), HEIRS OF FERNANDO
QUISUMBING (Perla, Josefina, Napoleon, Honorato, Remedios and
Alfonso, all surnamed Quisumbing), HEIRS OF MANUEL QUISUMBING,
SR. (Petrona, Natividad, Manuel, Jr., Dolores and Lilia, all surnamed
Quisumbing) and HEIRS OF FRANCISCO QUISUMBING (Fe, Johnny,
Ma. Luisa, Norberto, Jimmy, Ma. Victoria, Elsa and Oscar, all surnamed
Quisumbing), all represented by Atty. Galileo Brion, respondents.
G.R. No. 82251 July 14, 1995

WHEREFORE, the instant petition for certiorari and prohibition is

DISMISSED and the TEMPORARY RESTRAINING ORDER issued on
March 20, 1991, is hereby DISSOLVED. The decision dated November 20,
1990, as well as the Orders dated January 10, 1991 and March 11, 1991,
issued by respondent Judge Dayaw in Civil Case No. Q-90-6480 entitled "La
Campana Food Products, Inc. v. Manila Electric Company," are hereby
declared FINAL. Accordingly, the Writ of Execution dated March 12, 1991 is
hereby declared VALID.
Costs against the petitioner.
SO ORDERED.

Republic
SUPREME
Manila
FIRST DIVISION

of

the

Philippines
COURT

CESAR
vs.
EDUARDO QUISUMBING, respondent.

ALMENDRAL, petitioner,

G.R. No. 83059 July 14, 1995

EDUARDO QUISUMBING, NORBERTO QUISUMBING, HEIRS OF EMILIO
QUISUMBING (Carlos, Manuel and Paz, all surnamed Quisumbing),
HEIRS OF FERNANDO QUISUMBING, (Perla, Josefina, Napoleon,
Honorato, Remedios and Alfonso, all surnamed Quisumbing), HEIRS
OF MANUEL QUISUMBING, SR. (Petrona, Natividad, Manuel, Jr.,
Dolores and Lilia, all surnamed Quisumbing) and HEIRS OF
FRANCISCO QUISUMBING (Fe, Johnny, Ma. Victoria, Elsa and Oscar, all
surnamed
Quisumbing), petitioners,
vs.
HON. COURT OF APPEALS, PABLITO MENESES, LORENZO MENESES
and BRAULIO C. DARUM,respondents.

QUIASON, J.:
For review in these consolidated petitions is the Decision dated August 31,
1987 of the Court of Appeals in CA-G.R. CV No. 07049 affirming the
Decision dated March 26, 1984 of the Regional Trial Court, Branch 37,
Calamba, Laguna, in Civil Case No. 474-83-C which declared as null and

void the original certificates of title and free patents issued to Pablito
Meneses over lots found by the court to be accretion lands forming parts of
the bigger accretion land owned by Ciriaca Arguelles Vda. de Quisumbing.
I
On March 1, 1977, Braulio C. Darum, then the District Land Officer of Los
Baos, Laguna, issued to Pablito Meneses Free Patent No. (IV-5) P-12807
and Original Certificate of Title No. P-1268 covering Lot 1585 with an area of
417 square meters, and Free Patent No (IV-5) 12808 and Original Certificate
of Title No P-1269 for Lot 190 with an area of 515 square meters. Both lots
are located in Los Baos, Laguna.
Pablito Meneses acquired said property from Silverio Bautista through a
Deed of Waiver and Transfer of Rights executed on May 5, 1975 in
consideration of Bautista's "love and affection" for and "some monetary
obligations" in favor of Pablito Meneses (Rollo, p. 45). After the execution of
said document, Pablito Meneses took possession of the land, introduced
improvements thereon, declared the land as his own for tax purposes and
paid the corresponding realty taxes. In turn, Bautista acquired the 900square-meter land from his aunt, Sergia (Gliceria) M. Almeda. He had been
occupying the land since 1956.
On the other hand, the Quisumbing family traces ownership of the land as far
back as September 6, 1919 when their matriarch, Ciriaca Arguelles Vda. de
Quisumbing was issued Original Certificate of Title No. 989 covering a lot
with an area of 859 square meters located in Los Baos, Laguna with the
Laguna de Bay as its northwestern boundary. The same parcel of land was
registered on August 14, 1973 under Transfer Certificate of Title No. T-33393
in the names of Ciriaca's heirs: Emilio, Manuel, Eduardo, Norberto, Perla,
Josefina, Napoleon, Honorato, Remedios and Alfonso, all surnamed
Quisumbing.
In 1962, the Quisumbing instituted and accion publiciana in the then Court of
First Instance of Bian, Laguna to recover possession over a portion of the
property from Dominga Villamor and Lorenzo Lanuzo docketed as Civil Case
No. B-350. On January 3, 1966, the case was decided in favor of the
Quisumbings. On appeal, the Court of Appeals sustained the Quisumbings'
right over the property.
In LRC Case No. B-327, the Quisumbings applied for registration and
confirmation of title over an additional area of 2,387 square meters which had

gradually accrued to their property by the natural action of the waters of

Laguna de Bay. In its Decision of September 28, 1978, the Court of First
Instance of Bian confirmed the Quisumbings' title thereto which, after it was
duly surveyed, was identified as Psu-208327. The additional area was
divided into two lots in the survey plan approved by the Director of Lands on
November 16, 1964. In ordering the confirmation and registration of title on
favor of the Quisumbings, the land registration court said:
. . . There is no doubt that the applicants' right to the property
was bolstered by the unappealed decision of the Court of
Appeals in Civil Case No. B-350 of this Court when the
properties applied for were classified as accretions made by
the waters of the Laguna Lake. . . . (G.R. No. 82229, Rollo,
p. 20).
On April 17, 1979, the Quisumbings filed Civil Case No. 07049 before the
Court of First Instance of Laguna, Branch VI, Calamba against Lorenzo and
Pablito Meneses, Braulio C. Darum and Cesar B. Almendral for nullification
of the free patents and titles issued to Pablito Meneses. They alleged that
Lorenzo Menesis, then the Mayor of Los Baos, using his brother Pablito as
a "tool and dummy," illegally occupied their "private accretion land" an August
6, 1976, and, confederating with District Land Officer Darum and Land
Inspector Cesar Almendral, obtained free patents and original certificates of
title to the land.
On March 26, 1984, the trial court rendered the decision finding that the
lands registered by the Meneses brothers are accretion lands to which the
Quisumbings have a valid right as owners of the riparian land to which nature
had gradually deposited the disputed lots. In so holding, the trial court relied
heavily on the decision of the Court of Appeals in Civil Case No. B-350, and
quoted the following portions of the appellate court's decision:
Plaintiffs-appellees are titled owners of a (sic) 859 square
meters of land under TCT No. 25978 of the Laguna Land
Registry, the northwest boundary of which is the Laguna de
Bay.
It is ascertained that the northwest portion of Quisumbing's
lot is bounded by the Laguna de Bay. The nature of the
Laguna de Bay has long been settled in the case of
Government of the Philippines v. Colegio de San Jose (55
Phil. 423) when it held that:

Laguna de Bay is a body of water formed in

depression of the earth; it contains fresh
water coming from rivers and brooks and
springs, and is connected with Manila Bay
by the Pasig River. According to the
definition first quoted, Laguna de Bay is
a lake.
Consequently, since Laguna de Bay is a lake, the authorities
cited by the appellants referring to seashore would not apply.
The provision of the law on waters will govern in determining
the natural bed or basin of the lake. And accordingly, to Art.
84 of the Law of Waters of August 3, 1866:
Accretions deposited gradually upon land
contiguous to creeks, streams, rivers
andlakes by accessions or sediments from
the waters thereof, belong to the owners of
such lands.
Since the title indicate(s) that the northwest portion of the
property is bounded by Laguna de Bay, which is a lake, even
if the area where Lanuza's house and Villamor's house for
that matter is located is not included within the title, it must
necessarily be an accretion upon appellees' land by
accessions or sediments from the waters thereof which
should belong to the owner of the adjacent land. The
authorities cited by the appellants treat of the ownership of
accretions by water of the sea under Title I. Lakewaters
being terrestrial waters, their ownership is governed by Title
II of the Law of Waters. As held in the Colegio de San Jose
case, the provisions of the Law of Waters regulating the
ownership and use of sea water are not applicable to the
ownership and use of lakes which are governed by different
provisions. As pointed out by the lower court, no act of
appropriation is necessary in order to acquire ownership of
the alluvial formation as the law does not require the same
(Ignacio Grande, et al. vs. Hon. Court of Appeals, et al., G.R.
No. L-17652, June 30, 1962 citing Roxas vs. Tuazon, 9 Phil.
408; Cortez vs. City of Manila, 10 Phil. 567 and 3 Manresa,
C.C. pp. 321-326, pp. 4-5) (Records, pp. 80-84).

The trial court also found that the free patents issued to Pablito Meneses had
been procured through fraud, deceit and bad faith, citing the following facts
as bases for its conclusion: (1) The Deed of Waiver and Transfer of Rights
allegedly executed by Silverio Bautista in favor of Pablito Meneses was a
simulated contract for lack of consideration; (2) The said instrument was
sworn to before Mayor Lorenzo Meneses who had no authority to notarize
deeds of conveyances; (3) Although the lots subject of the deed of
conveyance were placed in his brother's name, Mayor Meneses actually
exercised rights of ownership thereto; (4) Land Inspector Cesar Almendral
admitted having anomalously prepared the documents to support the free
patent applications of Pablito Meneses and, having personally filled up the
blank forms, signed them in the absence of the persons concerned; (5)
Almendral kept the documents in his possession from 1979 to 1980 despite
orders from the Director of Lands to produce and surrender the same; (6)
District Land Officer Braulio Darum approved the free patent applications and
issued the questioned titles without the required cadastral survey duly
approved by the Director of Lands and despite the pendency of LRC Case
No. B-327 involving the contested lots; (7) Darum represented the Bureau of
Lands in LRC Case No. B-327 without authority from the Director of Lands
and after he had withdrawn his appearance in said case, persisted in filing a
motion to set aside the order for the issuance of a decree in favor of the
Quisumbings; (8) Darum and Almendral in bad faith, refused to produce the
missing original records of the free patent applications and their supporting
documents; and (9) When Darum was not yet an oppositor in LRC Case No.
B-327, he admitted in his letter to the Land Registration Commission that the
contested lots are portions of the land being claimed by the Quisumbings
contrary to his later representation in the joint answer to the petition that the
subject lots are not portions of Lots 1 and 2, Psu-208327 owned by the
Quisumbings. Accordingly, the trial court disposed of the case as follows:
WHEREFORE, judgment is hereby rendered:
1. Declaring that the lands covered by Pablito Meneses'
Original Certificate of Title No. P-1268/Free Patent No.
12807 (Exh. "J"), covering Lot No. 1585, consisting of 417
square meters and Original Certificate of Title No. P1269/Free Patent No. 12808 (Exh. "H"), covering Lot No.
190, consisting of 515 square meters, both located at Los
Baos, Laguna, as accretion lands forming parts of a bigger
accretion land owned by plaintiffs as declared in a final
judgment (Exh. "A"), rendered by the Court of First Instance
of Bian, Laguna, in LRC Case No. B-327, which bigger
accretion land is directly adjacent to or at the back of

plaintiffs' riparian land, and consequently, declaring as null

and void and cancelled Original Certificate of Title No. P1268/Free Patent No. 12807 and Original Certificate of Title
No. P-1269/Free Patent No. 12808;
2. Directing that the Register of Deeds of Laguna or his
Deputy at Calamba, Laguna, to make the corresponding
entries of cancellation in his Registry of the above mentioned
Original Certificate of Titles/Free Patents;
3. Directing defendants Lorenzo Meneses and Pablito
Meneses and all persons acting in their behalves to vacate
the subject lands and surrender the possession thereof to
the plaintiffs immediately; and
4. Directing the defendants to pay jointly and severally, the
plaintiffs the sums of:
a) P20,000.00, plus P500.00 per month from
January, 1977, until the subject property is
completely vacated, as actual and
compensatory damages;
b) P350,000.00, as moral damages;
c) P70,000.00 as exemplary damages;
d) P40,000.00, as attorney's fees; and
e) the costs (Rollo, pp. 41-42).
Thereafter, the Quisumbings filed a motion for execution pending appeal
which the trial court granted in its Order of September 7, 1984 subject to the
posting by the Quisumbings of a bond in the amount of P500,000.00. The
defendants unsuccessfully moved for the reconsideration of said order.
The Quisumbings also filed before the Sandiganbayan a complaint against
Pablito Meneses, Silverio Bautista, Pablo Silva, Virgilio Cruz and Cesar
Almendral for violation of paragraphs (e) and (j), Section 3 of Republic Act
No. 3019, for conspiring in the approval and grant of the free patents over
portions of Lots 1 & 2 of Psu-208327 owned by the heirs of Ciriaca Arguelles
Vda. de Quisumbing. In due course, the Sandiganbayan rendered a decision

finding the defendants guilty as charged. The case was elevated to this Court
but on August 27, 1987, the judgment of conviction was affirmed (Meneses v.
People, 153 SCRA 303 [1987]).
Meanwhile, the Meneses brothers and Darum appealed the decision in Civil
Case No. 07049 to the Court of Appeals. On August 31, 1987, the Court of
Appeals found the appeal to be without merit and affirmed in toto the lower
court's decision.
The defendants-appellants filed two motions for the reconsideration of the
appellate court's decision but it was denied in the Resolution of February 23,
1988 which in pertinent part stated:
However, for humanitarian considerations, and considering
the appeal of the defendants-appellants for a reduction of
the moral and exemplary damages, We favor the reduction
of the moral damages from P350,000.00 to P50,000.00 and
the exemplary damages from P70,000.00 to P5,000.00. In all
other respects, We find no justification for modifying the
dispositive portion of the decision of the lower court (G.R.
No. 82220, Rollo, p. 67).
Pablito and Lorenzo Meneses filed the instant petition for review on certiorari,
which was docketed as G.R. No. 82220. Cesar Almendral filed a motion in
G.R. No. 82251 for a 45-day extension within which to file a petition for
review on certiorari. After this Court had granted them a 30-day extension,
Almendral still failed to file any petition. The Quisumbings also filed a petition
for review on certiorari, docketed as G.R. No. 83059, solely on the issue of
the propriety of the reduction of the amount of damages in the Court of
Appeals' Resolution of February 23, 1988. Upon motion of petitioners in G.R.
No. 83059, the three petitions were consolidated in the Resolution of August
1, 1988.
Petitioners in G.R. No. 82220 retell the same errors they had raised before
the Court of Appeals, contending in the main: (1) that the lands in question
were not accretion lands but lands of the public domain; (2) that no
conspiracy to commit fraud, deceit and bad faith attended the issuance of the
free patent and titles to Pablito Meneses; and (3) that the Deed of Waiver
and Transfer of Rights was founded on a valid consideration.
As regards the issue of whether the lands in question are accretion lands,
petitioners relied on the Decision of the Court of Appeals in Republic of the

Philippines v. Braga, CA-G.R. No. 55390-R, October 23, 1980, holding that
the property involved therein was part of the natural bed of the Laguna de
Bay and therefore what had to be determined was whether said property was
covered by water when the lake was at its highest depth.
Petitioners' assigned errors in G.R. No. 82220 are evidently factual issues
which have been thoroughly passed upon and settled both by the trial court
and the appellate court. Factual findings of the Court of Appeals are
conclusive on the parties and not reviewable by this Court (Coca-Cola
Bottlers Philippines, Inc. v. Court of Appeals, 229 SCRA 533 [1994]) and they
carry even more weight when the Court of Appeals affirms the factual
findings of the trial court (Binalay v. Manalo, 195 SCRA 374 [1991]). The
jurisdiction of this Court is thus limited to reviewing errors of law unless there
is a showing that the findings complained of are totally devoid of support in
the record or that they are so glaringly erroneous as to constitute serious
abuse of discretion (BA Finance Corporation v. Court of Appeals, 229 SCRA
566 [1941]). We find no such showing in this case.
Petitioners' protestations notwithstanding the final decision of the Court of
Appeals in Civil Case No. B-350 has a bearing in the resolution of this case
for while the lots occupied by Villamor and Lanuzo may not be the very same
lots petitioners are claiming here, the two cases refer to the same accretion
lands northwest of the original land owned by the Quisumbings.
In the same vein, the decision of the land registration court in LRC Case No.
B-327 ordering the confirmation and registration of title in favor of the
Quisumbings over 2,387 square meters of accretion land is binding on
petitioners in G.R. No. 82220. As correctly pointed out by the Court of
Appeals, said decision, being the result of a proceeding in rem, binds the
whole world, more so because it became final and executory upon the
Bureau of Lands' failure to interpose an appeal.
Since petitioners in G.R. No. 82220 claim that "the foreshore land known as
Lots 190 and 1585 are part of Laguna de Bay" and therefore the
Quisumbings "have no legal right to claim the same as accretion land," we
quote the following pertinent portions of the decision in Republic v. Court of
Appeals, 131 SCRA 532 (1984) which, although the case deals with the
registration of a reclaimed land along the Laguna de Bay, is nonetheless
enlightening:
Laguna de Bay is a lake. While the waters of a lake are also
subject to the same gravitational forces that cause the

formation of tides in seas and oceans, this phenomenon is

not a regular daily occurrence in the case of lakes. Thus, the
alternation of high tides and low tides, which is an ordinary
occurrence, could hardly account for the rise in the water
level of the Laguna de Bay as observed four to five months a
year during the rainy season. Rather, it is the rains which
bring about the inundation of a portion of the land in
question. Since the rise in the water level which causes the
submersion of the land occurs during a shorter period (four
to five months a year) than the level of the water at which the
land is completely dry, the latter should be considered as the
"highest ordinary depth" of Laguna de Bay. Therefore, the
land sought to be registered is not part of the bed or basin of
Laguna de Bay. Neither can it be considered as foreshore
land. The Brief for the Petitioner Director of Lands cites an
accurate definition of a foreshore land, to wit:
. . . . that part of (the land) which is between
high and low water and left dry by the flux
and reflux of the tides.
The strip of land that lies between the high
and low water marks and that is alternately
wet and dry according to the flow of the tide.
As aptly found by the Court a quo, the submersion in water
of a portion of the land in question is due to the rains "falling
directly on or flowing into Laguna de Bay from different
sources." Since the inundation of a portion of the land is not
due to "flux and reflux of tides" it cannot be considered a
foreshore land within the meaning of the authorities cited by
petitioner Director of Lands. The land sought to be registered
not being part of the bed or basin of Laguna de Bay, nor a
foreshore land as claimed by the Director of Lands, it is not a
public land and therefore capable of registration as private
property provided that the applicant proves that he has a
registerable title (at pp. 538-539).
Accretion as a mode of acquiring property under Article 457 of the Civil Code
requires the concurrence of these requisites: (1) that the deposition of soil or
sediment be gradual and imperceptible; (2) that it be the result of the action
of the waters of the river (or sea); and (3) that the land where accretion takes
place is adjacent to the banks of rivers (or the sea coast). While the trial court

mainly relied on the findings in Civil Case No. B-350 that the lands in
controversy are accretion lands and it has not determined on its own the
presence of said requisites, it is too late now for petitioners in G.R. No.
82220 to claim otherwise. Consequently, the lands held to be accretion lands
could only benefit the Quisumbings, who own the property adjacent to the
lands in controversy (Cruz v. Court of Appeals, 216 SCRA 350 [1992]).
Petitioners in G.R. No. 82220 also assert that the principle of indefeasibility
of title should favor them as the one-year period provided for by law to
impugn their title had elapsed. They also urged that, having been granted by
the state, their title is superior to that of the Quisumbings. We hold, however,
that in the light of the fraud attending the issuance of the free patents and
titles of Pablito Meneses, said assertions crumble. Such fraud was confirmed
by this Court in Meneses v. People, 153 SCRA 303 (1987) which held the
petitioners therein liable for violation of the Anti-Graft and Corrupt Practices
Act in the issuance of the same free patents and titles.
Unlike the petition in G.R. No. 82220, the petition in G.R. No. 83059
(questioning the reduction of the damages awarded to the Quisumbings by
the Court of Appeals in the Resolution of February 23, 1988) is meritorious.
The task of fixing the amount of damages is primarily with the trial court (Air
France v. Carrascoso, 18 SCRA 155 [1966]). While it is the appellate court's
duty to review the same, a reduction of the award of damages must pass the
test of reasonableness. The Court of Appeals can only modify or change the
amount awarded as damages when they are palpably or scandalously and
reasonably excessive (Philippine Airlines, Inc. v. Court of Appeals, 226 SCRA
423 [1993]; Prudenciano v. Alliance Transport System, Inc., 148 SCRA 440
[1987]).
There is no justification for the radical reduction by the Court of Appeals of
the damages awarded by the trial court. Its action was premise merely on
"humanitarian considerations" and the plea of the defendants-appellants. We
may agree with the Court of Appeals in reducing the award after scrutinizing
its factual findings only if such findings are diametrically opposed to that of
the trial court (Prudenciado v. Alliance Transport System, Inc.,supra). But as
it is, the Court of Appeals affirmed point by point the factual findings if the
lower court upon which the award of damages had been based.
We, therefore, see no reason to modify the award of damages made by the
trial court. Respondent Braulio C. Darum in G.R. No. 83059 must also be
solidarily liable for said damages in his capacity as a public officer. A public
official is by law not immune from damages in his personal capacity for acts
done in bad faith which, being outside the scope of his authority, are no

longer protected by the mantle of immunity for official actions (Vidad v. RTC
of Negros, Br. 42, 227 SCRA 271 [1993]).
WHEREFORE, the petition in G.R. No. 82220 is DENIED while the petition in
G.R. No. 83059 is GRANTED. The Decision dated August 31, 1987 of the
Court of Appeals is AFFIRMED while its Resolution of February 23, 1988
insofar as it reduces the amount of damages awarded to the Quisumbing
family is SET ASIDE. Costs against petitioners in G.R. No. 82220 and
respondent Braulio Darum in G.R. No. 83059.
SO ORDERED.

T H I R D

D I V I S I O N

CIPRIANO
ENRIQUEZ,
RAYMUNDO
ENRIQUEZ, CONCEPCION ENRIQUEZ,
assisted
by
her
husband MATIAS
QUITANES, TOMAS ENRIQUEZ, LUIS
DIAZ, CESAR DIAZ, MANUEL DIAZ,
DOMINGO
ENRIQUEZ,
ELPIDIO
ENRIQUEZ,
FILIPINA
ENRIQUEZ,
CASIMIRA DIZON, SATURNINO DIZON,
JOSE
RAMOS,
AMADO
MISLANG,
ANTONIO
QUITANEG,
VILLAMOR
QUITANEG, JIMMY CLAVO, OSCAR
LABORCE, SEVILLA PIZARRO, ANGELITA
PIZZARO, ISIDRO RICO, PIO FAMISAN,
PANTALEON
ABILLE,
BEINVENIDO
CORUM, MARTINA HISOLE, ERNA D.
ENRIQUEZ,assisted
by
her
husband RITCHIE
FLAUTA, and IGNACIO
ENRIQUEZ, JR.,
Petitioners,

G.R. No. 139303

Present:

PANGANIBAN, J., Chairman

SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.

Promulgated:
August 25, 2005

- versus MAXIMO ENRIQUEZ (now deceased),

substituted by CARMEN AGANA, IGMIDIO

ENRIQUEZ, CONCEPCION ENRIQUEZ,

CIPRIANO
ENRIQUEZ,
DIONISIONENRIQUEZ,
MAXIMO
ENRIQUEZ, CLEOFE ENRIQUEZ, TOMAS
ENRIQUEZ, RAYMUNDO ENRIQUEZ and
NICOLAS ENRIQUEZ,
Respondents.
x---------------------------------------------------------------------------------------------x

of 44,984 square meters. He alleged that he owns 10/18 undivided portion

of the property, 9/18 by purchase and 1/18 by inheritance; and that
petitioners have been residing in the premises without his knowledge and
consent, thereby depriving him of his undivided share of the property.

D E C I S I O N
Petitioners, in their answer, averred that Cipriano Enriquez, one of
SANDOVAL-GUTIERREZ, J.:

the petitioners, owns of the property, while the others are in possession of
the other areas with his knowledge and consent.

On June 4, 1998, the RTC rendered a Decision ordering the

petitioners to vacate the property and to surrender possession thereof to
Assailed in the instant petition for review on certiorari are the

respondents.

Resolutions dated February 3, 1999 and July 7, 1999 issued by the Court of
Appeals in CA-G.R. CV UDK-7011 dismissing the appeal of petitioners for
their failure to pay the appellate court docket fee.

A copy of the Decision was received by counsel for petitioners on

June 22, 1998.

On July 3, 1998, they filed a Notice of Appeal with the

RTC. It was approved on July 7, 1998.

On November 17, 1988, Maximo Enriquez, later substituted by his
heirs (now respondents), filed with the Regional Trial Court (RTC), Branch 71
of Iba, Zambales a complaint for partition against petitioners, docketed as
Civil Case No. RTC-568-1. The complaint involves a parcel of land situated
at Amungan, Iba, same province, covered by TCT No. T-28593, with an area

On February 3, 1999, the Court of Appeals dismissed the appeal of

petitioners for their failure to pay the appellate court docket fee, thus:
For failure to pay docket fee, the appeal is deemed
ABANDONED and DISMISSED, pursuant to Section 1(c),
Rule 50, Revised Rules of Court.

Petitioners filed a motion for reconsideration but it was denied by the

In sum, the issue is whether the Court of Appeals correctly dismissed

Appellate Court in a Resolution dated July 7, 1999, thus:

Per copy of the official receipt attached to
appellants motion for reconsideration, the docket fee was
paid on November 4, 1998 or 4 months after the notice of
appeal was filed on July 3, 1998.
Consequently,
appellants
reconsideration is hereby denied.

motion

for

In the instant petition for review, petitioners raise the following errors
allegedly committed by the Appellate Court:

the petition for failure of the petitioners to pay appellate court docket fee.

In dismissing petitioners appeal, the Court of Appeals cited Section

1(c), Rule 50 of the Revised Rules of Court which provides:
Section 1. Grounds for dismissal of appeal. An
appeal may be dismissed by the Court of Appeals, on its
own motion or on that of the appellee, on the following
grounds:
xxx
(c) Failure of the appellant to pay the docket and
other lawful fees as provided in Section 4 of Rule 41.

I. THE RESPONDENT COURT OF APPEALS

SERIOUSLY ERRED IN CONSIDERING PETITIONERS
APPEAL AS DEEMED ABANDONED AND DISMISSED
FOR ALLEGED FAILURE OF PETITIONERS TO PAY
DOCKET FEE.
II. THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN DENYING PETITIONERS MOTION
FOR RECONSIDERATION OF THE RESOLUTION
CONSIDERING PETITIONERS APPEAL AS DEEMED
ABANDONED AND DISMISSED ON THE GROUND THAT
THE DOCKET FEE WAS PAID ON NOVEMBER 4, 1998,
OR FOUR (4) MONTHS AFTER THE NOTICE OF APPEAL
WAS FILED ON JULY 3, 1998.
III. THE RESPONDENT COURT OF APPEALS IN
ISSUING THE AFORESAID RESOLUTIONS GAVE
PREMIUM
ON
TECHNICALITIES
RATHER
ON
SUBSTANCE AND SUBSTANTIAL JUSTICE AND
DISREGARDED THE MERITS OF PETITIONERS CASE.

Petitioners admit that the governing Rule on their payment of

appellate court docket fee is Section 4, Rule 41 of the 1997 Rules of Civil
Procedure, as amended, which provides:
Section 4. Appellate court docket and other lawful
fees. Within the period for taking an appeal, the
appellant shall pay to the clerk of the court which rendered
the judgment or final order appealed from, the full amount of
the appellate court docket and other lawful fees. Proof of
payment of said fees shall be transmitted to the appellate
court together with the original record of the record or the
record on appeal.

Underscoring the sentence Proof of payment of said fees shall be

transmitted to the appellate court together with the original record or the
record on appeal, petitioners maintain that the trial court must first send

them a notice to pay the appellate court docket fee and other lawful fees
within the period for taking an appeal. Hence, they waited for the notice for
them to pay the appellate court docket fee. When they did not receive any,
they paid the docket fee to the trial court.

clerk of the court which rendered the judgment or final order appealed from,
the full amount of the appellate court docket and other lawful fees.

Consequently, they cannot be

faulted if they paid the appellate court docket fee four (4) months after their
Notice of Appeal was approved on July 7, 1998.

Prior to the effectivity of the 1997 Rules of Civil Procedure, as

amended, payment of appellate court docket fee is not a prerequisite for the
perfection of an appeal.

In Santos vs. Court of Appeals,[1] this Court held

that although an appeal fee is required to be paid in case of an appeal taken

from the Municipal Trial Court to the Regional Trial Court, it is not a
prerequisite for the perfection of an appeal under Sections 20 [2] and 23[3] of
the Interim Rules and Guidelines issued by this Court on January 11, 1983
implementing the Judiciary Reorganization Act of 1981 (B.P. Blg. 129).
Under these sections, there are only two requirements for the perfection of
an appeal, to wit: (a) the filing with the trial court of a notice of appeal within

The use of the word shall underscores the mandatory character of

the Rule. The term shall is a word of command, and one which has always
or which must be given a compulsory meaning, and it is generally imperative
or mandatory.[4] Petitioners cannot give a different interpretation to the Rule
and insist that payment of docket fee shall be made only upon their receipt of
a notice from the trial court to pay. For it is a rule in statutory construction
that every part of the statute must be interpreted with reference to the
context, i.e., that every part of the statute must be interpreted together with
the other parts, and kept subservient to the general intent of the whole
enactment.[5] Indeed, petitioners cannot deviate from the Rule.

the reglementary period; and (b) the expiration of the last day to appeal by
Also under Rule 41 of the same Rules, an appeal to the Court of

any party.

Appeals from a case decided by the RTC in the exercise of the latters
original jurisdiction, shall be taken within fifteen (15) days from the notice of
However, the 1997 Rules of Civil Procedure, as amended, which
took effect on July 1, 1997, now require that appellate docket and other

judgment or final order appealed from.

Such appeal is made by filing a

notice thereof with the court that rendered the judgment or final order and by
serving a copy of that notice upon the adverse party. Furthermore, within

lawful fees must be paid within the same period for taking an appeal.

This

is clear from the opening sentence of Section 4, Rule 41 of the same Rules
that, (W)ithin the period for taking an appeal, the appellant shall pay to the

this same period, appellant shall pay to the clerk of court which rendered the
judgment or final order appealed from, the full amount of the appellate court
docket and other lawful fees. The payment of docket fee within this period is
mandatory for the perfection of appeal. Otherwise, the appellate court would

not be able to act on the subject matter of the action, and the decision sought
to be appealed from becomes final and executory.[6]

Time and again, this Court has consistently held that payment of
docket fee within the prescribed period is mandatory for the perfection of an
appeal.

Without such payment, the appellate court does not acquire

jurisdiction over the subject matter of the action and the decision sought to
be appealed from becomes final and executory.[7]

Petitioners argue that the Appellate Court, in issuing the assailed

Resolutions, gave premium to technicalities rather than substance and
disregarded the merits of the petition. They ask for a liberal construction of
the Rules.

Appeal is not a right but a statutory privilege, thus, appeal must be

payment of appellate court docket fee. Actually, the payment of the required

made strictly in accordance with the provision set by law. The requirement of

docket fee was late because of the erroneous interpretation of the Rule by

the law under Section 4, Rule 41 is clear. The payment of appellate docket

petitioners counsel.

fee is not a mere technicality of law or procedure but an essential

premium on his ignorance or lack of knowledge of existing Rules. He should

requirement for the perfection of an appeal.[8]

be reminded that it is his duty to keep abreast of legal developments and

Verily, to grant their petition would be putting a

prevailing laws, rules and legal principles,[12] otherwise his clients will be
The payment of the docket fee within the period is a condition sine

prejudiced, as in this case.

qua non for the perfection of an appeal. Contrary to petitioners submission,

the payment of the appellate court docket and other lawful fees is not a mere
technicality of law or procedure.

It is an essential requirement, without

In fine, the Court of Appeals did not err in dismissing petitioners

appeal.

which the decision or final order appealed from would become final and
executory as if no appeal was filed at all.[9]

This Court has consistently ruled that litigation is not a game of

technicalities and that every case must be prosecuted in accordance with the

WHEREFORE,

resolved. The rules of procedure must be faithfully followed except only

a litigant of an injustice commensurate with his failure to comply within the

prescribed procedure. Concomitant to a liberal interpretation of the rules
of procedure should be an effort on the part of the party invoking
liberality to adequately explain his failure to abide by the rules.[10]
Anyone seeking exemption from the application of the Rule has the burden of
proving that exceptionally meritorious instances exist which warrant such
departure.[11]

In the present case, petitioners failed to establish any sufficient and

satisfactory reason to warrant a relaxation of the mandatory rule on the

instant

petition

on certiorari is DENIED. Costs against petitioners.

prescribed procedure so that issues may be properly presented and justly

when, for persuasive and weighting reasons, they may be relaxed to relieve

the

SO ORDERED.

for

review

HON. COURT OF APPEALS, HEIRS

OF BERNARDO DEL MUNDO,
namely: FE, CORAZON, JOSEFA,
SALVADOR and CARMEN, all
EN BANC

surnamed DEL MUNDO, LAND BANK

OF THE PHILIPPINES AND HON.

DOMINGO NEYPES, LUZ

G.R. No. 141524

ANTONIO N. ROSALES, Presiding

FAUSTINO, ROGELIO FAUSTINO,

Judge, Branch 43, Regional Trial

LOLITO VICTORIANO, JACOB

Court, Roxas, Oriental Mindoro,

OBANIA AND DOMINGO

Respondents. Promulgated :

Present :

September 14, 2005

CABACUNGAN,
Petitioners,

DAVIDE, JR., C.J.

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

PUNO,
PANGANIBAN,

DECISION

QUISUMBING,
YNARES-SANTIAGO,

CORONA, J.:
SANDOVAL-GUTIERREZ,
CARPIO,

- versus -

AUSTRIA-MARTINEZ,

CORONA,
CARPIO MORALES,
CALLEJO, SR.,

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito

Victoriano, Jacob Obania and Domingo Cabacungan filed an action for
annulment of judgment and titles of land and/or reconveyance and/or
reversion with preliminary injunction before the Regional Trial Court, Branch
43, of Roxas, Oriental Mindoro, against the Bureau of Forest Development,
Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del
Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.

AZCUNA,
TINGA,
CHICO-NAZARIO and
GARCIA, JJ.

