Jurisdiction 4 5

G.R. Nos.159104-05 October 5, 2007 RODOLFO M. CUENCA and CUENCA INVESTMENT CORP., petitioners, vs. THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, INDEPENDENT REALTY CORP., and UNIVERSAL HOLDINGS CORP., respondents. DECISION later, it turned over IRC and its subsidiary, UHC, to the Asset Privatization Trust (APT) for rehabilitation, conservation, or disposition, enabling APT to assign one share of stock in IRC and in each of its 25 subsidiaries, including UHC, to Paterno Bacani, Jr. Amidst this state of affairs, petitioners filed the October 2, 1991 Complaint 6 against IRC, UHC, APT, and Bacani before the Makati City RTC, which was docketed as Civil Case No. 91-2721, to compel IRC to transfer all its stock and subscription rights in UHC to them or order IRC and UHC to return and re-convey to them all the assets and shares of stock in CDCP, Sta. Ines, and Resort Hotels that they had transferred to UHC. The Ruling of the Regional Trial Court VELASCO, JR., J.: The Case In this Petition for Review on Certiorari under Rule 45, petitioners assail the January 6, 2003 Decision 1 of the Court of Appeals (CA) in consolidated cases CA-G.R. CV No. 60338 2 and CA-G.R. SP No. 496863 which upheld the jurisdiction of Sandiganbayan over a dispute involving the transfer of stocks and subscription rights of respondent Universal Holdings Corporation (UHC), a sequestered company, in favor of petitioners Rodolfo M. Cuenca and Cuenca Investment Corporation (CIC); and its July 15, 2003 Resolution 4 denying petitioners’ Motion for Reconsideration.5 The consolidated cases originated from Civil Case No. 91-2721 entitled Rodolfo M. Cuenca, et al. v. Independent Realty Corp., et al. filed before the Makati City Regional Trial Court (RTC), Branch 61––CA-G.R. CV No. 60338 being an appeal from the April 23, 1998 Decision rendered by the Makati City RTC, and CA-G.R. SP No. 49686 being a special civil action formerly filed as a petition for certiorari before the Supreme Court, but was remanded to the CA for a review of the denial of the motion for intervention filed by respondent Presidential Commission on Good Government (PCGG). The Facts Respondent UHC is a wholly owned subsidiary of Independent Realty Corporation (IRC). UHC had an authorized capital stock of PhP 200,000,000 of which 401,995 shares worth PhP 40,199,500 were subscribed and PhP 10,050,000 was paid up by IRC. Five stockholders of IRC held qualifying shares in UHC and served in its Board of Directors. UHC became an inactive holding company until the later months of 1978. In 1978, petitioner Rodolfo M. Cuenca and his family’s holding company, petitioner CIC, negotiated and reached an agreement with respondents IRC and UHC, whereby petitioners Cuenca and CIC would purchase all the shares of stock and subscription rights of IRC in UHC for PhP 10,000,000 and assume IRC’s unpaid subscription of PhP 30,000,000. Petitioners Cuenca and CIC were then the controlling stockholders of the Construction and Development Corporation of the Philippines (CDCP), now the Philippine National Construction Corporation (PNCC), Sta. Ines Melale Forest Products Corporation (Sta. Ines), and Resort Hotels Corporation (Resort Hotels). In order to build up UHC as his flagship company, petitioner Cuenca transferred to UHC the shares of stocks in CDCP, Sta. Ines, and Resort Hotels worth PhP 67,233,405, with UHC assuming Cuenca’s various bank obligations, some or all of which were secured by pledges or liens on the stocks. On October 21, 1978, petitioner Cuenca was elected Chairperson and President of UHC at a special stockholders’ meeting in accordance with the acquisition plan, and through UHC, Cuenca continued to control and manage CDCP, Sta. Ines, and Resort Hotels. Pursuant to the acquisition plan and agreement with IRC, Cuenca and CIC transferred their shares of stock in CDCP, Sta. Ines, and Resort Hotels to UHC, which in turn paid PhP 10,000,000 to IRC. In addition, petitioners assumed IRC’s unpaid subscription of PhP 30,000,000 in UHC. The only remaining matter to be accomplished was the transfer of the stocks and subscription rights of IRC in UHC to petitioners, but despite demand, IRC did not comply. In 1986, the instant controversy between petitioners and respondent IRC was overtaken by dramatic political events. President Marcos was ousted in a bloodless revolution and left behind an unbelievably large amount of funds and assets that were sequestered by the new government of President Aquino through PCGG. In July 1987, because of Marcos nominee Jose Yao Campos’ sworn statement, respondent PCGG directed Santos Luis Diego, President of IRC, to dissolve all the boards of directors of IRC’s fully-owned subsidiaries. A year On November 29, 1991, respondents IRC and UHC filed a Joint Motion to Dismiss 7 on the ground of lack of jurisdiction, claiming that the exclusive jurisdiction was lodged in the Sandiganbayan and not in the RTC. Meanwhile, on December 9, 1991, respondents IRC and UHC, represented by respondent PCGG, filed another Motion to Dismiss8 on the ground of litis pendentia as petitioner Cuenca had a pending case filed by respondent PCGG before the Sandiganbayan and docketed as Civil Case No. 0016 entitled Republic of the Philippines v. Rodolfo M. Cuenca, et al., which involved respondent UHC and several other corporations beneficially owned or controlled by petitioner Cuenca for and in behalf of the Marcoses. Meanwhile, in the May 14, 1992 Order, the trial court dismissed the Complaint against APT and Bacani, and dropped them as defendants on October 16, 1992.9On March 25, 1993, the trial court, however, denied both motions to dismiss on the ground that respondent PCGG was not impleaded in the instant case and that the transaction involved specific performance of a contract entered into in 1978 before the PCGG came into existence. Consequently, on August 19, 1993, respondents IRC and UHC filed their Answer with Counterclaim. 10 Before pre-trial, petitioners sent their Interrogatories 11 to IRC and UHC, which were answered by IRC on July 25, 1994.12After considerable time had elapsed without UHC filing its answer to the interrogatories, and unsatisfied with IRC’s answer not accomplished, duly signed, and sworn to by a competent and responsible IRC officer as only IRC’s counsel signed it, petitioners filed on August 30, 1994 a Motion to Compel UHC to Answer Interrogatories13 to which the trial court issued two related Orders, the first dated January 17, 1995 directing IRC to submit proper and complete answers and UHC to answer the interrogatories, 14 and the second dated February 10, 1995 granting respondents IRC and UHC an extension of 15 days to file their answers to the interrogatories.15 On September 29, 1995, petitioners filed a Motion to Declare Defendants in Default 16 for non-compliance with Section 5 of Rule 29,17 Revised Rules of Civil Procedure. Respondents IRC and UHC filed their respective Answers to Interrogatories18 on October 17, 1995 or only after the motion to declare them in default was filed and served. Consequently, the trial court issued its February 7, 1996 Order of default, which also granted petitioners the right to adduce their evidence ex-parte.19 On September 9, 1996, the trial court likewise denied20 the Motion for Reconsideration and/or Lift Order of Default 21 filed by respondents IRC and UHC. Subsequently, respondent PCGG filed its Motion for Leave to Intervene with Motion to Dismiss on December 18, 1996, which was denied by the trial court only on April 20, 1998. 22 Parenthetically, on October 22, 1996, petitioners filed an Urgent Ex-Parte Application for Receivership which was granted through an October 28, 1996 Order, appointing Jaime C. Laya as UHC’s receiver. After posting the requisite bond, the trial court issued on November 5, 1996 an Order approving the bond, and receiver Laya submitted his November 13, 1996 Oath of Office. Petitioners adduced their evidence and presented the testimonies of petitioner Rodolfo Cuenca and Lourdes G. Labao, a supervisor of Caval Securities Registry, Inc., who testified on the transfers of shares of stock of CDCP, Sta. Ines, and Resort Hotels from Cuenca and CIC to UHC. On March 20, 1998, petitioners filed their Formal Offer of Exhibits.23 On April 23, 1998, the trial court rendered a Decision in favor of petitioners. The fallo reads: Accordingly, JUDGMENT is hereby rendered in favor of plaintiffs and as against defendants IRC and UHC, who are hereby ordered to immediately return and reconvey to plaintiffs all of the shares of stocks and stock subscriptions in Philippine National Construction Corporation (formerly known as Construction and Development [Corporation] of the Philippines), Resort Hotels Corporation and Sta. Ines Melale Forest Products Corporation, including those transferred by plaintiffs to UHC such as the 24,780,746 shares in CDCP/PNCC, the 468,062 shares in Resort Hotels Corporation and the 23,748,932 shares in Sta. Ines Melale Forest Products Corporation plus all fruits thereof such as stock and cash dividends and stock splits. Petitioners raise the following grounds for our consideration: THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN DISMISSING CIVIL CASE NO. 91-2721 BELOW ON THE GROUND THAT THE SANDIGANBAYAN HAS EXCLUSIVE JURISDICTION OVER THE SUBJECT MATTER OF THE CASE. A. The plaintiffs’ prayer for damages and attorney’s fees are hereby DENIED. THE FACT ALONE THAT RESPONDENT UHC MAY HAVE BEEN SEQUESTERED DID NOT DIVEST THE REGIONAL TRIAL COURT OF ITS JURISDICTION OVER THE SUBJECT MATTER OF PETITIONERS’ COMPLAINT IN CIVIL CASE NO. 912721 BELOW. The counterclaim of defendants UHC and IRC for damages and attorney’s fees is hereby DENIED for lack of evidence. B. The appointment of JAIME C. LAYA as Receiver of defendant UHC is hereby MAINTAINED until finality of this Decision and full execution of this Decision or full compliance herewith by defendants.24 THE COURT OF APPEALS’ RELIANCE ON THE CASE OF REPUBLIC VS. SANDIGANBAYAN, 240 SCRA 376 (1995), IS MISPLACED. From the adverse Decision, respondents IRC and UHC appealed to the CA, which was docketed as CA-G.R. CV No. 60338. On the other hand, after the trial court denied respondent PCGG’s Motion for Reconsideration25through its July 22, 1998 Order,26 PCGG brought the instant case before this Court in G.R. No. 13516. Said PCGG special civil action was remanded to the CA and docketed as CA-G.R. SP No. 49686 entitled Presidential Commission on Good Government (PCGG) v. Hon. Fernando V. Gorospe, as Presiding Judge RTC of Makati City, Branch 61, et al. In the petition before the CA, PCGG also assailed the April 20, 1998 Order of the trial court denying its motion for intervention in Civil Case No. 91-2721. Thus, the petition for certiorari (CA-G.R. SP No. 49686) and the appeal (CA-G.R. CV No. 60338) were consolidated. The Ruling of the Court of Appeals Through its assailed Decision, the appellate court reversed the Makati City RTC’s Decision, granted the petition filed by PCGG, and dismissed the instant case for lack of jurisdiction. The appellate court ratiocinated that the Sandiganbayan had exclusive jurisdiction to hear the instant case involving petitioners and the sequestered respondents corporations. It held that the recourse of parties, petitioners in the instant case, who wish to challenge respondent PCGG’s acts or orders, would be to the Sandiganbayan pursuant to Executive Order No. (EO) 14 issued on May, 7, 1986,27 which ordained that this body alone had the original jurisdiction over all of respondent PCGG’s cases, civil or criminal, citing PCGG v. Peña28 as authority. The appellate court appliedRepublic v. Sandiganbayan29 on the issue of sequestration by respondent PCGG of UHC, CIC, and CDCP (now PNCC) against petitioner Cuenca, the Marcos spouses, their relatives, friends, and colleagues. The CA applied the doctrine of conclusiveness of judgment that any rule which had already been authoritatively established in a previous litigation should be deemed the law of the case between the same parties. As such, the appellate court adopted the ruling in Republic on the continuing force of the order of sequestration and concluded that, indeed, respondent UHC is a sequestered company. The CA did not find merit in petitioners’ contention that sequestration did not affect their transaction with respondents as it arose before PCGG was created. Even if petitioners had initially a cause of action, the CA ruled that the complaint was certainly affected by the passage of the law charging respondent PCGG with the performance of certain tasks over the subject matter of the action; and that the same subject matter had become subject to the new exclusive jurisdiction vested in the Sandiganbayan at the time petitioners filed the instant case. Aggrieved, petitioners filed their Motion for Reconsideration 30 which was denied by the assailed July 15, 2003 CA Resolution.31 Hence, they filed this petition for review. The Issues C. THE COURT OF APPEALS’ APPLICATION OF THE DOCTRINE OF CONCLUSIVENESS OF JUDGMENT IS ERRONEOUS.32 The Court’s Ruling The petition must fail. The core issue before us is that of jurisdiction. In gist, petitioners argue that UHC was not sequestered, and even if it was sequestered, the trial court still has the jurisdiction to hear the case for rescission of contract or specific performance, and conclude that the doctrine of conclusiveness of judgment does not apply in the instant case. Issue of Jurisdiction Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case. 33 Jurisdiction over the subject matter is conferred by the Constitution or by law while jurisdiction over the person is acquired by his/her voluntary submission to the authority of the court or through the exercise of its coercive processes. Jurisdiction over the res is obtained by actual or constructive seizure placing the property under the orders of the court.34 We are primarily concerned here with the first kind of jurisdiction, that is, jurisdiction over the subject matter. Petitioners contend that even if UHC was indeed sequestered, jurisdiction over the subject matter of petitioners’ Complaint for enforcement or rescission of contract between petitioners and respondents belonged to the RTC and not the Sandiganbayan. Petitioners cited Philippine Amusement and Gaming Corporation v. Court of Appeals,35 involving Philippine Casino Operators Corporation (PCOC) which was sequestered on March 19, 1986. In said case, this Court held that the fact of sequestration alone did not automatically oust the RTC of jurisdiction to decide upon the question of ownership of the disputed gaming and office equipment as PCGG must be a party to the suit in order that the Sandiganbayan’s exclusive jurisdiction may be correctly invoked, and as Section 236 of EO 14 was duly applied in PCGG v. Peña37 and PCGG v. Nepomuceno,38 which ineluctably spoke of respondent PCGG as a party-litigant. Likewise, petitioners cited Holiday Inn (Phils.), Inc. v. Sandiganbayan,39 which also involved a sequestered company, New Riviera Hotel and Development Co., Inc. (NRHDCI), where this Court held that there is a distinction between an action for the recovery of ill-gotten wealth, as well as all incidents arising from, incidental to, or related to such cases, and cases filed by those who wish to question or challenge respondent PCGG’s acts or orders in such cases vis-à-vis ordinary civil cases that do not pertain to the Sandiganbayan. As such, petitioners contend that the instant ordinary civil case for the enforcement or rescission of the 1978 contract between petitioners and respondents UHC and IRC is distinct from and has absolutely no bearing with the unrelated issue of the sequestration of respondents UHC and IRC. Thus, petitioners strongly contend that the trial court indeed had jurisdiction over the instant case. Besides, petitioners point out that PCGG was not impleaded as a defendant in Civil Case No. 91-2721, and that the Complaint "does not question the PCGG’s alleged sequestration of respondent UHC x x x or any other act or order of the PCGG." 40 Sandiganbayan has exclusive jurisdiction over the instant case A rigorous examination of the antecedent facts and existing records at hand shows that Sandiganbayan has exclusive jurisdiction over the instant case. d) EO 14-A, entitled "Amending Executive Order No. 14," dated August 18, 1986. Bearing on the jurisdiction of the Sandiganbayan over cases of ill-gotten wealth, EO 14, Secs. 1 and 2 provide: SECTION 1. Any provision of the law to the contrary notwithstanding, the Presidential Commission on Good Government with the assistance of the Office of the Solicitor General and other government agencies, is hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1, dated February 28, 1986 and Executive Order No. 2, dated March 12, 1986, as may be warranted by its findings. SECTION 2. The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof. (Emphasis supplied.) Notably, these amendments had been duly recognized and reflected in subsequent amendments to PD 1606, specifically Republic Act Nos. 797543 and 8249.44 Thus, the petition must fail for the following reasons: First, it is a fact that the shares of stock of UHC and CDCP, the subject matter of Civil Case No. 91-2721 before the Makati City RTC, were also the subject matter of an ill-gotten wealth case, specifically Civil Case No. 0016 before the Sandiganbayan. In Civil Case No. 91-2721 of the Makati City RTC, petitioners prayed for a judgment either transferring the UHC shares or restoring and reconveying the PNCC shares to them. In the event a final judgment is rendered in said Makati City RTC case in favor of petitioners, then such adjudication tends to render moot and academic the judgment to be rendered in Sandiganbayan Civil Case No. 0016 considering that the legal ownership of either the UHC or PNCC shares would now be transferred to petitioners Rodolfo Cuenca and CIC. Such adverse judgment would run counter to the rights of ownership of the government over the UHC and PNCC shares in question. It must be remembered that on March 21, 1986, a Sworn Statement41 executed by Mr. Jose Y. Campos in Vancouver, Canada, whereby Mr. Campos, a crony and close business associate of the deposed President Marcos, named and identified IRC and UHC (a whollyowned subsidiary of IRC) as among the several corporations organized, established, and managed by him and other business associates for and in behalf of the former President Marcos. Subsequently, the UHC and IRC shares were surrendered and turned over by Mr. Campos to PCGG, transferring, in effect, the ownership of the shares to the Government. Moreover, inasmuch as UHC was impleaded in Civil Case No. 0016 as a defendant and was listed among the corporations beneficially owned or controlled by petitioner Cuenca, the issue of the latter’s right to acquire ownership of UHC shares is inexorably intertwined with the right of the Republic of the Philippines, through PCGG, to retain ownership of said UHC shares. It must be borne in mind that the Sandiganbayan was created in 1978 pursuant to Presidential Decree No. (PD) 1606.42 Said law has been amended during the interim period after the Edsa Revolution of 1986 and before the 1987 Constitution was drafted, passed, and ratified. Thus, the executive issuances during such period before the ratification of the 1987 Constitution had the force and effect of laws. Specifically, then President Corazon C. Aquino issued the following Executive Orders which amended PD 1606 in so far as the jurisdiction of the Sandiganbayan over civil and criminal cases instituted and prosecuted by the PCGG is concerned, viz: a) EO 1, entitled "Creating the Presidential Commission on Good Government," dated February 28, 1986; b) EO 2, entitled "Regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, Their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees," dated March 12, 1986; c) EO 14, entitled "Defining the Jurisdiction over Cases Involving the Ill-gotten Wealth of Former President Ferdinand E. Marcos, Mrs. Imelda R. Marcos, Members of their Immediate Family, Close Relatives, Subordinates, Close and/or Business Associates, Dummies, Agents and Nominees," dated May 7, 1986; and In the light of the foregoing provisions, it is clear that it is the Sandiganbayan and not the Makati City RTC that has jurisdiction over the disputed UHC and PNCC shares, being the alleged "ill-gotten wealth" of former President Ferdinand E. Marcos and petitioner Cuenca. The fact that the Makati City RTC civil case involved the performance of contractual obligations relative to the UHC shares is of no importance. The benchmark is whether said UHC shares are alleged to be ill-gotten wealth of the Marcoses and their perceived cronies. More importantly, the interests of orderly administration of justice dictate that all incidents affecting the UHC shares and PCGG’s right of supervision or control over the UHC must be addressed to and resolved by the Sandiganbayan. Indeed, the law and courts frown upon split jurisdiction and the resultant multiplicity of suits, which result in much lost time, wasted effort, more expenses, and irreparable injury to the public interest. Second, the UHC shares in dispute were sequestered by respondent PCGG. Sequestration is a provisional remedy or freeze order issued by the PCGG designed to prevent the disposal and dissipation of ill-gotten wealth.45 The power to sequester property means to place or cause to be placed under [PCGG’s] possession or control said property, or any building or office wherein any such property or any records pertaining thereto may be found, including business enterprises and entities, for the purpose of preventing the destruction of, and otherwise conserving and preserving the same, until it can be determined, through appropriate judicial proceedings, whether the property was in truth ill-gotten. (Silverio v. PCGG, 155 SCRA 60 [1987]).46 Considering that the UHC shares were already sequestered, enabling the PCGG to exercise the power of supervision, possession, and control over said shares, then such power would collide with the legal custody of the Makati City RTC over the UHC shares subject of Civil Case No. 91-2721. Whatever the outcome of Civil Case No. 91-2721, whether from enforcement or rescission of the contract, would directly militate on PCGG’s control and management of IRC and UHC, and consequently hamper or interfere with its mandate to recover ill-gotten wealth. As aptly pointed out by respondents, petitioners’ action is inexorably entwined with the Government’s action for the recovery of ill-gotten wealth––the subject of the pending case before the Sandiganbayan. Verily, the transfer of shares of stock of UHC to petitioners or the return of the shares of stock of CDCP (now PNCC) will wreak havoc on the sequestration case as both UHC and CDCP are subject of sequestration by PCGG. Third, Philippine Amusement and Gaming Corporation and Holiday Inn (Phils.), Inc.47 are not analogous to the case at bar. The first dealt with ownership of gaming and office equipment, which is distinct from and will not impact on the sequestration issue of PCOC. The second dealt with an ordinary civil case for performance of a contractual obligation which did not in any way affect the sequestration proceeding of NRHDCI; thus, the complaint-in-intervention of Holiday Inn (Phils.), Inc. was properly denied for lack of jurisdiction over the subject matter. 48 where this Court held that the exclusive jurisdiction conferred on the Sandiganbayan would evidently extend not only to the principal causes of action. real or personal. commercial. 50 we nonetheless stated in said case the fact of the sequestration of the assets and records of Rodolfo Cuenca.R. As it is. it is not binding upon the parties for purposes of res judicata or conclusiveness of judgment. to wit: SUBJECTS/OBJECTS OF SEQUESTRATION DATE Congress enacted Republic Act (R. the trial court’s April 20. as well as IRC’s ownership of them.R. 1987 Investment Corporation. CIC. freezing or provisional takeover of companies or properties. 275-0-2003.A. The facts are undisputed. and OFFICE OF THE SOLICITOR GENERAL. but also to all incidents arising from. Fourth. capital and equipment. 0016.. is undeniably related to the recovery of the alleged illgotten wealth and can be squarely addressed via the exclusive jurisdiction of the Sandiganbayan. Branch 74.. with the Sandiganbayan. in his capacity as Commissioner of the Bureau of Internal Revenue (BIR). SO ORDERED. thus:a III. petitioners contend that the Court’s statements in said case did not constitute a ruling but mere references to unproven allegations by PCGG in its complaint against Cuenca in Sandiganbayan Civil Case No.J. May 23. INC. refers to the allegations in the complaint filed by PCGG against petitioner Cuenca. industrial.R. including a dispute over the sale of the shares. respondents. CV No. without jurisdiction over Civil Case No. SP No. Since the issue of sequestration has been resolved.R. Section 12 of the law provides: (a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local Government Code. 2003 Resolution of the CA in CA-G. 60338 and CA-G. We took factual notice of the sequestration of various companies and properties in said case. petitioners conclude that it was a mere obiter dictum which was not essential to the disposition of the aforecited case and thus. Orders of Sequestration issued by PCGG During 1986 and 1987 numerous orders of sequestration.. UHC and CDCP. were issued and implemented. On the other hand. BIR. Universal Holdings Corp. 91-2721. (formerly CDCP). 49686 are AFFIRMED in toto. 2003 Decision and July 15. Special Economic Zone.) No. and SUBIC BAY MOTORS CORPORATION. Assets and records of Rodolfo Cuenca. The appellate court clearly granted PCGG’s petition for certiorari in CA-G. Without doubt. we see no need to delve into the issue of conclusiveness of judgment. 91-2721." The above proviso has been squarely applied in Peña. 163445 December 18. . the trial court has no jurisdiction to hear and decide Civil Case No. petitioners contend that the appellate court’s reliance on Republic49 is misplaced. HON. No. 2 of EO 14 pertinently provides: "The Presidential Commission on Good Government shall file all such cases. Respondent UHC duly sequestered by PCGG The trial court ruled that respondent PCGG could not stop the transfer of the shares of respondent UHC in CDCP to petitioners as there was no proof of sequestration except a writ of sequestration of Cuenca’s stocks in CDCP. G. Philippine National Construction Corp. UHC and PNCC. Region III. freezing or take-over. JR. etc. petitioners.In both cases cited by petitioners. the issue of the ownership of the sequestered companies. the appellate court properly applied Republic as basis for its finding that UHC was a sequestered company. the propriety of the issuance of ancillary writs of relative provisional remedies. (b) The [SSEZ] shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital within. The January 6. PCGG was granted the right to intervene and thus became properly impleaded in the instant case. 1998 Order was reversed and set aside by the appellate court through its assailed Decision. exportation or removal of goods from the territory of the [SSEZ] to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines. we concluded that UHC had indeed been sequestered by the PCGG in 1986 and 1987. 51 From the foregoing account. They point out that neither PCGG nor respondent corporations relied on said case. while it is clear that the exclusive jurisdiction of the Sandiganbayan only encompasses cases where PCGG is impleaded. Cuenca July 23. vs. there was a substantial distinction between the sequestration proceedings and the subject matter of the actions. which may not be made the subject of separate actions or proceedings in another forum. 49686. Thus. THE REVENUE DISTRICT OFFICER. and as such. BIR. SP No. then it is the Sandiganbayan. GUILLERMO L. Consequently. While it may be true that in Republic. Besides. Sec. not the Makati City RTC. Suffice it to say that with the unequivocal finding that UHC was indeed sequestered. that is. whether civil or criminal. and the sequestration of the shares. San Mariano Mining Corp. on May 23. such requirement is satisfied in the instant case. financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments. it cannot be relied upon to hold that UHC was a sequestered corporation. as the ownership of the shares of stock of the sequestered companies. xxxx i. 0016. as well as provide incentives such as tax and duty-free importations of raw materials. which shall have exclusive and original jurisdiction thereof. or related to such cases. However. 2007 ASIA INTERNATIONAL AUCTIONEERS. Indeed. 1986. that has exclusive jurisdiction over the subject matter of Civil Case No.R. DECISION PUNO. UHC. WHEREFORE. our statement on Civil Case No. 1987. SP No. the [SSEZ] shall be developed into a selfsustaining. into and exported out of the [SSEZ]. C. Consequently. incidental to. Among those were the orders handed out against the firms or assets hereunder listed. We are not moved by petitioners’ submission. 79329 declaring the Regional Trial Court (RTC) of Olongapo City. recovery of alleged ill-gotten wealth. etc. 7227 creating the Subic Special Economic Zone (SSEZ) and extending a number of economic or tax incentives therein. This does not prevail in the instant case. THE REGIONAL DIRECTOR.. PARAYNO. CDCP. with the dates of sequestration.: At bar is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of Appeals (CA) in CA-G. is the subject matter of a pending case and thus addressed to the exclusive jurisdiction of the Sandiganbayan. assailing the trial court’s denial of its Motion for Leave to Intervene with Motion to Dismiss. the instant petition is DISMISSED for lack of merit. San Mariano Mining Corp. No costs. 1986 and July 23. as cited by PCGG. 5 In case the services of a professional auctioneer is employed for the public auction. 312003 setting the "Uniform Guidelines on the Taxation of Imported Motor Vehicles through the Subic Free Port Zone and Other Freeport Zones that are Sold at Public Auction. For excise tax purposes. In lieu of paying taxes. 12-97 3 was issued providing for the "Regulations Implementing Sections 12(c) and 15 of [R. The imported motor vehicles after its release from Customs custody are sold through public auction/negotiated sale by the consignee within or outside of the Freeport Zone: A. the customs duties. In case the consignee-auctioneer is a registered enterprise and/or locator not entitled to the preferential tax treatment or if the same is entitled from such incentive but its total income from the customs territory exceeds 30% of its entire income derived from the customs territory and the freeport zone. [R.A.4." The assailed portions of the RMC read: 1. 16-994 was issued "Amending [RR] No. Reg. 7227. Jr. or the expanded withholding tax of 20%. John Hay. 7916 Allocating Two Percent (2%) of the Gross Income Earned by All Businesses and Enterprises Within the Subic. 5 to wit: II. should these motor vehicles be brought out into the customs territory without returning to the freeport zones. 1999. and other administrative and selling expenses. The additional VAT and excise taxes shall be paid to the BIR before the auctioned motor vehicles are registered with the LTO. 7227 and Sections 24(b) and (c) of [R. xxx On June 3. Clark. three percent (3%) of the gross income earned by all businesses and enterprise within the [SSEZ] shall be remitted to the National Government. However. provided that the following conditions are present: 1. if applicable. shall be withheld by the consignee-auctioneer from the amount of consideration to be paid to the professional auctioneer and shall be remitted accordingly to the BIR. there is hereby established a development fund of one percent (1%) of the gross income earned by all business and enterprise within the [SSEZ] to be utilized for the development of municipalities outside the City of Olongapo and the Municipality of Subic. For imported motor vehicles that are imported by persons that are not duly registered enterprises of the freeport zones. reconditioning/rehabilitation of the motor vehicles. This was later amended by RMC No. the importer-consignee/auctioneer shall pay the value-added tax (VAT) and excise tax to the BOC before the registration thereof under its name with the LTO and/or the conduct of the public auction.] No. Rev. The gross income earned by the consignee-seller from the public auction/negotiated sale of the imported vehicles shall be subject to the preferential tax rate of five percent (5%) in lieu of the internal revenue taxes imposed by the National Internal Revenue Code of 1997. one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area. gold. and other related Rules and Regulations to Implement the Provisions of paragraphs (b) and (c) of Section 12 of [R.] No.] No. . Motor vehicles that are imported into the Freeport zones for exclusive use within the zones are. taxes and other charges.A. issued Revenue Memorandum Circular (RMC) No. based on the winning bid price. in cases where the consignee-auctioneer has already paid the VAT and excise tax on the motor vehicles before the registration thereof with LTO and the conduct of public auction.2. otherwise known as the ‘Bases Conversion and Development Act of 1992’ Relative to the Tax Incentives Granted to Enterprises Registered in the Subic Special Economic and Freeport Zone. securities and future shall be allowed and maintained in the [SSEZ]. issued Revenue Regulations [Rev. In the event that the winning bidder shall bring the motor vehicles into the customs territory. provided that the importer-consignee is a registered enterprise within such freeport zone. De Ocampo.] No. Rev.That the total income generated by the consignee-seller from sources within the customs territory does not exceed thirty percent (30%) of the total income derived from all sources. (d) No exchange control policy shall be applied and free markets for foreign exchange.A. and other municipalities contiguous to the base areas.2 providing the "Rules and Regulations to Implement the Tax Incentives Provisions Under Paragraphs (b) and (c) of Section 12. then CIR Guillermo L. 7227. through the recommendation of then Commissioner of Internal Revenue (CIR) Liwayway Vinzons-Chato. Parayno. [o]therwise known as the Bases Conversion and Development Act of 1992. (emphasis supplied) On January 24. 32-2003. the basis for the computation of the excise tax shall be the total costs plus ten percent (10%) thereof. In addition. or that the same are intended for public auction within the freeport zones. However. 1-95. the same shall be resolved in favor of the latter. taxes and other charges shall be paid to the BOC before release thereof from its custody. 1-95. the final withholding tax of 25%. Poro Point Special Economic Zones and other Special Economic Zones under PEZA. as a general rule. in case he/she is a non-resident citizen or alien. no taxes. the following are the uniform tax treatments that are to be adopted on the different transactions involved in the importation of motor vehicles through the SSEFZ and other legislated Freeport zones that are subsequently sold through public auction: 1.A. xxx 3. Reg. in case he/she is a resident citizen or alien. 1995. 2. II. Tax treatments on the transactions involved in the importation of motor vehicles through the SSEFZ and other legislated Freeport zones and subsequent sale thereof through public auction. the winning bidder shall be deemed the importer thereof and shall be liable to pay the VAT and excise tax. 2003. then Secretary of Finance Roberto F. No. rules and regulations to the contrary notwithstanding. shall be imposed within the [SSEZ]." Subsequently. Scenario One – The public auction is conducted by the consignee of the imported motor vehicles within the freeport zone xxx 1. in case the winning bid price is lower than the total costs to import.] No. Importation of motor vehicles into the freeport zones 1. Reg.That the consignee-seller is a duly registered enterprise entitled to such preferential tax rate as well as a registered taxpayer with the Bureau of Internal Revenue (BIR).(c) The provision of existing laws. In case of conflict between national and local laws with respect to tax exemption privileges in the [SSEZ]. the additional VAT and excise tax shall be paid by winning bidder resulting from the difference between the winning bid price and the value used by the consignee-auctioneer in payment of such taxes. A.—Pursuant to existing revenue issuances. and other factors." xxx B. local and national. exempt from customs duties. Subsequent sale/public auction of the motor vehicles 1. No. the income derived from the public auction shall be subjected to the regular internal revenue taxes imposed by the Tax Code." On September 27. as amended. 1997 and September 27. 1995. interest and compromise penalty. The Office of the Solicitor General (OSG) submitted its "Comment (In Opposition to the Application for Issuance of a Writ of Preliminary Injunction). 275-0-2003 is hereby DISMISSED and the assailed Order dated August 1. the CA issued its assailed decision. this Petition for Review on Certiorari 21 with an application for a temporary restraining order and a writ of preliminary injunction to enjoin respondents "from pursuing sending letters of assessments to petitioners. (1. Accordingly. [b] [W]hich Court. informing him of the VAT due from the company for the auction sales conducted on June 6-8. Particularly. The consignee-seller shall also observe the compliance requirements prescribed by the Tax Code. the following tax treatment shall be observed: 1. the respondents filed their Opposition. respectively. Petitioners filed a complaint before the RTC of Olongapo City. courts may take cognizance of the issue even if not raised by the parties themselves. petitioners’ application for the issuance of a writ of preliminary injunction is hereby GRANTED. the BIR Revenue District Officer of the SSEZ.2). without first filing a motion for reconsideration. the trial court issued its order15 granting the application for a writ of preliminary injunction. Value Added Tax (VAT)/ Percentage Tax (PT) – VAT or PT shall be imposed on every public auction or negotiated sale. 25 There is thus no reason to preclude the CA from ruling on this issue even if allegedly. respondents did not file a motion for reconsideration of the trial court’s order granting the writ of preliminary injunction before filing the petition with the CA. Public respondent Regional Trial Court.16 Consequently.20 Hence.B. Also. Branch 74. 2004." 11 Petitioners filed their "Motion to Expunge from the Records the Respondents[’] Motion to Dismiss" 12 for allegedly failing to comply with Section 4. Regional Director and Revenue District Officer submitted their joint "Opposition (To The Prayer for Preliminary Injunction and/or Temporary Restraining Order by Petitioners)." Petitioners raise the following issues: [a] [W]hether a petition for certiorari under Rule 65 of the New Rules is proper where the issue raised therein has not yet been resolved at the first instance by the Court where the original action was filed. 2003 as per RMC No. 322003. BIR Revenue District Officer Rey Asterio L. 10 Respondents CIR. 23 The issue is so basic that it may be raised at any stage of the proceedings. BIR Regional Director and BIR Revenue District Officer also filed their joint Motion to Dismiss on the grounds that "[t]he trial court has no jurisdiction over the subject matter of the complaint" and "[a] condition precedent. 129 or the Court of Tax Appeals – is the proper court of jurisdiction to hear a case to declare Revenue Memorandum Circulars unconstitutional and against an existing law where the challenge does not involve the rate and figures of the imposed taxes. 2003. 32-2003 dated June 5. 275-02003. and the OSG filed with the CA a petition for certiorari under Rule 65 of the Rules of Court with prayer for the issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction to enjoin the trial court from exercising jurisdiction over the case. plus surcharge. 24 In fact. 2003.the regular courts of justice established under Batas Pambansa Blg. Nos. When public auction or negotiated sale is conducted within or outside of the freeport zone. Subsequently. Thereafter. 32-2003. 2. respondents CIR. Ultra Vires. said Civil Case No." 9 Then Secretary of Finance Jose Isidro N. a Formal Letter of Demand19was sent to the President of petitioner AIAI by the Officer-in-Charge of the BIR Office of the Regional Director.4) and (1. petitioners filed their Second Amended Complaint7 to include Rev. Rule 15 of the Rules of Court. praying for the nullification of RMC No. On March 31. of Olongapo City is hereby declared bereft of jurisdiction to take cognizance of Civil Case No. 13 Meantime. 275-0-2003 and raffled to Branch 74. They are engaged in the importation of mainly secondhand or used motor vehicles and heavy transportation or construction equipment which they sell to the public through auction. Reg. has not been complied with. SO ORDERED. August 7. alleging that he is not a party to the suit and petitioners have no cause of action against him. the dispositive portion of which states: WHEREFORE. the same has not yet been resolved by the trial court. which allegedly contain some identical provisions as the questioned RMCs. even on appeal.17 Meantime. and. whether the writ of preliminary injunction granted by the Court at Olongapo City was properly and legally issued.22 Petitioners contend that there were fatal procedural defects in respondents’ petition for certiorari with the CA.5) of RMC No. 1-95. 31-2003 dated June 3. petitioners filed their "First Amended Complaint to Declare Void. 1999. (AIAI) and Subic Bay Motors Corporation are corporations organized under Philippine laws with principal place of business within the SSEZ. Duncano sent a Preliminary Assessment Notice 18 to the President of AIAI. they question paragraphs II(A)(1) and (3). but without changing the cause of action in their First Amended Complaint. Camacho filed a Motion to Dismiss the case against him. To this. exhaustion of administrative remedies. In case the consignee-seller is a registered enterprise and/or locator not entitled to the preferential tax treatment or if the same is entitled from such incentive but its total income from the customs territory exceeds thirty percent (30%) of its entire income derived from the customs territory and the freeport zone. 32-2003. premises considered. 2003 and [RMC] No. The complaint was docketed as Civil Case No. . 31-2003 and paragraphs II(A)(2) and (B) of RMC No. the petition is GRANTED. the sales or income derived from the public auction/negotiated sale shall be subjected to the regular internal revenue taxes imposed by the Tax Code. SO ORDERED. the BIR Regional Director of Region III.ANNULLED and SET ASIDE. and Unconstitutional [RMC] No. 31-2003 for being unconstitutional and an ultra vires act. The arguments are unmeritorious. Petitioners Asia International Auctioneers. necessarily. WHEREFORE. They point out that the CA resolved the issue of jurisdiction without waiting for the lower court to first rule on the issue. with Application for a Writ of Temporary Restraining Order and Preliminary Injunction" 6 to enjoin respondents from implementing the questioned RMCs while the case is pending. 2003. Excise Tax – The imposition of excise tax on public auction or negotiated sale shall be held in abeyance pending verification that the importer’s selling price used as a basis by the Bureau of Customs in computing the excise tax is correctly determined. try and decide a case. 12-97 and 16-99 dated January 24. II(B)(1. that is. On August 1. BIR Regional Director Danilo A. 2003. The dispositive portion of the order states: Jurisdiction is defined as the power and authority of a court to hear. Tambis sent a 10-Day Preliminary Notice 14 to the president of petitioner AIAI for unpaid VAT on auction sales conducted on June 6-8. Let the writ issue upon the filing and approval by the court of an injunction bond in the amount of Php 1 Million. Inc. Before a responsive pleading was filed. [c] [D]ependent on an affirmative resolution of the second issue in favor of the regular courts of justice." 8 Respondents CIR. as per RMC No. 15-91 was an offshoot of the CIR’s finding that the pawnshop business is akin to that of "lending investors" as defined in Section 157(u) of the Tax Code. The Court. rather they challenge the authority of the respondent Commissioner to impose and collect the said taxes. as herein provided— (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments. 1158 (The National Internal Revenue Code." The General Circular further provided that "[m]ere membership in the gun club does not. we agree with the ruling of the CA. V-148 which stated that "bona fide and active members of duly organized gun clubs and accredited by the Provost Marshal General… shall pay an initial fee of fifteen pesos and an annual fee of five pesos for each firearm held on license except caliber ." the annual fee is reduced to P5 for each firearm. seeking to prohibit petitioner CIR from implementing the revenue orders. They explain that they "do not challenge the rate.A. which imposed upon firearm holders the duty to pay an initial license fee of P15 and an annual fee of P10 for each firearm. It is settled that the premature invocation of the .A.—The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal. R. General Circular No. therefore. 15-91 and RMC No. or other matters arising under the National Internal Revenue Code or other laws or part of law administered by the Bureau of Internal Revenue. Lending investors shall pay a tax equivalent to five (5%) per cent." Rodriguez. 1125.A. but the same was denied by petitioner CIR. Jurisdiction. as set forth in the circular. as amended. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. hence.26 Hence. to the main issue: does the trial court have jurisdiction over the subject matter of this case? Petitioners contend that jurisdiction over the case at bar properly pertains to the regular courts as this is "an action to declare as unconstitutional. Inc. asked for a reconsideration of both RMO No. filed a motion to dismiss on the ground of lack of jurisdiction. a decision of the Collector of Internal Revenue (now Commissioner of Internal Revenue) Similarly. void and against the provisions of [R. V-148. the assailed revenue regulations and revenue memorandum circulars are actually rulings or opinions of the CIR on the tax treatment of motor vehicles sold at public auction within the SSEZ to implement Section 12 of R. the general rule of requiring a motion for reconsideration finds no application in a case where what is precisely being assailed is lack of jurisdiction of the respondent court. refunds of internal revenue taxes.30 Rodriguez v." They claim that the challenge on the authority of the CIR to issue the RMCs does not fall within the jurisdiction of the Court of Tax Appeals (CTA). regardless of the class of firearms they have. with the exception that in case of "bona fide and active members of duly organized gun clubs and accredited by the Provost Marshal General. On the issue of jurisdiction. 7. in CIR v. Pursuant to this.A. 7227 which provides that "exportation or removal of goods from the territory of the [SSEZ] to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines. structure or figures of the imposed taxes. Rizal. through the OSG. Leal then filed a petition for prohibition with the RTC of San Mateo.A. 1125 (An Act Creating the Court of Tax Appeals)." They were issued pursuant to the power of the CIR under Section 4 of the National Internal Revenue Code. 1125 that the CTA "shall exercise exclusive appellate jurisdiction to review by appeal…" decisions of the CIR. Although the prayer for reimbursement has been eliminated from his amended complaint." The Court held that under R. 43-91. No. plaintiff similarly contended that the action was not an appeal from a ruling of the CIR but merely an attempt to nullify General Circular No. Petitioner filed a petition for certiorari and prohibition with the CA which dismissed the petition "for lack of basis." In reversing the CA. 34 viz: Section 4. The power to decide disputed assessments. explained: We find no merit in this pretense. which states: It is now settled that the filing of a motion for reconsideration is not always sine qua non before availing of the remedy of certiorari. as manager of the Philippine Rifle and Pistol Association. fees or other charges. V-148 directs the officers charged with the collection of taxes and license fees to adhere strictly to the interpretation given by the defendant to the statutory provision above mentioned. No. it is only too obvious that the nullification of General Circular No." the CIR issued Revenue Memorandum Order (RMO) No. The RTC denied the motion. the Supreme Court held that "[t]he questioned RMO No. The issuance of RMO No. No. where further delay could prejudice the interests of the government. 28 the haste with which the Solicitor General raised these issues before this Court becomes understandable. Now. fees or other charges. 15-91 imposing 5% lending investor’s tax on pawnshops based on their gross income and requiring all investigating units of the BIR to investigate and assess the lending investor’s tax due from them.22 revolver or rifle. the CIR issued RMC No. a duly accredited gun club. 43-91 subjecting pawn tickets to documentary stamp tax. refunds of internal revenue taxes. subject to the exclusive appellate jurisdiction of the Court of Tax Appeals. there is no decision of the respondent CIR on any disputed assessment to speak of as what is being questioned is purely the authority of the CIR to impose and collect value-added and excise taxes. They argue that in the instant case.A. as amended by R. as amended) which states that "[d]ealers in securities shall pay a tax equivalent to six (6%) per centum of their gross income. entitle the member to the reduced rates prescribed by law. states: Sec. This case involves Commonwealth Act No." Besides. in finding this argument unmeritorious. 466. Josefina Leal.As to respondents’ failure to file a motion for reconsideration. it is plain from plaintiff’s original complaint that one of its main purposes was to secure an order for the refund of the sums collected in excess of the amount he claims to be due by way of annual fee from the gun club members. as amended. or other matters arising under this Code or other laws or portions thereof administered by the Bureau of Internal Revenue is vested in the Commissioner.] 7227" the RMCs issued by the CIR. penalties imposed in relation thereto. x x x (emphases supplied) We have held that RMCs are considered administrative rulings which are issued from time to time by the CIR. section 7 of which provides that the [CTA] "shall exercise exclusive appellate jurisdiction to review by appeal * * * decisions of the Collector of Internal Revenue in * * * matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue. V-148 is merely a step preparatory to a claim for refund. of their gross income. the administration of which is entrusted by law to the Bureau of Internal Revenue. owner and operator of Josefina’s Pawnshop. the CIR issued General Circular No.A. No. including ruling on the classification of articles of sales and similar purposes.. subject to review by the Secretary of Finance. dissolving the Writ of Preliminary Injunction issued by the trial court and ordering the dismissal of the case before the trial court. Petitioners’ arguments do not sway.] No.29 on the manner of enforcement of said statute. In the case at bar. Leal.32 pursuant to Section 116 of Presidential Decree No. filed an action in the Court of First Instance (now RTC) of Manila for the nullification of the circular and the refund of P5. as a matter of right. Subsequently. such rulings of the CIR are appealable to the CTA. Blaquera31 is in point. (emphases supplied) Petitioners point out that the CA based its decision on Section 7 of R." They were issued pursuant to the CIR’s power under Section 245 33 of the Tax Code "to make rulings or opinions in connection with the implementation of the provisions of internal revenue laws. Petitioners’ failure to ask the CIR for a reconsideration of the assailed revenue regulations and RMCs is another reason why the instant case should be dismissed.27And considering also the urgent necessity for resolving the issues raised herein. in behalf of the members who have paid under protest the regular annual fee of P10.The power to interpret the provisions of this Code and other tax laws shall be under the exclusive and original jurisdiction of the Commissioner. 15-91 and RMC No. As such. 1125. 84. No. 43-91 are actually rulings or opinions of the Commissioner implementing the Tax Code on the taxability of pawnshops.-. Respondent therein. The licensee must be accredited by the Chief of Constabulary… [and] the firearm covered by the license of the member must be of the target model in order that he may be entitled to the reduced rates. The CIR. penalties imposed in relation thereto. No. not within the jurisdiction of the CTA. The same incorporates. it comes within the purview of [R. On April 28. NISPEROS. Caoayan. GADIANO. 2009 Decision 1 and September 14. 5 IN VIEW WHEREOF. During the time when Maria and Cipriana were overseeing the property. He declared said property for taxation purposes starting December 1947. OCT No. RODOLFO F. NISPEROS. On January 23. 2009 Resolution2 of the Court of Appeals (CA) in CA-G.7 SO ORDERED. They further stated that they were never aware of said document. For taxation purposes. ISPEROS. FE N. it was initially declared only under the name of Maria..R. CARMEL IT A H. Maria and Cipriana. 6 Starting 1988. MARISSA NISPEROS-DUCUSIN. 2013 HEIRS OF SANTIAGO NISPEROS. PURIT A H. RAYMUNDO F. or on July 24. ELY N. JOSE. Maria took respondent Marissa Nisperos-Ducusin. NISPEROS. as farmer-beneficiary. NISPEROS. In said affidavit. San Fernando City. 189570 Alleging fraud on the part of respondent which petitioners claim to have discovered only in August 2001. no settlement between petitioners and respondent was reached prompting the MARO to issue a Certificate to File Action. The same was notarized by Notary Public Atty. 2002. . Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. RENA TO F. Fausto. MELBA N. DECISION VILLARAMA. who was then only 17 years old. Millan. claim that the subject property was occupied. PEPITO H. 0002122453902 10 was issued to respondent by the Department of Agrarian Reform (DAR) over the subject property. and respondent. Candido and Cipriana. SP No.350-square-meter agricultural land in Pao Sur. The appellate court affirmed the Decision 3 of the Department of Agrarian Reform Adjudication Board (DARAB) upholding the validity of the Deed of Voluntary Land Transfer and Original Certificate of Title (OCT) No.350-square-meter property and another 46. the petition is DENIED. controlled and tilled by all nine children of Santiago. G. VIRGILIO H.court's intervention is fatal to one's cause of action. any further disquisition would be obiter dictum. CON CHIT A H. the predecessor of petitioners. To support their complaint. Respondent. 36 Petitioners’ insistence for this Court to rule on the merits of the case would only prove futile. they attached a Joint Affidavit of Denial13 by Anita and Lucia Gascon the supposed instrumental witnesses to the VLT. then such remedy must first be exhausted before the court’s power of judicial review can be sought. Maria. They paid taxes for it and even hired farm workers under Maria and Cipriana’s supervision for the cultivation of the same. NISPEROS. BENITO F.000square-meter property. TEODORICO NISPEROS. When Santiago and his wife Estefania died. a Deed of Voluntary Land Transfer 9 (VLT) over the subject property was executed between Maria and Cipriana as landowners. J.35 The party with an administrative remedy must not only initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court. 2001 with the Municipal Agrarian Reform Office (MARO) of San Fernando City. NISPEROS. JR. If a remedy within the administrative machinery can still be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction. On February 12. 1992. petitioners filed a complaint on September 6. NISPEROS. By virtue of said CLOA. NISPEROS. Felix. La Union acquired by Santiago Nisperos. Unfortunately. assailing the July 13. The instrument was signed by the three in the presence of witnesses Anita. 1992. Olling. 12 July 31. a daughter of their cousin Purita. however. Lenardo. IGNACIO F. Petitioners. ABRAHAM H. On June 24. 1992. MUNAR. vs. La Union.: Petitioners likewise asseverated in their complaint that respondent committed fraud because she was not a bona fide beneficiary as she was not engaged in farming since she was still a minor at that time and that she could not validly enter into a contract with Maria and Cipriana. They further alleged that said document was falsified by respondent because Maria could not anymore sign but could only affix her thumbmark as she did in a 1988 Deed of Donation.R. CLOA-623 issued in favor of respondent Marissa Nisperos-Ducusin. No. NISPEROS. during his lifetime. NISPEROS. The heirs of Santiago. The instant case stemmed from a complaint4 filed by petitioners with the DARAB alleging the following antecedents: The 15. RESTITUTA LARON.837-square-meter parcel of land subject of the instant case is part of the 58. Petitioners contended that the transfer of ownership over the subject land was made without the consent of the heirs of Santiago and that respondent took advantage of Maria’s senility and made it appear that Maria and Cipriana sold said property by virtue of the VLT. Having declared the court a quo without jurisdiction over the subject matter of the instant case. represented by TEODORICO NISPEROS. acting as representatives of their other siblings. as her ward and raised her like her own child. they were survived by their nine children: Tranquilino. 1988. Roberto E. petitioners herein. NISPEROS. CLOA-62311 was issued to respondent a month later. as amended. Certificate of Land Ownership Award (CLOA) No. it was declared under the names of Maria and Cipriana. petitioners filed with the DARAB a complaint for annulment of documents and damages against respondent. 105898. REBECCA H. REYNALDO N. Lucia and Marcelina Gascon and Municipal Agrarian Reform Officer Susimo Asuncion. Anita and Lucia claimed that the signatures appearing therein are not theirs as they never affixed their signatures on said document. executed a Deed of Donation Mortis Causa8 in favor of petitioners over the 58. NISPEROS. Directing the concerned Assessor’s Office to reinstate the tax declaration of said landholding in the name of Maria and Cipriana Nisperos.On March 6. the same became indefeasible and incontrovertible by the time petitioners instituted the case in January 2002. SO ORDERED. 00021224 in the name of Marissa D. DECLARING the validity of the Original Certificate of Title (OCT) CLOA No. Considering that there are two owners. 5. No costs. The DARAB also did not give credence to the Affidavit of Denial by the instrumental witnesses since the statements there are mere hearsay because the affiants were not cross-examined. Respondent contended that the complaint should not have been given due course since other parties-in-interest such as Maria. 2002. the consent of petitioners is not necessary to the VLT. 3. and insisted that she is a bona fide beneficiary as she has been tilling the land with her parents even before 1992. respondent filed a Motion to Dismiss 14 petitioners’ complaint. The Regional Adjudicator also held there was reason to believe that Maria and Cipriana’s names were stated in the tax declaration for purposes of taxation only as no evidence was presented that they lawfully acquired the property from their parents. Directing the parties to refer this problem with the court so that the issue of ownership of the landholding could be finally resolved. The decretal portion reads: In respondent’s Answer with Counterclaim16 dated July 7. exclusively and publicly. Declaring Deed of Voluntary [L]and Transfer dated April 28. he ruled that the individual share of each would be less than five hectares each and well within the retention limit. and mere conjectures that fraud might have been exerted just because Maria was already of advanced age while respondent was her care giver or ward is not evidence. Dismissing the other ancillary claims and counterclaims for lack of merit and evidence. The DARAB dismissed petitioners’ claim of fraud since the VLT was executed in the presence of DAR-MARO Susimo Asuncion. In an Order15 dated April 17. the appellate court rendered the assailed decision dismissing the petition for review and upholding the DARAB decision. 2002. It also held that petitioners cannot assert their rights by virtue of the Deed of Donation Mortis Causa allegedly executed by Maria and Cipriana in their favor since before the operative condition (the death of the donors) was fulfilled. DARAB Regional Adjudicator Rodolfo A. Aggrieved. Caddarao rendered a Decision 17 annulling the VLT and OCT/CLOA in respondent’s name. She added that the Regional Adjudicator went beyond the scope of his authority by directing the parties to litigate the issue of ownership before the court. and thus may no longer be judicially reviewed.18 The DARAB likewise ruled that the fact that respondent was a minor at the time of the execution of the VLT does not void the VLT as this is the reason why there is an active government involvement in the VLT: so that even if the transferee is a minor. the Register of Deeds of La Union and duly authorized representatives of the DAR were not impleaded and prescription had already set in insofar as the contestability of the CLOA is concerned. exclusion of a property from CARP coverage and the qualification and disqualification of agrarian reform beneficiaries are issues not cognizable by the Regional Adjudicator and the DARAB but by the DAR Secretary. The Regional Adjudicator noted that the land supposedly owned by Maria and Cipriana (which includes the 15. WHEREFORE. petitioners elevated the case to the CA via a petition for review 21 where they raised the following issues: (1) whether the subject property is covered by the Comprehensive Agrarian Reform Program (CARP). Caoayan of the DAR. Declaring OCT No. she acquired absolute ownership of the landholding. the DARAB Regional Adjudicator denied respondent’s Motion to Dismiss and ordered her to file her answer to the complaint. and 6. and On October 16. 4. respondent alleged that Maria and Cipriana acquired the property from Santiago and possessed the same openly. The CA held that retention rights. judgment is hereby rendered as follows: 1. Directing the Register of Deeds of La Union to cause the cancellation of the aforementioned title. premises considered. Nisperos annulled or cancelled on the ground of material misrepresentation of the alleged agrarian reform beneficiary. the DARAB rendered a Decision 19 reversing the decision of the Regional Adjudicator and upholding the validity of the VLT and respondent’s title. a new judgment is hereby rendered: 1. 2. 623 issued in the name of respondent-appellant Marissa Nisperos-Ducusin covering 15.837 square meter portion of the disputed lot. It likewise held that the records are bereft of any indication that fraud was employed in the transfer. It ruled that the Regional Adjudicator acted with grave abuse of discretion when it held that the subject property was no longer covered by our agrarian laws because of the retention rights of petitioners. SO ORDERED. 2002. MAINTAINING respondent-appellant Marissa Nisperos-Ducusin in peaceful possession and cultivation of the subject lot. 2009. her rights shall be protected by law.837-square-meter subject property) has a total area of 58. 2008. The appellate court nevertheless held that petitioners failed to discharge their burden of proving that fraud attended the execution of the VLT. It was also ruled that the issuance of the title in respondent’s name was not in accordance with agrarian laws because she cannot be considered as a tenant but more of an heir of the transferors. 1992 executed by Maria Nisperos in favor of Marissa Nisperos annulled or cancelled and without force and effect for having been executed not in accordance with agrarian laws. She argued that the action for annulment of the VLT and the OCT/CLOA and the claim for damages have already prescribed. continuously.20 2. She likewise argued that being a farmer or a tenant is not a . DECLARING the VLT executed on April 28. Respondent contested the Regional Adjudicator’s decision before the DARAB alleging that the Regional Adjudicator committed grave abuse of discretion.350 square meters. Roberto E. The DARAB further ruled that when OCT No. thus. the donation was revoked by virtue of the VLT. WHEREFORE. CLOA-623 was issued in respondent’s name. 1992. primordial requisite to become an agrarian reform beneficiary. premises considered. On September 16. She added that her minority does not disqualify her from availing the benefits of agrarian reform. and (3) whether the action for annulment had already prescribed. between respondent-appellant Marissa Nisperos-Ducusin and Maria and Cipriana Nisperos as valid and regular. Thus her right thereto has become fixed and established and is no longer open to doubt or controversy. 2002. (2) whether the VLT is valid having been issued through misrepresentation and fraud. signed by three instrumental witnesses and notarized by Atty. On July 13. She denied the allegations of fraud and falsification. The fallo of the said decision reads: 3. It also agreed with the DARAB that considering a certificate of title was already issued in favor of respondent. in Morta. correction and cancellation of CLOAs which were registered with the LRA. maintaining. the concerned DAR official shall refer the case to the DARAB for resolution within the same period provided herein. petitioners. Occidental. Section 1. Sr. stewardship or otherwise. 6657 defines an agrarian dispute as "any controversy relating to tenurial arrangements. correction and cancellation of the CLOAs by the DAR in the administrative implementation of agrarian reform laws. (4) that the purpose of the relationship is to bring about agricultural production. (2) that the subject matter of the relationship is an agricultural land. she being not engaged in farming because she was still a minor" at the time the VLT was executed. Specifically.) f) Those involving the issuance. As held in Heirs of Julian dela Cruz v. However. Series of 2000: xxxx However.If a case covered by Section 2 herein is filed before the DARAB. tenants and other agrarian reform beneficiaries. Referral of Cases. In fact. and (6) that the harvest is shared between the landowner and the tenant or agricultural lessee. the fact that they are bereft of jurisdiction to resolve the same prevents this Court from resolving the instant petition on its merits. 27 and other agrarian laws and their implementing rules and regulations.. Likewise. (3) that there is consent between the parties to the relationship. 28 (Emphasis supplied. it is not enough that the controversy involves the cancellation of a CLOA registered with the Land Registration Authority for the DARAB to have jurisdiction.A. to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. The complaint should have been lodged with the Office of the DAR Secretary and not with the DARAB. the DARAB is bereft of jurisdiction to take cognizance of the same as it is the DAR Secretary who has authority to resolve the dispute raised by petitioners." SEC. The cases involving the issuance. provides: SECTION 1. Maria. did not allege in their complaint that a tenancy relationship exists between them and respondent. The DAR must be given a chance to correct its administrative and procedural lapses in the issuance of the CLOA. rules and regulations to parties who are not agricultural tenants or lessees are within the jurisdiction of the DAR and not of the DARAB. Moreover. 6657. correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority. or lessor and lessee. they must relate to an agrarian dispute between landowner and tenants to whom CLOAs have been issued by the DAR Secretary.24 this Court held that there must be a tenancy relationship between the parties for the DARAB to have jurisdiction over a case. especially where the DARAB’s lack of jurisdiction is apparent on the face of the complaint or petition. estoppel does not apply to confer jurisdiction to a tribunal that has none over the cause of action. II x x x AFFIRMING THE DECISION OF THE DARAB DESPITE CLEAR AND CONVINCING EVIDENCE REGARDING THE EXISTENCE OF FRAUD. 229 and 129-A. in their complaint. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law. What is of primordial consideration is the existence of an agrarian dispute between the parties. or waived by.22 We set aside the assailed Decision and Resolution. changing. for the DARAB to have jurisdiction in such cases. What the P ARAD should have done is to refer the complaint to the proper office as mandated by Section 4 of DAR Administrative Order No. The failure of the parties to challenge the jurisdiction of the DARAB does not prevent the court from addressing the issue. 6389. 6. Primary and Exclusive Original and Appellate Jurisdiction. the DARAB has jurisdiction over cases involving the issuance. fixing. as supposed owners of the subject property. which has yet to run its regular course.Hence this petition before this Court raising the issues of whether the appellate court erred in: I x x x DECLARING THAT THE PARAB HAS NO JURISDICTION TO RULE THAT THE SUBJECT PIECE OF LAND WAS NO LONGER COVERED BY AGRARIAN LAWS. to wit: (1) that the parties are the landowner and the tenant or agricultural lessee. tenancy. v. over lands devoted to agriculture. The Board shall have primary and exclusive jurisdiction. Nor can it be acquired through. they described respondent as a "ward" of one of the co-owners. No. . The doctrine of primary jurisdiction does not allow a court to arrogate unto itself authority to resolve a controversy. being the agency possessing the required expertise on the matter and authority to hear the same. over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for. or seeking to arrange terms or conditions of such tenurial arrangements" and includes "any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. Rule II of the 1994 DARAB Rules of Procedure. Republic Act No. While it is true that the PARAD and the DARAB (which was upheld by the CA) thoroughly discussed in their respective decisions the issues pertaining to the validity of the VLT and the OCT/CLOA issued to respondent. such jurisdiction shall include but not be limited to cases involving the following: Thus. whether the disputants stand in the proximate relation of farm operator and beneficiary. Presidential Decree No. landowner and tenant. Heirs of Alberto Cruz: xxxx The Court agrees with the petitioners’ contention that. 4. the jurisdiction over which is initially lodged with an administrative body of special competence. including a quasi-judicial officer or government agency. both original and appellate. III x x x RULING THAT THE CERTIFICATES OF TITLE ISSUED IN THE NAME OF THE RESPONDENT IS INDEFEASIBLE. 