In the course of the proceedings, the parties (both petitioners and

respondents) filed various motions with the trial court. Among these were: (1)
the motion filed by petitioners to declare the respondent heirs, the Bureau of
Lands and the Bureau of Forest Development in default and (2) the motions

to dismiss filed by the respondent heirs and the Land Bank of the Philippines,
respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent
Judge Antonio N. Rosales, resolved the foregoing motions as follows: (1) the
petitioners motion to declare respondents Bureau of Lands and Bureau of
Forest Development in default was granted for their failure to file an answer,
but denied as against the respondent heirs of del Mundo because the
substituted service of summons on them was improper; (2) the Land Banks
motion to dismiss for lack of cause of action was denied because there were
hypothetical admissions and matters that could be determined only after trial,
and (3) the motion to dismiss filed by respondent heirs of del Mundo, based
on prescription, was also denied because there were factual matters that
could be determined only after trial.[1]

The respondent heirs filed a motion for reconsideration of the order denying
their motion to dismiss on the ground that the trial court could very well
resolve the issue of prescription from the bare allegations of the complaint
itself without waiting for the trial proper.

In an order[2] dated February 12, 1998, the trial court dismissed petitioners
complaint on the ground that the action had already prescribed. Petitioners
allegedly received a copy of the order of dismissal on March 3, 1998 and, on
the 15th day thereafter or on March 18, 1998, filed a motion for
reconsideration. On July 1, 1998, the trial court issued another order
dismissing the motion for reconsideration[3] which petitioners received on
July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of
appeal[4] and paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that
it was filed eight days late.[5] This was received by petitioners on July 31,
1998. Petitioners filed a motion for reconsideration but this too was denied in
an order dated September 3, 1998.[6]

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules
of Civil Procedure, petitioners assailed the dismissal of the notice of appeal
before the Court of Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their
notice of appeal. They argued that the 15-day reglementary period to appeal
started to run only on July 22, 1998 since this was the day they received
the final order of the trial court denying their motion for reconsideration.
When they filed their notice of appeal on July 27, 1998, only five days
had elapsed and they were well within the reglementary period for appeal.[7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It
ruled that the 15-day period to appeal should have been reckoned from
March 3, 1998 or the day they received the February 12, 1998 order
dismissing their complaint. According to the appellate court, the order was
the final order appealable under the Rules. It held further:

Perforce the petitioners tardy appeal was correctly dismissed for the
(P)erfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional and non-compliance with such legal
requirement is fatal and effectively renders the judgment final and executory.
[8]

Petitioners filed a motion for reconsideration of the aforementioned

decision. This was denied by the Court of Appeals on January 6, 2000.

In this present petition for review under Rule 45 of the Rules, petitioners
ascribe the following errors allegedly committed by the appellate court:

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36
OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL
MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL
DOCKET FEES.

II

THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING

AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT
HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED
OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL
ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE
OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON
AUGUST 3, 1998.

III

THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING

THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41, OF THE
1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST]
ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED
FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED
JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS
THROUGH COUNSEL ON JULY 22, 1998.

IV.

THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING

THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA
280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE
PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE
FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE
ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.[9]

The foregoing issues essentially revolve around the period within which
petitioners should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part
of due process. It is merely a statutory privilege and may be exercised only in
the manner and in accordance with the provisions of law. Thus, one who
seeks to avail of the right to appeal must comply with the requirements of the
Rules. Failure to do so often leads to the loss of the right to appeal.[10] The
period to appeal is fixed by both statute and procedural rules. BP 129,[11] as
amended, provides:

Sec. 39. Appeals. The period for appeal from final orders,
resolutions, awards, judgments, or decisions of any court in all these cases
shall be fifteen (15) days counted from the notice of the final order,
resolution, award, judgment, or decision appealed from. Provided, however,
that in habeas corpus cases, the period for appeal shall be (48) forty-eight
hours from the notice of judgment appealed from. x x x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within

fifteen (15) days from the notice of the judgment or final order appealed from.
Where a record on appeal is required, the appellant shall file a notice of
appeal and a record on appeal within thirty (30) days from the notice of
judgment or final order.

The period to appeal shall be interrupted by a timely motion for new

trial or reconsideration. No motion for extension of time to file a motion for
new trial or reconsideration shall be allowed. (emphasis supplied)

Based on the foregoing, an appeal should be taken within 15 days

from the notice of judgment or final order appealed from. A final judgment or
order is one that finally disposes of a case, leaving nothing more for the court
to do with respect to it. It is an adjudication on the merits which, considering
the evidence presented at the trial, declares categorically what the rights and
obligations of the parties are; or it may be an order or judgment that
dismisses an action.[12]

As already mentioned, petitioners argue that the order of July 1, 1998

denying their motion for reconsideration should be construed as the final
order, not the February 12, 1998 order which dismissed their complaint.
Since they received their copy of the denial of their motion for
reconsideration only on July 22, 1998, the 15-day reglementary period to
appeal had not yet lapsed when they filed their notice of appeal on July 27,
1998.

What therefore should be deemed as the final order, receipt of which

triggers the start of the 15-day reglementary period to appeal the February
12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing
the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court
declared petitioner Quelnan non-suited and accordingly dismissed his
complaint. Upon receipt of the order of dismissal, he filed an omnibus motion
to set it aside. When the omnibus motion was filed, 12 days of the 15-day
period to appeal the order had lapsed. He later on received another order,
this time dismissing his omnibus motion. He then filed his notice of appeal.
But this was likewise dismissed for having been filed out of time.

The court a quo ruled that petitioner should have appealed within 15 days
after the dismissal of his complaint since this was the final order that was
appealable under the Rules. We reversed the trial court and declared that it

was the denial of the motion for reconsideration of an order of dismissal of a

complaint which constituted the final order as it was what ended the issues
raised there.

This pronouncement was reiterated in the more recent case of Apuyan

v. Haldeman et al.[14] where we again considered the order denying
petitioner Apuyans motion for reconsideration as the final order which finally
disposed of the issues involved in the case.

Based on the aforementioned cases, we sustain petitioners view that

the order dated July 1, 1998 denying their motion for reconsideration was the
final order contemplated in the Rules.

We now come to the next question: if July 1, 1998 was the start of the 15-day
reglementary period to appeal, did petitioners in fact file their notice of
appeal on time?

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or
final order to appeal the decision of the trial court. On the 15th day of the
original appeal period (March 18, 1998), petitioners did not file a notice of
appeal but instead opted to file a motion for reconsideration. According to the
trial court, the MR only interrupted the running of the 15-day appeal period.
[15] It ruled that petitioners, having filed their MR on the last day of the 15day reglementary period to appeal, had only one (1) day left to file the notice
of appeal upon receipt of the notice of denial of their MR. Petitioners,
however, argue that they were entitled under the Rules to a fresh period of
15 days from receipt of the final order or the order dismissing their motion
for reconsideration.

In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of

the decision of the trial court. We ruled there that they only had the remaining
time of the 15-day appeal period to file the notice of appeal. We consistently
applied this rule in similar cases,[16] premised on the long-settled doctrine
that the perfection of an appeal in the manner and within the period permitted
by law is not only mandatory but also jurisdictional.[17] The rule is also
founded on deep-seated considerations of public policy and sound practice

that, at risk of occasional error, the judgments and awards of courts must
become final at some definite time fixed by law.[18]

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised
Rules of Court read:

Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the
adverse party and filing with the trial court within thirty (30) days from notice
of order or judgment, a notice of appeal, an appeal bond, and a record on
appeal. The time during which a motion to set aside the judgment or order or
for new trial has been pending shall be deducted, unless such motion fails to
satisfy the requirements of Rule 37.

But where such motion has been filed during office hours of the last day of
the period herein provided, the appeal must be perfected within the day
following that in which the party appealing received notice of the denial of
said motion.[19] (emphasis supplied)

According to the foregoing provision, the appeal period previously

consisted of 30 days. BP 129, however, reduced this appeal period to 15
days. In the deliberations of the Committee on Judicial Reorganization[20]
that drafted BP 129, the raison d etre behind the amendment was to shorten
the period of appeal[21] and enhance the efficiency and dispensation of
justice. We have since required strict observance of this reglementary period
of appeal. Seldom have we condoned late filing of notices of appeal,[22] and
only in very exceptional instances to better serve the ends of justice.

In National Waterworks and Sewerage Authority and Authority v. Municipality

of Libmanan,[23] however, we declared that appeal is an essential part of our
judicial system and the rules of procedure should not be applied rigidly. This
Court has on occasion advised the lower courts to be cautious about not
depriving a party of the right to appeal and that every party litigant should be
afforded the amplest opportunity for the proper and just disposition of his
cause, free from the constraint of technicalities.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which

require litigants to do certain acts must be followed unless, under exceptional
circumstances, a delay in the filing of an appeal may be excused on grounds
of substantial justice. There, we condoned the delay incurred by the
appealing party due to strong considerations of fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy
appeals, we have not been oblivious to or unmindful of the extraordinary
situations that merit liberal application of the Rules. In those situations where
technicalities were dispensed with, our decisions were not meant to
undermine the force and effectivity of the periods set by law. But we hasten
to add that in those rare cases where procedural rules were not stringently
applied, there always existed a clear need to prevent the commission of a
grave injustice. Our judicial system and the courts have always tried to
maintain a healthy balance between the strict enforcement of procedural
laws and the guarantee that every litigant be given the full opportunity for the
just and proper disposition of his cause.[25]

The Supreme Court may promulgate procedural rules in all courts.[26] It has
the sole prerogative to amend, repeal or even establish new rules for a more
simplified and inexpensive process, and the speedy disposition of cases. In
the rules governing appeals to it and to the Court of Appeals, particularly
Rules 42,[27] 43[28] and 45,[29] the Court allows extensions of time, based
on justifiable and compelling reasons, for parties to file their appeals. These
extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford

litigants fair opportunity to appeal their cases, the Court deems it practical to
allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion
for a new trial or motion for reconsideration. [30]

Henceforth, this fresh period rule shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42
on petitions for review from the Regional Trial Courts to the Court of Appeals;
Rule 43 on appeals from quasi-judicial agencies[31] to the Court of Appeals

and Rule 45 governing appeals by certiorari to the Supreme Court.[32] The

new rule aims to regiment or make the appeal period uniform, to be counted
from receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the
fresh period of 15 days, counted from July 22, 1998 (the date of receipt of
notice denying their motion for reconsideration). This pronouncement is not
inconsistent with Rule 41, Section 3 of the Rules which states that the appeal
shall be taken within 15 days from notice of judgment or final order appealed
from. The use of the disjunctive word or signifies disassociation and
independence of one thing from another. It should, as a rule, be construed in
the sense in which it ordinarily implies.[33] Hence, the use of or in the
above provision supposes that the notice of appeal may be filed within 15
days from the notice of judgment or within 15 days from notice of the final
order, which we already determined to refer to the July 1, 1998 order
denying the motion for a new trial or reconsideration.

Neither does this new rule run counter to the spirit of Section 39 of BP 129
which shortened the appeal period from 30 days to 15 days to hasten the
disposition of cases. The original period of appeal (in this case March 3-18,
1998) remains and the requirement for strict compliance still applies. The
fresh period of 15 days becomes significant only when a party opts to file a
motion for new trial or motion for reconsideration. In this manner, the trial
court which rendered the assailed decision is given another opportunity to
review the case and, in the process, minimize and/or rectify any error of
judgment. While we aim to resolve cases with dispatch and to have
judgments of courts become final at some definite time, we likewise aspire to
deliver justice fairly.

In this case, the new period of 15 days eradicates the confusion as to when
the 15-day appeal period should be counted from receipt of notice of
judgment (March 3, 1998) or from receipt of notice of final order appealed
from (July 22, 1998).

availed of only if either motion is filed; otherwise, the decision becomes final
and executory after the lapse of the original appeal period provided in Rule
41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from
receipt of the order denying their motion for reconsideration on July 22, 1998.
Hence, the notice of appeal was well within the fresh appeal period of 15
days, as already discussed.[34]

We deem it unnecessary to discuss the applicability of Denso

(Philippines), Inc. v. IAC[35] since the Court of Appeals never even referred
to it in its assailed decision.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of

the Court of Appeals REVERSED and SET ASIDE. Accordingly, let the
records of this case be remanded to the Court of Appeals for further
proceedings.

No costs.

SO ORDERED.

EN BANC

DOMINGO NEYPES, LUZ

To recapitulate, a party litigant may either file his notice of appeal within 15
days from receipt of the Regional Trial Courts decision or file it within 15
days from receipt of the order (the final order) denying his motion for new
trial or motion for reconsideration. Obviously, the new 15-day period may be

G.R. No. 141524

FAUSTINO, ROGELIO FAUSTINO,

LOLITO VICTORIANO, JACOB
OBANIA AND DOMINGO

Present :

CABACUNGAN,

September 14, 2005

Petitioners,

DAVIDE, JR., C.J.

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

PUNO,
PANGANIBAN,

DECISION

QUISUMBING,
YNARES-SANTIAGO,

CORONA, J.:
SANDOVAL-GUTIERREZ,
CARPIO,

- versus -

AUSTRIA-MARTINEZ,

CORONA,
CARPIO MORALES,
CALLEJO, SR.,

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito

Victoriano, Jacob Obania and Domingo Cabacungan filed an action for
annulment of judgment and titles of land and/or reconveyance and/or
reversion with preliminary injunction before the Regional Trial Court, Branch
43, of Roxas, Oriental Mindoro, against the Bureau of Forest Development,
Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del
Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.

AZCUNA,
TINGA,
CHICO-NAZARIO and
GARCIA, JJ.
HON. COURT OF APPEALS, HEIRS

In the course of the proceedings, the parties (both petitioners and

respondents) filed various motions with the trial court. Among these were: (1)
the motion filed by petitioners to declare the respondent heirs, the Bureau of
Lands and the Bureau of Forest Development in default and (2) the motions
to dismiss filed by the respondent heirs and the Land Bank of the Philippines,
respectively.

OF BERNARDO DEL MUNDO,

namely: FE, CORAZON, JOSEFA,
SALVADOR and CARMEN, all
surnamed DEL MUNDO, LAND BANK
OF THE PHILIPPINES AND HON.
ANTONIO N. ROSALES, Presiding
Judge, Branch 43, Regional Trial
Court, Roxas, Oriental Mindoro,
Respondents. Promulgated :

In an order dated May 16, 1997, the trial court, presided by public respondent
Judge Antonio N. Rosales, resolved the foregoing motions as follows: (1) the
petitioners motion to declare respondents Bureau of Lands and Bureau of
Forest Development in default was granted for their failure to file an answer,
but denied as against the respondent heirs of del Mundo because the
substituted service of summons on them was improper; (2) the Land Banks
motion to dismiss for lack of cause of action was denied because there were
hypothetical admissions and matters that could be determined only after trial,
and (3) the motion to dismiss filed by respondent heirs of del Mundo, based
on prescription, was also denied because there were factual matters that
could be determined only after trial.[1]

The respondent heirs filed a motion for reconsideration of the order denying
their motion to dismiss on the ground that the trial court could very well
resolve the issue of prescription from the bare allegations of the complaint
itself without waiting for the trial proper.

In an order[2] dated February 12, 1998, the trial court dismissed petitioners
complaint on the ground that the action had already prescribed. Petitioners
allegedly received a copy of the order of dismissal on March 3, 1998 and, on
the 15th day thereafter or on March 18, 1998, filed a motion for
reconsideration. On July 1, 1998, the trial court issued another order
dismissing the motion for reconsideration[3] which petitioners received on
July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of
appeal[4] and paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that
it was filed eight days late.[5] This was received by petitioners on July 31,
1998. Petitioners filed a motion for reconsideration but this too was denied in
an order dated September 3, 1998.[6]

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules
of Civil Procedure, petitioners assailed the dismissal of the notice of appeal
before the Court of Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their
notice of appeal. They argued that the 15-day reglementary period to appeal
started to run only on July 22, 1998 since this was the day they received
the final order of the trial court denying their motion for reconsideration.
When they filed their notice of appeal on July 27, 1998, only five days
had elapsed and they were well within the reglementary period for appeal.[7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It
ruled that the 15-day period to appeal should have been reckoned from
March 3, 1998 or the day they received the February 12, 1998 order
dismissing their complaint. According to the appellate court, the order was
the final order appealable under the Rules. It held further:

Perforce the petitioners tardy appeal was correctly dismissed for the
(P)erfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional and non-compliance with such legal
requirement is fatal and effectively renders the judgment final and executory.
[8]

Petitioners filed a motion for reconsideration of the aforementioned

decision. This was denied by the Court of Appeals on January 6, 2000.

In this present petition for review under Rule 45 of the Rules, petitioners
ascribe the following errors allegedly committed by the appellate court:

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS AND IN
AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36
OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL
MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL
DOCKET FEES.

II

THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING

AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT

HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED

OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL
ORDER OF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE
OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON
AUGUST 3, 1998.

III

THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING

THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41, OF THE
1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST]
ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED
FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED
JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS
THROUGH COUNSEL ON JULY 22, 1998.

IV.

THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING

THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA
280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE
PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE
FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE
ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.[9]

The foregoing issues essentially revolve around the period within which
petitioners should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part
of due process. It is merely a statutory privilege and may be exercised only in
the manner and in accordance with the provisions of law. Thus, one who
seeks to avail of the right to appeal must comply with the requirements of the
Rules. Failure to do so often leads to the loss of the right to appeal.[10] The
period to appeal is fixed by both statute and procedural rules. BP 129,[11] as
amended, provides:

Sec. 39. Appeals. The period for appeal from final orders,
resolutions, awards, judgments, or decisions of any court in all these cases
shall be fifteen (15) days counted from the notice of the final order,
resolution, award, judgment, or decision appealed from. Provided, however,
that in habeas corpus cases, the period for appeal shall be (48) forty-eight
hours from the notice of judgment appealed from. x x x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within

fifteen (15) days from the notice of the judgment or final order appealed from.
Where a record on appeal is required, the appellant shall file a notice of
appeal and a record on appeal within thirty (30) days from the notice of
judgment or final order.

The period to appeal shall be interrupted by a timely motion for new

trial or reconsideration. No motion for extension of time to file a motion for
new trial or reconsideration shall be allowed. (emphasis supplied)

Based on the foregoing, an appeal should be taken within 15 days

from the notice of judgment or final order appealed from. A final judgment or
order is one that finally disposes of a case, leaving nothing more for the court
to do with respect to it. It is an adjudication on the merits which, considering
the evidence presented at the trial, declares categorically what the rights and
obligations of the parties are; or it may be an order or judgment that
dismisses an action.[12]

As already mentioned, petitioners argue that the order of July 1, 1998

denying their motion for reconsideration should be construed as the final
order, not the February 12, 1998 order which dismissed their complaint.
Since they received their copy of the denial of their motion for

reconsideration only on July 22, 1998, the 15-day reglementary period to

appeal had not yet lapsed when they filed their notice of appeal on July 27,
1998.

What therefore should be deemed as the final order, receipt of which

triggers the start of the 15-day reglementary period to appeal the February
12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing
the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court
declared petitioner Quelnan non-suited and accordingly dismissed his
complaint. Upon receipt of the order of dismissal, he filed an omnibus motion
to set it aside. When the omnibus motion was filed, 12 days of the 15-day
period to appeal the order had lapsed. He later on received another order,
this time dismissing his omnibus motion. He then filed his notice of appeal.
But this was likewise dismissed for having been filed out of time.

The court a quo ruled that petitioner should have appealed within 15 days
after the dismissal of his complaint since this was the final order that was
appealable under the Rules. We reversed the trial court and declared that it
was the denial of the motion for reconsideration of an order of dismissal of a
complaint which constituted the final order as it was what ended the issues
raised there.

This pronouncement was reiterated in the more recent case of Apuyan

v. Haldeman et al.[14] where we again considered the order denying
petitioner Apuyans motion for reconsideration as the final order which finally
disposed of the issues involved in the case.

Based on the aforementioned cases, we sustain petitioners view that

the order dated July 1, 1998 denying their motion for reconsideration was the
final order contemplated in the Rules.

We now come to the next question: if July 1, 1998 was the start of the 15-day
reglementary period to appeal, did petitioners in fact file their notice of
appeal on time?

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or
final order to appeal the decision of the trial court. On the 15th day of the
original appeal period (March 18, 1998), petitioners did not file a notice of
appeal but instead opted to file a motion for reconsideration. According to the
trial court, the MR only interrupted the running of the 15-day appeal period.
[15] It ruled that petitioners, having filed their MR on the last day of the 15day reglementary period to appeal, had only one (1) day left to file the notice
of appeal upon receipt of the notice of denial of their MR. Petitioners,
however, argue that they were entitled under the Rules to a fresh period of
15 days from receipt of the final order or the order dismissing their motion
for reconsideration.

In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of

the decision of the trial court. We ruled there that they only had the remaining
time of the 15-day appeal period to file the notice of appeal. We consistently
applied this rule in similar cases,[16] premised on the long-settled doctrine
that the perfection of an appeal in the manner and within the period permitted
by law is not only mandatory but also jurisdictional.[17] The rule is also
founded on deep-seated considerations of public policy and sound practice
that, at risk of occasional error, the judgments and awards of courts must
become final at some definite time fixed by law.[18]

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised
Rules of Court read:

Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the
adverse party and filing with the trial court within thirty (30) days from notice
of order or judgment, a notice of appeal, an appeal bond, and a record on
appeal. The time during which a motion to set aside the judgment or order or
for new trial has been pending shall be deducted, unless such motion fails to
satisfy the requirements of Rule 37.

But where such motion has been filed during office hours of the last day of
the period herein provided, the appeal must be perfected within the day
following that in which the party appealing received notice of the denial of
said motion.[19] (emphasis supplied)

According to the foregoing provision, the appeal period previously

consisted of 30 days. BP 129, however, reduced this appeal period to 15
days. In the deliberations of the Committee on Judicial Reorganization[20]
that drafted BP 129, the raison d etre behind the amendment was to shorten
the period of appeal[21] and enhance the efficiency and dispensation of
justice. We have since required strict observance of this reglementary period
of appeal. Seldom have we condoned late filing of notices of appeal,[22] and
only in very exceptional instances to better serve the ends of justice.

In National Waterworks and Sewerage Authority and Authority v. Municipality

of Libmanan,[23] however, we declared that appeal is an essential part of our
judicial system and the rules of procedure should not be applied rigidly. This
Court has on occasion advised the lower courts to be cautious about not
depriving a party of the right to appeal and that every party litigant should be
afforded the amplest opportunity for the proper and just disposition of his
cause, free from the constraint of technicalities.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which

require litigants to do certain acts must be followed unless, under exceptional
circumstances, a delay in the filing of an appeal may be excused on grounds
of substantial justice. There, we condoned the delay incurred by the
appealing party due to strong considerations of fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy
appeals, we have not been oblivious to or unmindful of the extraordinary
situations that merit liberal application of the Rules. In those situations where
technicalities were dispensed with, our decisions were not meant to
undermine the force and effectivity of the periods set by law. But we hasten
to add that in those rare cases where procedural rules were not stringently
applied, there always existed a clear need to prevent the commission of a
grave injustice. Our judicial system and the courts have always tried to
maintain a healthy balance between the strict enforcement of procedural
laws and the guarantee that every litigant be given the full opportunity for the
just and proper disposition of his cause.[25]

The Supreme Court may promulgate procedural rules in all courts.[26] It has
the sole prerogative to amend, repeal or even establish new rules for a more
simplified and inexpensive process, and the speedy disposition of cases. In
the rules governing appeals to it and to the Court of Appeals, particularly
Rules 42,[27] 43[28] and 45,[29] the Court allows extensions of time, based
on justifiable and compelling reasons, for parties to file their appeals. These
extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford

litigants fair opportunity to appeal their cases, the Court deems it practical to
allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion
for a new trial or motion for reconsideration. [30]

Henceforth, this fresh period rule shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42
on petitions for review from the Regional Trial Courts to the Court of Appeals;
Rule 43 on appeals from quasi-judicial agencies[31] to the Court of Appeals
and Rule 45 governing appeals by certiorari to the Supreme Court.[32] The
new rule aims to regiment or make the appeal period uniform, to be counted
from receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the
fresh period of 15 days, counted from July 22, 1998 (the date of receipt of
notice denying their motion for reconsideration). This pronouncement is not
inconsistent with Rule 41, Section 3 of the Rules which states that the appeal
shall be taken within 15 days from notice of judgment or final order appealed
from. The use of the disjunctive word or signifies disassociation and
independence of one thing from another. It should, as a rule, be construed in
the sense in which it ordinarily implies.[33] Hence, the use of or in the
above provision supposes that the notice of appeal may be filed within 15
days from the notice of judgment or within 15 days from notice of the final
order, which we already determined to refer to the July 1, 1998 order
denying the motion for a new trial or reconsideration.

Neither does this new rule run counter to the spirit of Section 39 of BP 129
which shortened the appeal period from 30 days to 15 days to hasten the
disposition of cases. The original period of appeal (in this case March 3-18,

1998) remains and the requirement for strict compliance still applies. The
fresh period of 15 days becomes significant only when a party opts to file a
motion for new trial or motion for reconsideration. In this manner, the trial
court which rendered the assailed decision is given another opportunity to
review the case and, in the process, minimize and/or rectify any error of
judgment. While we aim to resolve cases with dispatch and to have
judgments of courts become final at some definite time, we likewise aspire to
deliver justice fairly.

No costs.

SO ORDERED.

SECOND DIVISION
In this case, the new period of 15 days eradicates the confusion as to when
the 15-day appeal period should be counted from receipt of notice of
judgment (March 3, 1998) or from receipt of notice of final order appealed
from (July 22, 1998).

To recapitulate, a party litigant may either file his notice of appeal within 15
days from receipt of the Regional Trial Courts decision or file it within 15
days from receipt of the order (the final order) denying his motion for new
trial or motion for reconsideration. Obviously, the new 15-day period may be
availed of only if either motion is filed; otherwise, the decision becomes final
and executory after the lapse of the original appeal period provided in Rule
41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from
receipt of the order denying their motion for reconsideration on July 22, 1998.
Hence, the notice of appeal was well within the fresh appeal period of 15
days, as already discussed.[34]

Jenette Marie B. Crisologo,

Petitioner,

Present:

- versus -

CALLEJO, SR.,
TINGA, and
GLOBE TELECOM INC.

CHICO-NAZARIO, JJ.

and CESAR M. MAUREAL,

Vice President for Human

Promulgated:

Resources,
December 16, 2005

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

RESOLUTION
WHEREFORE, the petition is hereby GRANTED and the assailed decision of
the Court of Appeals REVERSED and SET ASIDE. Accordingly, let the
records of this case be remanded to the Court of Appeals for further
proceedings.

PUNO, Chairman,
AUSTRIA-MARTINEZ,

Respondents.
We deem it unnecessary to discuss the applicability of Denso
(Philippines), Inc. v. IAC[35] since the Court of Appeals never even referred
to it in its assailed decision.

G.R. No. 167631

AUSTRIA-MARTINEZ, J.:

Petitioner was an employee of respondent company. When she was

promoted as Director of Corporate Affairs and Regulatory Matters, she
became entitled to an executive car, and she procured a 1997 Toyota

WHEREFORE, finding merit in all the foregoing

uncontroverted facts supported by documentary exhibits,
judgment is hereby rendered declaring plaintiff to have the
right of possession over the subject motor vehicle and
ordering defendant plaintiff to pay plaintiff the following:

Camry. In April 2002, she was separated from the company. Petitioner filed
a complaint for illegal dismissal and reinstatement with the National Labor
Relations Commission (NLRC), which later dismissed the complaint.
Petitioner filed, on August 12, 2004, a petition for certiorari with the Court of
Appeals, docketed as CA-G.R. SP No. 85679 assailing the NLRCs
dismissal.

Pending said petition, respondent company filed with the Regional

1. The amount of TWO MILLION FIVE

HUNDRED FIFTY SIX THOUSAND
FOUR HUNDRED SIXTY PESOS
(P2,556,460.00) as damages in the form
of unpaid daily car rental for 730 (From
15 August 2002 until 22 June 2004) days
at THREE THOUSAND FIVE HUNDRED
TWO PESOS (P3,502.00) per day;

Trial Court of Mandaluyong (Branch 213) an action for recovery of

possession of a motor vehicle with application for a writ of replevin with

2.

The sum of TWO HUNDRED

THOUSAND PESOS (P200,000.00) AS
AND BY WAY OF Attorneys fee;

3.

The sum of TWO HUNDRED

THOUSAND PESOS (P200,000.00) as
exemplary damages in order to deter
others from doing similar act in
withholding possession of a property to
another to which he/she has no right to
possess; and

damages, docketed as Civil Case No. MC04-2480. Petitioner filed a motion

to dismiss on the ground of litis pendentia and forum shopping but this was
denied by the trial court. Thus, petitioner filed a petition for certiorari with the
Court of Appeals, docketed as CA-G.R. SP No. 85927. [1] Petitioner also filed
with the Court of Appeals a motion for the issuance of a writ of prohibition to
enjoin proceedings in the replevin case before the trial court.

Thereafter, respondent company filed a motion to declare defendant

in default in Civil Case No. MC04-2480, which was granted by the trial court.
Respondent company was thus allowed to present its evidence ex-parte.
Petitioner filed a motion for reconsideration of the order of default but it was

4. Costs of suit.

denied by the trial court. On April 5, 2005, the trial court rendered a
judgment by default, the dispositive portion of which reads:
SO ORDERED.

Instance, the Social Security Commission and the Court of Agrarian

Relations TO THE COURT OF APPEALS, and reads:
Petitioner

then

filed

with

the

Court

petition

for

review

on certiorari under Rule 45 of the Rules of Court, which was denied by the
Court in a Resolution dated May 16, 2005, for being the wrong remedy under
the 1997 Rules of Civil Procedure, as amended.

A party who has been declared in default may

likewise appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no petition for
relief to set aside the order of default has been presented by
him in accordance with Rule 38. (Emphasis supplied)

Petitioner thus filed the present motion for reconsideration, alleging

that the filing of said petition is the proper recourse, citing Matute vs. Court of

Had petitioner been more circumspect, she would have easily

Appeals, 26 SCRA 798 (1969), wherein it was ruled that a defendant

ascertained that said Section 2, paragraph 3 of Rule 41 of the old Rules of

declared in default has the remedy set forth in Section 2, paragraph 3 of Rule

Court, as cited in the Matute case, had already been superseded by the 1997

41 of the old Rules of Court.[2] Petitioner then cited in her motion, Section 2,

Rules of Civil Procedure, as amended, and under these new rules, the

paragraph 3 or (c) of the Rules of Civil Procedure.[3]

different modes of appeal are clearly laid down.

Evidently, petitioner misread the provision cited in the Matute case

The decision sought to be reviewed in this case is a judgment by

as that pertaining to Section 2(c), Rule 41 of the 1997 Rules of Civil

default rendered by the trial court in Civil Case No. MC04-2480. As such, the

Procedure, as amended, which states: (c) Appeal by certiorari. - In all cases

applicable rule is Section 2, Rule 41 of the 1997 Rules of Civil Procedure,

where only questions of law are raised or involved, the appeal shall be to the

as amended, which provides for the different modes of appeal from a

Supreme Court by petition for review on certiorari in accordance with Rule

Regional Trial Courts judgment or final order, to wit:

45. Hence, she directly filed her petition for review on certiorari with the
Court.

Section 2. Modes of appeal.

Petitioner should be reminded that the Matute case is of 1969

vintage and pertained to the old Rules of Court.

As stated in

the Matute case, a defendant validly declared in default has the remedy set
forth in Section 2, paragraph 3 of Rule 41. Note that under the old Rules,
Section 2, paragraph 3 of Rule 41 governed appeals from Courts of First

(a) Ordinary appeal. The appeal to the Court

of Appeals in cases decided by the Regional Trial Court
in the exercise of its original jurisdiction shall be taken
by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and
serving a copy thereof upon the adverse party. No
record on appeal shall be required except in special
proceedings and other cases of multiple or separate
appeals where the law or these Rules so require. In

such cases, the record on appeal shall be filed and

served in like manner.
(b) Petition for review. The appeal to the Court
of Appeals in cases decided by the Regional Trial Court in
the exercise of its appellate jurisdiction shall be by petition
for review in accordance with Rule 42.
(c) Appeal by certiorari. In all cases where only
questions of law are raised or involved, the appeal shall be
to the Supreme Court by petition for review on certiorari in
accordance with Rule 45. (Emphasis supplied)

a petition for relief under Section 2 [now Section 1] of Rule

38; and

d) He may also appeal from the judgment rendered

against him as contrary to the evidence or to the law, even if
no petition to set aside the order of default has been
presented by him (Sec. 2, Rule 41).

Moreover, a petition for certiorari to declare the nullity of a judgment

by default is also available if the trial court improperly declared a party in
In Cerezo vs. Tuazon,[4] the Court reiterated the remedies available to
a party declared in default:

default, or even if the trial court properly declared a party in default, if grave
abuse of discretion attended such declaration.[5]

The filing of the present petition is clearly not the proper remedy to
a) The defendant in default may, at any time after
discovery thereof and before judgment, file a motion under
oath to set aside the order of default on the ground that
his failure to answer was due to fraud, accident, mistake or
excusable negligence, and that he has a meritorious defense
(Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);

assail the default judgment rendered by the trial court. Petitioner still has the
available remedy of filing with the Regional Trial Court a motion for new trial
or an ordinary appeal to the Court of Appeals from the trial courts default
judgment. Note that petitioner admits that she was properly declared in
default.[6] Thus, there is no question of any improvident or improper
declaration of default by the trial court, and the remedy of filing a special civil

b) If the judgment has already been rendered when

the defendant discovered the default, but before the same
has become final and executory, he may file a motion for
new trial under Section 1 (a) of Rule 37;

action for certiorari has been effectively foreclosed on petitioner. Her only
recourse then is to file an ordinary appeal with the Court of Appeals under
Section 2(a), Rule 41 of the 1997 Rules of Civil Procedure, as amended.

Instead, she came directly to this Court via petition for review
c) If the defendant discovered the default after the
judgment has become final and executory, he may file

on certiorari, without setting forth substantial reasons why the ordinary

remedies under the law should be disregarded and the petition entertained.

Petitioner cannot even find solace in the Matute case as the old Rules of
III

Court then applicable explicitly laid down the remedy of anordinary appeal to
the Court of Appeals, and not appeal by certiorari to this Court, by a
defendant declared in default.