26 It is axiomatic that the jurisdiction of a tribunal.29To assume the power is to short-circuit the administrative process. (5) that there is personal cultivation on the part of the tenant or agricultural lessee. who is "not a bona fide beneficiary. any act or omission of the parties. Executive Order Nos. and not by the consent or waiver of the parties where the court otherwise would have no jurisdiction over the nature or subject matter of the action. if a case covered by Section 3 herein is filed before any office other than the DARAB. 228. 3844 as amended by Republic Act No. whether leasehold. Rule II of the DARAB Rules of Procedure. It is essential to establish all of the following indispensable elements. including disputes concerning farmworkers’ associations or representation of persons in negotiating.30Moreover. the rule in force at the time of the filing of the complaint by petitioners in 2001.27 Considering that the allegations in the complaint negate the existence of an agrarian dispute among the parties. irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. under Section 2(f). the concerned DARAB official shall refer the case to the proper DAR office for appropriate action within five (5) days after said case is determined to be within the jurisdiction of the Secretary. it is in a better position to resolve the particular issue at hand. 23 Section 3(d) of R. 25 In the instant case. We made clear that: (1) PSJ-A is subject of another petition for review interposed by Eduardo Cojuangco. The declaration of martial law in September 1972 saw the issuance of several presidential decrees ("P. 0033-F. had its share of the coco levy. and the other. 180705. the properties subject of the January 24. No. P. Republic Act No.02 was placed at the disposition of COCOFED. 961 and Section 3. JR. We affirmed the Sandiganbayan’s declaration that Sections 1 and 2 of Presidential Decree ("P. we affirmed with modification PSJ-A of the Sandiganbayan. et al. entitled "Republic of the Philippines. EDUARDO M. both rendered by the Sandiganbayan in its Civil Case ("CC") No. ("R. Class Action Movants. or who are averred as owner/s of the assets involved. 180705 November 27.D. Jr. Cojuangco. Nos. In our adverted January 24.7 It bears to stress at this juncture that the only portion of the appealed Partial Summary Judgment dated July 11. the present recourse proves to be one of the most difficult. ("Cojuangco") and several individuals. 2012 More specifically. 0033. 2012. Marcos. Defendants. even if Section 1 thereof made reference to the same. the national association of coconut producers declared by the Philippine Coconut Administration ("PHILCOA" now "PCA") as having the largest membership. Nos. In particular. the coconut levy fund came under various names x x x. 582 created the Coconut Industry Development Fund ("CIDF") to finance the operation of a hybrid coconut seed farm. against Eduardo M. Section 3. 2003. as reiterated in a Resolution 5 of December 28. Cojuangco. 2004 (hereinafter referred to as "PSJ-F’). P. the Court addressed and resolved all key matters elevated to it in relation to PSJ-A. 1468. Apart from this recourse. Like COCOFED with which it had a legal linkage. Republic) consolidated cases 1 (hereinafter collectively referred to as "COCOFED v. all issued in PSJ-A. v. JR. Jr." CC No..55 levy of which the copra seller was – or ought to be – issued COCOFUND receipts. vs." 3 For a better perspective. the instant recourse seeks to reverse the Partial Summary Judgment 4 of the anti-graft court dated July 11. We clarify right off that PSJ-A was challenged in two other separate but consolidated petitions for review.WHEREFORE.D. No. No. v. Jr. Republic. by statutory provisions scattered in different coco levy decrees.. Petitioner. Ursua ("Ursua"). We upheld the Sandiganbayan’s ruling that the coconut levy funds are special public funds of the Government. 0033-A to CC No.") purportedly designed to improve the coconut industry through the collection and use of the coconut levy fund. No. Eduardo M. and docketed as G. COCOFED.. in G. Charged with the duty of collecting and administering the Fund was PCA. 2009 Resolution of the Court of Appeals in CAG. SO ORDERED. docketed as G.D. which. v. and its Partial Summary Judgment in Civil Case No. No. correspondingly impleaded as defendants only the alleged participants in the transaction/s subject of the suit. dated May 7.2 and (2) the issues raised in the instant petition should not be affected by the earlier decision "save for determinatively legal issues directly addressed therein.D. The complaint is REFERRED to the Office of the Department of Agrarian Reform Secretary for appropriate action. Jr.9 It will be recalled that the Sandiganbayan declared the Agreement between the PCA and Cojuangco containing the assailed "compensation" null and void for not having the required valuable consideration. under Section 8 thereof. CC No. By Resolution of September 4. to be used only for the benefit of all coconut farmers and for the development of the coconut industry. interposed by Danilo S. of copra. below. No pronouncement as to costs. The following were some of the issuances on the coco levy. REPUBLIC OF THE PHILIPPINES. 2. 2009 Decision and September 14. Consequently. except for the issues raised in the instant petition which have not yet been resolved therein. 177857-58. and Danilo S. which shall be decided separately by the Court. 755. portions of the statement of facts in COCOFED v. among them. for having likewise been acquired using the coconut levy funds. Plaintiff. Republic"). Eduardo Cojuangco.R. as affirmed in a Resolution of December 28. 178193 (Ursua v.. 177857-58 (COCOFED et al. denying COCOFED’s motion for reconsideration. Republic relevant to the present case:10 In 1971.A. SP No. for the Republic of the Philippines ("Republic"). 2003 ("PSJ-A") which remains at issue revolves around the following decretal holdings of that court relating to the "compensation" paid to petitioner for exercising his personal and exclusive option to acquire the FUB/UCPB shares. Cojuangco. Accordingly.. Jr. Republic) and G. Then came P. In the same decision.R. Each of the eight (8) subdivided complaints. to be utilized to subsidize the sale of coconut-based products. and the May 11. and the CIIF block of San Miguel Corporation shares of stock.D.R. how the proceeds of the levy will be managed and by whom and the purpose it was supposed to serve: 1. the July 13. 2012. et al. 2003." a suit for recovery of ill-gotten wealth commenced by the Presidential Commission on Good Government ("PCGG"). 2004. Respondent. the UCPB shares of stocks that are subject of the Agreement were declared conclusively owned by the Government.D.") 755. et al. that . COJUANGCO.R. 0033 entitled. It also held that the Agreement did not have the effect of law as it was not published as part of P.. 105898 are SET ASIDE.") 6260 was enacted creating the Coconut Investment Company ("CIC") to administer the Coconut Investment Fund ("CIF"). thus stabilizing the price of edible oil. Of the PhP 0. Article III of P. as well as the pertinent implementing regulations of the Philippine Coconut Authority ("PCA"). J. Maria Clara Lobregat ("Lobregat"). "Republic of the Philippines v. 2012 Decision in COCOFED v.55 levy on the sale of every 100 kg. No.. BALLARES. By Decision dated January 24. one commenced by COCOFED et al.: The Case Of the several coconut levy appealed cases that stemmed from certain issuances of the Sandiganbayan in its Civil Case No. 0033-H. 276 established the Coconut Consumers Stabilization Fund ("CCSF") and declared the proceeds of the CCSF levy as trust fund.R. Ferdinand E. 0033-A is the result of the splitting into eight (8) amended complaints of CC No. DECISION VELASCO. entitled Eduardo M. 178193. the PCA. The Decision also affirmed the Government’s ownership of the six CIIF companies.R. 2012. G.R.8 the Court affirmed the above-stated Decision promulgated on January 24. was to be sourced from a PhP 0.D. While coming generally from impositions on the first sale of copra. 3. Article III of P. Republic of the Philippines. 2004. 0033-A (the judgment shall hereinafter be referred to as "PSJ-A"). the fourteen holding companies. are unconstitutional for allowing the use and/or the distribution of properties acquired through the coconut levy funds to private individuals for their own direct benefit and absolute ownership. PhP 0. Consequently. 2012 Decision were declared owned by and ordered reconveyed to the Government. 755 providing under its Section 1 the following: It is hereby declared that the policy of the State is to provide readily available credit facilities to the coconut farmers at preferential rates. its collection and utilization.. Ursua.. the instant petition for review under Rule 45 of the Rules of Court assails and seeks to annul a portion of the Partial Summary Judgment dated July 11.D.. No. et al. 2007 Resolution 6 denying COCOFED’s motion to set case for trial and declaring the partial summary judgment final and appealable. in the aforesaid G. Facts We reproduce. read: ARTICLE III Levies Section 1.00 per share. While the 64. 755 directing x x x as narrated. made reference to the creation. dated May 25.D. PCA paid. And so as not to dilute Cojuangco’s equity position in FUB. of 1979.2%. for itself and for the benefit of the coconut farmers. and Pedro Cojuangco in which the former was purportedly accorded the option to buy 72. from COCOFED v. P. from the "mother" PCA shares. The plan. 1468 (Revised Coconut Industry Code). of the 72. Apart from the aforementioned 72. In all. Organization of the Cooperative Endeavor.840 and 649. 5. Republic. shall not be construed … as special and/or fiduciary funds. …. 1975.98% portion. respectively). Cojuangco shall receive equity in FUB amounting to 10%. was denominated as Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers of the Philippines. s. Under paragraph # 8 of the second agreement. …. the shares of stock of the bank it acquired to the coconut farmers…. There were. later UCPB.. on behalf of the coconut farmers. the PCA appropriated. 1975. got 10%. the deposit withdrawable only when the bank has attained a certain level of sufficiency in its equity capital. Emerging from this elaborate. PCA to use the CCSF and CIDF to acquire a commercial bank to provide coco farmers with "readily available credit facilities at preferential rate" x x x. shares forming part of the aforesaid 64. pursuant to the stipulation on maintaining Cojuangco’s equity position in the bank. President Marcos issued. purchase from Cojuangco the shares of stock subject of the First Agreement for PhP200. — The PCA is hereby empowered to impose and collect … the Coconut Consumers Stabilization Fund Levy. albeit it would later reimburse itself from the coconut levy fund.22% = 64.D. dated May 1975.14 It would appear later that. . No. 15 We further quote. or 7. 12 Apropos the intended acquisition of a commercial bank for the purpose stated earlier.304.22%. for free. The relevant provisions of P.800 shares) = 95.98% portion of the option shares (72. circuitous arrangement were two deeds. however.) Through the years. at PhP 200 per share. out of other coco levy funds. And per Cojuangco’s own admission. the corresponding stock certificates supposedly representing the farmers’ equity were in the name of and delivered to PCA. Cojuangco would receive a total of 95.D. PCA agreed to expeditiously distribute the FUB shares purchased to such "coconut farmers holding registered COCOFUND receipts" on equitable basis. However. from PCA. authorized PCA to utilize the CCSF and the CIDF collections to acquire a commercial bank and deposit the CCSF levy collections in said bank interest free. or 137. which was subsequently renamed as United Coconut Planters Bank ("UCPB").98%) ostensibly pertained to the farmers. it would appear that FUB was the bank of choice which Pedro Cojuangco’s group (collectively. PCA purchased from other FUB shareholders 6. It had PCA. such portion of the CIIF … in private corporations … under the following guidelines: a) The coconut farmers shall own or control at least … (50%) of the outstanding voting capital stock of the private corporation acquired thru the CIIF and/or corporation owned or controlled by the farmers thru the CIIF ….955 shares.2% option shares. it was stipulated that. out of the CCSF. On its face. … the intention being that said Fund and the disbursements thereof as herein authorized for the benefit of the coconut farmers shall be owned by them in their private capacities: ….this policy can be expeditiously and efficiently realized by the implementation of the "Agreement for the Acquisition of a Commercial Bank for the benefit of Coconut Farmers" executed by the PCA…. 4. The same section also decreed that all levies PCA is authorized to collect shall not be considered as special and/or fiduciary funds or form part of the general funds of the government within the contemplation of P. 11 Relevant to the present petition is the acquisition of the First United Bank ("FUB")." for brevity). on behalf of coconut farmers. under its Section 2. or as part of the general funds of the national government within the contemplation of PD 711. on July 29. The remaining 27. in its capacity as the investment arm of the coconut farmers thru the CIIF … is hereby directed to invest. 711. Exemption. (Emphasis supplied) 6. entered into by and between Cojuangco for and in his behalf and in behalf of "certain other buyers". ("LOI") 926. in oil mills and other private corporations.440 shares + 10% (158. P. as later amended by P. No. out of its own fund." The second but related contract. or fully paid shares.800 shares. Letter of Instructions No. As found by the Sandiganbayan. the list of FUB stockholders included Cojuangco with 14. the PCA agreed under paragraph 6 (b) of the second agreement to cede over to the former a number of fully paid FUB shares out of the shares it (PCA) undertakes to eventually subscribe.840 shares) + 10% (649.2% of FUB’s outstanding capital stock. P. a part of the coconut levy funds went directly or indirectly to finance various projects and/or was converted into various assets or investments. facts relevant to the instant case: 16 Shortly after the execution of the PCA – Cojuangco Agreement. Towards achieving the policy thus declared. No.D. 1468 and entrusted a portion of the CIIF levy to UCPB for investment. the entire acquisition price for the 72. Section 5. which ended up in the hands of non-farmers.534 shares of which Cojuangco. (Words in bracket added. No. with the following equity ownership structure: Section 2. 1975. PCA would cede to him 10% of its subscriptions to (a) the authorized but unissued shares of FUB and (b) the increase in FUB’s capital stock (the equivalent of 158. – The UCPB.D. as later events unfolded. It was further stipulated that Cojuangco would act as bank president for an extendible period of 5 years. 961 codified the various laws relating to the development of coconut/palm oil industries. as may be gathered from the records. — The CCSF and theCIDF as well as all disbursements as herein authorized. The first one was simply denominated as Agreement.866 shares (the "option shares. No. was for PCA to buy all of Pedro Cojuangco’s shares in FUB. and that the PCA is hereby authorized to distribute. Coconut Consumers Stabilization Fund Levy. of the Coconut Industry Investment Fund ("CIIF") in P.304 FUB (UCPB) shares broken down as follows: 14. No.D.D.2% equity. then. "Pedro Cojuangco") had control of. As additional consideration for PCA’s buy-out of what Cojuangco would later claim to be his exclusive and personal option. this agreement does not mention the word "option. an amount for the purchase of the said 72.13 As of June 30.2%.440 shares and PCA with 129. 961. a simple direct sale from the seller (Pedro) to PCA did not ensue as it was made to appear that Cojuangco had the exclusive option to acquire the former’s FUB controlling interests.8% of the FUB capital stock were not covered by any of the agreements. No.2% – 7. 755. and the entities and persons above-enumerated. Declaring that the government is the lawful and true owner of the subject UCPB shares registered in the names of … Cojuangco. Mandaluyong. 0033. By Decision of December 14.D. E. 14 conferred on the Sandiganbayan exclusive and original jurisdiction over ill-gotten wealth cases. Jr. he declared Martial Law through Proclamation No. over the subject UCPB shares is based solely on the supposed COCOFUND receipts issued for payment of the RA 6260 CIF levy. praying that a summary judgment be rendered declaring: a. On April 17. 1081 dated September 21. Apropos thereto. for and in his own behalf and in behalf of certain other buyers. From January 17. On January 17. Right after it filed the Motion for Partial Summary Judgment RE: COCOFED. have not legally and validly obtained title over the subject UCPB shares. Marcos was President x x x for two terms under the 1935 Constitution and. including x x x and Danilo S. 1981. 2002. and c. . Pursuant to these issuances. (EO) 1.. for and in his own behalf and in behalf of certain other stockholders of First United Bank listed in Annex "A" attached hereto (hereinafter collectively called the SELLERS). the PCGG instituted before the Sandiganbayan a recovery suit docketed thereat as CC No. the facts which exist without any substantial controversy are set forth hereunder. Declaring that x x x Cojuangco.O. 755. et al. the facts it found to be without substantial controversy. No. among others. et al.s. et al. Filipino.Then came the 1986 EDSA event. 147062-64 (Republic v. No.D.D. One of the priorities of then President Corazon C. ANGARA. in G. 1981. COCOFED).17 E. Jr. By Order of March 11.. – and – b. 1972. 1975 providing payment of ten percent (10%) commission to defendant Cojuangco with respect to the FUB. 18 the Court declared the coco levy funds as prima facie public funds. 2002 of defendant Eduardo M. He x x x promulgated various P. 6. of legal age and with residence at 136 9th Street corner Balete Drive. Jr. (hereinafter collectively called the BUYERS)". the PCGG issued numerous orders of sequestration. have not legally and validly obtained title over the subject UCPB shares. Eleazar. That Section 2 of [PD] 755. 1 created the PCGG and provided it with the tools and processes it may avail of in the recovery efforts. beneficial ownership thereon and the corollary voting rights prima facie pertain." 5. P. 1987. Section 5. et al. 2. Philippines. to the government. No. 1468 are unconstitutional. amendments to the 1973 Constitution were effected and. Rizal. Aquino’s revolutionary government was the recovery of ill-gotten wealth reportedly amassed by the Marcos family and close relatives. and Ballares.A. 2 asserted that the ill-gotten assets and properties come in the form of shares of stocks. among which were P. together with the admissions and/or the extent or scope of the admissions made by the parties relating to the relevant facts: xxxx 3. on June 30. EDGARDO J.. the parties’ manifestations made in open court and the pleadings and evidence on record. were PCA Directors x x x during the period 1970 to 1986 x x x. Article III of P. "reassumed the title and exercised the powers of the President until 25 February 1986.D. including the SMC shares held by the CIIF companies. P. as follows: As culled from the exhaustive discussions and manifestations of the parties in open court of their respective pleadings and evidence on record. as amended by E. their nominees and associates. 2001. No. 961 and P. 6260 are not valid and legal bases for ownership claims over UCPB shares. Ursua.O.O. 5. 4. of legal age and with residence at 1575 Princeton St. That COCOFED.D. That x x x (CIF) payments under x x x (R. et al. No. Defendants Maria Clara Lobregat and Jose R. among which were those handed out x x x against shares of stock in UCPB purportedly owned by or registered in the names of (a) the more than a million coconut farmers.D. by and between: PEDRO COJUANGCO. x x x EDUARDO COJUANGCO. Correlatively. 276. after being elected President. according to the Court. And purchased as the sequestered UCPB shares were by such funds.D.D. 2001 ruling in Republic v. Cojuangco. etc.) No. nominees and dummies.. Jr. 19 We quote from COCOFED v. Civil Case 0033 x x x would be subdivided into eight complaints. 1981. Following an exchange of pleadings. (b) the CIIF companies and (c) Cojuangco. now UCPB shares subject matter thereof. while E. No. 1973 to April 7. docketed as CC 0033-A to CC 0033-H. during the second term.. together with the admissions and/or extent of the admission made by the parties respecting relevant facts. 1975 at Makati. 14-A.O.. Nos. and Ballares. No. he x x x exercised the powers and prerogative of President under the 1935 Constitution and the powers and prerogative of President x x x the 1973 Constitution. P. 2 and 14. No. 755 is unconstitutional insofar as it validates the provisions in the "PCA-Cojuangco Agreement x x x" dated May 25. the Republic. the Republic filed its sur-rejoinder praying that it be conclusively declared the true and absolute owner of the coconut levy funds and the UCPB shares acquired therefrom. Rizal. b. No. Quezon City. that the claim of COCOFED and Ballares et al. to the above-cited Motion for Partial Summary Judgment: a) "This Agreement made and entered into this ______ day of May. et al. JR. he issued Proclamation No. Republic:20 A joint hearing on the separate motions for summary judgment to determine what material facts exist with or without controversy then ensued. the Republic interposed a Motion for Partial Summary Judgment Re: Eduardo M. The late President Ferdinand E. xxxx 1. with the proviso that "technical rules of procedure and evidence shall not be applied strictly" to the civil cases filed under the EO. 232. she issued Executive Order Nos. Jr. 414. 1102 announcing the ratification of the 1973 Constitution. based on this Court’s ruling in related ill-gotten cases. represented in this act by his duly authorized attorney-in-fact. he. the Sandiganbayan detailed. Filipino. all series of 1986. xxxx 3. Cojuangco. P. dated April 22. Plaintiff admits the existence of the following agreements which are attached as Annexes "A" and "B" to the Opposition dated October 10. 961 and Section 5. on the strength of the December 14. 1973.D. and Ballares. Article III of P. for the benefit of all coconut farmers. Jr. filed a Motion for Partial Summary Judgment RE: COCOFED.. and his fronts. 2003. Declaring that Section 1 of P. praying that a summary judgment be rendered: a. On July 31. and c. 1468.R.D. No. COCOFED and on the argument.. 00 each.295. stock certificates Upon the execution of this Agreement. (b) The execution. Ayala Avenue. liabilities and other burdens in favor of the Bank or third parties. THEREFORE.. and (ii) BUYERS shall deliver to the SELLERS P27. JR. the SELLERS hereby sell. the Contract Shares and that (i) the certificates to be delivered pursuant thereto have been validly issued and are fully paid and non-assessable. by and between: EDUARDO M. the aforementioned shares of stock totaling 137. obligations. and the SELLERS are willing to sell. (i) the SELLERS shall deliver to the BUYERS the stock certificates representing the Contract Shares. 2. Sikatuna Building. (ii) the Contract Shares are free and clear of all liens. 3. hereinafter referred to as the SELLER. transfer and convey unto the BUYERS. NOW.200.WITNESSETH: That This representation shall survive the execution and delivery of this Agreement and the consummation or transfer hereby contemplated. of the common stock of the First United Bank (the "Bank"). (c) They have complied with the condition set forth in Article X of the Amended Articles of Incorporation of the Bank. made and entered into this 25th day of May 1975 at Makati. Implementation The parties hereto hereby agree to execute or cause to be executed such documents and instruments as may be required in order to carry out the intent and purpose of this Agreement. WHEREAS. Makati. Philippines. and payment for. encumbrances.573. Contract Price 7. the parties agree as follows: 5. with business address at 10th Floor. the parties hereto have hereunto set their hands at the place and on the date first above written. JR.) 4.00 (the "Contract Price"). Rizal. xxxx IN WITNESS WHEREOF.866 shares of stock.511. – and – . liabilities and other burdens in favor of the Bank or third parties x x x. (on his own behalf and in behalf Sellers of the other Buyers) (BUYERS) By: EDGARDO J. JR. of legal age. with a par value of P100. PEDRO COJUANGCO (on his own behalf and in behalf of the other listed in Annex "A" hereof) (SELLERS) EDUARDO COJUANGCO.. Representation and Warranties of Sellers The SELLERS respectively and independently of each other represent and warrant that: (a) The SELLERS are the lawful owners of. WHEREAS. Filipino. the BUYERS desire to purchase. free and clear of all liens. with good marketable title to. the SELLERS own of record and beneficially a total of 137.866 shares (hereinafter called the "Contract Shares") owned by the SELLERS due to their special relationship to EDUARDO COJUANGCO. Representation of BUYERS 1. a commercial banking corporation existing under the laws of the Philippines. Sale and Purchase of Contract Shares xxxx Subject to the terms and conditions of this Agreement. delivery and performance of this Agreement by the SELLERS does not conflict with or constitute any breach of any provision in any agreement to which they are a party or by which they may be bound. duly endorsed in blank or with stock powers sufficient to transfer the shares to bearer. obligations. assign. COJUANGCO. for and in consideration of the premises and the mutual covenants herein contained. Notices The purchase price per share of the Contract Shares payable by the BUYERS is P200. ANGARA Attorney-in-Fact xxxx b) "Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers of the Philippines. Rizal. and the BUYERS hereby purchase and acquire. (Emphasis added.50 representing the Contract Price less the amount of stock transfer taxes payable by the SELLERS. the Contract Shares free and clear of all liens and encumbrances thereon. which the BUYERS undertake to remit to the appropriate authorities. 6.00 or an aggregate price of P27. encumbrances. Delivery of. WHEREAS. 1975. While serving in such capacity. for that purpose. in response to the representations made by the coconut farmers. Upon execution of this Agreement. he shall be entitled to such salaries and emoluments as the Board of Directors may determine. WHEREAS. passed a resolution requesting the PCA to negotiate with the SELLER for the transfer to the coconut farmers of the SELLER’s option to buy the First United Bank (the "Bank") under such terms and conditions as BUYER may deem to be in the best interest of the coconut farmers and instructed Mrs. a public corporation created by Presidential Decree No. As promptly as practicable after execution of this Agreement. x x x the BUYER is willing to subscribe to additional shares ("Subscribed Shares") and place the Bank in a more favorable financial position to extend loans and credit facilities to coconut farmers at preferential rates. for and in consideration of the foregoing premises and the other terms and conditions hereinafter contained. the PCPF further instructed Mrs. and (2) that the SELLER shall receive compensation for exercising his personal and exclusive option to acquire the Option Shares. as well as for performing the management services required of him. and for performing the management services required of him hereunder. the parties undertake to cause the stockholders and the Board of Directors of the Bank to authorize and approve a management contract between the Bank and the SELLER under the following terms: (a) The management contract shall be for a period of five (5) years.00 per share. as amended. 2. 232. (e) The SELLER shall receive no compensation for managing the Bank. through its Board of Directors. (d) The BUYER undertakes to cause three (3) persons designated by the SELLER to be elected to the Board of Directors of the Bank. SELLER shall receive . the parties hereby declare and affirm that their principal contractual intent is (1) to ensure that the coconut farmers own at least 60% of the outstanding capital stock of the Bank. for that purpose. for itself and for the benefit of the coconut farmers of the Philippines. WHEREAS. the BUYER has requested the SELLER to exercise his personal option for the benefit of the coconut farmers.PHILIPPINE COCONUT AUTHORITY.400 shares (the "Option Shares") of the Bank. Maria Clara Lobregat to convey such request to the BUYER. the SELLER is willing to transfer the Option Shares to the BUYER at a price equal to his option price of P200 per share. As compensation for exercising his personal and exclusive option to acquire the Option Shares and for transferring such shares to the coconut farmers. other than such salaries or emoluments to which he may be entitled by virtue of the discharge of his function and duties as President. the BUYER shall deposit with the Escrow Agent such amount as may be necessary to implement the terms of this Agreement x x x. (b) The SELLER shall be elected President and shall hold office at the pleasure of the Board of Directors. THEREFORE. recognizing that ownership by the coconut farmers of a commercial bank is a permanent solution to their perennial credit problems. 1. for transferring such shares to the coconut farmers at the option price of P200 per share. on May 17. that it will accelerate the growth and development of the coconut industry and that the policy of the state which the BUYER is required to implement is to achieve vertical integration thereof so that coconut farmers will become participants in. 4. at the price of P200. expressed the desire of the coconut farmers to own a commercial bank which will be an effective instrument to solve the perennial credit problems and. WHEREAS. constituting 72. the SELLER has the exclusive and personal option to buy 144. To ensure that the transfer to the coconut farmers of the Option Shares is effected with the least possible delay and to provide for the faithful performance of the obligations of the parties hereunder. which option only the SELLER can validly exercise.2% of the present outstanding shares of stock of the Bank. renewable for another five (5) years by mutual agreement of the SELLER and the Bank. WHEREAS. provided x x x and (f) The management contract may be assigned to a management company owned and controlled by the SELLER. the sum of P150 Million to enable the farmers to buy the Bank and capitalize the Bank to such an extension as to be in a position to adopt a credit policy for the coconut farmers at preferential rates. the SELLER shall exercise his option to acquire the Option Share and SELLER shall immediately thereafter deliver and turn over to the Escrow Agent such stock certificates as are herein provided to be received from the existing stockholders of the Bank by virtue of the exercise on the aforementioned option x x x. the Philippine Coconut Producers Federation ("PCPF"). the BUYER approved the request of PCPF that it acquire a commercial bank to be owned by the coconut farmers and. (c) The SELLER shall recruit and develop a professional management team to manage and operate the Bank under the control and supervision of the Board of Directors of the Bank. and beneficiaries of the development and growth of the coconut industry. WHEREAS. 3. NOW. (hereinafter called the BUYER)" WITNESSETH: That WHEREAS. Maria Clara Lobregat to make representations with the BUYER to utilize its funds to finance the purchase of the Bank. the parties hereby appoint the Philippine National Bank as their escrow agent (the "Escrow Agent"). To ensure the stability of the Bank and continuity of management and credit policies to be adopted for the benefit of the coconut farmers. appropriated. . for the benefit of the coconut farmers. to shares with an aggregate par value of P64. with respect to the unissued portion of Class B shares comprising part of the authorized capital stock or any increase thereof.000 divided into 500. duly endorsed in blank or with stock powers sufficient to transfer the same to bearer. which subscriptions shall be deemed made upon the approval by the stockholders of the increase of the authorized capital stock of the Bank from P50 Million to P140 Million. All of the Option Shares constituting 72. and to pay for their subscriptions to Class B shares within a period of five (5) years from the call of the Board of Directors. To ensure that not only existing but future coconut farmers shall be participants in and beneficiaries of the credit policies. 8. 7. that shall be held by it for the benefit of the coconut farmers of the Philippines under the provisions of this Agreement.2% of the outstanding shares.304 shares: (a) The Escrow Agent shall.8% of the outstanding shares. to such. Such undertaking shall be complied with in the following manner: upon receipt of advice that the BUYER has subscribed to the Subscribed Shares upon approval by the stockholders of the increase of the authorized capital stock of the Bank.equity in the Bank amounting. with an aggregate par value of P36. the BUYER undertakes. shall be classified as Class A shares and the balance of the outstanding shares. with a par value of P100. in order to prevent the dilution of SELLER’s equity position. 9. the parties shall call a special stockholders’ meeting of the Bank: (a) To classify the present authorized capital stock of P50. the Escrow Agent shall thereupon issue a check in favor of the Bank covering the total payment for the Subscribed Shares. 11. (ii) replace the present provision restricting the transferability of the shares with a limitation on ownership by any individual or entity to not more than 10% of the outstanding shares of the Bank. The BUYER shall expeditiously distribute from time to time the shares of the Bank. the shares held by the coconut farmers shall not be entitled to pre-emptive rights with respect to the unissued portion of the authorized capital stock or any increase thereof.900. 5. The parties further undertake that the Board of Directors and management of the Bank shall establish and implement a loan policy for the Bank of making available for loans at preferential rates of interest to the coconut farmers x x x. In order to comply with the Central Bank program for increased capitalization of banks and to ensure that the Bank will be in a more favorable financial position to attain its objective to extend to the coconut farmers loans and credit facilities. to subscribe to Class B shares in proportion t the subscriptions of Class A shares.000 from the increased capital stock of the Bank.884. The parties undertake to declare stock dividends of P8 Million out of the present authorized but unissued capital stock of P30 Million. as Class B shares. in the aggregate. with an aggregate par value of P13. upon receipt from the SELLER of the stock certificates representing the Option Shares. to 95. (iii) provide that the holders of Class A shares shall not be entitled to pre-emptive rights with respect to the unissued portion of the authorized capital stock or any increase thereof.980.00 per share into: 361. (b) With respect to the Subscribed Shares.000. for the benefit of the coconut farmers.000. constituting 27.100.000 (the "Subscribed Shares").000 and 139. After the parties shall have acquired two-thirds (2/3) of the outstanding shares of the Bank.000 from the present authorized but unissued shares of the Bank.000 shares.000 Class A shares. the BUYER undertakes to subscribe to shares with an aggregate par value of P80. and shall be entitled to the benefit of loans and credit facilities to be extended by the Bank to coconut farmers at preferential rates. 6. coconut farmers holding registered COCOFUND receipts on such equitable basis as may be determine by the BUYER in its sound discretion. and (iv) provide that the holders of Class B shares shall be absolutely entitled to pre-emptive rights. and (b) The BUYER undertakes to subscribe. that it shall cede over to the SELLER 64.000 Class B shares. (b) To amend the articles of incorporation of the Bank to effect the following changes: (i) change of corporate name to First United Coconut Bank. present such stock certificates to the Transfer Agent of the Bank and shall cause such Transfer Agent to issue stock certificates of the Bank in the following ratio: one share in the name of the SELLER for every nine shares in the name of the BUYER. To carry into effect the agreement of the parties that the SELLER shall receive as his compensation 95.304 fully paid shares in accordance with the procedure set forth in paragraph 6 below.980 fully-paid shares out of the Subscribed Shares. x x x x 10. The Escrow Agent shall thereafter cause the Transfer Agent to issue a stock certificates of the Bank in the following ratio: one share in the name of the SELLER for every nine shares in the name of the BUYER.864. to shares with an aggregate par value of P15. The obligation of the BUYER with respect to the Subscribed Shares shall be as follows: (a) The BUYER undertakes to subscribe. 1975 as the "Agreement for the Acquisition of a Commercial Bank for the Benefit of Coconut Farmers" executed by the Philippine Coconut Authority" and incorporated in Section 1 of P. et al. admit that the affidavits of the coconut farmers (specifically. The remaining 27. did not own any share in the x x x (FUB) prior to the execution of the two Agreements x x x. 1975 Agreement. there were other coconut farmers who received UCPB shares although they did not present said COCOFUND receipt because the PCA distributed the unclaimed UCPB shares not only to those who already received their UCPB shares in exchange for their COCOFUND receipts but also to the coconut farmers determined by a national census conducted pursuant to PCA administrative issuances. 755. and (f) To authorize and approve the management contract provided in paragraph 2 above. 7. defendant Cojuangco’s equity in the FUB (now UCPB) was ten percent (10%) of the shares of stock acquired by the PCA for the benefit of the coconut farmers. of such percentage of the profits of the Bank as may be necessary.866 shares to 144. and COCOFED. Defendant Cojuangco d. . In order to achieve such objective. (on his own behalf and in behalf of the other buyers). the OPTION SHARES referred to in the Agreement of May 25.D. et al. 1975 Agreement were paid for by the PCA in accordance with the terms and conditions provided in the said Agreement.8% shares of stock in the FUB which later became the UCPB were not covered by the two (2) agreements referred to in item no. As to whether P. Jr. they are allegedly entitled to the subject UCPB shares. pursuant to the May 25. 6.D. et al. MARIA CLARA L.866 shares covered by the Agreement with Pedro Cojuangco. 16. (SELLER) did not make said admission as to the said 6. and under R. to purchase the FUB shares amounting to 72. 13.(c) To increase the authorized capital stock of the Bank from P50 Million to P140 Million. each with a par value of P100 per share. et al. and the PCA (Annex "B" for defendant Cojuangco’s OPPOSITION TO PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE: EDUARDO M.D. the BUYER and other stockholders of the Bank out of the present authorized but unissued capital stock of P30 Million. and Ballares.400 shares.. 12. dated September 18. 64. par. they are coconut farmers who sold coconut products. 1975 between defendant Eduardo M. other FUB stockholders sold their shares to PCA such that the total number of FUB shares purchased by PCA … increased from 137. and COCOFED.D. Plaintiff refused to make the same admission.304 shares of the FUB.D. by way of stock dividends. the parties shall cause the Bank to adopt a policy of reinvestment. Cojuangco.866 FUB shares of Pedro Cojuangco.A. JR.98% which were later sold or transferred to non-coconut farmers. Defendants Lobregat. (e) To amend the by-laws of the Bank accordingly. JR. 2002).. (d) To declare a stock dividend of P8 Million payable to the SELLER. and Ballares. et al.22% were given to defendant Cojuangco. 961 and 1468. Jr. by virtue thereof. in the sale thereof. 755 was published in x x x volume 71 of the Official Gazette but the text of the agreement x x x was not so published with P. Defendant Cojuangco insists he was the "only buyer" under the aforesaid Agreement. and Ballares. but subject to the following qualifications: a. and COCOFED. entirely paid for by PCA. et al. (a) and (b) above. Exhibit "1-Farmer" to "70-Farmer") uniformly state that: By: EDUARDO COJUANGCO. described in Section 1 of Presidential Decree (P. et al. 6260. 1975 Agreement. admit that the PCA used public funds x x x in the total amount of P150 million. et al. Cojuangco. they received COCOFUND receipts pursuant to R. divided into 1. et al.534 shares in excess of the 137. Cojuangco. et al. Defendants Lobregat. No. et al.200 Class B shares. later the UCPB. Jr.2% of the authorized capital stock of the FUB. 755 dated July 29. et al. No. 10. c. COJUANGCO. et al. 755 by reference. "There were shares forming part of the aforementioned 64. and COCOFED.800 Class A shares and 389. Defendants Lobregat. and Ballares. 1975. Defendants Lobregat. 11.2% shares of the authorized and the increased capital stock of the FUB (later UCPB). No. That the fully paid 95. 9. and Ballares. admit that the Agreement. Jr. out of the 72. No. admit that the x x x (PCA) was the "other buyers" represented by defendant Eduardo M. No.D. Defendant Eduardo M. LOBREGAT a. 13. refers to the "AGREEMENT FOR THE ACQUISITION OF A COMMERCIAL BANK FOR THE BENEFIT OF THE COCONUT FARMERS OF THE PHILIPPINES" dated May 25. Cojuangco.010. xxxx b. The parties agree that they shall vote their shares and take all the necessary corporate action in order to carry into effect the foregoing provisions of this paragraph 11. 6260. Jr.A. 12. 755 and the text of the agreement described therein was published. and 8. the Court takes judicial notice that P. including such other amendments of the articles of incorporation and by-laws of the Bank as are necessary in order to implement the intention of the parties with respect thereto. Nos. acquired by defendant x x x Cojuangco. Pursuant to the May 25. It is the contemplation of the parties that the Bank shall achieve a financial and equity position to be able to lend to the coconut farmers at preferential rates. Under the May 27. et al. which was later renamed the x x x (UCPB). although the PCA was later reimbursed from the coconut levy funds and that the PCA subscription in the increased capitalization of the FUB. in the May 1975 Agreement entered into between Pedro Cojuangco (on his own behalf and in behalf of other sellers listed in Annex "A"of the agreement) and defendant Eduardo M. covered by the Agreement. admit that in addition to the 137. Defendants Lobregat. The parties agree to execute or cause to be executed such documents and instruments as may be required in order to carry out the intent and purpose of this Agreement. P. came from the said coconut levy funds x x x.98% of the shares were placed in the name of the "PCA for the benefit of the coconut farmers" and 7. they registered the said COCOFUND receipts. and COCOFED. No. 14.) No. 755. et al. et al. IN WITNESS WHEREOF x x x PHILIPPINE COCONUT AUTHORITY (BUYER) 15. 961 and 1468 and the administrative issuances of the PCA cited above.366 coconut farmers solely on the basis of their having acquired said shares in compliance with R. et al. 23 From PSJ-A. The UCPB shares of stock of the alleged fronts. 2001 is hereby GRANTED. 0033-A.980) shares of the increased capital stock subscribed and paid by PCA. P. nominees and dummies of defendant Eduardo M. (Emphasis and words in brackets added. should not the FUB (later UCPB) shares revert to petitioner Cojuangco (under the PCA Agreement) or to Pedro Cojuangco. ruling in favor of the Republic. Jr. Jr.405. 1975 nor did it give the Agreement the binding force of a law because of the non-publication of the said Agreement.22% FUB (now UCPB) shares transferred to Cojuangco. belong to the plaintiff Republic of the Philippines as their true and beneficial owner. a "claim" pleaded in the complaint and may therefore be the basis of a "summary judgment" under Section 1. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M. Defendants Lobregat. a.A. Sec. 755. The 14. defendant … Cojuangco.400 shares from the "Option Shares". in view of the foregoing. Jr. Additional Bank Shares Subscribed and Paid by PCA. did the Sandiganbayan effectively nullify the PCA Agreement? May the Sandiganbayan nullify the PCA Agreement when the parties to the Agreement.) On July 11. we declare. Did the Sandiganbayan have jurisdiction. x x x? Would there be a basis then. PCA Resolution No. The above-mentioned shares of stock of the FUB/UCPB transferred to defendant Cojuangco are hereby declared conclusively owned by the plaintiff Republic of the Philippines. Eleazar. 2003. For this purpose. by Resolution 24 of December 28. and c. in Civil Case No. to declare the Cojuangco UCPB shares acquired by virtue of the Pedro Cojuangco. dated May 25. Is the acquisition of the so-called Cojuangco. et al. 2. that the transfer of the following FUB/UCPB shares to defendant Eduardo M. Sixty Four Thousand Nine Hundred Eighty (64.2% UCPB shares of petitioner Cojuangco as "conclusively owned by the plaintiff Republic of the Philippines"?26 The Court’s Ruling I THE SANDIGANBAYAN HAS JURISDICTION OVER THE SUBJECT MATTER OF THE SUBDIVIDED AMENDED COMPLAINTS. 18. 2004.) 17.2% shares of the FUB/UCPB paid for by the PCA with public funds later charged to the coconut levy funds. 2002 filed by plaintiff. 1978…. . "298Farmer"). we rule as follows: xxxx As earlier explained. and therefore. was not supported by valuable consideration. 033-78 dated February 16. Parts A and B of the same dispositive portion have already been finally resolved and adjudicated by this Court in COCOFED v. as follows: 25 C. even assuming the absence of consideration x x x. disposing insofar as pertinent as follows:21 WHEREFORE. Fifteen Thousand Eight Hundred Eighty-Four (15. Hence. subscribed and paid by PCA. 22 (Emphasis and underlining added. the core issue in this instant petition is Part C of the dispositive portion in PSJ-A declaring the 7. Rule 35 of the Rules of Court? d. No. namely: x x x concede its validity? If the PCA Agreement be deemed "null and void". By declaring the Cojuangco UCPB shares as "not supported by valuable consideration. and Ballares.884) shares out of the authorized but unissued shares of the bank. therefore. plus the other shares paid by the PCA as "conclusively" owned by the Republic. Cojuangco. JR. Cojuangco. particularly the CCSF. consisting of: 1. Nos. and therefore null and void: a. which form part of the 72. claim that the UCPB shares in question have legitimately become the private properties of the 1. there were other affidavits executed by Lobregat. Ballares and Aldeguer relative to the said distribution of the unclaimed UCPB shares. On the other hand. 1975 (Exh. PCA Administrative Order No.D. null and void"? b. an "ill-gotten wealth" case brought under EO Nos. Agreement and/or the PCA Agreement null and void because "not supported by valuable consideration"? c. the coconut farmers claim the UCPB shares by virtue of their compliance not only with the laws mentioned in item (d) above but also with the relevant issuances of the PCA such as. 1. and 3. 2. Jr. et al.D. et al. Additional Evidence dated March 28. and COCOFED. Cojuangco moved for partial reconsideration but the Sandiganbayan. Was the claim that the acquisition by petitioner Cojuangco of shares representing 7. the instant petition. Jr. 1 and 2. INCLUDING THE SHARES ALLEGEDLY ACQUIRED BY COJUANGCO BY VIRTUE OF THE PCA AGREEMENTS. denied the motion. 4. 755 did not validate the Agreement between PCA and defendant Eduardo M. solely on the basis of the two Agreements…. null and void". Republic on January 24. 6260. b. 2012.) dated September 18. The Issues Cojuangco’s petition formulates the issues in question form. claims ownership of the UCPB shares. Regarding the questioned transfer of the shares of stock of FUB (later UCPB) by PCA to defendant Cojuangco or the so-called "Cojuangco UCPB shares" which cost the PCA more than Ten Million Pesos in CCSF in 1975. COJUANGCO. Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d) of the Agreement. Cojuangco. 1 of P. et al. the Sandiganbayan issued the assailed PSJ-A. which he holds. dated August 20.b. No. to declare 7.2% of the outstanding capital stock of FUB (later UCPB) "not supported by valuable consideration". Let trial of this Civil Case proceed with respect to the issues which have not been disposed of in this Partial Summary Judgment. the plaintiff’s Motion Ad Cautelam to Present The plaintiff did not make any admission as to the foregoing qualifications. 1. 3. UCPB shares by petitioner Cojuangco x x x "not supported by valuable consideration and. 14. among others. . it is fairly obvious that both CC Nos.100. among others. nominees. (v) In gross violation of their fiduciary positions and in contravention of the goal to create a bank for the coconut farmers of the country. Nos. the issue on whether a suit comes within the penumbra of a statutory conferment is determined by the allegations in the complaint. establishing the character of the coconut levy funds as special. to the grave and irreparable damage of Plaintiff and the Filipino people.O. by taking undue advantage of their public office and/or using their powers. authority. Republic. coveted the coconut levy funds as a cheap. the PCGG Rules and Regulations defines the term "Ill-Gotten Wealth" as "any asset. violation of the constitution and laws of the Republic of the Philippines. and/or in unlawful concert with one another. connection. interest free to the prejudice of the government. business enterprise or material possession of persons within the purview of E. There. 1986 was actually held by the defendants. acquired by them directly. 0033-A 12.00 in a manner contrary to law and to the specific purposes for which said coconut levy funds were imposed and collected under P. During the period of his incumbency as a public officer. Jr. their lawyers. Danilo Ursua etc. agencies or instrumentalities or government-owned or controlled corporations. factotum and business associates. claiming that the 72. Marcos. and with sinister designs and under anomalous circumstances. constitute gross abuse of official position and authority. in the context of EO Nos. caused the issuance by Defendant Ferdinand E. 14 and 14-A. Jr. Marcos of an 14. Cojuangco. singly or collectively. connections or relationship. embarked upon devices. Defendant Eduardo M. Series of 1986. Defendant Eduardo Cojuangco. and PCA on the purchase of FUB by incorporating by reference said private commercial agreement in PD 755. the capital stock of UCPB as of February 25. 276. PDs 276 and 414. (ii) to legitimize a posteriori his highly anomalous and irregular use and diversion of government funds to advance his own private and commercial interests.. caused the issuance by Defendant Ferdinand E. Marcos and Imelda R. as alleged in the corresponding basic complaints. 1 charged the PCGG with the task of assisting the President in "The recovery of all illgotten wealth accumulated by former … President Marcos. vests the Sandiganbayan with. beginning the year 1975 with the active collaboration of Defendants x x x Maria Clara Lobregat. equity or any other form of interest or participation in any business enterprise or undertaking. 1 and 2.29 The Court wrote: Judging from the allegations of the defendants’ illegal acts thereat made. for the payment to him in fully paid shares as compensation thereof 95. he acquired assets.000. directly or through nominees. 30 P. No. promulgation and/or implementation of decrees and orders intended to benefit particular persons or special interests. property. (4) By obtaining. (iv) To perpetuate his opportunity to deal with and make use of the coconut levy funds x x x Cojuangco. or indirectly thru dummies.384 shares worth P1. to be ill-gotten assets of President Marcos." The Republic’s material averments in its complaint subdivided in CC No. 1606. Jr. and (6) By taking undue advantage of official position. (5) Through the establishment of agricultural. No. Both deal with the recovery of sequestered shares. Jr. receiving or accepting directly or indirectly any shares of stock. Marcos of PD 755 (a) declaring that the coconut levy funds shall not be considered special and fiduciary and trust funds and do not form part of the general funds of the National Government. taking undue advantage of his association. his immediate family.773. Cojuangco. imposed as consideration and conditions for the purchase that (a) he gets one out of every nine shares given to PCA. and (b) he gets to manage and control UCPB as president for a term of five (5) years renewable for another five (5) years. conversion. No. to wit: (i) Defendant Eduardo Cojuangco. unconstitutional decree (PD 1468) requiring the deposit of all coconut levy funds with UCPB. subordinates and/or business associates by any of the following means or similar schemes": (1) Through misappropriation. and acting in unlawful concert with Defendants Ferdinand E. served as a public officer during the Marcos administration. agents. lawful income and income from legitimately acquired property. thereby finally gaining control of the UCPB by misusing the names and identities of the so-called "more than one million coconut farmers.28 In no uncertain terms. to unjustly enrich themselves at the expense of Plaintiff and the Filipino people. and unjust enrichment.D. In turn. (PCA) of 72. Correlatively.O.The issue of jurisdiction over the subject matter of the subdivided amended complaints has peremptorily been put to rest by the Court in its January 24. 0033-A included the following: CC No.O. thus. 13. Defendant Eduardo M. the purchase by . during his administration.00 with the further condition that he shall manage and control the bank as Director and President for a term of five (5) years renewable for another five (5) years and to designate three (3) persons of his choice who shall be elected as members of the Board of Directors of the Bank. relationship or influence for personal gain or benefit. the Court. schemes and stratagems.. misuse or malversation of public funds or raids on the public treasury.A. Defendant Eduardo M.000 shares" of the bank. 0033-A and 0033-F. original jurisdiction over civil and criminal cases instituted pursuant to and in connection with E." Complementing the . (b) confirming the agreement between Defendant Eduardo Cojuangco. flagrant breach of public trust and fiduciary obligations. 1.O. Cojuangco. not by the consent or acquiescence of any or all of the parties. industrial or commercial monopolies or other combination and/or by the issuance. the Court has upheld the Sandiganbayan’s assumption of jurisdiction over the subject matter of Civil Case Nos. .444. 2012 Decision in COCOFED v. and PCA. Jr. Jr. as amended by R. conversion or diversion of government funds or property. The acts of Defendants. stressed the following interlocking precepts: Subject matter jurisdiction is conferred by law. relatives. funds and other property grossly and manifestly disproportionate to his salaries. his cronies and nominees and acquired by taking undue advantage of relationships or influence and/or through or as a result of improper use. regardless of whether or not the suitor will be entitled to recover upon all or part of the claims asserted. such as when he – a) manipulated. trust and governmental funds. fiduciary. conveniently repealing for that purpose a series of previous decrees. Recovery of these assets–– determined as shall hereinafter be discussed as prima facie ill-gotten––falls within the unquestionable jurisdiction of the Sandiganbayan.2% of the outstanding capital stock of FUB could only be purchased and transferred through the exercise of his "personal and exclusive action option to acquire the 144. (Emphasis supplied) Section 2(a) of E. 1. the nature of ill-gotten wealth suits. AND THE INDIVIDUAL DEFENDANTS. Jr.D. 2. brazen abuse of right and power. influence. 0033-A and CC 0033-F partake. authority. x x x executed on May 26. (2) x x x x (3) By the illegal or fraudulent conveyance or disposition of assets belonging to the government or any of its subdivisions. Defendant Eduardo Cojuangco. citing Regalado27and settled jurisprudence. series of 1986. 2 and 14. Jr. subordinates and close associates … including the takeover or sequestration of all business enterprises and entities owned or controlled by them. 1975 a purchase agreement which provides.2% of the outstanding capital stock of the x x x (FUB) which was subsequently converted into a universal bank named x x x (UCPB) through the use of the Coconut Consumers Stabilization Fund (CCSF) being initially in the amount of P85. property or business enterprises claimed. influence. 7975 and E. (iii)To further consolidate his hold on UCPB. Nos. lucrative and risk-free source of funds with which to exercise his private option to buy the controlling interest in FUB. by reference. PD 1468… (Words in bracket added. agents or nominees which had been or were acquired by them directly or indirectly. dummies. Art. otherwise stated. italics in the original). the terms of which "Agreement" are hereby incorporated by reference. III. RA 6260 and Sec. Jr. 2003. Pena. resulting in their unjust enrichment x x x. corporations 31 or manipulated instruments calculated to confuse if not altogether mislead would-be investigators from recovering wealth deceitfully amassed at the expense of the people or simply the fruits thereof. improper utilization or diversion of coconut levy funds aided by P. Jr. 1. No. squarely within the purview of Executive Orders Nos.aforesaid Section 2(a) is Section 1 of E. but controlled. 755 incorporated. the Court wrote in COCOFED v. given the public character of the coconut levy funds. on one hand. dated May 25. while the second relates to the accord between the PCA and Eduardo M. describing the rule of Marcos as a "well entrenched plundering regime of twenty years. xxxx Lest it be overlooked.) We. directly or through nominees. instrumentalities. Cojuangco.R. So it was that in PCGG v. their close relatives. The Court is satisfied that there is. the Court. it stands to reason that persons listed as associated with the Marcoses refer to those in possession of such ill-gotten wealth but holding the same in behalf of the actual.. through or as a result of the improper or illegal use of funds or properties owned by the Government x x x or any of its branches. 1975 CANNOT BE ACCORDED THE STATUS OF A LAW FOR THE LACK OF THE REQUISITE PUBLICATION. subordinates and cronies. or through their nominees. These would include the setting up of layers after layers of shell or dummy. subordinates and close associates. that ill-gotten properties (were) amassed by the leaders and supporters of the previous regime. business associates. the "Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers" executed by the PCA. 1975 (hereinafter referred to as "PCACojuangco Agreement"). as it has in fact taken. 2012 Decision. subordinates. it bears to stress. such burden falls on the shoulders of defendant in the hearing of a motion to dismiss anchored on said ground or a preliminary hearing thereon when such ground is alleged in the answer. Said petition should accordingly not be affected by this Decision save for determinatively legal issues directly addressed herein. dummies. THE AGREEMENT BETWEEN THE PCA AND EDUARDO M. to prevent discovery and consequently recovery. authority. to wit: "1. PCGG. by taking undue advantage of their public office and using their powers. at least prima facie.D. "save for determinatively legal issues directly addressed" therein. reiterate our holding in COCOFED v. bearing date "May 1975"36 (hereinafter referred to as "PC-ECJ Agreement"). sufficiently reveal that the subject matter thereof comprises the recovery by the Government of ill-gotten wealth acquired by then President Marcos. Marcos and his cronies. Be that as it may. Jr. Transferring the illegal assets to third parties not readily perceived as Marcos cronies would be another. Section 1 states: Section 1. Eduardo M. that the instant petition shall be decided separately and should not be affected by the January 24.34 (Emphasis Ours. relatives. and Eduardo M. No. The cited incidents. No. on the other. x x x (and) business enterprises and entities (came to be) owned or controlled by them. his cronies or their associates and dummies through the unlawful. that ‘there are assets and properties purportedly pertaining to the Marcoses. Cojuangco. Certainly. authority. xxxx 2. Republic. as plaintiff a quo. this Court has already decided that the sequestered shares are prima facie ill-gotten wealth rendering the issue of the validity of their sequestration and of the jurisdiction of the Sandiganbayan over the case beyond doubt. which shall be decided separately by this Court.D. a perusal of the allegations easily reveals the sufficiency of the statement of matters disclosing the claim of the government against the coco levy funds and the assets acquired directly or indirectly through said funds as ill-gotten wealth. 2. President Marcos himself issued these decrees in a brazen bid to legalize what amounts to private taking of the said public funds. It is hereby declared that the policy of the State is to provide readily available credit facilities to the coconut farmers at preferential rates. No. II PRELIMINARILY. Cojuangco. Section 1 of P. albeit undisclosed owner. to adduce evidence to show that the Sandiganbayan has jurisdiction over the subject matter of the complaints as it leaned on the averments in the initiatory pleadings to make visible the jurisdiction of the Sandiganbayan over the ill-gotten wealth complaints. "b. it is well-nigh inconceivable that ill-gotten assets would be distributed to and left in the hands of individuals or entities with obvious traceable connections to Mr. that this policy can be expeditiously and efficiently realized by the implementation of the "Agreement for the Acquisition of a Commercial Bank for the benefit of the Coconut Farmers" executed by the Philippine Coconut Authority. 5.O. As previously discussed. particularly those detailing the alleged wrongful acts of the defendants. (Emphasis Ours.. their associates. Declaration of National Policy. v. 180705 entitled. 33 Thus: We clarify that PSJ-A is subject of another petition for review interposed by Eduardo Cojuangco. Republic respecting the Sandiganbayan’s jurisdiction over the subject matter of Civil Case No. subordinates. all that the Court needs to determine is whether or not there is prima facie justification for the sequestration ordered by the PCGG. agents or nominees have any interest or participation. Jr. The Court can take. including those matters whose adjudication We shall resolve in the present case. 7. xxxx E. 2 decreeing the freezing of all assets "in which the Marcoses their close relatives. were issued precisely to effect the recovery of ill-gotten assets amassed by the Marcoses. For purposes of this proceeding.O. 755 was not reproduced or attached as an annex to the same law. inter alia. to wit Sec. The PC-ECJ Agreement allegedly contains. Jr. place petitioners COCOFED and its leaders and officials. his immediate family. as construed and applied in BASECO. 0033-A. during x x x (the Marcos) administration.) It bears to stress at this point that the PCA-Cojuangco Agreement referred to above in Section 1 of P. The PCA-Cojuangco Agreement shows PCA’s acquisition of the said option from Eduardo M. Rather. and that the Philippine Coconut Authority is hereby authorized to distribute. connections or relationship. Cojuangco. xxxx There was no actual need for Republic. It will be recalled that Cojuangco’s claim of ownership over the UCPB shares is hinged on two contract documents the respective contents of which formed part of and reproduced in their entirety in the aforecited Order35 of the Sandiganbayan dated March 11. And it is well-settled that laws must be . 14 and 14-A. DATED MAY 25. 755 and other sister decrees. 2 and 14." noted the magnitude of the past regime’s organized pillage and the ingenuity of the plunderers and pillagers with the assistance of experts and the best legal minds in the market." The Republic’s averments in the amended complaints. JR. enterprises. Republic of the Philippines. Moreover. We stated that: It is of course not for this Court to pass upon the factual issues thus raised. "a. that ‘(i) Ill-gotten wealth was accumulated by x x x Marcos. And in connection therewith. judicial notice of schemes and machinations that have been put in place to keep ill-gotten assets under wraps. business associates. there can no longer be any serious challenge as to the Sandiganbayan’s subject matter jurisdiction. Cojuangco’s personal and exclusive option to acquire the FUB ("UCPB") shares from Pedro and his group.32 Prescinding from the foregoing premises. banks or financial institutions. 1. the shares of stock of the bank it acquired to the coconut farmers under such rules and regulations it may promulgate. The petitioners’ claim that the assets acquired with the coconut levy funds are privately owned by the coconut farmers is founded on certain provisions of law. more particularly. the Court finds no rule that directs the plaintiff to first prove the subject matter jurisdiction of the court before which the complaint is filed. COJUANGCO. influence. In the case of COCOFED v. influence. The first contract refers to the agreement entered into by and between Pedro Cojuangco and his group. That function pertains to the Sandiganbayan in the first instance. Particularly. for free. therefore.D. connections or relationships’. or by taking undue advantage of their office. in G. The Court had the occasion to explain the reach of the above provision in Surtida v. into a veritable bank management contract with Cojuangco. III THE PCA-COJUANGCO AGREEMENT IS A VALID CONTRACT FOR HAVING THE REQUISITE CONSIDERATION. (1) Consent of the contracting parties. Rule 131. the option was. We join the Sandiganbayan in its holding that the PCACojuangco Agreement shall be treated as an ordinary transaction between agreeing minds to be governed by contract law under the Civil Code. that option was inexistent on the day of execution of the PCA-Cojuangco Agreement as the Special Power of Attorney executed by Cojuangco in favor of now Senator Edgardo J. Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature. 1975 while the PCA-Cojuangco Agreement was also signed on May 25. shall be published as a condition for their effectivity. the Sandiganbayan also ruled that the sequestered FUB (UCPB) shares of stock in the name of Cojuangco are conclusively owned by the Republic. Additionally. Tañada v. the following are disputable presumptions: (1) private transactions have been fair and regular. Rule 131 of the Rules of Court. the Sandiganbayan concluded that the PCA-Cojuangco Agreement was null and void. There is no contract unless the following requisites concur: We note at this point the conclusive presumption that every person knows the law. deep secrets. as stipulated in the May 25. among others. We shall explain. which of course presupposes that the law has been published if the presumption is to have any legal justification at all. for the latter to sign the PC-ECJ Agreement. neither personal nor exclusive as he claimed it to be. but may be contradicted and overcome by other evidence: xxxx (r) That there was a sufficient consideration for a contract.D... (Emphasis supplied) 42 xxxx Art. as to him. the Court finds as inconclusive the evidence relied upon by Sandiganbayan to support its ruling that the PCA-Cojuangco Agreement is devoid of sufficient consideration. extend to the said xxxx (3) Those whose cause or object did not exist at the time of the transaction. In PSJ-A. Mere referencing the number of the presidential decree.44 to wit: Under Section 3. 1975 Agreement between him and the PCA. which it viewed as exorbitant. so the Sandiganbayan ruled. 755 did not in any way reproduce the exact terms of the contract in the decree. The effect of a legal presumption upon a burden of proof is to create the necessity ." and this certainly applies to. publication is an indispensable condition for the effectivity of a law. therefore. the Sandiganbayan believed that when the parties affixed their signatures on the second Agreement. We cannot. (2) Object certain which is the subject matter of the contract. the Sandiganbayan ruled that PCA could not validly enter.866 FUB shares. Angara.published to be valid. the aforementioned provisions of the Civil Code state: xxxx Art. Moreover. On the other hand. The Sandiganbayan further ruled that there was no justification in the second Agreement for the compensation of Cojuangco of 14. 40 In this case. Rural Bank of Malinao (Albay). i. 38 We even went further in Tañada to say that: Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark. the evidence on record relied upon by defendant Cojuangco negates the presence of: (1) his claimed personal and exclusive option to buy the 137. was dated May 25." as fictitious. its title or whereabouts and its supposed date of effectivity would not satisfy the publication requirement. Section 1 of P. Neither was acopy thereof attached to the decree when published. Cojuangco’s option to purchase the FUB shares of stock did not yet exist. Consequently. directly conferred by the Constitution. the legislative enactments of the government. After a circumspect study. paragraph 3 of the Civil Code. Cojuangco’s "personal and exclusive option to acquire the Option Shares. the Sandiganbayan struck down the PCA-Cojuangco Agreement as void for lack of consideration/cause as required under Article 1318. A reading of the purchase agreement between Cojuangco and PCA. The Sandiganbayan stated: In sum. It is no less important to remember that Section 6 of the Bill of Rights recognizes "the right of the people to information on matters of public concern. including those of local application and private laws. Disputable presumptions. and (2) any pecuniary advantage to the Sec.39 The publication. A presumption may operate against an adversary who has not introduced proof to rebut it. The following contracts are inexistent and void from the beginning: We hold therefore that all statutes. PCA having a personality separate and distinct from that of FUB. Thus. while it incorporated the PCA-Cojuangco Agreement by reference. 1318. Section 3(r) of the Rules of Court states: Agreement the status of a law. or. must be of the full text of the law since the purpose of publication is to inform the public of the contents of the law. as further held in Tañada. 1975. (3) Cause of the obligation which is established. Inc. which could compensate for generous payment to him by PCA of valuable shares of stock. paragraph 3 in relation to Article 1409. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Tuvera37 said as much: government of the said option. in behalf of FUB/UCPB. and (3) there was sufficient consideration for a contract. 1409.—The following presumptions are satisfactory if uncontradicted. and indeed especially. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their existence and contents are confirmed by a valid publication intended to make full disclosure and give proper notice to the people. parry or cut unless the naked blade is drawn. thus. at present. The furtive law is like a scabbarded saber that cannot feint. Correspondingly. which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature. 41 Publication of the law is indispensable in every case x x x. 43 The Sandiganbayan found and so tagged the alleged cause for the agreement in question. 