THE MONETARY AWARDS FOR DAMAGES AND

ATTORNEYS
FEES
ARE
UNWARRANTED
AND
UNJUSTIFIABLE CONSIDERING THAT SUCH ARE NOT
SUPPORTED BY LAW AND JURISPRUDENCE

Petitioner further argues that the petition involved questions of law,

and the Court should have taken cognizance of the case. The grounds set
forth in her petition prove otherwise, viz.:

IV
GROUNDS

THE COURT A QUO ISSUED THE ASSAILED DECISION IN

A WAY THAT IT IS NOT IN ACCORD WITH LAW OR
APPLICABLE DECISIONS OF THE SUPREME COURT
AND HAS SO FAR DEPARTED FROM THE USUAL
COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR
THE EXERCISE BY THE SUPREME COURT OF ITS
POWER OF SUPERVISION

THE
COMPLAINT
FOR
REPLEVIN
FILED
BY
RESPONDENTS AGAINST PETITIONER SHOULD HAVE
BEEN DISMISSED ON THE GROUND OF LITIS
PENDENTIA AND FOR RESPONDENTS VIOLATION OF
THE RULES AGAINST FORUM-SHOPPING

The test of whether a question is one of law or of fact is not the

II

appellation given to such question by the party raising the same; rather, it is
whether the appellate court can determine the issue raised without reviewing
or evaluating the evidence, in which case, it is a question of law; otherwise, it

THE TRIAL COURT WENT AHEAD WITH THE EX-PARTE

PRESENTATION
OF
RESPONDENTS
EVIDENCE
DESPITE THE PETITIONERS PENDING MOTION FOR
RECONSIDERATION

is a question of fact.[7] The issues on the award of damages call for a reevaluation of the evidence before the trial court, which is obviously a
question of fact. Cases where an appeal involved questions of fact, of law,
or bothfall within the exclusive appellate jurisdiction of the Court of Appeals.
[8]

(Emphasis supplied)

It is on this score that the Court is inclined to concur with petitioners

argument that even if the remedy resorted to was wrong, the Court may refer

SECOND DIVISION

the case to the Court of Appeals under Rule 56, Section 6, paragraph 2 of
the 1997 Rules of Civil Procedure, as amended, which provides: (A)n appeal

[G.R. No. 127181. September 4, 2001]

by certiorari taken to the Supreme Court from the Regional Trial Court
submitting issues of fact may be referred to the Court of Appeals for decision
or appropriate action. This despite the express provision in Section 5(f) of
the same Rule, which provides that an appeal may be dismissed when there
is error in the choice or mode of appeal.

LAND BANK OF THE PHILIPPINES, petitioner, vs. THE COURT OF

APPEALS,
ECO
MANAGEMENT
CORPORATION
and
EMMANUEL C. OATE,respondents.
DECISION
QUISUMBING, J.:

Both Sections 5(f) and 6 of Rule 57 use the term may, denoting
discretion on the part of the Court in dismissing the appeal or referring the
case to the Court of Appeals. The question of fact involved in the appeal and
substantial ends of justice warrant a referral of this case to the Court of
Appeals for further appropriate proceedings.

WHEREFORE, the motion for reconsideration is GRANTED. The

petition is reinstated and the case is REFERRED to the Court of Appeals for
appropriate action.

SO ORDERED.

This petition for review on certiorari seeks to reverse and set aside the
decision[1] promulgated on June 17, 1996 in CA-GR No. CV-43239 of public
respondent and its resolution [2] dated November 29, 1996 denying
petitioners motion for reconsideration.[3]
The facts of this case as found by the Court of Appeals and which we
find supported by the records are as follows:
On various dates in September, October, and November, 1980, appellant
Land Bank of the Philippines (LBP) extended a series of credit
accommodations to appellee ECO, using the trust funds of the Philippine
Virginia Tobacco Administration (PVTA) in the aggregate amount of
P26,109,000.00. The proceeds of the credit accommodations were received
on behalf of ECO by appellee Oate.
On the respective maturity dates of the loans, ECO failed to pay the
same. Oral and written demands were made, but ECO was unable to
pay. ECO claims that the company was in financial difficulty for it was unable
to collect its investments with companies which were affected by the financial
crisis brought about by the Dewey Dee scandal.
xxx
On October 20, 1981, ECO proposed and submitted to LBP a Plan of
Payment whereby the former would set up a financing company which
would absorb the loan obligations. It was proposed that LBP would

participate in the scheme through the conversion of P9,000,000.00 which

was part of the total loan, into equity.

On February 3, 1993, the trial court rendered an Amended Decision, the

dispositive portion of which reads as follows:

On March 4, 1982, LBP informed ECO of the action taken by the formers
Trust Committee concerning the Plan of Payment which reads in part, as
follows:

ACCORDINGLY, the Decision, dated December 3, 1990, is hereby modified

to read as follows:

xxx
Please be informed that the Banks Trust Committee has deliberated on the
plan of payment during its meetings on November 6, 1981 and February 23,
1982. The Committee arrived at a decision that you may proceed with your
Plan of Payment provided Land Bank shall not participate in the undertaking
in any manner whatsoever.
In view thereof, may we advise you to make necessary revision in the
proposed Plan of Payment and submit the same to us as soon as
possible. (Records, p. 428)
On May 5, 1982, ECO submitted to LBP a Revised Plan of Payment
deleting the latters participation in the proposed financing company. The
Trust Committee deliberated on the Revised Plan of Payment and resolved
to reject it. LBP then sent a letter to the PVTA for the latters comments. The
letter stated that if LBP did not hear from PVTA within five (5) days from the
latters receipt of the letter, such silence would be construed to be an
approval of LBPs intention to file suit against ECO and its corporate
officers. PVTA did not respond to the letter.
On June 28, 1982, Landbank filed a complaint for Collection of Sum of
Money against ECO and Emmanuel C. Oate before the Regional Trial Court
of Manila, Branch 50.
After trial on the merits, a judgment was rendered in favor of LBP; however,
appellee Oate was absolved from personal liability for insufficiency of
evidence.
Dissatisfied,
both
parties
filed
their
respective
Motions
for
Reconsideration. LBP claimed that there was an error in computation in the
amounts to be paid. LBP also questioned the dismissal of the case with
regard to Oate.
On the other hand, ECO questioned its being held liable for the amount of
the loan. Upon order of the court, both parties submitted Supplemental
Motions for Reconsideration and their respective Oppositions to each others
Motions.

WHEREFORE, judgment is rendered ordering defendant Eco Management

Corporation to pay plaintiff Land Bank of the Philippines:
A. The sum of P26,109,000.00 representing the total amount of the ten (10)
loan accommodations plus 16% interest per annum computed from the dates
of their respective maturities until fully paid, broken down as follows:
1. the principal amount of P4,000,000.00 with interest at 16% computed from
September 18, 1981;
2. the principal amount of P5,000,000.00 with interest at 16% computed from
September 21, 1981;
3. the principal amount of P1,000,000.00 with interest rate at 16% computed
from September 28, 1981;
4. the principal amount of P1,000,000.00 with interest at 15% computed from
October 5, 1981;
5. the principal amount of P2,000,000.00 with interest rate at of 16%
computed from October 8, 1981;
6. the principal amount of P2,000,000.00 with interest rate at of 16% from
October 23, 1981;
7. the principal amount of P814,000.00 with interest rate at of 16% computed
from November 1, 1981;
8. the principal amount of P2,295,000.00 with interest rate at of 16%
computed from November 6, 1981;
9. the principal amount of P3,000,000.00 with interest rate at of 16%
computed from November 7, 1981;
10. the principal amount of P5,000,000.00 with interest rate at 16%
computed from November 9, 1981;

B. The sum of P260,000.00 as attorneys fees; and

C. The costs of the suit.
The case as against defendant Emmanuel Oate is dismissed for
insufficiency of evidence.
SO ORDERED. (Records, p. 608)[4]
The Court of Appeals affirmed in toto the amended decision of the trial
court.[5]
On June 9, 1996, petitioner filed a motion for reconsideration, which was
denied in a resolution dated November 29, 1996. Hence, this present
petition, assigning the following errors allegedly committed by the Court of
Appeals:
A
THE COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT
BASED ON THE FACTS AS ESTABLISHED BY EVIDENCE, THERE
EXISTS A SUBSTANTIAL AND JUSTIFIABLE GROUND UPON WHICH THE
LEGAL NOTION OF THE CORPORATE FICTION OF RESPONDENT ECO
MANAGEMENT CORPORATION MAY BE PIERCED.
B
THE COURT OF APPEALS GRAVELY ERRED IN NOT A[T]TACHING
LIABILITY TO RESPONDENT EMMANUEL C. OATE JOINTLY AND
SEVERALLY WITH RESPONDENT ECO MANAGEMENT CORPORATION
FOR THE PRINCIPAL SUM OF P26 M PLUS INTEREST THEREON.
C
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING
OF THE LOWER COURT THE SAME NOT BEING SUPPORTED BY THE
EVIDENCE AND APPLICABLE LAWS AND JURISPRUDENCE.[6]
The primary issues for resolution here are (1) whether or not the
corporate veil of ECO Management Corporation should be pierced; and (2)
whether or not Emmanuel C. Oate should be held jointly and severally liable
with ECO Management Corporation for the loans incurred from Land Bank.
Petitioner contends that the personalities of Emmanuel Oate and of
ECO Management Corporation should be treated as one, for the particular

purpose of holding respondent Oate liable for the loans incurred by

corporate respondent ECO from Land Bank. According to petitioner, the said
corporation was formed ostensibly to allow Oate to acquire loans from Land
Bank which he used for his personal advantage.
Petitioner submits the following arguments to support its stand: (1)
Respondent Oate owns the majority of the interest holdings in respondent
corporation, specifically during the crucial time when appellees applied for
and obtained the loan from LANDBANK, sometime in September to
November, 1980. (2) The acronym ECO stands for the initials of Emmanuel
C. Oate, which is the logical, sensible and concrete explanation for the
name ECO, in the absence of evidence to the contrary. (3) Respondent
Oate has always referred to himself as the debtor, not merely as an officer
or a representative of respondent corporation. (4) Respondent Oate
personally paid P1 Million taken from trust accounts in his name. (5)
Respondent Oate made a personal offering to pay his personal
obligation. (6) Respondent Oate controlled respondent corporation by
simultaneously holding two (2) corporate positions, viz., as Chairman and as
treasurer, beginning from the time of respondent corporations incorporation
and continuously thereafter without benefit of election. (7) Respondent
corporation had not held any meeting of the stockholders or of the Board of
Directors, as shown by the fact that no proceeding of such corporate
activities was filed with or borne by the record of the Securities and
Exchange Commission (SEC). The only corporate records respondent
corporation filed with the SEC were the following: Articles of Incorporation,
Treasurers Affidavit, Undertaking to Change Corporate Name, Statement of
Assets and Liabilities.[7]
Private respondents, in turn, contend that Oates only participation in
the transaction between petitioner and respondent ECO was his execution of
the loan agreements and promissory notes as Chairman of the corporations
Board of Directors. There was nothing in the loan agreement nor in the
promissory notes which would indicate that Oate was binding himself jointly
and severally with ECO. Respondents likewise deny that ECO stands for
Emmanuel C. Oate. Respondents also note that Oate is no longer a
majority stockholder of ECO and that the payment by a third person of the
debt of another is allowed under the Civil Code. They also alleged that there
was no fraud and/or bad faith in the transactions between them and Land
Bank. Hence, private respondents conclude, there is no legal ground to
pierce the veil of respondent corporations personality.[8]
At the outset, we find the matters raised by petitioner in his
argumentation are mainly questions of fact which are not proper in a petition
of this nature.[9] Petitioner is basically questioning the evaluation made by the
Court of Appeals of the evidence submitted at the trial. The Court of Appeals
had found that petitioners evidence was not sufficient to justify the piercing
of ECOs corporate personality.[10]Petitioner contended otherwise. It is basic
that where what is being questioned is the sufficiency of evidence, it is a

question of fact.[11] Nevertheless, even if we regard these matters as

tendering an issue of law, we still find no reason to reverse the findings of the
Court of Appeals.
A corporation, upon coming into existence, is invested by law with a
personality separate and distinct from those persons composing it as well as
from any other legal entity to which it may be related. [12]By this attribute, a
stockholder may not, generally, be made to answer for acts or liabilities of the
said corporation, and vice versa. [13] This separate and distinct personality is,
however, merely a fiction created by law for convenience and to promote the
ends of justice.[14] For this reason, it may not be used or invoked for ends
subversive to the policy and purpose behind its creation [15] or which could not
have been intended by law to which it owes its being. [16] This is particularly
true when the fiction is used to defeat public convenience, justify wrong,
protect fraud, defend crime,[17] confuse legitimate legal or judicial issues,
[18]
perpetrate deception or otherwise circumvent the law.[19] This is likewise
true where the corporate entity is being used as an alter ego, adjunct, or
business conduit for the sole benefit of the stockholders or of another
corporate entity.[20] In all these cases, the notion of corporate entity will be
pierced or disregarded with reference to the particular transaction involved. [21]
The burden is on petitioner to prove that the corporation and its
stockholders are, in fact, using the personality of the corporation as a means
to perpetrate fraud and/or escape a liability and responsibility demanded by
law. In order to disregard the separate juridical personality of a corporation,
the wrongdoing must be clearly and convincingly established. [22] In the
absence of any malice or bad faith, a stockholder or an officer of a
corporation cannot be made personally liable for corporate liabilities. [23]
The mere fact that Oate owned the majority of the shares of ECO is
not a ground to conclude that Oate and ECO is one and the same. Mere
ownership by a single stockholder of all or nearly all of the capital stock of a
corporation is not by itself sufficient reason for disregarding the fiction of
separate corporate personalities.[24] Neither is the fact that the name ECO
represents the first three letters of Oates name sufficient reason to pierce
the veil. Even if it did, it does not mean that the said corporation is merely a
dummy of Oate. A corporation may assume any name provided it is
lawful. There is nothing illegal in a corporation acquiring the name or as in
this case, the initials of one of its shareholders.
That respondent corporation in this case was being used as a mere alter
ego of Oate to obtain the loans had not been shown. Bad faith or fraud on
the part of ECO and Oate was not also shown. As the Court of Appeals
observed, if shareholders of ECO meant to defraud petitioner, then they
could have just easily absconded instead of going out of their way to propose
Plans of Payment.[25] Likewise, Oate volunteered to pay a portion of the
corporations debt.[26] This offer demonstrated good faith on his part to ease
the debt of the corporation of which he was a part. It is understandable that

a shareholder would want to help his corporation and in the process, assure
that his stakes in the said corporation are secured. In this case, it was
established that the P1 Million did not come solely from Oate. It was taken
from a trust account which was owned by Oate and other investors. [27] It was
likewise proved that the P1 Million was a loan granted by Oate and his codepositors to alleviate the plight of ECO. [28] This circumstance should not be
construed as an admission that he was really the debtor and not ECO.
In sum, we agree with the Court of Appeals conclusion that the
evidence presented by the petitioner does not suffice to hold respondent
Oate personally liable for the debt of co-respondent ECO. No reversible
error could be attributed to respondent courts decision and resolution which
petitioner assails.
WHEREFORE, the petition is DENIED for lack of merit. The decision
and resolution of the Court of Appeals in CA-G.R. CV No. 43239 are
AFFIRMED. Costs against petitioner.
SO ORDERED.

SECOND DIVISION
[G.R. No. 122860. April 30, 1999]
ASTA MOSKOWSKY, petitioner, vs. COURT OF APPEALS, ANTONIO C.
DORIA, EDGARDO L. ALCARAZ, AND EVANGELINE E.
DORIA, respondents.
RESOLUTION
QUISUMBING, J.:
Subject of the present petition for review on certiorari is the decision of
the Seventh Division of the Court of Appeals [1] in CA-G.R. CV-30210,
dismissing petitioners appeal motu propriofor non-payment of docket fees in
the trial court.
Petitioner herein Asta Moskowsky, a German national, is seeking to
recover her investments in an alleged joint venture with private respondents
Antonio C. Doria, Edgardo L. Alcaraz, and Evangeline E. Doria. The
procedural antecedents of her case are as follows:

On August 10, 1984, petitioner filed a complaint for collection of sum of

money and damages[2] against private respondents, docketed as Civil Case
No. 51369, and raffled to the Regional Trial Court of Pasig City, Branch 161.
[3]
The complaint filed before the court a quo had for its prayer the following:
WHEREFORE, it is respectfully prayed of this Honorable Court that after
trial on the merits, judgment be rendered in favor of the plaintiff and against
the defendants, ordering the defendants:
1) To return the amount of US$6,000.00 plus accrued interest to the plaintiff
or the equivalent thereof in Philippine currency at the time of payment;
2) To reimburse the plaintiff for telephone expenses incurred by her for
unauthorized calls between Doria and his patients in the amount of
US$1,016.19 or the equivalent thereof in Philippine currency at the time of
payment;
3) To reimburse the plaintiff for expenses incurred in connection with the
business transactions of Doria at the latters behest in the amount of US$724
or the equivalent thereof in Philippine currency at the time of payment;
4) To pay the plaintiff moral damages in an amount left to the sound
discretion of this Honorable Court;
5) To pay the plaintiff exemplary damages in an amount left to the sound
discretion of this Honorable Court;
6) To pay the plaintiff attorneys fees, costs of suit and expenses of litigation
in such amount proved at the trial.
On November 16, 1989, after a protracted trial on the merits, the trial
court rendered a decision[4] in favor of petitioner, the dispositive portion of
which reads:
In view of the foregoing, judgment is hereby rendered as follows, ordering
the defendants:

3. To pay damages in the amount of P50,000.00.

To pay the costs.
SO ORDERED.
From that decision, private respondents appealed to the Court of
Appeals, raising both factual and legal issues. [5] The Court of Appeals,
however, rendered a decision dated May 5, 1995 [6] dismissing the appeal
solely on the ground of plaintiff-appellees (petitioners) alleged non-payment
of docket fees in violation of the ruling in Manchester Development
Corporation v. Court of Appeals[7] as modified in the cases of Sun Insurance
Office Ltd. v. Asuncion[8] and Tacay v. Regional Trial Court[9] with the
additional finding that petitioner can no longer pay the docket fees since
prescription of the action has already set in.
On May 25, 1995, petitioner duly filed a Motion for Clarification and/or
Reconsideration[10] in order to clarify whether the dispositive portion of the
decision was referring to the appeal fee or the docket fees payable to the trial
court, and in case of the latter, petitioner humbly submitted that the dismissal
for non-payment of docket fees is erroneous because plaintiff already paid
the docket fees in the trial court, as evidenced by a xerox copy of the official
receipt issued by the clerk of court attached to the Motion.
In a Resolution dated November 29, 1995, [11] the Court of Appeals held
that:
It appearing that the arguments raised in the Motion for
Reconsideration submitted by plaintiff-appellee were sufficiently discussed
and passed upon in our Decision of May 5, 1995, said Motion for
Reconsideration dated May 25, 1995, is DENIED.
Nonetheless, considering that the aforesaid decision dealt with non-payment
of docketing fees pursuant to the ruling in Pantranco North Expressway, Inc.
v. C.A. (224 SCRA 477 [1993]), the dispositive portion of the May 5, 1995
decision is clarified such that what is being ordered dismissed therein in Civil
Case No. 51369 and not this appeal.

1. To pay or refund to the plaintiff the sum of US$5,400.00 or its equivalent Philippine peso, plus interest in the amount of 14% p.a. until fully paid;

SO ORDERED.

2. To reimburse the plaintiff the amount of $724.00 or its equivalent Philippine peso;

Hence, the present recourse to this Court by way of petition for review
on certiorari assailing the finding of the Court of Appeals that petitioner did

not pay docket fees in the trial court and the erroneous application of the
rules on non-payment of docket fees as enunciated by this Court in the cases
of Manchester, Sun Insurance and Tacay.
We find the petition impressed with merit.
At the outset, the resolution of this petition rests on whether or not
petitioner actually paid the docket fees in the trial court, and if so, whether
or not the correct amount of docket fees were paid. We are totally
confounded as to why the Court of Appeals dismissed the appeal when even
a cursory review of records would show that plaintiff therein paid P150.00
as docket fees.[12] Utmost circumspection should be exercised by appellate
courts in dismissing appeals on grounds which can be readily verified from
the records of the case. In Nerves v. Civil Service Commission, 276 SCRA
610, 617 (1997), we cautioned that:[13]
Litigation should, as much as possible, be decided on the merits and not on
technicality. Dismissal of appeals purely on technical grounds is frowned
upon, and the rules of procedure ought not to be applied in a very rigid,
technical sense, for they are adopted to help secure, not override, substantial
justice and thereby defeat their very aims. As has been the constant ruling of
this Court, every party litigant should be afforded the amplest opportunity for
the proper and just determination of his cause, free from the constraints of
technicalities.
In this case, the prayer of the complaint only specified the actual
damages suffered by petitioner and left the determination of moral and
exemplary damages to the sound discretion of the court. Attorneys fees,
costs of suit and expenses of litigation were prayed for in such amounts as
may be proven during trial. Ideally, considering that the present case
involves collection of sum of money and damages, petitioner should have
specified the amount of all her claims, whether for actual, moral, or
exemplary damages or any other claims, in the body and prayer of the
complaint. However, in view of the attendant circumstances, a more liberal
interpretation of the rules is called for.[14] While the docket fees were based
only on the amounts specified, the trial court acquired jurisdiction over the
action, and judgment awards which were left for determination by the court
or as may be proven during trial would still be subject to additional filing fees
which shall constitute a lien on the judgment. It would be the responsibility of
the Clerk of Court (of the trial court) or his duly authorized deputy to enforce
said lien and assess and collect the additional fees.[15]

WHEREFORE, the petition is hereby GRANTED. The decision of the

Court of Appeals dated May 5, 1995 and Resolution dated November 29,
1995 dismissing petitioners appeal are hereby SET ASIDE with a directive to
the Court of Appeals to RESOLVE the appeal on the merits with utmost
dispatch.
SO ORDERED.

SECOND DIVISION
[G.R. No. 122860. April 30, 1999]
ASTA MOSKOWSKY, petitioner, vs. COURT OF APPEALS, ANTONIO C.
DORIA, EDGARDO L. ALCARAZ, AND EVANGELINE E.
DORIA, respondents.
RESOLUTION
QUISUMBING, J.:
Subject of the present petition for review on certiorari is the decision of
the Seventh Division of the Court of Appeals [1] in CA-G.R. CV-30210,
dismissing petitioners appeal motu propriofor non-payment of docket fees in
the trial court.
Petitioner herein Asta Moskowsky, a German national, is seeking to
recover her investments in an alleged joint venture with private respondents
Antonio C. Doria, Edgardo L. Alcaraz, and Evangeline E. Doria. The
procedural antecedents of her case are as follows:
On August 10, 1984, petitioner filed a complaint for collection of sum of
money and damages[2] against private respondents, docketed as Civil Case
No. 51369, and raffled to the Regional Trial Court of Pasig City, Branch 161.
[3]
The complaint filed before the court a quo had for its prayer the following:
WHEREFORE, it is respectfully prayed of this Honorable Court that after
trial on the merits, judgment be rendered in favor of the plaintiff and against
the defendants, ordering the defendants:

1) To return the amount of US$6,000.00 plus accrued interest to the plaintiff

or the equivalent thereof in Philippine currency at the time of payment;
2) To reimburse the plaintiff for telephone expenses incurred by her for
unauthorized calls between Doria and his patients in the amount of
US$1,016.19 or the equivalent thereof in Philippine currency at the time of
payment;
3) To reimburse the plaintiff for expenses incurred in connection with the
business transactions of Doria at the latters behest in the amount of US$724
or the equivalent thereof in Philippine currency at the time of payment;
4) To pay the plaintiff moral damages in an amount left to the sound
discretion of this Honorable Court;
5) To pay the plaintiff exemplary damages in an amount left to the sound
discretion of this Honorable Court;

From that decision, private respondents appealed to the Court of

Appeals, raising both factual and legal issues. [5] The Court of Appeals,
however, rendered a decision dated May 5, 1995 [6] dismissing the appeal
solely on the ground of plaintiff-appellees (petitioners) alleged non-payment
of docket fees in violation of the ruling in Manchester Development
Corporation v. Court of Appeals[7] as modified in the cases of Sun Insurance
Office Ltd. v. Asuncion[8] and Tacay v. Regional Trial Court[9] with the
additional finding that petitioner can no longer pay the docket fees since
prescription of the action has already set in.
On May 25, 1995, petitioner duly filed a Motion for Clarification and/or
Reconsideration[10] in order to clarify whether the dispositive portion of the
decision was referring to the appeal fee or the docket fees payable to the trial
court, and in case of the latter, petitioner humbly submitted that the dismissal
for non-payment of docket fees is erroneous because plaintiff already paid
the docket fees in the trial court, as evidenced by a xerox copy of the official
receipt issued by the clerk of court attached to the Motion.
In a Resolution dated November 29, 1995, [11] the Court of Appeals held

6) To pay the plaintiff attorneys fees, costs of suit and expenses of litigation
in such amount proved at the trial.

that:

On November 16, 1989, after a protracted trial on the merits, the trial
court rendered a decision[4] in favor of petitioner, the dispositive portion of
which reads:

It appearing that the arguments raised in the Motion for

Reconsideration submitted by plaintiff-appellee were sufficiently discussed
and passed upon in our Decision of May 5, 1995, said Motion for
Reconsideration dated May 25, 1995, is DENIED.

In view of the foregoing, judgment is hereby rendered as follows, ordering

the defendants:
1. To pay or refund to the plaintiff the sum of US$5,400.00 or its equivalent Philippine peso, plus interest in the amount of 14% p.a. until fully paid;
2. To reimburse the plaintiff the amount of $724.00 or its equivalent Philippine peso;
3. To pay damages in the amount of P50,000.00.
To pay the costs.
SO ORDERED.

Nonetheless, considering that the aforesaid decision dealt with non-payment

of docketing fees pursuant to the ruling in Pantranco North Expressway, Inc.
v. C.A. (224 SCRA 477 [1993]), the dispositive portion of the May 5, 1995
decision is clarified such that what is being ordered dismissed therein in Civil
Case No. 51369 and not this appeal.
SO ORDERED.
Hence, the present recourse to this Court by way of petition for review
on certiorari assailing the finding of the Court of Appeals that petitioner did
not pay docket fees in the trial court and the erroneous application of the
rules on non-payment of docket fees as enunciated by this Court in the cases
of Manchester, Sun Insurance and Tacay.
We find the petition impressed with merit.

At the outset, the resolution of this petition rests on whether or not

petitioner actually paid the docket fees in the trial court, and if so, whether
or not the correct amount of docket fees were paid. We are totally
confounded as to why the Court of Appeals dismissed the appeal when even
a cursory review of records would show that plaintiff therein paid P150.00
as docket fees.[12] Utmost circumspection should be exercised by appellate
courts in dismissing appeals on grounds which can be readily verified from
the records of the case. In Nerves v. Civil Service Commission, 276 SCRA
610, 617 (1997), we cautioned that:[13]

epublic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION
Litigation should, as much as possible, be decided on the merits and not on
technicality. Dismissal of appeals purely on technical grounds is frowned
upon, and the rules of procedure ought not to be applied in a very rigid,
technical sense, for they are adopted to help secure, not override, substantial
justice and thereby defeat their very aims. As has been the constant ruling of
this Court, every party litigant should be afforded the amplest opportunity for
the proper and just determination of his cause, free from the constraints of
technicalities.
In this case, the prayer of the complaint only specified the actual
damages suffered by petitioner and left the determination of moral and
exemplary damages to the sound discretion of the court. Attorneys fees,
costs of suit and expenses of litigation were prayed for in such amounts as
may be proven during trial. Ideally, considering that the present case
involves collection of sum of money and damages, petitioner should have
specified the amount of all her claims, whether for actual, moral, or
exemplary damages or any other claims, in the body and prayer of the
complaint. However, in view of the attendant circumstances, a more liberal
interpretation of the rules is called for.[14] While the docket fees were based
only on the amounts specified, the trial court acquired jurisdiction over the
action, and judgment awards which were left for determination by the court
or as may be proven during trial would still be subject to additional filing fees
which shall constitute a lien on the judgment. It would be the responsibility of
the Clerk of Court (of the trial court) or his duly authorized deputy to enforce
said lien and assess and collect the additional fees.[15]
WHEREFORE, the petition is hereby GRANTED. The decision of the
Court of Appeals dated May 5, 1995 and Resolution dated November 29,
1995 dismissing petitioners appeal are hereby SET ASIDE with a directive to
the Court of Appeals to RESOLVE the appeal on the merits with utmost
dispatch.
SO ORDERED.

G.R. No. 104222 March 3, 1994

ASTA
MOSKOWSKY, petitioner,
vs.
HON. COURT OF APPEALS, ANTONIO DORIA, EDGARDO ALCARAZ
and EVANGELINE DORIA, respondents.
Alampay, Del Castillo, Maronilla for petitioner.
Ferdinand Valentin for private respondents.

NOCON, J.:
Petitioner Asta Moskowsky claims that the appellate court gravely abused its
discretion
when
it
admitted
the
private
respondents'
brief
(as appellants therein) which she claims was filed out of time. And she points
to the fact that private respondents' motion for extension of time to file
appellants' brief were filed after the expiration of the time sought to be
extended. The private respondents deny this claim. Records of the case
disclose that in private respondents' peculiar case the last days when their
motions were filed just happened to fall always on holidays. In which case
the private respondents had nor recourse but to file their motions on the very
first business days after the holidays. Can such filing by the private
respondents be sustained by this Court? Keeping faith with earlier decisions
by the Court, we rule in favor of private respondents.
The facts of this case are simple enough.

In Civil Case No. 51369 of the Regional Trial Court of Pasig Branch 161,
Metro Manila entitled: "Asta Moskowsky vs. Antonio Doria," a decision was
rendered on November 16, 1989 in favor of petitioner.
Said decision was appealed by private respondents and the records were
elevated to the Respondent Court of Appeals which docketed the appeal as
CA-G.R. CV No. 30210.
Acting on a motion for extension of time to file appellants' brief filed by the
private respondents, the Respondent Court in a resolution dated August 15,
1991 granted a non-extendible period of ninety (90) days within which to file
appellants' brief or until November 1, 1991.
On November 4, 1991, the private respondents through counsel filed an
"Urgent Motion for a Final Extension of 20 days to File Brief."
On even date, the petitioner, through counsel, filed a Motion to Dismiss
Appeal on the ground that no appellants' brief had yet been filed despite the
lapse of the reglementary period on November 1, 1991.
On November 25, 1991 the private respondents filed an "Urgent Motion for
Five (5) Days to file Brief."
On December 3, 1991, the private respondents filed a "Motion to Admit
Appellants' Brief."
In a Resolution dated December 19, 1991, the Respondent Court of Appeals
resolved to admit Appellants' Brief.
On January 6, 1992, petitioner filed a Motion for Reconsideration arguing that
the period within which to submit Appellants' Brief has expired and the
admission of the Appellants' Brief is contrary to Sec. 15 Rule 46 of the Rules.
In Resolution dated February 19, 1992, the Respondent Court of Appeals
denied the Petitioner's Motion for Reconsideration. 1
Hence, petitioner filed this instant petition.
Petitioner strongly argues that the filing of the "Urgent Motion For A Final
Extension Of 20 Days" on November 4, 1991 did not operate to alter the
expiration of the reglementary period which was November 1, 1991. She
states that the twenty-day period should be counted from November 1, 1991

and the same would expire on November 21, 1991. The filing of the "Urgent
Motion For Five (5) Days To File Brief" on November 25, 1991 was,
therefore, four (4) days late. The subsequent "Motion To Admit Appellants'
Brief" filed December 3, 1991 was therefore filed out of time. As of November
22, 1991 there was no longer any period to be extended as the decision of
the trial court became final and executory as of said date. The Court of
Appeals therefore, committed grave abuse of discretion in allowing the
motions to be filed in violation of Section 15, Rule 46, Rules of Court, as said
motions were not filed before the expiration of the time sought to be
extended.
In reply, the private respondents aver that:
In the instant case all motions filed by respondents for
extension of time to file their brief before the Honorable
Court of Appeals invariably stated the periods of time prayed
for within which to file the same. For example, in the urgent
motion for a final extension of twenty (20) days (Annex "C" of
petition) respondents informed the court that the last day for
private respondent to file their brief is November 4, 1991
which is a fact because November 1, November 2 and
November 3 were all non-working days, and prayed that they
may be granted another extension of twenty (20) days.
Necessarily, the twenty days should begin on November 4,
1991.
Again in the urgent motion for five (5) days to file brief
(Annex "E" of petition) private respondents ask for an
extension of five(5) days from November 25, 1991. And the
Court of Appeals, in the interest of justice and equity, for
indeed our courts are not only courts of justice but also
courts of equity, impliedly granted these motions. . . . 2
Section 15, Rule 46, Rules of Court, reads as follows:
Sec. 15. Extension of time for filing brief . Extension of
time for the filing of briefs will not be allowed, except for good
and sufficient cause, and only if the motion for extension is
filed before the expiration of the time sought to be extended.
Private respondents' former counsel, Emeterio T. Balguna, filed on August 2,
1991, an "Urgent Ex-Parte Motion For Extension of Time To File Brief" 3 for a

period of ninety (90) days counted from August 3, 1991. Said ninety-day
period would end on November 1, 1991. November 1 is a regular holiday.
Then President Aquino declared November 2, 1991 as a special holiday. The
next day, November 3, 1991 turned out to be a Sunday. The next business
day was, therefore, November 4, 1991 a Monday. Instead of filing a brief,
private respondents this time, through new counsel, filed a motion for a
twenty-day extension to file a brief on November 4, 1991 in the following
tenor:
1. That due to the recurring illness, original counsel for
defendant-appellant Emeterio T. Balguna has withdrawn as
counsel for defendant-appellant and the matter of filing
appellant's brief has been endorsed to me by the said
defendant-appellant;
2. That the undersigned counsel has been informed that the
last day for defendant-appellant to file his brief is today,
November 4, 1991;

The issue presented in this case is quite simple. The private

respondent received a copy of the decision against it on
January 4, 1969. On February 3, 1969, the last day for
perfecting its appeal, it filed a motion for an extension of "at
least thirty (30) days from the receipt of the Order of this
Honorable Court within which to file the Record on Appeal."
The late Judge Federico C. Alikpala of the Court of First
Instance of Manila, who rendered the decision, issued an
order on February 4, 1969, granting an extension but only for
ten days and without indicating when it would commence.
This order was received by the private respondent on
February 7, 1969, and seven days later, on February 14,
1969, it filed the record on appeal.
The question is: Was the record on appeal filed on time, that
is, within the extension? Or more to the point, when should
the 10-day extension start to run? 7
Here, the Court held as follows:

3. That the undersigned counsel was given the records only

10 days ago and for which reason he will need time to study
the records and file appellant's brief;
4. That he will need another extension of twenty (20) days
from today within which to file appellant's brief;
5. That this motion is not intended to unduly delay the
termination of this case. 4
The law for pretermission of holidays is that "Where the day, or the last day,
for doing any act required or permitted by law falls on a regular holiday or
special day, the act may be done on the next succeeding business day." 5
The abovementioned motion was, therefore, filed on time, i.e., the motion for
the extension sought was filed before the expiration of the time sought to be
extended.
The next question is: when should the extended period requested for
commence to run?
A similar question was posed in Vda. de Capulong vs. Workmen's Insurance
Co., Inc. 6 where the issue as formulated by the Court was as follows:

Regarding the date when the 10-day extension should begin,

it is true that as a rule the extension should be tacked to the
original period and commence immediately after the
expiration of such period. But that rule will not apply in the
case at bar because the private respondent specifically
moved that it be given "at least thirty days from receipt of the
order" of the court allowing such extension. 8
Similarly, since private respondents specifically manifested that they "will
need another extension of twenty (20) days from today within which to file
appellants' brief" and the "today" (November 4, 1991) was the date of the
filing of the motion, there was then authority for private respondents to fix the
commencement (of the extended period requested) from November 4, 1991.
The same goes for the motion for another five days to file brief. The twentieth
day from November 4, 1991 fell on a Sunday and the brief was therefore to
be filed on November 25, 1991. But, instead of the brief, the private
respondents filed the abovementioned motion for extension of time to file
brief wherein they manifested that they would need five (5) days from the
filing of said motion the 25th of November 1991, to file said brief.

Five days from November 25, 1991 is November 30, 1991 (Bonifacio Day)
one of the regular holidays of each year. 9 The next day, December 1, 1991,
was a Sunday. The brief had to be filed the next day, December 2, 1991, it
being the first business day which was neither a regular holiday or a special
day.

And since "Rules of procedure are intended to promote, not to defeat,

substantial justice and, therefore, they should not be applied in a very rigid
and technical sense," we therefore respect the appellate court's assessment
of the good faith it perceived on the part of private respondents' new counsel
when it granted the motion to admit appellants' brief.

The private respondents filed a "Motion To Admit Appellants' Brief" on

December 3, 1991 one (1) day after due date with the following reasons:

WHEREFORE, the petition is hereby DENIED for lack of merit. The case is
hereby REMANDED to the appellate court for further proceedings. No costs.

That the last day for him to file appellant's brief was
yesterday, December 2, 1991. However, due to typing errors
committed by the typist on some pages of the brief,
undersigned counsel had to ask that said pages be retyped
and for which reason, he was not able to file the brief
yesterday;

SO ORDERED.

That he is now filing the said appellant's brief, today,

December 3, 1991. 10

ANTONIO K. LITONJUA and AURELIO K. LITONJUA, JR., petitioners, vs.

MARY ANN GRACE FERNANDEZ, HEIRS OF PAZ TICZON ELEOSIDA,
represented by GREGORIO T. ELEOSIDA, HEIRS OF DOMINGO B.
TICZON, represented by MARY MEDIATRIX T. FERNANDEZ, CRISTETA
TICZON, EVANGELINE JILL R. TICZON, ERLINDA T. BENITEZ, DOMINIC
TICZON, JOSEFINA LUISA PIAMONTE, JOHN DOES and JANE DOES,
respondents.

A similar one (1) day delay occurred in Javier vs. Court of Appeals, 11 and
there the Court ruled that:
The one (1) day delay in the filing of the said motion for
extension can justifiably be excused, considering that aside
from the change of counsel, the last day for filing the said
motion fell on a holiday following another holiday, hence,
under such circumstances, an outright dismissal of the
petition would be too harsh. Litigations should, as much as
possible, be decided on their merits and not on
technicalities. In a number of cases, this Court, in the
exercise of equity jurisdiction, has relaxed the stringent
application of technical rules in order to resolve the case on
its merits. Rules of procedure are intended to promote, not
defeat, substantial justice and, therefore, they should not be
applied in a very rigid and technical sense. 12
The theme of private respondents' new counsel in the motions for extension
of time to file brief was that he had just been hired as counsel by the private
respondents for which reason he needed time to go over the records of the
case and check his facts very well before submitting the private respondents'
brief which included submitting the same without any errors in its typing.

SECOND DIVISION
[G.R. No. 148116. April 14, 2004]

DECISION
CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision[1] of the Court of

Appeals in CA-G.R. CV No. 64940, which reversed and set aside the June
23, 1999 Decision[2] of the Regional Trial Court of Pasig City, Branch 68, in
Civil Case No. 65629, as well as its Resolution dated April 30, 2001 denying
the petitioners motion for reconsideration of the aforesaid decision.

The heirs of Domingo B. Ticzon[3] are the owners of a parcel of land located
in San Pablo City, covered by Transfer Certificate of Title (TCT) No. T-36766
of the Register of Deeds of San Pablo City.[4] On the other hand, the heirs of
Paz Ticzon Eleosida, represented by Gregorio T. Eleosida, are the owners of
a parcel of land located in San Pablo City, covered by TCT No. 36754, also
of the Register of Deeds of San Pablo City.[5]

The Case for the Petitioners

Sometime in September 1995, Mrs. Lourdes Alimario and Agapito Fisico who
worked as brokers, offered to sell to the petitioners, Antonio K. Litonjua and
Aurelio K. Litonjua, Jr., the parcels of land covered by TCT Nos. 36754 and
36766. The petitioners were shown a locator plan and copies of the titles
showing that the owners of the properties were represented by Mary
Mediatrix Fernandez and Gregorio T. Eleosida, respectively. The brokers told
the petitioners that they were authorized by respondent Fernandez to offer
the property for sale.
The petitioners, thereafter, made two ocular
inspections of the property, in the course of which they saw some people
gathering coconuts.

In the afternoon of November 27, 1995, the petitioners met with respondent
Fernandez and the two brokers at the petitioners office in Mandaluyong City.
[6] The petitioners and respondent Fernandez agreed that the petitioners
would buy the property consisting of 36,742 square meters, for the price of
P150 per square meter, or the total sum of P5,098,500. They also agreed
that the owners would shoulder the capital gains tax, transfer tax and the
expenses for the documentation of the sale. The petitioners and respondent
Fernandez also agreed to meet on December 8, 1995 to finalize the sale. It
was also agreed upon that on the said date, respondent Fernandez would
present a special power of attorney executed by the owners of the property,
authorizing her to sell the property for and in their behalf, and to execute a
deed of absolute sale thereon. The petitioners would also remit the purchase
price to the owners, through respondent Fernandez. However, only Agapito
Fisico attended the meeting. He informed the petitioners that respondent
Fernandez was encountering some problems with the tenants and was trying
to work out a settlement with them.[7] After a few weeks of waiting, the
petitioners wrote respondent Fernandez on January 5, 1995, demanding that
their transaction be finalized by January 30, 1996.[8]

When the petitioners received no response from respondent Fernandez, the

petitioners sent her another Letter[9] dated February 1, 1996, asking that the
Deed of Absolute Sale covering the property be executed in accordance with
their verbal agreement dated November 27, 1995. The petitioners also
demanded the turnover of the subject properties to them within fifteen days

from receipt of the said letter; otherwise, they would have no option but to
protect their interest through legal means.

Upon receipt of the above letter, respondent Fernandez wrote the petitioners
on February 14, 1996[10] and clarified her stand on the matter in this wise:

1) It is not true I agreed to shoulder registration fees and other miscellaneous

expenses, etc. I do not recall we ever discussed about them. Nonetheless, I
made an assurance at that time that there was no liens/encumbrances and
tenants on my property (TCT 36755).

2) It is not true that we agreed to meet on December 8, 1995 in order to sign

the Deed of Absolute Sale. The truth of the matter is that you were the one
who emphatically stated that you would prepare a Contract to Sell and
requested us to come back first week of December as you would be leaving
the country then. In fact, what you were demanding from us was to apprise
you of the status of the property, whether we would be able to ascertain that
there are really no tenants. Ms. Alimario and I left your office, but we did not
assure you that we would be back on the first week of December.

Unfortunately, some people suddenly appeared and claiming to be tenants

for the entire properties (including those belonging to my other relatives.)
Another thing, the Barangay Captain now refuses to give a certification that
our properties are not tenanted.

Thereafter, I informed my broker, Ms. Lulu Alimario, to relay to Mr. Agapito

that due to the appearance of alleged tenants who are demanding for a
one-hectare share, my cousin and I have thereby changed our mind and that
the sale will no longer push through. I specifically instructed her to inform
you thru your broker that we will not be attending the meeting to be held
sometime first week of December.

In view thereof, I regret to formally inform you now that we are no longer
selling the property until all problems are fully settled. We have not
demanded and received from you any earnest money, thereby, no obligations

exist. In the meantime, we hope that in the future we will eventually be able
to transact business since we still have other properties in San Pablo City.
[11]

Appended thereto was a copy of respondent Fernandez letter to the

petitioners dated January 16, 1996, in response to the latters January 5,
1996 letter.[12]

On April 12, 1996, the petitioners filed the instant Complaint for specific
performance with damages[13] against respondent Fernandez and the
registered owners of the property. In their complaint, the petitioners alleged,
inter alia, the following:

7.
Plaintiffs, true to their word, and relying in good faith on the
commitment of defendants, pursued the purchase of the subject parcels of
lands. On 5 January 1996, plaintiffs sent a letter of even date to defendants,
setting the date of sale and payment on 30 January 1996.

7.1
to it.

Defendants received the letter on 12 January 1996 but did not reply

8.
On 1 February 1996, plaintiffs again sent a letter of even date to
defendants demanding execution of the Deed of Sale.

8.1
Defendants received the same on 6 February 1996. Again, there
was no reply. Defendants thus reneged on their commitment a second time.
4.
On 27 November 1995, defendants offered to sell to plaintiffs two (2)
parcels of land covered by Transfer Certificates of Title Nos. 36766 and
36754 measuring a total of 36,742 square meters in Barrio Concepcion, San
Pablo City. After a brief negotiation, defendants committed and specifically
agreed to sell to plaintiffs 33,990 square meters of the two (2)
aforementioned parcels of land at P150.00 per square meter.

5.

The parties also unequivocally agreed to the following:

9.
On 14 February 1996, defendant Fernandez sent a written
communication of the same date to plaintiffs enclosing therein a copy of her
16 January 1996 letter to plaintiffs which plaintiffs never received before.
Defendant Fernandez stated in her 16 January 1996 letter that despite the
meeting of minds among the parties over the 33,990 square meters of land
for P150.00 per square meter on 27 November 1995, defendants suddenly
had a change of heart and no longer wished to sell the same. Paragraph 6
thereof unquestionably shows defendants previous agreement as abovementioned and their unjustified breach of their obligations under it.

(a)
The transfer tax and all the other fees and expenses for the titling of
the subject property in plaintiffs names would be for defendants account.
10.
Defendants cannot unilaterally, whimsically and capriciously cancel a
perfected contract to sell.
(b)
The plaintiffs would pay the entire purchase price of P5,098,500.00
for the aforementioned 33,990 square meters of land in plaintiffs office on 8
December 1995.

6.
Defendants repeatedly assured plaintiffs that the two (2) subject
parcels of land were free from all liens and encumbrances and that no
squatters or tenants occupied them.

11.
Plaintiffs intended to use the subject property for their subdivision
project to support plaintiffs quarry operations, processing of aggregate
products and manufacture of construction materials. Consequently, by
reason of defendants failure to honor their just obligations, plaintiffs suffered,
and continue to suffer, actual damages, consisting in unrealized profits and
cost of money, in the amount of at least P5 Million.

12.
Plaintiffs also suffered sleepless nights and mental anxiety on account
of defendants fraudulent actuations for which reason defendants are liable to
plaintiffs for moral damages in the amount of at least P1.5 Million.

13.
By reason of defendants above-described fraudulent actuations,
plaintiffs, despite their willingness and ability to pay the agreed purchase
price, have to date been unable to take delivery of the title to the subject
property. Defendants acted in a wanton, fraudulent and malevolent manner
in violating the contract to sell. By way of example or correction for the public
good, defendants are liable to plaintiff for exemplary damages in the amount
of P500,000.00.

14.
Defendants bad faith and refusal to honor their just obligations to
plaintiffs constrained the latter to litigate and to engage the services of
undersigned counsel for a fee in the amount of at least P250,000.00.[14]

The petitioners prayed that, after due hearing, judgment be rendered in their
favor ordering the respondents to

(a)
Secure at defendants expense all clearances from the appropriate
government agencies that will enable defendants to comply with their
obligations under the Contract to Sell;

(b)

Execute a Contract to Sell with terms agreed upon by the parties;

(c)

Solidarily pay the plaintiffs the following amounts:

1.

4.

P250,000.00 in attorneys fees.[15]

On July 5, 1996, respondent Fernandez filed her Answer to the complaint.

[16] She claimed that while the petitioners offered to buy the property during
the meeting of November 27, 1995, she did not accept the offer; thus, no
verbal contract to sell was ever perfected. She specifically alleged that the
said contract to sell was unenforceable for failure to comply with the statute
of frauds. She also maintained that even assuming arguendo that she had,
indeed, made a commitment or promise to sell the property to the petitioners,
the same was not binding upon her in the absence of any consideration
distinct and separate from the price. She, thus, prayed that judgment be
rendered as follows:

1.

Dismissing the Complaint, with costs against the plaintiffs;

2.
On the COUNTERCLAIM, ordering plaintiffs to pay defendant moral
damages in the amount of not less than P2,000,000.00 and exemplary
damages in the amount of not less than P500,000.00 and attorneys fees and
reimbursement expenses of litigation in the amount of P300,000.00.[17]

On September 24, 1997, the trial court, upon motion of the petitioners,
declared the other respondents in default for failure to file their responsive
pleading within the reglementary period.[18] At the pre-trial conference held
on March 2, 1998, the parties agreed that the following issues were to be
resolved by the trial court: (1) whether or not there was a perfected contract
to sell; (2) in the event that there was, indeed, a perfected contract to sell,
whether or not the respondents breached the said contract to sell; and (3) the
corollary issue of damages.[19]

P5,000,000.00 in actual damages;

2.

P1,500,000.00 in moral damages;

3.

P500,000.00 in exemplary damages;

Respondent Fernandez testified that she requested Lourdes Alimario to look

for a buyer of the properties in San Pablo City on a best offer basis. She
was later informed by Alimario that the petitioners were interested to buy the
properties. On November 27, 1995, along with Alimario and another person,
she met with the petitioners in the latters office and told them that she was at
the conference merely to hear their offer, that she could not bind the owners

of the properties as she had no written authority to sell the same. The
petitioners offered to buy the property at P150 per square meter. After the
meeting, respondent Fernandez requested Joy Marquez to secure a
barangay clearance stating that the property was free of any tenants. She
was surprised to learn that the clearance could not be secured. She
contacted a cousin of hers, also one of the owners of the property, and
informed him that there was a prospective buyer of the property but that
there were tenants thereon. Her cousin told her that he was not selling his
share of the property and that he was not agreeable to the price of P150 per
square meter. She no longer informed the other owners of the petitioners
offer. Respondent Fernandez then asked Alimario to apprise the petitioners
of the foregoing developments, through their agent, Agapito Fisico. She was
surprised to receive a letter from the petitioners dated January 5, 1996.
Nonetheless, she informed the petitioners that she had changed her mind in
pursuing the negotiations in a Letter dated January 18, 1996. When she
received petitioners February 1, 1996 Letter, she sent a Reply-Letter dated
February 14, 1996.

After trial on the merits, the trial court rendered judgment in favor of the
petitioners on June 23, 1999,[20] the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the Court hereby renders judgment

in favor of plaintiffs ANTONIO K. LITONJUA and AURELIO K. LITONJUA and
against defendants MARY MEDIATRIX T. FERNANDEZ, HEIRS OF PAZ
TICZON ELEOSIDA, represented by GREGORIO T. ELEOSIDA, JOHN
DOES and JANE DOES; HEIRS OF DOMINGO B. TICZON, represented by
MARY MEDIATRIX T. FERNANDEZ, CRISTETA TICZON, EVANGELINE
JILL R. TICZON, ERLINDA T. BENITEZ, DOMINIC TICZON, JOSEFINA
LUISA PIAMONTE, JOHN DOES and JANE DOES, ordering defendants to:

1.
execute a Contract of Sale and/or Absolute Deed of Sale with the
terms agreed upon by the parties and to secure all clearances from the
concerned government agencies and removal of any tenants from the
subject property at their expense to enable defendants to comply with their
obligations under the perfected agreement to sell; and

2.
pay to plaintiffs the sum of Two Hundred Thousand (P200,000.00)
Pesos as and by way of attorneys fees.[21]

On appeal to the Court of Appeals, the respondents ascribed the following

errors to the court a quo:

I.
THE LOWER COURT ERRED IN HOLDING THAT THERE WAS A
PERFECTED CONTRACT OF SALE OF THE TWO LOTS ON NOVEMBER
27, 1995.

II. THE LOWER COURT ERRED IN NOT HOLDING THAT THE VERBAL
CONTRACT OF SALE AS CLAIMED BY PLAINTIFFS-APPELLEES
ANTONIO LITONJUA AND AURELIO LITONJUA WAS UNENFORCEABLE.

III. THE LOWER COURT ERRED IN HOLDING THAT THE LETTER OF

DEFENDANT-APPELLANT FERNANDEZ DATED JANUARY 16, 1996 WAS
A CONFIRMATION OF THE PERFECTED SALE AND CONSTITUTED AS
WRITTEN EVIDENCE THEREOF.

IV. THE LOWER COURT ERRED IN NOT HOLDING THAT A SPECIAL

POWER OF ATTORNEY WAS REQUIRED IN ORDER THAT DEFENDANTAPPELLANT FERNANDEZ COULD NEGOTIATE THE SALE ON BEHALF
OF THE OTHER REGISTERED CO-OWNERS OF THE TWO LOTS.

V. THE LOWER COURT ERRED IN AWARDING ATTORNEYS FEES IN

THE DISPOSITIVE PORTION OF THE DECISION WITHOUT STATING THE
BASIS IN THE TEXT OF SAID DECISION.[22]

On February 28, 2001, the appellate court promulgated its decision reversing
and setting aside the judgment of the trial court and dismissing the
petitioners complaint, as well as the respondents counterclaim.[23] The
appellate court ruled that the petitioners failed to prove that a sale or a
contract to sell over the property between the petitioners and the private
respondent had been perfected.

Hence, the instant petition for review on certiorari under Rule 45 of the
Revised Rules of Court.

The petitioners submit the following issues for the Courts resolution:

A. WHETHER OR NOT THERE WAS A PERFECTED CONTRACT OF SALE

BETWEEN THE PARTIES.

B. WHETHER OR NOT THE CONTRACT FALLS UNDER THE COVERAGE

OF THE STATUTE OF FRAUDS.

C. WHETHER OR NOT THE DEFENDANTS DECLARED IN DEFAULT ARE

BENEFITED BY THE ASSAILED DECISION OF THE COURT OF APPEALS.
[24]

The petition has no merit.

The general rule is that the Courts jurisdiction under Rule 45 of the Rules of
Court is limited to the review of errors of law committed by the appellate
court. As the findings of fact of the appellate court are deemed continued,
this Court is not duty-bound to analyze and calibrate all over again the
evidence adduced by the parties in the court a quo.[25] This rule, however, is
not without exceptions, such as where the factual findings of the Court of
Appeals and the trial court are conflicting or contradictory.[26] Indeed, in this
case, the findings of the trial court and its conclusion based on the said
findings contradict those of the appellate court. However, upon careful
review of the records of this case, we find no justification to grant the petition.
We, thus, affirm the decision of the appellate court.

On the first and second assignment of errors, the petitioners assert that there
was a perfected contract of sale between the petitioners as buyers and the
respondents-owners, through respondent Fernandez, as sellers.
The
petitioners contend that the perfection of the said contract is evidenced by
the January 16, 1996 Letter of respondent Fernandez.[27] The pertinent
portions of the said letter are as follows:

[M]y cousin and I have thereby changed our mind and that the sale will no
longer push through. I specifically instructed her to inform you thru your
broker that we will not be attending the meeting to be held sometime first
week of December.

In view thereof, I regret to formally inform you now that we are no longer
selling the property until all problems are fully settled. We have not
demanded and received from you any earnest money, thereby, no obligations
exist[28]

The petitioners argue that the letter is a sufficient note or memorandum of

the perfected contract, thus, removing it from the coverage of the statute of
frauds. The letter specifically makes reference to a sale which respondent
Fernandez agreed to initially, but which the latter withdrew because of the
emergence of some people who claimed to be tenants on both parcels of
land. According to the petitioners, the respondents-owners, in their answer
to the complaint, as well as respondent Fernandez when she testified,
admitted the authenticity and due execution of the said letter. Besides, when
the petitioner Antonio Litonjua testified on the contract of sale entered into
between themselves and the respondents-owners, the latter did not object
thereto. Consequently, the respondents-owners thereby ratified the said
contract of sale. The petitioners thus contend that the appellate courts
declaration that there was no perfected contract of sale between the
petitioners and the respondents-owners is belied by the evidence, the
pleadings of the parties, and the law.

The petitioners contention is bereft of merit. In its decision, the appellate

court ruled that the Letter of respondent Fernandez dated January 16, 1996
is hardly the note or memorandum contemplated under Article 1403(2)(e) of
the New Civil Code, which reads:

Art. 1403.
ratified:

The following contracts are unenforceable, unless they are

(2)
Those that do not comply with the Statute of Frauds as set forth in this
number. In the following cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some note or memorandum
thereof, be in writing, and subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be received without the writing,
or secondary evidence of its contents:

(e)
An agreement for the leasing for a longer period than one year, or
for the sale of real property or of an interest therein.[29]

The appellate court based its ruling on the following disquisitions:

In the case at bar, the letter dated January 16, 1996 of defendant-appellant
can hardly be said to constitute the note or memorandum evidencing the
agreement of the parties to enter into a contract of sale as it is very clear that
defendant-appellant as seller did not accept the condition that she will be the
one to pay the registration fees and miscellaneous expenses and therein
also categorically denied she had already committed to execute the deed of
sale as claimed by the plaintiffs-appellees. The letter, in fact, stated the
reasons beyond the control of the defendant-appellant, why the sale could no
longer push through because of the problem with tenants. The trial court
zeroed in on the statement of the defendant-appellant that she and her
cousin changed their minds, thereby concluding that defendant-appellant had
unilaterally cancelled the sale or backed out of her previous commitment.
However, the tenor of the letter actually reveals a consistent denial that there
was any such commitment on the part of defendant-appellant to sell the
subject lands to plaintiffs-appellees. When defendant-appellant used the

words changed our mind, she was clearly referring to the decision to sell
the property at all (not necessarily to plaintiffs-appellees) and not in selling
the property to herein plaintiffs-appellees as defendant-appellant had not yet
made the final decision to sell the property to said plaintiffs-appellees. This
conclusion is buttressed by the last paragraph of the subject letter stating
that we are no longer selling the property until all problems are fully settled.
To read a definite previous agreement for the sale of the property in favor of
plaintiffs-appellees into the contents of this letter is to unduly restrict the
freedom of the contracting parties to negotiate and prejudice the right of
every property owner to secure the best possible offer and terms in such sale
transactions. We believe, therefore, that the trial court committed a
reversible error in finding that there was a perfected contract of sale or
contract to sell under the foregoing circumstances. Hence, the defendantappellant may not be held liable in this action for specific performance with
damages.[30]

In Rosencor Development Corporation vs. Court of Appeals,[31] the term

statute of frauds is descriptive of statutes which require certain classes of
contracts to be in writing. The statute does not deprive the parties of the
right to contract with respect to the matters therein involved, but merely
regulates the formalities of the contract necessary to render it enforceable.
The purpose of the statute is to prevent fraud and perjury in the enforcement
of obligations, depending for their existence on the unassisted memory of
witnesses, by requiring certain enumerated contracts and transactions to be
evidenced by a writing signed by the party to be charged. The statute is
satisfied or, as it is often stated, a contract or bargain is taken within the
statute by making and executing a note or memorandum of the contract
which is sufficient to state the requirements of the statute.[32] The application
of such statute presupposes the existence of a perfected contract. However,
for a note or memorandum to satisfy the statute, it must be complete in itself
and cannot rest partly in writing and partly in parol.
The note or
memorandum must contain the names of the parties, the terms and
conditions of the contract and a description of the property sufficient to
render it capable of identification.[33] Such note or memorandum must
contain the essential elements of the contract expressed with certainty that
may be ascertained from the note or memorandum itself, or some other
writing to which it refers or within which it is connected, without resorting to
parol evidence.[34] To be binding on the persons to be charged, such note or
memorandum must be signed by the said party or by his agent duly
authorized in writing.[35]

In City of Cebu v. Heirs of Rubi,[36] we held that the exchange of written

correspondence between the parties may constitute sufficient writing to
evidence the agreement for purposes of complying with the statute of frauds.

In this case, we agree with the findings of the appellate court that there was
no perfected contract of sale between the respondents-owners, as sellers,
and the petitioners, as buyers.

There is no documentary evidence on record that the respondents-owners

specifically authorized respondent Fernandez to sell their properties to
another, including the petitioners. Article 1878 of the New Civil Code
provides that a special power of attorney is necessary to enter into any
contract by which the ownership of an immovable is transmitted or acquired
either gratuitously or for a valuable consideration,[37] or to create or convey
real rights over immovable property,[38] or for any other act of strict
dominion.[39] Any sale of real property by one purporting to be the agent of
the registered owner without any authority therefor in writing from the said
owner is null and void.[40] The declarations of the agent alone are generally
insufficient to establish the fact or extent of her authority.[41] In this case, the
only evidence adduced by the petitioners to prove that respondent
Fernandez was authorized by the respondents-owners is the testimony of
petitioner Antonio Litonjua that respondent Fernandez openly represented
herself to be the representative of the respondents-owners,[42] and that she
promised to present to the petitioners on December 8, 1996 a written
authority to sell the properties.[43] However, the petitioners claim was belied
by respondent Fernandez when she testified, thus:

Madam Witness, what else did you tell to the plaintiffs?

A
I told them that I was there representing myself as one of the owners of
the properties, and I was just there to listen to his proposal because that
time, we were just looking for the best offer and I did not have yet any written
authorities from my brother and sisters and relatives. I cannot agree on
anything yet since it is just a preliminary meeting, and so, I have to secure
authorities and relate the matters to my relatives, brother and sisters, sir.

And what else was taken up?

A Mr. Antonio Litonjua told me that they will be leaving for another country
and he requested me to come back on the first week of December and in the
meantime, I should make an assurance that there are no tenants in our
properties, sir.[44]

The petitioners cannot feign ignorance of respondent Fernandez lack of

authority to sell the properties for the respondents-owners. It must be
stressed that the petitioners are noted businessmen who ought to be very
familiar with the intricacies of business transactions, such as the sale of real
property.

The settled rule is that persons dealing with an assumed agent are bound at
their peril, and if they would hold the principal liable, to ascertain not only the
fact of agency but also the nature and extent of authority, and in case either
is controverted, the burden of proof is upon them to prove it.[45] In this case,
respondent Fernandez specifically denied that she was authorized by the
respondents-owners to sell the properties, both in her answer to the
complaint and when she testified. The Letter dated January 16, 1996 relied
upon by the petitioners was signed by respondent Fernandez alone, without
any authority from the respondents-owners. There is no evidence on record
that the respondents-owners ratified all the actuations of respondent
Fernandez in connection with her dealings with the petitioners. As such, said
letter is not binding on the respondents as owners of the subject properties.

Contrary to the petitioners contention, the letter of January 16, 1996[46] is

not a note or memorandum within the context of Article 1403(2) because it
does not contain the following: (a) all the essential terms and conditions of
the sale of the properties; (b) an accurate description of the property subject
of the sale; and, (c) the names of the respondents-owners of the properties.
Furthermore, the letter made reference to only one property, that covered by
TCT No. T-36755.

We note that the petitioners themselves were uncertain as to the specific

area of the properties they were seeking to buy. In their complaint, they
alleged to have agreed to buy from the respondents-owners 33,990 square
meters of the total acreage of the two lots consisting of 36,742 square

meters. In their Letter to respondent Fernandez dated January 5, 1996, the

petitioners stated that they agreed to buy the two lots, with a total area of
36,742 square meters.[47] However, in their Letter dated February 1, 1996,
the petitioners declared that they agreed to buy a portion of the properties
consisting of 33,990 square meters.[48] When he testified, petitioner Antonio
Litonjua declared that the petitioners agreed to buy from the respondentsowners 36,742 square meters at P150 per square meter or for the total price
of P5,098,500.[49]

The failure of respondent Fernandez to object to parol evidence to prove (a)

the essential terms and conditions of the contract asserted by the petitioners
and, (b) her authority to sell the properties for the respondents-registered
owners did not and should not prejudice the respondents-owners who had
been declared in default.[50]

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The decision

of the appellate court is AFFIRMED IN TOTO. Costs against the petitioners.

SO ORDERED.

[G.R. No. 150888. September 24, 2004]

DECISION
CALLEJO, SR., J.:

On July 21, 1980, the respondent, Development Bank of the Philippines

(DBP), granted a loan of P910,000.00 to the petitioner, Traverse
Development Corporation, for the construction of a three-storey commercial
building on its property located in Tarlac (now Tarlac City), with an area of
698 square meters covered by TCT No. 154736. The loan was payable in
fifteen (15) years, or until June 30, 1996. To secure the payment thereof, the
petitioner executed a real estate mortgage over a portion of said property,
consisting of 349 square meters. The contract of mortgage was annotated at
the dorsal portion of TCT No. 154736 as Entry No. E-20-10483.[2]

Under the real estate mortgage, the petitioner was required to secure an
insurance policy covering the building against fire and earthquake from an
acceptable insurance company and to endorse the corresponding
policy/policies to the respondent. The respondent was authorized to
foreclose the mortgage extrajudicially in case the petitioner defaulted on its
obligation.

The petitioner secured a fire insurance policy from the FGU Insurance
Corporation for P1,000,000, effective until May 7, 1982. However, before the
said date, the respondent required the petitioner to secure another fire
insurance policy, this time from the Central Surety and Insurance Company
(CSIC) also for P1,000,000. The petitioner did as directed and secured Fire
Insurance Policy No. TAR 1056 from CSIC covering the building for the
period of May 7, 1982 to May 7, 1983.[3] Under the policy, the CSIC obliged
itself to pay, in case of loss or damage to the insured property, the amount of
such loss or damage to the respondent or as its interests may appear.[4]

SECOND DIVISION

TRAVERSE
DEVELOPMENT
CORPORATION,
petitioner,
DEVELOPMENT BANK OF THE PHILIPPINES, respondent.

Before us is a petition for review on certiorari assailing the Decision[1] of the

Court of Appeals dismissing the petitioners appeal in CA-G.R. CV No. 43157
for lack of jurisdiction and the Resolution denying the motion for
reconsideration thereof.

vs.
On August 9, 1982, the building was gutted by fire. The petitioner notified the
respondent, through a written notice, of the total loss of the building and, at
the same time, filed its claim with CSIC in the amount of P1,000,000 under
the insurance policy.

On November 6, 1982, the CSIC proposed a settlement of the petitioners

claim for P230,748.00. The petitioner rejected the offer and filed, on February
28, 1983, a complaint against the CSIC and the respondent in the Regional
Trial Court (RTC) of Quezon City. The case was docketed as Civil Case No.
Q-37497.

The petitioner alleged that, despite its demands, the CSIC refused to pay the
amount of P1,000,000 which was the amount of the insurance plus interests,
and that because of such delay, it failed to pay its loan to the respondent and
to collect rentals from its prospective lessees on the building. The
respondent failed to convince the CSIC to pay the said amount.

The petitioner prayed that it be granted the following reliefs:

WHEREFORE, after hearing, it is most respectfully prayed that judgment be

rendered by this Honorable Court in favor of the plaintiff and against the
defendants as follows:

1. Sentencing the defendants, jointly and severally, to pay to the plaintiff the
amount of P1,000,000.00, the amount for which Fire Insurance Company
Policy No. TAR 1056 was issued plus interest thereon at the legal rate
computed thirty (30) days after defendants received proof of loss;

2. Sentencing defendants, jointly and severally, to pay to plaintiff actual and

compensatory damages in an amount of not less than P275,000.00, more or
less;

3. Sentencing defendants, jointly and severally, to pay to the plaintiff, rentals

which it failed to receive from the premises due to the unjustifiable delay of
the defendants in the settlement of plaintiffs claim;

4. Sentencing defendants, jointly and severally, to pay to plaintiff the interest

and penalty charged to plaintiffs loan account with the Development Bank of

the Philippines due to the unjustifiable delay of defendants in the settlement

of plaintiffs claim;

5. Sentencing defendant SURETY to pay to plaintiff nominal damages in an

amount of not less than P100,000.00, more or less;

6. Sentencing defendant SURETY to pay to plaintiff exemplary damages in

an amount of not less than P100,000.00, more or less;

7. Sentencing defendants, jointly and severally, to pay to plaintiff the amount

of P50,000.00 by way of attorneys fees and expenses of litigation;

8. Sentencing defendants, jointly and severally, to pay the costs of suit.

Plaintiff prays for such other and further reliefs as may be just and equitable
in the premises.[5]

However, the RTC did not issue any temporary restraining order.

During the pendency of Civil Case No. Q-37497, the respondent foreclosed
the real estate mortgage upon the petitioners default in the payment of its
obligation under the said contract. The respondent was the highest bidder at
the sale at public auction, with the bid price of P540,050.00. A certificate of
sale was issued in its favor on May 30, 1990 and was annotated at the dorsal
portion of TCT No. 154736.[6] The respondent consolidated its title to the
property in due course.

On May 28, 1991, the petitioner filed a complaint against the respondent in
the RTC of Tarlac, for the annulment of the extrajudicial foreclosure sale and
damages; and for the issuance of a writ of preliminary injunction and
temporary restraining order, to enjoin the defendant from selling the property.
The case was docketed as Civil Case No. 7432[7] which was raffled to
Branch 63, Tarlac, Tarlac.