3.e. would show that Cojuangco was not the only seller. In fact.400 shares. as the Sandiganbayan deduced. As such. (2) the ordinary course of business has been followed. and which if no proof to the contrary is presented and offered. and in contracts of pure beneficence. The document itself is incontrovertible proof and hard evidence that petitioner Cojuangco had the right to purchase the subject FUB (now UCPB) shares. however.of presenting evidence to meet the legal presumption or the prima facie case created thereby. Indeed.) While one may posit that the PCA-Cojuangco Agreement puts PCA and the coconut farmers at a disadvantage. it is presumed that consideration exists and is lawful unless the debtor proves the contrary. New Civil Code). the commission of what the law knows as an actionable wrong. Except in cases specified by law. as stipulated in the May 25. in addition. Mahinay: 45 Under Article 1354 of the Civil Code. the alleged lack of consideration must be shown by preponderance of evidence. Cajucom. The effect of a legal presumption upon a burden of proof is to create the necessity of presenting evidence to meet the legal presumption or the prima facie case created thereby. The Sandiganbayan’s stated observation. Cojuangco had no personal and exclusive option to purchase the FUB shares from Pedro Cojuangco had really little to commend itself for acceptance. Moreover. the prestation or promise of a thing or service by the other. THEREFORE. As compensation for exercising his personal and exclusive option to acquire the Option ShareApplying Samanilla to the case at bar. which fact is not disputed. but by the presumption.46(Emphasis supplied. will prevail. The burden of proof remains where it is. lesion or inadequacy of cause shall not invalidate a contract. and (2) that the SELLER shall receive compensation for exercising his personal and exclusive option to acquire the Option Shares. pointed to the perceived "lack of any pecuniary value or advantage to the government of the said option. It is even clear as day that none of the parties who entered into the two agreements with petitioner Cojuangco contested nor sought the nullification of said agreements. (Emphasis Ours. as plaintiff a quo. like the PCA. (Emphasis supplied. stoops down to level of an ordinary citizen when it enters into a private transaction with private individuals. The Sandiganbayan. Villa51 elucidates why a bad transaction cannot serve as basis for voiding a contract: x x x Courts cannot follow one every step of his life and extricate him from bad bargains. under Section 3. and the same has been reduced into a public instrument will all due formalities and solemnities as in this case. (Emphasis supplied. it need not be monetary.)s and for transferring such shares to the coconut farmers. all they have in the world. because the presumption stands in the place of evidence unless rebutted. In this setting. because the presumption stands in the place of evidence unless rebutted. as opposed to the fact that such sale and purchase agreement is memorialized in a notarized document whereby both Eduardo Cojuangco. In onerous contracts the cause is understood to be. Petitioners failed to discharge this burden x x x. more particularly the PCA who is always provided legal advice in said transactions by the Government corporate counsel. With the silence of PCA not to challenge the validity of the PCA-Cojuangco Agreement and the inability of government to demonstrate the lack of ample consideration in the transaction. mistake or undue influence.304 fully paid shares in accordance with the procedure set forth in paragraph 6 below. the facts do not make out a clear case of violation of any law that will necessitate the recall of said contract. make ridiculous contracts. and documents acknowledged before a notary public have in their favor the disputable presumption of regularity. and for performing the management services required of him hereunder. A government agency. SELLER shall receive equity in the Bank amounting. 1350.) A perusal of the PCA-Cojuangco Agreement disclosed an express statement of consideration for the transaction: NOW. the Court is left with no other choice but to uphold the validity of said agreements. for each contracting party.) . "generally carries the evidentiary weight conferred upon it with respect to its due execution. before the courts are authorized to lay hold of the situation and remedy it. therefore. for that matter.) Vales v. but by the presumption. The exercise of such right resulted in the execution of the PC-ECJ Agreement.48 the Court clarified that the presumption of a valid consideration cannot be discarded on a simple claim of absence of consideration. Res ipsa loquitur. x x x Men may do foolish things. We do not find the stipulated price as so inadequate to shock the court’s conscience. (2) the ordinary course of business has been followed. A notarized document. The burden of proof remains where it is. A presumption may operate against an adversary who has not introduced proof to rebut it. the express and positive declaration by the parties of the presence of adequate consideration in the contract makes conclusive the presumption of sufficient consideration in the PCA Agreement. and Pedro Cojuangco attested to the correctness of the provisions thereof. if no proof to the contrary is presented and offered. and lose money by them – indeed. mistake or undue influence.) The assumption that ample consideration is present in a contract is further elucidated in Pentacapital Investment Corporation v. use miserable judgment. To overcome the presumption of consideration. for transferring such shares to the coconut farmers at the option price of P200 per share. (Emphasis ours. the presumption contextually operates in favor of Cojuangco and against the Republic. does not render a contract void under Article 1355 of the Civil Code: Art. Obviously then. which could compensate for the generous payment to him by PCA of valuable shares of stock. the one who has that burden is relieved for the time being from introducing evidence in support of the averment. Moreover. 1975 Agreement between him and the PCA. relieve him from one-sided contracts. that there was fraud. or annul the effects of foolish acts. in remuneratory ones. among which was that Eduardo had such option to purchase. however. (Emphasis supplied. the anti-graft court has not put forward any specific stipulation therein that is at war with any law. This." 49 Inadequacy of the consideration. that based on the wordings of the Second Agreement. to 95. the option to purchase shares and management services for UCPB was already availed of by petitioner Cojuangco for the benefit of the PCA. the one who has that burden is relieved for the time being from introducing evidence in support of the averment.) The rule then is that the party who stands to profit from a declaration of the nullity of a contract on the ground of insufficiency of consideration––which would necessarily refer to one who asserts such nullity––has the burden of overthrowing the presumption offered by the aforequoted Section 3(r). Agustin 47 teaches. xxxx 4." In Samanilla v. Lazaro v. which then had the burden to prove that indeed there was no sufficient consideration for the Second Agreement. While consideration is usually in the form of money or property. Rule 131 of the Rules of Court. especially when the contract itself states that consideration was given: x x x This presumption appellants cannot overcome by a simple assertion of lack of consideration. 1355. PCA is bound by the law on contracts and is bound to comply with the terms of the PCA-Cojuangco Agreement which is the law between the parties. (Article 1355. Court of Appeals50 is instructive that lack of ample consideration does not nullify the contract: Inadequacy of consideration does not vitiate a contract unless it is proven which in the case at bar was not. (Emphasis supplied.) Alsua-Betts v. unless there has been fraud. and (3) there was sufficient consideration for a contract. and a battery of lawyers and presumably the COA auditor assigned to said agency. the mere liability of the benefactor. considering that the price paid was much higher than the assessed value of the subject properties and considering that the sales were effected by a father to her daughter in which case filial love must be taken into account. protect him from unwise investments. Especially may not the presumption be so lightly set aside when the contract itself states that consideration was given. the following are disputable presumptions: (1) private transactions have been fair and regular. or the Constitution. in the aggregate. will prevail. (Emphasis ours. the parties hereby declare and affirm that their principal contractual intent is (1) to ensure that the coconut farmers own at least 60% of the outstanding capital stock of the Bank. but not for that alone can the law intervene and restore. There must be. Jr. for and in consideration of the foregoing premises and the other terms and conditions hereinafter contained. a violation of law. the service or benefit which is remunerated. This is clear from Article 1350 which reads: Art. The presumption that a contract has sufficient consideration cannot be overthrown by the bare uncorroborated and self-serving assertion of petitioners that it has no consideration. and which. as well as for performing the management services required of him. Monte de Piedad y Caja de Ahorros52 tells us of the meaning of consideration: x x x A consideration. The fact remains. the Sandiganbayan centered on the alleged imaginary option claimed by petitioner to buy the FUB shares from the Pedro Cojuangco group. The execution of the PC-ECJ Agreement on the same day as the PCA-Cojuangco Agreement more than satisfies paragraph 2 thereof which requires petitioner to exercise his option to purchase the FUB shares as promptly as practicable after. IV COJUANGCO IS NOT ENTITLED TO THE UCPB SHARES WHICH WERE BOUGHT WITH PUBLIC FUNDS AND HENCE. The Escrow Agent shall thereupon issue its check in favor of the SELLER covering the purchase price for the shares delivered." If petitioner is the only buyer. Still we can only speculate as to the true intentions of the parties. of legal age and with residence at 136 9th Street corner Balete Drive. (Emphasis Ours. As promptly as practicable after execution of this Agreement. the Court is left with no option but to uphold the validity of the two agreements in question. EDGARDO J. the very same issue took center stage.) The Court rules that the transfer of the subject UCPB shares is clearly supported by valuable consideration. thus: 2. the UCPB shares acquired using the coconut levy funds are public funds. that the identities of the unnamed buyers were not revealed up to the present day. The consequence is he can legally sell the shares to PCA. Such conjecture cannot prevail over the fact that without petitioner Cojuangco. The issue of whether or not taxpayers’ money. In fact. only the parties can explain the reasons behind the execution of the two agreements and the SPA on the same day. Again. the instant case inquires whether the coconut levy funds. Evidently. ANGARA. JR. 1975. the PC-ECJ Agreement could not have been consummated and enforced. which is May 25. Without any evidence adduced on this issue. As We wrote in Republic v. Preliminarily. We can opt to treat the PC-ECJ Agreement as a totally separate agreement from the PCA-Cojuangco Agreement but it will not detract from the fact that petitioner actually acquired the rights to the ownership of the FUB shares from the Pedro Cojuangco group. The pertinent portion of said agreement reads: EDUARDO COJUANGCO. ARE PUBLIC PROPERTY. The Sandiganbayan viewed the compensation of petitioner of 14. then the presumption that "private transactions have been fair and regular" 53 must apply. More importantly." It may be true that petitioner intended to include other buyers. Consequently. Angara. To justify the nullification of the PCA-Cojuangco Agreement. COCOFED: . COCOFED and related cases. determinative issue: Indeed. without more. be the basis for the conclusion as to the non-existence of the option of petitioner. he would resell the shares to PCA for a profit and PCA would still end up paying a higher price for the FUB shares. prejudice. however.54 citing Republic v. the execution of the second agreement.) A plain reading of the aforequoted description of petitioner as a party to the PC-ECJ Agreement reveals that petitioner is not only the buyer. And there is hardly any question about the subject funds’ public and special character. benefit. Republic. any use or transfer of the funds that directly benefits private individuals should be invalidated. the fact that the PC-ECJ Agreement was executed not earlier than May 25. unfortunately. or disadvantage suffered or undertaken by the promisee other than to such as he is at the time of consent bound to suffer. (Emphasis supplied. x x x. proved the exercise of the option by petitioner. In the absence of proof to the contrary and considering the absence of any complaint of illegality or fraud from any of the contracting parties. it is PCA which has the right to challenge the stipulations on the management contract as unenforceable. Filipino. Thus. This is clear from the word "BUYERS. He is the named buyer and there are other buyers who were unnamed. still it does not necessarily follow that petitioner had no option to buy said shares from the group of Pedro Cojuangco. (hereinafter collectively called the "BUYERS"). for and in his own behalf and in behalf of certain other buyers. the Court will not venture on any unproven conclusion or finding which should be avoided in judicial adjudication. none of the two agreements in question would have been executed and implemented and the FUB shares could not have been successfully conveyed to PCA. However. They were. the coconut levy was imposed in the exercise of the State’s inherent power of taxation. In this scenario. that the PC-ECJ Agreement appears to have been executed on the same day as the PCA-Cojuangco Agreement (dated May 25." The fact that the execution of the SPA and the PCA-Cojuangco Agreement occurred sequentially on the same day cannot. in the legal sense of the word. loss. The coincidence on the dates casts "doubts as to the existence of defendant Cojuangco’s prior ‘personal and exclusive’ option to the FUB shares. however. is some right. Otherwise. Again. the first Agreement did not create the option. The "profit" that will accrue to petitioner may just be equal to the value of the shares that were given to petitioner as commission.It. Quezon City. Lastly. then his description as a party to the sale would only be "BUYER. The anti-graft court also inferred from the date of execution of the special power of attorney in favor of now Senator Edgardo J.400 FUB shares as exorbitant. precluded from elucidating the reasons behind such occurrence. or any detriment.Gabriel v. the proposition that the option does not exist has no leg to stand on. It relied on the phrase "in behalf of certain other buyers" mentioned in the PC-ECJ Agreement as basis for the finding that petitioner’s option is neither personal nor exclusive. discussed and was directly addressed in COCOFED v. or advantage conferred upon the promisor.. PCA has waived and forfeited its right to nullify said stipulations and is now estopped from questioning the same. 1975). 2003 Partial Summary Judgment. interest. and not before. We have hitherto discussed. Indeed. it must be emphasized that from its terms. In the absence of such illuminating proof. The coconut levy funds were exacted for a special public purpose. 1975 proves that petitioner Cojuangco had an option to buy the FUB shares prior to that date. represented in this act by his duly authorized attorney-in-fact. the very execution of the first agreement undeniably shows that he had the rights or option to buy said shares from the Pedro Cojuangco group. PCA chose not to assail said stipulations and instead even complied with and implemented its prestations contained in said stipulations by installing petitioner as Chairman of UCPB. Republic. to which he is otherwise not lawfully entitled. the fact that PCA entered into an agreement to purchase the FUB shares with petitioner militates against such conjecture since there would be no need at all to enter into the second agreement if PCA was already a buyer of the shares in the first contract. and accordingly. however. petitioner was no longer allowed to testify on the matter and was precluded from explaining the transactions because of the motion for partial summary judgment and the eventual promulgation of the July 11. While one can conjure or speculate that PCA may be one of the buyers. settle once and for all this core. The following excerpts from COCOFED v. In view of the foregoing. The conclusion is incontestable that petitioner indeed had the right or option to buy the FUB shares as buttressed by the execution and enforcement of the very document itself. respondent interjects the thesis that PCA could not validly enter into a bank management agreement with petitioner since PCA has a personality separate and distinct from that of FUB. the SELLER shall exercise his option to acquire the Option Shares and SELLER shall immediately thereafter deliver and turn over to the Escrow Agent such stock certificates as are herein provided to be received from the existing stockholders of the bank by virtue of the exercise on the aforementioned option. or funds and property acquired through the imposition of taxes may be used to benefit a private individual is once again posed. Even if conceding for the sake of argument that PCA is one of the buyers of the FUB shares in the PC-ECJ Agreement. It is only the parties to the PC-ECJ Agreement that can plausibly shed light on the import of the phrase "certain other buyers" but. …. an independent government corporation directly under the President." (c) They were clearly imposed for a public purpose.000. courts do not.A. as amended by E. Thus. and all its components. the current levy being collected shall be continued.e. 1973. desiccators and other end-users of copra or its equivalent in other coconut products. There is absolutely no question that they were collected to advance the government’s avowed policy of protecting the coconut industry." Like other tax measures. which created the … (CCSF). They were raised with the use of the police and taxing powers of the State for the benefit of the coconut industry and its farmers in general. with the end-goal of developing the entire coconut industry. which is so affected with public interest as to be within the police power of the State. the investment. 276 did not raise money to boost the government’s general funds but to provide means for the rehabilitation and stabilization of a threatened industry.00 per 100 kilograms of copra resecada or its equivalent in other coconut products. In the same vein.D. it is still public in character…. And. the cocolevy funds were imposed pursuant to law. oil millers. thusly: We have ruled time and again that taxes are imposed only for a public purpose.D. copra exporters. Executive Secretary 55 came next: The Court was satisfied that the coco-levy funds were raised pursuant to law to support a proper governmental purpose. 6260 and P. 388. that law cannot be said to satisfy the requirement of public purpose. with the intent to give undue benefit or advantage to private persons.00 per picul from the sugar proceeds of the sugar producers pursuant to P. Needless to stress. such as the subject UCPB shares. or the promotion of private enterprises. (b) The coconut levies were imposed pursuant to the laws enacted by the proper legislative authorities of the State. 1956. 276 and 582. the coconut industry. The Bureau of Internal Revenue (BIR) treated them as public funds and the very laws governing coconut levies recognize their public character. A levy. Republic Planters Bank. it is at once apparent that any property acquired by means of the coconut levy funds. sugarcane planters and millers sought the distribution of the shares of stock of the Republic Planters Bank (RPB). Of course. therefore." The Court amply reasoned that the sugar stabilization fund is to "be utilized for the benefit of the entire sugar industry. Until otherwise prescribed by the Authority. and coconuts and their byproducts occupy a leading position among the country’s export products. and the oil price stabilization funds under P.. or its equivalent … delivered to. and c) it is levied for the support of the government. initially. would contravene the rationale behind the imposition of taxes or levies. The COA reviewed the use of the funds. 388. We cannot subscribe to the idea of what appears to be an indirect – if not exactly direct – conversion of special funds into private funds. at the discretion of the Court. or both. 276." Such penalties were later amended thus: …. It is. the purchase of RPB. the free distribution of shares . or suffer cancellation of licenses to operate. stabilization of the domestic market including foreign market. In that case. The coconut levy funds fall squarely into these elements for the following reasons: (a) They were generated by virtue of statutory enactments imposed on the coconut farmers requiring the payment of prescribed amounts. should be treated as public funds or public property. "They cannot be used for purely private purposes or for the exclusive benefit of private persons. allow by judicial fiat the conversion of special funds into a private fund for the benefit of private individuals. or are a part of the coconut industry. 276: "3. Clearly. Here. the CCSF was collected under PD No. R. namely. Taxes are enforced proportional contributions from persons and property. in addition to penalties already prescribed under existing administrative and special law. and to secure economic benefits for the coconut farmers and far workers. Republic. as the respondent public officials pointed out. pay a fine of not less than P2." The coco levies were further clarified in amendatory laws. …. as they cannot. effective at the start of business hours on August 10. are enforced proportional contributions from persons and properties. The Court has also recently declared that the coco-levy funds are in the nature of taxes and can only be used for public purpose. (Emphasis Ours. PD No. the petitioning sugar producers." When a law imposes taxes or levies from the public. shall be imposed on every first sale.D. that the revenues received from the imposition of the coconut levies be used purely for private purposes to be owned by private individuals in their private capacity and for their benefit. R. 276. The levy shall be paid by such copra exporters. This Court takes judicial notice of the fact that the coconut industry is one of the great economic pillars of our nation. a tax has three elements. From the foregoing. desiccators and other end-users of copra or its equivalent in other coconut products under such rules and regulations as the Authority may prescribe.Indeed. the coconut levy funds were sourced from forced exactions decreed under P. unlike ordinary revenue laws. namely: a) it is an enforced proportional contribution from persons and properties. 137. delved into such limitations. i.A." Similarly in this case. one of the main economic backbones of the country. In Gaston v. 1468 – in this wise: "The Authority (PCA) is hereby empowered to impose and collect a levy.D. Even if the money is allocated for a special purpose and raised by special means. the pertinent laws used the term levy. exacted by the State by virtue of its sovereignty for the support of government and for all public needs. coconut levy funds partake of the nature of taxes. 961 and PD No. which means to tax. Nos. as provided under PD No. the Court observed that certain agencies or enterprises "were organized and financed with revenues derived from coconut levies imposed under a succession of law of the late dictatorship … with deposed Ferdinand Marcos and his cronies as the suspected authors and chief beneficiaries of the resulting coconut industry monopoly. the Court held that to rule in their favor would contravene the general principle that revenues received from the imposition of taxes or levies "cannot be used for purely private purposes or for the exclusive benefit of private persons. the industry being of vital importance to the country’s economy and to national interest. on every one hundred kilos of copra resecada.. In ruling against the petitioners. 276. specifically PD No. i. which. as a separate trust fund which shall not form part of the general fund of the government. they were not voluntary payments or donations by the people. in general. 7(b) of P. Any person or firm who violates any provision of this Decree or the rules and regulations promulgated thereunder. PCGG.D. was funded by the deduction of PhP 1. Taxation is done not merely to raise revenues to support the government. It cannot be denied that the coconut industry is one of the major industries supporting the national economy.e. oil millers. levied by the State by virtue of its sovereignty for the support of the government and for all its public needs. Indeed. 500 or more than P10. to hold therefore. b) it is imposed by the State by virtue of its sovereignty. which is so affected with public interest as to be within the police power of the State …. and/or purchased by. Even if these private individuals belong to. to be known as the Coconut Consumers Stabilization Fund Levy.) The following parallel doctrinal lines from Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan (PKSMMN) v. alleging that they are the true beneficial owners thereof. the State’s concern to make it a strong and secure source not only of the livelihood of a significant segment of the population. shall. mandated the following: "a. in describing the exaction. among others." The Court continued: "…. by using special funds to purchase shares of stocks. The subject laws are akin to the sugar liens imposed by Sec.D. of P15. No. In Cocofed v. 232. They were enforced contributions exacted on pain of penal sanctions. "The proceeds from the levy shall be deposited with the Philippine National Bank or any other government bank to the account of the Coconut Consumers Stabilization Fund. in accordance with the mechanics established under RA 6260. The funds were collected and managed by the PCA. but also of export earnings the sustained growth of which is one of the imperatives of economic stability. subject to the burdens and restrictions attached by law to such property. but also to provide means for the rehabilitation and the stabilization of a threatened industry. Based on its definition. The funds sought to support the coconut industry. even by law.O. COCOFED v. 6260 and P. which in turn would be distributed for free to private individuals. D. the entire acquisition price for the 72. As MODIFIED. and ordered reconveyed to the Government.1âwphi1 We. 276. does not and cannot entitle them to be beneficial owners of the subject funds – or more bluntly. or a total of 7..22% of the FUB shares without violating the constitutional caveat that public funds can only be used for public purpose. subscribed and paid by PCA. 755. 56 In this case. but not limited to. 3.884) shares out of the authorized but unissued shares of the bank. Cojuangco received public assets – in the form of FUB (UCPB) shares with a value then of ten million eight hundred eighty-six thousand pesos (PhP 10. 1975 Agreement between the PCA and Cojuangco provided for the transfer to the latter. as well as any increments thereto arising from. dated May 25.60 It is precisely for the foregoing that impels the Court to strike down as unconstitutional the provisions of the PCA-Cojuangco Agreement that allow petitioner Cojuangco to personally and exclusively own public funds or property.2% FUB (now UCPB) shares of stocks PCA purchased using the coconut levy funds. taxes are imposed only for a public purpose. 1 of P.) As the coconut levy funds partake of the nature of taxes and can only be used for public purpose. and that the funds were channeled to the purchase of shares of stock in respondent Bank do not convert the funds into a trust fund for their benefit nor make them the beneficial owners of the shares so purchased.886. the development. 0033-A. they cannot be used to benefit––whether directly or indirectly–– private individuals. which the Court seeks to uphold.22% fully paid shares subject of the instant petition. 0033-A is AFFIRMED with modification. …. be it by way of a commission. or the so-called "Cojuangco-UCPB shares" is declared unconstitutional. particularly the CCSF. Cojuangco. The transfer by PCA to defendant Eduardo M. Cojuangco cannot stand to benefit by receiving. To compound the situation. Jr.1âwphi1 4. provisions that convert public property into private funds to be used ultimately for personal benefit: … not only were the laws unconstitutional for decreeing the distribution of the shares of stock for free to the coconut farmers and therefore negating the public purposed declared by P. No. i. Nos.2% option shares. The conversion of public funds into private assets was illegally allowed. Invalid stipulations that are independent of. grave injustice is inflicted not only upon the Government but most especially upon the citizenry––the taxpayers––to whom We owe a great deal of accountability. which as We previously clarified." 59 The ensuing are the underlying rationale for declaring. Cojuangco received the aforementioned asset as a result of the PCA-Cojuangco Agreement.e." 64 But apart from the stipulation in the PCA-Cojuangco Agreement. 7. as unconstitutional. paid or issued thereon. 1.e.65 WHEREFORE. therefore. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M. hence null and void.2% shares of the FUB/UCPB paid for by the PCA with public funds later charged to the coconut levy funds. the offending provisions effectively removed the coconut levy fund away from the cavil of public funds which normally can be paid out only pursuant to an appropriation made by law. COJUANGCO. desiccators and other end-users of copra or its equivalent in other coconut products. Section 29 (3) of the Constitution. i. and c. Cojuangco. for the purpose for which it was exacted. 1975 is a valid contract for having the requisite consideration under Article 1318 of the Civil Code. 1975 nor did it give the Agreement the binding force of a law because of the non-publication of the said Agreement. oil millers. void. . therefore. which form part of the 72. other provisions are valid and shall be enforced.000) in 1975. to be used "only for the benefit of all coconut farmers and for the development of the coconut industry. in fact mandated. shall "be used only for the benefit of all coconut farmers and for the development of the coconut industry. providing for the transfer to Cojuangco for the UCPB shares adverted to immediately above. Accordingly. the fact that the coconut levy funds were collected from the persons or entities in the coconut industry. to stabilize the price of edible oil and to protect the coconut industry. applies mutatis mutandis to this case: The stabilization fees in question are levied by the State … for a special purpose – that of "financing the growth and development of the sugar industry and all its components. They likewise reclassified the coconut levy fund as private fund. contrary to the original purpose for the creation of such fund. Sixty Four Thousand Nine Hundred Eighty (64. 1975. The ratio in Gaston. the disbursement of which We so greatly protect if only to give light and meaning to the mandates of the Constitution. the said private individuals cannot own the UCPB shares of stocks so purchased using the said special funds of the government. The UCPB shares of stock of the alleged fronts. Fifteen Thousand Eight Hundred Eighty-Four (15. 57 Likewise so. Sec. shall read as follows: C. or as the subject Agreement interestingly words it. and divisible from. 5. As heretofore amply discussed. In sum. admitted that the PCA paid. by way of compensation. 2. or shall be respected. Drawing a clear parallelism between Gaston and this case. no less. Jr. 2002 filed by Plaintiff. and importantly. nominees and dummies of defendant Eduardo M. It is but rational that the fees be collected from them since it is also they who are benefited from the expenditure of the funds derived from it. In this case. shall be reconveyed to the Government of the Republic of the Philippines. compensation.22% fully paid shares. In effect. 755 did not validate the Agreement between PCA and defendant Eduardo M. dated May 25. the pertinent provisions of P. belong to the plaintiff Republic of the Philippines as their true and beneficial owner. affirm. owners thereof in their private capacity.of stocks purchased with special public funds to them. the funds here were channeled to the purchase of the shares of stock in UCPB. to be owned by private individuals in their private capacities. the distribution by PCA of the UCPB shares purchased by means of the coconut levy fund – a special fund of the government – to the coconut farmers is. Parenthetically. The Agreement between PCA and defendant Eduardo M.D. Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d) of the PCA-Cojuangco Agreement dated May 25. and exclusively benefited himself by owning property acquired using solely public funds.D. the exercise of pre-emptive rights. Part C of the appealed Partial Summary Judgment in Sandiganbayan Civil Case No. rehabilitation and stabilization of the coconut industry. therefore. 62 Otherwise. b. Cojuangco. In this context. out of the 72. the May 25.980) shares of the increased capital stock subscribed and paid by PCA. by these provisions. Jr. more specifically paragraph 4 in relation to paragraph 6 thereof. The above-mentioned shares of stock of the FUB/UCPB transferred to defendant Cojuangco are hereby declared conclusively owned by the Republic of the Philippines to be used only for the benefit of all coconut farmers and for the development of the coconut industry. Jr.) dated September 18. consisting of a. stabilization of the domestic market including the foreign market. Clearly therefore. the coconut levy funds were being exacted from copra exporters. if the corresponding prestation had already been performed. the UCPB shares of stock representing the 7. of 14. among others. the decision of the Sandiganbayan nullifying the shares of stock transfer to Cojuangco. That the fees were collected from sugar producers etc. Consequently. out of the CCSF.400 shares of stock of FUB (later UCPB) from the "Option Shares" and the additional FUB shares subscribed and paid by PCA. as articulated below." The fact that the State has taken possession of moneys pursuant to law is sufficient to constitute them as state funds even though they are held for a special purpose…. on this ground. the rest of the agreement and which can easily be separated therefrom without doing violence to the manifest intention of the contracting minds do not nullify the entire contract. No. Accordingly. the dispositive portion in Part C of the Sandiganbayan’s Partial Summary Judgment in Civil Case No. 58 (Emphasis Ours. 63 This is in clear violation of the prohibition. 961 and 1468 are unconstitutional for violating Article VI.. with all dividends declared. paid by coconut levy funds. Cojuangco. be used for the benefit of the public and not for the exclusive profit or gain of private persons. JR. nevertheless cannot be justified.. the 7.22% FUB (UCPB) shares that were given to Cojuangco shall be returned to the Government. of 10% of the shares subject of the agreement. Cojuangco. 61 They must. in his private capacity. Branch 58. into other productive uses to promote the economic and social development of Central Luzon in particular and the country in general. Sta. and 10380.693 Rosemary Eng Tay Tan Diosdado O. (f) To establish a mechanism in coordination with the appropriate local government units to effect meaningful consultation regarding the plans. hold and/or administer the military reservations of John Hay Air Station. 10362. 1998.825 8.982 608 919 Benjamin G. 00477828 00559057 00477832 00477833 00477834 00477823 00477824 00477825 00477826 00477827 NAME TCT No.[14] On March 31. or resettlement of population within the Clark and Subic military reservations and their extensions as may be deemed necessary and beneficial by the Conversion Authority. (e) To manage and operate through private sector companies developmental projects outside the jurisdiction of subsidiary companies and Special Economic Zones declared by presidential proclamations and established under this Act. Provincial Agrarian Reform Officer of Pampanga On April 3. relocation. and covered by Transfer Certificate of Title (TCT) Nos. 2000. [11] creating and designating the areas covered by the CSEZ as those “consisting of the Clark military reservations.[3] as amended by Republic Act No. as the government official who has custody of all the original copies of the Certificates of Title subject of this petition. 80 [9] was issued. [15] wherein they created a CSEZ Technical Research Committee to conduct a technical research of properties within CSEZ covered by patents and certificates of title. program and undertake the readjustment. which had just been transferred to the BCDA. entered into a Memorandum of Agreement (MOA). 18257 and TCT No. 10363. de Guzman Antonio M. 10378. Antonio Manalo. Leandro de Guzman. BSD 10204 portion of Lot 857. in coordination with the appropriate government agencies and local government units.769 Leandro de Guzman 324 2000 Socorro de Guzman Leandro de Guzman Benjamin Poy Lorenzo 325 326 327 20. Diosdado de Guzman. J. 10377. (b) To adopt. Ramos likewise issued Proclamation No. Rosemary Eng Tay Tan. The following CLOA’s with a total area of 3[1. Property is covered by TCT No. had already been issued in the names of private individuals.[10] DECISION LEONARDO-DE CASTRO. Lorenzo.Accordingly. 7227 or the Bases Conversion and Development Act of 1992. the BCDA became the owner of these lands. (c) To encourage the active participation of the private sector in transforming the Clark and Subic military reservations and their extensions into other productive uses. applications for patent and title registration. Lavernie Poy Lorenzo. was later partially cancelled due to the issuance of Nine (9) [C]ertificates of Land Ownership Award (CLOA) from the Department of Agrarian Reform dated June 19. the areas turned over to the Department of Agrarian Reform (DAR). [16] The objective was to identify various levels of ownership claims as reflected in the official records of the concerned agencies. programs and projects within the regions where such plans. these lands were transferred to the BCDA. CDC. the instant petition is hereby DENIED. AREA (sq. 10379.612 . Bataan) and those portions of Metro Manila military camps which may be transferred to it by the President. and Benjamin Poy Lorenzo. Lorenzo 323 1. and the Department of Environment and Natural Resources (DENR) Region III. Bases Conversion Development Authority v. 18247-R [13] and 18257-R. [17] The CSEZ Technical Research Committee discovered that titles over parcels of land within the CSEZ. property surveys. which shall determine how to utilize and dispose of such lands.825 20. This lot is equivalent to Lot 857-A of Angeles Cadastre.[8] On the same day. prepare and implement a comprehensive and detailed development plan embodying a list of projects including but not limited to those provided in the Legislative-Executive Bases Council (LEBC) framework plan for the sound and balanced conversion of the Clark and Subic military reservations and their extensions consistent with ecological and environmental standards. as the government official responsible for approving and issuing the Certificates of Land Ownership Awards (CLOAs) involved in this case. covered by a title in the name of the Republic of the Philippines. programs and/or project development are part of the conversion of the Clark and Subic military reservations and their extensions and the surrounding communities as envisioned in this Act. in the name of the Republic of the Philippines. 18247. and Socorro de Guzman (private respondents) as the private individuals who were awarded the CLOAs. 2002 Order of the Regional Trial Court (RTC) of Angeles City. as registered in the name of the Republic of the Philippines. O'Donnell Transmitter Station. and the areas in the reverted baselands for military use. 163. Benjamin G.[4] The respondents are the Provincial Agrarian Reform Officer (PARO) of Pampanga. To plan. then President Fidel V. [5] Pursuant to the national policy of accelerating the sound and balanced conversion of the Clark and Subic military reservations and their extensions into alternative productive uses for the promotion of economic and social development of Central Luzon and the entire country in general. (g) SO ORDERED. and tax declarations and payments. 1993. As such. including the Clark Air Base proper and portions of the Clark reverted baselands. Rita Station (Hermosa. authorizing the establishment of the Clark Development Corporation (CDC) to act as the operating and implementing arm of the BCDA with regard to the management of the Clark Special Economic Zone (CSEZ). the Bureau of Local Government Finance (BLGF).” [12] Under Section 2 of Proclamation No. (d) To serve as the holding company of subsidiary companies created pursuant to Section 16 of this Act and to invest in Special Economic Zones declared under Sections 12 and 15 of this Act. Wallace Air Station. Benjamin Poy Lorenzo 329 13. in Civil Case Nos.: This is a petition for review on certiorari to reverse the September 24. [1] [2] Petitioner Bases Conversion Development Authority (BCDA) is a government owned and controlled corporation (GOCC) created under Republic Act No. the Land Registration Authority (LRA). the Register of Deeds of Pampanga (Register of Deeds). Manalo 394 321 322 23. and excluding the areas covered by previous Presidential Proclamations. 10376. San Miguel Naval Communications Station. Mt. Executive Order No. [6] the BCDA was created[7] with the following purposes: (a) To own. 7917.]891 hectares were inscribed at the back of the title as encumbrances[:] CLOA No. 10364. to wit: Certificate of Land Ownership Award A property within CSEZ Main Zone near the Friendship Gate. and Costs against petitioner Cojuangco.009 Lavernie Poy Lorenzo 328 2. 163. The BCDA went on to point out Benjamin Poy Lorenzo’s improper initiation of a contempt proceeding. Since the alleged misconduct falls under indirect contempt. for allegedly certifying before the RTCs in Angeles City. proceedings should be initiated either motu proprio by order of or a formal charge by the offended court. in both complaints for expropriation. at the outset.00477829 Lavernie Poy Lorenzo 330 164[18] In view of the findings. the BCDA mentioned it both in its Complaint for Expropriation[39] and in its Verification and Certification as to Non-Forum Shopping. Corollarily. Primary. averred that it was erroneous to state that the DARAB had jurisdiction over the cases as they do not involve an agrarian reform issue. that the private respondents’ titles were subject to pending complaints at the RTC for Cancellation of Title. the PARO. were awarded to the private respondents as the bona fide and de jure farmerbeneficiaries under Republic Act No. x x x. [27] The BCDA. These allegations alone had divested this court from acquiring jurisdiction over the subject matter of the cases. [25] the private respondents and the PARO moved for the dismissal of the complaints based on the following grounds: 1. RTC JUDGE PHILBERT ITURALDE. The BCDA added that the subject properties. were reserved by the Philippine government as part of the Clark military reservations in accordance with the 1947 Military Bases Agreement between the Philippines and the United States of America. and the Register of Deeds of Angeles City. they could not be the subject of an award by the PARO. 10363. and were derivative titles of Original Certificate of Title (OCT) issued earlier. without prejudice. 2002. it had no intention at all to mislead the RTCs of Angeles City as it mentioned. in dismissing the cases. which had already been transferred to it. which were part of the landholdings of the National Housing Authority. xxxx This Court believes that it is the Department of Agrarian Reform which is vested with exclusive jurisdiction to try and decide the instant controversy. the BCDA claims. 10376. Anent the Motion to Cite the BCDA in Contempt This Court. the BCDA said. which became the bases for the TCTs issued to private respondents. for being prematurely filed. ---The Agrarian Reform Adjudication Board shall have primary jurisdiction.[23] issued on February 11. cases. were issued by the Register of Deeds. 6657 or the Comprehensive Agrarian Reform Law of 1988.[37] the private respondents reiterated their position that under Section 50 of Republic Act No. including disputes concerning farmworkers associations or . Section 1 of the Revised Rules of Procedure of the DARAB provides: Section 1. Republic Act No. these titles are governed by the Torrens system. denying the motion of Benjamin Poy Lorenzo and will not belabor the point that such is not in keeping with the rules and jurisprudence. That the Honorable [RTC] with due respect lacks jurisdiction over the subject matter and the nature of the action in the instant case. wherein it filed eminent domain cases against him [32] and Lavernie Poy Lorenzo. to determine and adjudicate all agrarian disputes. Rule II of the DARAB New Rules of Procedure. [21] Moreover. and 10380. the jurisdiction over their cases falls under the DARAB. 2004. whether leasehold. [20] In its complaints. The RTC added: Evident on the allegations in the complaint that plaintiff BCDA impugned the validity of the issuances of the subject CLOAs to private respondents and questioned the act of public respondent PARO to be beyond of its authority in awarding the subject parcels of land to said respondents on the ground that the subject parcels of land are outside the areas allocated to the Department of Agrarian Reform to be distributed to farmer-beneficiaries and that the same is registered in the name of the Republic of the Philippines. commenting[28] on the Motions to Dismiss. as holders of CLOAs. Moreover. 10364. the BCDA claimed that the approval and issuance of CLOAs by the PARO. 3844 as amended by Republic Act No. It is not a simple cancellation of registration of title as the same involves agrarian reform issues. there must exist a tenancy relationship between the parties. and Section 1. private respondent Benjamin Poy Lorenzo. 229. 10378. 18247-R[22] and 18257-R. the BCDA argued that the complaints for expropriation involve issues that are completely different from the one posed in this petition. [36] In their Comment. as the BCDA has shown. 1958. 6657. questions on the legality of their issuance should be addressed to the DARAB. it should not submit itself to the jurisdiction of the DARAB.[24] In their separate Motions to Dismiss. 6657. 10362. The BCDA further contends that under Sections 78 and 112 of the Land Registration Act. the BCDA filed separate Complaints for Cancellation of Title [19] against the private respondents. which original jurisdiction is vested with an administrative tribunal (DARAB). that it had not commenced a similar action before the Supreme Court. before this Court could resolve the petition. since the TCTs of the private respondents. the BCDA elevated its cause to this Court. much less to decide and delve into the issue of the legality of the issuances of the subject CLOAs. 6657 an “agrarian dispute” is defined as follows: (d) Agrarian Dispute refers to any controversy relating to tenurial arrangements. both original and appellate. [40] This Court is. [26] The respondents argued that since the subject properties. The BCDA believes that since it had no tenurial relationship with the private respondents. the BCDA alleged that since the properties (subject properties) were outside those allocated to DAR. declared that while it had jurisdiction to cancel CLOAs. On September 24.[30] Aggrieved. and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned. which is under the exclusive jurisdiction of the RTC. 228 and 129-A. 10379.[33] that it has not commenced any other action before this Court. and were already titled in the name of the Republic of the Philippines then transferred to the BCDA. on February 23. over lands devoted to agriculture. However. Original and Appellate Jurisdiction. would like to resolve Benjamin Poy Lorenzo’s motion to cite the BCDA in contempt. Moreover. were null and void in view of the fact that these subject properties were already titled in the name of the Republic of the Philippines under TCT Nos. Pampanga. That the [BCDA] has no cause or causes of action against the private defendant and public defendant PARO.[34] Issue The resolution of this petition boils down to the determination of the following lone issue as presented by the BCDA: THE SOLE ISSUE SUBMITTED FOR THE RESOLUTION OF THIS HONORABLE SUPREME COURT IS WHETHER THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB). tenancy. as it was done through a mere motion instead of a verified petition. Rule II. 6389. filed a Motion to Cite the Petitioner in Contempt of Court[31] for certifying before two branches of the RTC in Angeles City. 2. These cases were docketed as Civil Case Nos. HAS JURISDICTION OVER THE CASE AS RULED BY THE HON. 27 and other agrarian laws and their implementing rules and regulations. This Court’s Ruling on the Main Issue This case properly falls within the jurisdiction of the RTC. controversies. Presidential Decree No. Under Section 3(d) of Republic Act No. OR THE REGIONAL TRIAL COURT. the RTC has the authority to decide petitions for cancellation of titles. In fact. jurisdiction over the cancellation of their titles fall under the DAR through its Adjudication Board known as the Department of Agrarian Reform Adjudication Board (DARAB). stewardship or otherwise. the RTC issued one Order/Resolution [29] dismissing the eight cases. Opposing the motion. or by a verified petition with supporting particulars and certified true copies of documents or papers involved therein. [38] It is clear that Benjamin Poy Lorenzo has missed out on all of the above requirements. therefore. Executive Order Nos. it did not hide the fact that it had commenced a separate action involving his lot before RTC Branch 58 of Angeles City. The RTC. 10377. and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No.[35] The BCDA asseverates that for the case to fall within the ambit of DARAB’s jurisdiction. . Chairperson.. respondent Eduardo Hong. has jurisdiction over the mortgaged properties to the exclusion of any other court. 10379. 55208) the CA upheld the SEC ruling. the ex-officio sheriff has absolutely no . 1998. 1997. The case was remanded to the hearing panel for liquidation proceedings. Public auction of the mortgaged properties was scheduled on December 19.. The action filed by the BCDA was cognizable by regular courts.. which is not attendant in the instant case.-x Promulgated: February 15. maintaining. On September 16. Inc. [41] It is a basic rule that jurisdiction is determined by the allegations in the complaint. Consequently. claims and proceedings against EYCO until further orders from the SEC. No. doing business under the name and style “SUPER LINE PRINTING PRESS” and the COURT OF APPEALS. In the action filed by the BCDA. the SEC retains jurisdiction over the mortgaged properties of EYCO Properties. No...... 09-97-5764... The ex-officio sheriff has no authority to sell the mortgaged properties.. x. the issue to be resolved was who between the BCDA and the private respondents and their purported predecessors-in-interest. Said court is ORDERED to assume jurisdiction over Civil Case Nos... (CA-G. SP No. 2002 and Resolution[2] dated January 12. Respondents. Edgardo Tarriela was empowered by the SEC to receive and preserve all assets.. [7] Sometime in November 2000 while the case was still pending with the CA. at which the liquidation is pending. SO ORDERED.. one of the companies of EYCO. 10378..versus It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. CORONA. therefore. and 10380 and conduct further proceedings in said cases. an unsecured creditor of Nikon Industrial Corporation. [4] On September 14... Branch 58 of Angeles City dated September 24. 2005. The SEC. and cause their valuation (SEC Rules on Corporate Recovery. docketed as G.. even in the slightest. On its principal cause of action. EYCO then filed a petition for certiorari before this Court. C.. the petition is hereby GRANTED. a petition for extra-judicial foreclosure of real properties mortgaged to it by Eyco Properties. JR. whether the disputants stand in the proximate relation of farm operator and beneficiary. terminating EYCO’s proposed rehabilitation plan and ordering the dissolution and liquidation of the petitioning corporation. EDUARDO HONG.[5] On appeal by EYCO.. filed with the Office of the Clerk of Court.J. Therefore.. petitioner Bank of the Philippine Islands (BPI). Petitioner.. Inc. 10376. 10377. tenants and other agrarian reform beneficiaries. filed an action for injunction and damages against the petitioner in the same court (RTC of Valenzuela City).. Regional Trial Court of Valenzuela City. The Order/Resolution of the Regional Trial Court.. BANK OF THE PHILIPPINE ISLANDS. The case thus involves a controversy relating to the ownership of the subject properties. which is beyond the scope of the phrase “agrarian dispute. [8] Claiming that the foreclosure proceedings initiated by petitioner was illegal. 1997 enjoining the disposition in any manner except in the ordinary course of business and payment outside of legitimate business expenses during the pendency of the proceedings.... To allow the ex-officio sheriff to take possession of the mortgaged properties and sell the same in a foreclosure sale would be in derogation of said jurisdiction. 10364..”[43] The RTC.[6] Said resolution had become final and executory on June 16.. Section 6-4). and Blue Star Mahogany. Upon his appointment as liquidator. 10363. 161771 Present: 19.. docketed as SEC Case No. JJ.. as successor-in-interest of Far East Bank and Trust Company. Rule VI..: This petition for review on certiorari under Rule 45 assails the Decision[1] dated September 27.. 10362. SP No. 145977. .representation of persons in negotiating. All the assets of the EYCO Group should thus be surrendered for collation to the liquidator and all claims against the EYCO Group should be filed with the liquidator in the liquidation proceedings with the SEC. or lessor and lessee.. and suspending all actions.R.which case was eventually dismissed under Resolution dated May 3. 1999. have a valid title over the subject properties in light of the relevant facts and applicable laws. the hearing panel approved the proposed rehabilitation plan prepared by EYCO despite the recommendation of the management committee for the adoption of the rehabilitation plan prepared and submitted by the steering committee of the Consortium of Creditor Banks which appealed the order to the Commission. and VILLARAMA.. 64166.. J...[3] On December 18.. 2002 is REVERSED and SET ASIDE. fixing.R.... JR. G.. A stay order was issued on September 19.. DEL CASTILLO. 2012 DECISION VILLARAMA. 2005 upon joint manifestation and motion to dismiss filed by the parties. 2000. Inc.. landowner and tenant. the SEC rendered its decision disapproving the petition for suspension of payments.. [42] The BCDA’s complaints did not contain any allegation that would. 2004 of the Court of Appeals (CA) in CA-G. BERSAMIN. gravely erred when it dismissed the complaints on the grounds that they were prematurely filed. LEONARDO-DE CASTRO. the complaint alleged that: 18.R... imply that the issue to be resolved in this case involved an agrarian dispute..R. This Court agrees with the BCDA for this case to fall within the ambit of DARAB’s jurisdiction. WHEREFORE. changing or seeking to arrange terms or conditions of such tenurial arrangements. the EYCO Group of Companies (“EYCO”) filed a petition for suspension of payments and rehabilitation before the Securities and Exchange Commission (SEC).. the issue must be one that involves an agrarian dispute. jurisdiction to issue the notice of sheriff’s sale and to sell the mortgaged properties on 19 December 2000. 20. Moreover, the sale of the mortgaged properties on 19 December 2000 would give undue preference to defendant FEBTC to the detriment of other creditors, particularly plaintiff. This was specifically proscribed by the Supreme Court stating in the case of Bank of the Philippine Islands v. Court of Appeals that whenever a distressed corporation asks SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but shall stand on equal footing with other creditors. Consequently, foreclosure should be disallowed so as not to prejudice other creditors or cause discrimination among them. [9] (Emphasis supplied.) An action for injunction is a suit which has for its purpose the enjoinment of the defendant, perpetually or for a particular time, from the commission or continuance of a specific act, or his compulsion to continue performance of a particular act. It has an independent existence, and is distinct from the ancillary remedy of preliminary injunction which cannot exist except only as a part or an incident of an independent action or proceeding. In an action for injunction, the auxiliary remedy of preliminary injunction, prohibitory or mandatory, may issue.[18] As a rule, actions for injunction and damages lie within the jurisdiction of the RTC pursuant to Section 19 of Batas Pambansa Blg. 129, otherwise known as the “Judiciary Reorganization Act of 1980,” as amended by Republic Act (R.A.) No. 7691. Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original jurisdiction: After hearing, the trial court issued a temporary restraining order (TRO). Petitioner filed a motion to dismiss[10] arguing that by plaintiff’s own allegations in the complaint, jurisdiction over the reliefs prayed for belongs to the SEC, and that plaintiff is actually resorting to forum shopping since he has filed a claim with the SEC and the designated Liquidator in the ongoing liquidation of the EYCO Group of Companies. In his Opposition,[11] plaintiff (respondent) asserted that the RTC has jurisdiction on the issue of propriety and validity of the foreclosure by petitioner, in accordance with Section 1, Rule 4 of the 1997 Rules of Civil Procedure, as amended, the suit being in the nature of a real action. On January 17, 2001, the trial court denied the motion to dismiss. [12] Petitioner’s motion for reconsideration was likewise denied. [13] Petitioner challenged the validity of the trial court’s ruling before the CA via a petition for certiorari under Rule 65. The CA affirmed the trial court’s denial of petitioner’s motion to dismiss. It held that questions relating to the validity or legality of the foreclosure proceedings, including an action to enjoin the same, must necessarily be cognizable by the RTC, notwithstanding that the SEC likewise possesses the power to issue injunction in all cases in which it has jurisdiction as provided in Sec. 6 (a) of Presidential Decree (P.D.) No. 902-A. Further, the CA stated that an action for foreclosure of mortgage and all incidents relative thereto including its validity or invalidity is within the jurisdiction of the RTC and is not among those cases over which the SEC exercises exclusive and original jurisdiction under Sec. 5 of P.D. No. 902-A. Consequently, no grave abuse of discretion was committed by the trial court in issuing the assailed orders. With the CA’s denial of its motion for reconsideration, petitioner is now before this Court raising the sole issue of whether the RTC can take cognizance of the injunction suit despite the pendency of SEC Case No. 09-97-5764. The petition has no merit. Jurisdiction is defined as the power and authority of a court to hear and decide a case. [14] A court’s jurisdiction over the subject matter of the action is conferred only by the Constitution or by statute. [15] The nature of an action and the subject matter thereof, as well as which court or agency of the government has jurisdiction over the same, are determined by the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs.[16] And jurisdiction being a matter of substantive law, the established rule is that the statute in force at the time of the commencement of the action determines the jurisdiction of the court. [17] (1) In all civil actions in which the subject of the litigations is incapable of pecuniary estimation; xxxx (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising x x x judicial or quasi-judicial functions; xxxx (8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs or the value of the property in controversy exceeds Three hundred thousand pesos (P300,000.00) or, in such other cases in Metro Manila, where the demand exclusive of the abovementioned items exceeds Four hundred thousand pesos (P400,000.00). (Italics supplied.) On the other hand, Sec. 6 (a) of P.D. No. 902-A empowered the SEC to “issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction.” Such cases in which the SEC exercises original and exclusive jurisdiction are the following: (a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission; (b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and (c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations. [19] Perusal of the complaint reveals that respondent does not ask the trial court to rule on its interest or claim -- as an unsecured creditor of two companies under EYCO -- against the latter’s properties mortgaged to petitioner. The complaint principally seeks to enjoin the foreclosure proceedings initiated by petitioner over those properties on the ground that such properties are held in trust and placed under the jurisdiction of the appointed Liquidator in SEC Case No. 09-97-5764. Thus, Civil Case No. 349-V-00 is one for injunction with prayer for damages. Previously, under the Rules of Procedure on Corporate Recovery, the SEC upon termination of cases involving petitions for suspension of payments or rehabilitation may,motu proprio, or on motion by any interested party, or on the basis of the findings and recommendation of the Management Committee that the continuance in business of the debtor is no longer feasible or profitable, or no longer works to the best interest of the stockholders, parties-litigants, creditors, or the general public, order the dissolution of the debtor and the liquidation of its remaining assets appointing a Liquidator for the purpose. [20] The debtor’s properties are then deemed to have been conveyed to the Liquidator in trust for the benefit of creditors, stockholders and other persons in interest. This notwithstanding, any lien or preference to any property shall be recognized by the Liquidator in favor of the security or lienholder, to the extent allowed by law, in the implementation of the liquidation plan.[21] However, R.A. No. 8799, which took effect on August 8, 2000, transferred to the appropriate regional trial courts the SEC’s jurisdiction over those cases enumerated in Sec. 5 of P.D. No. 902-A. Section 5.2 of R.A. No. 8799 provides: SEC. 5.2 The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. (Emphasis supplied.) Upon the effectivity of R.A. No. 8799, SEC Case No. 09-97-5764 was no longer pending. The SEC finally disposed of said case when it rendered on September 14, 1999 the decision disapproving the petition for suspension of payments, terminating the proposed rehabilitation plan, and ordering the dissolution and liquidation of the petitioning corporation. With the enactment of the new law, jurisdiction over the liquidation proceedings ordered in SEC Case No. 09-97-5764 was transferred to the RTC branch designated by the Supreme Court to exercise jurisdiction over cases formerly cognizable by the SEC. As this Court held in Consuelo Metal Corporation v. Planters Development Bank [22]: The SEC assumed jurisdiction over CMC’s petition for suspension of payment and issued a suspension order on 2 April 1996 after it found CMC’s petition to be sufficient in form and substance. While CMC’s petition was still pending with the SEC as of 30 June 2000, it was finally disposed of on 29 November 2000 when the SEC issued its Omnibus Order directing the dissolution of CMC and the transfer of the liquidation proceedings before the appropriate trial court. The SEC finally disposed of CMC’s petition for suspension of payment when it determined that CMC could no longer be successfully rehabilitated. However, the SEC’s jurisdiction does not extend to the liquidation of a corporation. While the SEC has jurisdiction to order the dissolution of a corporation, jurisdiction over the liquidation of the corporation now pertains to the appropriate regional trial courts. This is the reason why the SEC, in its 29 November 2000 Omnibus Order, directed that “the proceedings on and implementation of the order of liquidation be commenced at the Regional Trial Court to which this case shall be transferred.” This is the correct procedure because the liquidation of a corporation requires the settlement of claims for and against the corporation, which clearly falls under the jurisdiction of the regular courts. The trial court is in the best position to convene all the creditors of the corporation, ascertain their claims, and determine their preferences.[23] (Emphasis supplied.) There is no showing in the records that SEC Case No. 09-97-5764 had been transferred to the appropriate RTC designated as Special Commercial Court at the time of the commencement of the injunction suit on December 18, 2000. Given the urgency of the situation and the proximity of the scheduled public auction of the mortgaged properties as per the Notice of Sheriff’s Sale, respondent was constrained to seek relief from the same court having jurisdiction over the foreclosure proceedings – RTC of Valenzuela City. Respondent thus filed Civil Case No. 349-V-00 in the RTC of Valenzuela City on December 18, 2000 questioning the validity of and enjoining the extrajudicial foreclosure initiated by petitioner. Pursuant to its original jurisdiction over suits for injunction and damages, the RTC of Valenzuela City, Branch 75 properly took cognizance of the injunction case filed by the respondent. No reversible error was therefore committed by the CA when it ruled that the RTC of Valenzuela City, Branch 75 had jurisdiction to hear and decide respondent’s complaint for injunction and damages. Lastly, it may be mentioned that while the Consortium of Creditor Banks had agreed to end their opposition to the liquidation proceedings upon the execution of the Agreement [24] dated February 10, 2003, on the basis of which the parties moved for the dismissal of G.R. No. 145977, it is to be noted that petitioner is not a party to the said agreement. Thus, even assuming that the SEC retained jurisdiction over SEC Case No. 09-97-5764, petitioner was not bound by the terms and conditions of the Agreement relative to the foreclosure of those mortgaged properties belonging to EYCO and/or other accommodation mortgagors. WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated September 27, 2002 and Resolution dated January 12, 2004 of the Court of Appeals in CA-G.R. SP No. 64166 are AFFIRMED. With costs against the petitioner. SO ORDERED. HEIRS OF CANDIDO DEL ROSARIOand HEIRS OF GIL DEL ROSARIO, Petitioners, G.R. No. 181548 Present: CARPIO, J., Chairperson, BRION, PEREZ, SERENO, and REYES, JJ. - versus - Promulgated: MONICA DEL ROSARIO, Respondent. June 20, 2012 x-----------------------------------------------------------------------------------------x DECISION REYES, J.: Nature of the Petition This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by the Heirs of Candido Del Rosario and the Heirs of Gil Del Rosario (petitioners), assailing the Decision[1] dated January 21, 2008 issued by the Court of Appeals (CA) in CA-G.R. SP No. 85483. The Antecedent Facts This involves a parcel of land with an area of 9,536 square meters situated in Barangay Caingin, Bocaue, Bulacan. The subject land was formerly owned by Pedro G. Lazaro and tenanted by the spouses Jose Del Rosario and Florentina De Guzman (Spouses Del Rosario). Spouses Del Rosario had three children: Monica Del Rosario (Monica), Candido Del Rosario (Candido) and Gil Del Rosario (Gil). The petitioners claimed that when Spouses Del Rosario died, only they continued to tenant and actually till the subject land. Sometime in February 1991, Monica and Gil agreed that the latter would facilitate the application for an Emancipation Patent over the subject land in the name of the former. In exchange, Monica agreed to cede to Gil one-third of the said land after the Emancipation Patent had been issued to her. On May 29, 1998, the Department of Agrarian Reform (DAR) issued to Monica Emancipation Patent No. 00733146 over the land. Subsequently, on October 22, 1998, the Registry of Deeds for the Province of Bulacan issued Transfer Certificate of Title (TCT) No. EP-257-M in the name of Monica. The petitioners claimed that Monica, despite repeated demands, refused to cede to Gil the onethird portion of the subject land pursuant to their agreement. Thus, on April 17, 2000, the petitioners filed with the Office of the Provincial Agrarian Reform Adjudicator (PARAD) in Malolos, Bulacan a complaint against Monica for amendment of TCT No. EP-257-M and partition of the subject land. For her part, Monica claimed that their father entrusted to her the cultivation of the subject land after the latter became ill and incapacitated sometime in 1950. Gil and Candido, in turn, were entrusted with the cultivation of other parcels of land tenanted by Spouses Del Rosario. Further, after Presidential Decree No. 27 (P.D. No. 27) took effect, Monica claimed that she was the one listed in the files of the DAR as the tenant-beneficiary of the subject land and that she was the one who was paying the amortizations over the same. The PARAD’s Decision On May 22, 2002, PARAD Provincial Adjudicator Toribio E. Ilao, Jr. (PA Ilao) rendered a Decision[2] the decretal portion of which, in part, reads: of a tenant, what he may transfer to his successor upon his death is merely the right to cultivate the landholding. Such transfer of right to cultivate, however, cannot be applied in the instant case. The right to cultivate the subject landholding was being exercised by [Monica’s] father until he became incapacitated (due to high blood pressure) to till the land, at which time, he passed the responsibility of cultivation to his eldest child, [Monica]. x x x The records show that the parents of [Monica] gave her the right to till the property of Pedro Lazaro. This is corroborated by the fact that Pedro Lazaro has recognized [Monica] as the only registered tenant of the subject property as evidenced by their “Kasunduan Sa Pamumuwisan” dated 25 September 1973 x x x. [5] Further, the DARAB ruled that the agreement between Monica and Gil that one-third of the subject land would be ceded to the latter after the same had been registered under Monica’s name is contrary to law as P.D. No. 27 prohibits the transfer of parcels of land given to qualified farmer-beneficiaries other than by hereditary succession or to the government. The petitioners sought a reconsideration of the Decision dated January 8, 2004, but it was denied by the DARAB in its Resolution[6] dated July 8, 2004. Subsequently, the petitioners filed a petition for review [7] with the CA alleging that the DARAB erred in ruling that they and Monica are not co-owners of the subject land. WHEREFORE, premises considered, judgment is hereby rendered in the following manner: The CA’s Decision 1). Ordering the Register of Deeds of Bulacan to cancel TCT/EP No. 257(M)/00733146 containing an area of 9,536 square meters, more or less, issued to Monica del Rosario and partitioned (sic) the covered lot among the heirs of the late spouses Jose del Rosario and Florentina de Guzman; On January 21, 2008, the CA rendered the herein assailed decision denying the petition for review filed by the petitioners. The CA held that the PARAD and the DARAB had no jurisdiction to take cognizance of the petitioners’ complaint for amendment of the Emancipation Patent and partition of the subject land, there being no agrarian dispute or tenancy relations between the parties. Thus: 2). Ordering the respondent to cede the ONE THIRD (1/3) portion of the 9,536 square meters, equivalent to 3,178 square meters of the subject agricultural land in favor of the heirs of the late Gil Del Rosario in compliance with their agreement; While it is true that the DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP), which include those involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority, however, for the DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties, which does not obtain in the petition at bench. 3). Ordering the remaining portion of 6,358 square meters to be subdivided into four (4) equal shares: to the surviving heirs of the late spouses Jose del Rosario and Florentina de Guzman as follows, to wit: a. b. c. d. Respondent Monica del Rosario – 1,589 square meters; Heirs of Candido del Rosario represented by his children – 1,589 square meters; Heirs of Gil del Rosario represented by his children – 1,589 square meters; and Consolacion del Rosario – 1,589 square meters. 4). Directing the PARO of Bulacan thru the Operations Division and all DAR personnel concerned to generate and issue EPs/titles in the name of the parties concerned with the corresponding area of tillage as indicated above, in accordance with the DAR existing rules and regulations, and cause the registration of the new EPs/titles with the Registry of Deeds of Bulacan. [3] The jurisdiction of a tribunal or quasi-judicial body over the subject matter is determined by the averments of the complaint/petition and the law extant at the time of the commencement of the suit/complaint/petition. All proceedings before a tribunal or quasi-judicial agency bereft of jurisdiction over the subject matter of the action are null and void.[8] (Citations omitted) Nevertheless, the CA also held that the petitioners are bound by the decision of the DARAB declaring Monica as the bona fide holder of TCT No. EP-257-M since they participated in the proceedings before the PARAD and the DARAB without raising any objection thereto. Issues PA Ilao found that Monica was not the bona fide tenant-farmer of the subject land and that she had continuously failed to cultivate or develop the same. In the instant petition, the petitioners submit the following issues for this Court’s resolution: [I] Unperturbed, Monica appealed from the foregoing disposition of PA Ilao to the Department of Agrarian Reform Adjudication Board (DARAB). The DARAB’s Decision THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT DENIED THE PETITION FOR REVIEW ON GROUND OF LACK OF JURISDICTION ON [THE] PART OF THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB). On January 8, 2004, the DARAB rendered a Decision, [4] which reversed and set aside the Decision dated May 22, 2002 of PA Ilao. The DARAB held that: [II] [Monica] and her siblings are not co-heirs to the landholding in question. The said land was not a part of the inheritance of their late parents. This conclusion is based on the simple reason that tenants are not the owners of the landholding they cultivate. Under the law, inheritance includes all the property, rights and obligations of a person which are not extinguished by his death x x x. In the case THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD THAT PETITIONERS ARE BOUND BY THE DECISION OF THE DARAB DECLARING MONICA DEL ROSARIO AS BONA FIDE TCT/EP HOLDER, THAT THEY ARE NOT CO-HEIRS TO THE SUBJECT LANDHOLDING, THAT THE AGREEMENT THAT ONE THIRD (1/3) OF THE to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. tenants and other agrarian reform beneficiaries. including incidents arising from the implementation of agrarian laws. tenancy. Monica asserts that the CA did not err in declaring that the PARAD and the DARAB have no jurisdiction over the said complaint for amendment and partition since there was simply no “tenancy relationship” alleged therein. 6657 and other terms and conditions of transfer of ownership from landowners to farmworkers. over lands devoted to agriculture. as amended by R. to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act (R. which were adopted and promulgated on May 30. g) Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations under Section 12 of Presidential No. the proceedings before the PARAD and the DARAB were governed by the DARAB New Rules of Procedures. 6657 defines an agrarian dispute in this wise: (d) Agrarian dispute refers to any controversy relating to tenurial arrangements.O. Primary and Exclusive Original and Appellate Jurisdiction. f) Those involving the issuance. 6389.[9] Simply put. correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority. 3844 as amended by R.) No. . engaged in the management. except sub-paragraph (Q) thereof and Presidential Decree No. Presidential Decree No.A. It is understood that the aforementioned cases. amortization payments. No. changing or seeking to arrange terms or conditions of such tenurial arrangements.A.A. landowner and tenant. and second. No. Executive Order (E. including disputes concerning farmworkers associations or representation of persons in negotiating. and incidents in connection therewith. otherwise known as the Comprehensive Agrarian Reform Law (CARP) of 1988 and other agrarian laws as enunciated by pertinent rules shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.D. whether leasehold. 229. matters or concerns referred to it by the Secretary of the DAR. disturbance compensation.A. b) The valuation of land. related to lands covered by the CARP and other agrarian laws. – The Board shall have primary and exclusive jurisdiction. 815. 1994 after publication (1994 DARAB Rules). e) Those involving the sale. Nos. whether the petitioners are bound by their respective dispositions. (Emphasis supplied. 946. if the PARAD and the DARAB have no jurisdiction over the complaint for amendment and partition.[10] At the time the complaint for amendment and partition was filed by the petitioners. maintaining. Executive Order Nos. Section 3(d) of R. 9700. 6657. fixing. 228. Matters involving strictly the administrative implementation of Republic Act No.O. Specifically.A.A. The jurisdiction of the PARAD and the DARAB is limited only to all agrarian disputes and matters or incidents involving the implementation of the CARP. farmers’ cooperatives and other registered farmers’ associations or organizations. 27 and other agrarian laws and their implementing rules and regulations.) No. They assert that the complaint below essentially involves a determination of the actual tenant and eventual rightful beneficiary of the subject land. P. and the preliminary determination and payment of just compensation. The 1994 DARAB Rules identified the cases over which the DARAB shall have jurisdiction. arising within their assigned territorial jurisdiction. alienation. 27 and other agrarian laws and their Implementing Rules and Regulations. [11] Thus. and 129-A. – The RARAD and the PARAD shall have concurrent original jurisdiction with the Board to hear. cultivation and use of all agricultural lands covered by the CARP and other agrarian laws. whether the PARAD and the DARAB have jurisdiction to take cognizance of the petitioners’ complaint for amendment and partition. The Court’s Ruling c) The annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under the administration and disposition of the DAR or LBP. pre-emption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws. whether natural or juridical.SUBJECT LANDHOLDING SHALL BE GIVEN TO GIL DEL ROSARIO IS NULL AND VOID FOR BEING CONTRARY [TO] AGRARIAN LAWS AND ORDERING THEM NOT TO INTERFERE WITH MONICA DEL ROSARIO’S CULTIVATION OF SUBJECT LANDHOLDING. Specifically.) RULE II JURISDICTION OF THE ADJUDICATION BOARD SECTION 1. stewardship or otherwise. 3844 as amended by Republic Act No. disputes. foreclosure. First Issue: Jurisdiction of the PARAD and the DARAB Contrary to the CA’s disposition. E. complaints or petitions were filed with the DARAB after August 29. 129-A created the DARAB to assume the powers and functions with respect to the adjudication of agrarian reform matters. and 129-A. 6657. Jurisdiction of the Regional and Provincial Adjudicator. No. the petitioners insist that the PARAD and the DARAB have the jurisdiction to take cognizance of their complaint for amendment of the Emancipation Patent and partition of the subject land notwithstanding the absence of tenancy relationship between them and Monica. the issues for this Court’s resolution are the following: first. The petition is partly meritorious. to wit: h) And such other agrarian cases. Republic Act No. R. 1994. In the process of reorganizing the DAR. On the other hand. or lessor and lessee. determine and adjudicate all agrarian cases and disputes. the PARAD and the DARAB have primary and exclusive jurisdiction. whether the disputants stand in the proximate relation of farm operator and beneficiary. No. 6657. both original and appellate. the jurisdiction of the PARAD and the DARAB is only limited to cases involving agrarian disputes. mortgage. fixing and collection of lease rentals. No. and came into effect on June 21. It includes any controversy relating to compensation of lands acquired under R. 228. d) Those case arising from. and similar disputes concerning the functions of the Land Bank of the Philippines (LBP). such jurisdiction shall include but not be limited to cases involving the following: a) The rights and obligations of persons. both original and appellate. 1987. SECTION 2. or connected with membership or representation in compact farms. 6389. the recovery of petitioners’ purported hereditary share over the subject land. the petitioners alleged that it was Gil and Candido who continued the tillage of the subject land after the death of Spouses Del Rosario. and second. the petitioners merely sought that the subject land be equally partitioned among the surviving heirs of Spouses Del Rosario. the petitioners sought the following reliefs: WHEREFORE. it [is] most respectfully prayed of this Honorable Board that after due hearing. brothers CANDIDO DEL ROSARIO and GIL DEL ROSARIO. after receiving the EP over the subject agricultural land. the petitioners implicitly recognized the validity of the issuance of the emancipation patent over the subject land in favor of Monica. lodged the petition in Monica del Rosario’s name for the issuance of EP over the subject agricultural land being tilled by them. leasehold. over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. basic jurisprudential tenets come into play. they are. the children of the former. thus. It is the rule that the jurisdiction of a tribunal. by merely asking for the recovery of their alleged hereditary share in the subject land. The EP was issued by the DAR to the respondent with the help of her brother Gil Del Rosario who. 3. we nevertheless find the same insufficient to clothe the PARAD and the DARAB with jurisdiction over the complaint. the petitioners did not seek the nullification of the emancipation patent issued to Monica and the issuance of a new one in their names. thus: . refused to give the shares of her brothers (predecessors-in-interest of herein petitioners) and subdivide equally the subject land among them. they being surviving heirs of their late parents who first tilled the subject agricultural land despite persistent demand. Spouses Valdez[16] is instructive. in representation of Gil and Candido. A perusal of the foregoing will readily show that the complaint essentially sought the following: first. and that the agreement that one third (1/3) of the subject landholding shall be given to Gil del Rosario is null and void for being contrary to agrarian laws.536 square meters more or less situated at Brgy. Thus: However. and ordering them not to interfere with Monica’s cultivation of her landholding. premises considered. Where a question of jurisdiction between the DARAB and the RTC is at the core of a dispute. The subject agricultural land identified as Lot No. we turn to the petitioners’ complaint for amendment and partition. The petitioners are seeking the assistance of this Honorable Board to amend and partition the EP issued to the respondent and the subject agricultural land be divided equally among the respondent and the predecessors-in-interest of herein petitioners. with the late Gil del Rosario dated February 1991. Bocaue.” nor does it involve any incident arising from the implementation of agrarian laws. they should not have taken cognizance of the petitioners’ complaint for amendment of the Emancipation Patent and partition. the late grandparents of herein petitioners. including the co-tenant farmers that are adjacent and adjoining in that area. [15] (Citation omitted) We do not agree with the foregoing ratiocination of the CA. An agreement was likewise entered into by the respondent and the other tenant farmers of the adjoining lots. Admittedly. wherein they alleged (b) Ordering respondent to stop collecting lease rentals from the herein petitioners relative to their establishments and those erected by their predecessors-in-interest. Since the PARAD and the DARAB have no jurisdiction over the present controversy. The Decision dated January 8. specifically. 2004. [12] Accordingly. When the late grandparents of herein petitioners died. Psd-03-091057 (AR) consisting of an area of 9.00 to petitioners and costs of litigation. C. x x x. While ostensibly assailing Monica’s qualification as a farmer-beneficiary. The respondent. xxxx 12. xxxx 6. the subject agricultural land. On this point. Settled is the rule that participation by certain parties in the administrative proceedings without raising any objection thereto.000.The petitioners’ complaint for amendment and partition is beyond the jurisdiction of the PARAD and the DARAB. in representation of their respective predecessors-in-interest. Bulacan. The petitioners and Monica have no tenurial. the instant case does not involve an “incident arising from the implementation of agrarian laws” as would place it within the jurisdiction of the PARAD and the DARAB. continued in the tillage of the subject agricultural land. While the foregoing allegation seems to raise a challenge to Monica’s qualification as a farmerbeneficiary of the subject land. xxxx Second Issue: Effect of the DARAB’s Decision 10. produced no effect whatsoever. the DARAB having no jurisdiction to take cognizance of the petitioners’ complaint for amendment and partition. predecessors-in-interest of herein petitioners. our disquisition in Spouses Atuel v. Verily. 2004 of the DARAB is null and void and. [14] (Emphasis supplied) that: 2. the ONE THIRD (1/3) portion of their tillage will be segregated and given to her brother Gil del Rosario in consideration of the assistance of the latter. committing themselves that after the issuance of their EPs by the DAR. Further. including a quasi-judicial office or government agency. judgment be rendered in the above-entitled petition as follows: (a) Ordering respondent to partition or subdivide equally among the respondent and herein petitioners. aside from shouldering all expenses relative thereto. including Monica. was formerly owned by Pedro Lazaro and was tenanted by SPOUSES JOSE DEL ROSARIO AND FLORENTINA DE GUZMAN. bars them from any jurisdictional infirmity after an adverse decision is rendered against them. Despite its finding that the PARAD and the DARAB lacked jurisdiction to take cognizance of the petitioners’ complaint for amendment and partition. bound by the Decision of the DARAB declaring Monica as the bona fide TCT/EP holder. therefore. the CA nevertheless ruled that the petitioners were bound by the DARAB’s Decision dated January 8.[13] (Emphasis supplied) Based on these allegations. Caingin. (d) Ordering respondent to allow the petitioners to plant palay or vegetable plants (sic) over the agricultural land occupied by them. (e) Ordering respondent to pay attorney’s fees of [P]50. 7. the said complaint for amendment and partition does not involve any “agrarian dispute. Instead. Indubitably. the enforcement of the agreement entered into by and between Gil and Monica wherein the latter promised to cede to the former one-third portion of the subject land upon the issuance of the emancipation patent over the same. that they are not co-heirs to the subject landholding. considering that petitioners invoked the jurisdiction of the DARAB Provincial Adjudicator by opposing Monica’s motion to dismiss the case on the ground that said Adjudicator has no jurisdiction over the case. (c) Ordering respondent to stop cutting [of] trees and other improvements thereon established by the herein petitioners and their predecessors-ininterest. or any agrarian relations whatsoever that will bring this controversy within the jurisdiction of the PARAD and the DARAB. as the registered tenant-farmers over the subject agricultural land devoted to planting of palay. 2002 and July 23. the BOC sold the remaining four (4) CB bills to Capital One Equities Corporation 13 which transferred them to All-Asia Capital and Trust Corporation (All Asia). 2004. estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. or waived by.1 on pure questions of law. as evidenced by a PDB Security Delivery Receipt.6The BOC delivered the Detached Assignments to the PDB. All Asia further transferred the four CB bills back to the RCBC. Petitioner. 85483 is herebyREVERSED and SET ASIDE.4 As evidenced by another "Detached Assignment" 5 of even date. 45347-50 BANGKO SENTRAL NG PILIPINAS. as the DARAB’s lack of jurisdiction is apparent on the face of the complaint. 2002 Orders (assailed orders) of the Regional Trial Court (RTC) of Makati City. PLANTERS DEVELOPMENT BANK. it "sold back" 11 to the PDB three of the seven CB bills. ultimately. and (iii) the countercomplaint/cross-claim for interpleader filed bythe BSP.2 As evidenced by a "Detached Assignment" dated April 8. Accordingly. vs. In a long line of decisions. First set of CB bills On April 20. 1994.R. Likewise. Consequently.7 On April 15. issued on January 2. It is basically the nature of this April 15 transaction that the PDB and the BOC cannot agree on.14 On November 16. 1994. 2012 BANK OF COMMERCE. the PDB. They assail the January 10. 1994. These orders dismissed (i) the petition filed by the Planters Development Bank (PDB). are declared NULL and VOID for lack of jurisdiction. the BOC purchased from All Asia this lone CB bill. Nos. the RCBC sold back to All Asia one of these 4 CB bills. Respondent.10Nevertheless. in turn. When the BSP refused to release the amount of this CB bill on maturity. and the Department of Agrarian Reform Adjudication Board’s Decision dated January 8. in consideration of the foregoing disquisitions. 94-3233 and 94-3254. This Court finds no compelling reason to rule on the other issues raised by the Spouses Atuel and the Spouses Galdiano. in Civil Case Nos. G. vs. 45351-53 On April 20. Respondent. Petitioner. The transfer of the first set of seven CB bills i. as jurisdiction is conferred only by law. 1994. instead of delivering the Treasury Bills. CB bill nos. this Court has consistently held that an order or decision rendered by a tribunal or agency without jurisdiction is a total nullity.: 2BB XM 045348 Quantity: One (1) Denomination: Php 10 million Total Face Value: Php 10 million As the registered owner of the remaining three CB bills. The failure of the parties to challenge the jurisdiction of the DARAB does not prevent this Court from addressing the issue. Nos. we rule that the decision of the DARAB in the instant case is null and void. The active participation of the parties in the proceedings before the DARAB does not vest jurisdiction on the DARAB. Issues of jurisdiction are not subject to the whims of the parties. PLANTERS DEVELOPMENT BANK and BANGKO SENTRAL NG PILIPINAS. 154589-90 DECISION BRION. the PDB delivered the seven CB bills to the BOC. The Central Bank bills The Rizal Commercial Banking Corporation (RCBC) was the registered owner of seven Central Bank (CB) bills with a total face value of P 70 million. In turn. The Provincial Agrarian Reform Adjudicator’s Decision dated May 22. sold to the BOC Treasury Bills worth P 70 million. On April 25. the RCBC sold them to IVI Capital and Insular Savings Bank. the BOC bought the three CB bills from Bancap – so. .Jurisdiction over the subject matter cannot be acquired through. 15 particularly described as follows:16 Serial No. the RCBC paid back its transferees. 1994. the BOC acquired these three CB bills. (ii) the "counterclaim" filed by the BOC.: Before the Court are two consolidated petitions for review on certiorari under Rule 45. in turn. any act or omission of the parties.R. with maturity date of June 29. the Decision dated January 21. CB bill nos. sold these CB bills to the PDB. 1994 (April 15 transaction). SO ORDERED. as evidenced by a Trading Order 8 and a Confirmation of Sale. bearing a "note: ** substitution in lieu of 06-29-94" – referring to the Treasury Bills. according to the BOC. 2008 of the Court of Appeals in CA-G. SP No. and denied the BOC’s and the BSP’s motions for reconsideration. the decision of the Court of Appeals affirming the decision of the DARAB is likewise invalid. 1994. the PDB retained possession of the Detached Assignments. Again. 1994 and would mature on January 2. 154470-71 September 24.12 particularly described as follows: Serial No. 2004 and Resolution dated July 8. filed by the petitioners Bank of Commerce (BOC) and the Bangko Sentral ng Pilipinas (BSP). On September 30. the BOC reacquired these three CB bills. The courts or the parties cannot disregard the rule of non-waiver of jurisdiction. the BOC. 1995. x-----------------------x G. J. reacquired these three CB bills and sold them to the BOC – ultimately. 1994. THE ANTECEDENTS I. 2002.9 However. 3 the RCBC sold these CB bills to the BOC. Branch 143. the PDB transferred these three CB bills to Bancapital Development Corporation (Bancap).: 2BB XM 045351 2BB XM 045352 2BB XM 045353 Quantity: Three (3) Denomination: Php 10 million Total Face Value: Php 30 million ii. [17] (Citations omitted and emphases supplied) WHEREFORE. when the BSP refused to release the amount of this CB bill on maturity.R. 1994. as shown by its non-issuance of a detached assignment in favor of the BOC and Bancap. and (ii) to Bancap (in the April 19 transaction) upon the PDB’s delivery of the 2nd set of CB bills to Bancap. there was no intent on its part to transfer title of the CB bills. likewise by way of substitution. Prohibition and Injunction with prayer for Preliminary Injunction and Temporary Restraining Order. 94-3233 (covering the first set of CB bills) and Civil Case 94-3254 (covering the second set of CB bills) against Nuqui.26 Nuqui responded that the BSP was "not in a position at that point in time to determine who is and who is not the holder in due course since it is not privy to all acts and time involving the transfers or negotiation" of the CB bills. the PDB filed an Amended Petition. (ii) x x x RCBC x x x. 1994 letter. invoking Section 8 of CB Circular No. will call upon the owner and the person presenting the bond to substantiate their respective claims. and. (iii) x x x BOC x x x. and (ii) the presenter of the bonds upon maturity be required to submit proof as a holder in due course (of the first set of CB bills).36 After the petitions were filed. 1994. as and for exemplary damages. Contrary to the PDB’s "warehousing theory. or payment of the bond the payment of interest thereon. Second set of CB bills In light of these BSP responses and the impending maturity of the CB bills. Servicing and Redemption of the Public Debt) 24 which requires the presentation of the bond before a registered bond may be transferred on the books of the BSP. as and for attorney’s fees. will pass the bond for transfer.32 On January 10. Prohibition and Injunction.were valid contracts of sale. exchange or payments. the Central Bank. the cases were consolidated. praying for the dismissal of the petition. be issued. Otherwise.000. In a December 29. after due notice and hearing. the Central Bank can grant no relief if the assignment has been honored without notice of fraud. respectively. The PDB relied on Section 10 (d) 4 of CB Circular No. to submit proof as to who stands as the holder in due course of said bills. docketed as Civil Case No. explaining that its non-possession of the CB bills is "on account of imperfect negotiations thereof and/or subsequent setoff or transfer. as the case may be. upon receipt of notice that the assignment is claimed to have been secured by fraudulent representations. without further question. 19 PDB’s move against the transfer of the first and second sets of CB bills On June 30. Bancap sold the CB bills to Al-Amanah Islamic Investment Bank of the Philippines. Nuqui again denied the request.All in all. reiterating the BSP’s previous stand.: BB XM 045373 BB XM 045374 Issue date: January 3. 1995. 21 Lagrimas Nuqui. . which in turn sold it to the BOC. 28 This provision reads: (4) Assignments effected by fraud – Where the assignment of a registered bond is secured by fraudulent representations. of the PDB’s claim over these CB bills. or whoever may take her place (a) to record forthwith in the books of BSP the claim of x x x PDB on the [two sets of] CB Bills in accordance with Section 10 (d) (4) of revised C. as security collateral. additionally impleading the BOC and All Asia. and when the bond is presented. the BOC acquired the first set of seven CB bills. (i) sold two CB bills with a total face value of P 20 million to the PDB and (ii) delivered to the PDB the corresponding Detached Assignment."38 the BOC asserted that the (i) April 15 transaction and the (ii) April 19 transaction – covering both sets of CB bills . (b) the sum of at least P 500. and (b) also pursuant thereto. thereafter. 1994.25 In a July 25. (i) commanding the BSP and Nuqui. or such amount as shall be proved at the trial. the PDB informed 20 the Officer-inCharge of the BSP’s Government Securities Department. Circular No.00. Defenses of the BSP and of the BOC 37 The BOC filed its Answer. the RTC temporarily enjoined Nuqui and the BSP from paying the face value of the CB bills on maturity. 28 (Regulations Governing Open Market Operations. 1995. or payment of the bonds and the payment of interest thereon. 1994 Maturity date: January 2. upon learning of the transfers involving the CB bills. 28. the PDB also asked BSP Deputy Governor Edgardo Zialcita that (i) a notation in the BSP’s books be made against the transfer. Stabilization of the Securities Market.B. The PDB particularly alleges that it merely "warehoused" 31 the first set of CB bills with the BOC. the PDB delivered to Bancap the two CB bills 18 (April 19 transaction). the PDB clarified to Nuqui that it was not "asking for the transfer of the CB Bills…. and (d) the costs of suit. It argued that the PDB has no cause of action against it since the PDB is no longer the owner of the CB bills. In turn. 1995 Denomination: Php 10 million Total Face value: Php 20 million On even date. 1995 Order. 17 The two CB bills were particularly described as follows: Serial No. and (ii) ordering the BSP and Nuqui to pay jointly and severally to x x x PDB the following: Nuqui denied the request. the PDB filed 29 with the RTC two separate petitions for Mandamus." 23 The PDB essentially claims that in both the April 15 transaction (involving the first set of CB bills) and the April 19 transaction (involving the second set of CB bills). to call (i) x x x PDB. the RCBC. the Central Bank. act accordingly. 1994.33 In a January 13. exchange." and. (a) the sum of P 100. therefore the BSP should not make payment upon the presentation of the CB bills on maturity. the BOC acquired/reacquired all the nine CB bills – the first and second sets of CB bills (collectively.000. the BSP and the RCBC. 30 On April 19. followed by a transfer of title (i) to the BOC (in the April 15 transaction) upon the PDB’s delivery of the 1st set of CB bills in substitution of the Treasury Bills the PDB originally intended to sell.27 On November 17. and (iv) x x x ALL-ASIA x x x. 35 In both petitions. the Writs of Mandamus. 34 On January 17. (c) the legal rate of interest from the filing of this Petition until full payment of the sums mentioned in this Petition. 28. it is respectfully prayed x x x that. Nuqui added that the BSP’s action shall be governed by CB Circular No. 1994 letter. the PDB identically prayed: WHEREFORE. The PDB requested the BSP 22 to record its claim in the BSP’s books. Issue. as registered owner. as amended. based on the Detached Assignments in its possession.00. when the bills are presented on maturity date for payment. or whoever will present the [first and second sets of] CB Bills for payment. after giving the owner an opportunity to assert his claim. On December 28. subject CB bills). 28. the RTC granted the PDB’s application for a writ of preliminary prohibitory injunction. rather it intends to put the BSP on formal notice that whoever is in possession of said bills is not a holder in due course. II.If it then appears that the person presenting the bond stands in the position of bonafide holder for value. b.45 The first agreement covered the first set of CB bills." 39 According to the BSP – Section 10 d. as buyer in the April 15 transaction and ultimate successor-in-interest of the buyer (Bancap) in the April 19 transaction. accordingly.40(underscoring supplied) Consequently. the RTC granted the BSP’s motion to interplead and.66 THE BOC’S and THE BSP’S PETITIONS The BOC argues that the present cases do not fall within the limited provision of Section 10 (d) 4 of CB Circular No."54 Complying with the RTC’s order. the BSP countered that the PDB cannot invoke Section 10 (d) 4 of CB Circular No. in its favor to clothe it with the status of an "owner. The RTC cannot entertain the BOC’s counterclaim. 1995. on June 9. The BOC opposed62 the PDB’s Omnibus Motion. the BOC added that even assuming that there was no effective transfer of the nine CB bills ultimately to the BOC. 64 With the denial of their separate motions for Reconsideration. either the original subjects of the sales or the value thereof. and third. the BSP released the maturity proceeds of the CB bills by crediting the Demand Deposit Account of the PDB and of the BOC with 50% each of the maturity proceeds of the amount in escrow. The BOC also asserted a compulsory counterclaim for damages and attorney’s fees. Ordering the dismissal of the PDB’s petition for lack of merit. x x x. 53 In light of the developments. On the other hand. the BSP asked that an interpleader suit be allowed between and among the claimants to the subject CB bills on the position that while it is able and willing to pay the subject CB bills’ face value. (1) of CB Circular 28 provides that registered bonds "may be transferred only by an assignment thereon duly executed by the registered owner or his duly authorized representative x x x and duly recorded on the books of the Central Bank. 2000."55 The PDB joined the BOC in its motion. The PDB filed its Reply. where the fraudulent assignment is not coupled with a notice to the BSP. the RTC dismissed the PDB’s petition." 46 The BOC and the PDB filed a Joint Motion. 42 Accordingly." of which the PDB is neither. To declare BOC as the rightful owner of the nine (9) CB bills and as the party entitled to the proceeds thereof as well as all income earned pursuant to the two (2) Escrow Agreements entered into by BOC and PDB. plus whatever income that may have been earned during the pendency of the case. the PDB remains obligated to deliver to the BOC.58 In the alternative. second. 41 Subsequent events The PDB agreed with the BSP’s alternative response for an interpleader – 4. on February 23. 2001. (4) applies only to a registered bond which is assigned. where the fraudulent assignment is coupled with a notice of fraud to the BSP. it is duty bound to ensure that payment is made to the rightful owner. the total face value of the subject CB bills should be deposited in escrow with a private bank to be disposed of only upon order of the RTC. 28 cannot apply to the PDB’s case because (i) the PDB is not in possession of the CB bills and (ii) the BOC acquired these bills from the PDB. . PDB agrees that the various claimants should now interplead and substantiate their respective claims on the subject CB bills. 28. The parties agreed to jointly collect from the BSP the maturity proceeds of these CB bills and to deposit said amount in escrow. 28. However." xxxx The alleged assignment of subject CB Bills in PDB’s favor is not recorded/registered in BSP’s books. All Asia 50 moved to be dropped as a respondent (with the PDB’s conformity51). The RTC gave its approval to the parties’ Joint Motion. "otherwise.49 In view of the BOC’s acquisition of all the CB bills. Ordering PDB to pay BSP and Nuqui such actual/compensatory and exemplary damages… as the RTC may deem warranted. 199543 and August 4. they were merely performing their duties in accordance with CB Circular No. 1998. where the case does not fall on either of the first two situations. Ordering PDB to pay Nuqui moral damages… and to pay the costs of the suit.The BOC adds that Section 10 (d) 4 of CB Circular No. particularly on "who has a better right over the subject CB bills. 2002 Order. And the issuance of CB Bills x x x are required to be recorded/registered in BSP’s books. the RTC required the parties to manifest their intention regarding the case and to inform the court of any amicable settlement. the BOC’s counterclaim and the BSP’s counter-complaint/cross-claim for interpleader. as to the 2nd set of CB bills. and e. or amicable settlement as to who shall be eventually entitled thereto. th[e] case shall be dismissed for lack of interest. it has no jurisdiction (i) over the BOC’s "counterclaims" and (ii) to resolve the issue of ownership of the CB bills. Section 4 a. The PDB has not presented to the BSP any assignment of the subject CB bills. Without any opposition or objection from the PDB. Alternatively. 28. it can grant no relief. In the alternative. the PDB filed an Omnibus Motion. Determining which between/among [PDB] and the other claimants is/are lawfully entitled to the ownership of the subject CB bills and the proceeds thereof. while the second agreement covered the second set of CB bills. because it is the BSP which has jurisdiction to determine who is entitled to receive the proceeds of the CB bills. on May 4. the BOC filed its Amended Consolidated Answer with Compulsory Counterclaim. ordering PDB to deliver the original subject of the sales transactions or the value thereof and whatever income earned by way of interest at prevailing rate.56 On September 28. which the RTC granted.59 That BOC prayed: 1. as to the 1st set of CB bills.48 Accordingly.47 submitting these Escrow Agreements for court approval.52 The RCBC subsequently followed suit. In May 2001. the BOC moved (i) that the case be set for pre-trial and (ii) for further proceeding to resolve the remaining issues between the BOC and the PDB. "pending final determination by Court judgment. 65 the BOC and the BSP separately filed the present petitions for review on certiorari. 57 In October 2000. holding that under CB Circular No. The BSP prayed that judgment be rendered: a. regardless of its nature." The PDB argues that its petitions pray for the BSP (not the RTC) to determine who among the conflicting claimants to the CB bills stands in the position of the bona fide holder for value. reiterating its earlier arguments asserting ownership over the subject CB bills. in good faith and for value. duly recorded in the BSP’s books. c.61 questioning the RTC’s jurisdiction over the BOC’s "additional counterclaims.63 In a January 10. which contemplates only of three situations: first. 28 because this section applies only to an "owner" and a "person presenting the bond.44 the BOC and the PDB entered into two separate Escrow Agreements. required the BOC to amend its Answer and for the conflicting claimants to comment thereon. d. In this regard. the RTC admitted 60 the BOC’s Amended Consolidated Answer with Compulsory Counterclaims. when Nuqui and the BSP refused the PDB’s request (to record its claim). it will make a notation against the assignment and require the owner and the holder to substantiate their claims. and from Bancap. 2. The abolition of Nuqui’s office is not only consistent with the BSP’s Charter but. even the PDB itself failed to submit an interpretation based on its own position of harmonization. 769-80. which. in turn. In the present case. 28 – The provisions of Central Bank Circular No. without extending the same benefit to those who chose to ignore the Circular’s requirement. CB Circular No. 28’s suppletory application.72 or at least to amend earlier CB circulars. 28. have been transferred through fraudulent representations – an allegation which properly recognized the BSP’s jurisdiction to resolve conflicting claims of ownership over the CB bills. in the second situation.e. 769-80 expressly provides that CB Circular No. 769-80 obviously did not expressly repeal CB Circular No. at the time the PDB supposedly invoked the jurisdiction of the BSP in 1994 (by requesting for the annotation of its claim over the subject CB bills in the BSP’s books). 28. Therefore. The PDB adds that under the doctrine of primary jurisdiction.70 In filing the petition with the RTC. The PDB counters that the BOC’s tri-fold interpretation of Section 10 (d) 4 of CB Circular No. CB Circular No. 28 requires that the conflict must be between an "owner" and a "holder.71 Interestingly. is determinative of the proper remedy available to the PDB and/or the BOC as claimants to the proceeds of the subject CB bills. with CB Circular No. 28. and. in particular. upon notice under oath that the assignment was secured through fraudulent means. 769-80. is not the registered owner nor is it in possession (holder) of the CB bills. The Central Bank. 28 or CB Circular No. . then "the protective mantle of administrative proceedings" should necessarily benefit him only.67 Consequently. 769-80: ARTICLE XI SUPPLEMENTAL RULES Section 1. ARTICLE XII EFFECTIVITY Effectivity – The rules and regulations herein prescribed shall take effect upon approval by the Monetary Board.but even this tri-fold interpretation which.under CB Circular No. The PDB asserts that the existence of CB Circular No. – Any assignment for transfer of ownership of registered certificate obtained through fraudulent representation if honored by the Central Bank or any of its authorized service agencies shall not make the Central Bank or agency liable therefore unless it has previous formal notice of the fraud. the BSP simply has to look at its books to determine who is the owner of the CB bills fraudulently assigned. the RTC’s dismissal of the BOC’s counterclaims is palpably erroneous. Section 10 (d) 4 aims to protect not just the registered owner but anyone who has been deprived of his bond by fraudulent representation in order to deter fraud in the secondary trading of government securities. 69 it can no longer adjudicate the dispute under the second situation covered by CB Circular No. with the authority to resolve the issue of ownership of a registered bond (the CB bills) not falling in either of the first two situations. 28 by the following provisions of CB Circular No. however. The Central Bank or service agency concerned shall continue to withhold action on the certificate until such time that the conflicting claims have been finally settled either by amicable settlement between the parties or by order of the Court. it even provided for the suppletory application of CB Circular No. 769-80 to operate as an implied repeal. exchange and redemption upon sworn notice of a fraudulent assignment. 28 shall have suppletory application to CB Circular No. 769-80. 28 sanctions split jurisdiction which is not favored. the PDB argues that even assuming that the RTC has jurisdiction to resolve the issue of ownership of the CB bills. the PDB merely seeks to compel the BSP to determine. in fact. and the word "owner" here refers to the registered owner giving notice of the fraud to the BSP. Under this Circular. should be upheld. exchange. THE PDB’S COMMENT The PDB claims that jurisdiction is determined by the allegations in the complaint/petition and not by the defenses set up in the answer. therefore. With particular regard to the second situation. or office orders inconsistent herewith are revoked or modified accordingly. 769-80 has long been in effect. 28. CB Circular No. given the supposed repeal or modification of Section 10 (d) 4 of CB Circular No.. the party legally entitled to the proceeds of the subject CB bills. Central Bank Circular No. as a court of general jurisdiction. however. (Emphases added) We agree with the PDB that in view of CB Circular No. an attempt to harmonize the apparently conflicting provisions is a prerequisite before one may possibly conclude that an amendment or a repeal exists. the BSP’s special knowledge and experience in resolving disputes on securities. memoranda. the PDB’s case can only falls under the third situation which leaves the RTC. 769-80 (Rules and Regulations Governing Central Bank Certificates of Indebtedness) already superseded CB Circular No. Assignment Affected by Fraud. 28. Given the more passive stance of the BSP – the very agency tasked to enforce the circulars involved . courts should refrain from determining a controversy involving a question whose resolution demands the exercise of sound administrative discretion. we note that the parties have not raised the validity of either CB Circular No. the BSP has jurisdiction to resolve the issue of ownership of the CB bills – the more recent CB Circular No. like the PDB. which removed the BSP’s adjudicative authority over fraudulent assignments. 769-80. since Nuqui’s office (Government Securities Department) had already been abolished. limits the meaning of the "owner" to the registered owner is flawed. the intent of CB Circular No." for the BSP to exercise its limited jurisdiction to resolve conflicting claims. be dismissed and expunged from the record. The applicable circular. This conclusion is important. 28 do not have any significance unless it is first established that that Circular governs the resolution of their conflicting claims of ownership. 28. The PDB. 28 on "matters not specially covered by" CB Circular No. whether by agreement or by court order. CB Circular No. The repealing clause of CB Circular No. What the parties largely contest is the applicable circular in case of an allegedly fraudulently assigned CB bill. 769-80 or the abolition of Nuqui’s office does not result in depriving the BSP of its jurisdiction: first. shall immediately issue and circularize a "stop order" against the transfer. THE COURT’S RULING At the outset. The BOC asserts that the policy consideration supportive of its interpretation of CB Circular No. effectively amended Section 10 (d) 4 of CB Circular No. 28 is to have a reliable system to protect the registered owner. the BSP can always designate an office to resolve the PDB’s claim over the CB bills. the parties’ respective interpretations of the provision of Section 10 (d) 4 of CB Circular No. the BSP shall only continue to withhold action until the dispute is ended by an amicable settlement or by judicial determination. and second. is supported by its text "revoking" or "modif[ying" "all circulars" which are inconsistent with its terms. The PDB’s case cannot fall under the first two situations. more importantly. 769-80 as an issue. pursuant to CB Circular No. Since it is only the registered owner who complied with the BSP’s requirement of recording an assignment in the BSP’s books. should he file a notice with the BSP about a fraudulent assignment of certain CB bills. The pertinent provisions of CB Circular No. Lastly. Unlike CB Circular No. and all circulars. 769-80 read: We grant the petitions. 28 shall have suppletory application to matters not specially covered by these Rules. 769-80 limited the BSP’s authority to the mere issuance and circularization of a "stop order" against the transfer.68 Lastly. Indisputably. as the PDB alleged. redemption of the Certificate including the payment of interest coupons. Central Bank of the Philippines. Assuming arguendo that the PDB’s case falls under the second situation – i. These counterclaims should.the BSP will have to await action on the assignment pending settlement of the case. whose assignment and trading are governed by the BSP’s rules. the RTC has not acquired jurisdiction over the BOC’s so-called "compulsory" counterclaims (which in truth is merely "permissive") because of the BOC’s failure to pay the appropriate docket fees. While no express repeal exists. including the issue. it refers to the authority of a court to hear and decide a case. the primary objective of maintaining price stability. i. 28 would depend on the need to supplement any deficiency or silence in CB Circular No. 28.86 irrespective of whether the plaintiff is entitled to favorable judgment on the basis of his assertions. it is given. and of promoting and maintaining monetary stability and convertibility of the peso. tribunal or body exercising judicial or quasi-judicial functions. given the present state of law. Section 5. The other occurs when the later act covers the whole subject of the earlier one and is clearly intended as a substitute. the continued relevance and application of CB Circular No. the Court observes that none of the parties ever raised the issue of whether the BSP can simply disown its jurisdiction. entitled "Regulations Governing Open Market Operations. by the simple expedient of promulgating a new circular (specially applicable to a certificate of indebtedness issued by the BSP itself). constitutes an implied repeal of the earlier one. the then Central Bank was constitutionally made as the country’s central monetary authority until such time that Congress 93 shall have established a central bank. With the 1973 Constitution. assuming it has. No. acting in its quasi-judicial capacity. 769-80. in case of fraudulent assignments. on the matter of fraudulent assignment. that the laws or orders are clearly repugnant and patently inconsistent with one another so that they cannot co-exist. 769-80 inescapably repealed Section 10 (d) 4 of CB Circular No. entitled "Rules and Regulations Governing Central Bank Certificate of Indebtedness. assertive of its limited jurisdiction over ownership issues arising from fraudulent assignments of a certificate of indebtedness. 28.. Even granting. (iii) sole power and authority to issue currency within the Philippine territory. 7653. the power of supervision over the operation of banks. the BSP’s powers and functions include (i) supervision over the operation of banks. Servicing and Redemption of Public Debt. 769-80 impliedly repeals CB Circular No. too. as the country’s central monetary authority. procedural rules alone can confer no jurisdiction to courts or administrative agencies.the core question of law involved in these petitions .e. No.A. No. it has jurisdiction over cases whose subject matter does not fall within the exclusive original jurisdiction of any court. (v) making rediscounts. we find that CB Circular No. created a new central monetary authority which later came to be known as the Bangko Sentral ng Pilipinas. CB Circular No. in relation to CB Circular No. conducive to a balanced and sustainable growth of the economy. CB Circular No. matters involving the subject CB bills should necessarily be governed by CB Circular No. the later act. we stress that none of the parties disputes that the subject CB bills fall within the category of a certificate or evidence of indebtedness and that these were issued by the Central Bank. and (vii) acting as banker and financial advisor of the government. exchange. Under the New Central Bank Act (R. the legislature is presumed to know the existing law and would express a repeal if one is intended. 82 As a matter of substantive law. from there. loans and advances to banking and other financial institutions to influence the volume of credit consistent with the objective of achieving price stability. lay hidden On that note. However. Under Section 1. (vi) engaging in open market operations. 95 The Constitution expressly grants the BSP. 73 Repeal by implication is not favored. is a tribunal of limited jurisdiction and. 769-80 alone is not enough. 769-80 on a particular matter. redemption of the [registered] certificate" without any adjudicative function (which is the precise root of the present controversy). Article V of CB Circular No." is the governing regulation on matters77 (i) involving certificate of indebtedness78 issued by the Central Bank itself and (ii) which are similarly covered by CB Circular No. the Court could have written finis to the present controversy by simply sustaining the BSP’s hands-off approach to the PDB’s problem under CB Circular No. including Section 119 of R. 1949. Stabilization of Securities Market. 94 the BSP is given the responsibility of providing policy directions in the areas of money. 89 Parenthetically. pursuant to the Constitution. 769-80. The issue of BSP’s jurisdiction.1âwphi1 . determine who has a better right over the registered bond.74 There are two instances of implied repeal. the provisions of the law itself that gave CB Circular 769-80 its life and jurisdiction must be examined. even as R. 28. 75 A general reading of the two circulars shows that the second instance of implied repeal is present in this case. 76 On the other hand. in which case. No. 769-80 provide the BSP with a course of action in case of an allegedly fraudulently assigned certificate of indebtedness. (ii) regulation of operations of finance companies and non-bank financial institutions performing quasi banking functions. jurisdiction is determined by the law in force at the time of the filing of the complaint. an RTC is a court of general jurisdiction. 28." is a regulation governing the servicing and redemption of public debt.A. the BSP shall merely "issue and circularize a ‘stop order’ against the transfer. could wield only such powers that are specifically granted to it by the enabling statutes. within the authority granted to the Board and the Central Bank" 92 under its original charter. while leaving with Congress the authority to define the BSP’s regulatory powers over the operations of finance companies and other institutions performing similar functions. discounts. the patent irreconcilability of these two provisions does not require elaboration. No. In the present case. Thus. First. 769-80. The CB Monetary Board issued CB Circular No. In contrast. under CB Circular No. 769-80 itself. 80 In the exercise of judicial or quasi-judicial power. both CB Circular No. 83 In fact. 28 applies broadly to both government-issued bonds and securities and Central Bank-issued evidence of indebtedness. 87 The reason is that the complaint is supposed to contain a concise statement of the ultimate facts constituting the plaintiff's causes of action. to the extent of the conflict. the jurisdictional provision of CB Circular No. CB Circular No. an administrative agency. 84 Second. however. that reliance on CB Circular No. jurisdiction over the subject matter is determined only by the Constitution and by law. In light of the above principles pointing to jurisdiction as a matter of substantive law. 7653. In other words. banking and credit. we hark back to the basic principles governing the question of jurisdiction over the subject matter. Congress created the Central Bank of the Philippines (Central Bank) as a corporate body with the primary objective of (i) maintaining the internal and external monetary stability in the Philippines. has given rise to a question of jurisdiction . Article XI of CB Circular No. 7653 continued to recognize this role by the BSP. The 1987 Constitution continued to recognize this function of the then Central Bank until Congress. (iv) engaging in foreign exchange transactions. jurisdiction is the legal power or authority to hear and determine a cause. 28.which the Court cannot just treat sub-silencio. 88 Third. On the other hand. 769-80 now operate on the same subject – Central Bank-issued evidence of indebtedness. 28.At the outset. 28 and CB Circular No. as such. Broadly speaking. Under CB Circular No. even without resorting to statutory construction aids. 81 In the context of these petitions. thus. the Central Bank was empowered to issue rules and regulations "necessary for the effective discharge of the responsibilities and exercise of the powers assigned to the Monetary Board and to the Central Bank.A. the Central Bank is authorized to organize (other) departments for the efficient conduct of its business and whose powers and duties "shall be determined by the Monetary Board. 28 to regulate the servicing and redemption of public debt. payment and replacement of bonds and securities representing the public debt. The PDB. a subsequent law cannot be construed as repealing a prior law unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and the old laws. in particular. pursuant to Section 124 (now Section 119 of Republic Act R. Under R. 28 and CB Circular No. An implied repeal transpires when a substantial conflict exists between the new and the prior laws. it will operate to repeal the earlier law. 7653) of the old Central Bank law 79 which provides that "the servicing and redemption of the public debt shall also be effected through the Bangko Sentral. unless manifestly intended by the legislature. One takes place when the provisions in the two acts on the same subject matter are irreconcilably contradictory.A. 7653)."91Specifically. transfer. registration." However.A. The Philippine Central Bank On January 3. inscription. and (ii) preserving the international value and the convertibility of the peso. jurisdiction over the subject matter is determined not by the pleas set up by the defendant in his answer85 but by the allegations in the complaint. now the BSP. 769-80. or unless it is convincingly and unambiguously demonstrated. Issue. 90 In line with these broad objectives. 28. inconsistent with an old circular. 769-80. even if CB Circular No. As the two circulars stand. In the absence of an express repeal. the BSP would have to "call upon the owner and the person presenting the bond to substantiate their respective claims" and. relied solely and heavily on CB Circular No. the law required a phase-out of all fiscal agency functions by the BSP. 28 (as amended) covering assignments of registered bonds. hold hearings. all banks and all concerned are enjoined to observe strictly the pertinent provisions of said CB Circular as hereunder quoted: xxxx Under Section 10. over conflicting claims to the proceeds of the CB bills. 1991 xxx then CB Governor Jose L. of public administrative officers or bodies. In fact.4." the existence of the BSP’s jurisdiction in the present dispute cannot rely on this provision..98 the Court considered the BSP as an administrative agency. the BSP exercises supervisory powers (and regulatory powers) over banks (and quasi banks). as a basis for their official action and to exercise discretion of a judicial nature. [Boldfacing supplied] However.97 The PDB’s claim is not accurate." In fact. 4. 4. Inc. (2) Non-compliance herewith will constitute a basis for non-action or withholding of action on redemption/payment of interest coupons/transfer transactions or denominational exchange that may be directly affected thereby.A. Section 4 of R. 4. — The operations and activities of banks shall be subject to supervision of the Bangko Sentral. (e) x x x 4. It held: A quasi-judicial agency or body is an organ of government other than a court and other than a legislature. Regular investigation which shall not be oftener than once a year from the last date of examination to determine whether an institution is conducting its business on a safe or sound basis: Provided. in a memo dated September 23. or 4. The fact remains that the BSP already made known to the PDB its unfavorable position on the latter’s claim of fraudulent assignment due to the latter’s own failure to comply 96 with existing regulations: In this connection. What the PDB requested the BSP on that date was not the recording of the assignment of the CB bills in its favor but the annotation of its claim over the CB bills at the time when (i) it was no longer in possession of the CB bills. Section 10 (b) 2 also requires that a "Detached assignment will be recognized or accepted only upon previous notice to the Central Bank x x x. or ascertain the existence of facts. 28. modes or standards are to be applied. trust entities and other financial institutions which under special laws are subject to Bangko Sentral supervision. (n) The Bangko Sentral shall also have supervision over the operations of and exercise regulatory powers over quasi-banks. BSP has quasi-judicial powers over a class of cases which does not include the adjudication of ownership of the CB bills in question In United Coconut Planters Bank v. who are required to investigate facts. 1994.3. taking into consideration the distinctive character of the operations of institutions and the substantive similarities of specific functions to which such rules. "quasi-banks" shall refer to entities engaged in the borrowing of funds through the issuance. the books of the BSP do not show that the supposed assignment of subject CB Bills was ever recorded in the BSP’s books.6. is the PDB’s own failure to comply therewith. does not concern the BSP’s supervisory power over banks as this power is understood under the General Banking Law. endorsement or assignment with recourse or acceptance of deposit substitutes as defined in Section 95 of Republic Act No. No. however. The very definition of an administrative agency includes its being vested with quasi-judicial powers. and draw conclusions from them. "Supervision" shall include the following: 4. (c) assignments of treasury notes and certificates of indebtedness in registered form which are not provided at the back thereof with assignment form. [emphasis ours] While this provision empowers the BSP to oversee the operations and activities of banks to "ascertain that laws and regulations are complied with. 7653 (hereafter the "New Central Bank Act") for purposes of relending or purchasing of receivables and other obligations.5. [Boldfacing supplied] Again.. E. (2-Ca) For the purposes of this Act. under its power of supervision. . True. Cuisia advised all banks (including PDB) xxx as follows: In view recurring incidents ostensibly disregarding certain provisions of CB circular No. The issuance of rules of conduct or the establishment of standards of operation for uniform application to all institutions or functions covered. the PDB faults the BSP for not recording the assignment of the CB bills in the PDB’s favor despite the fact that the PDB already requested the BSP to record its assignment in the BSP’s books as early as June 30. Overseeing to ascertain that laws and regulations are complied with.1. which the PDB is bound to observe. there is nothing in the PDB’s petition (even including the letters it sent to the BSP) that would support the BSP’s jurisdiction outside of CB Circular No. which the PDB has not shown to be compliant with Section 10 (b) 2 above-quoted. Inquiring into the solvency and liquidity of the institution (2-D). having been transferred from one entity to another and (ii) all it has are the detached assignments. Ganzon. That the deficiencies/irregularities found by or discovered by an audit shall be immediately addressed. The conduct of examination to determine compliance with laws and regulations if the circumstances so warrant as determined by the Monetary Board.b. etc. which affects the rights of private parties through either adjudication or rule-making. discretion. Enforcing prompt corrective action.2. the PDB cannot insist that the BSP take cognizance of its plaint when the basis of the BSP’s refusal under existing regulation. Obviously. The issue presented before the Court. A "quasi-judicial function" is a term which applies to the action. (d) Assignment of securities which have changed ownership several times.On the BSP’s power of supervision over the operation of banks. The ever increasing variety of powers and functions given to administrative agencies recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed in countless controversies which cannot possibly be handled by regular courts. 8791 (The General Banking Law of 2000) elaborates as follows: CHAPTER II AUTHORITY OF THE BANGKO SENTRAL x x x Detached assignment will be recognized or accepted only upon previous notice to the Central Bank and its use is authorized only under the following circumstances: (a) x x x (b) x x x SECTION 4. Supervisory Powers.99 exercising quasi-judicial functions through its Monetary Board. the matters over which it may exercise this power must find sufficient anchorage on its enabling law.119 Subject to the principles stated in Section 90 of this Act. the BSP is able to exert some influence on the prices of goods and services and achieve its inflation objectives. Among its several functions under R. Nothing in the BSP’s charter confers on the BSP the jurisdiction or authority to determine this kind of claims. cost and availability of money and credit. quasi-legislative. 116 What the law grants the BSP is a continuing role to shape and carry out the country’s monetary policy – not the authority to adjudicate competing claims of ownership over the securities it has issued – since this authority would not fall under the BSP’s purposes under its charter. 7653. 7653117 empowers the BSP to conduct administrative hearings and render judgment for or against an entity under its supervisory and regulatory powers and even authorizes the BSP Governor to "render decisions. While the very nature of an administrative agency and the raison d'être for its creation 103 and proliferation dictate a grant of quasi-judicial power to it. emphases ours) The BSP is not simply a corporate entity but qualifies as an administrative agency created." 118 The non-compliance with the pertinent requirements under CB Circular No.A. if it deems it advisable. as well as other financial factors.A. instruction or ruling by the Governor. any banking law or any order. par. No. the provisions of the enabling statute are the yardsticks by which the Court would measure the quantum of quasi-judicial powers an administrative agency may exercise. which necessarily implies that the BSP Monetary Board must conduct some form of investigation or hearing regarding the same. exchange." it is precisely the text of the BSP’s own regulation (whose validity is not here raised as an issue) that points to the BSP’s limited role in case of an allegedly fraudulent assignment to simply (i) issuing and circularizing a ‘"stop order" against the transfer. as may be conferred by the Constitution or by statute. that is. regulatory. the law has not given the BSP the quasi-judicial power to resolve these competing claims as part of its power to engage in open market operations. place. administrative agencies exercise powers and/or functions which may be characterized as administrative. the BSP is authorized to engage in open market operations and thereby "issue. or rulings x x x on matters regarding application or enforcement of laws pertaining to institutions supervised by the BSP and laws pertaining to quasi-banks. investigatory.104 Scattered provisions in R. instruction or regulation issued by the Monetary Board. issuing. as defined in the enabling act of such agency. explicitly provides that the BSP Monetary Board shall exercise its discretion in determining whether administrative sanctions should be imposed on banks and quasi-banks.A. 108 (italics supplied. when competing claims of ownership over the proceeds of the securities it has issued are brought before it.A. deprives a party from any right to demand payment from the BSP. to lay down stable monetary policy and exercise bank supervisory functions. denominate the obligations in gold or foreign currencies. Issue and Negotiation of Bangko Sentral Obligations. – The open market purchases and sales of securities by the Bangko Sentral shall be made exclusively in accordance with its primary objective of achieving price stability. 115 To reiterate. The Monetary Board shall determine the interest rates. among others. in particular. as amended. of the entity entitled to receive the proceeds of the security upon its maturity. No. Principles of Open Market Operations. xxxx SEC. maturities and other characteristics of said obligations of the Bangko Sentral.Undoubtedly. including the payment of interest coupons. or the rules and regulations issued by the Monetary Board) of R. 112 Significantly. the Constitution granted it fiscal and administrative autonomy. To increase or reduce liquidity in the financial system. mandated to provide policy directions in the areas of money. 92. 90.110 Open market operation is a monetary tool where the BSP publicly buys or sells government securities111 from (or to) banks and financial institutions in order to expand or contract the supply of money. 7653. It has power to issue subpoena. either through purchases in the open market or through redemptions at par and by lot if the Bangko Sentral has reserved the right to make such redemptions. the BSP uses open market operations. among others. and shall be immediately retired and cancelled. This determination by the BSP is an exercise of its administrative powers 113 under the law as an incident to its power to prescribe rules and regulations governing open market operations to achieve the "primary objective of achieving price stability. 101 To be able to perform its role as central monetary authority. to regulate the supply of money in the economy to influence the timing. too. conferring jurisdiction on the BSP on certain matters. to administer oaths and compel presentation of books. [citations omitted] shall not be included among its assets. to impose fines and other sanctions and to issue cease and desist order. 7653. or violation of. The primary objective of the BSP is to maintain price stability.109 The BSP has a number of monetary policy instruments at its disposal to promote price stability. In other words." 114 As a matter of necessity. or a mix of these five. place.A. While R. the grant of quasi-judicial authority to the BSP cannot possibly extend to situations which do not call for the exercise by the BSP of its supervisory or regulatory functions over entities within its jurisdiction. the same rules and regulations facilitate transaction with the BSP by providing for an orderly manner of. – In order to provide the Bangko Sentral with effective instruments for open market operations. the BSP would necessarily make a determination. for the purpose of stabilizing the price level. subject to such rules and regulations as the Monetary Board may prescribe and in accordance with the principles stated in Section 90 of this Act. the BSP Monetary Board is a quasi-judicial agency exercising quasi-judicial powers or functions. A similar conclusion can be drawn from the BSP’s administrative adjudicatory power in cases of "willful failure or refusal to comply with. As aptly observed by the Court of Appeals. In general. the quasi-judicial power partakes of the nature of a limited and special jurisdiction. or may be issued without relation to specific types of assets of the Bangko Sentral.100 to carry out a particular governmental function. The evidences of indebtedness acquired or redeemed by the Bangko Sentral The fact alone that the parties involved are banking institutions does not necessarily call for the exercise by the BSP of its quasi-judicial powers under the law. the BSP’s assumption of jurisdiction over competing claims cannot find even a stretched-out justification under its corporate powers "to do and perform any and all things that may be necessary or proper to carry out the purposes" of R. in accordance with its own rules. buy and sell freely negotiable evidences of indebtedness of the Bangko Sentral" in the following manner. to sue for contempt those refusing to obey the subpoena without justifiable reason. pursuant to constitutional mandate. under the situations contemplated under Section 36. 8791. the Bangko Sentral may. Once found. or any order.A. to hear and determine a class of cases within its peculiar competence and expertise. exchanging and paying securities representing public debt. issue. open market operation is a monetary policy instrument that the BSP employs. 7653. That issuance of such certificates of indebtedness shall be made only in cases of extraordinary movement in price levels. either by express provision or by necessary implication. transferring. the evidences of indebtedness of the Bangko Sentral to which this section refers may be acquired by the Bangko Sentral before their maturity. among others. No. and may. the BSP may place an entity under receivership and/or liquidation or impose administrative sanctions upon the entity or its officers or directors. Said evidences of indebtedness may be issued directly against the international reserve of the Bangko Sentral or against the securities which it has acquired under the provisions of Section 91 of this Act. Section 37 of Republic Act No. By controlling the money supply. 28. No. exist.105 For instance. In other words. needed in its examination. that is. buy and sell freely negotiable evidences of indebtedness of the Bangko Sentral: Provided. 2 106 (where a bank or quasi bank persists in carrying on its business in an unlawful or unsafe manner) and Section 37 107 (where the bank or its officers willfully violate the bank’s charter or by-laws. policies or instructions issued by the Monetary Board. SEC. arising out of a subsequent transfer or assignment of evidence of indebtedness – a matter that appropriately falls within the competence of courts of general jurisdiction. banking and credit. or quasi-judicial. 