As its first cause of action, the petitioner alleged, inter alia, that the
foreclosure of the real estate mortgage of the entire property, as well as the
sale thereof at public auction to the respondent, was null and void because
only 349 square meters of the entire property, or one-half (1/2) of the eastern
portion thereof, was mortgaged to the respondent. The petitioner alleged
that its failure to pay its loan was due to the fire that gutted its building, a
fortuitous event under Article 1174 of the New Civil Code; as such, it was
excused from paying its loan. The petitioner also alleged that were it not for
the delay of the payment of its insurance claim from the CSIC, an insurance
company chosen by the respondent, it would have been able to pay its loan,
as provided in the real estate mortgage.

On its second cause of action, the petitioner alleged that the respondent
proceeded with the extrajudicial foreclosure of the mortgage and the sale of
its property at public auction despite the pendency of Civil Case No. Q37497.

The petitioner prayed that it be granted the following reliefs:

WHEREFORE, it is respectfully prayed that

(1) immediately upon the filing of this Complaint, a temporary restraining

order be issued ex parte and, after notice and hearing, a writ of preliminary
injunction, enjoining defendants from consolidating ownership over the
foreclosed properties or issuing new transfer certificate of title;

[b] on the Second Cause of Action, ordering defendants to pay plaintiff, jointly
and severally

moral damages in the amount of P200,000.00;

attorneys fees and expenses of litigation in the sum of P100,000.00;

Exemplary or corrective damages of P100,000.00; and

the costs of suit.

Plaintiff prays for such other reliefs as this Court may deem just and
equitable in the premises.[8]

Since the RTC did not issue a writ of preliminary injunction, the respondent
consolidated its title on August 21, 1991 over the foreclosed property and
was placed in possession thereof.

Almost two (2) years thereafter, or on July 7, 1993, the petitioner filed
another complaint in the RTC of Tarlac against DBP for annulment of
extrajudicial foreclosure proceedings, reconveyance of title, cancellation of
writ of possession, damages and preliminary injunction with prayer for a
restraining order. The verification in the complaint was signed by Angel
Tadeo Q. Roxas. The case was docketed as Civil Case No. 7885[9] and
raffled to Branch 63 of the court.

(2) after trial, judgment be rendered in favor of plaintiff and against

defendants

[a] on the First Cause of Action, annulling the foreclosure sale and enjoining
defendants from consolidating ownership over the foreclosed properties or
issuing new transfer certificate of title thereto;

The petitioner alleged, inter alia, that, despite the respondents interference
in the procurement of a fire insurance policy over the still-to-be constructed
building, and the fact that the respondent was entitled to the proceeds of the
insurance policy under the real estate mortgage and fire insurance policy in
the amount of P1,000,000.00, the said respondent still proceeded with the
extrajudicial foreclosure of the real estate mortgage; the respondent failed to
give notice to the petitioner relative to its agreement with the respondent to

await the outcome of Civil Case No. Q-37497 and Civil Case No. 7432 before
the latter consolidated its title over the property and took possession thereof;
the petitioner was no longer obliged to pay its loan to the respondent
because of the total loss of the building; the petitioners failure to pay its loan
was due to the delay in the payment of the amount of P1,000,000 in
insurance policy by the CSIC; since it was the respondent which impelled the
petitioner to procure the said policy, the petitioner should not be faulted for
failure to pay its loan. The petitioner prayed for judgment, thus:

WHEREFORE, it is respectfully prayed that a restraining order be

immediately issued by this Honorable Court prohibiting or restraining the
defendant or any other persons acting in its behalf from proceeding with the
sale of plaintiffs (sic) properties to third parties, either through public bidding
or through negotiated sale.

And after due hearing, judgment be rendered:

f) to pay the cost of suit.

PLAINTIFF FURTHER PRAYS for such other reliefs this Honorable Court
may deem just and equitable in the premises.[10]

The case was raffled to Branch 63 of the court. On July 15, 1993, the
respondent filed an Omnibus Motion[11] in Civil Case No. 7885 for the
dismissal of the case on the grounds of litis pendentia and forum shopping
and to cite Angel Tadeo Q. Roxas and the petitioners counsel, Atty. Jesus A.
Concepcion, in contempt of court. The respondent asserted that Civil Case
No. 7885 was a duplication of Civil Case No. 7432 pending before the same
branch of the RTC, with the same parties, the same issues and the same
reliefs being prayed for by the petitioner. The respondent cited Section 1(e),
Rule 16 of the 1985 Rules of Court, as its ground for its motion to dismiss
Civil Case No. 7885. It asserted that Angel Tadeo Roxas, the petitioner and
its counsel, were guilty of indirect contempt and should be sanctioned for
abusing the processes of the courts, citing the ruling of this Court in Minister
of Natural Resources vs. Heirs of Orval Hughes.[12]

a) Making the restraining order and/or preliminary injunction permanent and

declare the extra-judicial foreclosure as null and void;

b) Ordering defendant to reconvey to plaintiff the title to the foreclosed

properties;

c) Declaring the Writ of Possession issued thereon as cancelled and ordering

defendant to return and surrender possession of the premises it seized to the
plaintiff;

d) Ordering defendant to pay the plaintiff moral damages in an amount not

less than P500,000.00 and exemplary damages in the sum of P100,000.00;

e) Ordering defendant to pay attorneys fees and expenses of litigation in the

amount of P100,000.00; and

The respondent opposed the motion asserting that the reliefs prayed for by it
in the two cases are different. It contended that in Civil Case No. 7432, it
sought the nullification of the extrajudicial foreclosure of the mortgage and
the sale of the mortgaged property at public auction and prayed for an
injunctive relief to enjoin the respondent from consolidating its title over the
property; on the other hand, in Civil Case No. 7885, it sought to enjoin the
respondent from selling the property to third parties, and the nullification of
the extrajudicial foreclosure of the mortgage, including the sale at public
auction of the mortgaged property on account of the respondents violations
of the real estate mortgage provisions, and to cancel the writ of possession in
its favor. The petitioner contended that the decision of the RTC in Civil Case
No. 7432 was not a bar to its action in Civil Case No. 7885 and that Roxas
and his counsel were not liable for contempt of court.

On August 20, 1993, the trial court issued an Order granting the respondents
motion to dismiss the case, but denied its motion to cite Roxas, the petitioner
and its counsel for contempt of court.

The petitioner appealed the decision to the Court of Appeals in which it

asserted the following:

2. Contrary to the ruling of the lower court, the appeal below is the correct
mode of appeal.[15]

THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT

BECAUSE OF LITIS PENDENTIA.

3. Because Civil Case No. 7885 is merely a continuation of Civil Case No.
7432, consolidation, not dismissal, is the proper remedy.[16]

II

The issue for resolution is whether or not the Court of Appeals erred in
dismissing the petitioners appeal on the ground that it had no jurisdiction
over the same. The resolution of the issue is, in turn, anchored on the
determination of whether the petitioner raised purely legal issues in the
appellate court.

THE LOWER COURT ERRED IN HOLDING THAT THE PLAINTIFF IS

GUILTY OF FORUM SHOPPING UNDER THE CONCLUSION THAT CIVIL
CASE NO. 7432 AND CIVIL CASE NO. 7885 ARE BASED ON THE SAME
ALLEGATIONS OF FACTS INVOLVING THE SAME ISSUE, THE SAME
TRANSACTION AND ARE BETWEEN THE SAME PARTIES.

The petition has no merit.

III

THE LOWER COURT ERRED IN NOT ORDERING THE CONSOLIDATION

OF CIVIL CASE NO. 7432 WITH CIVIL CASE NO. 7885.[13]

On July 27, 2001, the Court of Appeals rendered judgment dismissing the
appeal for lack of jurisdiction, ruling that the remedy of the petitioner from
the trial courts order dismissing Civil Case No. 7885 was to file a petition for
review on certiorari under Rule 45 of the Rules of Court, the sole issue raised
by it on appeal being purely legal and not factual.

The petitioner now comes to this Court, asserting that:

1. The appeal below raises not only questions of law but also questions of
fact that may very well be looked into.[14]

Under Batas Pambansa Blg. 129, as amended, the Court of Appeals has
exclusive appellate jurisdiction over decisions of the Regional Trial Courts in
the exercise of its original jurisdiction. Under Rule 41, Section 2 of the Rules
of Court, as amended, the aggrieved party may appeal from the said decision
by filing a notice of appeal and paying the requisite docket fees therefor
within fifteen days from notice of said decision. However, the Court of
Appeals has no jurisdiction over appeals from the decision of the Regional
Trial Court rendered in the exercise of its original jurisdiction in cases
wherein the issues raised are purely legal.[17] In such a case, the remedy of
the aggrieved party is to appeal the decision via a petition for review on
certiorari in this Court under Rule 45 of the Rules of Court.

It has been held in a number of cases[18] that there is a question of law

when the doubt or difference arises as to what the law is on certain state of
facts, and which does not call for an examination of the probative value of the
evidence presented by the parties-litigants. On the other hand, there is a
question of fact when the doubt or controversy arises as to the truth or
falsity of the alleged facts. Simply put, when there is no dispute as to fact,
the question of whether or not the conclusion drawn therefrom is correct, is a
question of law.[19]

DECISION
We agree with the Court of Appeals that only legal issues were raised by the
petitioner in its appeal: (a) whether its action in Civil Case No. 7885 which
was raffled to Branch 63 of the court is barred by the pendency of Civil Case
No. 7432, also pending in the same court and, if so, whether the petitioner is
guilty of forum shopping; (b) whether Roxas, a member of the petitioners
Board of Directors, who signed the verification of the complaint in Civil Case
No. 7885 and its counsel are guilty of forum shopping; and (c) whether the
trial court should have denied the consolidation of the proceedings in the two
cases considering that the same were raffled to the same court.

The petitioner appended to its brief a copy of its complaint in Civil Case No.
7432. The records of Civil Case No. 7885 were elevated to the Court of
Appeals. Thus, the Court of Appeals had the complaints in Civil Cases Nos.
7885 and 7432 before it for review in resolving the issue of whether or not
the issues raised were purely legal or factual, and whether it had jurisdiction
over the petitioners appeal or not.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED DUE

COURSE. The assailed Decision of the Court of Appeals is AFFIRMED.
Costs against the petitioner.

SO ORDERED.

EN BANC
[G.R. No. 129742. September 16, 1998]
TERESITA G. FABIAN petitioner, vs. HON. ANIANO A. DESIERTO, in his
capacity as ombudsman; HON. JESUS F. GUERRERO, in his
capacity as Deputy Ombudsman for Luzon; and NESTOR V.
AGUSTIN respondents.

REGALADO, J:
Petitioner has appealed to us by certiorari under Rule 45 of the Rules of
Court from the "Joint Order" issued by public respondents on June 18, 1997
in OMB-Adm. Case No. 0-95-0411 which granted the motion for
reconsideration of and absolved private respondents from administrative
charges for inter alia grave misconduct committed by him as then Assistant
Regional Director, Region IV-A, Department of Public Works and Highways
(DPWH).
I
It appears from the statement and counter-statement of facts of the
parties that petitioner Teresita G. Fabian was the major stockholder and
president of PROMAT Construction Development Corporation (PROMAT)
which was engaged in the construction business. Private respondents
Nestor V. Agustin was the incumbent District Engineering District (FMED)
when he allegedly committed the offenses for which he was administratively
charged in the Office in the office of the Ombudsman.
Promat participated in the bidding for government construction project
including those under the FMED, and private respondent, reportedly taking
advantage of his official position, inveigled petitioner into an amorous
relationship. Their affair lasted for some time, in the course of which private
respondents gifted PROMAT with public works contracts and interceded for it
in problems concerning the same in his office.
Later, misunderstanding and unpleasant incidents developed between
the parties and when petitioner tried to terminate their relationship, private
respondent refused and resisted her attempts to do so to the extent of
employing acts of harassment, intimidation and threats. She eventually filed
the aforementioned administrative case against him in a letter-complaint
dated July 24, 1995.
The said complaint sought the dismissal of private respondent for
violation of Section 19, Republic Act No. 6770 (Ombudsman Act of 1989) and
Section 36 of Presidential Decree No. 807 (Civil Service Decree), with an
ancillary prayer for his preventive suspension. For purposes of this case, the
charges referred to may be subsumed under the category of oppression,
misconduct, and disgraceful or immoral conduct.

On January 31, 1996, Graft Investigator Eduardo R. Benitez issued a

resolution finding private respondents guilty of grave misconduct and
ordering his dismissal from the service with forfeiture of all benefits under the
law. His resolution bore the approval of Director Napoleon Baldrias and
Assistant Ombudsman Abelardo Aportadera of their office.
Herein respondent Ombudsman, in an Order dated February 26, 1996,
approved the aforesaid resolution with modifications, by finding private
respondent guilty of misconduct and meting out the penalty of suspension
without pay for one year. After private respondent moved for
reconsideration, respondent Ombudsman discovered that the former's new
counsel had been his "classmate and close associate" hence he inhibited
himself. The case was transferred to respondent Deputy Ombudsman
Jesus F. Guerrero who, in the now challenged Joint Order of June 18, 1997,
set aside the February 26, 1997 Order of respondent Ombudsman and
exonerated private respondents from the administrative charges.
II
In the present appeal, petitioner argues that Section 27 of Republic Act
No. 6770 (Ombudsman Act of 1989)[1] pertinently provides that In all administrative diciplinary cases, orders, directives or decisions of the
Office of the Ombudsman may be appealed to the Supreme Court by filing a
petition for certiorari within ten (10) days from receipt of the written notice
of the order, directive or decision or denial of the motion for
reconsideration in accordance with Rule 45 of the Rules of Court. (Emphasis
supplied)
However, she points out that under Section 7, Rule III of Administrative
Order No. 07 (Rules of Procedure of the office of the Ombudsman), [2] when a
respondent
is
absolved
of
the
charges
in
an
administrative proceeding decision of the ombudsman is final and
unappealable. She accordingly submits that the office of the ombudsman
has no authority under the law to restrict, in the manner provided in its
aforesaid Rules, the right of appeal allowed by Republic Act No. 6770, nor to
limit the power of review of this Court. Because of the aforecited provision in
those Rules of Procedure, she claims that she found it "necessary to take an
alternative recourse under Rule 65 of the Rules of Court, because of the
doubt it creates on the availability of appeals under Rule 45 of the Rules of
Court.

Respondents filed their respective comments and rejoined that the

Office of the Ombudsman is empowered by the Constitution and the law to
promulgate its own rules of procedure. Section 13(8), Article XI of the 1987
Constitution provides, among others, that the Office of the Ombudsman can
"(p)romulgate its rules of procedure and exercise such other powers or
perform such functions or duties as may be provided by law."
Republic Act No. 6770 duly implements the Constitutional mandate with
these relevant provisions:
Sec. 14. Restrictions. - x x x No court shall hear any appeal or application
for remedy against the decision or findings of the Ombudsman except the
Supreme Court on pure question on law.
xxx
Sec. 18. Rules of Procedure. - (1) The Office of the Ombudsman shall
promulgate its own rules of procedure for the effective exercise or
performance of its powers, functions, and duties.
xxx
Sec. 23. Formal Investigation. - (1) Administrative investigations by the
Office of the Ombudsman shall be in accordance with its rules of procedure
and consistent with the due process. x x x
xxx
Sec. 27. Effectivity and Finality of Decisions. - All provisionary orders at
the Office of the Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office
of the Ombudsman must be filed within five (5) days after receipt of written
notice shall be entertained only on any of the following grounds:
xxx
Findings of fact by the Office of the Ombudsman when supported by
substantial evidence are
conclusive. Any
order,
directive
or
decision imposing the penalty of public censure or reprimand, suspension of
not more than one month salary shall be final and unappealable.

In all administrative disciplinary cases, orders, directives or decisions of the

Office of the Ombudsman may be appealed to the Supreme Court by
filing a petition for certiorari within ten (10) days from receipt of the written
notice of the order, directive or decision or denial of the motion
for reconsideration in accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the
Ombudsman as the interest of justice may require.
Respondents consequently contend that, on the foregoing constitutional
and statutory authority, petitioner cannot assail the validity of the rules of
procedure formulated by the Office of the Ombudsman governing the
conduct of proceeding before it, including those with respect to the availabity
or non-avalability of appeal in administrative cases. Such as Section 7, Rule
III of Administrative Order No.07.
Respondents also question the propriety of petitioner's proposition that,
although she definitely prefaced her petition by categorizing the same as "an
appeal by certiorari under Rule 45 of the Rules of Court," she makes the
aforequoted ambivalent statement which in effect asks that, should the
remedy under Rule 45 be unavailable, her petition be treated in the
alternative as an original action for certiorariunder Rule 65. The parties
thereafter engage in a discussion of the differences between a petition for
review on certiorari under Rule 45 and a special civil action of certiorari under
Rule 65.
Ultimately, they also attempt to review and rationalize the decision of
this Court applying Section 27 of Republic Act No. 6770 vis--vis Section 7,
Rule III of Administrative Order No. 07. As correctly pointed out by public
respondents, Ocampo IV vs. Ombudsman, et al.[3] and Young vs. Office of
the Ombudsman, et al.[4] were original actions for certiorari under Rule
65. Yabut vs. Office of the Ombudsman, et al. [5] was commenced by a
petition for review on certiorari under Rule 45. Then came Cruz, Jr. vs.
People, et al.,[6] Olivas vs. Office of the Ombudsman, et al., [7] Olivarez vs.
Sandiganbayan, et al.,[8] and Jao, et al. vs. Vasquez,[9] which were
for certiorari, prohibition and/or mandamus under Rule 65. Alba vs.
Nitorreda, et al.[10] was initiated by a pleading unlikely denominated as an
"Appeal/Petition for Certiorari and/or Prohibition," with a prayer for ancillary
remedies, and ultimately followed by Constantino vs. Hon. Ombudsman
Aniano Desierto, et al.[11] which was a special civil action for certiorari.

Considering, however the view that this Court now takes of the case at
bar and the issues therein which will shortly be explained, it refrains from
preemptively resolving the controverted points raised by the parties on the
nature and propriety of application of the writ of certiorari when used as a
mode of appeal or as the basis of a special original action, and whether or
not they may be resorted to concurrently or alternatively, obvious though the
answers thereto appear to be. Besides, some seemingly obiter statements in
Yabuts and Alba could bear reexamination and clarification. Hence, we will
merely observe and lay down the rule at this juncture that Section 27 of
Republic Act No. 6770 is involved only whenever an appeal
by certiorari under Rule 45 is taken from a decision in an administrative
diciplinary action. It cannot be taken into account where an original action
for certiorari under Rule 65 is resorted to as a remedy for judicial review,
such as from an incident in a criminal action.
III
After respondents' separate comments had been filed, the Court was
intrigued by the fact, which does appear to have been seriously considered
before, that the administrative liability of a public official could fall under the
jurisdiction of both the Civil Service Commission and the Office of the
Ombudsman. Thus, the offenses imputed to herein private respondent were
based on both Section 19 of Republic Act. No. 6770 and Section 36 of
Presidential Decree No. 807. Yet, pursuant to the amendment of section 9,
Batas Pambansa Blg. 129 by Republic Act No. 7902, all adjudications by
Civil Service Commission in administrative disciplinary cases were made
appealable to the Court of Appeals effective March 18, 1995, while those of
the Office of the Ombudsman are appealable to this Court.
It could thus be possible that in the same administrative case involving
two respondents, the proceedings against one could eventually have been
elevated to the Court of Appeals, while the other may have found its way to
the Ombudsman from which it is sought to be brought to this Court. Yet
systematic and efficient case management would dictate the consolidation of
those cases in the Court of Appeals, both for expediency and to avoid
possible conflicting decisions.
Then there is the consideration that Section 30, Article VI of the 1987
Constitution provides that "(n)o law shall be passed increasing the appellate
indiction of the Supreme Court as provided in this Constitution without its
advice and consent," and that Republic Act No. 6770, with its
challenged Section 27, took effect on November 17, 1989, obviously in spite

of that constitutional grounds must be raised by a party to the case, neither of

whom did so in this case, but that is not an inflexible rule, as we shall explain.
Since the constitution is intended fort the observance of the judiciary
and other departments of the government and the judges are sworn to
support its provisions, the courts are not at liberty to overlook or disregard its
commands or countenance evasions thereof. When it is clear that a statute
trangresses the authority vested in a legislative body, it is the duty of the
courts to declare that the constitution, and not the statute, governs in a case
before them for judgement.[12]
Thus, while courts will not ordinarily pass upon constitutional questions
which are not raised in the pleadings, [13] the rule has been recognized to
admit of certain exceptions. It does not preclude a court from inquiring into
its own jurisdiction or compel it to enter a judgement that it lacks jurisdiction
to enter. If a statute on which a court's jurisdiction in a proceeding depends
is unconstitutional, the court has no jurisdiction in the proceeding, and since
it may determine whether or not it has jurisdiction, it necessarily follows that it
may inquire into the constitutionality of the statute. [14]
Constitutional question, not raised in the regular and orderly procedure
in the trial are ordinarily rejected unless the jurisdiction of the court below or
that of the appellate court is involved in which case it may be raised at any
time or on the court's own motion. [15] The Court ex mero motu may take
cognizance of lack of jurisdiction at any point in the case where the fact is
developed.[16] The court has a clearly recognized right to determine its own
jurisdiction in any proceeding.[17]
The foregoing authorities notwithstanding, the Court believed that the
parties hereto should be further heard on this constitutional
question. Correspondingly, the following resolution was issued on May 14,
1998, the material parts stating as follows:
The Court observes that the present petition, from the very allegations
thereof, is "an appeal by certiorari under Rule 45 of the Rules of Court from
the 'Joint Order (Re: Motion for Reconsideration)' issued in OMB-Adm. Case
No. 0-95-0411, entitled 'Teresita G. Fabian vs. Engr. Nestor V. Agustin, Asst.
Regional Director, Region IV-A, EDSA, Quezon City,' which absolved the
latter from the administrative charges for grave misconduct, among other."
It is further averred therein that the present appeal to this Court is allowed
under Section 27 of the Ombudsman Act of 1987 (R.A. No. 6770) and,

pursuant thereto, the Office of the Ombudsman issued its Rules of

Procedure, Section 7 whereof is assailed by petitioner in this proceeding. It
will be recalled that R.A. No. 6770 was enacted on November 17, 1989, with
Section 27 thereof pertinently providing that all administrative diciplinary
cases, orders, directives or decisions of the Office of the Ombudsman may
be appealed to this Court in accordance with Rule 45 of the Rules of Court.
The Court notes, however, that neither the petition nor the two comments
thereon took into account or discussed the validity of the aforestated Section
27 of R.A. No. 8770 in light of the provisions of Section 30, Article VI of the
1987 Constitution that "(n)o law shall be passed increasing the appellate
jurisdiction of the Supreme Court as provided in this Constitution without its
advise and consent."
The Court also invites the attention of the parties to its relevant ruling in First
Lepanto Ceramics, Inc. vs. The Court of Appeals , et al. (G.R. No. 110571,
October 7, 1994, 237 SCRA 519) and the provisions of its former Circular
No. 1-95,as now substantially reproduced in Rule 43 of the 1997 revision of
the Rules of Civil Procedure.
In view of the fact that the appellate jurisdiction of the Court is invoked and
involved and in this case, and the foregoing legal consideration appear to
impugn the constitutionality and validity of the grant of said appellate
jurisdiction to it, the Court deems it necessary that the parties be heard
thereon and the issue be first resolved before conducting further proceedings
in this appellate review.
ACCORDINGLY, the Court Resolved to require the parties to Submit their
position and arguments on the matter subject of this resolution by filing their
corresponding pleadings within ten (10) days from notice hereof.
IV
The records do not show that the Office of the Solicitor General has
complied with such requirement, hence the Court dispenses with any
submission it should have presented. On the other hand, petitioner
espouses the theory that the provision in Section 27 of Republic Act No.
6770 which authorizes an appeal by certiorari to this Court of the
aforementioned adjudications of the Ombudsman is not violative of Section
30, Article VI of the Constitution. She claims that what is proscribed is the
passage of law "increasing" the appellate jurisdiction of this Court "as
provided in this Constitution," and such appellate jurisdiction includes "all

cases in which only an error or question of law is involved." Since Section

5(2)(e), Article VIII of the Constitution authorizes this Court to review, revise,
reverse, modify, or affirm on appeal or certiorari the aforesaid final judgement
or orders "as the law or the Rules of Court may provide," said Section 27
does not increase this Court may provide," said section 27 does not
increase this Court's appellate jurisdiction since, by providing that the mode
of appeal shall be by petition for certiorari under Rule 45, then what may be
raised therein are only questions of law of which this Court already has of
which this Court already has jurisdiction.
We are not impressed by this discourse. It overlooks the fact that by
jurisprudential developments over the years, this Court has allowed appeals
by certiorari under Rule 45 in a substantial number of cases and instances
even if questions of fact are directly involved and have to be resolved by the
appellate court.[18] Also, the very provision cited by petitioner specifies that
the appellate jurisdiction of this Court contemplated therein is to be exercised
over "final judgements and orders of lower courts," that is, the courts
composing the integrated judicial system. It does not include the quasijudicial bodies or agencies, hence whenever the legislature intends that the
decisions or resolutions of the quasi-judicial agency shall be reviewable by
the Supreme Court or the Court of Appeals, a specific provision to that effect
is included in the law creating that quasi-judicial agency and, for that matter,
any special statutory court. No such provision on appellate procedure is
required for the regular courts of the integrated judicial system because they
are what are referred to and already provided for in Section 5, Article VIII of
the Constitution.
Apropos to the foregoing, and as correctly observed by
private respondent, the revised Rules of Civil Procedure[19] preclude
appeals from quasi-judicial agencies to the Supreme Court via a petition for
review on certiorari under Rule 45. In the 1997 Rules of Civil Procedure,
Section 1 Rule 45, on "Appeal by Certiorari to the Supreme Court," explicitly
states:
SECTION 1 . Filing of petition with Supreme Court. - A person desiring to
appeal by certiorari from a judgement or final order or Resolution of
the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other
court whenever authorized by law, may file with the Supreme Court a verified
petition for review on certiorari. The petition shall raise only question of law
which must be distinctly set forth. (Italics ours).
This differs from the former Rule 45 of the 1964 Rules of Court which
made mention only of the Court of Appeals, and had to be adopted in

statutes creating and providing for appeals from certain administrative or

quasi-judicial agencies, whenever the purpose was to restrict the scope of
the appeal to questions of law. That intended limitation on appellate review,
as we have just discussed, was not fully subserved by recourse to the former
Rule 45 but, then, at that time there was no uniform rule on appeals from
quasi-judicial agencies.
Under the present Rule 45, appeals may be brought through a petition
for review on certiorari but only from judgments and final orders of the
courts enumerated in Section 1 thereof. Appeals from judgments and final
orders of quasi-judicial agencies[20] are now required to be brought to the
Court of Appeals on a verified petition for review, under the requirements and
conditions in Rule 43 which was precisely formulated and adopted to provide
for a uniform rule of appellate procedure for quasi-judicial agencies . [21]
It is suggested, however, that the provisions of Rule 43 should apply
only to "ordinary" quasi-judicial agencies, but not to the Office of the
Ombudsman which is a "high constitutional body." We see no reason for this
distinction for, if hierarchical rank should be a criterion, that proposition
thereby disregards the fact that Rule 43 even includes the Office of the
President and the Civil Service Commission, although the latter is even an
independent constitutional commission, unlike the Office of the Ombudsman
which is a constitutionally-mandated but statutorily created body.
Regarding the misgiving that the review of the decision of the Office of
the Ombudsman by the Court of Appeals would cover questions of law, of
fact or of both, we do not perceive that as an objectionable feature. After all,
factual controversies are usually involved in administrative disciplinary
actions, just like those coming from the Civil Service, Commission, and the
Court of Appeals as a trier of fact is better prepared than this Court to resolve
the same. On the other hand, we cannot have this situation covered by Rule
45 since it now applies only to appeals from the regular courts. Neither can
we place it under Rule 65 since the review therein is limited to jurisdictional
questions.*
The submission that because this Court has taken cognizance of cases
involving Section 27 of Republic Act No. 6770, that fact may be viewed as
"acquiescence" or "acceptance" by it of the appellate jurisdiction
contemplated in said Section 27, is unfortunately too tenuous. The
jurisdiction of a court is not of acquiescence as a matter of fact but an issue
of conferment as a matter of law. Besides, we have already discussed the
cases referred to, including the inaccuracies of some statements therein, and
we have pointed out the instances when Rule 45 is involved, hence covered

by Section 27 of Republic Act No. 6770 now under discussion, and when that
provision would not apply if it is a judicial review under Rule 65.

Jurisdiction. Otherwise, the indiscriminate enactment of legislation enlarging

its appellate jurisdiction would unnecessarily burden the Court [24]

Private respondent invokes the rule that courts generally avoid having to
decide a constitutional question, especially when the case can be decided on
other grounds. As a general proposition that is correct. Here, however, there
is an actual case susceptible of judicial determination. Also, the
constitutional question, at the instance of this Court, was raised by the proper
parties, although there was even no need for that because the Court can rule
on the matter sua sponte when its appellate jurisdiction is involved. The
constitutional question was timely raised, although it could even be raised
any time likewise by reason of the jurisdictional issue confronting the
Court. Finally, the resolution of the constitutional issue here is obviously
necessary for the resolution of the present case. [22]

We perforce have to likewise reject the supposed inconsistency of the

ruling in First Lepanto Ceramics and some statements in Yabut and Alba, not
only because of the difference in the factual settings, but also because those
isolated cryptic statements in Yabut and Alba should best be clarified in the
adjudication on the merits of this case. By way of anticipation, that will have
to be undertaken by the proper court of competent jurisdiction.

It is, however, suggested that this case could also be decided on other
grounds, short of passing upon; the constitutional question. We appreciate
the ratiocination of private respondent but regret that we must reject the
same. That private respondent could be absolved of the charge because the
decision exonerating him is final and unappealable assumes that Section 7,
Rule III of Administrative Order No. 07 is valid, but that is precisely one of the
issues here. The prevailing rule that the Court should not interfere with the
discretion of the Ombudsman in prosecuting or dismissing a complaint is not
applicable in this administrative case, as earlier explained. That two
decisions rendered by this Court supposedly imply the validity of the
aforementioned Section 7 of Rule III is precisely under review here because
of some statements therein somewhat at odds with settled rules and the
decisions of this Court on the same issues, hence to invoke the same would
be to beg the question.
V
Taking all the foregoing circumstances in their true legal roles and
effects, therefore, Section 27 of Republic Act No. 6770 cannot validly
authorize an appeal to this Court from decisions of the Office of the
Ombudsman in administrative disciplinary cases. It consequently violates
the proscription in Section 30, Article VI of the Constitution against a law
which increases the Appellate jurisdiction of this Court. No countervailing
argument has been cogently presented to justify such disregard of the
constitutional prohibition which, as correctly explained in First Leparto
Ceramics, Inc. vs. The Court of Appeals, el al. [23] was intended to give this
Court a measure of control over cases placed under its appellate

Furthermore in addition to our preceding discussion on whether Section

27 of Republic Act No. 6770 expanded the jurisdiction of this Court without its
advice and consent, private respondent's position paper correctly yields the
legislative background of Republic Act No. 6770. On September 26, 1989,
the Conference Committee Report on S.B. No. 453 and H.B. No. 13646,
setting forth the new version of what would later be Republic Act No. 6770,
was approved on second reading by the House of Representatives. [25] The
Senate was informed of the approval of the final version of the Act on
October 2, 1989[26] and the same was thereafter enacted into law by
President Aquino on November 17, 1989.
Submitted with said position paper is an excerpt showing that the
Senate, in the deliberations on the procedure for appeal from the Office of
the Ombudsman to this Court, was aware of the provisions of Section 30,
Article III of the Constitution. It also reveals that Senator Edgardo Angara, as
a co-author and the principal sponsor of S.B. No. 543 admitted that the said
provision will expand this Court's jurisdiction, and that the Committee on
Justice and Human Rights had not consulted this Court on the matter, thus:
INTERPELLATION OF SENATOR SHAHANI
xxx
Thereafter, with reference to Section 22(4) which provides that the decisions
of the Office of the Ombudsman may be appealed to the Supreme Court, in
reply to Senator Shahani's query whether the Supreme Court would agree to
such provision in the light of Section 30, Article VI of the Constitution which
requires its advice and concurrence in laws increasing its appellate
jurisdiction, Senator Angara informed that the Committee has not yet
consulted the Supreme Court regarding the matter. He agreed that the
provision will expand the Supreme Court's jurisdiction by allowing appeals
through petitions for review, adding that they should be appeals on certiorari.