7653 and R. No. and (ii) withholding action on the certificate. Thus.102 Once the issue and/or sale of a security is made. inter alia. No. as well as regulations. redemption of the certificate of indebtedness. That the statute withholds this power from the BSP is only consistent with the fundamental reasons for the creation of a Philippine central bank. the BSP Monetary Board is an independent central monetary authority and a body corporate with fiscal and administrative autonomy. records and others.120 . the present case is quite unique since the court’s jurisdiction was. Rule 62 of the Rules of Court provides when an interpleader is proper: SECTION 1. the adoption of either of these two would lead the trial court into serious legal error: first. Congress likewise defines the limits of an agency’s jurisdiction in the same manner as it defines the jurisdiction of courts. the courts cannot or will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal. the BSP’s own position. One of the instances when a court may properly defer to the adjudicatory authority of an agency is the applicability of the doctrine of primary jurisdiction. specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved. Section 1. are bound by the rule on non-waiver of jurisdiction. he may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims among themselves. Not only the parties themselves. even the PDB’s invocation of the doctrine of primary jurisdiction is misplaced. Necessarily. and services of the administrative tribunal to determine technical and intricate matters of fact. 134 where the claims of the interpleaders themselves are brought to the fore. 130 Of the three possible options available to the RTC. – Whenever conflicting claims upon the same subject matter are or may be made against a person who claims no interest whatever in the subject matter. invoked to compel an administrative agency (the BSP) to resolve the legal conflict of ownership over the CB bills . its decision would have to be set aside on appeal because the BSP has no jurisdiction as previously discussed. dismissed not only the BOC’s/the BSP’s counterclaims but the PDB’s petition itself as well. it is well-settled that the interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the courts construing such rule or regulation. Given the non-applicability of the doctrine of primary jurisdiction.The doctrine of primary jurisdiction argues against BSP’s purported authority to adjudicate ownership issues over the disputed CB bills Given the preceding discussions. However. when proper. although it did not so expressly state in the law. 126 While there are exceptions127 to this rule. the trial court remains to be without jurisdiction to entertain the suit since the contract sought to be rescinded is "inextricably tied up with the right to develop coal-bearing lands and the determination of whether or not the reversion of the coal operating contract over the subject coal blocks to [the plaintiff] would be in line with the country’s national program and objective on coal-development and over-all coal-supply-demand balance. In the exercise of its plenary legislative power. then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. In a similar vein. This is plain error. 769-80.133 When the court orders that the claimants litigate among themselves. originally. it has been the jurisprudential trend to apply the doctrine of primary jurisdiction in many cases involving matters that demand the special competence of administrative agencies. the Court taking cognizance of the move to vest jurisdiction in administrative commissions and boards the power to resolve specialized disputes xxx ruled that Congress in requiring the Industrial Court's intervention in the resolution of labor-management controversies xxx meant such jurisdiction to be exclusive. v." It then applied the doctrine of primary jurisdiction – In recent years. have been placed within the special competence of an administrative body. deserves respect from the Court. Court of Appeals. the trial court seriously erred because precisely. cases involving the application of doctrine of primary jurisdiction are initiated by an action invoking the jurisdiction of a court or administrative agency to resolve the substantive legal conflict between the parties. the PDB has not convinced us that a departure is warranted in this case. development and extraction of mineral resources like coal. [emphases ours] The absence of any express or implied statutory power to adjudicate conflicting claims of ownership or entitlement to the proceeds of its certificates of indebtedness finds complement in the similar absence of any technical matter that would call for the BSP’s special expertise or competence. if the case is such that its determination requires the expertise. the RTC acted correctly in initially assuming jurisdiction over the PDB’s petition for mandamus. exploitation. In short. merely provides an avenue for the conflicting claims on the same subject matter to be threshed out in an action. and comes into play whenever enforcement of the claim requires the resolution of issues which. 122 As early as 1954. The Trial Court does not have the competence to decide matters concerning activities relative to the exploration. Inc. the doctrine of primary jurisdiction finds application in this case since the question of what coal areas should be exploited and developed and which entity should be granted coal operating contracts over said areas involves a technical determination by the Bureau of Energy Development as the administrative agency in possession of the specialized expertise to act on the matter. Ordinarily. the stakeholder can join all competing claimants in a single proceeding to determine conflicting claims without exposing the stakeholder to the possibility of having to pay more than once on a single liability. in light of Circular No. It may occur that the Court has jurisdiction to take cognizance of a particular case. the remedy of interpleader. When interpleader proper. 121 As a result. under a regulatory scheme.132 Through this remedy. on the ground that it lacks jurisdiction. This is the doctrine of primary jurisdiction. but more so the courts. but even this correct alternative is no longer plausible since the BSP. prohibition and injunction.. already properly brought before the RTC the remaining conflicting claims over the subject CB bills by way of a counterclaim/crossclaim for interpleader. and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered. the Court applied the doctrine of primary jurisdiction under the following terms: 6. it may happen that either a court or an administrative agency has exclusive jurisdiction over a specific matter or both have concurrent jurisdiction on the same. too. Without emasculating its jurisdiction. The remedy of an action of interpleader131 is designed to protect a person against double vexation in respect of a single liability. Congress may create administrative agencies endowed with quasi-legislative and quasi-judicial powers. These issues preclude an initial judicial determination. the resolution of the conflicting claims over the CB bills falls within its general jurisdiction. The remedy of interpleader Based on the unique factual premise of the present case. In the fifties. the stakeholder as plaintiff is relegated merely to the role of initiating the suit. In this sense. which means that the matter involved is also judicial in character.129believes that jurisdiction over the BOC’s counterclaims and the BSP’s counterclaim/crossclaim for interpleader calls for the application of the doctrine of primary jurisdiction.." Clearly. or an interest which in whole or in part is not disputed by the claimants. It may happen. if it granted the PDB’s petition. that conflicting claims upon the same subject matter are or may be made against the stakeholder (the possessor of the subject matter) who claims no interest whatever in the subject matter or an interest which in whole or in part is not disputed by the claimants. in reality a new action arises. as an indispensable requisite. and second when it dismissed the PDB’s petitions and the BOC’s counterclaims on the ground that it lacks jurisdiction.7 It requires. as a respondent below. The Court held that under the "sense-making and expeditious doctrine of primary jurisdiction .instead of obtaining a judicial determination of the same dispute. the RTC could have properly dismissed the PDB’s petition but on the ground that mandamus does not lie against the BSP." 123 (emphasis ours) In Industrial Enterprises.124 the Court ruled that while an action for rescission of a contract between coal developers appears to be an action cognizable by regular courts. the allowance of the PDB’s petition even becomes imperative because courts may raise the issue of primary jurisdiction sua sponte. It applies "where a claim is originally cognizable in the courts. where the question demands the exercise of sound administrative discretion requiring the special knowledge. Section 2 of Rule 62 provides: . it. experience. 128 While the RTC agreed (albeit erroneously) with the PDB’s view (that the BSP has jurisdiction). what the PDB’s petitions bear out is essentially the nature of the transaction it had with the subsequent transferees of the subject CB bills (BOC and Bancap) and not any matter more appropriate for special determination by the BSP or any administrative agency. 125 In fact. however. that courts and agencies may willingly relinquish adjudicatory power that is rightfully theirs in favor of the other. " already resulted in the dismissal of the PDB’s petition. Given that the motion to interplead has been actually filed. Rule 6. – When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim. the RTC could only dismiss the PDB’s petition since it is the RTC which has jurisdiction to resolve the parties’ conflicting claims – not the BSP. governing ordinary civil actions. 136 Indeed. made only in the BSP’s Answer." Interpleader may be considered as a stakeholder’s remedy to prevent a wrong. As the preceding discussions would show. the BOC correctly argues that a remedy is provided under the Rules. Order. Similarly. does not require payment of docket fees. 146 The PDB takes a contrary position through its insistence that a compulsory counterclaim should be one where the presence of third parties. the payment of docket fees covering BOC’s counterclaim This is precisely what the RTC did by granting the BSP’s motion to interplead. the court shall issue an order requiring the conflicting claimants to interplead with one another.)-party complaint.e. third (fourth. especially when the claimant demonstrates a willingness to abide by the rules prescribing such payment. third party-complaint) which is separately allowed under Section 5. the court may direct in such order that the subject matter be paid or delivered to the court. from making payment to one not entitled to it. 2 of Rule 62. therefore." 144 whether compulsory145 or permissive. 147 However. the PDB does not possess any right to have its claim recorded in the BSP’s books. The same order required the BOC to amend its answer and for the conflicting claimants to comment. the interpleader was only an alternative position. The PDB itself "agreed that the various claimants should now interplead. Rule 62 does not expressly authorize the filing of a complaint-in-interpleader as part of. however. as a special civil action What is quite unique in this case is that the BSP did not initiate the interpleader suit through an original complaint but through its Answer." We disagree with the PDB. although separate and independent from. the RTC acted on the correct premise that it has jurisdiction to resolve the parties’ conflicting claims over the CB bills .148 In the present case. etc. its assertion of ownership over the CB bills – is in reality just that. Even if we gloss over the PDB’s own conformity to the dropping of these entities as parties.SEC. however. This is not altered by the fact that the PDB additionally prayed in its petition for damages. It reasons out that since the RCBC and All Asia (the intervening holders of the CB bills) have already been dropped from the case.which means that it did not actually compel the BSP to resolve the BOC’s and the PDB’s claims. that is. 2. or the prevention or redress of a wrong. that vests a trial court with jurisdiction over the claim or the nature of the action. Even then. if jurisdiction over them can be obtained. the BOC’s "claim" . It is the filing of the complaint or appropriate initiatory pleading. of whom the court cannot acquire jurisdiction. Suddenly. Perhaps. is not required.i. Thus. 12. Rule 9 of the Rules of Court137 does not include a complaint-in-interpleader as a claim. by reason of the BOC’s denomination of its claim as a "compulsory counterclaim" and the PDB’s failure to fully appreciate the RTC’s order granting the "BSP’s motion for interpleader" (with the PDB’s conformity).and accordingly required the BOC to amend its answer and for the PDB to comment thereon. While captioned "Answer with counter complaint/cross-claim for interpleader. that the BSP’s "counter-complaint/cross-claim for interpleader" runs counter to general procedures. attorney’s fees and costs of suit "against the public respondents" because the grant of the order to interplead effectively sustained the propriety of the BSP’s resort to this procedural device. the PDB and the BOC subsequently entered into two separate escrow agreements. The rules define a "civil action" as "one by which a party sues another for the enforcement or protection of a right. the PDB cannot properly be considered even as a potential claimant to the proceeds of the CB bills upon maturity. Apart from a pleading. we surely cannot deduce from the BOC’s mere failure to specify in its prayer the total amount of the CB bills it lays claim to (or the value of the subjects of the sales in the April 15 and April 19 transactions. Under Section 2. compounded by the unusual manner in which the interpleader suit was initiated and the circumstances surrounding it. Rule 6 of the Rules of Court. – Upon the filing of the complaint. Section 5. so long as the fee is paid within the applicable prescriptive or reglementary period. a party’s claim is asserted "in a complaint. covering the CB bills. Interpleader is a civil action made special by the existence of particular rules to govern the uniqueness of its application and operation. We see no reason to belabor this claim. as a special civil action.to which the PDB in fact acquiesced into . This circumstance becomes understandable if it is considered that insofar as the BSP is concerned. Without the motion to interplead and the order granting it. and submitted them to the RTC for approval. counterclaim. in its alternative prayer) an intention to defraud the government that would warrant the dismissal of its claim.consistent with the rules and the parties’ conduct . counter-claim (or cross-claim. however.. This does not mean. the court shall order them to be brought in as defendants. a "claim" against the stakeholder and not as a "counterclaim. accompanied by the payment of the prescribed docket fee. When an action is filed in court. considering the lack of a clear guideline on the payment of docket fee by the claimants in an interpleader suit. If the interests of justice so require." Thus. Rule 6 of the Rules of Court reads: SEC.effectively resulted in the dismissal of the PDB’s petition. 2. Swayed by the PDB’s argument. the PDB made an about-face and questioned the jurisdiction of the RTC. the BOC’s failure to pay the appropriate docket fees prevents the RTC from acquiring jurisdiction over the BOC’s "counterclaims. 138 a form of defense. the PDB mistakenly treated the BOC’s claim as a "permissive counterclaim" which necessitates the payment of docket fees.142 seeking relief which essentially consists in an order for the conflicting claimants to litigate with each other so that "payment is made to the rightful or legitimate owner"143 of the subject CB bills. par. Section 12. To reiterate and recall. however. the RTC dismissed even the PDB’s petition . It is only the BOC’s alternative prayer (for the PDB to deliver to the BOC. is primarily governed by the specific provisions in Rule 62 of the Rules of Court and secondarily by the provisions applicable to ordinary civil actions. This claim is different from the The PDB argues that.149 . thereby rendering itself vulnerable to lawsuit/s from those legally entitled to payment.139 or as an objection that a defendant may be allowed to put up in his answer or in a motion to dismiss. the answer. the complaint must be accompanied by the payment of the requisite docket and filing fees by the party seeking affirmative relief from the court. the RTC could not have really granted the relief originally sought in the PDB’s petition since the RTC’s order granting the BSP’s motion to interplead . in relation to Section 1." the RTC understood this as in the nature of a motion. a claim is not required to be contained in any of these pleadings but in the answer-(of the conflicting claimants)-in-interpleader. In granting the BSP’s motion. as the buyer in the April 15 transaction and the ultimate successor-in-interest of the buyer in the April 19 transaction. Bringing new parties. presumably to conform to the nature of an answer-in interpleader. the strict characterization of the BOC’s counterclaim is no longer material in disposing of the PDB’s argument based on non-payment of docket fees. 135 The remedy of interpleader. cross-claim. or complaint-in-intervention. the non-payment of the docket fee at the time of filing does not automatically cause the dismissal of the case. consequently.140 the rules141 allow a party to seek an affirmative relief from the court through the procedural device of a motion. the order granting the "PDB’s motion to interplead. either the original subjects of the sales or the value thereof plus whatever income that may have been earned pendente lite) and its prayer for damages that are obviously compulsory counterclaims against the PDB and. then the BOC’s counterclaim must only be permissive in nature and the BOC should have paid the correct docket fees. even assuming that the RTC has jurisdiction over the issue of ownership of the CB bills." In an interpleader suit. Interpleader 1. in order to avoid tremendous losses to the judiciary. represented by Present: The Ruling of the Trial Court RECTO INSO. – The docket and other lawful fees paid by the party who filed a complaint under this Rule. The same rule applies to permissive counterclaims. J. DEL CASTILLO. Rule 62 of which reads: PEREZ. costs and litigation expenses as liens. premises considered the consolidated PETITIONS are GRANTED. must be assessed the payment of the correct docket fee arising from their respective claims. Consequently. [4] In 2004. In an Order dated 30 August 2004. except when the claimant is a pauper-litigant. Docket and other lawful fees. BAGUIO MARKET VENDORS G. or the Cooperative Code of the Philippines. x x x Where the filing of the initiatory pleading is not accompanied by payment of the docket fee. under the Rules. These fees are necessary to defray court expenses in the handling of cases. or where such action is brought by the Cooperative Development Authority before the court. Petitioner. [3] Article 62(6) of RA 6938 exempts cooperatives: from the payment of all court and sheriff's fees payable to the Philippine Government for and in connection with all actions brought under this Code. as mortgagee. regardless of the nature of the BOC’s "counterclaims. HON. Branch 143. Branch 143. [6] petitions for extrajudicial foreclosure are subject to legal fees based on the value of the mortgagee’s claim. Respondent. in accordance with this decision. which shall not be considered filed until and unless the filing fee prescribed therefor is paid. as previously ordered by the Regional Trial Court. shall constitute a lien or charge upon the subject matter of the action. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. and 1. The seminal case of Sun Insurance Office. petitioner. only pertain to the docket and lawful fees to be paid by the one who initiated the interpleader suit. Chairperson. SO ORDERED. 152 WHEREFORE. or his duly authorized representative is hereby ORDERED to assess and collect the appropriate amount of docket fees separately due the Bank of Commerce and Planters Development Bank as conflicting claimants in Bangko Sentral ng Pilipinas’ interpleader suit. to wit: BRION. the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. properly as defendants-in-interpleader.versus - ABAD. Executive Judge of the trial court. CARPIO. The Clerk of Court of the Regional Trial Court of Makati City. 2. The Regional Trial Court of Makati City. is hereby ORDERED to assess the docket fees due from Planters Development Bank and Bank of Commerce and order their payment. actually "claims no interest whatever in the subject matter. Executive Judge. 6938 (RA 6938). as . Ltd. Judge Asuncion150provides us guidance in the payment of docket fees. Section 7 in effect only aims to actually compensate the complainant-ininterpleader.. Judge Iluminada Cabato-Cortes (respondent). petitioner sought exemption from payment of the fees. Baguio City. The Facts Petitioner Baguio Market Vendors Multi-Purpose Cooperative (petitioner) is a credit cooperative organized under Republic Act No. The Planters Development Bank is hereby REQUIRED to file with the Regional Trial Court its comment or answer-in-interpleader to Bank of Commerce’s Amended Consolidated Answer with Compulsory Counterclaim. 7. J. MULTI-PURPOSE COOPERATIVE (BAMARVEMPCO)." for purposes of payment of filing fees.: The Case For review[1] are the Orders[2] of the Executive Judge of the Regional Trial Court of Baguio City finding petitioner Baguio Market Vendors Multi-Purpose Cooperativeliable for payment of foreclosure fees. . JJ. denied the request for exemption.then to them devolves the duty to pay the docket fees prescribed under Rule 141 of the Rules of Court. Invoking Article 62 (6) of RA 6938.151 The importance of paying the correct amount of docket fee cannot be overemphasized: The matter of payment of docket fees is not a mere triviality. [underscoring ours] This must be the rule considering that Section 7.only that it was extraordinarily done through the procedural device of interpleader . filed with the Clerk of Court of the Regional Trial Court of Baguio City (trial court) a petition to extrajudicially foreclose a mortgage under Act 3135. who happens to be the stakeholder unfortunate enough to get caught in a legal crossfire between two or more conflicting claimants." By constituting a lien on the subject matter of the action. No.x DECISION CARPIO. v. as amended. SEC. 165922 Promulgated: ____________________ x --------------------------------------------------------------------------------------. Operations Manager. third-party claims and similar pleadings. to enforce the payment of obligations contracted in favor of the cooperative. as amended. and to the government as well. Since the defendants-ininterpleader are actually the ones who make a claim . Regional Trial Court.R. ILUMINADA CABATO-CORTES. unless the court shall order otherwise. citing Section 22 of Rule 141 of the Rules of Court. as amended. as well as the costs and litigation expenses. the payment of docket fees cannot be made dependent on the outcome of the case. [5] Under Section 7(c) of Rule 141.At any rate. for the faultless trouble it found itself into. and who. and to resolve with DELIBERATE DISPATCH the parties’ conflicting claims of ownership over the proceeds of the Central Bank bills. both the BOC and the PDB. as amended. it cannot be validly annulled. Article VIII[18]x x x . Thus. The Court was also granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial bodies. Among others. practice and procedure. Rule 141. assessments. Article 62(6) of RA 6938 prevails over Section 22 of Rule 141. We take the opportunity to reiterate our En Banc ruling inGSIS. exempting GSIS from “all taxes. the 1987 Constitution took away the power of Congress to repeal. it is immediately apparent that Article 62(6) of RA 6938 is no authority for petitioner to claim exemption from the payment of legal fees in this proceeding because first. exempting from the Rule’s coverage only the “Republic of the Philippines. we required the Court’s Office of the Chief Attorney (OCAT) to comment on the petition. The Power of the Legislature Any lingering doubt on the import of the textual evolution of Section 5(5) should be put to rest with our recent En Banc ruling denying a request by the Government Service Insurance System (GSIS) for exemption from payment of legal fees based on Section 39 of its Charter. This Court for the first time was given the power to promulgate rules concerning the protection and enforcement of constitutional rights. involving as it does. Petitioner maintains that the case calls for nothing more than a simple application of Article 62(6) of RA 6938. The Ruling of the Court We hold that Article 62(6) of RA 6938 does not apply to petitioner’s foreclosure proceeding. [11]Lastly.” However. By simple deduction. petitioner is not the Cooperative Development Authority which can claim exemption only in actions to enforce payments of obligations on behalf of cooperatives. charges or dues of all kinds. a judicial rule of procedure. practice and procedure. as defined under the Revised Administrative Code. fees. boldfacing supplied) Petitions for Extrajudicial Foreclosure Outside of the Ambit of Article 62(6) of RA 6938 The scope of the legal fees exemption Article 62(6) of RA 6938 grants to cooperatives is limited to two types of actions. alter or supplement” such rules. alter. or supplement rules concerning pleading. As one of the safeguards of this Court’s institutional independence. changed or modified by Congress.” [19] Reaffirming Echegaray’s construction of Section 5(5). more so with the Executive. x x x x (Italicization in the original.[9] Our holding above suffices to dispose of this petition. Until the 1987 Constitution took effect. practice and procedure is now the Court’s exclusive domain. the Court En Banc has recently ruled in Re: Petition for Recognition of the Exemption of the Government Service Insurance System from Payment of Legal Fees [12] on the issue of legislative exemptions from court fees. the Court described its exclusive power to promulgate rules on pleading. and procedure in all courts. issues relating to the Court’s power to promulgate judicial rules. the OCAT recommends the amendment of Section 22. respondent reasoned that petitioner’s reliance on Article 62(6) of RA 6938 is misplaced because the fees collected under Rule 141 are not “fees payable to the Philippine Government” as they do not accrue to the National Treasury but to a special fund [8] under the Court’s control. [16] This glaring and fundamental omission led the Court to observe in Echegaray v.amended. In fine. the power to promulgate rules of pleading. 8291. Hence. The OCAT called attention to the Court’s previous denial of a request by a cooperative group for the issuance of “guidelines” to implement cooperatives’ fees exemption under Article 62(6) of RA 6938. Second. and the admission to the practice of law. The Office of the Solicitor General (OSG). But most importantly. namely: (1) actions brought under RA 6938. the power to promulgate rules of pleading. the fees imposable on petitioner do not pertain to an action brought under RA 6938 but to a petition for extrajudicial foreclosure of mortgage under Act 3135. Rule 141 to make explicit the non-exemption of cooperatives from the payment of legal fees. practice and procedure as “one of the safeguards of this Court’s institutional independence”: [T]he payment of legal fees is a vital component of the rules promulgated by this Court concerning pleading. In its compliance. in its Manifestation (in lieu of Comment). The Issue The question is whether petitioner’s application for extrajudicial foreclosure is exempt from legal fees under Article 62(6) of RA 6938. The OSG also takes issue with respondent’s finding that the legal fees collected under Rule 141 are not “fees payable to the Philippine Government” as the judiciary forms part of the Philippine government. Secretary of Justice [17] that this Court’s power to promulgate judicial rules “is no longer shared by this Court with Congress”: The 1987 Constitution molded an even stronger and more independent judiciary. its agencies and instrumentalities” and certain suits of local government units. these constitutions also granted to the legislature the concurrent power to “repeal. [10] Although not a party to this suit. the OCAT recommends the denial of the petition. joins causes with petitioner. both the 1935 [13] and the 1973[14] Constitutions vested on the Supreme Court the “power to promulgate rules concerning pleading. practice. our two previous constitutions textualized a power sharing scheme between the legislature and this Court in the enactment of judicial rules. and (2) actions brought by the Cooperative Development Authority to enforce the payment of obligations contracted in favor of cooperatives. This time. this petition. opining that Section 22. it enhanced the rule making power of this Court [under] Section 5(5). Republic Act No. [7] vis a vis the Power of the Supreme Court to Enact Judicial Rules Petitioner sought reconsideration but respondent denied its motion in the Order dated 6 October 2004.[20] x x x (Emphasis supplied) . [15] The 1987 Constitution textually altered the power-sharing scheme under the previous charters by deleting in Section 5(5) of Article VIII Congress’ subsidiary and corrective power. prevails over Article 62(6) of RA 6938 because (1) the power to impose judicial fees is eminently judicial and (2) the 1987 Constitution insulated the Court’s rule-making powers from Congress’ interference by omitting in the 1987 Constitution the provision in the 1973 Constitution allowing Congress to alter judicial rules. However. practice and procedure is no longer shared by this Court with Congress. The OSG submits that as the substantive rule. The rule making power of this Court was expanded. a day too late to appeal. 2007 local elections. that Section 3. Rule 22 of the COMELEC Rules of Procedure. to wit: Pursuant to Section 3. Cavite. except Part VI. as amended by COMELEC Resolution No. that even assuming that the appeal was belatedly filed. with copy served on the adverse counsel or party if not represented by counsel.. Castillo further insists that Section 12 of Rule 2 of the COMELEC Rules of Procedure provides that assignment of cases to the specially designated courts should be done exclusively by raffle conducted by the executive judge or by the judges designated by the Supreme Court. that the Court relaxed on numerous occasions the application of the rules in order to give due course to belated appeals upon strong and compelling reasons. considering that SCAO 54-2007 should be construed as a permissive rule that cannot supersede the general rule that jurisdiction over election contests is vested in the RTC. Revilla ran for Municipal Mayor of Bacoor.[5] WHEREFORE. MINERVA GOMEZ-CASTILLO G. Parties’ Arguments Castillo insists that her notice of appeal was seasonably filed. Castillo filed his protest in the RTC in Bacoor. which was eventually raffled to Branch 19. 54-2007. otherwise known as The Rules of Procedure in Election Contests Involving Elective Municipal and Barangay Officials. Revilla sought the dismissal of the election protest. In his comment. Cavite. seeking reconsideration of the Commission's (First Division) Order dated 30 January 2009. and that the COMELEC should not have dismissed her motion for reconsideration for her mere failure to pay the corresponding filing fee. 2010 Respondents. . Cavite. alleging that it was filed in the wrong Branch of the RTC. Castillo. Cavite during the May 14. Applicability. SO ORDERED. 2009[1] issued in EAC No. the aggrieved party may filed with said court a notice of appeal. June 22. that Section 4 of Rule I of the COMELEC Rules of Procedure even allows the COMELEC to suspend its own rules of procedure in order to obtain a speedy disposition of all matters pending before the COMELEC. . the RTC would not have given due course to his appeal. Cavite. On December 23. . Antecedents Castillo and respondent Strike P. Petitioner Minerva Gomez-Castillo (Castillo) hereby seeks to nullify the orders dated January 30. and serve a copy thereof upon the attorney of record of the adverse party. shall apply to all actions and proceedings brought before the Commission.R.[3] Thereupon. by filing a notice of appeal with the court that rendered the decision. x-----------------------------------------------------------------------------------------x DECISION BERSAMIN. [7] Castillo has brought the present recourse. but the COMELEC denied the motion because she did not pay the motion fees required under Sec.Within five (5) days after promulgation of the decision of the court. 2009 and March 11. not to actions or proceedings originating in courts of general jurisdiction. because it involved the paramount need to clarify the real choice of the electorate.[8] Revilla submits that the COMELEC correctly dismissed Castillo’s appeal for being filed beyond the five-day reglementary period prescribed in Section 3 of Rule 22 of the COMELEC Rules of Procedure. 2008. is hereby DENIED for failure of the movant to pay the necessary motion fees under Sec. J. Through his Answer. Part VI shall apply to election contests and Quo Warrantocases cognizable by courts of general jurisdiction. After the Municipal Board of Canvassers proclaimed Revilla as the elected Municipal Mayor of Bacoor. she filed her notice of appeal on December 23. 54-2007.[4] The First Division of the COMELEC dismissed the appeal for being brought beyond the five-day reglementary period. On November 21. 7(f). 54-2007 designated Branch 22 of the RTC in Imus. 2008. otherwise. He pointed out that Supreme Court Administrative Order (SCAO) No.These rules. did not apply to her case. thru registered mail on 13 February 2009 and received by this Commission on 4 March 2009. noting that although Castillo had received the November 21. REVILLA. First that the COMELEC Rules of Procedure applied only to actions and proceedings brought before the COMELEC. which was not the proper court. 2008 order of the RTC on December 15 . Rule 22 of the COMELEC Rules of Procedure which requires the appellant to file her notice of appeal “within five (5) days after promulgation of the decision of the court xxx” and considering further that jurisprudence holds that perfection of an appeal in the manner and within the period laid down by law is not only mandatory but JURISDICTIONAL. A-01-2009 by the Commission on Elections (COMELEC). rendering the designation of the RTC branches to handle election protests akin to a designation of venue. We AFFIRM the Orders dated 30 August 2004 and 6 October 2004 of the Executive Judge of the Regional Trial Court of Baguio City. Rule 40 of the COMELEC Rules of Procedure. RESOLVES to DISMISS the instant appeal for appellant's failure to file her Notice of Appeal within the five (5) day reglementary period. 7(f). that an electoral contest like hers was imbued with public interest.Division. Notice of Appeal.M. we DENY the petition. cited in the assailed order dated January 30. Castillo presented a notice of appeal. contending that the COMELEC’s orders dismissing her appeal and denying her motion for reconsideration were issued with grave abuse of discretion amounting to lack or excess of jurisdiction. 2009. Let a copy of this Decision be furnished the Office of the Court Administrator for circulation to all courts. and that her protest was thus duly raffled to the RTC in Bacoor. 2008. No. Appeal. the RTC ordered that the complete records of the protest be forwarded to the Election Contests Adjudication Department (ECAD) of the COMELEC. Cavite and Branch 88 of the RTC in Cavite City to hear. try and decide election contests involving municipal officials in Cavite. but should have considered the soundness of her argument to the effect that SCAO No. Rule 40 of the Comelec Rules of Procedure[6] as amended by Comelec Resolution no. 2008. SO ORDERED. 07-4-15-SC.An aggrieved party may appeal the decision to the commission on Elections. within five days after promulgation. No. and that contrary to SCAO No. the rules on election contests should be liberally construed to the end that mere technical objections would not defeat the will of the people in the choice of public officers. 187231 Petitioner Present: COMISSION ON ELECTIONS and STRIKE B. 54-2007 continued to vest jurisdiction to try and decide election contest involving elective municipal officials in the RTC as a whole. because Section 2 of Rule I of the COMELEC Rules of Procedure provides that: Sec. 2. that A. 02-0130. clearly and categorically directed: Section 8.: Castillo moved for the reconsideration of the dismissal of her appeal. thus: Section 3. Castillo filed an Election Protest Ad Cautelam[2] in the Regional Trial Court (RTC) in Bacoor. viz: The “Motion for Reconsideration” filed by protestant-appellant Minerva G.this Commission. Branch 19 dismissed Castillo’s election protest for being violative of SCAO No. 02-0130. Castillo now insists that her appeal should not be dismissed. Respondent. B Castillo’s tardy appeal should be dismissed Section 8 of A. whether she as the protestant sought it or not. implying that such period was but a trivial guideline to be ignored or brushed aside at will. The period of appeal and the perfection of appeal are not mere technicalities to be so lightly regarded. nor conferred by any acquiescence of the court. particularly of the courts. The petition has no merit. by specifying the proper venue where such cases may be filed and heard. nor be acquired through waiver nor enlarged by the omission of the parties. No. 2008 order of the RTC on December 15. ways or manner in which said jurisdiction. or eight days after her receipt of the decision. is the error enough to warrant the reversal of its order of dismissal despite its having attained finality? Ruling Although Castillo had received the November 21.versus KOLONWEL TRADING. A. . This result provides an additional reason to warrant the assailed actions of the COMELEC in dismissing her appeal. that Castillo’s tardy appeal resulted in the finality of the RTC’s dismissal even before January 30. Petitioner.R. No. INC. the Supreme Court is circumscribed by the zone properly denominated as the promulgation of rules concerning pleading. and cannot be delegated to another office or agency of the Government. 175608 . we cannot also presume the timeliness of her appeal from the fact that the RTC gave due course to her appeal by its elevating the protest to the COMELEC. The allocation of jurisdiction is vested in Congress. What Branch 19 should have done under the circumstances was to transfer the protest to Branch 22 of the RTC in Imus. that the failure to pay the filing fee rendered the motion for reconsideration a mere scrap of paper. . for they are essential to the finality of judgments. not tainted by either arbitrariness or whimsicality. DEPARTMENT of BUDGET and MANAGEMENT PROCUREMENT SERVICE (DBM-PS) and the Inter-Agency Bids and Awards Committee (IABAC). Her appeal was properly dismissed for being too late under the aforequoted rule of the COMELEC. because it was enacted to ensure the exclusive and speedy disposition of election protests and petitions for quo warranto involving elective municipal officials. in order that the will of the electorate is ascertained as soon as possible so that the winning candidate is not deprived of the right to assume office. and procedure in all courts. even on the assumption that it was filed on time. . and so that any doubt that can cloud the incumbency of the truly deserving winning candidate is quickly removed. Castillo’s insistence is unacceptable. No. she filed her notice of appeal only on December 23. Batas Pambansa Blg. jurisdiction cannot be fixed by the will of the parties. WHEREFORE.M. As such. x --------------------------------------------------x VIBAL PUBLISHING HOUSE. not jurisdictional It is not trite to observe. the petition is dismissed for lack of merit. KOLONWEL TRADING. finally. Cavite amounted only to a wrong choice of venue. still remained futile due to the petitioner’s failure to pay the corresponding fee for the motion for reconsideration. In promulgating the Rules of Court. shall be exercised. or does it merely designate the proper venuefor filing? In case the RTC was incorrect. Petitioners.An aggrieved party may appeal the decision to the Commission on Elections within five days after promulgation by filing a notice of appeal with the court that rendered the decision with copy served on the adverse counsel or party if not represented by counsel. 07-4-15-SC provides that: Section 8.versus KOLONWEL TRADING. 07-4-15-SC was designed to ensure a just and orderly administration of justice. because she claims that the five-day reglementary period was a mere technicality. Appeal.versus The jurisdiction over election contests involving elective municipal officials has been vested in the RTC by Section 251. LG & M CORPORATION G. 2002. Such transfer was proper. [12] and is permissive.M. that the notice of appeal. Respondent. a notion underlying the stability of our judicial system. The Rules of Court does not define jurisdictional boundaries of the courts. Cavite. Issues Does Section 13 of Rule 2 of A. Like other rules on venue. 881 (Omnibus Election Code). given that the determination of the will of the electorate of Bacoor. Contrary to Castillo’s posture.. The Rules of Court yields to the substantive law in determining jurisdiction. The presumption of timeliness would not arise if her appeal was actually tardy.. Hence. 2008. and that the COMELEC could not be faulted for applying its procedural rules to achieve a just and expeditious determination of every proceeding brought before it.M. A Error of Petitioner in filing the protest in RTC in Bacoor. considering that her wrong choice did not affect the jurisdiction of the RTC. [9] consequently. Accordingly.M. and SD PUBLICATIONS. It is well-settled that jurisdiction is conferred by law.[13] Castillo’s filing her protest in the RTC in Bacoor. 07-4-15-SC designate the RTC Branch that has jurisdiction over an election contest. 07-4-15SC. the dismissal of the protest by Branch 19 constituted plain error. A.[14] A greater reason to adhere to this notion exists herein. for the short period of five days as the period to appeal recognizes the essentiality of time in election protests. which was the proper venue. Cavite according to the process set forth by law was of the highest concern of our institutions. 2008. because it prevented the COMELEC from acquiring jurisdiction over the protest. No.that the period for filing an appeal is not a mere technicality of law or procedure and the right to appeal is merely a statutory privilege that may be exercised only in the manner prescribed by the law. INC. .[11] On the other hand. as fixed by the Constitution and acts of Congress. Petitioners. Respondent. the Court finds that the COMELEC’s assailed actions were appropriate and lawful. No. x------------------------------------------------x DEPARTMENT OF EDUCATION. only spelled out the manner by which an RTC with jurisdiction exercises such jurisdiction. the Rules of Court can only determine the means.[10] SO ORDERED. practice. ”[7] The following events. Vibal filed an urgent motion to dismiss [19] Kolonwel’s petition on several grounds. as amended in another order [18] dated November 20.the WB with the revised Bid Evaluation Report (BER). In support of its TRO application. of Thailand (Watana. 2006.[10] Kolonwel raised several issues and requested that its disqualification be reconsidered and set aside. In the meantime. petitioner Vibal Publishing House. Appended to the covering letter was a document entitled “Bid Evaluation Report and Recommendation for Award of Contract. via Resolution (Res. for brevity) and respondent Kolonwel. On December 4. issued Res.and eventually conducted . these three (3) petitions which the Court. On June 23. 2006. On March 15. This court grants a final injunction pursuant to Sec. from proceeding with the subject September 12. 2006. the court grants the petition for certiorari and prohibition. and the Asian Development Bank (ADB). [IABAC]. 2006. 001-2006. restraining respondents Department of Education and Culture (sic). She thus asked the IABAC to review its evaluation and to provide Hence. On May 11. October 12. WB offered “no objection” to the recommended award. 001-2006-A are consequently nullified and set aside. taking into account the December 31. among other things. the WB. as detailed in PS IABAC Res. to nullify and set aside the Order[1] dated December 4.” Issues of “Conflict of interest”with respect to Watana and Vibal. 06-116010. divided into three (3) lots. upheld the disqualification of all the other bidders. (Emphasis and words in brackets supplied) 1. A week after. for stated reasons. IABAC apprised WB of Kolonwel’s concerns stated in its letter-reply. the DBM-PS Inter-Agency Bids and Awards Committee (IABAC) called for a bidding for the supply of the Makabayan textbooks and manuals. et al. SO ORDERED. through the Second Social Expenditure Management Program (SEMP2) of the Philippines (RP) – International Bank for Reconstruction and Development (IBRD) Loan Agreement No.. the trial court did not conduct a hearing on either dismissal motions. in reply to a DepEd query. 2005. stated that “procurement[s] for MAKABAYAN …textbooks where funds therefore (sic) are sourced from World Bank Loan shall be governed by the applicable procurement guidelines of the foreign lending institution. inter alia alleging that the latter had pursued judicial relief without first complying with the protest procedure prescribed by Republic Act (R. 2006. contracts or transactions proceeding from the issuance of IABAC Resolution No.[11] 4) The issuance of notices of award and the execution on September 12. with a prayer for a temporary restraining order. Kolonwel’s tender appeared to cover all three (3) lots. 9 of Rule 58 of the Rules of Court as amended. non-compliance and reservations of [DepEd]. IABAC Resolution No. hereinafter) dated September 12. 2006. 1654-PHI. 2006 to the DepEd and the DBM-PS IABAC Chairman.R. in SP Civil Case No. 2006 RP-IBRD Loan closing date. the IABAC submitted to WB for its review and information Res. Menon.[16] the petition sought to nullify IABAC Res. as recited in the assailed Manila RTC order and as borne out by the records. hereinafter). LG & M Corporation and SD Publications from the commission or continuance of acts. 2006. the IABAC informed Kolonwel of its or its bid’s failure to post qualify and of the grounds for the failure.. (Vibal. a second request for reconsideration of Kolonwel [14] after WB found the reasons therefor. the DBM-PS IABAC chairman informed Kolonwel of the denial of its request for reconsideration and of the WB’s concurrence with the denial. All subsequent actions of the respondents resulting from the issuance of IABAC Resolution No. R. J. either as principal or in joint venture arrangement. with the IABAC’s finding of conflict of interest on the part of Vibal and Watana and the rejection of their bids. the Executive Director of the Government Procurement Policy Board (GPPB). the IABAC. 2006.[9] G. and 8.a summary hearing on the TRO application. Such was the state of things when on. in G.) No. 2006. The IABAC Resolution No. June 8. 7118-PH [2] (Loan No. Menon. No. In a letter[8] dated April 24. Inc.supply contracts. Vibal Publishing House. Nos. G. 2006. In an order[17] of October 31. the DepEd requested the services of the DBM-PS to undertake the aforementioned procurement project which is to be jointly funded by the World Bank (WB). partly based on the same protest provision. Earlier. per its Resolution [21] of January 16. Ms. 001-2006-A.A. No. In the original order..which responded and procured the Bidding Documents. 7118-PH. Upon review. Of the entities.R. Ltd. The factual antecedents: In the middle of 2005. as petitioner a WHEREFORE.. 2006 purchase. to wit: Lot 1 for Sibika Grades 1-3. [DBMPS]. [5] Following the bid and the book content/body evaluation process. the court granted a 20-day TRO enjoining the IABAC. 9184. to Watana of Sibika 2 and HeKaSi 4 & 5 and to Daewoo of Sibika 3.: Before the Court are these consolidated three (3) petitions for review under Rule 45 of the Rules of Court. onSeptember 8. No.[12] 5. Inc. No. Lot 2 for HeKaSi Grades 4-6 and Lot 3 for Araling Panlipunan Years I-IV. then transpired: 3) Subsequently. starting November 6. 2006 is annulled and set aside. a project of the Department of Education (DepEd). however. the IABAC.Among them were Watana Phanit Printing & Publishing Co. 2007 2. foreign and local. among them want of jurisdiction and lack of cause of action. 001-2006[6] dated March 9.[13] The IABAC denied. a special civil action for certiorari and prohibition thereat commenced by herein respondent Kolonwel Trading (Kolonwel for short) against the Department of Budget and Management Procurement Service (DBM-PS). unmeritorious. through its Regional Senior Economist. et al. 2002. Branch 18. 2007. respectively. resolved “to recommend to the [WB] and the [ADB] failure of bids for all lots in view of the abovementioned disqualifications.) No. At the core of the controversy are the bidding and the eventual contract awards for the supply and delivery of some 17. 2006. 175616.”[3] On October 27. 001-2006 is declared validly and regularly issued in the absence of a showing of grave abuse of discretion or excess of jurisdiction. the Manila RTC scheduled . Docketed as SP Civil Case No. through SEDIP Loan No. Rekha Menon. disagreed. particularly on the aspect of cover stock testing. No. proposals for the different lots. the court set the preliminary conference and hearing for the applied preliminary injunction on November 7. disposing as follows: [20] finding for Kolonwel. 2006. As records show. the Court issued. 2006. Ms. 001-2006-A dated May 30. otherwise known as the “Government Procurement Reform Act. 001-2006-A effectively recommending to WB the contract award to Vibal of Sibika 1 & 3 andHekaSi 5. Daewoo International Corporation of South Korea (Daewoo. Kolonwel alleged. 2006 of the Manila Regional Trial Court (RTC). Kolonwel filed with the RTC of Manila a special civil action for certiorari and prohibition with a prayer for a temporary restraining order (TRO) and/or writ of preliminary injunction. 175659 x-----------------------------------------------------------------------------------------x DECISION GARCIA. that the supply-awardees were rushing with the implementation of the void supply contracts to beat the loan closing-date deadline. 06-116010. No. 2006 of the corresponding Purchaser-Supplier contracts followed.[4] only eleven (11) bidders submitted. 001-2006-B[15] dated July 18.” The DepEd later followed with its own motion to dismiss. “failure in cover stock testing” for Kolonwel and DepEd’s “reservation” were among the disqualifying reasons stated in the resolution. albeit it heard the parties on their opposing claims respecting the propriety of issuing a writ of preliminary injunction. the Manila RTC issued its assailed Order quo. In reaction.5 million copies of Makabayan (social studies) textbooks and teachers manuals. The 2005 Call for Submission of Textbooks and Teacher’s Manuals shall be viewed vis-à-vis relevant World Bank guidelines. and raffled to Branch 18 of the court. 001-2006 and 001-2006-A and to set aside the contract awards in favor of Vibal and Watana. for short). 175616 In its reply-letter of May 18. ordered consolidated. agreeing with WB’s position articulated in Ms. a TRO[22] enjoining the presiding judge [23] of the . Earlier. 9184 before going to the RTC of Manila via a petition for certiorari. the aforequoted Section 55 of R. 55 in relation to Secs. its filing of SP Civil Case No. that court could not have lawfully acquired jurisdiction over the subject matter of this case. No. even absurd. among others. as required by law. has to be lodged before court action. inversely. What Congress contextually intended under the premises was that not only would there be a distinct administrative grievance mechanism to be observed . Section 55. of R. 9184 emphatically states that cases filed in violation of the protest process therein provided “shall be dismissed for lack of jurisdiction. As in Abaya.l of IRR-A on the procedure for protest cannot be applied. (Emphasis and words in bracket added. 9184 to indicate that Congress intended such a variance in the protest procedure. respectively reading as follows: Sec. to foreign-funded procurement projects. For another. 2006. is limited to fixing “the amount of the protest fee and the periods during which the protest may be filed and resolved .RTC of Manila. No. No. Stated differently. there really should be no reason why the policy behind Section 55.Decisions of the BAC [Bids and Awards Committee] in all stages of procurement may be protested to the head of the procuring entity….. apply RA 9184 retroactively with respect to foreign-funded procurement projects.” it being also provided that “foreign-funded procurement activities shall be the subject of a subsequent issuance.A. even analogously. jurisdiction over suits assailing the BAC’s decisions is in turn found in the succeeding Section 58 which provides that the courts would have jurisdiction over such suits only if the protest procedure has already been completed. 06-116010 or implementing its assailed order.A. the absence of provisions on protest fee and reglementary period does not signify the deferment of the implementation of the protest mechanism as a condition sine qua non to resort to judicial relief. At any rate. It was not prescribed by an administrative agency tasked with implementing a statute through the medium of interpretative circulars or bulletins.A. supra. The [RTC] shall have jurisdiction over final decisions of the head of the procuring entity. The jurisdictional caveat that authorizes courts to assume or. What is beyond dispute. Section 58. Nonetheless.e. 57 and 58 of R. Ignoring thus this administrative remedy would be to defy the law itself. however. on the other hand. There may perhaps be room for relaxing the prescription on protest if a bona fide attempt to comply with legal requirements had been made. the respondent would argue. in fact a set of implementing rules and regulations. as urged by the petitioners. vis-à-vis the matter of protest. No.” issued on July 11. PH-P204 entered into by and between the RP and the Japan Bank for International Cooperation (JBIC) for the implementation DPWH Contract Package No. No.funded projects. 9184. accompanied by a fixed protest fee. stated the observation that there was “substantial compliance of the requirement of protest. No. and certainly there is no concrete foundation in R. Neither is it necessary that the amount of protest fee be prescribed first. It is only after the BAC itself denies reconsideration that the protest. No. In the same breath. a similarly drawn argument involving IRR-A was set aside in Abaya v. in granting the petition for certiorari and prohibition. Protest on Decision of the BAC. the respondent had to file a protest and pursue it until its completion before going to court. As the last sentence of the afore-quoted Section 55 of R.Court action may be resorted to only after the protests contemplated in this Article shall have been completed. Stated a bit differently. The Court is unable to lend concurrence to the trial court’s and respondent’s positions on the interplay of the protest and jurisdictional issues.) As a counterpoint. 9184. cases that are filed in violation of the protest process “shall be dismissed for lack of jurisdiction. precludes courts from assuming. i. Given the above perspective.” It is to be stressed that the protest mechanism adverted to is a built-in administrative remedy embodied in the law itself. In its petition before the Manila RTC. And not to be overlooked of course is the fact that the third protest-completing requirement. For one.[28] a case involving Loan Agreement No. 9184. Non-interruption of the Bidding Process. 9184 is couched. It would be incongruous. to provide for the prospective application of RA 9184 with respect to domestically-funded procurement projects and. was not complied with. and 3) the payment of a non-refundable protest fee. As may be noted. It will not avail the respondent any to argue that the absence of an IRR to make the protest mechanism under R.. 9184 become operative for foreign-funded projects was what prevented it from complying with the protest procedure.A. No. 9184 sets three (3) requirements that must be met by the party desiring to protest the decision of the Bids and Awards Committee (BAC). and having been twice spurned by. Certiorari. as a matter of necessity.A. there is no reason why the policy behind Section 77 of IRR-A cannot be applied to foreign-funded procurement projects like the CP I project. Sec. particularly in seeking reconsideration of its decision. In fact. again following the RTC’s line.1 [26] of which provides that prior to a resort to protest. there is no discernable justification why a different procedure should obtain with respect to foreign-funded procurement undertakings as opposed to a locally funded project. Indeed. as the law itself would put it. the same letters were unverified.” Considering that the respondent’s petition in RTC Manila was actually filed in violation of the protest process set forth in Section 55 of R. As applied to the present case. Neither did the respondent then argue that it was not able to comply due to the absence of an IRR for foreign. payment of protest fee.A. albeit with the lame excuse that it was effectively barred from complying with the required administrative remedies of protest..A. Decisions of the BAC may be protested by filing a verified position paper and paying a non-refundable protest fee. in the form of a verified position paper. Sec. Or. in its dealings with the IABAC. But the fact alone that the respondent did not even submit a verified position paper by way of protest argues against such plausibility. there is. the aggrieved party must first file a motion for reconsideration of the decision of the BAC. It may be that IRR-A specifically defines its coverage to “all fully domestically-funded procurement activities. To be sure. The amount of the protest fee and the periods during which the protest may be filed and resolved shall be specific in the IRR. 57. Protests must first be resolved before any award is made. 2) the protest must be submitted to the head of the procuring entity. 2006[25] in which it requested reconsideration of its disqualification cannot plausibly be given the status of a protest in the context of the aforequoted provisions of R. Report to Regular Courts. 9184 to render the protest mechanism of the law operative for foreign-funded projects.A. the respondent veritably admitted to not complying with the protest requirement. 58.” [27] However. Hence. even by way of noting that it was at a loss as to the inoperativeness of such provision in the light of the absence of an IRR. is that courts are precluded by express legislative command from entertaining protests from decisions of the BAC.A. respondent sought judicial intervention even before duly completing the protest process. the respondent draws attention to its having twice asked. none of the reconsiderationseeking letters of the respondent advert to the protest procedure under Section 55 of R. in this case the DepEd Secretary or the head of the DBM Procurement Service. 55. 06-116010 was precipitate. such as those in this case. Cases that are filed in violation of the process specified in this article shall be dismissed for lack of jurisdiction. 2006[24] and June 28. was even aware of the protest requirements. Petitioners urge the annulment of the assailed RTC Order dated December 4. In no case shall any process taken from any decision treated in this Article stay or delay the bidding process. Respondent could very well have proceeded with its protest without paying the required protest fee.A. remitting the proper amount once the appropriate IRR fixed the protest fee. No. denominated as “ IRR-A. I (CP I). the lawmakers could not have intended such an absurdity. Significantly. IRR-A covers only fully domestically-funded procurement activities from procurement planning up to contract implementation and that it is expressly stated that IRR-B for foreign-funded procurement activities shall be subject of a subsequent issuance. Ebdane. These are: 1) the protest must be in writing. it cannot really be said that the respondent availed itself of the protest procedure prescribed under Section 55 of R. obviously agreeing with the Manila RTC that the judicial window was already opened under the exhaustion of available administrative remedies principle. There was hardly any need to wait for the specific filing period to be prescribed by the IRR because the protest. the policy on the prospective or non-retroactive application of RA 9184 with respect to domestically-funded procurement projects cannot be any different with respect to foreign-funded procurement projects …. 2003 by the GPPB and the Joint Congressional Oversight Committee.” Surely. shall be filed within the period defined in the IRR.A. It is their parallel posture that the Manila RTC erred in assuming jurisdiction over the case despite respondent Kolonwel’s failure to observe the protest mechanism provided under Sec. it is not even clear that respondent Kolonwel. The Manila RTC. from proceeding with SP Civil Case No. that it was prevented from filing a protest inasmuch as the government had not issued the Implementing Rules and Regulations (IRR) of R. however. 9184. the IABAC to reconsider its disqualification. Branch 18. neither of the letter-request was addressed to the head of the procuring entity. Respondent’s letters of May 18. on jurisdictional ground.”[29]Yet. Wrote the Court in Abaya: Admittedly. the specific office of an IRR for foreign-funded project. No. not the courts by discretion. Indispensable parties are those with such interest in the controversy that a final decree would necessarily affect their rights so that courts cannot proceed without their presence.) Petitioner.[36] which is in fact embodied in the afore-quoted Section 4 of R. Schedule 4 of which stipulates that “Goods … shall be procured in accordance with the provisions of Section 1 [35] of the ‘Guidelines for Procurement under IBRD Loans. WHEREFORE.A. to repeat. LEONISA GENOVIA. 06-116010. Given the above perspective. but that courts would be without jurisdiction over actions impugning decisions of the BACs. It is Congress by law. 7118. the latter having been awarded by the IABAC Sibika 2 and HeKaSi 4 &5. under Section 58 of the same law.[32] THE COMMISSION ON ELECTIONS. 06116010 is NULLIFIED and SET ASIDE. 06-116010 even without acquiring jurisdiction over Watana. Ma. of the Manila RTC’s holding that the WB Guidelines on Procurement under IBRD Loans do not in any way provided superiority over local laws on the matter. No.A. 129. The records. Section 4 of R. (Emphasis added.” There can be no dispute that Watana is an indispensable party to the respondent’s petition in SP Civil Case No. 9184 expressly recognized this particular process. The absence of the IRR does not detract from the reality that R.R. No. the Manila RTC had no jurisdiction over respondent Kolonwel’s petition for certiorari and prohibition.A. No. in its petition before the RTC. the IABAC conducted the bidding for the supply of textbooks and manuals based on the WB Guidelines. however.PH. which defines the court’s jurisdiction not otherwise conferred by the Constitution. Worse. 7118-PH. Kolonwel having therein assailed and sought to nullify the contract-award made in its and Vibal’s favor. Similarly. was never served with summons. impleaded Watana as one of the defendants. unless. 9184 is brought to its logical completion. Through the same medium. No. No. Marvin V. 4. neither did it participate in the proceedings below.in assailing decisions of the BAC. show that Watana was not served with summons. it ought to have granted herein petitioners’ motion to dismiss. Applying this postulate in the concrete to this case. the protest procedure mandated under Section 55 of R. however. Clara Street. all interested bidders were put on notice that the DepEd’s procurement project was to be funded from the proceeds of the RP-IBRD Loan No. Abaya declared that the RP-JBIC loan agreement was to be of governing application over the CP I project and that the JBIC Procurement Guidelines. the respondent. With the foregoing disquisitions. regardless of source of funds. 9184 could not be any clearer when it mandates the manner of protesting the decision of bids and awards committees. J. Under the fundamental international law principle of pacta sunt servanda. No. the instant consolidated petitions are GRANTED and the assailed Order dated December 4.A. 7118-PH. shall primarily govern the procurement of goods necessary to implement the main project. 171208 DECISION CARPIO MORALES. the WB Guidelines on the conduct and implementation of the bidding/procurement process in question. Araneta Avenue cor. Regional Trial Court.: . Any treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed .A. such as Loan No. or accord primacy to. Presiding Judge. in the meantime. x------------------------------------------------------------------x The question as to whether or not foreign loan agreements with international financial institutions. as stipulated in the loan agreement. Significantly. partake of an executive or international agreement within the purview of the Section 4 of R. the IABAC was legally obliged to comply with. . the joinder of whom is compulsory. Br. No. SO ORDERED. Promulgated: September 7. As may be recalled. 9184. Congress also draws the parameters in the exercise of the functions of administrative agencies. and MA. particularly the provisions on International Competitive Bidding (ICB). courts do not have jurisdiction over decisions of the BACs unless the appropriate protest has been made and completed. noted that summons was not served on Watana and another defendant at “No. on the ground that said companies were not holding office thereat according to Mr. Accordingly. the court even added another layer to its grievous error when it granted the respondent’s basic petition for certiorariand prohibition itself. [30] All of them must be included in a suit for an action to prosper or for a final determination to be had.This Act shall apply to the Procurement of … Goods and Consulting Services.’” Accordingly. HON. No cost. G. 9184 requires a protest to be filed under the form therein prescribed. 2006. as borrower. whether local or foreign by all branches and instrumentalities of government …. [33] the Court wishes to state the following observation: As may be recalled. [31] Watana.A. THELMA CANLAS TRINIDAD-PE AGUIRRE. thus: Sec. bound itself to perform in good faith its duties and obligation under Loan No. the Manila RTC did not acquire jurisdiction over one of the indispensable parties. The Sheriff’s Return dated October 18. Plainly. Scope and application. has been answered by the Court in the affirmative in Abaya. Quezon City. In the light. 2006 of the Regional Trial Court of Manila in its SP Case No. supra. Section 55 of R. the Court finds it unnecessary to even dwell on the other points raised in this consolidated cases. then. 9184. Compounding the Manila RTC’s error is its having proceeded with SP Civil Case No. the RP. [34] Section 1. 1281 G. but it did not. Caloocan City. 2007 Respondents. Catacutan. there can be no quibbling that. 2005. in the City of Caloocan. irrespective of kind. cast her vote in substitution of another person by misrepresenting herself to be Emely Genovia and voted in substitution of said Emely Genovia. 129 (The Judiciary Reorganization Act of 1980) reading: Sec. dated July 26. emphasis and underscoring supplied) SECTION 268. for violation of Section 261 (z) (3) of the Omnibus Election Code which penalizes “Any person who votes in substitution for another whether with or without the latter’s knowledge and/or consent. – Any person found guilty of any election offense under this Code shall be punished with imprisonment of not less than one year but not more than six years and shall not be subject to probation.” . violation of any election offense is punishable as follows: SECTION 264.P. 32. Jurisdiction of Metropolitan Trial Courts. he shall be sentenced to deportation which shall be enforced after the prison term has been served. appeal will lie as in other criminal cases. Leonisa Genovia. however. a registered voter in Precinct No. they shall have exclusive original jurisdiction thereof. If he is a foreigner. (Underscoring supplied) By a one sentence Order of November 15. Any political party found guilty shall be sentenced to pay a fine of not less than ten thousand pesos. 2002 Synchronized Barangay and Sangguniang Kabataan (SK) Elections. emphasis and underscoring supplied) The COMELEC moved to reconsider the trial court’s dismissal order. x x x (Italics in the original. which shall be imposed upon such party after criminal action has been instituted in which their corresponding officials have been found guilty. (Italics in the original. Metro Manila. Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: xxxx The accusatory portion of the Information. 2005. reads: That on or about July 15. including the civil liability arising from such offenses or predicated thereon. Jurisdiction of courts. Barangay 60. it citing Section 32(2) of Batas Pambansa (B. Philippines. 779-A. C-73774. the Metropolitan Trial Courts.[1] its Law Department filed an Information against respondent Ma. the guilty party shall be sentenced to suffer disqualification to hold public office and deprivation of the right of suffrage.” (Underscoring supplied) By Order of September 21. willfully and unlawfully. Penalties. That in offenses involving damage to property through criminal negligence. Caloocan City. [4] inviting attention to Section 268 of the Omnibus Election Code which reads: Under Section 264 of the Omnibus Election Code. did. except those relating to the offense of failure to register or failure to vote which shall be under the jurisdiction of the metropolitan or municipal trial courts.[2] (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine regardless of other imposable accessory penalties. From the decision of the courts.) Blg.[5] the trial court denied the COMELEC’s motion for “lack of merit.” On the directive of the Commission on Elections (COMELEC) En Banc.The present petition for Certiorari under Rule 64 of the Rules of Court involves jurisdiction over an election offense punishable under the Omnibus Election Code by “imprisonment of not less than one year but not more than six years. In addition. – The regional trial court shall have the exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of this Code. the above-named accused. nature. which was filed before the Regional Trial Court (RTC) of Caloocan City where it was docketed as Criminal Case No. 2005. or value amount thereof: Provided. then and there. Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. – Except in cases falling within the exclusive jurisdiction of Regional Trial Courts and of the Sandiganbayan. and within the jurisdiction of this Honorable Court.[3] Branch 129 of the Caloocan RTC dismissed the case for lack of jurisdiction. the present petition for certiorari under Rule 64.000. Petitioners prayed for an award of P5. [9] For our resolution is a petition for review on certiorari assailing the Resolution[1] of the Court of Appeals (Third Division) dated December 20. regional trial courts have exclusive jurisdiction to try and decide any criminal action or proceedings for violation of the Code “except those relating to the offense of failure to register or failure to vote. the RTC motu prioprio issued an Order dismissing the case for lack of jurisdiction over the subject matter of the case. it may. the appeal should have been elevated to the Supreme Court under Rule 45 of the 1997 Rules of Civil Procedure. 1999. falls within the exclusive original jurisdiction of regional trial courts. fall within the exclusive jurisdiction of regional trial courts (and of the Sandiganbayan). Branch 82. 2000 in CA-G. prescribe and apportion the jurisdictions of various courts.R. SEVILLENO and PURITA S. Petitioners filed a motion for reconsideration but it was denied by the RTC in an Order dated May 18. The appellate court held that since the issue being raised is whether the RTC has jurisdiction over the subject matter of the case. 129.R. Q-35895.00 as actual damages. 129.[8] x --------------------------------------------------------------------------------------x DECISION SANDOVAL-GUTIERREZ. a complaint for damages against spouses Camelo and Pacita Carilo. in Criminal Case No. WHEREFORE. On March 23.000. They prayed that the trial court dismiss the complaint for lack of cause of action. by specific provision of law. Quezon City. the general law on jurisdiction of courts. respondents. Petitioners interposed an appeal to the Court of Appeals but it was dismissed for being the wrong mode of appeal. Pamela and Purita. J. provide that a certain class of cases should be exclusively heard and determined by a specific court. filed with the Regional Trial Court (RTC). SEVILLENO. Petitioners. On October 28. except those relating to failure to register or failure to vote which shall be under the exclusive jurisdiction of inferior courts. Respondent judge is DIRECTED to reinstate the case to the court docket and to conduct appropriate proceedings thereon with reasonable dispatch. No. 1998. PAMELA S. municipal trial courts and municipal circuit trial courts – does not cover criminal cases which.00 as exemplary damages.Hence.00 for attorney’s fees. any criminal action or proceeding which bears the same penalty. by law. docketed as Civil Case No. while BP Blg. metropolitan trial courts and municipal circuit trial courts jurisdiction over criminal cases carrying a penalty of imprisonment of less than one year but not exceeding six years. jurisdiction of first-level courts – the metropolitan trial courts. and P50. following Section 268 of the Omnibus Election Code. all criminal cases for violation of the Code.[7] G. 129 lodges in municipal trial courts. 63608. fall under the exclusive jurisdiction of regional trial courts. Promulgated: The petition is meritorious. In fine. as amended. [6] the COMELEC contending that the dismissal order is contrary to Section 268 of the Omnibus Election Code.000. September 14.: As correctly argued by the COMELEC. Respondents seasonably filed their answer with compulsory counterclaim. both surnamed Sevilleno. SO ORDERED. 2007 From the above-quoted provision of Section 32 of BP Blg. .” It bears emphasis that Congress has the plenary power to define.P400. The COMELEC argues that under the above-quoted provision of Section 268 of the Omnibus Election Code.000. with the exception of the therein mentioned two cases. P10. which is a question of law. The challenged orders of respondent Judge Thelma Canlas Trinided-Pe Aguirre. Respondents. C-73774 are SET ASIDE. petitioners. CV No.00 as moral damages. the petition is GRANTED. Section 268 of Omnibus Election Code is one such and must thus be construed as an exception to BP Blg. Section 268 of the Omnibus Election Code specifically provides. 1999. Hence. 146454 Present: PACITA CARILO and CAMELO CARILO. provides: Sec. and that an appeal erroneously taken to the Court of Appeals shall be dismissed outright. jurisdiction of a court over the subject matter of the action is a matter of law. – (a) Ordinary appeal.R. Modes of appeal. Branch 8. Inc. 2012 (1) In all cases decided by the RTC in the exercise of its original jurisdiction. Inc. issues of pure law not being reviewable by said court.Section 2. COSCO PHILIPPINES SHIPPING. CV No. 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. However.).R. we DENY the petition. which was loaded at a port in Brisbane. respondent insured the shipment of imported frozen boneless beef (owned by Genosi. – An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed. SEC. Manila. The CA Decision reversed and set aside the Order dated March 22. (2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions of law. Inc. the record on appeal shall be filed and served in like manner. which granted the Motion to Dismiss filed by petitioner Cosco Philippines Shipping. questions of law. An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright. – 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. entitled Kemper Insurance Company v. Indeed.----------------------------------------x DECISION PERALTA. they should have directly taken their appeal to this Court by filing a petition for review on certiorari under Rule 45. G. as it is not doing business in the Philippines. Inc. (3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction. – 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. the appellate court did not err in holding that petitioners pursued the wrong mode of appeal. CV No. (the importer-consignee) in the Philippines. (c) Appeal by certiorari. We have a long standing rule that a court’s jurisdiction over the subject matter of an action is conferred only by the Constitution or by statute. Cosco Philippines Shipping. Similarly. April 23.. [4] Consequently. Clearly. v. KEMPER INSURANCE COMPANY. INC. It is not disputed that the issue brought by petitioners to the Court of Appeals involves the jurisdiction of the RTC over the subject matter of the case. In such cases. – In all cases where only questions of law are raised or involved. the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45. 179488 Petitioner. not an ordinary appeal with the Court of Appeals under Rule 41.: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision[1] and Resolution[2] of the Court of Appeals (CA). in CA-G. Costs against petitioners. by reason of spoilage arising from the alleged temperature fluctuations of petitioner's reefer containers. SO ORDERED. shall be brought to the Court of Appeals by filing a petition for review under Rule 42. J. Inc. In 1998. As petitioners’ appeal solely involves a question of law. Inc. WHEREFORE. issues which deal with the jurisdiction of a court over the subject matter of a case are pure questions of law. Dismissal of improper appeal to the Court of Appeals. Australia. In Macawiwili Gold Mining and Development Co. No. United States of America (USA) with no license to engage in business in the Philippines.. while petitioner is a domestic shipping company organized in accordance with Philippine laws. . appeal may be made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law. Court of Appeals. 63608 is AFFIRMED.. The antecedents are as follows: Respondent Kemper Insurance Company is a foreign insurance company based in Illinois. Rule 41 of the same Rules which governs appeals from judgments and final orders of the RTC to the Court of Appeals. 75895. upon arrival at the Manila port. Section 2. [2] we summarized the rule on appeals as follows: Promulgated: Respondent. The questioned Resolution of the Court of Appeals (Third Division) in CA-G. and ordered that the case be remanded to the trial court for further proceedings. except in isolated transactions. [3] Otherwise put. the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. Rule 50 of the same Rules provides that an appeal from the RTC to the Court of Appeals raising only questions of law shall be dismissed. for shipment to Genosi. 2002 of the Regional Trial Court (RTC). 2. regardless of whether the appellant raises questions of fact. (b) Petition for review. a portion of the shipment was rejected by Genosi.R. thus: x---------. the Court of Appeals did not err in dismissing petitioners’ appeal. or mixed questions of fact and law. an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be dismissed. 2. The CA ruled that the required certificate of non-forum shopping is mandatory and that the same must be signed by the plaintiff or principal party concerned and not by counsel. respondent admitted that it failed to attach in the complaint a concrete proof of Atty. with interest thereon at the legal rate from date of demand.594.492. the CA pointed out that the factual circumstances of the case warranted the liberal application of the rules and. 1999. LAT REFER TO [THE AUTHORITY TO REPRESENT DURING THE] PRE-TRIAL [STAGE] AND DO NOT COVER THE SPECIFIC POWER TO SIGN THE CERTIFICATE.. while petitioner's counsel manifested that he would mark his client's exhibits on the next scheduled pre-trial. and costs.00. McLarens Chartered recommended a settlement of the claim in the amount of $64. (the insured) in the amount of $64. that the loss and damage it sustained was due to the fault and negligence of petitioner. Illinois. and that due to the unjustified refusal of the petitioner to pay the said amount. LAT AS RESPONDENT'S ATTORNEYIN-FACT WAS MERELY AN UNDERWRITER OF THE RESPONDENT WHO HAS NOT SHOWN PROOF THAT HE WAS AUTHORIZED BY THE BOARD OF DIRECTORS OF RESPONDENT TO DO SO. Jr.[13] Petitioner alleged that respondent failed to submit any board resolution or secretary's certificate authorizing Atty. and not by counsel. in consideration thereof. Further. However. and 18. (the consignee-insured) accepted. petitioner filed a Motion to Dismiss. Rodolfo A. subrogates respondent to the claims of Genosi. 99-95561. Respondent prayed that after due hearing. Lat. respondent paid the claim of Genosi. and in case of corporations. who failed to show his authority to sue and sign the corresponding certification against forum shopping. [6] contending that the same was filed by one Atty. It argued that Atty. and December 5. Rule 7 of the 1997 Rules of Court. and in good order condition. However. USA. and.492. In its Comment. there was subsequent compliance as respondent submitted an authenticated SPA empowering Atty. who lacks authorization from its board of directors. Inc. 1998. 2001. submitted by Atty. 1999. Inc. hence. the trial court granted petitioner's Motion to Dismiss and dismissed the case without prejudice. thereby causing damage and prejudice to respondent in the amount of US$64. the certification against forum shopping executed by said counsel was fatally defective and constituted a valid cause for dismissal of the complaint. executed a Loss and Subrogation Receipt[3] dated September 22.Respondent's Motion for Reconsideration[8] was denied by the trial court in an Order [9] dated July 9. Respondent then made demands upon petitioner. After processing the claim documents.492.58. that the loss or damage sustained by the shipments. The claim was referred to McLarens Chartered for investigation.492. Mangahas. or its equivalent in Philippine currency at the prevailing foreign exchange rate. Petitioner submits that since respondent is a juridical entity. petitioner failed and refused to pay the same. the SPA[14] dated May 11. if any. entitled Kemper Insurance Company v. on October 28. 2002. Avelino S. with the following issues: THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT ATTY. Inc. respondent filed a Complaint for Insurance Loss and Damages [4] against petitioner before the trial court. Lat's act of signing the certification against forum shopping was a clear violation of Section 5. but the latter failed and refused to pay the said amount. representing the value of the loss. or a total of P2. specifically. to the extent of the said amount.. RODOLFO LAT WAS PROPERLY AUTHORIZED BY THE RESPONDENT TO SIGN THE CERTIFICATE AGAINST FORUM SHOPPING DESPITE THE UNDISPUTED FACTS THAT: A) THE PERSON WHO EXECUTED THE SPECIAL POWER OF ATTORNEY (SPA) APPOINTING ATTY. was due to causes beyond the carrier's control and was due to the inherent nature or insufficient packing of the shipments and/or fault of the consignee or the hired stevedores or arrastre operator or the fault of persons whose acts or omissions cannot be the basis of liability of the carrier. that no timely claim was filed. sealed. and that the subject shipment was discharged under required temperature and was complete. which was notarized before the Consulate General of Chicago.58. the signatory in the complaint must show proof of his or her authority to sign on behalf of the corporation. Cosco Philippines Shipping. In its Answer[5] dated November 29.513. Hence.58. Lat's authority to execute the certificate of non-forum shopping on its behalf. petitioner should be held liable to pay interest thereon at the legal rate from the date of demand. 2007. that respondent had no capacity to sue since it was doing business in the Philippines without the required license. . 2007. allegedly authorizing him to represent respondent in the pre-trial and other stages of the proceedings was signed by one Brent Healy (respondent's underwriter). the fluctuations in the temperature of the reefer container beyond the required setting which was caused by the breakdown in the electronics controller assembly. petitioner insisted. Consequently. During the pre-trial proceedings. respondent's counsel proffered and marked its exhibits. ordered the remand of the case to the trial court for further proceedings. Further. judgment be rendered in its favor and that petitioner be ordered to pay the amount of US$64. that due to the unjustified failure and refusal to pay its just and valid claims. that the complaint has prescribed and/or is barred by laches. it averred that petitioner is barred by laches from questioning the purported defect in respondent's certificate of non-forum shopping. Inc. Petitioner's Motion for Reconsideration[11] was later denied by the CA in the Resolution [12] dated September 3.58. among others. Lat to represent it in the pre-trial and all stages of the proceedings. Lat. However. received from respondent the amount of $64. 25% of the whole amount due as attorney's fees. and adjustment of the claim. 2002.492. B) THE POWERS GRANTED TO ATTY. Hence.58. Genosi. Inc. Respondent alleged that despite repeated demands to pay and settle the total amount of US$64. stating that Genosi. Inc. under various policy numbers. evaluation. and discharges respondent of all claims for losses and expenses sustained by the property insured. through its General Manager. Since respondent's counsel did not have a Special Power of Attorney (SPA) to act on its behalf. Lat to institute the complaint and sign the certificate of non-forum shopping on its behalf. in its Decision [10] dated March 23. Thereafter. due to spoilage brought about by machinery breakdown which occurred on October 25. petitioner elevated the case to this Court via Petition for Review on Certiorari under Rule 45 of the Rules of Court. the physical act of signing may be performed in behalf of the corporate entity by specifically authorized individuals.58 as the full and final satisfaction compromise. In its Order[7] dated March 22. reversed and set aside the trial court's order. 14. ruling that it is mandatory that the certification must be executed by the petitioner himself. docketed as Civil Case No. Inc. Thus. the CA. which Genosi.492. filed a claim against both petitioner shipping company and respondent Kemper Insurance Company. on November 8. 2000. it was compelled to engage the services of a counsel whom it agreed to pay 25% of the whole amount due as attorney's fees. 1999. November 7 and 10. Genosi. as such. On appeal by respondent. The main issue in this case is whether Atty. Lat was properly authorized by respondent to sign the certification against forum shopping on its behalf. The petition is meritorious. We have consistently held that the certification against forum shopping must be signed by the principal parties.[15] If, for any reason, the principal party cannot sign the petition, the one signing on his behalf must have been duly authorized.[16] With respect to a corporation, the certification against forum shopping may be signed for and on its behalf, by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such document. [17] A corporation has no power, except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. Thus, it has been observed that the power of a corporation to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers. In turn, physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors.[18] In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the Philippines (FASAP), we ruled that only individuals vested with authority by a validboard resolution may sign the certificate of non-forum shopping on behalf of a corporation. We also required proof of such authority to be presented. The petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatory's authority. [19] In the present case, since respondent is a corporation, the certification must be executed by an officer or member of the board of directors or by one who is duly authorized by a resolution of the board of directors; otherwise, the complaint will have to be dismissed. [20] The lack of certification against forum shopping is generally not curable by mere amendment of the complaint, but shall be a cause for the dismissal of the case without prejudice.[21] The same rule applies to certifications against forum shopping signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file the complaint on behalf of the corporation. [22] authority, since the board resolution which was subsequently attached recognized the pre-existing status of the bank manager as an authorized signatory. In Abaya Investments Corporation v. Merit Philippines, where the complaint before the Metropolitan Trial Court of Manila was instituted by petitioner's Chairman and President, Ofelia Abaya, who signed the verification and certification against non-forum shopping without proof of authority to sign for the corporation, we also relaxed the rule. We did so taking into consideration the merits of the case and to avoid a re-litigation of the issues and further delay the administration of justice, since the case had already been decided by the lower courts on the merits. Moreover, Abaya's authority to sign the certification was ratified by the Board.[24] Contrary to the CA's finding, the Court finds that the circumstances of this case do not necessitate the relaxation of the rules. There was no proof of authority submitted, even belatedly, to show subsequent compliance with the requirement of the law. Neither was there a copy of the board resolution or secretary's certificate subsequently submitted to the trial court that would attest to the fact that Atty. Lat was indeed authorized to file said complaint and sign the verification and certification against forum shopping, nor did respondent satisfactorily explain why it failed to comply with the rules. Thus, there exists no cogent reason for the relaxation of the rule on this matter. Obedience to the requirements of procedural rules is needed if we are to expect fair results therefrom, and utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction.[25] Moreover, the SPA dated May 11, 2000, submitted by respondent allegedly authorizing Atty. Lat to appear on behalf of the corporation, in the pre-trial and all stages of the proceedings, signed by Brent Healy, was fatally defective and had no evidentiary value. It failed to establish Healy's authority to act in behalf of respondent, in view of the absence of a resolution from respondent's board of directors or secretary's certificate proving the same. Like any other corporate act, the power of Healy to name, constitute, and appoint Atty. Lat as respondent's attorney-in-fact, with full powers to represent respondent in the proceedings, should have been evidenced by a board resolution or secretary's certificate. Respondent's allegation that petitioner is estopped by laches from raising the defect in respondent's certificate of non-forum shopping does not hold water. There is no proof that respondent, a private corporation, authorized Atty. Lat, through a board resolution, to sign the verification and certification against forum shopping on its behalf. Accordingly, the certification against forum shopping appended to the complaint is fatally defective, and warrants the dismissal of respondent's complaint for Insurance Loss and Damages (Civil Case No. 99-95561) against petitioner. In Republic v. Coalbrine International Philippines, Inc., [23] the Court cited instances wherein the lack of authority of the person making the certification of non-forum shopping was remedied through subsequent compliance by the parties therein. Thus, [w]hile there were instances where we have allowed the filing of a certification against non-forum shopping by someone on behalf of a corporation without the accompanying proof of authority at the time of its filing, we did so on the basis of a special circumstance or compelling reason. Moreover, there was a subsequent compliance by the submission of the proof of authority attesting to the fact that the person who signed the certification was duly authorized. In China Banking Corporation v. Mondragon International Philippines, Inc., the CA dismissed the petition filed by China Bank, since the latter failed to show that its bank manager who signed the certification against nonforum shopping was authorized to do so. We reversed the CA and said that the case be decided on the merits despite the failure to attach the required proof of In Tamondong v. Court of Appeals, [26] we held that if a complaint is filed for and in behalf of the plaintiff who is not authorized to do so, the complaint is not deemed filed. An unauthorized complaint does not produce any legal effect. Hence, the court should dismiss the complaint on the ground that it has no jurisdiction over the complaint and the plaintiff. [27] Accordingly, since Atty. Lat was not duly authorized by respondent to file the complaint and sign the verification and certification against forum shopping, the complaint is considered not filed and ineffectual, and, as a necessary consequence, is dismissable due to lack of jurisdiction. Jurisdiction is the power with which courts are invested for administering justice; that is, for hearing and deciding cases. In order for the court to have authority to dispose of the case on the merits, it must acquire jurisdiction over the subject matter and the parties. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, and to be bound by a decision, a party should first be subjected to the court's jurisdiction.[28] Clearly, since no valid complaint was ever filed with the RTC, Branch 8, Manila, the same did not acquire jurisdiction over the person of respondent. Since the court has no jurisdiction over the complaint and respondent, petitioner is not estopped from challenging the trial court's jurisdiction, even at the pre-trial stage of the proceedings. This is so because the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel.[29] In Regalado v. Go,[30] the Court the Sibonghanoy[31] doctrine to apply, thus: held that laches should be clearly present for PHILIP L. GO, PACIFICO Q. LIM and ANDREW Q. LIM Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier, it is negligence or omission to assert a right within a reasonable length of time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.” G.R. No. 194024 Petitioners April 25, 2012 DISTINCTION PROPERTIES DEVELOPMENT AND CONSTRUCTION, INC. The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. In such controversies, lachesshould have been clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. Respondent. DECISION In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the Surety almost 15 years after the questioned ruling had been rendered. At several stages of the proceedings, in the court a quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits. It was only when the adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. [32] MENDOZA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing the March 17, 2010 Decision [1] and October 7, 2010 Resolution [2] of the Court of Appeals (CA) in CA-G.R. SP No. 110013 entitled “Distinction Properties Development & Construction, Inc. v. Housing Land Use Regulatory Board (NCR), Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim.” The factual setting attendant in Sibonghanoy is not similar to that of the present case so as to make it fall under the doctrine of estoppel by laches. Here, the trial court's jurisdiction was questioned by the petitioner during the pre-trial stage of the proceedings, and it cannot be said that considerable length of time had elapsed for laches to attach. WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the Court of Appeals, dated March 23, 2007 and September 3, 2007, respectively, in CA-G.R. CV No. 75895 are REVERSED and SET ASIDE. The Orders of the Regional Trial Court, dated March 22, 2002 and July 9, 2002, respectively, in Civil Case No. 99-95561, are REINSTATED. SO ORDERED. Factual and Procedural Antecedents: Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered individual owners of condominium units in Phoenix Heights Condominium located at H. Javier/Canley Road, Bo. Bagong Ilog, Pasig City, Metro Manila. Respondent Distinction Properties Development and Construction, Inc. (DPDCI) is a corporation existing under the laws of the Philippines with principal office at No. 1020 Soler Street, Binondo, Manila. It was incorporated as a real estate developer, engaged in the development of condominium projects, among which was the Phoenix Heights Condominium. In February 1996, petitioner Pacifico Lim, one of the incorporators and the then president of DPDCI, executed a Master Deed and Declaration of Restrictions (MDDR)[3]of Phoenix Heights Condominium, which was filed with the Registry of Deeds. As the developer, DPDCI undertook, among others, the marketing aspect of the project, the sale of the units and the release of flyers and brochures. Thereafter, Phoenix Heights Condominium Corporation (PHCC) was formally organized and incorporated. Sometime in 2000, DPDCI turned over to PHCC the ownership and possession of the condominium units, except for the two saleable commercial units/spaces: 1. G/F Level BAS covered by Condominium Certificate of Title (CCT) No. 21030 utilized as the PHCC’s administration office, and 2. 3. Ordering the Respondent to pay the sum of Php998,190.70, plus interests and surcharges, as condominium dues in arrears and turnover the administration office to PHCC without any charges pursuant to the representation of the respondent in the brochures it circulated to the public with a corresponding credit to complainants’ individual shares as members of PHCC entitled to such refund or reimbursements. 4. Ordering the Respondent to refund to the PHCC the amount of Php1,277,500.00, representing the cost of the deep well, with interests and surcharges with a corresponding credit to complainants’ individual shares as members of PHCC entitled to such refund or reimbursements. 5. Ordering the Respondent to pay the complainants moral and exemplary damages in the amount of ₱10,000.00 and attorney’s fees in the amount of ₱10,000.00. G/F Level 4-A covered by CCT No. PT-27396/C-136-II used as living quarters by the building administrator. Although used by PHCC, DPDCI was assessed association dues for these two units. Meanwhile, in March 1999, petitioner Pacifico Lim, as president of DPDCI, filed an Application for Alteration of Plan[4] pertaining to the construction of 22 storage units in the spaces adjunct to the parking area of the building. The application, however, was disapproved as the proposed alteration would obstruct light and ventilation. In August 2004, through its Board,[5] PHCC approved a settlement offer from DPDCI for the set-off of the latter’s association dues arrears with the assignment of title over CCT Nos. 21030 and PT-27396/C-136II and their conversion into common areas. Thus, CCT Nos. PT-43400 and PT-43399 were issued by the Registrar of Deeds of Pasig City in favor of PHCC in lieu of the old titles. The said settlement between the two corporations likewise included the reversion of the 22 storage spaces into common areas. With the conformity of PHCC, DPDCI’s application for alteration (conversion of unconstructed 22 storage units and units GF4-A and BAS from saleable to common areas) was granted by the Housing and Land Use Regulatory Board (HLURB).[6] In August 2008, petitioners, as condominium unit-owners, filed a complaint [7] before the HLURB against DPDCI for unsound business practices and violation of the MDDR. The case was docketed as REM080508-13906. They alleged that DPDCI committed misrepresentation in their circulated flyers and brochures as to the facilities or amenities that would be available in the condominium and failed to perform its obligation to comply with the MDDR. In defense, DPDCI denied that it had breached its promises and representations to the public concerning the facilities in the condominium. It alleged that the brochure attached to the complaint was “a mere preparatory draft” and not the official one actually distributed to the public, and that the said brochure contained a disclaimer as to the binding effect of the supposed offers therein. Also, DPDCI questioned the petitioners’ personality to sue as the action was a derivative suit. After due hearing, the HLURB rendered its decision [8] in favor of petitioners. It held as invalid the agreement entered into between DPDCI and PHCC, as to the alteration or conversion of the subject units into common areas, which it previously approved, for the reason that it was not approved by the majority of the members of PHCC as required under Section 13 of the MDDR. It stated that DPDCI’s defense, that the brochure was a mere draft, was against human experience and a convenient excuse to avoid its obligation to provide the facility of the project. The HLURB further stated that the case was not a derivative suit but one which involved contracts of sale of the respective units between the complainants and DPDCI, hence, within its jurisdiction pursuant to Section 1, Presidential Decree (P.D.) No. 957 (The Subdivision and Condominium Buyers’ Protective Decree), as amended. The decretal portion of the HLURB decision reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered: 1. Ordering respondent to restore/provide proper gym facilities, to restore the hallway at the mezzanine floor. 2. Declaring the conversion/alteration of 22 storage units and Units GF4-A and BAS as illegal, and consequently, and ordering respondent to continue paying the condominium dues for these units, with interest and surcharge. All other claims and counterclaims are hereby dismissed accordingly. IT IS SO ORDERED.[9] Aggrieved, DPDCI filed with the CA its Petition for Certiorari and Prohibition [10] dated August 11, 2009, on the ground that the HLURB decision was a patent nullity constituting an act without or beyond its jurisdiction and that it had no other plain, speedy and adequate remedy in the course of law. On March 17, 2010, the CA rendered the assailed decision which disposed of the case in favor of DPDCI as follows: WHEREFORE, in view of the foregoing, the petition is GRANTED. Accordingly, the assailed Decision of the HLURB in Case No. REM0800508-13906 is ANNULLED and SET ASIDE and a new one is entered DISMISSING the Complaint a quo. IT IS SO ORDERED.[11] The CA ruled that the HLURB had no jurisdiction over the complaint filed by petitioners as the controversy did not fall within the scope of the administrative agency’s authority under P.D. No. 957. The HLURB not only relied heavily on the brochures which, according to the CA, did not set out an enforceable obligation on the part of DPDCI, but also erroneously cited Section 13 of the MDDR to support its finding of contractual violation. The CA held that jurisdiction over PHCC, an indispensable party, was neither acquired nor waived by estoppel. Citing Carandang v. Heirs of De Guzman,[12] it held that, in any event, the action should be 957 and P. THE COURT A QUO ALSO ERRED IN NOT GIVING DUE RESPECT OR EVEN FINALITY TO THE FINDINGS OF THE HLURB. together with an administration office.[15] Petitioners contend that the HLURB has jurisdiction over the subject matter of this case.D. an examination of the laws defining the HLURB’s jurisdiction and authority becomes imperative. 957. THE COURT OF APPEALS ALSO ERRED IN FINDING THAT PHCC IS AN INDISPENSABLE PARTY WHICH WARRANTED THE DISMISSAL OF THE CASE BY REASON OF IT NOT HAVING BEEN IMPLEADED IN THE CASE. Petitioners further argue that DPDCI’s petition before the CA should have been dismissed outright for failure to comply with Section 1. THE COURT OF APPEALS ERRED IN HOLDING THAT THE HLURB HAS NO JURISDICTION OVER THE INSTANT CASE. Likewise. speedy and adequate remedy and its application may cause great and irreparable damage. for want of authority to act. in its Comment.D. 2010. if not wholly. They point out that the violation by DPDCI of its obligations enumerated in the said complaint squarely put their case within the ambit of Section 1. the case does not fall within the jurisdiction of the HLURB under Section 1. Finally. the issues to be resolved are: (1) whether the HLURB has jurisdiction over the complaint filed by the petitioners. not only as to the absent parties but even as to those present. irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. P. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: (a) Unsound real estate business practices. enumerating the cases that are within the exclusive jurisdiction of the HLURB. 957. Finally. the CA held that the rule on exhaustion of administrative remedies could be relaxed. that the challenged administrative act is patently illegal. granted the National Housing Authority (NHA) the "exclusive jurisdiction to regulate the real estate trade and business. In the present case. No. it claims that the decision of the HLURB Arbiter has not attained finality.dismissed because the absence of PHCC. Such being the case. the extent to which an administrative agency may exercise its powers depends largely. on the provisions of the statute creating or empowering such agency. was denied by the CA in its Resolution dated October 7. petitioners argue that the case was not a derivative suit as they were not suing for and in behalf of PHCC. According to DPDCI. DPDCI. as follows: SECTION 1. The motion. Once vested by the allegations in the complaint. their developer for breach of contract. They were suing. and that the procedure of the HLURB does not provide a plain. and (3) whether the rule on exhaustion of administrative remedies applies in this case. (3) THE COURT OF APPEALS HAS LIKEWISE ERRED IN RELAXING THE RULE ON NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES BY DECLARING THAT THE APPEAL MAY NOT BE A SPEEDY AND ADEQUATE REMEDY WHEN JURISDICTIONAL QUESTIONS WERE CONTINUOUSLY RAISED BUT IGNORED BY THE HLURB. P. jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. it was ruled that the jurisdiction of the HLURB to hear and decide cases is determined by the nature of the cause of action. petitioners sought to address the invalidation of the corporate acts duly entered and executed by PHCC as a corporation of which petitioners are admittedly members of. The nature of an action. proper gym facilities.” Thus. the subject matter or property involved and the parties. the same having been issued without jurisdiction. No. and not the acts pertaining to their ownership of the units.[16] strongly objects to the arguments of petitioners and insists that the CA did not err in granting its petition. P. In support of their view that Generally. 1344. [19] With respect to the HLURB. among others. PHCC should have been impleaded as a party to the complaint. [17] Thus. petitioners even quoted the dispositive portion of the HLURB decision to show that complete relief between or among the existing parties may be obtained without the presence of PHCC as a party to this case. No. Their complaint with the HLURB clearly alleged and demanded specific performance upon DPDCI of the latter’s contractual obligation under their individual contracts to provide a back-up water system as part of the amenities provided for in the brochure.”[13] Petitioners filed a motion for reconsideration [14] of the said decision. restoration of a hallway. No. an indispensable party.D. petitioners interpose the present petition before this Court anchored on the following PHCC was not an indispensable party. if not with grave abuse of discretion amounting to lack or excess of jurisdiction. however. Appeal was not a speedy and adequate remedy as jurisdictional questions were continuously raised but ignored by the HLURB.D." Then came P. is determined based on the allegations contained in the complaint of the plaintiff. Rule XVI of the 2004 Rules of Procedure of the HLURB providing for an appeal to the Board of Commissioners by a party aggrieved by a decision of a regional officer. [18] (4) THAT FINALLY. as well as which court or body has jurisdiction over it. 1344[21] expanding the jurisdiction of the NHA (now HLURB).[20] specifically Section 3. as amended. It posits that the HLURB has no jurisdiction over the complaint filed by petitioners because the controversies raised therein are in the nature of “intra-corporate disputes. (2) The petition fails. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. however. rendered all subsequent actuations of the court void.D. DPDCI further avers that the doctrine of exhaustion is inapplicable inasmuch as the issues raised in the petition with the CA are purely legal. . 957. and Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's cause of action. in their individual capacities as condominium unit buyers. The averments in the complaint and the character of the relief sought are the ones to be consulted. to determine if said agency has jurisdiction over petitioners’ cause of action. GROUNDS (1) Essentially. Its non-inclusion as an indispensable party warrants the dismissal of the case. Hence. “[t]he bottom line is that the challenged decision is one that had been rendered in excess of jurisdiction. (2) whether PHCC is an indispensable party. No. Ordering the respondent to restore the hallway at the second floor.[23] P. [24] The HLURB is given a wide latitude in characterizing or categorizing acts which may constitute unsound business practice or breach of contractual obligations in the real estate trade. which explains the reasons for enactment of the law or the contextual basis for its interpretation. Ordering the respondent to pay the complainant attorney’s fees in the amount of PHP100. representing the cost of the deep well. i. the complaint filed by petitioners alleged causes of action that apparently are not cognizable by the HLURB considering the nature of the action and the reliefs sought. that of being subdivision owner/developer and subdivision lot buyer. Rule 3 of the Rules of Court.[25] wherein the Court held that: 4. PHCC. 957. the National Housing Authority (NHA) before and now the HLURB.000. dealer. developer.190. 345. broker or salesman. 6. [30] In the recent case of Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMK-OLALIA-KMU) v. in his absence. has jurisdiction over complaints aimed at compelling the subdivision developer to comply with its contractual and statutory obligations. Keihin Philippines Corporation.the April 29. not only as to the absent parties but even to those present. 47 Phil. developer. that all cases involving subdivision lots or condominium units automatically fall under its jurisdiction. For an action to fall within the exclusive jurisdiction of the HLURB. the decisive element is the nature of the action as enumerated in Section 1 of P.D. This grant of expansive jurisdiction to the HLURB does not mean. It is "precisely ‘when an indispensable party is not before the court (that) an action should be dismissed. A decision valid on its face cannot attain real finality where there is want of indispensable parties. and (c) Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner.000. thus: "The general rule with reference to the making of parties in a civil action requires the joinder of all indispensable parties under any and all conditions. Ordering the respondent to restore the gym to its original location. 2005 Agreement [27]entered into by PHCC with DPDCI and its Board Resolution[28] which authorized the acceptance of the proposed offsetting/settlement of DPDCI’s indebtedness and approval of the conversion of certain units from saleable to common areas.(b) Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner. Ordering the respondent to pay the sum of PHP998. this case cannot prosper for failure to implead the proper party.000. does not automatically vest jurisdiction in the HLURB. On this matter. In support thereof. 3. Ordering the respondent to refund to the PHCC the amount of PHP1.00.00 for every hearing scheduled by the Honorable Office. 2. Ordering the respondent to pay the complainants moral/exemplary damages in the amount of PHP100. as amended.. any judgment rendered would have no effectiveness. Ignacio. dealer. A perusal of the complaint discloses that petitioners are actually seeking to nullify and invalidate the duly constituted acts of PHCC . with interests and surcharges. The CA aptly quoted the case of Christian General Assembly. ordering respondent to continue paying the condominium dues for these units." If there is a failure to implead an indispensable party. 348) For this reason. This provision must be read in light of the law’s preamble.D.[33] the Court held that a final decree would necessarily affect the rights of indispensable parties so that the Court could not proceed without their presence.277. Inc. and to construe it in a manner that disregards or defeats such purpose is to nullify or destroy the law. 5. but also as regards other persons who may be affected by the judgment.e.500. without injuring or affecting that interest. our Supreme Court has held that when it appears of record that there . and PHP3. (Borlasa v. their presence being a sine qua non of the exercise of judicial power. [32] (Underscoring supplied) Similarly. with interest and surcharge. Specifically. 1344. No. Polistico. [22] A statute derives its vitality from the purpose for which it is enacted. Court of Appeals.[29] As it is clear that the acts being assailed are those of PHHC. v. in the case of Plasabas v. the Court in Plasabas cited the following authorities. we have consistently held that the concerned administrative agency. and consequently. Declaring the conversion/alteration of 22 storage units and Units GF4-A and BAS as illegal.’ The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act.[26] [Emphases supplied] In this case. The mere relationship between the parties. however. broker or salesman.70. "parties in interest without whom no final determination can be had of an action shall be joined as plaintiffs or defendants. All these were approved by the HLURB. the reliefs sought or prayers are the following: 1. An indispensable party is defined as one who has such an interest in the controversy or subject matter that a final adjudication cannot be made.00.[31] the Court had the occasion to state that: Under Section 7. as condominium dues in arrears and turnover the administration office to PHCC without any charges pursuant to the representation of the respondent in the brochures it circulated to the public. aims to protect innocent subdivision lot and condominium unit buyers against fraudulent real estate practices. plus interest and surcharges. and 7." The purpose of the rules on joinder of indispensable parties is a complete determination of all issues not only between the parties themselves.00. so that the whole matter in dispute may be determined once and for all in one litigation. the Court sustains the CA’s finding that: There was nothing in the records to suggest that DPDCI sought the amendment of a part or the whole of such MDDR. who are members of PHCC. (i) where the issue of non-exhaustion of administrative remedies has . (d) where the amount involved is relatively so small as to make the rule impractical and oppressive.70. by the affirmative vote of Unit owners constituting at least fifty one (51%) percent of the Unit shares in the Project at a meeting duly called pursuant to the Corporation By Laws and subject to the provisions of the Condominium Act. (Sec. Evidently.[43] the Court enumerated the numerous exceptions to these rules. Moreno. partners or associates themselves. 902-A. In fact. (2) between the corporation. After the corporation shall have been created. [42] It has been held.[37] Moreover. in whole or in part.277. partners. 156). (39 Amjur [sic] 885). The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. the HLURB cited a provision in the MDDR. or the acts complained of. The cited section is somewhat consistent only with the principle that an amendment of a corporation’s Articles of Incorporation must be assented to by the stockholders holding more than 50% of the shares. Also. partnership or association and the State in so far as its franchise. representing the cost of the deep well. that the doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. the cause of action rightfully pertains to PHCC. pursuant to Section 5b of P. by such provision. (h) where the controverted acts violate due process.2 of Republic Act (R. Sps. the dispositive portion in particular. amounting to lack of jurisdiction. This action. the matter being an intra-corporate dispute. 8799. G. Blanco. who are not made parties to the action. this MDDR may be amended. Rule 3. 178).190.500. however. the action should be dismissed. (f) where judicial intervention is urgent. Rules of Court). The evident purpose of the rule is to prevent the multiplicity of suits by requiring the person arresting a right against the defendant to include with him. PHCC’s acts as a body corporate. In the recent case of Chateau De Baie Condominium Corporation v. No. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. [35] In the cited case of Chua v. No. namely: (a) where there is estoppel on the part of the party invoking the doctrine. (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice. to which agreement PHCC was a party. it is required that the minority stockholder suing for and on behalf of the corporation must allege in his complaint that he is suing on a derivative cause of action on behalf of the corporation and all other stockholders similarly situated who may wish to join him in the suit. Rodriguez. (Pobre. there is no doubt that the controversy in this case is essentially intra-corporate in character. all persons standing in the same position.A. DPDCI was ordered (1) to pay ₱998. thus. were the acts of PHCC as a corporate body. petitioners claim that their complaint is not a derivative suit. v. 177.. The MDDR does not contemplate. either as a plaintiff or as a defendant. considering that petitioners. et al. is misplaced as the above-quoted provision pertains to the amendment of the MDDR. To justify its finding of contractual violation. (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant. Lacap. In the complaint.00. 7.R. the causes of action. 1959) (sic) "Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. September 30. Petitioners cannot exercise the same except through a derivative suit. members or officers. In other words. however. the Court again agrees with the position of the CA that the circumstances prevailing in this case warranted a relaxation of the rule. PHCC is an indispensable party and should have been impleaded. plus interests and surcharges. x x x When an indispensable party is not before the court. It is a condition sine qua non that the corporation be impleaded as a party because not only is the corporation an indispensable party. et al. In the case of Republic of the Philippines v. The judgment must be made binding upon the corporation in order that the corporation may get the benefit of the suit and may not bring subsequent suit against the same defendants for the same cause of action. as condominium dues in arrears and turnover the administration office to PHCC. From all indications. the RTC had jurisdiction to hear the same pursuant to R. x x x Where the petition failed to join as party defendant the person interested in sustaining the proceeding in the court. partnership or association and the public. and (4) among the stockholders. there can be no final adjudication of the HLURB’s judgment. et al. Note that in the judgment rendered by the HLURB. with interests and surcharges. that all corporate acts ought to be with the concurrence of a majority of the unit owners.[39] An intra-corporate controversy is one which "pertains to any of the following relationships: (1) between the corporation. [34] in the complaint filed before the HLURB as it would be directly and adversely affected by any determination therein. in the petition. there was no allegation that the action was a derivative suit. it is the duty of the court to suspend the trial until such parties are made either plaintiffs or defendants. [38] as amended by Section 5. (b) where the challenged administrative act is patently illegal. v. L-14059-62. correct in ordering the dismissal of the case for failure to implead an indispensable party.[36] the Court ruled: For a derivative suit to prosper. 38 Phil. either as co-plaintiffs or as co-defendants.D. 17 Phil." [40] Based on the foregoing definition. for being between a condominium corporation and its members-unit owners. The burden of procuring the presence of all indispensable parties is on the plaintiff .[41] an action involving the legality of assessment dues against the condominium owner/developer. but transferred to the courts of general jurisdiction or the appropriate Regional Trial Court (RTC). therefore.” the jurisdiction over which used to belong to the Securities and Exchange Commission (SEC). Nos. organized and operating.are other persons interested in the subject matter of the litigation. (Underscoring supplied) Without PHCC as a party. Court of Appeals. Baginsi. and (2) to refund to PHCC ₱1. As to the alleged failure to comply with the rule on exhaustion of administrative remedies. in effect. (3) between the corporation.) No. This citation.A. Amendment. but it is also the present rule that it must be served with process. 8799. (Palarca v. the Court held that. the HLURB declared as illegal the agreement regarding the conversion of the 22 storage units and Units GF4-A and BAS. The CA was. Thus. What they are really praying for is a declaration that the agreement regarding the alteration/conversion is illegal. are ultimately challenging the agreement entered into by PHCC with DPDCI. partnership or association and its stockholders. To belabor the point. It should be stressed that petitioners are not asking for any change or modification in the terms of the MDDR. permit or license to operate is concerned. the same should be dismissed. the corporation must be joined as party because it is its cause of action that is being litigated and because judgment must be a res adjudicata against it. (g) where the application of the doctrine may cause great and irreparable damage. to wit: Section 13. partakes the nature of an “intra-corporate controversy. they are assailing. however. (People. In sum. Both rulings were anchored on the validity of PAL’s retrenchment program. Philippine Airlines. SO ORDERED. 2008 Decision. This. however. but he likewise inhibited himself from participation on June July 14. 2009. et al. NLRC. (j) where there is no other plain. To accord petitioners the right to demand compliance with the commitment under the said brochure is to allow them to profit by their own act. 5. For a full background of the matter. The July 22. The July 22. Also.. 2. 11-10-1-SC Present: March 13.” [7] The other Members of the Special Third Division unanimously concurred with the denial of the motion. Mendoza re: G. 2008 due to his previous efforts in settling the controversy when he was still in Malacañan. the Court cannot tolerate. despite having voted on the July 22. Estelito P. 2009 Resolution Justice Ynares-Santiago. the petition is DENIED. therefore. A. PAL’s 2nd MR On November 3. . 3. 2008 Decision. Justice Nachura. and (l) in quo warranto proceedings. 5. 2012 To fully explain the movements in the membership of the division. having been a president of DPDCI. 178083 – Flight Attendants and Stewards Association of the Philippines (FASAP) v. Finally.[8] 3. the Special Third Division missed Justice Austria-Martinez (who was among those who signed the July 22. [44] [Underscoring supplied] RESOLUTION BRION. 2009). Estelito P. The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law. the Court sustains the subject decision of the CA that the HLURB decision is null and void ab initio. if not with grave abuse of discretion amounting to lack or excess of jurisdiction. Justice Alicia Austria-Martinez. Inc. (PAL). because nothing of an administrative nature is to be or can be done. Justice Ynares-Santiago. petitioners faulted the CA in not giving respect and even finality to the findings of fact of the HLURB. Inc. No. speedy and adequate remedy. 2009). 2011 of Atty. 1. Justice Diosdado Peralta (replacing Justice Austria-Martinez who retired on April 30. [3] In this manner. and not as to the truth or the falsehood of alleged facts. 2009 Resolution. 4. 4. J. [2] Then Associate Justice Renato Corona was originally designated to replace Justice Ruben Reyes. The Third Division was then composed of: 1. Justice Minita Chico-Nazario. 2. specifically Pacifico Lim. This disposition. 20. because of her own subsequent inhibition on July 28. (k) where strong public interest is involved. Justice Chico-Nazario. cannot validly invoke DPDCI’s failure to fulfill its obligation on the basis of a plain draft leaflet which petitioners were able to obtain.: The situations (b) and (e) in the foregoing enumeration obtain in this case. 16. Before the Court is the administrative matter that originated from the letters dated September 13.[6] The Court further declared that “[n]o further pleadings will be entertained. As the Court wrote in Vigilar v. and Justice Teresita Leonardo-De Castro (replacing Justice Ruben Reyes who inhibited himself from the case). inasmuch as the HLURB has no jurisdiction over petitioners’ complaint. Their reliance on the case of Dangan v. finding Philippine Airlines. Philippine Airlines. No. and 22.[4] WHEREFORE. Justice Antonio Eduardo Nachura. Mendoza regarding G. The final decision on the matter rests not with them but with the courts of justice.R. Justice Leonardo-De Castro was included to replace Justice Ruben Reyes who had inhibited himself from the case because he concurred in the Court of Appeals (CA) decision assailed by FASAP before the Court. PAL subsequently filed its motion for reconsideration (MR) of the July 22. Justice Leonardo-De Castro came to participate in the July 22. The October 2. Aquino:[45] It does not involve an examination of the probative value of the evidence presented by the parties. The motion was handled by the Special Third Division composed of: Petitioners. 2. the issue on jurisdiction is purely legal which will have to be decided ultimately by a regular court of law. The Special Third Division[5] denied the MR with finality on October 2. is without prejudice to any action that the parties may rightfully file in the proper forum. and Justice Lucas Bersamin (replacing Justice Leonardo-De Castro who inhibited at the MR stage for personal reasons on July 28. The challenged decision of the HLURB is patently illegal having been rendered in excess of jurisdiction.been rendered moot. 2009. 2008. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts. one additional Member needed be drawn from the rest of the Court to replace the inhibiting Member. PAL asked for leave of court to file (a) an MR of the October 2. as the ponente of the July 22. 3. 2009. Under Administrative Circular (AC) No. 2009. No.[46]reiterating the well-settled principles involving decisions of administrative agencies. et al. 2008 Decision. Inc.R. 2008 Decision. 2008 Decision) due to her intervening retirement on April 30. the antecedent developments are outlined below. Justice Ynares-Santiago. 2008 Decision On July 22. Justice Leonardo-De Castro also did not participate in resolving the 1st MR. 2008 Decision. and (b) a 2 nd MR of the July 22. Said question at best could be resolved only tentatively by the administrative authorities. 178083 – Flight Attendants and Stewards Association of the Philippines v. 1.M. 84-2007. Exhaustion of administrative remedies does not apply. In Re: Letters of Atty. continued to act as the ponente of the case. deserves scant consideration as the decision of the HLURB in this case is manifestly not supported by law and jurisprudence. 2008 Decision was penned by Justice Consuelo YnaresSantiago who was joined by the other four Members of the Third Division. (PAL) guilty of illegal dismissal. the Court’s Third Division ruled to grant [1] the petition for review on certiorari filed by the Flight Attendants and Stewards Association of the Philippines ( FASAP). The Reorganization of the Court In May 2010. [underscoring ours] A necessary implication is that either the Clerk of Court or the Raffle Committee should have advised Justice Velasco that his Division should refer the case back to raffle for referral of the case to the original Justices who participated in the assailed Decision and Resolution under the terms of the general rule under A. If only one member of the Court who participated and concurred in the rendition of the decision or resolution remains. to the two other remaining Justices. 2008.M. granted PAL’s Motion for Leave to File and Admit Motion for Reconsideration of the Resolution dated 2 October 2009 and 2 nd Motion for Reconsideration of Decision dated 22 July 2008. 2010. 99-8-09-SC that the Raffle Committee cited lost its efficacy.[15] Under A.”) Thus. he/she shall be replaced by another Justice who shall be chosen by raffle from among the remaining Members of the Division: With the acceptance of PAL’s 2nd MR. 2009 Resolution. 2009 Resolution. Justice Antonio Carpio (vice Justice Corona who inhibited himself as of July 14. 99-8-09-SC. Its relevant terms took the place of A. Stated otherwise. 838 dated May 17. only Justice Nachura was a Member of the original Third Division that issued the main decision on July 22. the Court’s Raffle Committee [9] had to resolve the question of who would be the new ponente of the case. which opened both the Decision and the Resolution penned by Justice Ynares-Santiago for review. 2010 (or while A. however. 4. . 99-8-09-SC was still in effect). Parenthetically. 2010. 2009). motions filed after the case has been denied with finality may be resolved by any Member of the Court to whom the case shall be raffled. with the re-opening of the case for review on the merits. Resolutions of motions for reconsideration or clarification of decisions or signed resolutions and all other motions and incidents subsequently filed. The Court’s Third Division further required the respective parties to comment on PAL’s motion and FASAP’s Urgent Appeal dated November 23. based on the Rules of Court provision that “[n]o second MR of a judgment or final resolution by the same party shall be entertained. – In the reorganization of the membership of Divisions. 99-8-09-SC that states: [t]hese rules shall not apply to motions for reconsideration of decisions or resolutions already denied with finality. Rule 52[12] (in relation with Section 4. the Justices who participated in the assailed Decision and Resolution were the best ones to consider the motion and to review their own rulings. If the ponente is no longer a member of the Court or is disqualified or has inhibited himself from acting on the motion. Pursuant to the new IRSC. – Motions for reconsideration or clarification of a decision or of a signed resolution and all other motions and incidents subsequently filed in the case shall be acted upon by theponente and the other Members of the Division who participated in the rendition of the decision or signed resolution. Justice Ynares-Santiago (who retired on October 5. the logic behind the rule is that no further change can be made involving the merits of the case. inhibited himself from participation “due to a close relationship to a party. Justice Velasco (ponente). The pertinent provisions of the IRSC on the matter of inhibition state: RULE 2. 2008 Decision through the October 2. creation of a Special Division. The second was the retirement of then Chief Justice Reynato Puno and the appointment as Chief Justice of then Associate Justice Corona. the resolution of post-decisional matters in a case already declared final may be resolved by other Members of the Court to whom the case may be raffled after the retirement of the original ponente. 2008 Decision or to a Member of the Special Third Division that rendered the October 2.M. The acceptance of PAL’s 2nd MR On January 20. not to a Member of the Third Division that issued the July 22. The Member-in-Charge is the Member given the responsibility of overseeing the progress and disposition of a case assigned by raffle. he shall be designated as the ponente. The following were the Members of the Third Division that issued the January 20. Thus. when PAL’s 2 nd MR was filed and when it was subsequently accepted. THE OPERATING STRUCTURES Section 9. effective April 1. not necessarily by a Member of the same Division that decided or resolved the case. if theponente has retired.” despite his previous action on the case. No.M. 2000). it found nothing irregular in raffling the case to Justice Velasco (who did not take part in the deliberation of the Decision and the Resolution) of the reorganized Third Division for handling by a new regular division. Effect of reorganization of Divisions on assigned cases. on November 11.M. 2. The re-raffle of the FASAP case to Justice Nachura (or to Justices Peralta and Bersamin) would have been consistent with the constitutional rule that “ [c]ases or matters heard by a division shall be decided or resolved with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the case and voted thereon[. at the very least. heretofore existing under various separate and scattered resolutions. Significantly. 5. effectively opened the whole case for review on the merits. 99-8-09-SC.”[11] (The October 2. various existing Court decisions that entertained 2 nd MRs in the higher interest of justice. Justice Nachura. the question that could have arisen (but was not asked then) was whether the general rule under A. who was then a Member of the newly-constituted regular Third Division.M. This was the first major error that transpired in the case and one that the Clerk of Court failed to see. The case should have gone to Justice Nachura or. as judgment has reached finality and is thus irreversible. Justice Peralta. No. but to Justice Presbitero Velasco. 2009 Resolution. 2009. and Bersamin were the only remaining Members of the Special Third Division that rendered the October 2. Presumably. the new regular Third Division. Another significant development in the case came on January 17. In other words. the case was raffled. 2010 Resolution: 1. 2010. 99-8-09-SC (Rules on Who Shall Resolve Motions for Reconsideration in Cases Assigned to the Divisions of the Court. had been subject to The first was the approval of the IRSC by the Court on May 4. Rule 56[13]) of the Rules of Court applied. Justice Velasco brought with him the FASAP case so that the case went from the Third Division to the First Division: RULE 2.In view of the retirement of the ponente. However. cases already assigned to a Member-in-Charge shall be transferred to the Division to which the Member-inCharge moves. 2009. 2009 Resolution denying PAL’s 1st MR further stated that “[n]o further pleadings will be entertained. No. This prohibition. he shall be replaced by another Justice who shall be chosen by raffle from among the remaining members of the Division who participated and concurred in the rendition of the decision or resolution and who concurred therein. 2011 (or under the new regime of the IRSC) when Justice Velasco. 4. The third was the reorganization of the divisions of the Court under Special Order No.[14] This liberalized policy was not formalized by the Court until the effectivity of the Internal Rules of the Supreme Court ( IRSC) on May 4. No. at the time leave of court was granted (which was effectively an acceptance for review of PAL’s 2nd MR). three developments critical to the FASAP case transpired. No. 2. subject to the rule on the resolution of motions for reconsideration under Section 7 of this Rule.M. the Raffle Committee considered the above-quoted rule inapplicable because of the express excepting qualification provided under A. The IRSC codified the procedural rules of the Court.M. the prohibition against entertaining a 2 nd MR under Section 2. This grant. and Justice Bersamin. Justice Velasco was transferred from the Third Division to the First Division. No.[10] In raffling the case to Justice Velasco. the Raffle Committee found it unnecessary to create a special Third Division. after acting on the FASAP case for almost one whole year. Jr. Of these three Justices. the application of the excepting qualification under A. st Given the denial of PAL’s 1 MR and the declaration of finality of the Court’s July 22. 2008).]”[16] 5. when the original ponente of a case retires. THE OPERATING STRUCTURES Section 7. Peralta. through Justice Velasco. No. as the rulings of the Court were no longer final for having been opened for further review. Justices Nachura. 3. 99-8-09-SC (which was then still in effect) should have applied so that the case should have been transferred to the remaining Members of the Division that ruled on the merits of the case. he or she shall replace the designated Justice as replacement Member of the Special Division. Justice Brion was transferred from the Third Division to the Second Division. he or she shall be replaced through raffle by a new ponente who shall be chosen [from] among the new Members of the Division who participated in the rendition of the decision or signed resolution remains. Thus. and . On September 13. is disqualified. as stated in the Division Raffle Sheet. Justice Peralta. 6. Arturo D. Hon. 2011 Resolution and Atty. also addressed to the Clerk of Court. 842007. Rule 8 of the governing IRSC (as Justice Ma. acted upon by Justices Carpio. Whenever the ponente. Justice Peralta (replacing Justice Carpio who inhibited). Diosdado M. Peralta. and Nachura had already retired from the Court. however. 2011 (after the retirement of Justice Nachura on June 13. pursuant to Section 9. Any vacancy or vacancies in the Special Division shall be filled by raffle from among the other Members of the Court to constitute a Special Division of five (5) Members. Mendoza’s third letter. namely: Hon. As discussed by the Division that issued the September 7. Accordingly. Bersamin.If the ponente has retired. Chico-Nazario. 2011. too. asking for the date and time when the Resolution was deliberated upon and a vote taken thereon. Justice Carpio “recused himself from the case per advice of the office of the Member-in-Charge. Justice Brion (as Member-in-Charge and as Acting Chair. Atty. in case a resolution had already been rendered by the Court and in the event that “such resolution was issued by a different division. The Vidal-Anama Memorandum explained the events that transpired and the actions taken. to Justice Velasco. again addressed to the Clerk of Court. and/or designating Members of the division which resolved” its 2 nd MR. Chief Justice Corona issued Special Order No. Mendoza dated September 13 and 20. was composed of: 1. Lucas P. 1025. Section 3 of the IRSC. Justice Brion also furnished the Members of the ruling Division a copy of the Vidal-Anama Memorandum. Justice Ynares-Santiago. the Clerk of Court issued the Vidal-Anama [23] Memorandum to the Members of the Second Division in relation to the inquiries contained in the first and second letters of Atty. 2011. the case shall be returned to the Raffle Committee for re-raffling among the Members of the other two Divisions of the Court. again addressed to the Clerk of Court requesting that “copies of any Special Orders or similar issuances transferring the case to another division. Mendoza sent his second letter. 2011. and did not use the ponente as its reference point. This seemingly trivial point carries a lot of significance. Hon. he or she shall be designated as the new ponente. 2. If the ponente and all the Members of the Division that rendered the Decision or signed Resolution are no longer members of the Court. Mendoza. [underscoring and italics ours] Reference to AC No. after voting for the January 20. and the Third Division had issued a Resolution on the case dated January 20. On June 21.] The case was then referred to the Raffle Committee pursuant to Administrative Circular (AC) No. motions or incidents subsequent to the denial of the motion for reconsideration [or] clarification. 84-2007 states: 2. 5. the case shall be returned to the Raffle Committee for re-raffling among the other Members of the same Division with one additional Member from the other two Divisions. 3. as amended by A. 2010 Resolution granting leave to PAL to file its 2 nd MR. The letter then asked whether the Court had acted on the 2 nd MR and. suggesting that “if some facts subject of my inquiries are not evident from the records of the case or are not within your knowledge. Under the rule on inhibition found in Section 3. On September 16. however. that you refer the inquiries to the Members of the Court who appear to have participated in the issuance of the Resolution of September 7. if so. 2011. 2011. 84-2007. 2011. the Court – through its Second Division as then constituted – resolved to deny with finality PAL’s 2nd MR through an unsigned resolution. Mendoza. INHIBITION AND SUBSTITUTION OF MEMBERS OF THE COURT SEC. Justice Bersamin. 2011 raffle of the case to Justice Brion to be legally correct. of the Members of the Court who acted on the MR dated August 20. the counsel for PAL.” On September 26. is no longer a Member of the Court. is no longer a Member of the Court. Upon the appointment of a new Justice. The September 7. 10-4-20-SC dated August 3. 2010) [All emphasis supplied. in the exercise of sound discretion. 2011. 2011). It asked. This matter is discussed at length below. Atty. Nachura.[17] Justice Carpio (the Chair of the Second Division). [22] He reiterated his request in his two earlier letters to the Court. 4. Justice Jose Perez. No. Hon. The pertinent provision of AC No. Mendoza sent his fourth and last letter dated September 22. the application of the IRSC is not as simple as Justice Sereno views it to be. if an action had already been taken thereon. for the identity of the current ponente or justice-in-charge. For one.[21] Atty. and Justice Mendoza (replacing Justice Bienvenido Reyes who was on leave [19]). again reorganizing the divisions of the Court. a to f above. though. as then constituted. If there are pleadings. 2010. motion or incident is to be taken up by the Court. Effects of Inhibition. 2011. 3. – The consequences of an inhibition of a Member of the Court shall be governed by these rules: (a) Whenever a Member-in-Charge of a case in a Division inhibits himself for a just and valid reason. The prevailing IRSC. Brion. 2008 and who issued the Resolution of October 2. the case shall be acted upon by the ponente on record with the participation of the other Members of the Division to which he or she belongs at the time said pleading. Peralta. Lourdes Sereno found in her dissenting opinion). 