[27]

There is no showing that even up to its enactment, Republic Act No. 6770
was ever referred to this Court for its advice and consent .[28]
VI
As a consequence of our ratiocination that Section 27 of Republic Act
No. 6770 should be struck down as unconstitutional, and in line with the
regulatory philosophy adopted in appeals from quasi-judicial agencies in the
1997 Revised Rules of Civil Procedure, appeals from decisions of the Office
of the Ombudsman in administrative disciplinary cases should be taken to
the Court of Appeals under the provisions of Rule 43.
There is an intimation in the pleadings, however, that said Section 27
refers to appellate jurisdiction which, being substantive in nature, cannot be
disregarded by this Court under its rule-making power, especially if it results
in a diminution, increase or modification of substantive rights. Obviously,
however, where the law is procedural in essence and purpose, the foregoing
consideration would not pose a proscriptive issue against the exercise of the
rule-making power of this Court. This brings to fore the question of whether
Section 27 of Republic Act No. 6770 is substantive or procedural.
It will be noted that no definitive line can be drawn between those rules
or statutes which are procedural, hence within the scope of this Court's rulemaking power, and those which are substantive. In fact, a particular rule may
be procedural in one context and substantive in another.[29] It is admitted that
what is procedural and what is substantive is frequently a question of great
difficulty.[30] It is not, however, an insurmountable problem if a rational and
pragmatic approach is taken within the context of our own procedural and
jurisdictional system.
In determining whether a rule prescribed by the Supreme Court, for the
practice and procedure of the lower courts, abridges, enlarges, or modifies
any substantive right, the test is whether the rule really regulates procedure,
that is, the judicial process for enforcing rights and duties recognized by
substantive law and for justly administering remedy and redress for a
disregard or infraction of them.[31] If the rule takes away a vested right, it is
not procedural. If the rule creates a right such as the right to appeal, it may
be classified as a substantive matter; but if it operates as a means o
implementing an existing right then the rule deals merely with procedure. [32]
In the situation under consideration, a transfer by the Supreme Court, in
the exercise of its rule-making power, of pending cases involving a review of

decisions of the Office of the Ombudsman in administrative disciplinary

actions to the Court of Appeals which shall now be vested with exclusive
appellate jurisdiction thereover, relates to procedure only.[33] This is so
because it is not the right to appeal of an aggrieved party which is affected by
the law. That right has been preserved. Only the procedure by which the
appeal is to be made or decided has been changed. The rationale for this is
that litigant has a vested right in a particular remedy, which may be changed
by substitution without impairing vested rights, hence he can have none in
rules of procedure which relate to the remedy.[34]
Furthermore, it cannot be said that transfer of appellate jurisdiction to
the Court of Appeals in this case is an act of creating a new right of appeal
because such power of the Supreme Court to transfer appeals to subordinate
appellate courts is purely a procedural and not a substantive power. Neither
can we consider such transfer as impairing a vested right because the
parties have still a remedy and still a competent tribunal to administer that
remedy.[35]
Thus, it has been generally held that rules or statutes involving a
transfer of cases from one court to another, are procedural and remedial
merely and that, as such, they are applicable to actions pending at the time
the statute went into effect[36] or, in the case at bar, when its invalidity was
declared. Accordingly, even from the standpoint of jurisdiction ex
hypothesi the validity of the transfer of appeals in said cases to the Court of
Appeals can be sustained.
WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act
of 1989), together with Section 7, Rule III of Administrative Order No. 07
(Rules of Procedure of the Office of the Ombudsman), and any other
provision of law or issuance implementing the aforesaid Act and insofar as
they provide for appeals in administrative disciplinary cases from the Office
of the Ombudsman to the Supreme Court, are hereby declared INVALID and
of no further force and effect.
The instant petition is hereby referred and transferred to the Court of
Appeals for final disposition, with said petition to be considered by the Court
of Appeals pro hac vice as a petition for review under Rule 43, without
prejudice to its requiring the parties to submit such amended or supplemental
pleadings and additional documents or records as it may deem necessary
and proper.
SO ORDERED.

dishonesty against the petitioner Jessie Macalalag, an employee of

the Philippine Postal Corporation, Bacolod City. The petitioner was
directed to file his answer through Orders dated February 18, July 7,
and November 13, 1997 and April 24, 1998 but he did not bother to
file any. Instead, when the case was called for preliminary
conference on 27 October 1998, he sent a telegram requesting for
postponement and praying that he be allowed to submit his position
paper after which the case shall be deemed submitted for resolution.
Again, no position paper was ever submitted by him. Accordingly, the
investigator was constrained to resolve the case on the basis solely
of the evidence furnished by the private respondent.
Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION
G.R. No. 147995

March 4, 2004

JESSIE
MACALALAG, petitioner,
vs.
OMBUDSMAN, PABLO ALORO and COURT OF APPEALS, respondents.

DECISION

VITUG, J.:
The elemental issue in the petition for review is whether or not the Court of
Appeals has jurisdiction over actions for annulment of decisions or orders of
the Ombudsman in administrative cases.
The factual antecedents of the case, summarized by the appellate court, are
basically undisputed
"x x x on February 3, 1997, private respondent Pablo Aloro lodged
with the Office of the Ombudsman for Visayas a complaint for

"It was established that the private respondent, a resident of Bacolod

City, is a retired employee receiving a monthly pension from the
Social Security System. As of September 15, 1996, however, he
failed to receive his pension checks corresponding to the months of
April, May and July, 1996. When he went to Bacolod City Post Office
to verify about the matter, he learned that his missing checks were
taken by the petitioner, an employee of the Philippine Postal
Corporation in Bacolod City, who endorsed and encashed them for
his personal benefit. When confronted by the private respondent, the
petitioner issued to the former his personal check in the amount of
P7,320.00 in payment of the checks. However, when the private
complainant presented the check for payment, it was dishonored by
the drawee bank for having been drawn against insufficient funds.
"Nonetheless, the private-respondent executed an affidavit of
desistance for the purpose of seeking the dismissal of the case
against the petitioner. But said affidavit was rejected and, instead,
the petitioner was declared administratively liable and ordered
dismissed from the service with forfeiture of all benefits and
disqualification from government service. The petitioner sought a
consideration but the same was denied.
"The petitioner next appealed to the Supreme Court by way of a
petition for review on certiorari. However, in the light of the decision
in Fabian vs. Desierto, [(295 SCRA 470) 1998] and Administrative
Circular No. 99-2-01-SC, the appeal was dismissed.
"In the interim, the adverse Ombudsman decision attained finality." 1
Petitioner filed an action for annulment of judgment with the Court of Appeals
on the ground that "the gross ignorance, negligence and incompetence of
petitioner's former lawyer deprived petitioner of his day in court which (would)
justify the annulment of the assailed Resolution and Order." The appellate

court, however, dismissed the petition for lack of jurisdiction thereover; it

ratiocinated:
"x x x Under Section 9 (2) of B.P. Blg. 129, this Court has exclusive
original jurisdiction only over actions for annulment of judgments of
the Regional Trial Courts. Nothing is mentioned therein about
judgments of other courts, much less of the Ombudsman or any
quasi-judicial body. The case of Fabian v. Desierto, 295 SCRA 470
(1998), vested this Court only with exclusive appellate
jurisdiction to review decisions of the Office of the Ombudsman in
administrative disciplinary actions which should be taken via a
petition for review under Rule 43 of the 1997 Rules of Civil
Procedure."2
Undaunted, petitioner has filed the instant petition for review, arguing that
Section 47 of the Rules of Court on annulment of judgments, refers to
"Regional Trial Courts" in its generic sense that should thus include quasijudicial bodies whose functions or rank are co-equal with those of the
Regional Trial Court.
Petitioner's thesis finds no support in law and jurisprudence.
Rule 47, entitled "Annulment of Judgments or Final Orders and Resolutions,"
is a new provision under the 1997 Rules of Civil Procedure albeit the remedy
has long been given imprimatur by the courts. 3 The rule covers "annulment
by the Court of Appeals of judgments or final orders and resolutions in civil
actions of Regional Trial Courts for which the ordinary remedies of new trial,
appeal, petition for relief or other appropriate remedies could no longer be
availed of through no fault of the petitioner." 4 An action for annulment of
judgment is a remedy in law independent of the case where the judgment
sought to be annulled is rendered.5 The concern that the remedy could so
easily be resorted to as an instrument to delay a final and executory
judgment,6 has prompted safeguards to be put in place in order to avoid an
abuse of the rule. Thus, the annulment of judgment may be based only on
the grounds of extrinsic fraud and lack of jurisdiction, 7 and the remedy may
not be invoked (1) where the party has availed himself of the remedy of new
trial, appeal, petition for relief or other appropriate remedy and lost therefrom,
or (2) where he has failed to avail himself of those remedies through his own
fault or negligence.
Section 27 of Republic Act No. (R.A.) 6770, also known as The Ombudsman
Act of 1989, provides that orders, directives and decisions of the
Ombudsman in administrative cases are appealable to the Supreme Court
via Rule 45 of the Rules of Court. In Fabian v. Desierto8, the Court has
declared Section 27 of the Act to be unconstitutional since it expands the

Supreme Court's jurisdiction without its advice and consent required under
Article VI, Section 30, of the 1987 Constitution. Hence, all appeals from
decisions of the Ombudsman in administrative disciplinary cases are instead
to be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil
Procedure. The rule is reiterated in Administrative Circular No. 99-2-01-SC.
Parenthetically, R.A. 6770 is silent on the remedy of annulment of judgments
or final orders and resolutions of the Ombudsman in administrative cases.
In Tirol, Jr. v. Del Rosario,9 the Court has held that since The Ombudsman
Act specifically deals with the remedy of an aggrieved party from orders,
directives and decisions of the Ombudsman in administrative disciplinary
cases only, the right to appeal is not to be considered granted to parties
aggrieved by orders and decisions of the Ombudsman in criminal or nonadministrative cases. The right to appeal is a mere statutory privilege and
may be exercised only in the manner prescribed by, and in accordance with,
the provisions of law.10 There must then be a law expressly granting such
right.11 This legal axiom is also applicable and even more true in actions for
annulment of judgments which is an exception to the rule on finality of
judgments.
Moreover, petitioner may no longer resort to the remedy of annulment of
judgment after having filed an appeal with the Supreme Court. Neither can
he claim that he is not bound by his lawyer's actions; it is only in case of
gross or palpable negligence of counsel when the courts can step in and
accord relief to a client who would have suffered thereby.12 If every perceived
mistake, failure of diligence, lack of experience or insufficient legal
knowledge of the lawyer would be admitted as a reason for the reopening of
a case, there would be no end to controversy. Fundamental to our judicial
system is the principle that every litigation must come to an end. It would be
a clear mockery if it were otherwise. Access to the courts is guaranteed, but
there must be a limit to it.
WHEREFORE, the petition is DISMISSED and the decision, dated 24
January 2001, of the Court of Appeals in CA-G.R. SP No. 59361 is
AFFIRMED. Costs against petitioner.
SO ORDERED.

SECOND DIVISION

WHEREFORE, premises considered, it is respectfully recommended that the

Motion For Reinvestigation be GRANTED and that the case as against
VENANCIO NAVA and AQUILINA GRANADA be DISMISSED for
insufficiency of evidence.

[G.R. No. 134509. April 12, 2005]

Manila, Philippines, May 4, 1998.[6]
VENANCIO R. NAVA, petitioner, vs. NATIONAL BUREAU OF
INVESTIGATION, REGIONAL OFFICE NO. XI, DAVAO CITY, respondent.
DECISION

On 21 May 1998, the Ombudsman disapproved the recommendation of his

subordinates with nary an explanation.

TINGA, J.:

In this Petition[1] filed pursuant to Section 27,[2] Republic Act No. 6770,
otherwise known as The Ombudsman Act of 1989, in relation to Rule 45 of
the Revised Rules of Court, petitioner Venancio R. Nava (hereinafter, Nava)
assails the disapproval[3] by the Ombudsman of the Order[4] of the Office of
the Special Prosecutor recommending the dismissal of the case against him
and his co-accused Aquilina Granada (hereinafter, Granada) for alleged
Falsification Thru Reckless Imprudence in OMB Cases No. 3-93-3219 and
No. 3-96-0462, in which the public respondent National Bureau of
Investigation (NBI) was the complainant. The Order was issued to resolve
the Motion for Reinvestigation[5] filed by Nava. The Order reads in part:

Movant VENANCIO NAVA and AQUILINA GRANADA have to rely in good

faith upon their subordinates. In the absence of any proof that they have
knowledge of the irregularity committed by their subordinates they cannot be
held criminally liable for having acted with reckless imprudence. In the instant
case the accused could not have suspected any irregularity in the
preparation of the PAL based on the ERFs (sic) as the said ERFs (sic) were
certified as true copies by the responsible official in the Division Office
therefore as noted by Superintendent Luceria de Leon.

In short, absence of any proof to the contrary, the accused enjoys the
presumption of regularity in the performance of their official duty.

The case subject of this Petition emanated from anonymous lettercomplaints[7] filed before the Office of the Ombudsman in Mindanao alleging
that fake Equivalent Record Forms (ERFs) of several teachers of the Davao
City National High School were made the bases for the Plantilla Allocation
List (PAL) for calendar year 1988 and for the teachers corresponding
promotion and salary upgrading.[8]

The Office of the Ombudsman in Mindanao referred the matter to the NBI in
Region XI (NBI-XI) and directed it to conduct a fact-finding investigation.[9]
The investigation by the NBI-XI disclosed, among others, the submission by
a certain Myrna Rosales-Velez of a Service Record (DECS Form No. 93)
containing fabricated facts and the handing in of fake ERFs by other teachers
which were the bases of the PAL approved as correct by Nava who was then
the Department of Education, Culture and Sports (DECS) Regional Director
for Region XI.[10] The NBI recommended the filing of appropriate charges
against the teachers and officials concerned.[11]

Acting on the findings of the NBI, the Office of the Ombudsman in Mindanao,
in a Joint Resolution[12] dated 23 October 1996, recommended the
indictment of Nava before the Sandiganbayan for Falsification of Official
Documents thru Reckless Imprudence.[13] The pertinent portions of the Joint
Resolution state:

Likewise, this Office finds prima facie evidence to hold respondent DECS
Regional Director Venancio Nava and Administrative Officer Aquilina
Granada liable for Falsification of Official Documents thru Reckless
Imprudence. Evidence on record would show that respondents Nava and
Granada are liable for the charge of falsification for their act of approving and
certifying as correct the Plantilla Allocation List (PAL) based on the approved
Equivalent Record Forms (ERFs) of the subject teachers without verifying
and scrutinizing the ERFs which turned out to be only certified copies of
none-existing documents. Their defense that at their level of responsibility, it
is not fair and right to expect them to be responsible for such verification as
they relied and depended on the processing and verification of the subject
documents to their subordinates, cannot be given credence. In fact, such
admission all the more bolstered the evidence against the respondents for
reckless imprudence in the performance of their official functions. Indeed
respondents Nava and Granada who are holding sensitive positions, are
liable for their failure to detect the falsity of the Equivalent Record Forms
(ERFs) and even approved and certified correct the Plantilla Allocation List
based on the fake or falsified Equivalent Record Forms. In fact, even their
subordinates in the Regional Office have knowledge of the non-existence of
the subject ERFs. On record is the list of DCHS teachers with approved
ERFs as of 1988, submitted by Administrative Officer Rolando Suase
(Records, pp. 47-48 in OMB-3-96-0462). In the said list, not one of the
subject teachers appear. Moreover, a certification dated 15 January 1993,
issued by Administrative Officer Edilberto Madria disclosed that based on the
files of subject teachers, same do not have approved ERFs for the years
1987, 1988 and 1989 (Record, p. 61).[14]

was docketed as SB Criminal Case No. 23519, the accusatory portion of

which reads as follows:

That during the Calendar Year 1988 and sometime prior or subsequent
thereto, at Davao City, Philippines and within the jurisdiction of this
Honorable Court, the said accused, both public officers, Venancio R. Nava
being the DECS-XI Regional Director with salary grade 28 and Aquilina B.
Granada, being the Administrative Officer of the same office; while in the
performance of their official duties, thus committing an offense in relation to
their office, did then and there unlawfully and feloniously through gross
inexcusable negligence, certified as correct and approved without verifying
and scrutinizing the Plantilla Allocation List for the Calendar Year 1988 and
earlier of the Davao City High School Teachers, based on the approved
Equivalent Record Forms which turned out to be photocopies of none (sic)
existing Equivalent Record Forms, thereby enabling the subject teachers to
be upgraded in their salary grade from Teacher I to Teacher III with
corresponding salary increase as in fact same teachers were able to collect
salary differentials.

CONTRARY TO LAW.[18]

The Joint Resolution was approved by Ombudsman Aniano A. Desierto on

15 November 1996.[16]

Nava filed before the Second Division of the Sandiganbayan a Motion for
Reinvestigation[19] which was granted in a Resolution dated 22 September
1997.[20] On 4 May 1998, Special Prosecution Officer Manuel A. Corpuz
(hereinafter, Special Prosecutor) recommended the dismissal of the charges
against Nava and Granada for insufficiency of evidence.
This
recommendation was, however, disapproved by the Ombudsman.[21] Hence,
the instant Petition in which Nava contends that the Ombudsman gravely
erred or was manifestly mistaken in disapproving the recommendation of
dismissal of the case against him, which disapproval, he further avers, is
based on an erroneous conclusion drawn from undisputed facts which
assumes the nature of a question of law reviewable by this Honorable Court.
Petitioner cites the cases of Arias v. Sandiganbayan[22] and Magsuci v.
Sandiganbayan[23] to support his stance that the case against him should
have been ordered dismissed.[24]

Thus, the filing of an Information[17] against Nava and his co-accused

Granada before the Sandiganbayan on 20 November 1996. The Information

In Arias v. Sandiganbayan,[25] the Court absolved the accused therein, who

was an auditor in an engineering district, from the indictment that he

....

It is also recommended that respondents Venancio Nava and Aquilina

Granada, be indicted before the Sandiganbayan for Falsification of Official
Documents thru Reckless Imprudence.[15]

conspired in the overpricing of land purchased by the government by

approving the vouchers for its payment. The Court concluded, to wit:

We would be setting a bad precedent if a head of office plagued by all too

common problemsdishonest or negligent subordinates, overwork, multiple
assignments or positions, or plain incompetenceis suddenly swept into a
conspiracy conviction simply because he did not personally examine every
single detail, painstakingly trace every step from inception, and investigate
the motives of every person involved in a transaction before affixing his
signature as the final approving authority.[26]

It further held that:

(H)eads of offices have to rely to a reasonable extent on their subordinates

and on the good faith of those who prepare bids, purchase supplies, or enter
into negotiations . . . There has to be some added reason why he should
examine each voucher in detail. Any executive head of even small
government agencies or commissions can attest to the volume of papers that
must be signed. There are hundreds of documents, letters, memoranda,
vouchers, and supporting papers that routinely pass through his hands. The
number in bigger offices or departments is even more appalling.[27]

In Magsuci v. Sandiganbayan,[28] the Court acquitted the accused therein, a

regional director, of the charges that he approved the payment of a work
order based on a Certificate of Completion and Accomplishment Report
which turned out to be falsities, allegedly in conspiracy with the contractor
and the engineer who was tasked with the duty to accomplish said certificate
and report. The Court ruled in this wise:

In concluding petitioners involvement in the conspiracy, the Sandiganbayan

could only point to Magsucis having (1) noted the Accomplishment Report
and Certification submitted by Enriquez, (2) signed the disbursement voucher
with the usual certification on the lawful incurrence of the expenses to be
paid, and (3) co-signed four checks for the payment of P352,217.16 to Ancla.
The Sandiganbayan concluded that the petitioner would not have thusly
acted had he not been a party to the conspiracy.

Fairly evident, however, is the fact that the action taken by Magsuci involved
the very functions he had to discharge in the performance of his official
duties. There has been no intimation at all that he had foreknowledge of any
irregularity committed by either or both Engr. Enriquez and Ancla. Petitioner
might have indeed been lax and administratively remiss in placing too much
reliance on the official reports submitted by his subordinate (Engineer
Enriquez), but for conspiracy to exist, it is essential that there must be a
conscious design to commit an offense. Conspiracy is not the product of
negligence but of intentionality on the part of the cohorts.[29]

In the Comment[30] filed by the Office of the Ombudsman on behalf of the

NBI, through the Office of the Special Prosecutor,[31] it was put forward that
as head of office and the final approving authority of the ERFs, it behooved
Nava to see to it that the supporting documents were attached to the PAL.
Nava should have taken the necessary measures to verify the contents of the
ERFs. Yet he did nothing other than affix his signature signifying that the
ERFs were in order. His contention then that he had acted in good faith
crumbles since he had known that the ERFs of the teachers did not have the
supporting documents to warrant their approval and the eventual inclusion of
the teachers names in the PAL.[32]

Corollarily, the NBI asserted that the Ombudsman did not err in not applying
the principles laid down by the Court in Arias v. Sandiganbayan[33] and
Magsuci v. Sandiganbayan[34] as Navas knowledge of the infirmity of the
ERFs cannot controvert the truth that he had acted in bad faith when he
approved the said ERFs and thereafter the PAL.[35]

Moreover, it is discretionary on the Ombudsman whether or not to rely on the

findings of fact of the investigating prosecutor in making a review of the
latters report and recommendation, as he can very well make his own
findings of fact. And citing the case of Knecht, et al. v. Desierto et al.,[36] the
NBI further pleaded that it is beyond the Courts ambit to review the exercise
of the Ombudsman in prosecuting or dismissing a complaint filed before it.
[37]

In the Comment[38] filed by the Solicitor General also on its behalf, the NBI
explained that for the ERFs to be processed and approved, they must be
accompanied by the teachers service records, performance ratings, special
order of bachelors degree, transcripts of records of undergraduate course or
masteral units earned, if any, and a consolidated record of training seminars
and workshops attended. Had Nava exercised ordinary prudence or
reasonable care or caution, he would have noticed the absence of supporting
documents accompanying the ERFs. Navas sole reliance on the certification
and initials of his subordinates is indicative of a wanton attitude and gross
lack of precaution.[39]

The NBI also argued that the Ombudsman, in denying the recommendation
of the Special Prosecutor, committed no error in fact and in law. He merely
exercised his prosecuting powers based on the constitutional mandate.[40]

Further, the NBI pointed out that the instant Petition is one for review on
certiorari pursuant to Section 27 of R.A. 6770 in relation to Rule 45 of the
Rules of Court, which provision of law had already been declared
unconstitutional in Fabian v. Desierto[41] and reiterated in Namuhe v.
Ombudsman.[42] Pursuant to the Courts ruling, appeals from orders,
directives or decisions of the Ombudsman in administrative disciplinary
cases should be taken to the Court of Appeals by way of a petition for review
under Rule 43 of the Rules of Court. In any event, as the instant case is not
an administrative disciplinary case, the proper remedy should have been a
petition for certiorari under Rule 65 of the Rules of Court. However, even
assuming that this remedy was pursued, since there is nothing on record to
even suggest that the Ombudsman committed grave abuse of discretion in
refusing to have the case against Nava dismissed, the NBI insists that the
Petition must fail.[43]

aggrieved by an order and decision of the Ombudsman in criminal cases, like

finding probable cause to indict accused persons. Nava implored the Court to
consider the instant Petition instead as a petition for certiorari under Rule 65
of the Rules of Court as the actuations of the Ombudsman amount to a grave
abuse of discretion amounting to lack or excess of its jurisdiction.[46]

We first dispose of the remedy issue raised by respondent NBI in its

Comment[47] filed on its behalf by the Solicitor General. It asserted that
since the instant Petition was filed pursuant to Section 27 of R.A. 6770,
Navas appeal should be taken to the Court of Appeals by way of a petition
for review under Rule 43 of the Rules of Court according to Fabian. An
alternative would be to file a petition for certiorari under Rule 65 of the Rules
of Court to the Court as the instant case is not an administrative disciplinary
case.[48]

We agree that the alternative remedy avails. Reiterating Tirol,[49] we held in

Mendoza-Arce v. Office of the Ombudsman (Visayas),[50] that although as a
consequence of the decision in Fabian,[51] appeals from the orders,
directives, or decisions of the Ombudsman in administrative cases are now
cognizable by the Court of Appeals, nevertheless in cases in which it is
alleged that the Ombudsman has acted with grave abuse of discretion
amounting to lack or excess of jurisdiction, a special civil action of certiorari
under Rule 65 may be filed with this Court to set aside the Ombudsmans
order or resolution. In Kuizon v. Desierto,[52] we held that the Court has
jurisdiction over such petitions questioning resolutions or orders of the Office
of the Ombudsman in criminal cases. As Nava himself beseeched the Court
to consider his Petition as a petition for certiorari under Rule 65, we shall
treat the same as one.

Coming now to the merits, the Petition cannot succeed.

Nava in his Consolidated Reply[44] stressed that the instant Petition was
filed on 3 September 1998 before the promulgation of the Fabian case on 16
September 1998; and maintained that it was then his honest position that
Section 27 of R.A. 6770 was available as a remedy in non-administrative
cases notwithstanding its silence on the matter. In this instance, however, he
posited that the Court of Appeals may likewise not take cognizance of the
Petition in light of the Courts ruling in Tirol, Jr. v. Justice del Rosario,[45] that
the right to appeal to the Court of Appeals granted to an aggrieved party in
administrative disciplinary cases as ruled in Fabian is not available to a party

In certiorari proceedings under Rule 65 of the Rules of Court, questions of

fact are generally not permitted, the inquiry being limited essentially to
whether or not the respondent tribunal had acted without or in excess of its
jurisdiction or with grave abuse of discretion.[53]

Grave abuse of discretion implies a capricious and whimsical exercise of

judgment tantamount to lack of jurisdiction. In other words, the exercise of
power is in an arbitrary or despotic manner by reason of passion or personal
hostility. It must be so patent and gross as to amount to an evasion of
positive duty or a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.[54]

Deliberating upon the Petition and the arguments in support thereof side by
side with the comments of the respondent thereon, we find that the Petition
fails to show a grave abuse of discretion or any act without or in excess of
jurisdiction on the part of the Ombudsman. Navas asseveration that the
Ombudsman gravely abused his discretion when he disapproved the
recommendation of the Special Prosecutor urging the dismissal of the case
against the petitioner and without giving any reasons therefor is specious.
The Ombudsman is not duty bound to render anew a statement of facts or
elaborate on the applicable law.[55] As we held in Cruz, Jr. v. People:[56]

It may seem that that the ratio decidendi of the Ombudsmans disapproval
may be wanting but this is not a case of total absence of factual and legal
bases nor a failure to appreciate the evidence presented. What is actually
involved here is merely a review of the conclusion arrived at by the
investigating prosecutor as a result of his study and analysis of the
complaint, counter-affidavits, and the evidence submitted by the parties
during the preliminary investigation. The Ombudsman here is not conducting
anew another investigation but is merely determining the propriety and
correctness of the recommendation given by the investigating prosecutor,
that is, whether probable cause actually exists or not, on the basis of the
findings of the latter. Verily, it is discretionary upon the Ombudsman if he will
rely mainly on the findings of fact of the investigating prosecutor in making a
review of the latters report and recommendation, as the Ombudsman can
very well make his own findings of fact. There is nothing to prevent him from
acting one way or the other. As a matter of fact, Section 4, Rule 112 of the
Rules of Court provides that where the investigating assistant fiscal
recommends the dismissal of the case but his findings are reversed by the
provincial or city fiscal or the chief state prosecutor on the ground that a
probable cause exists, the latter may, by himself, file the corresponding
information against the respondent or direct any other assistant fiscal or state
prosecutor to do so, without conducting another preliminary investigation.[57]

Likewise, it cannot be said that the Ombudsman committed a grave abuse of

discretion because he opined differently from the Special Prosecutor that,
under the facts obtaining in the case, there is probable cause to believe that
Nava is guilty of the offense charged. If the Ombudsman may dismiss a
complaint outright for lack of merit, it necessarily follows that it is also within
his discretion to determine whether the evidence before him is sufficient to
establish probable cause.[58] In case of conflict between the conclusion of
the Ombudsman and the Special Prosecutor, the formers decision shall
prevail since the Office of the Special Prosecutor is under the supervision
and control of the Ombudsman.[59]

The Ombudsmans act of disapproving the recommendation of the Special

Prosecutor to dismiss the case against Nava was not whimsical or
capricious. He disapproved the recommendation of the Special Prosecutor
because in his estimation, there was sufficient evidence to indict the
accused. This was an exercise of the powers of the Ombudsman based on
constitutional mandate and the courts should not interfere in such exercise.

Congruently with the rule that criminal prosecutions may not be restrained,
either through a preliminary or final injunction or a writ of prohibition, the
Court ordinarily does not interfere with the Ombudsmans exercise of
discretion in determining whether there exists a reasonable ground to believe
that a crime has been committed and that the accused is probably guilty
thereof, and thereafter in filing the corresponding information with the
appropriate courts,[60] save for the following instances:

(1) To afford adequate protection to the constitutional rights of the accused;

(2) When necessary for the orderly administration of justice or to avoid
oppression or multiplicity of actions;
(3) When there is a pre-judicial question which is sub-judice;
(4) When the acts of the officer are without or in excess of authority;
(5) Where the prosecution is under an invalid law, ordinance or regulation;
(6) When double jeopardy is clearly apparent;
(7) Where the court has no jurisdiction over the offense;
(8) Where it is a case of persecution rather than prosecution;

(9) Where the charges are manifestly false and motivated by lust for
vengeance;
(10) When there is clearly no prima facie case against the accused and a
motion to quash on that ground has been denied;
(11) Preliminary injunction has been issued by the Supreme Court to prevent
the threatened unlawful arrest of the petitioners.[61]

The Court has consistently refrained from interfering with the constitutionally
mandated investigatory and prosecutorial powers of the Ombudsman absent
any compelling reason.[62] In Alba v. Nitorreda,[63] we have held that:

It is beyond the ambit of this Court to review the exercise of discretion of the
Ombudsman in prosecuting or dismissing a complaint filed before it. Such
initiative and independence are inherent in the Ombudsman, who beholden
to no one, acts as the champion of the people and preserver of the integrity
of the public service.[64]

much the same way that the courts would be extremely swamped if they
could be compelled to review the exercise of discretion on the part of the
fiscals or prosecuting attorneys each time they decide to file an information in
court or dismiss a complaint by a private complainant.[67]

Further, it needs repeating that while it is the Ombudsman who has the full
discretion to determine whether or not a criminal case should be filed in the
Sandiganbayan, once the case has been filed with said court, it is the
Sandiganbayan, and no longer the Ombudsman, which has full control of the
case so much so that the Information may not be dismissed without the
approval of said court.[68]

Next, Nava contends that he was not accorded the opportunity to file a
motion for reconsideration within five (5) days from receipt thereof and before
the filing of the Information[69] in violation of Section 7 of Administrative
Order No. 7, as amended by Administrative Order No. 9, which provides that:

Sec. 7. Motion for Reconsideration.

While in the case of Presidential Commission on Good Government v.
Desierto,[65] we reiterated:

The prosecution of offenses committed by public officers is vested in the

Office of the Ombudsman. To insulate the Office from outside pressure and
improper influence, the Constitution as well as R.A. 6770 has endowed it with
a wide latitude of investigatory and prosecutory powers virtually free from
legislative, executive or judicial intervention. This Court consistently refrains
from interfering with the exercise of its powers, and respects the initiative and
independence inherent in the Ombudsman who, beholden to no one, acts as
the champion of the people and the preserver of the integrity of public
service.[66]

This policy of non-interference is not only based on constitutional and

statutory considerations but upon practicality as well. Otherwise, the
functions of the courts would be grievously hampered by innumerable
petitions assailing the dismissal of investigatory proceedings conducted by
the Office of the Ombudsman with regard to complaints filed before it, in

a) Only one motion for reconsideration or reinvestigation of an approved

order or resolution shall be allowed; the same to be filed with the Office of the
Ombudsman, or of the Deputy Ombudsman as the case may be, within an
inextendible period of five (5) days from notice thereof.

b) No motion for reconsideration or reinvestigation shall be entertained after

the information shall have been filed in court, except upon order of the court
wherein the case was filed.[70]

We find that the issue not of momentous legal significance for noncompliance with Section 7 of Administrative Order No. 7 does not affect the
validity of the Information filed with the Sandiganbayan. An aggrieved partys
motion for reconsideration or reinvestigation may nevertheless be filed and
acted upon by the Ombudsman if so directed by the court where the
information was filed such as what had taken place in this case.[71]

Finally, reliance on the cases of Arias and Magsuci cannot be countenanced

as they are not on all fours with the present Petition. In both cases, trial on
the merits had already been held, as in fact the judgment of conviction was
challenged in the petition, and therefore the Court had the opportunity to
appreciate the evidentiary matters which came out of the trial. On the other
hand, Navas allegations in the case involve evidentiary issues which could
be resolved only in a full-blown trial and not presently in this Petition.

ACCORDINGLY, the instant Petition is DISMISSED. Costs against petitioner.

SO ORDERED.