84-2007.” Justice Peralta became the replacement for Justice Carpio. This letter noted that. 2011 Resolution issued by the Second Division.” The Court received Atty. has an almost similar rule. on September 20. inhibits herself or himself from the case for just and valid reasons other than those mentioned in paragraph 1. which resulted in the transfer of the case from its original ponente. As stated in the Division Raffle Sheet of August 15. Jose P. Jose C. Estelito Mendoza’s letters On September 7. being the most senior Member). the inhibition called for the raffle to a Member of the two other divisions of the Court. with the difference that the IRSC speaks of the inhibition of a Member-in-Charge or of a Member of the Division other than the Member-in-Charge in its rule on inhibition. or has inhibited himself or herself from acting on the motion for reconsideration or clarification. and Hon. was erroneous. the IRSC was already in effect when Justice Velasco inhibited himself from participation.M. Justices Ynares-Santiago (ponente). Velasco. inhibited himself from the case on August 15. 2011 Resolution. 2011 Resolution (the ruling Division). notwithstanding that all prior Court Resolutions he received regarding the case had been issued by the Third Division. which division – whether regular or special – acted and who were the chairperson and members. Atty. Rule 2 of the IRSC. Justice Sereno found the subsequent January 26. Justice Bersamin (replacing Justice Sereno who was on leave [18]). and Justice Sereno (who was included as additional Member) – referred the FASAP case to the Second Division where Justice Brion belonged. 2009. and when and for what reason he or she was designated asponente. sent the first of a series of letters[20] addressed to the Clerk of Court of the Supreme Court. the Third Division – composed of Justice Velasco. Mendoza stated that he received a copy of the September 7. (IRSC. as well as the names of the Members of the Court who had participated in the deliberation and voted on the September 7. he or she shall be replaced through raffle by a replacement Member who shall be chosen from the other Divisions until a new Justice is appointed as replacement for the retired Justice. Justice Jose Mendoza. and Bersamin. It further asked for a copy of the Resolution rendered on the 2 nd MR. particularly in the context of the FASAP case. pursuant to Rule 8. and the IRSC had already superseded AC No. If a Member (not the ponente) of the Division which rendered the decision or signed resolution has retired. 2011. is disqualified. or has inhibited himself or herself from acting on the motion for reconsideration or clarification. xxx RULE 8. 2011. The Second Division. the case shall be raffled to any Member of the Court and the motion shall be acted upon by him or her with the participation of the other Members of the Division to which he or she belongs. Perez. ] raffling among the Members of the other two (2) Divisions of the Court. OPERATING STRUCTURES SEC. through Justice Velasco. Perez. Attached to the Memorandum were the legal and documentary bases for all the actions of the various raffle committees. In these meetings. or Section 7. their discussions centered on the application of A. after acceptance by the Third Division. Bersamin. Ruling positively. If only one Member of the Court who participated and concurred in the rendition of the decision or signed resolution remains. Later in the day. Rule 8 were to be solely applied after Justice Velasco’s inhibition. – The Court en banc shall act on the following matters and cases: Member of the Court shall be governed by these rules: xxxx (a) Whenever a Member-in-Charge inhibits himself for a just and valid reason. the above unresolved questions were even further compounded in the course of the deliberations of the Members of the ruling Division when they were informed that the parties received the ruling on September 19. some of the Members of the ruling Division saw the problems pointed out above. 3. or Bersamin. Justice Nachura participated in both the original Decision and the subsequent Resolution. 99-8-09-SC for the incidents that transpired prior to the effectivity of the IRSC. 2009). As previously mentioned. Resolutions of motions for reconsideration or clarification of decisions or signed resolutions and all other motions and incidents subsequently filed. 2011 Resolution be recalled at the very latest on October 4. the Court acted on its own pursuant to its power to recall its own orders and resolutions before their finality. Peralta. 2011. No.. Justice Brion met with the Members of the ruling Division (composed of Justices Brion. i. 2011 Resolution) were “NOTED” by the regular Second Division. what was being reviewed were the merits of the case and the review should be by the same Justices who had originally issued the original Decision and the subsequent Resolution. while Section 3. Rule 2 on the resolution of MRs. 2011. (n) cases that the Court en banc deems of sufficient importance to merit its shall be returned to the Raffle Committee for reattention[. No. and all three Justices were the remaining Members who voted on the October 2. 2011 Resolution recalling the September 7. These were the legal considerations that largely confronted the ruling Division in late September 2011 when it deliberated on what to do with Atty. was correct. is no longer a Member of the Court. Even the use of this IRSC provision. of a failure to recall their ruling was for that Resolution to lapse to finality. Vidal (asking that his inquiry be referred to the relevant Division Members who took part on the September 7. 2011 Resolution and ordering the re-raffle of the case to a new Member-in-Charge. On the other hand. 2011 ruling) dated October 3. . If the ponente has retired. or has inhibited himself from acting on the case. which should now apply because the ruling on the case is no longer final after the case had been opened for review on the merits. as a Member outside of Justice Velasco’s Division. in the ruling Division’s view. the recall was not a ruling on the merits and did not constitute the reversal of the substantive issues already decided upon by the Court in the FASAP case in its previously issued Decision (of July 22. A. 2011. the Clerk of Court would be correct in her assessment and the raffle to Justice Brion. is disqualified. as a prudent move. Rule 2. the case should have been re-raffled and assigned to anyone of Justices Nachura (who did not retire until June 13. 2011 (a Friday).e. on the other hand. with emphasis on the more important words: RULE 2 THE OPERATING STRUCTURES SEC. the Letters dated September 13 and 20. Section 3. as its use still raised the question of the provision that should really apply in the resolution of the MR: should it be Section 3.M. that the September 7. 99-8-09-SC indicated the general rule that the re-raffle shall be made among the other Members of the same Division who participated in rendering the decision or resolution and who concurred therein. Section 7. and on the conflicting rules under the IRSC – Section 3. 2011 Resolution was issued to determine the propriety of the September 7. some of which indicated that the ruling Division might have had no authority to rule on the case. if Section 3. at the very least. he or she shall be designated as the new ponente. expressly uses the term Member-in-Charge and generally refers to his or her inhibition. To point out the obvious. and Sereno [25]). The consequence.M. Specifically. Brion.eventually to Justice Brion. The propriety of and grounds for the recall of the September 7. Mendoza asked. . Rule 2 of the IRSC. or has inhibited himself or herself from acting on the motion for reconsideration or clarification. Thus. These two provisions are placed side-by-side in the table below for easier and clearer comparison. is disqualified. without reference to the stage of the proceeding when the inhibition is made. 2011 Resolution Most unfortunately.M. The basis for the referral is Section 3(n). In short. Mendoza to Atty. however. or after October 4. On the other hand. After finality. would not solve the problem. 2011. but to simply remove any doubt about the validity of the ruling Division’s action on the case. xxx A comparison of these two provisions shows the semantic sources of the seeming conflict: Section 7. Rule 8 on the effects of inhibition and Section 7. In other words. there should have been a referral to raffle because the excepting qualification that the Clerk of Court cited no longer applied. Rule 2 refers to a situation where the ponente has retired. Rule 8 generally refers to the inhibition of a Member-in-Charge who does not need to be the writer of the decision or resolution under review. is no longer a Member of the Court. which provides: RULE 8 INHIBITION AND SUBSTITUTION OF MEMBERS OF THE COURT RULE 2. Mendoza’s letters. Mendoza. 2011 Resolution given the facts that came to light after the ruling Division’s examination of the records. The FASAP MR mainly invoked the violation of its right to due process as the recall arose from the Court’s ex parte consideration of mere letters from one of the counsels of the parties. 7. 2011 of Atty. the Court received PAL’s Motion to Vacate (the September 7. 2011).The consequences of an inhibition of a Section 3. pursuant to the same A. any recall for lack of jurisdiction of the ruling Division might not be understood by the parties and could lead to a charge of flip-flopping against the Court. Rule 2 of the IRSC on the inhibition of the ponente when an MR of a decision and a signed resolution was filed. 2011 Resolution. he or she shall be replaced through raffle by a new ponente who shall be chosen among the new Members of the Division who participated in the rendition of the decision or signed resolution and who concurred therein. As the narration in this Resolution shows. 2011. the Members went to Chief Justice Corona and recommended. Perez. and this ruling would lapse to finality after the 15 th day. On September 28. This was followed by FASAP’s MR dated October 17. The Members of the ruling Division also met to consider the queries posed by Atty. or (2) after Justice Velasco’s inhibition because the same condition existed. 2011. Under Section 7. rather than with the regular Second Division (composed of Justices Carpio. or by whoever of these Justices are still left in the Court. The October 4. creation of a Special Division. on September 30. Rule 8 of the IRSC. Rule 8. either (1) after the acceptance of the 2nd MR (because the original rulings were no longer final). 84-2007 that had been superseded by Section 3. 2008) and Resolution (of October 2. Effects of inhibition. the October 4. the raffle to Justice Brion was made by applying AC No. The case. as the former were the active participants in the September 7. Rule 8 on the inhibition of a Member-in-Charge. Peralta. it involves the interpretation of conflicting provisions of the IRSC with potential jurisdictional implications. Rule 2 expressly uses the word ponente (not Member-in-Charge) and refers to a specific situation where the ponente (or the writer of the Decision or the Resolution) is no longer with the Court or is otherwise unavailable to review the decision or resolution he or she wrote. . No. Court en banc matters and cases. and Mendoza).Motions for reconsideration or clarification of a decision or of a signed resolution and all other motions and incidents subsequently filed in the case shall be acted upon by the ponente and the other Members of the Division who participated in the rendition of the decision or signed resolution. 2011 Resolution was not meant and was never intended to favor either party. [24] These included the decisions of the two raffle committees on the transfer of the ponencia from Justice Ynares-Santiago to Justice Velasco and finally to Justice Brion as a regular Second Division case. could be brought to the Court en banc since it is one of “sufficient importance”. the need for a review by the same Justices who rendered the decision or resolution. the Court en banc duly issued its disputed October 4. 99-8-09SC. 2009 Resolution. of the 2nd MR. 2011 addressing the Court Resolution of October 4. and that the case be referred to the Court en banc for a ruling on the questions Atty. of course. Significantly. resulting in the recall of this Resolution by the Court en banc. 2011 of the Special Division’s Resolution of September 7. As can be seen from the above narration. the Clerk of Court cannot and should not be faulted for her recommended position. 2011 was effectively void and should appropriately be recalled. is the requirement of Section 4(3). Article VIII of the Constitution. separately from the existing jurisprudential rulings. (e) the unusual timing of Atty. At that point. that a subsequent 2 nd MR would be accepted for the Court’s further consideration of the case on the merits. and the consequent running of the period for finality computed from this latter date. as well as the deadline for the finality of . then to the Second Division. to the looming finality of their Division’s ruling if this ruling would not be recalled. through their previous participation and deliberations. (c) the occurrence of a series of inhibitions in the course of the case (Justices Ruben Reyes.on the merits of the case on review. the chance to take a look at the decision or resolution produced with their participation. and Carpio). which all took place during the pendency of the case. Leonardo-De Castro. and the absences of Justices Sereno and Reyes at the critical time. Recall that at that time. the case should have been decided by the Members who actually took part in the deliberations. yield where the inhibition occurs at the late stage of the case when a decision or signed resolution is assailed through an MR. as indeed there was a ruling in the 1 st MR that declared the original ruling on the case final. No unanimity among the Members of the ruling Division could be gathered on the unresolved legal questions. made after the ruling Division had issued its Resolution of September 7. To the extent of the recommended recall. For practically the same reasons. Mendoza’s letters. This realization. brought about by the parties’ receipt on September 19. requiring their replacement. The confusion on this matter could have been brought about by the Chief Justice’s role as the Presiding Officer of the Court en banc (particularly in itsmeeting of October 4. in no small measure. as against the general rule on inhibition under Section 3. though. 2011 Resolution. Rule 8 no longer applies and must yield to Section 7. but before the parties received their copies of the said Resolution. she could not have considered. the ponente. On deeper consideration. they concluded that the matter is best determined by the Court en banc as it potentially involved questions of jurisdiction and interpretation of conflicting provisions of the IRSC. 2011 ruling – the FASAP case.M. the Third (or Velasco) Division. The only matter legally certain was the looming finality of the September 7. the ruling on the merits made by the ruling Division on September 7. in light of the allegations of the Dissent is the role of the Chief Justice in the recall of the September 7. with Justice Velasco as Memberin-Charge. Rule 2 of the IRSC should have prevailed in considering the raffle and assignment of cases after the 2 nd MR was accepted. Mendoza’s letters. and (f) finally. On this basis. or lack of objection from. should have realized that Justice Velasco was not the proper Member-inCharge of the case and another raffle should have been held to assign the case to a Justice who participated in the original Decision of July 22. Section 3. 2011. Section 3. and the fact that the four most senior Justices of the Court (namely. and to their firm resolve to avoid any occasion for future flip-flopping by the Court. it is neither correct nor proper to hold the Chief Justice personally accountable for the collegial ruling of the Court en banc. but it must yield to the more specific Section 7. Corona. Another disturbing allegation in the Dissent is the implication of the alleged silence of. cannot and should not be faulted for accepting the 2 nd MR. the IRSC was not yet in existence and a specific rule under the IRSC on the handling of 2 nd MRs was yet to be formulated. Rule 8. Since the inhibiting Justice was only the Member-in-Charge and was technically merely a nominal ponente[26] in so far as the case is concerned (because he was not the writer of the Decision and Resolution under consideration). Rule 2 of the IRSC which contemplates a situation when the ponente is no longer available. the raffle should have been confined among the Members who actually participated in ruling on the merits of the original Decision or of the subsequent Resolution. 2008 or in the Resolution of October 2. contributed in their own peculiar way to the confusing situations that attended the September 7. Section 3. 2011 Resolution. Perhaps. and the Resolution would have lapsed to finality after October 4. however. Of the above-cited reasons. This latter provision should rightly apply as it gives those who intimately know the facts and merits of the case. 2008. of course. did not dawn on the Clerk of Court. to the First. 99-8-09-SC. The underlying constitutional reason. the time constraint that intervened. was the time constraint – the Members of the ruling Division met with the Chief Justice on September 30. the variance introduced by the ruling on the 1st MR and the higher interest of justice (in light alone of the gigantic amount involved) appeared to justify further consideration of the case. a legal reason that the involved officials and Justices should have again recognized is the rationale of the rule on replacements when an inhibition or retirement intervenes. A final point that needs to be fully clarified at this juncture. necessitating the transfer of the case from the Third Division. the majority now firmly holds the view that Section 7. Justices Corona. To be sure.s to the IRSC regime – which transpired during the pendency of the case. The lack of a very active role in the arguments can only be attributable to the Members of the ruling Division’s unanimous agreement to recall their ruling immediately. thus. as it developed. Velasco and Leonardo-De Castro are the four most senior Members of the Court. 2011). as he was not the writer of the assailed Decision and Resolution. she did not fully realize that the ruling on the 1 st MR varied the terms of the original Decision of July 22. when the situation calls for the review of the merits of the decision or the signed resolution made by a ponente (or writer of the assailed ruling). namely. should be chosen from the remaining participating Justices. the Members of the ruling Division during the October 4. however. could not have held on to the case after its merits were opened for new consideration. 2009. To summarize all the developments that brought about the present dispute – expressed in a format that can more readily be appreciated in terms of the Court en banc’s ruling to recall the September 7. there was no clear indication of how they would definitively settle the unresolved legal questions among themselves.M. 2011 Resolution if it would not be immediately recalled by the Court en banc by October 4.[30] Only after the failure at this attempt at reconciliation should one provision be considered the applicable provision as against the other. In the absence of any clear personal malicious participation.At the time the Members of the ruling Division went to the Chief Justice to recommend a recall. No.[29] as a statute must be so construed as to harmonize and give effect to all its provisions whenever possible. With Justice Velasco’s subsequent inhibition. To reiterate. 2011. notably. Rule 2 of the IRSC where the obtaining situation is for the review on the merits of an already issued decision or resolution and the ponente or writer is no longer available to act on the matter. Justice Velasco. Since under the IRSC [27] and Section 4(3). 2011 (the date of the closest Court en banc meeting. only Justices Peralta and Bersamin were left because all the other Members of the original ruling groups had retired. Rule 8 of the IRSC is the general rule on inhibition. Article VIII of the Constitution already referred to above. the rightful ponente should be a remaining Member of the Division that rendered the decision or resolution. At that point. 2011. (d) the three re-organizations of the divisions. the Chief Justice acted only on the recommendation of the ruling Division. the Clerk of Court and the Raffle Committee. was attended by special and unusual circumstances that saw: (a) the confluence of the successive retirement of three Justices (in a Division of five Justices) who actually participated in the assailed Decision and Resolution. Carpio. (b) the change in the governing rules – from the A. Given this background. the ruling Division was unanimous and the Members communicated this intent to the Chief Justice in clear and unequivocal terms. Upon acceptance of the 2nd MR by the Third Division through Justice Velasco. it was not due to any conspiracy to reverse their ruling to affirm the previous Court rulings already made in favor of FASAP.[31] Applying these rules by reconciling the two provisions under consideration. Rule 8 of the IRSC should be read as the general rule applicable to the inhibition of a Member-in-Charge . since he had inhibited himself from participation in the case long before. nor was he a Member of the Division that acted on the case. Velasco. Carpio. 2011. Justices Peralta and Bersamin. had it not been recalled by that date. to their desire to have the intricate issues ventilated before the Court en banc. the Division’s response was simply dictated by the legal uncertainties that existed and the deep division among them on the proper reaction to Atty. All these developments. a major influencing factor. [28] The general rule on statutory interpretation is that apparently conflicting provisions should be reconciled and harmonized. the Friday before October 4. as advocated by some Members within the ruling Division. too. 2011 deliberations. and calls for the referral of the case for raffle among the remaining Members of the Division who acted on the decision or on the signed resolution. 2011. citing for this purpose the internal en banc deliberations. Under A. Justices Corona. unfortunately. Velasco and Leonardo-De Castro) inhibited from participating in the case. of course. This general rule should. 2002 charging the two with violation of Article 244 of the Revised Penal Code was filed with the Sandiganbayan: xxxx That on or about 01 July 1998 or sometime prior or subsequent thereto... 2011 Resolution)... They impressed upon the Chief Justice the urgent need to recall their September 7. 2011.. Bersamin or Justice Diosdado M.. [11] and was given 15 days from receipt to file his Demurrer to Evidence.. 1999 to June 30. Upon arraignment on September 3.. 2009 Resolution. the above-named accused. ran for Municipal Mayor of Kitcharao.R. a relative of Villapando’s wife. as follows: . committing the crime herein charged. Inc.. July 23.. if no detailed reference to internal Court deliberations is made in this Resolution... in Criminal Case No. The Philippine Airlines.. 2008 Decision and October 2. 2000. 2011 Resolution of the ruling Division was a proper and legal move to make under the applicable laws and rules..[9] After the prosecution rested its case. addressing our July 22. Palawan.. He filed his Demurrer to Evidence[12] onOctober 28..[8] The Information was docketed as Criminal Case No. but it should yield to the more specific Section 7.. The facts culled from the records are as follows: During the May 11.. Villapando’s Demurrer to Evidence [2] and acquitting him of the crime of unlawful appointment under Article 244[3] of the Revised Penal Code. PEOPLE OF THE PHILIPPINES. 2002. Fourth Division. Agusan del Norte.. Agusan del Norte during the May 1998 elections. 2000.. no due process issue ever arose.-x DECISION QUISUMBING. did then and there wilfully. Orlando M. 2011 Resolution was made by the Court on its own before the ruling’s finality pursuant to the Court’s power of control over its orders and resolutions. 27465 and raffled to the Fourth Division of the Sandiganbayan. The Sandiganbayan. the recall of the September 7... VILLAPANDO. the recall of the September 7. Palawan. TIAPE as a Municipal Administrator of San Vicente. 2011 is hereby denied... Villapando moved for leave to file a demurrer to evidence... has thereby been rendered moot and academic. Between Section 3. On February 4. Palawan. being then the Municipal Mayor of San Vicente. the former is the general provision on a Member-in-Charge’s inhibition. the case against Tiape was dismissed after the prosecution proved his death which occurred on July 26. 2004. 2011 Resolution under the risk of being accused of a flip-flop if the Court en banc would later decide to override its ruling. 2011 ruling of the Second Division has been effectively recalled....[4] A Contract of Consultancy[5] dated February 8.953. As a final word. despite its pendency. Fernandez charged Villapando and Tiape for violation of Article 244 of the Revised Penal Code before the Office of the Deputy Ombudsman [6] for Luzon... ALEJANDRO A.’s Motion to Vacate dated October 3...[10] Villapando then filed a Manifestation of Intent to File Demurrer to Evidence.. WHEREFORE. Villapando designated Tiape as Municipal Administrator of the Municipality of San Vicente. J. 1998.the September 7. Meanwhile.. in San Vicente. we hereby confirm that the Court en banc has assumed jurisdiction over the resolution of the merits of the motions for reconsideration of Philippine Airlines. Section 7.: This petition for certiorari filed by the Office of the Ombudsman through the Office of the Special Prosecutor assails the May 20. The complaint was resolved against Villapando and Tiape and the following Information[7] dated March 19. Solomon B. Thus. 1998 elections. Tiape (now deceased). granting private respondent Alejandro A. 2004 Decision [1] of the Sandiganbayan. and any disclosure in this Resolution could mean the disclosure of the Court’s internal deliberations to outside parties. Rule 2. Philippines. the omission is intentional in view of the prohibition against the public disclosure of the internal proceedings of the Court during its deliberations. and within the jurisdiction of this Honorable Court. The present administrative matter. Thereafter. Inc. SO ORDERED. Fourth Division found Villapando’s Demurrer to Evidence meritorious.. to the damage and prejudice of the government and of public interest. 2003. conspiring and confederating with accused Orlando M. and that the September 7.... Promulgated: THE SANDIGANBAYAN (FOURTH DIVISION) and ALEJANDRO A. Palawan and Tiape whereby the former employed the services of Tiape as Municipal Administrative and Development Planning Consultant in the Office of the Municipal Mayor for a period of six months from January 1. unlawfully and feloniously appoint ORLANDO M.. Villapando knowing fully well that Orlando Tiape lacks the qualification as he is a losing mayoralty candidate in the Municipality of Kitcharao. Fourth Division denied his motion but gave him five days within which to inform the court in writing whether he will nonetheless submit his Demurrer to Evidence for resolution without leave of court. Villapando ran for Municipal Mayor of San Vicente. but received by this Court after a recall had been made. on July 1. accused Alejandro A. contrary to the clear terms of the Court en banc Resolution of February 14.. Rule 2 in a situation where the review of an issued decision or signed resolution is called for and the ponente or writer of these rulings is no longer available to act. The Flight Attendants and Stewards Association of the Philippines’ Motion for Reconsideration of October 17.. is being ventilated in the impeachment of Chief Justice Corona before the Senate acting as an Impeachment Court. CONTRARY TO LAW... Palawan. premises considered. in relation to and taking advantage of his official functions. Palawan. 2012 on the attendance of witnesses from this Court and the production of Court records. Peralta (the remaining Members of the Special Third Division that originally ruled on the merits of the case) as Member-in-Charge in resolving the merits of these motions. G. CONCLUSION In sum.. Tiape. x. In a Decision dated May 20. Respondents.. 1999 was executed between the Municipality of San Vicente. Maagad and Renato M. 2008 27465...80. Article 8 and Section 7. both of the IRSC.. No. Villapando pleaded not guilty. Villapando won while Tiape lost. and the indisputably unusual developments and circumstances of the case. This case should now be raffled either to Justice Lucas P. a public officer. Rule 2 exactly contemplates this situation.. 164185 Petitioner. the Sandiganbayan. hence is ineligible for appointment to a public office within one year (1) from the date of the elections. 1999 for a monthly salary of P26. VILLAPANDO. 6. 2. and a first grade civil service eligible or its equivalent. 4. he must be a lawyer. Article 244 of the Revised Penal Code provides: Article 244. accused nominated or appointed a person to a public office. Anent the last element. Accused appointed Orlando Tiape as Municipal Administrator of the Municipality of San Vicente. xxx xxx xxx. Petitioner raises the following issues: I. Prosecution’s argument rested on the assertion that since Tiape lost in the May 11. the offender in this article is a public officer who nominates or appoints a person to a public office. but could not be appointed as he lacked any or all of the required legal qualifications imposed by law. 3. this Court deems it unnecessary to discuss the same.” Afore-cited elements are hereunder discussed. A dissection of the above-cited provision [yields] the following elements. representing the People of the Philippines. he necessarily lacked the required legal qualifications. 1.–Any public officer who shall knowingly nominate or appoint to any public office any person lacking the legal qualificationstherefor. he failed to do so and in a Resolution [14] dated June 7. a holder of a college degree preferably in public administration. (underscoring supplied) In this case. 2. He must have acquired experience in management and administration work for at least five (5) years in the case of the provincial or city administrator. a resident of the local government unit concerned. one may not be temporarily disqualified for appointment. be appointed to any office in the Government? It is noteworthy to mention that the prosecution did not allege much less prove that Mayor Villapando’s appointee. Justice Rodolfo Palattao succinctly discussed in his book that the qualification of a public officer to hold a particular position in the government is provided for by law. As such. law. member of the Philippine Bar. Powers and Duties. Art. WHETHER THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN . shall suffer the penalty of arresto mayor and a fine not exceeding 1. this petition by the Office of the Ombudsman. In ascertaining the legal qualifications of a particular appointee to a public office. This Court is now called upon to determine whether Orlando Tiape. finding the “Demurrer to Evidence” filed by Mayor Villapando with merit. civil service eligibility or experience: As the title suggests.[13] Thus. through the Office of the Special Prosecutor . The qualification to hold public office may refer to educational attainment. The purpose of the law is to ensure that the person appointed is competent to perform the duties of the office. civil service eligibility or experience. of good moral character.The Court found the “Demurrer to Evidence” impressed with merit. 94 (b) of the Local Government Code. The person nominated or appointed is not qualified and his lack of qualification is known to the party making the nomination or appointment. the offender was a public officer. mandating that a candidate who lost in any election shall not. or any other related course from a recognized college or university. to wit: “Section 480. was lacking in legal qualification. Despite several notices. lacked any of the qualifications imposed by law on the position of Municipal Administrator. Mayor Villapando is hereby ACQUITTED of the crime charged. such act constitutes a violation of the law under consideration. Palawan when the alleged crime was committed. does “legal qualification” contemplate the one (1) year prohibition on appointment as provided for in Sec. The qualification of a public officer to hold a particular position in the government is provided by law. There appears to be a dispute. The Court answers in the negative. such person did not have the legal qualifications [therefor. Palawan.000 pesos.] and. For instance. Qualifications. which may refer to educational attainment. this Court informed him that he is deemed to have waived the filing of his comment and the case shall be resolved on the basis of the pleadings submitted by the petitioner. 2006. Mayor Villapando was the duly elected Municipal Mayor of San Vicente. “there must be a law providing for the qualifications of a person to be nominated or appointed” therein. Orlando Tiape was allegedly appointed to the position of Municipal Administrator. Orlando Tiape. Stated differently. at the time of [his] designation as Municipal Administrator. It bears stressing that temporary prohibition is not synonymous with absence or lack of legal qualification. Terms. thereby promoting efficiency in rendering public service. and three (3) years in the case of the municipal administrator. 1998 election. to wit: 1. Villapando was required by this Court to file his comment to the petition. IX-B of the Constitution and Sec. the offender knew that his nominee or appointee did not have the legal qualifications at the time he made the nomination or appointment. To illuminate further. however. Unlawful appointments. 4. SO ORDERED. Article X of the Local Government Code. the law that provides for the legal qualification for the position of municipal administrator is Section 480. A person who possessed the required legal qualifications for a position may be temporarily disqualified for appointment to a public position by reason of the one year prohibition imposed on losing candidates. 3. So if the Judicial and Bar Council nominates a person for appointment as judge knowing him to be not a WHEREFORE. within one year after such election. Upon the other hand.–(a) No person shall be appointed administrator unless he is a citizen of the Philippines. the same is hereby GRANTED. for one to be appointed as judge. be appointed to any office in the Government or any Governmentowned or controlled corporations or in any of their subsidiaries. acted with grave abuse of discretion. cannot be the source of an acquittal. a judgment rendered with grave abuse of discretion or without due process is void.[17] In this case. The Decision dated May 20.(a) No elective or appointive local official shall be eligible for appointment or designation in any capacity to any public office or position during his tenure. the petition is GRANTED. as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility. 2004 of the Sandiganbayan. We reiterate the legal maxim ubi lex non distinguit nec nosdistinguere debemus. thus. There is no basis in law or jurisprudence for this interpretation. Fourth Division’s interpretation of the term legal disqualification lack cogency. Petitioner argues that the court erred when it ruled that temporary prohibition is not synonymous with the absence of lack of legal qualification. government or any subdivision. WHEREFORE. we can do no less but declare its decision null and void. THE DEMURRER TO EVIDENCE. within one year after such election. Fourth Division held that the qualifications for a position are provided by law and that it may well be that one who possesses the required legal qualification for a position may be temporarily disqualified for appointment to a public position by reason of the one-year prohibition imposed on losing candidates. be appointed to any office in the government or any government-owned or controlled corporation or in any of their subsidiaries. Basic is the rule in statutory construction that where the law does not distinguish. be appointed to any office in the government or any government-owned or controlled corporations or in any of their subsidiaries. On the contrary. but it generally refers to capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. Unlawful appointments. Section 6. . Fourth Division. Article 244 of the Revised Penal Code cannot be circumscribed lexically. Article IX-B of the 1987 Constitution states: Section 6. However. states that except for losing candidates in barangay elections. this Court held in the same case that such ruling on the matter shall not be disturbedin the absence of a grave abuse of discretion. Candidates Who Lost in Election. including government-owned or controlled corporations or their subsidiaries. the issue is whether or not the Sandiganbayan. Section 94(b) of the Local Government Code of 1991. The Sandiganbayan. in Criminal Case No. Fourth Division. does not exist in legal contemplation and. Article IX of the 1987 Constitution which states no candidate who has lost in any election shall. there is no violation of Article 244 of the Revised Penal Code should a person suffering from temporary disqualification be appointed so long as the appointee possesses all the qualifications stated in the law. particularly Section 6. 27465. Petitioner argues that the Sandiganbayan. AND EVENTUALLY GRANTING. Legal disqualification cannot be read as excluding temporary disqualification in order to exempt therefrom the legal prohibitions under the 1987 Constitution and the Local Government Code of 1991. (b) Except for losing candidates in barangay elections. in disregarding basic rules of statutory construction. agency or instrumentality thereof.INTERPRETING THAT THE “LEGAL DISQUALIFICATION” IN ARTICLE 244 OF THE REVISED PENAL CODE DOES NOT INCLUDE THE ONE YEAR PROHIBITION IMPOSED ON LOSING CANDIDATES AS ENUNCIATED IN THE CONSTITUTION AND THE LOCAL GOVERNMENT CODE. Article IX of the 1987 Constitution and Section 94(b) of the Local Government Code of 1991. Grave abuse of discretion defies exact definition. Unless otherwise allowed by law or by the primary functions of his position. the Sandiganbayan. within one (1) year after such election. Villapando’s contention and the Sandiganbayan. the courts should not distinguish. II. 244. legal disqualification in Article 244 of the Revised Penal Code simply means disqualification under the law. no candidate who lost in any election shall. Further.[15] Simply. No candidate who has lost in any election shall. Section 6. Article 244 of the Revised Penal Code states: Art. Appointment of Elective and Appointive Local Officials. WHETHER THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN GIVING DUE COURSE TO. Clearly. Notably. Article IX of the 1987 Constitution and Section 94(b) of the Local Government Code of 1991 prohibits losing candidates within one year after such election to be appointed to any office in the government or any government-owned or controlled corporations or in any of their subsidiaries. Fourth Division having acted with grave abuse of discretion in disregarding the basic rules of statutory construction resulting in its decision grantingVillapando’s Demurrer to Evidence and acquitting the latter. such order amounts to an acquittal and any further prosecution of the accused would violate the constitutional proscription on double jeopardy. granting private respondent Alejandro A. Villapando’s Demurrer to Evidence and acquitting him of the crime of unlawful appointment under Article . Legal disqualification cannot be read as excluding temporary disqualification in order to exempt therefrom the legal prohibitions under Section 6. the Sandiganbayan. be appointed to any office in the government or any government-owned or controlled corporation or in any of their subsidiaries. Fourth Division. within one year after such election.000 pesos. Its interpretation of the term legal disqualification in Article 244 of the Revised Penal Code defies legal cogency. no elective or appointive local official shall hold any other office or employment in the The Sandiganbayan. Although this Court held in the case of People v. for its part. Sandiganbayan[16] that once a court grants the demurrer to evidence. [18] Section 94 of the Local Government Code provides: SECTION 94. shall suffer the penalty of arresto mayor and a fine not exceeding 1. — Any public officer who shall knowingly nominate or appoint to any public office any person lacking the legal qualifications therefore. The abuse of discretion must be patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. no candidate who lost in any election shall. or to act at all in contemplation of law. Fourth Division acted with grave abuse of discretion amounting to lack or excess of jurisdiction because its interpretation of Article 244 of the Revised Penal Code does not complement the provision on the one-year prohibition found in the 1987 Constitution and the Local Government Code. Fourth Division denied Villapando’s Motion for Leave to File Demurrer to Evidence yet accommodated Villapando by giving him five days within which to inform it in writing whether he will submit his demurrer to evidence for resolution without leave of court. There should be no distinction in the application of a law where none is indicated. acted with grave abuse of discretion amounting to lack or excess of jurisdiction. within one year after such election. respectfully returned duly served. who signed to acknowledge receipt thereof. NICOLAS V. Defendant Allen A. 156759 June 5. QUIJANO. respondent. 2000 to personally serve the summons on each defendant.. Soriano Streets. J.. Esleta said defendants is (sic) always roving outside and gathering news. The suit. the serving officer must first attempt to effect the same upon the defendant in person. at the same address. but the same were ineffectual and unavailing on the ground that per information of (sic) his wife said defendant is always out and not available. ISAIAS ALBANO. Rooms 301-305 3rd Floor. a person of sufficient age and discretion working therein who signed to acknowledge receipt thereof. its Managing Director Nicolas V. But his efforts to personally serve each defendant in the address were futile because the defendants were then out of the office and unavailable.244 of the Revised Penal Code is hereby declared NULL and VOID. a person of sufficient age and discretion working therein. LILY REYES. Rule 14 of the Rules of Court. They contended that the sheriff had made no prior attempt to serve the summons personally on each of them in accordance with Section 6 and Section 7. Intramuros. thus. President/Publisher of defendant AbanteTonite. Branch 51. a daily tabloid of general circulation. Janet Bay. Manila. G. Macasaet. Quijano. upon the following: 1. substituted service was applied. 2000. Soriano Street. Petitioners. 2000. its Circulation Manager Isaias Albano. Manila. AND RANDY HAGOS. JANET BAY. claiming damages because of an allegedly libelous article petitioners published in the June 6. September 22. which in due course issued summons to be served on each defendant. but the same were ineffectual and unavailing on the ground that per information of Ms. Quijano. Manila. 2000. sued Abante Tonite. substituted service was applied.R. 2005. 5 to wit: SHERIFF’S RETURN This is to certify that on September 18. Respondent. thru his secretary Lu-Ann Quijano. including Abante Tonite. the CA upheld the order the Regional Trial Court (RTC). Quijano said defendant is always out and not available. at the same address. SO ORDERED. JR. thus. Macasaet. Thereby. 4 In the morning of September 18. a retired police officer assigned at the Western Police District in Manila. Galang. I caused the service of summons together with copies of complaint and its annexes attached thereto. that . thru his wife Lu-Ann Quijano. 3. was raffled to Branch 51 of the RTC. Galang and Randy Hagos. Original copy of summons is therefore. CO. JR. for further proceedings. thus. JESUS R.: To warrant the substituted service of the summons and copy of the complaint. Jesus R. 2000. prohibition and mandamus and denied their motion for reconsideration. 2 whereby the Court of Appeals (CA) respectively dismissed their petition for certiorari. thru Rene Esleta. Jesus R. substituted service was applied. 301-305 3rd Floor. GALANG. but he was informed that petitioners were still out of the office. its Publisher Allen A. at their business address at Monica Publishing Corporation. Defendant Nicolas V. No. Solana corner A. and its Columnist/Reporter Lily Reyes (petitioners). MACASAET. On October 3. Intramuros. Let the records of this case be remanded to the Sandiganbayan. At the hearing of petitioners’ motion to dismiss. He returned in the afternoon of that day to make a second attempt at serving the summons. 2003. BF Condominium Building. docketed as Civil Case No. 20021 and the resolution promulgated on January 13. They further moved to drop Abante Tonite as a defendant by virtue of its being neither a natural nor a juridical person that could be impleaded as a party in a civil action. On July 3. Medina testified that he had gone to the office address of petitioners in the morning of September 18. Fourth Division. in Manila had issued on March 12. petitioners moved for the dismissal of the complaint through counsel’s special appearance in their behalf. That effort (sic) to serve the said summons personally upon said defendants were made. The Case Petitioners – defendants in a suit for libel brought by respondent – appeal the decision promulgated on March 8. 2000 issue of Abante Tonite. That effort (sic) to serve the said summons personally upon said defendant were made. at Monica Publishing Corporation. Editorial Assistant of defendant AbanteTonite. That effort (sic) to serve the said summons personally upon said defendant were made. 2013 ALLEN A. alleging lack of jurisdiction over their persons because of the invalid and ineffectual substituted service of summons. its Editors Janet Bay. who signed to acknowledge receipt thereof. 3 Antecedents 2. Randy Hagos and Lily Reyes. RTC Sheriff Raul Medina proceeded to the stated address to effect the personal service of the summons on the defendants. 2001 denying their motion to dismiss because the substituted service of the summons and copies of the complaint on each of them had been valid and effective. Solana Street corner A. He decided to resort to substituted service of the summons. Defendants Isaias Albano. 2000. FRANCISCO R. but the same were ineffectual and unavailing on the ground that per information of (sic) Mr. vs. DECISION BERSAMIN. 00-97907. Only after the attempt at personal service has become futile or impossible within a reasonable time may the officer resort to substituted service. BF Condominium Building. and explained why in his sheriff’s return dated September 22. President/Publisher of defendant AbanteTonite. pursuant to the rules. The information written on the said newspaper will affect the person. and that he had then resorted to substituted service upon realizing the impossibility of his finding petitioners in person within a reasonable time. will be estopped from denying its corporate capacity in a suit against it by a third person who relies in good faith on such representation. It is apparent in the Sheriff’s Return that on several occasions. WHEREFORE. otherwise it cannot be held liable for damages and injuries it may inflict to other persons. so the sheriff resorted to substituted service of summons. 2001. records). Janet Bay. and directed petitioners to file their answers to the complaint within the remaining period allowed by the Rules of Court. through Rene Esleta. and upholding the trial court’s finding that there was a substantial compliance with the rules that allowed the substituted service. 2001. During the hearing of the herein motion. showing ostensibly its being a corporate entity. and that Abante Tonite. hence substituted service of summonses was validly applied. the wife of the defendant and the Editorial Assistant of the defendant. Jesus R. through LuAnn Quijano. Furthermore. the RTC denied the motion to dismiss.petitioners were out of the office at the time. the CA denied petitioners’ motion for reconsideration. Accordingly. New Civil Code. held that: On June 29. in denying petitioners’ motion for reconsideration. mandamusin the CA to nullify the orders of the RTC dated March 12. SO ORDERED. viz: "Abante Tonite" is a daily tabloid of general circulation. Galang. An unincorporated association. prohibition. 44 (2 or 3). who was stated or implicated in the news. it is for public consumption. Hagos and Reyes were always out roving to gather news. which represents itself to be a corporation. WHEREFORE. There was substantial compliance with the rules. but then again he was informed that the defendants were out and unavailable. The persons who organized said publication obviously xxxx There being no grave abuse of discretion committed by the respondent Judge in the exercise of his jurisdiction.. considering the difficulty to serve the summons personally to them because of the nature of their job which compels them to be always out and unavailable. There are factual bases and legal justification for the assailed orders. the CA promulgated its questioned decision. it is deemed a corporation by estoppels considering that it possesses attributes of a juridical person. upon defendants Isaias Albano. the sheriff certified that "effort to serve the summons personally xxx were made. SO ORDERED. that some competent persons working in petitioners’ office had informed him that Macasaet and Quijano were always out and unavailable. All of these facts imply that "Abante Tonite" falls within the provision of Art. but the same were ineffectual and unavailing xxx. the instant petition is DENIED. Assuming arguendo that "Abante Tonite" is not registered with the Securities and Exchange Commission. A judicious reading of the questioned orders of respondent Judge would show that the same were not issued in a capricious or whimsical exercise of judgment. efforts to served (sic) the summons personally upon all the defendants were ineffectual as they were always out and unavailable. and that they were always out because they were roving around to gather news. the CA ruled: Anent the issue raised by petitioners that "Abante Tonite is neither a natural or juridical person who may be a party in a civil case. 2001. Macasaet. 1997 Rules of Civil Procedure). Randy Hagos and Lily Reyes. 2001." and therefore the case against it must be dismissed and/or dropped. 2001 and June 29. in view of the foregoing. Petitioners filed a motion for reconsideration. natural as well as juridical. as follows: Abante Tonite’s newspapers are circulated nationwide. petitioners brought a petition for certiorari. 2002. defendants are directed to file their Answers to the complaint within the period still open to them. Bay. 2000 in the morning. Considering that summonses cannot be served within a reasonable time to the persons of all the defendants. the RTC denied petitioners’ motion for reconsideration. 8 dismissing the petition for certiorari. derived profit from it. The rule is that certiorari will prosper only if there is a showing of grave abuse of discretion or an act without or in excess of jurisdiction committed by the respondent Judge. and that Albano. prohibition. 2003.9 On January 13. Rule 14. Because of that information and because of the nature of the work of the defendants that they are always on field. So he went back to serve said summons upon the defendants in the afternoon of the same day. Secretary of the President who is duly authorized to receive such document. is untenable. so the Sheriff served the summons by substituted service. Regarding the impleading of Abante Tonite as defendant. Galang. being neither a natural nor a juridical person. Records show that the summonses were served upon Allen A. could not be made a party in the action. the RTC held. to wit: We find petitioners’ argument without merit. People all over the country could buy a copy of "Abante Tonite" and read it. he went to the office address of the defendants to personally serve summons upon them but they were out. Editorial Assistant of defendant Abante Tonite (p. the Motion to Dismiss is hereby DENIED for lack of merit. The respondent Judge. 10 Issues Petitioners hereby submit that: . Sheriff Raul Medina of this Branch of the Court testified that on September 18. On March 12. asserting that the sheriff had immediately resorted to substituted service of the summons upon being informed that they were not around to personally receive the summons. thus the doctrine of corporation by estoppel may appropriately apply. The assailed Orders of respondent Judge are AFFIRMED. mandamus. From the Return. were considered competent persons with sufficient discretion to realize the importance of the legal papers served upon them and to relay the same to the defendants named therein (Sec. 7. 6 relevantly stating: Undaunted. the relief of prohibition is also unavailable. 12. 7 It stated in respect of the service of summons. Additional matters regarding the service of summons upon defendants were sufficiently discussed in the Order of this Court dated March 12. Ruling of the CA On March 8. hence. The allegations of the defendants that the Sheriff immediately resorted to substituted service of summons upon them when he was informed that they were not around to personally receive the same is untenable. that he had returned in the afternoon of the same day to again attempt to serve on each defendant personally but his attempt had still proved futile because all of petitioners were still out of the office. Jurisdiction over the person. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. Combs. although it may involve his right to. like voluntarily appearing in the action. an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. but when the case is an action in rem or quasi in rem enumerated in Section 15. Rule 14 of the Rules of Court." After Medina learned from those present in the office address on his second attempt that there was no likelihood of any of petitioners going to the office during the business hours of that or any other day. considering that he was expressly authorized to resort to substituted service should he be unable to effect the . Such personal service consists either in handing a copy of the summons to the defendant in person. such action is brought against the person. the defendant cannot be served in person within a reasonable time. when the defendant in an action in Upon the filing of the complaint and the payment of the requisite legal fees. on the one hand. is determined by its nature and purpose. the service of the summons may then be effected either (a) by leaving a copy of the summons at his residence with some person of suitable age and discretion then residing therein. which statement should be found in the proof of service or sheriff’s return. and he can thereby take steps to protect his interest if he is so minded. 23 Under the Rules of Court. he may also waive the process. In an action quasi in rem. 11 As the initiating party. if the defendant refuses to receive and sign for it. 15 Ruling The petition for review lacks merit.28Nonetheless. and (b) to afford to the defendant the opportunity to be heard on the claim brought against him. the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. and by these only.1. the requisite showing of the impossibility of prompt personal service as basis for resorting to substituted service may be waived by the defendant either expressly or impliedly. the ensuing trial and judgment are void.27 Only when the defendant cannot be served personally within a reasonable time may substituted service be resorted to.16 The summons is directed to the defendant and signed by the clerk of court under seal. He was not expected or required as the serving officer to effect personal service by all means and at all times. as distinguished from a judgment against the property to determine its state. The purpose of a proceeding in personam is to impose. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY IN THE INSTANT CASE.26 This is because substituted service. 13 thusly: The settled rule is that the aim and object of an action determine its character. and such extraterritorial service of summons is not for the purpose of vesting the court with jurisdiction. As far as suits for injunctive relief are concerned. in tendering it to him. he concluded that further attempts to serve them in person within a reasonable time would be futile. the clerk of court forthwith issues the corresponding summons to the defendant. If. 21 As to the latter. In Combs v. or by a voluntary appearance in the action. some responsibility or liability directly upon the person of the defendant. 24 The rule on personal service is to be rigidly enforced in order to ensure the realization of the two fundamental objectives earlier mentioned. On the other hand.20 If the defendant knowingly does an act inconsistent with the right to object to the lack of personal jurisdiction as to him. the plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court by the act of filing the initiatory pleading. extraterritorial service of summons can be made upon the defendant. 19 As to the former. specific property. Actions for recovery of real property are in personam. Jensen. but for the purpose of complying with the requirements of fair play or due process.29 There is no question that Sheriff Medina twice attempted to serve the summons upon each of petitioners in person at their office address. he is deemed to have submitted himself to the jurisdiction of the court. on the other hand. the impossibility of prompt personal service should be shown by stating the efforts made to find the defendant himself and the fact that such efforts failed. if any. and jurisdiction over the person of the non-resident defendant is not essential. or seek to compel him to control or dispose of it in accordance with the mandate of the court. or. compliance with the rules regarding the service of the summons is as much an issue of due process as it is of jurisdiction. faithfully and fully. and a notice that unless the defendant so answers. The service of the summons fulfills two fundamental objectives. or (b) by leaving the copy at his office or regular place of business with some competent person in charge thereof. namely: (a) to vest in the court jurisdiction over the person of the defendant. is extraordinary in character and may be used only as prescribed and in the circumstances authorized by statute. the first in the morning of September 18. a direction that the defendant answers within the time fixed by the Rules of Court. As to the defendant. civil as well as criminal. and any substituted service other than that authorized by statute is considered ineffective. ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. or quasi in rem for that matter. As a rule. for justifiable reasons. Whether a proceeding is in rem. the essence of due process lies in the reasonable opportunity to be heard and to submit any evidence the defendant may have in support of his defense. are aptly delineated in Domagas v. Actions quasi in rem deal with the status. for the appointment of a guardian ad litem. or jurisdiction in personam –the power of the court to render a personal judgment or to subject the parties in a particular action to the judgment and other rulings rendered in the action – is an element of due process that is essential in all actions. Each attempt failed because Macasaet and Quijano were "always out and not available" and the other petitioners were "always roving outside and gathering news. 18 The significance of the proper service of the summons on the defendant in an action in personam cannot be overemphasized. Philippine courts have jurisdiction to hear and decide the case because they have jurisdiction over the res. It has been held that an action in personam is a proceeding to enforce personal rights or obligations. 12 The distinctions that need to be perceived between an action in personam. the court acquires jurisdiction over his person either by the proper service of the summons. The judgments therein are binding only upon the parties who joined in the action. the service of the summons should firstly be effected on the defendant himself whenever practicable. On the other hand. 2000 and the second in the afternoon of the same date. The circumstances fully warranted his conclusion. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person. the plaintiff will take judgment by default and may be granted the relief applied for. our courts cannot try the case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. and the court acquires jurisdiction over an actionas long as it acquires jurisdiction over the resthat is thesubject matter of the action. a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. or in personam. 17 To be attached to the original copy of the summons and all copies thereof is a copy of the complaint (and its attachments. 21 In other words. It contains the name of the court and the names of the parties to the action. In the latter instance. 25 The latter mode of service is known as substituted service because the service of the summons on the defendant is made through his substitute. Jurisdiction over the defendantin an action in rem or quasi in rem is not required. An action in personam is said to be one which has for its object a judgment against the person. being in derogation of the usual method of service. except in actions in rem or quasi in rem. With the proper service of the summons being intended to afford to him the opportunity to be heard on the claim against him. Philippine courts cannot try any case against a defendant who does not reside and is not found in the Philippines because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. Hence. The purpose of summons in such action is not the acquisition of jurisdiction over the defendant but mainly to satisfy the constitutional requirement of due process. if any) and the order. or the exercise of ownership of. personam does not reside and is not found in the Philippines. it is well-settled that it is an injunctive act in personam. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER HEREIN PETITIONERS. so that the defendant will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff. 14 2. and an action inrem or quasi in rem. It is no longer debatable that the statutory requirements of substituted service must be followed strictly. through the judgment of a court. when jurisdiction in personam is not acquired in a civil action through the proper service of the summons or upon a valid waiver of such proper service. 150872. Manila. 3) pay the plaintiff the sum of Php5. 2006. thru one Rosauro Diaz. otherwise. docketed as Civil Case No. judgment is hereby rendered for the plaintiff and against the defendant ordering the latter and all persons claiming under her to: 1) vacate the parcel of land located at 1287 Castanos Street. The [MeTC] rendered its decision on November 29. nothing in the box indicated that Monica Publishing Corporation had owned Abante Tonite. 2005 dismissing the petition before it.personal service within a reasonable time. as borne out by their filing of several pleadings in the RTC. denying petitioner's Motion for Reconsideration. 2012 ATTY. Petitioner-appellant SALVADOR's appeal was denied by the [Regional Trial Court] RTC in a Decision dated March 12. 2005. vs.000. it found no . In that regard. petitioners’ insistence on personal service by the serving officer was demonstrably superfluous. It was ruled by the CA that there were no significant facts or circumstances that the trial court overlooked or misinterpreted. Fe Salvador (SALVADOR) alleged that she bought on September 7. the Court AFFIRMS the decision promulgated on March 8. substituted by LUZ G. The CA affirmed the factual findings of the lower courts that Galiga.: In the appeal filed by petitioner-appellant SALVADOR. Petitioner-appellant SALVADOR remained in possession of said subject property from November 1993 up to the present. filed a complaint for ejectment on October 12. On November 18. as a lessee with a lease contract. the respondentappellee ANGELES. Sampaloc. We cannot disagree with the CA. the dispositive portion of which reads. Jr. Respondent. 146190-CV. CONSTANTINO ANGELES. but in a Decision dated September 16. the person who supposedly sold the subject premises to petitioner. said petition was dismissed for lack of merit. The Motion for Reconsideration filed by SALVADOR was denied in an Order dated March 16. she alleged. 2003. be reversed and set aside. to wit: WHEREFORE. that DIAZ. Sampaloc. SO ORDERED. DECISION PERALTA. to wit: Nor can we sustain petitioners’ contention that Abante Tonite could not be sued as a defendant due to its not being either a natural or a juridical person. 2004. No. xxxx Respondent-appellee ANGELES is one of the registered owners of a parcel of land located at 1287 Castanos Street. In rejecting their contention. 1993. thus. among others. the registered owner of the land in question. and its Resolution2 dated January 13. sent a letter to petitionerappellant SALVADOR demanding that the latter vacate the subject property.3 Petitioner elevated the case to the CA via a petition for review. the lower court ruled that Galiga could not have validly transferred ownership of subject property to herein petitioner. Respondent-appellee ANGELES. evidenced by Transfer Certificate of Title No. In reality. They had also availed themselves of the modes of discovery available under the Rules of Court. was a mere lessee of respondent. and surrender the same to the plaintiff. 1993 the subject parcel of land from GALIGA who represented that he was the owner. Such being the case. who filed the complaint for ejectment. Branch 16. the registered owner. Thereby. (DIAZ). we do not cling to such strictness should the circumstances already justify substituted service instead.000. Subsequently. G. The Assailed Decision of the Trial Courts SO ORDERED. the CA concluded that the RTC did not gravely abuse its discretion in holding that the non-incorporation of Abante Tonite with the Securities and Exchange Commission was of no consequence. Petitioner. including an answer with compulsory counterclaim ad cautelam and a pre-trial brief ad cautelam. which was not heeded by petitioner-appellant SALVADOR. The subject parcel of land was occupied by one Jelly Galiga (GALIGA) from 1979 up to 1993. The records reveal the CA's narration of facts to be accurate. 1999 in favor of herein respondent-appellee ANGELES. praying that the Decision1of the Court of Appeals (CA) promulgated on September 16. that governs. They had actually received the summonses served through their substitutes. 171219 September 3. Such acts evinced their voluntary appearance in the action. J. being one in possession. and ORDERS petitioners to pay the costs of suit. what was a reasonable time was dependent on the circumstances obtaining.00 as attorney's fees and the cost of suit. ANGELES *. not their letter.R.30 This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court. had no authority whatsoever from respondent-appellee ANGELES at the time of filing of the suit. whoever of the public who would suffer any damage from the publication of articles in the pages of its tabloids would be left without recourse. WHEREFORE. While we are strict in insisting on personal service on the defendant. PALMIANO-SALVADOR. It is the spirit of the procedural rules. 2002. the CA categorized Abante Tonite as a corporation by estoppel as the result of its having represented itself to the reading public as a corporation despite its not being incorporated. FE Q. 1994 with the Metropolitan Trial Court [MeTC] of Manila. Manila. considering that the editorial box of the daily tabloid disclosed that basis.00 monthly as reasonable compensation for her use and occupancy of the above parcel of land beginning November 1993 up to the time she has actually vacated the premises. 2) pay the plaintiff the sum of Php1. for. This basic issue has been ignored by the MeTC and the RTC. G. vs. Makati City in Civil Case No. On 30 January 2006. Hertz likewise failed to pay its utility bills for the months of November and December of 2005 and January and February of 2006. the complaint is not deemed filed. the latter still failed to pay its rentals for the months of August to December of 2005 and January to February 2006. because this threshold issue should have been resolved at the outset as it is determinative of the court's jurisdiction over the complaint and the plaintiff. July and August 2005. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. 10 However. Respondent. appearing to have been notarized by one Robert F. Exclusive Cars. Hence. no copy of any document attached to the complaint to prove Diaz's allegation regarding the authority supposedly granted to him. 1995.: Before us is a Rule 45 Petition assailing the Decision 1 and Resolution2 of the Court of Appeals (CA) in CA-GR SP No. DECISION SERENO. and to be bound by a decision. 2006. the Decision of the Regional Trial Court in Civil Case No. Hertz alleged that it experienced a 50% drop in monthly sales and a significant decrease in its personnel’s productivity. in her Answer filed with the MeTC. Optima is engaged in the business of leasing and renting out commercial spaces and buildings to its tenants. 8 As a result. alleging therein that he was respondent's attorney-in-fact. 2013 OPTIMA REALTY CORPORATION.8 where the Court went on to say that "[i]n order for the court to have authority to dispose of the case on the merits. The courts could not have delved into the very merits of the case. that there was no certification from the Philippine Consulate General in San Francisco. However. it entered into a Contract of Lease with respondent over a 131-square-meter office unit and a parking slot in the Optima Building for a period of three years commencing on 1 March 2003 and ending on 28 February 2006. more than a year after the complaint was filed.S. 7 Renovations in the Optima Building commenced in January and ended in November 2005. In addition. Hence. 146190." 7 This ruling was reiterated in Cosco Philippines Shipping. There was. 1994. Petitioner. further. Optima informed it that the lease would expire on 28 February 2006 and would not be renewed. it must acquire jurisdiction over the subject matter and the parties. Optima wrote another letter to Hertz.R. Note that the complaint before the MeTC was filed in the name of respondent. there was no complaint to speak of. 06-672. the court should dismiss the complaint on the ground that it has no jurisdiction over the complaint and the plaintiff. said SPA was executed only on November 16. California.A. 183035 January 9. No. Hertz wrote a letter belatedly advising Optima of the former’s desire to negotiate and extend the lease. 1994. (Hertz) and ordering it to pay back rentals and other arrearages to petitioner Optima Realty Corporation (Optima). Kemper Insurance Company. 