SECOND DIVISION
G.R. No. L-55694 October 23, 1981
ADALIA B. FRANCISCO, ZENAIDA FRANCISCO, ESTER FRANCISCO,
ADELUISA FRANCISCO and ELIZABETH FRANCISCO, Petitioners,
vs. HON. BENIGNO M. PUNO, as Presiding Judge, Court of First
Instance of Quezon, Branch II, Lucena City and JOSEFINA D.
LAGAR Respondents.chanrobles virtual law library
BARREDO, J.:
Petition for certiorari impugning the resolution of respondent judge of October
8, 1980 granting private respondent's petition for relief from the judgment
rendered by the same respondent judge on January 8, 1980 in Civil Case
No. 8480 of the Court of First Instance of Quezon which dismissed private
respondent's complaint for reconveyance of a parcel of land and damages.
That decision was rendered notwithstanding the absence of petitioners at the
pre-trial by reason of which they were declared in default. It was based alone
on the testimony of private respondent Josefina D. Lagar and the documents
she presented.chanroblesvirtualawlibrary chanrobles virtual law library

On August 29, 1979, private respondent filed with respondent judge a

complaint for reconveyance of a parcel of land and damages alleging inter
alia that respondent's father caused the land in question titled in his name
alone as "widower", after her mother's death, in spite of the property being
conjugal, and then sold it to the predecessor in interest of petitioners from
whom they bought the same.chanroblesvirtualawlibrary chanrobles virtual
law library
After the defendants, herein petitioners had filed their answer, wherein they
alleged lack of personality of plaintiff to sue, prescription and that they are
buyers in good faith, the case was set for pre-trial, but petitioners failed to
appear thereat. Taking advantage of such absence, private respondent's
counsel move that they be declared in default and that private respondent,
with the assistance of her counsel, Atty. Pacifico M. Monje, be allowed to
present their evidence. The motion was granted and after presenting her
evidence, counsel rested her case. On the same date, respondent judge
rendered judgment finding the evidence insufficient to sustain the cause of
action alleged and therefore dismissing the complaint. That was on January
8, 1980. On February 15, 1980, respondent's counsel was served with copy
of the decision. (See Annex G of the petition.) chanrobles virtual law library
On February 16, 1980, private respondent filed, thru a new counsel, Atty.
Bienvenido A. Mapaye, a motion for new trial and/or reconsideration alleging
that the insufficiency of her evidence was due to the fault of her counsel who
presented the same without her being fully prepared. In other words, she
claimed, she had newly discovered evidence that could prove her cause of
action. It is relevant to note that said motion was signed and sworn to by
private
respondent
herself
together
with
her
counsel.chanroblesvirtualawlibrary chanrobles virtual law library
Acting on the said motion for new trial and/or reconsideration, on April 28,
1980, respondent judge denied the same for having been filed out of time.
Indeed, from January 15, 1980, when respondent's counsel was served with
the decision, to February 16, 1980, when the motion was filed, more than 30
days
had
already
elapsed
(32
days
to
be
exact).chanroblesvirtualawlibrary chanrobles virtual law library
Persisting in her effort to pursue her claim, under date of May 7, 1980,
private respondent filed, thru another new counsel, Atty. Ricardo Rosales, Jr.,
a petition for relief, purportedly under Rule 38, claiming: chanrobles virtual
law library

1. She filed civil case 8480 for Reconveyance and Damages against
defendants
Luis
Francisco,
et
al.,
on
August
29,
1979.chanroblesvirtualawlibrary chanrobles virtual law library
2. The main trust in petitioner's action against defendant was her unlawful
deprivation of one-half of the property covered by TCT No. 2720 and
denominated as Lot 4864 of the cadastral survey of Lucena, as said parcel
belongs to the conjugal partnership of Dionisio Lagar and Gaudencia Daelo,
plaintiff-petitioner's
immediate
predecessor-ininterest.chanroblesvirtualawlibrary chanrobles virtual law library
3. Gaudencia Daelo having predeceased her husband, petitioner contends
that one-half of the property belongs to her mother and therefore should
rightfully by inherited by her after her mother's death, but failed however, to
inherit any part thereof, because her father sold the entire parcel to the
defendant Luis Francisco.chanroblesvirtualawlibrary chanrobles virtual law
library
4. On January 8, 1980, a pre-trial hearing was scheduled, where defendants
were declared as if in default thereafter an order of default was issued and
plaintiff adduced evidence ex-parte.chanroblesvirtualawlibrary chanrobles
virtual law library
5. On the same date, January 8, 1980, a decision was rendered dismissing
the case after plaintiff took the witness stand, who through excusable neglect
was not able to expound on very vital points and inadvertently failed to
introduce in support of her theory.chanroblesvirtualawlibrary chanrobles
virtual law library
6. Because plaintiff-petitioner was under the belief that the scheduled hearing
was one where no testimony is yet to be taken, coupled by the fact that she
was not prepared to testify, and that it was her first time to take the witness
stand, she did not fully comprehend the questions propounded to
her.chanroblesvirtualawlibrary chanrobles virtual law library
7. Plaintiff-petitioner filed a Motion for Reconsideration and/or new trial but
was denied in its order dated April 28, 1980, which petitioner received on
May 5,1980.chanroblesvirtualawlibrary chanrobles virtual law library
8. If plaintiff-petitioner will be allowed to introduce evidence in her
possession, which by excusable neglect and/or mistake were not introduced,
the same will necessarily alter and, or change the decision in her favor,

attached is her affidavit of merits.chanroblesvirtualawlibrary chanrobles

virtual law library
9. Evidence in support of her claim that it is a conjugal property consist of a
deed of sale executed by Manual Zaballero and Germana Ona in favor of the
conjugal partnership of Dionisio Lagar and Gaudencia Daello (Doc. No. 412;
Page No. 55; Book No. 11; Series of 1948 of Notary Public Francisco
Mendioro xerox copy thereof is attached herewith as Annex
"A".chanroblesvirtualawlibrarychanrobles virtual law library
10. The deed of sale ratified by Notary Public Ramon Ingente (Doc. No. 68;
Page No. 7; Book No. VI; Series of 1955 executed by Dionisio Lagar should
refer only to one-half (1/2) and therefore is annulable in so far as the other
half of the property is Concerned.chanroblesvirtualawlibrary chanrobles
virtual law library
11. That the petition wherein Dionisio Lagar sought [4) change his civil status
was not known personally to the plaintiff-petitioner and/or not understood by
her, otherwise she could have made reservations in that petition eventually
protecting her right insofar as one-half (1/2) of the property is
concerned.chanroblesvirtualawlibrary chanrobles virtual law library
12. Plaintiff-petitioner has a valid substantial cause of action consisting of
evidence enumerated above, which by excusable negligence or error was
not presented otherwise, the decision will be in favor of the plaintiff herein
petitioner. (Petition for Relief of Judgment, pp. 50-52, Record
Answering the petition for relief, petitioners maintained that aside from the
fact that no excusable negligence has been alleged, for, on the contrary,
there was an evident effort oil respondent's part to take advantage of the
absence and default of petitioners when respondent presented her evidence,
the petition for relief was filed out of time in the light of Section 3 of Rule 38,
which provides that such a petition should be " filed within sixty (60) days
after the petitioner learns of the judgment, order or proceeding to be set
aside, and not more than six (6) months after such judgment or order was
entered or such proceeding was taken." chanrobles virtual law library
In his resolution of October 8, 1980 now under question, respondent judge
ruled that: chanrobles virtual law library
Defendants' claim that plaintiff is presumed to have learned of the judgment
of January 8, 1980, either on January 15, 1980 when Atty. Monje received a

copy thereof or on February 15, 1980, when plaintiff signed the Motion for
Reconsideration and/or New Trial prepared by Atty. Mapaye, in either case,
the petition for relief of May 8, 1980 by Atty. Rosales was resorted to beyond
the 60-day period prescribed under Section 3, Rule 38 of the Rules of Court;
from January 15 to May 8 is a period of 114 days and from February 15 to
May 8 is a period of 84 days; in either case, the filing of the petition for relief
is beyond 60 days from the time plaintiff is presumed to have learned of said
decision of January 8, although, in either or both events, the filing thereof is
admittedly within 6 months from the issuance of said decision; on the other
hand, the plaintiff stated that she did not actually learn of the decision of
January 8, until she received a copy thereof on March 17, 1980 (p. 67 of
Record or Exh. "G") and that she was not informed of the contents of the
motion for new trial and/or reconsideration on February 15, 1980 when she
was
made
to
sign
it
(TSN,
pp.
20-21,
July
28,
1980).chanroblesvirtualawlibrarychanrobles virtual law library
Q From where did you secure that copy of the decision? chanrobles virtual
law library
A I went to the court myself and secured a copy of the decision. (TSN, p. 16id).
xxx xxx xxxchanrobles virtual law library
Q And you are sure of the fact that you only became aware of the decision in
the month of March, 1980?chanrobles virtual law library
A Yes. sir, (TSN, p. 20, Id).
In the light of the circumstances obtaining in this case, it is the opinion of the
Court that it is the date when plaintiff actually learned of the decision from
which she seeks relief that should be considered in computing the period of
60 days prescribed under Sec. 3, Rule 38 of the Rules of Court for purposes
of determining the timeliness of the said petition for relief; this opinion finds
support in Cayetano vs. Ceguerra et al., No. L-18831, 13 SCRA, where the
Supreme Court, in effect, held that the date of 'actual knowledge' (and not the
presumed date of receipt or knowledge) of the decision, order or judgment
from which relief is sought shall be the date which should be considered in
determining the timeliness of the filing of a petition for relief; in that case, the
Supreme Court said:

It is conceded that defendants received a first registry notice on January 13,

1961, but they did not claim the letter, thereby giving rise to the presumption
that five (5) days after receipt of the first notice, the defendants were deemed
to have received the letter. This Court, however, cannot justly attribute upon
defendants actual knowledge of the decision, because there is no showing
that the registry notice itself contained any indication that the registered letter
was a copy of the decision, or that the registry notice referred to the case
being ventilated. We cannot exact a strict accounting of the rules from
ordinary mortals, like the defendants. (Resolution, pp. 67-68, Record.)
We cannot agree, for two reasons. First, according to Chief Justice
Moran: chanrobles virtual law library
The relief provided for by this rule is not regarded with favor and the
judgment would not be avoided where the party complaining "has, or by
exercising proper diligence would have had, an adequate remedy at law, or
by proceedings in the original action, by motion, petition, or the like to open,
vacate, modify or otherwise obtain relief against, the judgment." (Fajardo v.
Judge Bayona, etc., et al., 52 O.G. 1937; See Alquesa v. Cavoda L-16735,
Oct. 31, 1961, citing 49 C.J.S. 695.) The remedy allowed by this rule is an
act of grace, as it were, designed to give the aggrieved party another and last
chance. Being in the position of one who begs, such party's privilege is not to
impose conditions, haggle or dilly-dally, but to grab what is offered him.
(Palomares, et al. v. Jimenez, et al., L-4513, Jan. 31, 1952.) (Page 226,
Moran, Comments on the Rules of Court, Vol. 2, 1979 Edition.)
In other words, where, as in this case, another remedy is available, as, in
fact, private respondent had filed a motion for new trial and/or
reconsideration alleging practically the same main ground of the petition for
relief under discussion, which was denied, what respondent should have
done was to take to a higher court such denial. A party who has filed a timely
motion for new trial cannot file a petition for relief after his motion has been
denied. These two remedies are exclusive of each other. It is only in
appropriate cases where a party aggrieved by a judgment has not been able
to file a motion for new trial that a petition for relief can be
filed.chanroblesvirtualawlibrary chanrobles virtual law library
Second, it is beyond doubt that the petition for relief of private respondent
was filed out of time. We cannot sanction respondent court's view that the
period should be computed only from March 17, 1980 when she claims selfservingly that she first knew of the judgment because, as stated above, she
signed and even swore to the truth of the allegations in her motion for new
trial filed by Atty. Mapaye on February 16, 1980 or a month earlier. To give

way to her accusations of incompetence against the lawyer who handled her
case at the pre-trial, which resulted in a decision adverse to her despite the
absence of petitioners, and charge again later that her new counsel did not
inform her properly of the import of her motion for new trial and/or
reconsideration is to strain the quality of mercy beyond the breaking point
and could be an unwarranted slur on the members of the bar. That, however,
Atty. Mapaye cud not pursue the proper course after his motion for new trial
was denied is, of course, unfortunate, but We are unaware of the
circumstances of such failure and how much of it could be attributed to
respondent herself, hence We cannot say definitely Chat it was counsel's
fault, chanrobles virtual law library

MAURICIO GORDULAN, Plaintiff-Appellee, vs. CESAREO GORDULAN,

Defendant-Appellant.

In any event, We hold that notice to counsel of the decision is notice to the
party for purposes of Section 3 of Rule 38. The principle that notice to the
party, when he is represented by a counsel of record, is not valid is
applicable here in the reverse for the very same reason that it is the lawyer
who is supposed Lo know the next procedural steps or what ought to be
done in law henceforth for the protection of the rights of the client, and not
the latter.chanroblesvirtualawlibrary chanrobles virtual law library

This appeal, which was certified to this Court by the Court of Appeals
because only issues of law are raised, questions an order of the Court of
First Instance of Nueva Ecija denying defendant's petition for relief from a
final judgment by default.chanroblesvirtualawlibrarychanrobles virtual law
library

Under the circumstances, We hold that respondent judge acted beyond his
jurisdiction in taking cognizance of private respondent's petition for relief and,
therefore, all his actuations in connection therewith are null and void, with the
result that his decision of January 8, 1980 should be allowed to stand, the
same
having
become
final
and
executory.chanroblesvirtualawlibrary chanrobles virtual law library
ACCORDINGLY, judgment is hereby rendered setting aside the resolution of
respondent judge of October 8, 1980 and reinstating his decision of January
8, 1980 in Civil Case No. 8480 of his court, which latter decision may now be
executed, the same being already final and executory. No costs.

Agustin Bagasao for plaintiff-appellee.

Pedro D. Maldia for defendant-appellant.

REYES, J.B.L., J.:

It is uncontested that in Civil Case No. 2488 of the court below, a suit for the
recovery of land, the defendant therein, Cesareo Gordulan, although duly
summoned, failed to file his answer in due time. Upon motion of the plaintiff,
the defendant was declared in default. After reception of evidence for the
plaintiff, the lower court rendered judgment against defendant (now
appellant). Availing himself of the provisions of Rule 38 of the Rules of Court,
the defendant Cesareo Gordulan sought to set the judgment aside, claiming
that he had good and valid defenses against plaintiff's complaint and that it
was excusable negligence on his part that his counsel failed to file an
answer.chanroblesvirtualawlibrarychanrobles virtual law library

His petition having been denied, the defendant interposed

appeal.chanroblesvirtualawlibrarychanrobles virtual law library

EN BANC

G.R. No. L-17722

October 9, 1961

this

The questioned order should not be disturbed. Section 2 and 3 of Rule 38 of

the Rules of Court are explicit, and require not only a sworn statement of the
facts constituting petitioner's good and substantial defense, but likewise a
showing that the failure to file an answer was by reason of fraud, accident,
mistake or excusable negligence. While appellant's petition for relief contains
a recital of facts, duly sworn to by him, that the lot in dispute is owned in
common by the plaintiff and the defendant in equal shares, nothing is,

however, offered to show that there was fraud, mistake, accident or

excusable negligence in the failure of the lawyer to timely join issues with the
plaintiff.chanroblesvirtualawlibrarychanrobles virtual law library

The trial judge, Honorable Felix V. Makasiar, has correctly pointed out in the
appealed order:

considering that the negligence of Atty. Antero Tomas, as counsel for the
defendant, in failing to file his answer to the complaint within the
reglementary period is not excusable and, therefore, not a ground for relief;
that Atty. Antero Tomas has not even submitted any affidavit with respect to
his alleged negligence; that the defendant had the duty to inquire from Atty.
Tomas as to what he did with the complaint or whether he filed his answer
thereto or the status of the case before the order of default on May 27, 1957,
or before the plaintiff presented his evidence on July 18, 1957 and could
have presented a motion to set aside the order of default prior to July 18,
1957 (See Taguinod, et al. vs. Mangantilao, L-7970, February 28, 1956;
Robles, et al. v. San Jose, et al., L-8627, July 31, 1956; 52 Off. Gaz. 6183;
Vivero v. Belo, No. L-8105, February 28, 1956; 52 Off. Gaz, 1924); that the
defendant could have easily inquired from the records as to the status of the
case inasmuch as his residence in Muoz is only less than one hour by bus
from Cabanatuan City; and that his duty to make such an inquiry is
underscored by his claim that his harvest of palay of 16 cavans from the land
for the agricultural year 1956-57 was attached by the plaintiff's mortgagee,
the petition for relief is hereby denied.

Rule 38 is a special remedy and the requirements therein set forth are
considered as conditions sine qua non to the proper allowance of
relief.chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, the order appealed from is affirmed, with costs against

appellant.chanroblesvirtualawlibrarychanrobles virtual law library

Bengzon, C.J., Padilla, Labrador, Concepcion, Paredes and De Leon, JJ.,

concur.

Republic
SUPREME
Manila

of

the

Philippines
COURT

G.R. No. L-46674 September 16, 1985

LAUREANO
ARCILLA, petitioner,
vs.
BASILISA ARCILLA, SERAPIA ARCILLA, MARCELA ARCILLA, DIONISIA
ARCILLA, ZACARIAS ARCILLA, GAVINA MOLO VDA. DE ARCILLA,
CESAR M. ARCILLA, GLORIA M. ARCILLA, ANTONIO M. ARCILLA,
POMPEY M. ARCILLA, ERNESTO M. ARCILLA, ELENA M. ARCILLA,
ASUNCION M. ARCILLA, RANULFO M. ARCILLA, IGLESIA A. CAETE,
ROSABELLA A. CAETE, and HONORABLE FRANCIS J. MILITANTE,
Presiding Judge of Branch IX of the Court of First Instance of
Cebu, respondents.
Vicente Varela, Jr. for petitioner.
Basilio E. Duaban for respondents.

Neither is it arguable that defendant should not be held to suffer for his
counsel's shortcomings, for a client is bound by the acts, even by the
mistakes and negligence, of his counsel in the realm of procedural technique.
Of course, the door is open for him to seek redress against the erring lawyer
for the wrong suffered (Isaac vs. Mendoza, L-2820, June 21,
1951).chanroblesvirtualawlibrarychanrobles virtual law library

CUEVAS, J.:
The instant special civil action for certiorari and PROHIBITION assails the
Order 1 dated May 18, 1977 issued by respondent Judge Francis J. Militante,
presiding Judge of the then Court of First Instance of Cebu, Branch IX in Civil
Case No. 395-T, denying Laureano Arcilla's Petition for Relief from

Judgment, for having been filed beyond the period prescribed by Section 3,
Rule 38 of the Rules of Court.
Petitioner was among the several defendants in Civil Case No. 395-T, an
action for Annulment of Sale with Damages, filed by the herein private
respondents before the then Court of First Instance of Cebu on May 28,
1973.
After the issues were joined by the filing of defendants' Answer, the case was
set for pre-trial conferences. At the scheduled pre-trial on July 29, 1975, the
lower court issued the following Order. 2
Let the continuation of the pre-trial of this case be set to
October 2, 1975 at 8:30 a.m. in Cebu City.

Although the defendants had been declared in default, let a copy of this
decision be furnished them through their counsel.
SO ORDERED.
A copy of the aforesaid decision was sent to and received by defendants'
counsel of record, Atty. Cosme D. Monteclaros, on November 8,1976.
On March 25, 1977, herein petitioner, as one of the defendants in said Civil
Case No. 395-T, through his new counsel, filed a Motion to Lift Order of
Default and to Set Aside the Decision dated October 27, 1976, 5 which was
denied by respondent Judge in his Order dated April 12, 1977.
On April 16, 1977, petitioner
Judgment, 6 alleging mainly

filed

Petition

for

Relief

from

Attys. Duaban and Monteclaros are notified in open court.

On October 2, 1975, defendants (among whom is the petitioner herein) and
their counsel did not appear. Whereupon, on motion of plaintiffs' (now private
respondents) counsel, defendants were declared in default 3pursuant to
Section 2, Rule 20 of the Rules of Court and the plaintiffs were allowed to
present their evidence ex-parte.
On October 27, 1976, judgment 4 was rendered in favor of the plaintiffs, the
dispositive portion of which reading as follows
(1) Declaring the Deed of Sale (Exh. 'E') allegedly executed
by Segunda Vda. de Arcilla in favor of defendant Laureano
Arcilla as null and void;
(2) Declaring the eight (8) children of Segunda O. Vda. de
Arcilla (including defendant Laureano) as co-owners on
equal shares of the one-half (1/2) portion of that parcel of
land covered by Tax Declaration No. 00347 which was
adjudicated to her in the Extrajudicial Partition Settlement
and as co- owner in eight (8) equal shares of the parcel of
land covered by Tax Declaration No. 00349 which was
intended for her full usufruct
(3) Dismissing the complaint as against defendant Nemesio
Jubay.

That on July 29, 1975, a Court Order was issued setting the
pre-trial of the above-entitled case to October 2, 1975;
however, on October 2, 1975, the then Hon. Presiding Judge
of this Court, without previous examination of the records as
to whether or not said defendants were duly notified of the
setting for pre-trial on that same date (October 2nd) and
upon oral motion by counsel for the plaintiffs, declared
defendants in default based and in accordance with the
supposed provisions of Sec. 2 of Rule 20 of the Revised
Rules of Court . . . the declaration of default under said Sec.
2 of Rule 20 is within supposition that the defendants sought
to be declared as such should be shown that they actually
know of such setting, but the records of the case disclose
that no notice was ever served upon said defendants;
That, defendants, particularly the principal defendant
Laureano Arcilla, learned of the decision of October 27, 1976
only on March 24, 1977 when the herein undersigned
counsel showed him a xerox copy of the same which the
undersigned counsel procured a day earlier. (Mar. 23)
That the defendants therefore seek the setting aside and
lifting the effects of the decision aforementioned based on
mistake and/or excusable neglect for their failure to inquire
from their lawyer Atty. Monteclaros or with this Court
believing that they will be duly notified of any proceeding in

connection with the above-entitled case either by their

lawyer Atty. Monteclaros or by the Office of the Clerk of
Court of this Court inasmuch as they are not the plaintiffs
and are therefore in the defensive side of the case.
That an Affidavit of Merit is attached to the present petition
for Relief of Judgment based on Rule 38 of the Revised
Rules of Court and herein marked as Annex '1' to form an
integral part hereof executed by principal defendant
Laureano Arcilla and said defendants, in accordance with the
obligations contained in said affidavit of merits, has a good
and valid defense against the claim of plaintiffs, considering
that the late Segunda O. Vda. de Arcilla voluntarily and
willingly executed the document of sale sought to be
annulled, the contents thereof having been fully explained to
her by the notary public and it was for a valuable
consideration.
On May 18, 197 7, respondent Judge issued his now assailed Order denying
petitioner's Petition for Relief, the pertinent portion reading as follows
The plaintiff in her opposition, contends that the petition for
relief from judgment is already filed out of time because the
judgment of this Court was received by counsel for the
defendants on November 8, 1976, hence, the defendants
had only up to January 8, 1977 to file a petition for relief from
judgment. Sec. 3 of Rule 38 of the Rules of Court clearly
states that "A petition provided for in either of the preceeding
section of this rule must be verified, filed within sixty (60)
days after the petitioner learns of the judgment, order, or
other proceeding to be set aside, and not more than six (6)
months after such judgment or order was entered or said
proceeding was taken". It is claimed by the defendants that
they learned only of the judgment on March 24, 1977. This
contention of the defendants cannot be given weight
because notice to counsel is notice to the client and since
the defendants' former counsel Atty. Cosme D. Monteclaros
received the judgment on November 8, 1976, then the date
to be reckoned with is the date when the defendants'
counsel received the judgment which is November 8, 1976.
This Court is in sympathy with the pathetic plight of the
defendants if it is really true that the order declaring them in

default was not through a fault of their own but since they
slept on their rights for quite a time such as would bar the
present petition, this Court is not in a position to extend the
period within which to file the present petition for relief from
judgment.
In view of the foregoing, the petition for relief from judgment
is hereby denied for having been filed beyond the
reglementary period."
Attributing grave abuse of discretion on the part of respondent Judge in
issuing the aforesaid Order, petitioner now comes to Us through the instant
petition praying that the said challenged order be set aside and declared null
and void.
The only issue then to be resolved in this case is whether or not the lower
court acted with grave abuse of discretion and/or without jurisdiction in
denying the Petition for Relief from judgment for having been filed out of
time.
The pertinent provisions of Rule 38 of the Revised Rules of Court on "Relief
from Judgments, Orders or Other Proceedings" state
Sec. 2. Petition to Court of First Instance for relief from
judgment or other proceeding thereof.When a judgment or
order is entered, or any other proceeding is taken, against a
party in a Court of First Instance through fraud, accident,
mistake or excusable negligence, he may file a petition in
such court and in the same cause praying that the judgment,
order or proceeding be set aside.
Sec. 3. Time for filing petition contents and verification. A
petition provided for in either of the preceding sections of this
rule must be verified filed within sixty (60) days after the
petitioner learns of the judgment, order or other proceeding
to be set aside, and not more than six (6) months after such
judgment or order was entered or such proceeding was
taken; and must be accompanied with affidavits showing the
fraud, accident, mistake or excusable negligence relied
upon, and the facts constituting the petitioner's good and
substantial cause of action or defense, as the case may be.

In the case of Turqueza vs. Hernando, L-51626, April 30, 1980, 97 SCRA
483, this Court held that

not notified of the pre-trial on October 2, 1975, consequently, all subsequent

proceedings including the judgment by default were all null and void.

The Court has said time and again that the doctrine of finality
of judgments is grounded on fundamental considerations of
public policy and sound practice that at the risk of occasional
error, the judgments of courts must become final at some
definite date fixed by law. The law gives an exception or "last
chance" of a timely petition for relief from judgment within the
reglementary period (within 60 days from knowledge and 6
months from entry of judgment) under Rule 38 supra, but
such grace period must be taken as "absolutely fixed,
inextendible, never interrupted and cannot be subjected to
any condition or contingency. Because the period fixed is
itself devised to meet a condition or contingency (fraud,
accident, mistake or excusable neglect), the equitable
remedy is an act of grace, as it were, designed to give the
aggrieved party another and last chance, and failure to avail
of such last chance within the grace period fixed by the
statute or the Rules of Court is fatal.

At first blush, petitioner's aforesaid contention appears very tenable, for

indeed it is settled that a declaration of default, in the absence of a notice of
pre-trial constitutes denial of due process. 8 But a deeper examination of the
pleadings and the record of the case would show that petitioner was present
during the pre-trial conference on July 29, 1975 when the lower court re-set
the pre-trial to October 2, 1975. On the said date, however, although notified,
both petitioner and his counsel did not appear, hence, the declaration of
default pursuant to Sec. 2, of Rule 20 of the Rules of Court.

The rule, therefore, is that in order for a petition for relief filed under Rule 38
to be entertained by the court, the petitioner must satisfactorily show that he
has faithfully and strictly complied with the provisions of said Rule 38.
Consequently, in assailing the lower court's dismissal of his petition for relief
for having been filed out of time, it is incumbent upon herein petitioner to
show that the said petition was filed within the reglementary period specified
in Section 3, Rule 38. He has failed to do so, instead he argues on the merits
of his petition for relief, without first showing that the same was filed on time
in the court below. On this ground alone, the instant case should be
dismissed.

A careful perusal of the Deed of Sale (Exh. "E") sought to be

annulled bear and bare that the same was written in English
and that Segunda O. Vda. de Arcilla is an illiterate who do
not know how to write having affixed her thumbmark on the
said document which fact is corroborated by the testimony of
Marcela Arcilla.

Moreover, We agree with the respondent Judge that the petition for relief was
filed late. We note that the decision sought to be set aside was rendered on
October 27, 1976. Petitioner, through counsel, received a copy of the said
decision on November 8, 1976, and he filed his petition for relief from
judgment only on April 18, 1977. Clearly, the same was filed beyond the
period allowed by Section 3 of Rule 38. As in previous cases, this Court
holds and so rules that the instant petition filed after the lapse of the
reglementary period cannot be entertained. 7
Arguing on the merits of his petition for relief, petitioner's main contention is
that the order of default was illegally and improperly issued because he was

The case filed before the lower court is for annulment of a deed of sale
allegedly executed by Segunda O. Vda. de Arcilla in favor of one of his sons,
herein petitioner Laureano Arcilla. It was originally filed and instituted by the
said Segunda O. Vda. de Arcilla but she died even before the pre-trial of the
case and was therefore substituted by her other children. The other
defendant in the case Nemesio Jubay was the Notary Public who allegedly
notarized the document. From the evidence presented by the plaintiffs, the
lower court found

While it is true that the natural presumption is that one always acts with due
care and signs with full knowledge of all the contents of a document for which
he can not repudiate the transaction (Abaya vs. Standard Vaccuume Oil Co.
L-9511, August 30, 1957; Javier vs. Javier, 7 Phil . 261; Tan Tua vs, Jy Liao
Sontua, 56 Phil. 20) this presumption referred to cannot apply in the case at
bar when one of the parties is unable to read and write the contract in a
language not understood by one of the parties (Art. 1332, New Civil Code). In
both cases, the person enforcing the contract must show the terms thereof
have been fully explained to the party (Ayala vs. Balderama Lumber
Manufacturing Co., Inc. (CA) 490 O.G. 980)
Furthermore, the record is replete of proof that the care and custody of the
deceased Segunda O. Vda. de Arcilla was burdened on the defendant
Laureano Arcilla and this fact, coupled with the age, infirmity and intelligence

of the former, advantage may have favored the situation of the latter which
lead to the consummation of the questioned document (Exh. "E") by virtue of
which the latter has the burden of proof to dislodge such misapprehension.
With respect to Atty. Nemesio Jubay, he should be reminded of the protective
mandate of Art. 1332 of the New Civil Code for those illiterates and those
documents drawn in English or Spanish."
Examining the petition for relief filed by petitioner, while the same appears
verified and accompanied by an affidavit of merit, the allegations of fact
made therein do not prove either fraud, accident, mistake, or excusable
negligence, nor show a valid defense in favor of the party seeking relief ...
The general allegation made therein to the effect that "petitioner has a good
and valid defense considering that the late Segunda O. Vda. de Arcilla
voluntarily and willingly executed the document of Sale", is not sufficient
compliance with the rules. Since the Deed of Sale sought to be annulled was
written in English and it is admitted that Segunda O. Vda. de Arcilla is an
illiterate and do not know how to read and write, it would have been an easy
matter for petitioner to have secured the affidavit of Nemesio Jubay, the
Notary Public who allegedly notarized the document as well as the witnesses
to the execution and signing thereof to show that the contents of the
document was fully explained to said Segunda O. Vda. de Arcilla and that
she voluntarily signed the same. This way, petitioner could convince the
Court that in his legal fight, he had a leg on which to stand. It thus results that
reversal of the order complained of, as well as the judgment rendered
thereon would be an Idle ceremony. It would not advance or for that matter
serve the ends of justice. It would only result in another waste of time, effort
and expense. Paraphrasing what this Court has stated in Paner vs. Yatco 9 it
would be pointless to re-open this case, "for like a mirage it would merely
raise false hopes and in the end avail her (him) nothing."

Republic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION

G.R. No. 115595 November 14, 1994

ANTONIO DEMETRIOU, HARRIET DEMETRIOU, ET AL., petitioners,
vs.
COURT OF APPEALS, HON. JUDGE RHODIE A. NIDEA, and HILDA
RALLA-ALMINE, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioners.
Almine-Rojas & Associates for private respondent.

MENDOZA, J.:

For the reasons stated above, the Order of the lower court dated May 8,
1977 denying herein petitioner's Petition for Relief should be affirmed.

Petitioners brought an action in the Court of Appeals seeking the annulment

of the decision of the Regional Trial Court at Tabaco, Albay which ordered the
Register of Deeds to issue a new owner's duplicate certificate of title to
private respondent. Their petition was, however, denied due course on the
ground that the fraud alleged therein was not extrinsic fraud but, if at all, only
intrinsic fraud which did not justify setting aside the final decision of the trial
court. Hence this petition for review of the decision of the Copurt of
Appeals. 1

WHEREFORE, the instant special civil action is hereby DISMISSED. Costs

against petitioner.

The allegations of the petition for annulment of judgment are summarizzed in

the following portion of the decision of the Court of Appeals:

SO ORDERED.

Alleged in the petition, among other things, are that

petitioners are the co-owners (to the extent of 2/3) of Lot No.
7651-A of the subdivision survey PSD-05-005263 (a portion
of Lot 7651 Cad. 221 Tabaco Cadastre) situated at
Poblacion, Tabacco, Albay, containing an area of one
thousand ten (1,010) square meters covered by Transfer
Certificate
of
Title

No. T-65878 of the register of Deeds of the Province of Albay

in the name of Pablo Ralla, private respondent's deceased
father (hereinafter referred to as the "Property"); that
petitioners acquired two-thirds of the Property from Miriam
Catherine Ralla by virtue of two deeds of absolute sale both
executed on 11 July 1985, the sale from Miriam Catherine
Ralla was reconfirmed by another Deed of Absolute Sale
executed on July 1986 [sic], while the sale from Joan
Pauline R. Belista was ratified and confirmed by virtue of an
order date 11 May 1989 of the Regional Trial Court of Fifth
Judicial Region, Branch 8 Legaspi City; that at the time of
the sale of the Property to the petitioners, there was a tenyear lease contract over the property which was scheduled
to expire on 15 July 1991, for this reason, the petitioners
decided to await the termination of the lease before
registering the sale and obtaining a new title in their name;
that soon after the expiration of the lease contract, sometime
in the first week of August 1991, the father of the petitioners
went to the Register of Deeds to have the deed of sale
registered and to obtain new title in the name of the
petitioners; that to his great surprise and shock, the father of
petitioners learned from the Register of Deeds that by an
order of Judge Rhodie A. Nidea of the RTC of Tabaco, Albay,
Branch 16, the owner's duplicate copy of TCT No. T-65878 in
the possession of the petitioner had been declared of no
further force and effect and that a new second owner's
duplicate copy of said title has been issued to the private
respondent; that subsequent investigation by the petitioners
disclosed that on Sept. 20, 1990 private respondent filed a
petition with the RTC of Tabaco, Albay, Branch 16 and
docketed as CAD Case No. T-1024 wherein she falsely and
fraudulently
alleged
that
"the owner's duplicate copy of the said Transfer Certificate of
Title
No. T-65878 was lost and/or destroyed while in the
possession and custody of herein petitioner as per her
Affidavit of Affidavit of Loss and despite earnest effort to
locate said title, the same have been fruitless, "that the
representation of private respondent in her aforesaid petition
and affidavit of loss that the owner's duplicate copy of
Transfer Certificate No. T-65878 was delivered to her mother
after the death of her father and that she lost the said copy
during the devastation brought by typhoon "Sisang" is

patently false, fraudulent, and perjurious since she knew fully

well or ought to have known that 2/3 of the property covered
by TCT No. T-65878 had already been sold to the petitioners
on July 11, 1985 and the owner's duplicate copy of the said
title was delivered by private respondent's brother, Gerardo
Ralla, to the petitioners on the same day; that on the basis of
the fraudulent representation of the respondent Judge
Rhodie A. Nidea, the Presiding Judge of the Regional Trial
Court of Tabaco, Albay, Branch 16, issued an order dated
Dec. 7, 1990 ordering the Register of Deeds to issue a
second owner's duplicate copy of transfer certificate of title
No. T-65878 with all the annotations and encumbrances
thereon, which shall be of like faith and credit as the one lost
and declaring the lost or destroyed owner's duplicate copy of
the TCT No. T-65878 of no further force and effect, and that
pursuant to the order, the Register of Deeds issued a new
second owner's duplicate copy of TCT No. T-65878 to the
private respondent; that despite repeated demands by
petitioners and despite protracted attempts at settlement,
private respondent refused to deliver or turn over to the
petitioners the second owner's duplicate copy of TCT No.
65878 issued pursuant to the aforesaid order of Judge
Rhodie A. Nidea; that the aforesaid order of Judge Rhodie A.
Nidea has become final and executory, that it was clearly
issued on the basis of the false and fraudulent
representation of private respondent, hence, it is null and
void and must be annulled and set aside, and that because
of private respondent's refusal to satisfy the petitioners'
plainly valid and just claim, the petitioners have been
compelled to litigate and to hire counsel for a fee and to
incur other expenses of litigation.
On the basis of these allegations the appellate court ruled that the fraud
alleged was, if at all, only intrinsic and not extrinsic in character:
An action to annul a final judgment on the ground of fraud
will lie only if the fraud is extrinsic or collateral in character.
Extrinsic fraud refers to any fraudulent act of the prevailing
party in the litigation which is committed outside of the trial of
the case, whereby the defeated party has been prevented
from exhibiting fully his side of the case, by fraud or
deception practiced on him by his opponent (Macabingkil vs.
People's Homesite and Housing Corporation, 72 SCRA 326

cited in Canlas vs. CA, 164 SCRA 160). On the other hand,
intrinsic fraud takes the form of "acts of a party in a litigation
during the trial such as the use of forged or false document
or perjured testimony, which did not affect the presentation of
the case, but did prevent a fair and just determination of the
case" (Libudan vs. Gil, 45 SCRA 17). In the present petition,
the allegation of fraud involves admission by the respondent
court of an alleged false affidavit of loss, which alleged fraud
is intrinsic in character. Thus, as the alleged fraud committed
by the private respondent is not extrinsic in character, the
instant petition for annulment of the said December 1, 1990
order of the lower court should be dismissed.
The appellate court is certainly right in holding that the use of a false affidavit
of loss does not constitute extrinsic fraud to warrant the invalidation of a final
judgment. The use of the alleged false affidavit of loss by private respondent
is similar to the use during trial or forged instruments or perjured testimony.
In the leading case ofPalanca v. Republic, 2 it was held that the use of a
forged instrument constituted only intrinsic fraud for while perhaps it
prevented a fair and just determination of a case, the use of such instrument
or testimony did not prevent the adverse party from presenting his case fully
and fairly. In the case at bar, petitioners were not really kept out of the
proceedings because of the fraudulent acts of the private respondent. They
could have rebutted or opposed the use of the affidavit and shown its falsity
since they were theoretically parties in the case to whom notice had been
duly given.
But a judgment otherwise final may be annulled not only on the ground of
extrinsic fraud but also because of lack of jurisdiction of the court which
rendered it. In Serra Serra v. Court of Appeals, 3 on facts analogous to those
involved in this case, this Court already held that if a certificate of title has not
been lost but is in fact in the possession of another person, the reconstituted
title is void and the court rendering the decision has not acquired jurisdiction.
Consequently the decision may be attacked any time. Indeed, Rep. Act No.
26, 18 provides that "in case a certificate of title, considered lost or
destroyed be found or recovered, the same shall prevail over the
reconstituted certificate of title." It was, therefore, error for the Court of
Appeals to dismiss the petition for annulment of judgment of the petitioners.
Nor was the filing of such a petition forum shopping in violation of Circular
No. 28-91. Private respondents allege that in an action for recovery of
possession of the lands which they had brought against the JB Line in the
Regional Trial Court of Albay (Civil Case No. T-1590), petitioners intervened

and alleged substantially the same facts as those alleged by them in their
petition for annulment of judgment. We have gone over petitioners' answer in
intervention in that case. We find that the allegation of forum shopping is
without basis. While they indeed alleged that private respondent had
obtained a second owner's duplicate of TCT T-65878 knowing that 2/3 of the
land covered by the certificate had been sold to them and that the "2nd
owner's copy should be cancelled and recalled considering the fact that the
original is in fact still existing and not lost, "the allegation was made more for
the purpose of demanding a partition, recognizing that private respondent is
the owner of 1/3 of the land. Petitioner's intervention is thus different from
their action in the Court of Appeals which is solely for the purpose of seeking
the annulment of the judgment in CAD Case No. T-1024 granting private
respondent's petition for the issuance of a new owner's duplicate certificate
of title.
WHEREFORE, the decision appealed from is REVERSED and the case is
REMANDED to the Court of Appeals for further proceedings.
SO ORDERED.

SECOND DIVISION
[G.R. No. 156118. November 19, 2004]

PABLO T. TOLENTINO and TEMPUS PLACE REALTY MANAGEMENT

CORPORATION, petitioners, vs. HON. OSCAR LEVISTE, Presiding Judge,
RTC, Quezon City, Br. 97 and SPOUSES GERARDO CINCO, JR. and
PAMELA H. CINCO, respondents.
DECISION
PUNO, J.:

Petitioners Pablo T. Tolentino and Tempus Place Realty Management

Corporation seek the review and reversal of the decision and amended
decision of the Court of Appeals in CA-G.R. SP No. 59506 entitled Tempus
Place Realty Management Corporation and Pablo T. Tolentino vs. Hon. Oscar
Leviste, Presiding Judge, RTC - Quezon City, Branch 97 and Sps. Gerardo

Cinco, Jr., and Pamela H. Cinco. The Court of Appeals denied petitioners
petition for annulment of the decision of the Regional Trial Court (RTC) of
Quezon City, Branch 97, on the action for specific performance with
damages filed by respondents Spouses Gerardo and Pamela Cinco against
them.

This Court after considering the oral and documentary evidences presented
by the plaintiff finds that the allegation contained in their pleadings are all true
facts and are entitled to the relief as prayed for, to wit:

1) To deliver to the plaintiffs the possession of the condominium unit covered

by CCT No. 5002 of the Register of Deeds of Quezon City;
The antecedent facts are as follows:

On October 18, 1996, respondents Spouses Gerardo Cinco, Jr. and Pamela
Cinco filed a complaint for specific performance with damages against
petitioners Tempus Place Realty Management Corporation and Pablo T.
Tolentino.
The complaint alleged that respondents purchased from
petitioners a condominium unit in Tempus Place Condominium II at
Katarungan St., Diliman, Quezon City. Despite, however, the execution of the
Deed of Absolute Sale and the delivery of the owners copy of the
condominium certificate of title, petitioners failed to deliver possession of the
unit because they have allegedly leased it to a third party. The complaint
further alleged that petitioners refused to pay the corresponding capital gains
tax and documentary stamp tax on the transaction, and execute the
necessary board resolution for the transfer of the property, thus preventing
respondents from registering the Deed of Absolute Sale and transferring the
title to the unit in their names. The respondents claimed that because
petitioners refused to deliver possession of the unit and instead leased it to a
third party, they are entitled to a reasonable rental value in the amount of
P20,000.00 a month from May 1994 until the time the possession of the unit
is delivered to them. They also claimed moral damages in the amount of
P1,000,000.00 and exemplary damages in the amount of P1,000,000.00 plus
attorneys fees in the amount of P1,000,000.00.[1]

As petitioners failed to file their answer to the complaint, Hon. Oscar Leviste,
Presiding Judge, RTC, Branch 97, Quezon City, issued an order on January
17, 1997 granting respondents motion to declare petitioners in default. He
also appointed the Branch Clerk of Court to act as commissioner to receive
respondents evidence ex parte.[2] After reception of evidence, the trial court,
on April 15, 1997, issued a decision for the respondents. It stated:

2) To pay the corresponding capital gains tax and documentary stamps tax
on the transaction, and deliver the receipts thereof to the plaintiffs;

3) To execute and deliver to the plaintiffs the necessary Board Resolution;

4) Jointly and severally, to pay plaintiffs the following:

a.
Actual damages in the amount of P20,000.00 a month from May
1994, up to the time possession of the condominium units (sic) is delivered to
the plaintiffs representing the reasonable rental value of the unit;

b.

Moral damages in the amount of P1,000,000.00;

c.

Exemplary damages in the amount of P1,000,000.00;

d.

Attorneys fees in the amount of P1,000,000.00.[3]

Petitioners thereafter filed a motion for new trial. They contended that their
right to fair and impartial trial had been impaired by reason of accident,
mistake or excusable negligence of their former counsel, a certain Atty.
Villamor.[4] The trial court denied the motion for new trial for lack of merit.[5]

On November 3, 1997, petitioners, through their new counsel, Atty. Ricardo

A. Santos, filed a notice of appeal of the April 15 decision of the trial court.[6]
The Court of Appeals, however, dismissed the appeal on February 26, 1999
on the ground of abandonment as petitioners failed to submit the required
appeal brief.[7] The decision became final and executory on March 26, 1999
and was recorded in the Book of Entries of Judgment.[8]

7. A fortiori, the court has no jurisdiction and/or authority and has committed
a grave abuse of discretion in awarding amounts in excess of what is prayed
for in the complaint nor proved by the evidence as well as in palpable
violation of the mandatory provisions of the Civil Code and the Rules of Court
and applicable decisions of the Supreme Court.
Consequently, the
challenged judgment in default is an absolute nullity.[9]

On July 4, 2000, petitioners filed with the Court of Appeals an action for
annulment of judgment based on the following grounds:

On April 23, 2002, the appellate court issued a decision modifying the trial
court decision. It explained that the annulment of judgment may be based on
the grounds of extrinsic fraud and lack of jurisdiction, and it is important that
petitioner failed to move for new trial, or appeal, or file a petition for relief, or
take other appropriate remedies assailing the questioned judgment, final
order or resolution through no fault attributable to him. The Court of Appeals
found that the trial court decision may not be annulled on the ground of
extrinsic fraud. It stated that the failure of petitioners counsel to file an
appellants brief in the Court of Appeals did not amount to extrinsic fraud as
to justify annulment of judgment, as it was not shown that their former
counsels omission was tainted with fraud and/or deception tantamount to
extrinsic or collateral fraud. Neither may it be annulled on the ground of lack
of jurisdiction as the action for specific performance and damages was within
the jurisdiction of the RTC. Nonetheless, the appellate court, in the interest
of justice and in the exercise of its sound discretion in determining the
amount of damages that may be awarded, held that the moral damages in
the amount of one million pesos (P1,000,000.00) was excessive. It lowered
the moral damages to P100,000.00. It also reduced the exemplary damages
to P100,000.00, and the attorneys fees to P100,000.00.[10]

1. The judgment in default granted reliefs in excess of what is prayed for in

the complaint in gross violation of the clear provisions of the 1997 Rules of
Civil Procedure.

2. The judgment in default awarded unliquidated damages in palpable

violation of the mandatory provision of Section 3[,] Rule 9, 1997 Rules of Civil
Procedure.

3. The judgment in default is in gross violation of Section 14, Article VIII,

1987 Constitution and Section 1, Rule 36, 1997 Rules of Civil Procedure.

4. The judgment in default was rendered in violation of the rights of the

petitioner to substantive and procedural due process.

5. Corrollarily, the gargantuan award for damages by the court a quo in

patent and blatant violation of the law and settled jurisprudence [is]
unconscionable and clearly violative of substantial justice and equities of the
case.

6. Petitioners have good and substantial defenses in respect of private

respondents claims.

Respondents filed a motion for reconsideration of the Decision of the Court of

Appeals. On November 18, 2002, the Court of Appeals issued an Amended
Decision, the dispositive portion of which reads:

WHEREFORE, the Motion for Reconsideration is partly GRANTED in that

the dispositive portion of the assailed decision is modified as follows:

a)
Actual damages in the amount of P10,000.00 a month from May 1994,
up to the time possession of the condominium units [sic] is delivered to the
plaintiffs (private respondents herein) representing the reasonable rental
value of the unit.

b)
Moral damages in the amount of One Hundred Thousand Pesos
(P100,000.00);

c)
Exemplary damages in the amount of One Hundred Thousand Pesos
(P100,000.00); and,

d)
Attorneys fees in the amount of One [H]undred Thousand Pesos
(P100,000.00).

d.
The judgment in default was rendered in violation of the rights of the
petitioner to substantive and procedural due process.

2. The petitioners were prevented from having their day in court because of
the gross negligence of their former counsel, which gross negligence
amounts to extrinsic fraud.

3. The remedies of appeal, petition for relief or other remedies are no longer
available through no fault of petitioners.

SO ORDERED.[11]

4. The petitioners have valid and substantial defenses to respondents cause

of action.[12]

Petitioners filed the instant petition for review of the decision and amended
decision of the Court of Appeals. They raise the following arguments:

The petition is without merit.

1. The petitioners can avail of the remedy of annulment of judgment to annul

the decision of the RTC in Civil Case No. 96-29707 as Hon. Judge Leviste
had no jurisdiction and/or acted without jurisdiction in issuing the April 15,
1997 Decision because:

a.
The judgment in default granted reliefs in excess of what is prayed for
in the complaint in gross violation of the clear provisions of the 1997 Rules of
Civil Procedure.

The issue that needs to be resolved in this petition for review is whether the
Court of Appeals erred in dismissing the petition for annulment of judgment
filed by petitioners.

The governing rule is Rule 47 of the 1997 Rules of Civil Procedure on

Annulment of Judgments or Final Orders and Resolutions. Sections 1 and 2
of the Rule provide for its coverage and the grounds therefor, thus:

b.
The judgment in default awarded unliquidated damages in palpable
violation of the mandatory provision of Section 3[,] Rule 9, 1997 Rules of Civil
Procedure.

Sec. 1. Coverage. - This Rule shall govern the annulment by the Court of
Appeals of judgments or final orders and resolutions in civil actions of
Regional Trial Courts for which the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no longer available
through no fault of the petitioner.

c.
The judgment in default is in gross violation of Sec. 14, Art. VIII, 1987
Constitution and Sec. 1, Rule 36, 1997 Rules of Civil Procedure.

Sec. 2. Grounds for annulment. - The annulment may be based only on the
grounds of extrinsic fraud and lack of jurisdiction.

Extrinsic fraud shall not be a valid ground if it was availed of, or could have
been availed of, in a motion for new trial or petition for relief.

Under the Rule, an action for annulment of judgments may only be availed of
on the following grounds: (1) extrinsic fraud and (2) lack of jurisdiction.

Extrinsic fraud refers to any fraudulent act of the prevailing party in the
litigation which is committed outside of the trial of the case, whereby the
unsuccessful party has been prevented from exhibiting fully his case, by
fraud or deception practiced on him by his opponent. Fraud is regarded as
extrinsic where it prevents a party from having a trial or from presenting his
entire case to the court, or where it operates upon matters pertaining not to
the judgment itself but to the manner in which it is procured. The overriding
consideration when extrinsic fraud is alleged is that the fraudulent scheme of
the prevailing litigant prevented a party from having his day in court.[13]

Petitioners in this case did not allege nor present evidence of fraud or
deception employed on them by the respondents to deprive them of
opportunity to present their case to the court. They, however, assert that the
negligence of their former counsel in failing to file the appeal brief amounts to
extrinsic fraud which would serve as basis for their petition for annulment of
judgment. We disagree. The Court has held that when a party retains the
services of a lawyer, he is bound by his counsels actions and decisions
regarding the conduct of the case. This is true especially where he does not
complain against the manner his counsel handles the suit.[14] Such is the
case here. When the complaint was filed before the trial court, summons
was served upon the petitioners.[15] They allegedly referred the matter to
Atty. Villamor who was holding office at the building owned and managed by
respondent Tempus Place Realty Management Corporation.[16] However,
after they have endorsed the summons to said lawyer, they did not exert any
effort to follow up the developments of the suit. Hence, they were declared in
default and judgment was rendered against them. Even in the course of the
appeal, they never bothered to check with their counsel, Atty. Ricardo
Santos, the status of the appeal. The notice of appeal was filed on
November 3, 1997 and petitioners learned of the dismissal of the appeal in
October 1999, after petitioner Tolentino received notice of garnishment of his
insurance benefits in connection with the judgment in Civil Case No. Q-9629207. It was only at that time that they learned that Atty. Santos had
migrated to Australia. This only shows that petitioners, as what happened

during the pendency of the case before the trial court, never bothered to
confer with their counsel regarding the conduct and status of their appeal.
The Court stated in Villaruel, Jr. vs. Fernando:[17]

xxx Litigants represented by counsel should not expect that all they need to
do is sit back, relax and await the outcome of their case. To agree with
petitioners stance would enable every party to render inutile any adverse
order or decision through the simple expedient of alleging negligence on the
part of his counsel. The Court will not countenance such ill-founded
argument which contradicts long-settled doctrines of trial and procedure.[18]

We reiterate the rule that a client is bound by the mistakes of his counsel
except when the negligence of his counsel is so gross, reckless and
inexcusable that the client is deprived of his day in court.[19] Only when the
application of the general rule would result in serious injustice should the
exception apply.[20] We find no reason to apply the exception in this case.

In addition, it is provided in Section 2 of Rule 47 that extrinsic fraud shall not

be a valid ground if it was availed of, or could have been availed of, in a
motion for new trial or petition for relief. In other words, it is effectively barred
if it could have been raised as a ground in an available remedial measure.
[21] The records show that after petitioners learned of the judgment of
default, they filed a motion for new trial on the ground of extrinsic fraud. It
was however denied by the trial court. They filed a notice of appeal
thereafter. Hence, they are now precluded from alleging extrinsic fraud as a
ground for their petition for annulment of the trial court decision.

We are also not persuaded by petitioners assertion that the trial court judge
lacked jurisdiction so as to justify the annulment of his decision in Civil Case
No. Q-96-29207. Lack of jurisdiction as a ground for annulment of judgment
refers to either lack of jurisdiction over the person of the defending party or
over the subject matter of the claim.[22] Jurisdiction over the person of the
defendant or respondent is acquired by voluntary appearance or submission
by the defendant or respondent to the court, or by coercive process issued
by the court to him, generally by the service of summons. The trial court
clearly had jurisdiction over the person of the defending party, the petitioners
herein, when the latter received the summons from the court. On the other
hand, jurisdiction over the subject matter of the claim is conferred by law and

is determined from the allegations in the complaint. Under the law, the action
for specific performance and damages is within the jurisdiction of the RTC.
Petitioners submission, therefore, that the trial court lacked jurisdiction does
not hold water.

We note that petitioners arguments to support their stand that the trial court
did not have jurisdiction actually pertain to the substance of the decision.
Jurisdiction is not the same as the exercise of jurisdiction. As distinguished
from the exercise of jurisdiction, jurisdiction is the authority to decide a
cause, and not the decision rendered therein. Where there is jurisdiction
over the person and the subject matter, the decision on all other questions
arising in the case is but an exercise of the jurisdiction. And the errors which
the court may commit in the exercise of jurisdiction are merely errors of
judgment which are the proper subject of an appeal.[23] The errors raised by
petitioners in their petition for annulment assail the content of the decision of
the trial court and not the courts authority to decide the suit. In other words,
they relate to the courts exercise of its jurisdiction, but petitioners failed to
show that the trial court did not have the authority to decide the case.

Based on the foregoing discussion, it is clear that petitioners petition for

annulment of judgment had no basis and was rightly dismissed by the Court
of Appeals.

G.R. No. 100776 October 28, 1993

ALBINO
S.
CO, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.

NARVASA, C.J.:
In connection with an agreement to salvage and refloat asunken vessel
and in payment of his share of the expenses of the salvage operations
therein stipulated petitioner Albino Co delivered to the salvaging firm on
September 1, 1983 a check drawn against the Associated Citizens' Bank,
postdated November 30, 1983 in the sum of P361,528.00. 1 The check was
deposited on January 3, 1984. It was dishonored two days later, the terselystated reason given by the bank being: "CLOSED ACCOUNT."
A criminal complaint for violation of Batas Pambansa Bilang 22 2 was filed by
the salvage company against Albino Co with the Regional Trial Court of
Pasay City. The case eventuated in Co's conviction of the crime charged,
and his being sentenced to suffer a term of imprisonment of sixty (60) days
and to indemnify the salvage company in the sum of P361,528.00.

IN VIEW WHEREOF, the petition at bar is DENIED.

SO ORDERED.

Republic
SUPREME
Manila
EN BANC

of

the

Philippines
COURT

Co appealed to the Court of Appeals. There he sought exoneration upon the

theory that it was reversible error for the Regional Trial Court to have relied,
as basis for its verdict of conviction, on the ruling rendered on September 21,
1987 by this Court in Que v. People, 154 SCRA 160 (1987) 3 i.e., that a
check issued merely to guarantee the performance of an obligation is
nevertheless covered by B.P. Blg. 22. This was because at the time of the
issuance of the check on September 1, 1983, some four (4) years prior to the
promulgation of the judgment in Que v. People on September 21, 1987, the
delivery of a "rubber" or "bouncing" check as guarantee for an obligation was
not considered a punishable offense, an official pronouncement made in a
Circular of the Ministry of Justice. That Circular (No. 4), dated December 15,
1981, pertinently provided as follows:

2.3.4. Where issuance of bouncing check is neither estafa

nor violation of B.P. Blg. 22.
Where the check is issued as part of an arrangement to
guarantee or secure the payment of an obligation, whether
pre-existing or not, the drawer is not criminally liable for
either estafa or violation of B.P. Blg. 22 (Res. No. 438, s.
1981, Virginia Montano vs. Josefino Galvez, June 19, 1981;
Res. No. 707, s. 1989; Alice Quizon vs. Lydia Calingo,
October 23, 1981, Res. No. 769, s. 1981, Alfredo Guido vs.
Miguel A. Mateo, et. al., November 17, 1981; Res. No. 589,
s. 1981, Zenaida Lazaro vs. Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by another issued on
August 8, 1984 (Ministry Circular No. 12) almost one (1) year after Albino
Co had delivered the "bouncing" check to the complainant on September 1,
1983. Said Circular No. 12, after observing inter alia that Circular No. 4 of
December 15, 1981 appeared to have been based on "a misapplication of
the deliberation in the Batasang Pambansa, . . . (or) the explanatory note on
the original bill, i.e. that the intention was not to penalize the issuance of a
check to secure or guarantee the payment of an obligation," as follows: 4
Henceforth, conforming with the rule that an administrative
agency having interpreting authority may reverse its
administration interpretation of a statute, but that its review
interpretation applies only prospectively (Waterbury Savings
Bank vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all
cases involving violation of Batas Pambansa Blg. 22 where
the check in question is issued after this date, the claim that
the check is issued as a guarantee or part of an
arrangement to secure an obligation collection will no longer
be considered a valid defense.
Co's theory was rejected by the Court of Appeals which affirmed his
conviction. Citing Senarillos v. Hermosisima, 101 Phil. 561, the Appellate
Court opined that the Que doctrine did not amount to the passage of new law
but was merely a construction or interpretation of a pre-existing one, i.e., BP
22, enacted on April 3, 1979.
From this adverse judgment of the Court of Appeals, Albino Co appealed to
this Court on certiorari under Rule 45 of the Rules of Court. By Resolution
dated September 9, 1991, the Court dismissed his appeal. Co moved for

reconsideration under date of October 2, 1991. The Court required comment

thereon by the Office of the Solicitor General. The latter complied and, in its
comment dated December 13, 1991, extensively argued against the merits of
Albino Co's theory on appeal, which was substantially that proffered by him in
the Court of Appeals. To this comment, Albino Co filed a reply dated February
14, 1992. After deliberating on the parties' arguments and contentions, the
Court resolved, in the interests of justice, to reinstate Albino Co's appeal and
adjudicate the same on its merits.
Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the
Philippines," according to Article 8 of the Civil Code. "Laws
shall have no retroactive effect, unless the contrary is
provided," declares Article 4 of the same Code, a declaration
that is echoed by Article 22 of the Revised Penal Code:
"Penal laws shall have, a retroactive effect insofar as they
favor the person guilty of a felony, who is not a habitual
criminal . . . 5
The principle of prospectivity of statutes, original or amendatory, has been
applied in many cases. These include: Buyco v. PNB, 961 2 SCRA 682 (June
30, 1961), holding that Republic Act No. 1576 which divested the Philippine
National Bank of authority to accept back pay certificates in payment of
loans, does not apply to an offer of payment made before effectivity of the
act; Largado v. Masaganda, et al., 5 SCRA 522 (June 30, 1962), ruling that
RA 2613, s amended by RA 3090 on June, 1961, granting to inferior courts
jurisdiction over guardianship cases, could not be given retroactive effect, in
the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the
effect that Sections 9 and 10 of Executive Order No. 90, amending Section 4
of PD 1752, could have no retroactive application; People v. Que Po Lay, 94
Phil. 640, holding that a person cannot be convicted of violating Circular No.
20 of the Central, when the alleged violation occurred before publication of
the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying
retroactive application to P.D. No. 27 decreeing the emancipation of tenants
from the bondage of the soil, and P.D. No. 316 prohibiting ejectment of
tenants from rice and corn farmholdings, pending the promulgation of rules
and regulations implementing P.D. No. 27; Nilo v. Court of Appeals, 128
SCRA 519, adjudging that RA 6389 whichremoved "personal cultivation" as a
ground for the ejectment of a tenant cannot be given retroactive effect in the
absence of a statutory statement for retroactivity;Tac-An v. CA, 129 SCRA
319, ruling that the repeal of the old Administrative Code by RA 4252 could
not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500,

holding that RA 6389 should have only prospective application; (see

also Bonifacio v. Dizon, 177 SCRA 294 and Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to administrative
rulings and circulars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct.
12, 1981, 108 SCRA 142, holding that a circular or ruling of the
Commissioner of Internal Revenue may not be given retroactive effect
adversely to a taxpayer: Sanchez v.COMELEC, 193 SCRA 317, ruling that
Resolution No. 90-0590 of the Commission on Elections, which directed the
holding of recall proceedings, had no retroactive application; Romualdez
v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular
No. 29, s. 1989 cannot be given retrospective effect so as to entitle to
permanent appointment an employee whose temporary appointment had
expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions
which, "although in themselves not laws, are nevertheless evidence of what
the laws mean, . . . (this being) the reason whyunder Article 8 of the New
Civil Code, 'Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system . . .'"
So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
It will be noted that when appellant was appointed Secret
Agent by the Provincial Government in 1962, and
Confidential Agent by the Provincial commander in 1964, the
prevailing doctrine on the matter was that laid down by Us
in People
v. Macarandang (1959)
and People
v. Lucero (1958). 6Our
decision
in People
v. Mapa, 7 reversing the aforesaid doctrine, came only in
1967. The sole question in this appeal is: should appellant
be
acquitted
on
the
basis
of
Our
rulings
in Macarandang and Lucero, or should his conviction stand
in view of the complete reverse of the Macarandang and
Lucero doctrine in Mapa? . . .
Decisions of this Court, although in themselves not laws, are
nevertheless evidence of what the laws mean, and this is the
reason why under Article 8 of the New Civil Code, "Judicial
decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system . . ."The interpretation
upon a law by this Court constitutes, in a way, a part of the

law as of the date that law was originally passed, since this
Court's
construction
merely
establishes
the
contemporaneous legislative intent that the law thus
construed intends to effectuate. The settled rule supported
by numerous authorities is a restatement of the legal
maxim "legis interpretation legis vim obtinet" the
interpretation placed upon the written law by a competent
court has the force of law. The doctrine laid down
in Lucero andMacarandang was part of the jurisprudence,
hence, of the law, of the land, at the time appellant was
found in possession of the firearm in question and where he
was arraigned by the trial court. It is true that the doctrine
was overruled in the Mapa case in 1967, but when a doctrine
of this Court is overruled and a different view is adopted, the
new doctrine should be applied prospectively, and should not
apply to parties who had relied on, the old doctrine and
acted on the faith thereof. This is especially true in the
construction and application of criminal laws, where it is
necessary that the punishment of an act be reasonably
foreseen for the guidance of society.
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan
v. Court of Appeals, et al. (G.R. No. 97973) and Development Bank of the
Philippines v. Court of Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205
SCRA 515, 527-528: 8
We sustain the petitioners' position, It is undisputed that the
subject lot was mortgaged to DBP on February 24, 1970. It
was acquired by DBP as the highest bidder at a foreclosure
sale on June 18, 1977, and then sold to the petitioners on
September 29, 1979.
At that time, the prevailing jurisprudence interpreting section
119 of R.A. 141 as amended was that enunciated
in Monge and Tupas cited above. The petitioners Benzonan
and respondent Pe and the DBP are bound by these
decisions for pursuant to Article 8 of the Civil Code "judicial
decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system of the Philippines." But
while our decisions form part of the law of the land, they are
also subject to Article 4 of the Civil Code which provides that
"laws shall have no retroactive effect unless the contrary is
provided." This is expressed in the familiar legal maxim lex

prospicit, non respicit, the law looks forward not backward.

The rationale against retroactivity is easy to perceive. The
retroactive application of a law usually divests rights that
have already become vested or impairs the obligations of
contract and hence, is unconstitutional (Francisco vs.
Certeza, 3 SCRA 565 [1061]).
The same consideration underlies our rulings giving only
prospective effect to decisions enunciating new doctrines.
Thus, we emphasized in People v. Jabinal, 55 SCRA 607
[1974]" . . . when a doctrine of this Court is overruled and a
different view is adopted, the new doctrine should be applied
prospectively and should not apply to parties who had relied
on the old doctrine and acted on the faith thereof.
A compelling rationalization of the prospectivity principle of judicial decisions
is well set forth in the oft-cited case of Chicot County Drainage Dist. v. Baxter
States Bank, 308 US 371, 374 [1940]. The Chicot doctrine advocates the
imperative necessity to take account of the actual existence of a statute prior
to its nullification, as an operative fact negating acceptance of "a principle of
absolute retroactive invalidity.
Thus, in this Court's decision in Taada v. Tuvera, 9 promulgated on April 24,
1985 which declared "that presidential issuances of general application,
which have not been published,shall have no force and effect," and as
regards which declaration some members of the Court appeared "quite
apprehensive about the possible unsettling effect . . . (the) decision might
have on acts done in reliance on the validity of these presidential
decrees . . ." the Court said:
. . . . The answer is all too familiar. In similar situation is in
the past this Court, had taken the pragmatic and realistic
course set forth in Chicot County Drainage District vs. Baxter
Bank (308 U.S. 371, 374) to wit:
The courts below have proceeded on the theory that the Act
of Congress, having found to be unconstitutional, was not a
law; that it was inoperative, conferring no rights and
imposing no duties, and hence affording no basis for the
challenged decree. Norton vs. Shelby County, 118 US 425,
442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U. S. 559, 566.
It is quite clear, however, that such broad statements as to

the effect of a determination of unconstitutionality must be

taken with qualifications. The actual existence of a statute,
prior to such a determination, is an operative fact and may
have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to
be considered in various aspects with respect to particular
conduct, private and official. Questions of rights claimed to
have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public
policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions
are among the most difficult of those who have engaged the
attention of courts, state and federal, and it is manifest from
numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.
Much earlier, in De Agbayani v. PNB, 38 SCRA 429 concerning the effects
of the invalidation of "Republic Act No. 342, the moratorium legislation, which
continued Executive Order No. 32, issued by the then President Osmea,
suspending the enforcement of payment of all debts and other monetary
obligations payable by war sufferers," and which had been "explicitly held in
Rutter v. Esteban (93 Phil. 68 [1953] 10 . . . (to be) in 1953 'unreasonable and
oppressive, and should not be prolonged a minute longer . . ." the Court
made substantially the same observations, to wit: 11
. . . . The decision now on appeal reflects the orthodox view
that an unconstitutional act, for that matter an executive
order or a municipal ordinance likewise suffering from that
infirmity, cannot be the source of any legal rights or duties.
Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared
results in its being to all intents and purposes amere scrap of
paper. . . . It is understandable why it should be so, the
Constitution being supreme and paramount. Any legislative
or executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of
simplicity. lt may not however be sufficiently realistic. It does
not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in
force and had to be compiled with. This is so as until after
the judiciary, in an appropriate case, declares its invalidity,, it

is entitled to obedience and respect. Parties may have acted

under it and may have changed theirpositions, what could be
more fitting than that in a subsequent litigation regard be had
to what has been done while such legislative or executive act
was in operation and presumed to be valid in all respects. It
is now accepted as a doctrine that prior to its being nullified,
its existence is a fact must be reckoned with. This is merely
to reflect awareness that precisely because the judiciary is
the governmental organ which has the final say on whether
or not a legislative or executive measure is valid, a, period of
time may have elapsed before it can exercise the power of
judicial review that may lead to a declaration of nullity. It
would be to deprive the law of its quality of fairness and
justice then, if there be no recognition of what had transpired
prior to such adjudication.

retroactive nullification of final judgments, whether of

conviction or acquittal, rendered by military courts against
civilians before the promulgation of the Olaguer decision.
Such final sentences should not be disturbed by the State.
Only in particular cases where the convicted person or the
State shows that there was serious denial of constitutional
rights of the accused, should the nullity of the sentence be
declared and a retrial be ordered based on the violation of
the constitutional rights of the accused and not on the
Olaguer doctrine. If a retrial is no longer possible, the
accused should be released since judgment against him is
null on account of the violation of his constitutional rights and
denial of due process.

In the language of an American Supreme Court decision:

'The actual existence of a statute, prior to such a
determination [of unconstitutionality], is an operative fact and
may have consequences which cannot justly be ignored. The
past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have
to be considered in various aspects, with respect to
particular relations, individual and corporate, and particular
conduct, private and official (Chicot County Drainage Dist. v.
Baxter States Bank, 308 US 371, 374 [1940]). This language
has been quoted with approval in a resolution in Araneta v.
Hill (93 Phil. 1002 [1953]) and the decision in Manila Motor
Co. Inc. v. Flores (99 Phil. 738 [1956]). An even more recent
instance is the opinion of Justice Zaldivar speaking for the
Court in Fernandez v. Cuerva and Co. (L-21114, Nov. 28,
1967, 21 SCRA 1095).

The trial of thousands of civilians for common crimes before

the military tribunals and commissions during the ten-year
period of martial rule (1971-1981) which were created under
general orders issued by President Marcos in the exercise of
his legislative powers is an operative fact that may not just
be ignored. The belated declaration in 1987 of the
unconstitutionality and invalidity of those proceedings did not
erase the reality of their consequences which occurred long
before our decision in Olaguer was promulgated and which
now prevent us from carrying Olaguer to the limit of its logic.
Thus did this Court rule in Municipality of Malabang
v. Benito, 27 SCRA 533, where the question arose as to
whether the nullity of creation of a municipality by executive
order wiped out all the acts of the local government
abolished. 13

Again, treating of the effect that should be given to its decision in Olaguer
v. Military Commission No 34, 12 declaring invalid criminal proceedings
conducted during the martial law regime against civilians, which had resulted
in the conviction and incarceration of numerous persons this Court, in Tan
vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:

It would seem then, that the weight of authority is decidedly in favor of the
proposition that the Court's decision of September 21, 1987 in Que
v. People, 154 SCRA 160 (1987) 14 that a check issued merely to guarantee
the performance of an obligation is nevertheless covered by B.P. Blg. 22
should not be given retrospective effect to the prejudice of the petitioner and
other persons situated, who relied on the official opinion of the Minister of
Justice that such a check did not fall within the scope of B.P. Blg. 22.

In the interest of justice and consistently, we hold that

Olaguer should, in principle, be applied prospectively only to
future cases and cases still ongoing or not yet final when
that decision was promulgated. Hence, there should be no

xxx xxx xxx

Inveighing against this proposition, the Solicitor General invokes U.S. v. Go

Chico, 14 Phil. 128, applying the familiar doctrine that in crimes mala
prohibita, the intent or motive of the offender is inconsequential, the only

relevant inquiry being, "has the law been violated?" The facts in Go
Chico are substantially different from those in the case at bar. In the former,
there was no official issuance by the Secretary of Justice or other
government officer construing the special law violated; 15 and it was there
observed, among others, that "the defense . . . (of) an honest misconstruction
of the law under legal advice" 16 could not be appreciated as a valid defense.
In the present case on the other hand, the defense is that reliance was
placed, not on the opinion of a private lawyer but upon an official
pronouncement of no less than the attorney of the Government, the
Secretary of Justice, whose opinions, though not law, are entitled to great
weight and on which reliance may be placed by private individuals is
reflective of the correct interpretation of a constitutional or statutory provision;
this, particularly in the case of penal statutes, by the very nature and scope
of the authority that resides in as regards prosecutions for their
violation. 17 Senarillos vs. Hermosisima, supra, relied upon by the respondent
Court of Appeals, is crucially different in that in said case, as in U.S. v. Go

Chico, supra, no administrative interpretation antedated the contrary

construction placed by the Court on the law invoked.
This is after all a criminal action all doubts in which, pursuant to familiar,
fundamental doctrine, must be resolved in favor of the accused. Everything
considered, the Court sees no compelling reason why the doctrine of mala
prohibita should override the principle of prospectivity, and its clear
implications as herein above set out and discussed, negating criminal liability.
WHEREFORE, the assailed decisions of the Court of Appeals and of the
Regional Trial Court are reversed and set aside, and the criminal prosecution
against the accused-petitioner is DISMISSED, with costs de oficio.
SO ORDERED.