90842 evicting respondent Hertz Phil. respondent attached to his Reply and/or Comment to Respondent's (herein petitioner) Position Paper. however.19 As a result. 9 On 8 December 2005. the MeTC never acquired jurisdiction over this case and all proceedings before it were null and void. This prompted petitioner to raise in her Answer and in her Position Paper.18 Hertz. and for actual. Inc. since no valid complaint was ever filed with the [MeTC]. A motion for reconsideration of said Decision was denied in a Resolution dated January 13.12 or a total of four months.16 However. moral and exemplary damages. for a Writ of Preliminary Injunction ordering petitioner to reconnect its utilities. On December 11. Optima was constrained to file . 17 It likewise demanded payment of the sum of ₱420. On 8 December 2005. the parties amended their lease agreement by shortening the lease period to two years and five months. The court's jurisdiction cannot be deemed to have been invoked at all.28 in rental arrearages. is the effect of a complaint filed by one who has not proven his authority to represent a plaintiff in filing an action? In Tamondong v. It then requested a 50% discount on its rent for the months of May. v.1âwphi1 What then. INC. dated November 29. the same did not acquire jurisdiction over the person of respondent [plaintiff before the lower court]. The Decision of the Metropolitan Trial Court in Civil Case No. On 12 December 2002. Court of Appeals. Thus. On 1 March 2006. Clearly.e. no evidentiary weight or value can be attached to the document designated as an SPA dated November 16. despite petitioner's insistence on it from the very beginning.. An unauthorized complaint does not produce any legal effect.6 On 9 March 2004. Branch 64. a party should first be subjected to the court's jurisdiction.reason to overturn the factual findings of the MeTC and the RTC. or more than a month after the complaint was filed. IN VIEW OF THE FOREGOING. 99890. Hertz filed a Complaint for Specific Performance. Inc. EXCLUSIVE CARS. and the Decision of the Court of Appeals in CA-G. for petitioner to be ordered to renegotiate a renewal of the Contract of Lease.R. however. The complaint filed by respondent before the Metropolitan Trial Court is hereby DISMISSED. the issue of Diaz's authority to file the case.967. Hertz prayed for the issuance of a TRO to enjoin petitioner from committing acts that would tend to disrupt respondent’s peaceful use and possession of the leased premises. but it was one Rosauro Diaz who executed the verification and certification dated October 12. and hence. U.6 the Court categorically stated that "[i]f a complaint is filed for and in behalf of the plaintiff [by one] who is not authorized to do so. through counsel. the Petition is GRANTED. which reversed the Decision3 and Resolution4 of the Regional Trial Court (RTC). are SET ASIDE AND NULLIFIED. 83467. therefore. The RTC had affirmed in toto the 22 May 2006 Decision 5 of the Metropolitan Trial Court (MeTC). California. June.. 1999. i. that said person is indeed a notary public in Santa Clara County. the court cannot give full faith and credit to the official acts of said Robert McGuire. dated March 12. Optima granted the request of Hertz. 14 As no letter was received from Hertz regarding its intention to seek negotiation and extension of the lease contract within the 90-day period. Branch 13 7. 11 or a total of seven months. commencing on 1 October 2003 and ending on 28 February 2006. refused to vacate the leased premises. Makati City in Civil Case No. petitioner no longer entertained respondent’s notice. 00-96344. unpaid utility bills and other charges. where one of the important issues for resolution is the effect of Rosauro Diaz's (respondent's representative) failure to present proof of his authority to represent respondent (plaintiff before the MeTC) in filing the complaint. SO ORDERED. Observe. CJ. as well as attorney’s fees and costs. In that Complaint. Verily. while the CA absolutely failed to address it. HERTZ PHIL. 1994. the present petition. This is quite unfortunate. 13 reminding the latter that the Contract of Lease could be renewed only by a new negotiation between the parties and upon written notice by the lessee to the lessor at least 90 days prior to the termination of the lease period. 15 On 21 December 2005."9 Pursuant to the foregoing rulings. wrote Hertz a letter requiring the latter to surrender and vacate the leased premises in view of the expiration of the Contract of Lease on 28 February 2006. McGuire of Santa Clara County. Injunction and Damages and/or Sum of Money with prayer for the issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction (Complaint for Specific Performance) against Optima. 2003. as the Contract of Lease provided that the notice to negotiate its renewal must be given by the lessee at least 90 days prior to the expiration of the contract. because legally. SP No. Optima. there is nothing on record to show that Diaz had been authorized by respondent to initiate the action against petitioner.4 a document entitled Special Power of Attorney (SPA)5 supposedly executed by respondent in favor of Rosauro Diaz. the defendant corporation to pay the plaintiff the amount of Four Hundred Twenty Thousand Nine Hundred Sixty Seven Pesos and 28/100 (P420. is tempered by the concept of conditional appearance.967. The MeTC acquired jurisdiction over the person of respondent Hertz. Branch 64. premises considered. the defendant corporation to pay the amount of Fifty Four Thousand Two Hundred Pesos (P54. Whether the ejectment of Hertz and the award of damages. in Civil Case No. I 4. which is DIRECTED to ensure that its Sheriff properly serve summons to only those persons listed in Sec. 3. the MeTC rendered a Decision. Rule 14 of the Rules of Civil Procedure in order that the MTC could acquire jurisdiction over the person of the defendant corporation HERTZ. THE COURT’S RULING We grant the Petition and reverse the assailed Decision and Resolution of the appellate court. or 14 days after service of the Summons. petitioner then filed the instant Rule 45 Petition for Review on Certiorari with this Court.21 On 28 March 2006." 23 In the same Motion. premises considered. Branch 64. 31 On appeal. the fallo of which reads: In this case.00) as and for attorney’s fees. in the interest of substantial justice. the cost of suit. quality control supervisor of Hertz. the MeTC acquired jurisdiction over the person of respondent Hertz by reason of the latter’s voluntary appearance in court. The appellate court thereafter reversed the RTC and remanded the case to the MeTC to ensure the proper service of summons. In Philippine Commercial International Bank v. are hereby REVERSED. the Answer with Counterclaim attached to the Motion for Leave to File Answer should be admitted regardless of its belated filing.28) representing its rentals arrearages and utility charges for the period of August 2005 to February 2006. the defendant corporation and all persons claiming rights from it to immediately vacate the leased premises and to surrender possession thereof to the plaintiff. for reconsideration of a default judgment. the court's jurisdiction over his person cannot be considered to have submitted to its authority. 90842. On 18 June 2007. and 2. This.200. the MeTC failed to acquire jurisdiction over the person of respondent Hertz. however. as well as the June 18. "in spite of the defective service of summons. 22 In that Motion. ANNULLED and SET ASIDE – due to lack of jurisdiction over the person of the defendant corporation HERTZ. who complied with the telephone instruction of manager Rudy Tirador to receive the Summons. the following issues are submitted for resolution by this Court: 1. deducting therefrom defendant’s security deposit. As a general proposition. for additional time to file answer. Accordingly. It is by reason of this rule that we have had occasion to declare that the filing of motions to admit answer. 2. among others. the CA issued its 17 March 2008 Decision. SO ORDERED. 24 On 22 May 2006.26 The dispositive portion of the Decision reads: WHEREFORE. Whether the unlawful detainer case is barred by litis pendentia. 2007 Resolution.34 THE ISSUES As culled from the records. is considered voluntary submission to the court's jurisdiction. it is thus clear that: . such that a party who makes a special appearance to challenge. WHEREFORE. attorneys fees and costs are proper. and both the March 16. of the Regional Trial Court of Makati City. 90842. the RTC denied respondent’s Motion for Reconsideration of its assailed Decision. Spouses Dy.before the MeTC a Complaint for Unlawful Detainer and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction (Unlawful Detainer Complaint) against Hertz.32 Petitioner’s Motion for Reconsideration of the CA’s Decision was denied in a Resolution dated 20 May 2008. and to lift order of default with motion for reconsideration.000.25 ruling that petitioner Optima had established its right to evict Hertz from the subject premises due to nonpayment of rentals and the expiration of the period of lease. In civil cases. Prescinding from the foregoing. the Court hereby renders judgment for the plaintiff and against the defendant. due to the improper service of summons. 2006 Decision of the Metropolitan Trial Court of Makati City. and 5. 2007 Decision. Hertz stated that. This case is hereby REMANDED to the Metropolitan Trial Court of Makati City. jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person. 06-672.36 we had occasion to state: Preliminarily. Hertz filed a Motion for Leave of Court to file Answer with Counterclaim and to Admit Answer with Counterclaim (Motion for Leave to File Answer). in Civil Case No. Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz. the CA ruled that. one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. since the service of summons was defective. the defendant corporation to pay the amount of Thirty Thousand Pesos (P30. 11. and 3.35 SO ORDERED. 33 Aggrieved by the ruling of the appellate court. the RTC affirmed it by dismissing the appeal in a Decision29 dated 16 March 2007. jurisdiction over the person of the defendant may be acquired either by service of summons or by the defendant’s voluntary appearance in court and submission to its authority. it likewise prayed that. Summons for the Unlawful Detainer Complaint was served on Henry Bobiles. ordering: 1.27 Hertz appealed the MeTC’s Decision to the RTC. 30 Hertz thereafter filed a verified Rule 42 Petition for Review on Certiorari with the CA. it opted to file the instant Answer with Counterclaim with Leave of Court. 28 Finding no compelling reason to warrant the reversal of the MeTC’s Decision. in Civil Case No. Branch 137.00) as a reasonable monthly compensation for the use and occupancy of the premises starting from March 2006 until possession thereof is restored to the plaintiff. the May 22. 20 On 14 March 2006. or his voluntary appearance in court. WHEREFORE.1âwphi1 Under the Civil Code. we find it to be a reasonable award. SP No.38 Finally. the relief being founded on the same facts. or at least their representation of the same interests in both actions. (Emphases supplied) In this case. The defenses that it pleaded were limited to litis pendentia. and.45 Litis pendentia requires the concurrence of the following elements: (1) Identity of parties. and (3) Identity with respect to the two preceding particulars in the two cases. the records show that Hertz failed to pay rental arrearages and utility bills to Optima. the records show that the following statement appeared in respondent’s Motion for Leave to File Answer: In spite of the defective service of summons. we find that Hertz should pay adequate compensation to Optima.e. regardless of which party is successful. 90842 is hereby REINSTATED and AFFIRMED. The assailed Decision and Resolution of the Court of Appeals in CA-G. 42 entitling the lessor to terminate the lease. On the first ground. Thus. Hertz had until 30 November 2005 within which to express its interest in negotiating an extension of the lease with Optima. (Emphasis supplied) 37 Furthermore. (2) Identity of rights asserted and reliefs prayed for. 39 Measured against the standards in Philippine Commercial International Bank. (2) Accordingly. would amount to res judicata in the other case. As the lease price during the effectivity of the lease contract was P54. in view of the foregoing. second. 06-672 affirming in toto the Decision of the Metropolitan Trial Court.43 On the second ground. II The instant ejectment case is not barred by litis pendentia. the failure of Hertz to pay timely rentals and utility charges entitles the lessor to judicially eject it under the provisions of the Civil Code. 41 As to the award of monthly compensation. these actions lead to no other conclusion than that Hertz voluntarily appeared before the court a quo. i. On the other hand. 2006.R. we find that the MeTC committed no reversible error in its 22 May 2006 Decision. and (3) Failure to do so constitutes voluntary submission to the jurisdiction of the court. the expiry of the period agreed upon by the parties is likewise a ground for judicial ejectment. Makati City in Civil Case No. The lease can be renewed only by a new negotiation between the parties upon written notice by the LESSEE to be given to the LESSOR at least 90 days prior to termination of the above lease period. III The eviction of respondent and the award of damages. the unlawful detainer case sought the ejectment of defendant-appellant Hertz from the leased premises and to collect arrears in rentals and utility bills. especially in instances where a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution. pari delicto. performance of its obligations and lack of cause of action. .. objections to the jurisdiction of the court over the person of the defendant must be explicitly made. by virtue of the voluntary appearance of respondent Hertz before the MeTC. From the foregoing.200 per month. The pertinent provision of the Contract of Lease reads: x x x. since the former continued to occupy the leased premises even after the expiration of the lease contract.40 Here. the Contract of Lease expired without any request from Hertz for a renegotiation thereof at least 90 days prior to its expiration. Finally.(1) Special appearance operates as an exception to the general rule on voluntary appearance. the instant Rule 45 Petition for Review is GRANTED. Makati City in Civil Case No. while there is identity of parties in both cases. and (3) pay damages. upon inquiring from the office of the clerk of court of this Honorable Court and due to its notice of hearing on March 29. As aptly found by the trial court: The Complaint for Specific Performance] seeks to compel plaintiff-appellee Optima to: (1) renegotiate the contract of lease. Moreover. 2005 application for TRO/Preliminary Mandatory Injunction was received on March 26. attorney’s fees and costs were proper. we find that the pendency of the Complaint for Specific Performance is not a bar to the institution of the present case for ejectment. Branch 13 7.000 and judicial costs in the light of Hertz's unjustifiable and unlawful retention of the leased premises. the defendant opted to file the instant Answer with Counterclaim with Leave of Court. the Answer with Counterclaim filed by Hertz never raised the defense of improper service of summons. As the rights asserted and the reliefs sought in the two cases are different. the trial court acquired jurisdiction over respondent’s. we uphold the award of attorney's fees in the amount of P30. the Contract of Lease expired on 28 February 2006. respondent failed to pay rental arrearages and utility bills to Optima. such that any judgment that may be rendered in the pending case. We find that the RTC’s ruling upholding the ejectment of Hertz from the building premises was proper. Hertz failed to communicate its intention to negotiate for an extension of the lease within the time agreed upon by the parties. The Decision of the Regional Trial Court. and that the RTC committed no reversible error either in affirming the MeTC's Decision. it even asserted its own counterclaim against Optima. However. the records likewise show that the lease had already expired on 28 February 2006 because of Hertz’s failure to request a renegotiation at least 90 days prior to the termination of the lease period. 99890 are hereby REVERSED and SET ASIDE. Hertz contends that the instant case is barred by litis pendentia because of the pendency of its Complaint for Specific Performance against Optima before the RTC. We therefore rule that. Failure to pay timely rentals and utility charges is an event of default under the Contract of Lease. (2) reconnect the utilities at the leased premises. Branch 64. First. set forth in an unequivocal manner. We disagree. thus forcing Optima to file the instant case in order to protect its rights and interest. by its own provisions. we find that the rights asserted and the reliefs prayed for under the Complaint for Specific Performance and those under the present Unlawful Detainer Complaint are different. 44 As the lease was set to expire on 28 February 2006. EAIC explained that the RTC did not touch upon the issue of fraud in the petition for relief from judgment as it was dismissed for being filed out of time. 1996 Adverse Claim and the November 18. Following the presentation of evidence ex parte. EAIC’s Chairman and President. Sariaya. Quezon and registered under EAIC’s name and covered by Transfer Certificate of Title (TCT) No. Further. No motion for reconsideration or notice of appeal was filed by EAIC. 1999. 2001. 1998. Guia G. 96-177 in TCT No. RODEL T. entered into a Contract to Sell. According to EAIC. was unsuccessful as EAIC could not be located in the said address. respondents filed a Complaint 5 for specific performance. 1996. Pursuant to the Contract to Sell. through Gala. EAIC was informed of the pending civil case against it. neither Domingo nor her counsel appeared. Agent or Director. 6 The initial attempt to serve the summons and a copy of the complaint and its annexes on EAIC.00) Pesos. on Rizal Street. filed its Answer with Counterclaim. respondents had their Affidavit of Adverse Claim annotated in TCT No. November 21. Secretary. in CA-G. Despite such payment. Singalong. represented by its alleged corporate secretary and attorney-in-fact. had already been rejected with finality. EAIC. 96-177 from EAIC. in Civil Case No. 1996. No. 1995. dismissing the petition and upholding the November 11. sent Wee a letter. 4 On November 14. 1997. . Sariaya. 1999 RTC Decision before the same court. SP No. T-157038 should be deemed constructive notices to the world of the pending litigation referred to therein and. 1997.050.SO ORDERED. at the time the summons was served upon her and she did not possess the requisite authorization to represent EAIC in the subject transaction. 96-177 because of the November 8.11 On July 10. wherein EAIC agreed to sell to the respondents a 30. 96-177. The second attempt to serve the alias summons to Domingo was. dated July 9. Moreover. Young. Domingo was not its President." The Facts On July 24. Rule 18 10 of the Rules of Court. Domingo (Domingo). G. RAUL E. initiated the Petition for Annulment of Judgment 15 under Rule 47 of the Rules of Court of the November 11. respondents were allowed to present their evidence ex parte.8 dated July 9. it could not be bound by the assailed RTC Decision pursuant to Section 13. Ellice Agro Industrial Corporation. through Domingo. bound EAIC to Civil Case No. successful. the applicable rule then. Petitioner.3 respondents paid EAIC.00) Pesos as partial payment for the acquisition of the subject property. represented by Domingo. the residence of Domingo. T-157038. EAIC. and GUIA G. On the scheduled pre-trial conference on January 27. On November 8. 2000 Order. informing him of Domingo’s lack of authority to represent EAIC. EAIC claimed that the exchange of letters between Wee and EAIC never stated anything whatsoever of any pending suit between them. therefore. hence. the RTC rendered its November 11. T157038. Rule 14 16 of the 1964 Rules of Court which was.20 between Wee and EAIC. with the exchange of letters.R. respondents countered that considering EAIC’s petition for relief from judgment under Rule 38 grounded on extrinsic fraud. a letter. respondent Jim Wee (Wee) sent Raul E.000. represented by its Chairman of the Board of Directors and President. 1999 RTC Decision before the CA. YOUNG. 64421. entitled "Rodel T. 7 In response. As a result of EAIC’s failure to appear in the pre-trial conference. Delfin Chan and Jim Wee (respondents) and Ellice Agro-Industrial Corporation (EAIC). introducing itself to be the counsel of EAIC. the said RTC decision became final and executory on December 8. 14 On April 24. *** Respondents. the aggregate amount of Five Hundred Forty Five Thousand (P545. Rodel T. The petition for relief from judgment was premised on the alleged fraud committed by Domingo in concealing the existence of both the Contract to Sell and Civil Case No. defrauded EAIC of the potential gains it should have realized from the proceeds of the sale. JIM WEE. against EAIC and Domingo before the RTC. this time. represented by Gala. Young. Branch 60 (RTC). Cashier.000. EAIC. J. DECISION MENDOZA. Domingo. In their Answer with Counterclaim18 filed before the CA. respondents caused the annotation of a Notice of Lis Pendens involving Civil Case No. prompted by the failure of EAIC to comply with its obligation. 174077 Meanwhile. docketed as Civil Case No. 1997. Delfin Chan and Jim Wee v.13 the RTC denied the petition for relief from judgment for being clearly filed out of time under Section 3. on November 18. 96-177. The petition was grounded on the RTC’s lack of jurisdiction over EAIC and the extrinsic fraud committed by Domingo. 1999 Decision of the Regional Trial Court of Lucena City. Respondents insisted that the mentioned annotations in TCT No. Rule 38 of the Rules of Court. represented by Gala.R. In addition. 2000 (roughly seven months after the finality of the RTC Decision). vs. T-157038 in consideration of One Million and Fifty Thousand (P1.000 square-meter portion of a parcel of land located in Lutucan. seeking a conference with the latter relating to the execution of an absolute deed of sale pursuant to the Contract to Sell entered into between EAIC and respondents. Another attempt was made to serve the alias summons on EAIC at 996 Maligaya Street. GALA. represented by Guia G.9 dated July 18.: Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court are the July 1. 1999 Decision ordering EAIC to deliver the owner’s duplicate copy of TCT No. as evidenced by the General Information Sheets17 (GIS) it filed with the Securities and Exchange Commission (SEC). 2006 Resolution2 of the Court of Appeals (CA). 2012 ELLICE AGRO-INDUSTRIAL CORPORATION. pursuant to Section 5. On March 21. Gala (Gala). EAIC discarded any knowledge of the said sale and the suit filed by respondents against it. Consequently. her misrepresentation that she was EAIC’s corporate secretary who was properly authorized to sell and receive payment for the subject property. T-157038 and to execute a final deed of sale in favor of respondents. 1997 19 and July 18. 1996 Notice of Lis Pendens annotated at the back of TCT No. T-157038. Manila. filed its Petition for Relief from Judgment 12 under Rule 38 of the Rules of Court of the November 11. EAIC could not be permitted to invoke the same ground in a petition for annulment of judgment under Rule 47. In its Reply21 filed before the CA. 1997. Quezon. the Robles Ricafrente Aguirre Sanvicente & Cacho Law Firm. Furthermore. 2003 Decision1 and the August 8. In its July 12. DOMINGO. under certain terms and conditions. through Domingo. EAIC could not feign ignorance of Civil Case No. 96-177. 1996. DELFIN CHAN. Manager. EAIC failed to deliver to respondents the owner’s duplicate certificate of title of the subject property and the corresponding deed of sale as required under the Contract to Sell. The letter was duly acknowledged and the parties thereafter even tried to settle among themselves the consideration and conveyance of the 30. 96-177 and. through Raul E. 96177. there was no reason why the corporation could not have proceeded with the pre-trial in Civil Case No. DOMINGO WAS A DIRECTOR OF PETITIONER CORPORATION AT THE TIME SUMMONS WAS SERVED UPON HER AND IN DENYING PETITIONER’S MOTION FOR RECONSIDERATION. Moreover. These constructive notices ought to have spurred the corporation into action by filing an answer in Civil Case No. It did not. at the inception of Civil Case No. for instance. Service upon private domestic corporation or partnership. But the corporation chose to keep quiet. Respondents stress that the extrinsic fraud claimed by EAIC is not a valid ground for a petition for annulment of judgment because the latter had already availed of the said ground in a petition from relief from judgment in contravention to Section 2. 96-177 for EAIC since she truly believed that she was authorized to do so. thus. Be that as it may. Rule 14 of the 1964 Rules of Civil Procedure. in effect.— If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered. the corporation had availed of the remedy of relief from the judgment in Civil Case No. 1998.22 The main issue for the Court’s consideration is whether the RTC validly acquired jurisdiction over the person of EAIC. 2006. secretary. cashier. Even without the constructive notices. Gala. the CA ratiocinated: THE COURT OF APPEALS ERRED IN RULING THAT GUIA G. THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER CAN NO LONGER AVAIL OF THE PRESENT PETITION HAVING EARLIER FILED A PETITION FOR RELIEF FROM JUDGMENT.25 Domingo argues that EAIC. 96-177. therefore. Domingo is its proper or legitimate representative. rendered in SEC Cases Nos. In their Memorandum. EAIC. in its Memorandum. through a letter signed by one of them.000 square-meter portion. these remedies no longer are available. defendant in Civil Case No. at the time summons was served. in filing its Answer with Counterclaim and Petition for Relief from Judgment. clothed the RTC with jurisdiction over the person of EAIC. she claims that she acted in utmost good faith in receiving the summons and filing the Answer in Civil Case No. agent. 1990 was held to be illegitimate. 3747 and 4027. the applicable rule on service of summons upon a private domestic corporation then. already had constructive notice of the three (3) businessmen’s herein respondents adverse claim to a 30. manager. 1996. It even appears that she was. after all.26 contends that there was no valid service of summons because Domingo. amounted to a waiver of its right to actively participate in the proper disposition of Civil Case No. Sec. 1997. to move for a new trial therein and to appeal from the decision rendered therein.23 respondents argue that at the time the summons was served upon Domingo. any judgment of the court which has no jurisdiction over the person of the defendant is null and void. provides: The Issues Not in conformity with the ruling of the CA. a proper or legitimate representative of the corporation because in the decision. EAIC seeks relief from this Court raising the following errors: THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS VALID SERVICE OF SUMMONS UPON PETITIONER CORPORATION. x x x x. the corporation’s board headed by Raul E. she was acting for and in behalf of EAIC. [Underscoring supplied] . but only the corporation should be faulted for this. respondents’ duty to prosecute their case diligently includes ensuring that the proper parties are impleaded and properly served with summonses. 13. the CA dismissed the petition for annulment of judgment. secretary. EAIC’s filing of its Answer with Counterclaim and the petition for relief from judgment before the trial court constitutes voluntary appearance thereby submitting itself to the jurisdiction of the RTC. manager. In its decision. It is a settled rule that jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. or director. 96-177.28 x x x x. was not its president. Section 13.000 square-meter portion of the land covered by TCT No. EAIC’s motion for reconsideration was denied by the CA in its Resolution. Hence. The CA erred in considering the Adverse Claim and Notice of Lis Pendens annotated in TCT No. but also to give notice to the defendant that an action has been commenced against it and to afford it an opportunity to be heard on the claim made against it. Gala since August 24. this petition for review. or any of its directors. Further. The requirements of the rule on summons must be strictly followed. 27 The purpose of summons is not only to acquire jurisdiction over the person of the defendant. 96-177 through proper or legitimate representations. The GIS filed with the SEC consistently showed that she never held any position with EAIC which could have authorized her to receive summons in behalf of EAIC. T-157038 as constructive notice to EAIC of the pendency of Civil Case No. On the other hand. Rule 47. This was in July. of their contract to sell. agent. T-157038 because this claim was duly registered and annotated on the said title even before this date. cashier. The Court’s Ruling It would serve no useful purpose then to delve into the issues of jurisdiction and fraud raised in the petition as the petition itself is unavailing under the circumstances. Moreover. The corporation’s reticence in view of the constructive notices and its then incumbent board’s personal knowledge of the case had.In its July 1. The fact that it was not able to prove that it was entitled thereto does not mean that it can now avail of the instant remedy. the trial court will not acquire jurisdiction over the defendant. at any rate. dated August 8. the businessmen herein respondents. When this failed. had invoked the jurisdiction of the same trial court that it now denies. 96-177. making the trial court and everyone else concerned with said civil case believe that Guia G. service may be made on the president. The corporation. apprised the corporation. Certainly. four (4) days after the inception of the civil case. 96-177 on November 14. Those annotations in the TCT merely serve to apprise third persons of the controversy or pending litigation relating to the subject property but do not place a party under the jurisdiction of the court. They further point out that. 2003 Decision. When the defendant does not voluntarily submit to the court’s jurisdiction or when there is no valid service of summons. room was provided for on the same title for the annotation of a notice of lis pendens. otherwise. The Court finds merit in the petition. 24 In her Memorandum. dated November 3. a judgment of annulment shall set aside the questioned judgment or final order or resolution and render the same null and void. the 1996 GIS30 of EAIC. the RTC did not validly acquire jurisdiction over the person of EAIC. 96-177 before the RTC despite the filing of an Answer with Counterclaim. Consequently. if any. the RTC ordered the dismissal of petitioners Abubakar A. by mere tolerance. 96-177 lodged against it. manager. AFDAL and FATIMA A. DECISION CARPIO. Respondent claimed that petitioner Abubakar Afdal (petitioner Abubakar) sold the property to him but that he allowed petitioners to stay in the property. The physical acts of the corporation. and all other persons claiming rights under them were occupying. or director. should be made on the persons enumerated in the rule. Incidentally. Zenaida Guijabar (Guijabar). 3 and 18 February 2004. Gala." 6 Then. In the present case.32 the Court stated: A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. In advancing the said allegations. The Facts On 18 December 2003. Petitioners. service of summons on anyone other than the president. petitioners failed to file an answer.: The Case This is a petition for review1 of the 3 January 20052 and 16 June 20063 Orders of the Regional Trial Court. J. T-5301394 in the Registry of Deeds Calamba. the RTC denied petitioners’ motion for reconsideration. 31 it was held that "x x x jurisdiction of the court over the person of the defendant or respondent cannot be acquired notwithstanding his knowledge of the pendency of a case against him unless he was validly served with summons. can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board. Ricafort-Bautista. to be effective and valid. Biñan. In its 3 January 2005 Order. Branch 60. Biñan. for the proper service of summons to the petitioner and other parties. among others. Afdal’s (petitioners) petition for relief from judgment.7 However. 96-177." G. agent. secretary. there were three attempts to serve the summons and complaint on petitioners – 14 January. Domingo alleged in her Answer with Counterclaim that "Alicia E. respondent demanded that petitioners. a parcel of land in respondent’s name covered by Transfer Certificate of Title No. In this case. 29 The records of the case is hereby ordered remanded to the Regional Trial Court of Lucena City. Peter Doe. No. through Domingo. secretary. manager. Juana Doe. Hence.R. Laguna (MTC). According to the records. The November 11."33 In the same pleading. EAIC cannot be bound or deemed to have voluntarily appeared before the RTC by the act of an unauthorized stranger. not EAIC. WHEREFORE. vs. Respondent alleged that petitioners. agent or director. In view of Domingo’s lack of authority to properly represent EAIC. The July 1. Domingo lacked the necessary authority to bind EAIC to Civil Case No. Afdal and Fatima A. in CA-G. John Doe. for service of summons upon a private domestic corporation.Based on the above-quoted provision. 2006 Resolution of the Court of Appeals. Due to this fact. 5 Respondent further alleged that petitioners refused to heed his demand and he was constrained to file a complaint before the Lupon ng Tagapamayapa (Lupon). According to respondent. the Court is of the view that her honest belief that she was the authorized corporate secretary was clearly mistaken because she was evidently not the corporate secretary she claimed to be. SO ORDERED. Domingo claimed that she was authorized by Alicia E. In Salenga v. In view of the fact that EAIC was not validly served with summons and did not voluntarily appear in Civil Case No.1âwphi1 Pursuant to Section 7. On 25 August 2003. petitioners ignored the notices and the Lupon issued a "certificate to file action. and all persons claiming rights under them turn over the property to him because he needed the property for his personal use. Gala. much less duly authorized by any board resolution or secretary’s certificate from EAIC to file the said Answer with Counterclaim in behalf of EAIC. December 1. the Court is constrained to rule that there was no valid service of summons binding on it. respondent filed the complaint before the MTC. Guijabar. cashier. the purported beneficial owner of the subject property. Rule 4734 of the Rules of Court. EAIC is deemed to have voluntarily submitted itself to the jurisdiction of the RTC. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. in Civil Case No.R. ROMEO CARLOS. AFDAL. Court of Appeals. Guijabar. Domingo was clearly not an officer of EAIC. Laguna. Such is the important role a valid service of summons plays in court actions. at the time she filed the Answer with Counterclaim. Granting arguendo that EAIC had actual knowledge of the existence of Civil Case No. Gala is the real owner and possessor of all the real properties registered in the business name and style Ellice-Agro Industrial Corporation x x x. to represent her in Civil Case No. Undoubtedly. respondent Romeo Carlos (respondent) filed a complaint for unlawful detainer and damages against petitioners. 2010 ABUBAKAR A. the pertinent document showing EAIC’s composition at the time the summons was served upon it. Conversely. B-6721. the petition is GRANTED. the proceedings had before the RTC and ultimately its November 11. will readily reveal that she was not its president. are hereby REVERSED. her conduct in the filing of the Answer with Counterclaim cannot and should not be binding to EAIC. The power of a corporation to sue and be sued is exercised by the board of directors. 96-177 by virtue of a General Power of Attorney. and for other appropriate proceedings. SP No. 1999 Decision were null and void. with the RTC. the RTC still failed to validly acquire jurisdiction over EAIC. through Domingo. 173379 The Court cannot likewise subscribe to respondents argument that by filing its answer with counterclaim. In its 16 June 2006 Order. Respondent. Laguna (RTC) in Civil Case No. 96-177. 1999 Decision of the Regional Trial Court of Lucena City. Branch 60. is not valid. 3719 before the Municipal Trial Court. 64421. Domingo evidently acted in representation of Alicia E. In Cesar v. is hereby declared VACATED and SET ASIDE. Branch 25. . cashier. like the signing of documents. and all persons claiming rights under them docketed as Civil Case No. 2003 Decision and August 8. Petitioners allege the need to reconcile the apparent inconsistencies with respect to the filing of a petition for relief from judgment under Rule 38 of the Rules of Court and the prohibition under the Revised Rule on Summary Procedure. x x x Section 19(d) of the Revised Rule on Summary Procedure also provides: 5. Section 1. . The dispositive portion of the 23 August 2004 Decision reads: WHEREFORE. On 10 November 2004. Petitioners argue that they have no other recourse but to file the petition for relief with the RTC. he may file a petition in such court and in the same case praying that the judgment. x x x On 30 October 2004. Zenaida Guijabar and all persons claiming rights under them to vacate the subject property and peacefully turn-over possession of the same to plaintiff. An action for unlawful detainer or forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation on the defendant for the latter to vacate the property subject of the action. Moreover. this petition. The RTC said it had no jurisdiction over the petition because the petition should have been filed before the MTC in accordance with Section 1 of Rule 38 of the Rules of Court which provides that a petition for relief should be filed "in such court and in the same case praying that the judgment. In its 16 June 2006 Order.The following pleadings. Prohibited pleadings and motions. 19.G. as in the present case. or petitions shall not be allowed in the cases covered by this Rule: x x x On 1 October 2004. Petitioners denied that they sold the property to respondent. The remedy of petitioners in such a situation is to file a petition for certiorari with the RTC under Rule 65 18 of the Rules of Court on the ground of lack of jurisdiction of the MTC over the person of petitioners in view of the absence of summons to petitioners.14 Clearly. Here. Therefore. for the 10 May 2004 elections. Moreover. respondent filed an ex-parte motion and compliance with position paper submitting the case for decision based on the pleadings on record. or pleadings shall not be allowed: x x x 4.00) appearance fee. Zamboanga del Sur.00) as rental arrears from August 25.000. .00) as and for attorney’s fees plus ONE THOUSAND FIVE HUNDRED PESOS (P1. as reasonable compensation for the use of the subject premises until they finally vacate the same. Petitioners alleged that they are the lawful owners of the property which they purchased from spouses Martha D. accident. Ubaldo and Francisco D. judgment is hereby rendered in favor of plaintiff and against defendants as follows: 1. motions. The Ruling of the Court Petitioners maintain that the RTC erred in dismissing their petition for relief. Hence. Petitioners added that on 15 December 2003. order or proceeding be set aside. petitioners said they were not served a copy of the summons and the complaint. motions. 2003 up to the date of decision.10 SEC. the RTC denied petitioners’ motion. 8 The Issue Petitioners raise the sole issue of whether the RTC erred in dismissing their petition for relief from judgment." Petitioners filed a motion for reconsideration. a petition for relief from judgment in forcible entry and unlawful detainer cases. On 3 January 2005.16 15 On 6 December 2004. if allowed by the Rules and not a prohibited pleading. (Emphasis supplied) A petition for relief from judgment. order or proceeding be set aside. 13 Subsequently. petitioners cannot file the petition for relief with the MTC because it is a prohibited pleading in an unlawful detainer case. Petitioners said they only learned of the MTC’s 23 August 2004 Decision on 27 October 2004. the RTC issued the assailed Order dismissing the petition for relief. . Prohibited pleadings and motions. order or other proceedings. The reason for this is to achieve an expeditious and inexpensive determination of the cases subject of summary procedure. Section 13(4) of Rule 70 of the Rules of Court provides: SEC. Ordering defendants to pay the costs of suit.500.000. Petitioners suggest that petitions for relief from judgment in forcible entry and unlawful detainer cases can be filed with the RTC provided that petitioners have complied with all the legal requirements to entitle him to avail of such legal remedy. Ordering defendants to pay plaintiff the amount of FIFTY THOUSAND PESOS (P50. Ordering defendants to pay plaintiff the amount of TEN THOUSAND PESOS (P10. Petition for relief from judgment. petitioners filed the petition for relief before the RTC. or any other proceeding is thereafter taken against a party in any court through fraud.When a judgment or final order is entered. Petitioners also pointed out that they never received respondent’s demand letter nor were they informed of. we shall treat petitioners’ petition for relief from judgment as a petition for certiorari before the RTC. 13. 1. Ubaldo. . Rule 38 of the Rules of Court provides: SEC. petitioners manifested their intention to withdraw the petition for relief after realizing that it was a prohibited pleading under the Revised Rule on Summary Procedure. SO ORDERED. petitioners filed a petition for relief from judgment with the MTC. Petitioners cannot also file the petition for relief with the RTC because the RTC has no jurisdiction to entertain petitions for relief from judgments of the MTC. In its 23 August 2004 Decision. 2. mistake or excusable negligence. the proceedings before theLupon. 4. Ordering defendants Abubakar Afdal. Petition for relief from judgment.00) a month thereafter. the MTC issued a writ of execution. petitioner Abubakar filed with the Commission on Elections his certificate of candidacy as mayor in the municipality of Labangan. 171avvphi1 In the present case.The following petitions. 3.On 2 June 2004.9 the MTC ruled in favor of respondent. Ordering defendants to pay plaintiff the amount of TEN THOUSAND PESOS (P10. the RTC did not err in dismissing the petition for relief from judgment of the MTC. should be filed with and resolved by the court in the same case from which the petition arose.11 (d) Petition for relief from judgment. the MTC granted petitioners’ request to withdraw the petition for relief. is a prohibited pleading. 12 Respondent filed a motion to dismiss or strike out the petition for relief.000. much less participated in. it should be left with a person of "suitable age and discretion then residing therein. 04-7350. 2010 x .. jurisdiction can be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the Rules of Court..29 we said: We have long held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service. The complaint.. 27 understand the importance of a summons. Branch 25. Thus. it also never became final. ensuring that the latter would receive or at least be notified of the receipt of the summons.* CASTRO.. otherwise. We SET ASIDE the 3 January 2005 and 16 June 2006 Orders of the Regional Trial Court.-x DECISION CARPIO MORALES.. Biñan. It is an extraordinary method since it seeks to bind the defendant to the consequences of a suit even though notice of such action is served not upon him but upon another whom the law could only presume would notify him of the pending proceedings. Rapid City Realty and Development Corporation (petitioner) filed a complaint for declaration of nullity of subdivision plans . 6.. resorted to substituted service by serving summons upon respondents’ househelp who did not acknowledge receipt thereof and refused to divulge their names. . NACHURA.19 In an action in personam. After one failed attempt at personal service of summons." 24 The second indorsement dated 3 February 2004 stated that the summons was "duly served as evidenced by his signature of one Gary Acob25(relative). strictly.. J.J.. was a person of suitable age and discretion residing in petitioners’ residence.: Sometime in 2004. Failure to faithfully. It was also not shown that efforts were made to find petitioners personally and that said efforts failed..23 A closer look at the records of the case also reveals that the first indorsement dated 14 January 2004 carried the annotation that it was "unsatisfied/given address cannot be located. why efforts exerted towards personal service failed.Whenever practicable. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer’s Return. Afdal and Fatima A. which was docketed at the Regional Trial Court of Antipolo City as Civil Case No. such person must know how to read and understand English to comprehend the import of the summons. The second was on February 3. the MTC’s 23 August 2004 Decision is void. .. Biñan. Hence. 2004 where the same was served to one Gary Akob and the last was on February 18. the summons shall be served by handing a copy thereof to the defendant in person. BERSAMIN. Afdal a chance to file their answer and present evidence in their defense. Promulgated: February 11. as well as all acts and deeds incidental to the judgment in Civil Case No.. JR.. Sec. the person must have the "relation of confidence" to the defendant.. and fully comply with the statutory requirements of substituted service renders such service ineffective. 3719 by substituted service. the MTC failed to acquire jurisdiction over the person of the petitioners and. 20 Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. In sum. was lodged at Branch 71 thereof.If. The sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age... nowhere in the return of summons or in the records of the case was it shown that Gary Acob. jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. the substituted service cannot be upheld.. 31 Likewise. Laguna."26 While the last indorsement dated 18 February 2004 carried the annotation that it was "duly served but refused to sign" without specifying to whom it was served. the defendant cannot be served within a reasonable time as provided in the preceding section." Thus. Court of Appeals. and thereafter to hear and decide the case. Thus Zapanta stated in the Return of Summons: . and pay actual damages by way of reasonable compensation for his use or occupation of the property. court process server. the process server failed to specify Gary Acob’s age... 3719. by tendering it to him.. ORLANDO VILLA and LOURDES PAEZ-VILLA.versus - PUNO. to be of sufficient discretion..restore physical possession thereof to the plaintiff. the indorsements failed to state that prompt and personal service on petitioners was rendered impossible. "Discretion" is defined as "the ability to make decisions which represent a responsible choice and for which an understanding of what is lawful. what the recipient’s relationship with the defendant is. These matters must be clearly and specifically described in the Return of Summons. 22 The 23 August 2004 Decision of the MTC states: Record shows that there were three attempts to serve the summons to the defendants... and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons.. petitioners were not validly served with summons and the complaint in Civil Case No. . . In Manotoc v. thus.." A person of suitable age and discretion is one who has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to ...35 WHEREFORE.34 Since the MTC’s 23 August 2004 Decision is void. the person on whom substituted service of summons was effected. Service in person on defendant... 184197 Present: Service of summons upon the defendant shall be by personal service first and only when the defendant cannot be promptly served in person will substituted service be availed of. 2004 where the same was unserved..... 28 In Samartino v. JJ.. service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein.... No.33 (Emphasis supplied) In this case... C. CARPIO MORALES. SO ORDERED. right or wise may be presupposed. or. Raon. RAPID CITY REALTY AND DEVELOPMENT CORPORATION.. The first was on January 14.. It failed to show the reason why personal service could not be made. are declared VOID. 2004 where the return was duly served but refused to sign. or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof. we GRANT the petition. These requirements are indispensable because substituted service is in derogation of the usual method of service. Gregorio Zapanta (Zapanta). G. mandamus and damages against several defendants including Spouses Orlando and Lourdes Villa (respondents). Laguna. which state: Sec...[1] Respondents. Any judgment of the court which has no jurisdiction over the person of the defendant is null and void. 21 If the defendant does not voluntarily appear in court.. Substituted Service. WeREMAND the case to the Municipal Trial Court.. his relationship to petitioners and to ascertain whether he comprehends the significance of the receipt of the summons and his duty to deliver it to petitioners or at least notify them of said receipt of summons...R. 7. 3719 and for the said Municipal Trial Court to continue proceedings thereon by affording petitioners Abubakar A. Chairperson. and VILLARAMA. for consolidation with the unlawful detainer case in Civil Case No.. 30 In this case. if he refuses to receive and sign for it.32 we said: If the substituted service will be effected at defendant’s house or residence... Petitioner. for justifiable causes. and fully realize the need to deliver the summons and complaint to the defendant at the earliest possible time for the person to take appropriate action.. The 23 August 2004 Decision and the 1 October 2004 Writ of Execution. by Decision of September 4. . 20. The latter motion clearly stated prefatorily their counsel’s reservation or “special appearance to question jurisdiction” over the persons of the petitioners. – The defendant’s voluntary appearance in the action shall be equivalent to service of summons.e. challenged the trial court’s February 21. Motion to Dismiss of the Solicitor General and the ORDER dated May 3. the court’s jurisdiction over his person cannot be considered to have submitted to its authority. the helpers had no authority to receive the documents. it comes to the Court via petition for review on certiorari.[10] Respondents did not. Branch 71. 2007 and April 18. 2006. italics. among others. 2007. the appellate court annulled the trial court’s Orders declaring respondents in default for the second time in this wise: In assailing the orders of the trial court through their Motion to Lift… and later their Omnibus Motion… the petitioners [herein-respondents] never raised any other defense in avoidance of the respondents’ [herein petitioners] claim. allege that their filing thereof was a special appearance for the purpose only to question the jurisdiction over their persons. 04-7350 be remanded to the court of origin.. It is settled that if there is no valid service of summons. for reconsideration of a default judgment. Let the original records of Civil Case No. Voluntary appearance. emphasis and underscoring supplied) Petitioner’s motion for reconsideration having been denied by the appellate court by Resolution of August 12. In the meantime. 2006. such that a party who makes a special appearance to challenge. especially in instances where a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution. voluntarily submitted themselves to the jurisdiction of the court. Respondents just the same did not file an Answer. which the trial court again granted by Order of February 21. 2004) but they refused to sign to acknowledge receipt and they refused to tell their name as per instruction of the defendants. in said motion. which is a basic right of every Filipino. I served the summons and the copy of the complaint with its annexes to the two ladies ( The same lady househelp I met on Sept. it is thus clear that: (1) Special appearance operates as an exception to the general rule on voluntary appearance. In any event. jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person. the undersigned caused the service of summons together with a copy of the complaint with its annexes to defendant Spouses Lourdes Estudillo Paez-Cline and Orlando Villa at their given address at 905 Padre Faura Street. 2004. 5. Respondents.THIS IS TO CERTIFY that on September 24. who was with me at that time. the trial court. there is no reason why they should not receive the Orders of this Honorable Court since the subject of the case is their multimillion real estate property and naturally they would not want to be declared in default or lose the same outright without the benefit of a trial on the merits. they had acquiesced to the jurisdiction of the court. Thus Section 20 of Rule 14 of the Rules of Court provides: Sec. drawing petitioner to again file a Motion to declare them in default. one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. the trial court set aside the Order of Default and gave herein respondents five days to file their Answer. 2005. [2] x x x (emphasis and underscoring supplied) Despite substituted service. It would be the height of injustice if the respondents is [sic] denied the equal protection of the laws[. And Philippine Commercial International Bank v. rendered judgment in favor of petitioner. On April 18. objections to the jurisdiction of the court over the person of the defendant must be explicitly made. i. . 2007. respondents filed a Motion to Lift Order of Default. et al. and (3) Failure to do so constitutes voluntary submission to the jurisdiction of the court. via certiorari. [4] By Order of July 17. for additional time to file answer. (2) Accordingly. 2007 Orders before the Court of Appeals. It is by reason of this rule that we have had occasion to declare that the filing of motions to admit answer. 2006. they contended that assuming that the allegation were true. . “A party who makes a special appearance in court challenging the jurisdiction of said court based on the ground of invalid service of summons is not deemed to have submitted himself to the jurisdiction of the court. 2005. 2008. . arguing in the main that respondents. enlightens: Preliminarily. in filing the first Motion to Lift the Order of Default. it is most respectfully prayed . . prompting petitioner to file a “Motion to Declare Defendants[-herein respondents] in Default” which the trial court granted by Order of May 3. Respondents must be afforded “Due process of Law” as enshrined in the New Constitution. the defendant spouses are not around at that time. is considered voluntary submission to the court’s jurisdiction. is tempered by the concept of conditional appearance. Regional Trial Court of Antipolo City. the petition is GRANTED. . and instead focused all their energies on questioning the said court’s jurisdiction. The assailed Court of Appeals Decision of April 29. Prescinding from the foregoing. or his voluntary appearance in court. grounds aside from lack of jurisdiction over the person shall not be deemed a voluntary appearance. respondents filed an Omnibus Motion for reconsideration of the second order declaring them in default and to vacate proceedings. With me who can attest to the said incident is Mr. 2007. Spouses Wilson Dy Hong Pi and Lolita Dy. set forth in an unequivocal manner. SO ORDERED. the court can still acquire jurisdiction over the person of the defendant by virtue of the latter’s voluntary appearance. respondents failed to file their Answer.” And they denied the existence of two women helpers who allegedly refused to sign and acknowledge receipt of the summons. Jun Llanes. 2005 granting the Motion to Declare [them] in Default. and to lift order of default with motion for reconsideration. [5] By Decision of April 29. On the 27th of September. 24.[7] (italics and underscoring supplied) In their first Motion to Lift the Order of Default[8] dated January 30. as per information given by two lady househelps who are also residing at the said address. xxxx In the case of respondents. 2004.”[6] (citation omitted. 2008. 2007 and proceeded to receive ex-parte evidence for petitioner.[3] claiming that on January 27. More than eight months thereafter or on January 30. this time claiming that the trial court did not acquire jurisdiction over their persons due to invalid service of summons. since they were not furnished copies of pleadings by the plaintiff and the Order dated May 3. I returned to the same place to serve the summons. This. The petition is impressed with merit. 2005 declaring [them] in default be LIFTED. 2008 is REVERSED and SET ASIDE.] 6. that the Order dated May 5. respondents alleged: The trial court denied respondents’ Omnibus Motion by Order of May 22. WHEREFORE. The inclusion in a motion to dismiss of other x x x x[9] and accordingly prayed as follows: WHEREFORE. however. Clearly. Ermita Manila. As a general proposition. 2006 they “officially received all pertinent papers such as Complaint and Annexes. 4. Upon appeal by the Matienzos to the Court of Appeals (AC G. AND FLORENCIA MATIENZO.081 sq. Likewise.000 as attorney's fees and litigation expenses. the respondent spouses signed the Deed of Absolute Sale.R. the Matienzo spouses. The dispositive part of its decision promulgated on October 31. against defendants Domingo Molina. entitled "Epifanio Matienzo and Florencia Matienzo. Transfer Certificate of Title 1332 was issued in the name of Orlando Molina (p. Orlando Molina and Ireneo Molina. Despite repeated demands for payment. THE HONORABLE COURT OF APPEALS. B) were signed by Orlando Molina. Rollo). when the Deed of Absolute Sale (Exh. Orlando and Ireneo. . dismissed Civil Case No. 26. No. at his own expense. 27945 (pp. 000. 1977. instead of Orlando. EPIFANIO MATIENZO. and On March 14. 1977. 3.450. Posada for private respondents. Virac.350 out of the P20. Defendants-Appellees. all surnamed Molina. Philippine National Bank (or PNB for brevity). After the trial. 27-41. PNB foreclosed the real estate mortgage and purchased the mortgaged property as the highest bidder at the public auction sale which was conducted on March 10. PREMISES CONSIDERED. the Matienzos filed an action for Reconveyance of Title. Respondents Matienzos offered to sell their lot in Cabinitan. vs. 3. seeks the reversal of the decision of the Court of Appeals in AC-G.G. . Ireneo Molina. 14. Recovery of Ownership and Possession. Branch 43. were looking for a lot in Virac where they could put up a furniture shop and a 'chicharon' factory. Convinced of the group's sincerity. which is hereby ordered and declared a party in this appeal. A. 5253. to recovery (sic) the ownership and peaceful possession over 1/2 portion thereof to the plaintiffs-appellants. Later. Rollo) situated at Cabinitan.000 price of the sale of one-half of their property.080-sq. Domingo Molina appeared as vendee. 1981. and ordering the Register of Deeds of Virac.161 sq. Orlando Molina and the Manager of PNB Virac Branch. plus costs. 1978. 1979. Orlando Molina would. Orlando Molina deposited with PNB Virac Branch the amount of P15. but the other half (2. the Regional Trial Court. with 12 % interest from the time of the filing of the complaint until the amount is fully paid. for the PNB Virac Branch. 1983. BRANCH 43. B) for P20.: In this petition for certiorari and prohibition with prayer for preliminary injunction. C) was executed by the parties containing the following memorandum of their agreement: That the true intention of the parties in the Deed of Sale (Exh. On October 8. the business partners. 1105. 82971 September 15. 1105). Fifth Judicial Region. pp. 1985 (Annex C. CV-02959-R). 1. 1989 PHILIPPINE NATIONAL BANK. payable in installments as the price of the 2. In May. . the complaint was amended to include another defendant. J. herein petitioner. they agreed that after five (5) or ten (10) years. the lower court on February 9. petitioner.000 as earnest money for the redemption of the foreclosed property. 3-4. PNB consolidated its ownership over the mortgaged land. the decision appealed from is hereby REVERSED and another one is hereby entered: Orlando Molina issued a promissory note (Exh. Ordering the defendants-appellees Domingo Molina and Orlando Molina to pay jointly and severally the plaintiffs-appellants the remaining balance of the consideration of the Deed of Sale. Free Patent No.R. Ordering the defendants-appellees Domingo Molina and Orlando Molina to pay jointly and severally the plaintiffs-appellants the amount of P10. An affidavit (Exh. cause the other half portion of the land to be surveyed and titled in the name of Epifanio Matienzo. Whereupon. Virac.800. The counterclaim contained in the answer of defendant PNB Manager is also hereby dismissed as he could have prayed for the dismissal of the complaint as against him right after receipt of the copy thereof. meter-lot registered under OCT No. Epifanio Matienzo and Florencia Matienzo were the original owners of a 4. 1984. Catanduanes to issue the corresponding title over said half portion in the names of plaintiffs-appellants. No. The defendants were able to pay Matienzo only P3. On June 15. Annulment of the Document and Damages (Civil Case No. . meters) of Matienzo's property. Orlando Molina mortgaged the entire lot to the PNB branch in Virac for P l5. This case therefore as against the defendant PNB Manager is hereby dismissed. for the price of Pl0 per square meter.080 sq. Delfin G. They also defaulted in paying the PNB loan. On March 31. JUDICIAL REGION V. in the amount of Pl7. Rollo). The spouses wondered why that was so.800. Domingo Molina sold the whole parcel of land to Orlando Molina for the same price of P20. 1981. Rollo) reads thus: WHEREFORE. THE REGIONAL TRIAL COURT. 2. In August 1983.-meter portion of Matienzo's land. Rollo). However. Domingo Molina. The Molinas wanted to buy only one-half of the property. the Molinas defaulted. respondents. Plaintiffs-Appellants vs. A) to be executed by them was for the transfer of ownership over one-half only (2. The Chief Legal Counsel for petitioner. Ordering the court of origin to cause the partition of the property into two equal parts. A perusal of the complaint will readily show that even if all the allegations in the complaint are admitted. there is no liability on the part of defendant PNB Manager.R. meters) would be included in the sale for the purpose of facilitating the defendant-partners' loan and to use it as additional collateral to enable them to secure a bigger loan from PNB. Both the affidavit (Exh. Domingo. the appellate court reversed the appealed judgment. Meanwhile. Exh. CV-02959-R. Catanduanes. A) was presented to Matienzo for signing on November 9. but they were assured that there would be no problem because Domingo Molina was one of the partners to the proposed business venture. dismissed the case insofar as the defendant Manager of PNB Virac Branch was concerned (p." reversing the judgment appealed from and ordering petitioner to reconvey one-half of the mortgaged land in favor of herein private respondents. C) and the promissory note (Exh. It found "that no actionable wrong amounting to fraud were (sic) committed by defendants to entitle plaintiffs to the relief prayed for" (p. No. The order reads as follows: GRIÑO-AQUINO. to have rendered a decision against petitioners who were neither appellants nor appellees in the appeal brought before said court. During the pendency of the case. the Court of Appeals should have sent back the case to the trial court for it to order the plaintiffs to amend their complaint. 1987. we issued a temporary restraining order to stop the implementation of the writ of execution issued pursuant to the order of February 12. Rollo). PNB was an innocent mortgagee (and purchaser) of the property for value. are hereby directed to submit their proposed project of partition of the property involved. and for the Bank to answer the amended complaint and present its evidence in the case (Banco Español-Filipino vs. October 30. (Annex D. That the decision of the Court of Appeals deprives it of its property without due process. The filing of Civil Case No..450 of the price of the 2. the trial court correctly found no fraud or deceit both in the execution of the deed of sale by Matienzo and in the mortgage of the whole lot to the PNB by Molina.1961). the then Acting Presiding Judge in this Court. after the property had been sold to the Bank at the foreclosure sale. the reduction of the consideration in the Deed of Sale was explained to the plaintiffs. Rollo.000 as partial execution of the appellate court's judgment. the fact is it was never actually joined as a defendant in the case. L-15195. that the PNB was an indispensable party in Civil Case No. the court issued an alias writ of execution ordering the PNB Virac Branch to turn over to the sheriff the amount of P15. Rollo). as stated in the affidavit of Orlando Molina (Exh. The trial court and the Court of Appeals found as a fact that. 74. 77369. Jurisdiction over a person is acquired by service of summons and copy of the complaint on him (Rule 14. As stated by Pio Tiu. Ltd. is to act entirely without jurisdiction. 41. No.R. Rollo. vs. 5. P. Rollo. March 29. dismissed the case insofar as defendant Manager PNB Virac Agency is concerned. bring in the PNB as an additional defendant. 37 Phil. Hyopsung Maritime Co. Silvestre S. Romero. CV No. On January 12. 1105 without whom no complete relief could be accorded to the plaintiffs (p.. et al. 44. and the plaintiffs-appellants. Court of Appeals. To which dismissal no opposition nor appeal was interposed by the plaintiffs. Mere service of the appellants' brief on PNB did not operate to bring the Bank into the case. L-25393. The Court of Appeals was aware of the dismissal of the complaint against the PNB manager for that fact was mentioned in the appealed decision of the trial court (Annex B. on motion of the plaintiffs.1988. within a period of fifteen (15) days from receipt of this order. Rollo).R. Palanca. Sending a copy of the appellants' brief to a lawyer of the Bank in the Virac agency was not the proper way to implead the bank. 1988. in order that separate titles may be issued to PNB. Rollo). p.) The decision of the Court of Appeals ordering the PNB to reconvey one-half of the lot in question to Matienzo without giving PNB a chance to defend its own title to the property. 1105. The Court of Appeals' decision ordering the Bank to reconvey to Matienzo one-half of the land which it had purchased at the foreclosure sale. 02959-R (p. That the Court of Appeals had no jurisdiction to render the judgment against it. The plan of the defendants Orlando Molina and Ireneo Molina to mortgage the property in question to the PNB or other banking institution to obtain capital for the business they intended to put up. the court issued. an order placing in custodia legis the P15. the parties concerned. Florencia Matienzo died and she was substituted by her heirs (p. did not invalidate the sale nor the title of the Bank. The Court of Appeals' finding that the order dismissing the complaint against the Bank's manager in Virac "has never become final" (p. . 40. 31-32. The title in the name of Orlando Molina was clean. without them interposing any objection. 42. was likewise explained to plaintiff spouses. Upon noticing that an indispensable party had not been impleaded. never having been put on notice that they were involved in the appeal so that they would have tried to prevent the appellate court from rendering an adverse decision against them in the ordinary course of law. C) Epifanio Matienzo allowed Orlando Molina to use the other half of the property as additional collateral of a loan to be made with the DBP (sic). It had no notice of the adverse claim of Matienzo to one-half of the mortgaged property. The Bank manager in Virac (who was sued but later dropped from the complaint) is not the PNB. He is only an employee of the bank. 1988 and the decision dated October 31. was therefore null and void for lack of jurisdiction (Paramount Insurance Corporation vs. et al. furthermore constitutes a deprivation of property without due process. PNB could not be expected to answer the appellants' brief not only because it was not a party in the appeal (nor in the trial court) but also because the dismissal of the complaint against the PNB manager in Virac was not one of the errors argued in the appellants' brief.1983. Rollo) and in its own decision as follows: On June 18. Matienzo signed the Deed of Sale for the whole of his land. p.Upon remand of the case to the trial court for execution. 834. 148 SCRA 564. petitioners would also be denied due process. Rollo). as observed by the Court. in the instant case. vs.000 earnest money deposited by Orlando Molina in the PNB (p. 1980. 79. 921. As a corollary. WHEREFORE. they knew the purpose for which the property was being purchased by the defendants Domingo Molina and Orlando Molina. Rules of Court). Rollo). and — Furthermore. Paragraph 2 of the dispositive portion of the decision of the Court of Appeals: . August 31. alleging mainly: 1. Neither could it be done by a peremptory declaration in the dispositive portion of the Court's decision that the PNB "is hereby ordered and declared a party in this appeal" even if it never was (p. Upon receipt of the petition for certiorari. (p. 1987. The trial court found that when plaintiffs entered into the contract of sale of the lot in question. An urgent motion for reconsideration of the order was filed by PNB on January 26. G. 28.080 square meters sold to them by Matienzo. Nilo vs. Court of Appeals.R. null and void for that cause. 40. For that reason. the trial court issued an order of execution against Domingo and Orlando Molina to pay the unpaid balance of P7. For the respondent court. under paragraph 2 of the dispositive portion of the decision. the petition for certiorari is granted. although the true agreement with Molina was to sell to him only one-half of it. On February 12. Infante vs. 1988). No. 44 Phil. While it is true. Hon. PNB filed a petition for certiorari under Rule 65 of the Rules of Court. 1985 of the Court of Appeals in case AC-G. Felix.) On May 3. hence.) Since the PNB was not a party in the suit (only its manager was sued and then dropped from the complaint) both the trial court and the Court of Appeals did not acquire jurisdiction over said Bank. . Rollo) has no basis. Toledo. G. to completely enforce the judgment of the Intermediate Appellate Court. . Virac Branch. as borne out by the testimony of plaintiff Florencia Matienzo (pp. The petition is meritorious. Under the circumstances. Luna. (Fernando Go. 15. and 2. petitioner. 42. on July 18. (p. Nieto M. e) for attorney's fees. There is an express finding of gross negligence on the part of private respondent in the judgment of the lower court. Lucrecia got electrocuted by the high speed sewing machine which had been assigned to her by the private respondent. and INTERMEDIATE APPELLATE COURT. but it is lifted with regard to paragraphs 1 and 3 of the dispositive portion of the same decision which are affirmed. was served on its production manager. (p. 12 SCRA 449). was employed as sample maker by the private respondent Hunter Garments Manufacturing (Philippines) Incorporated. the sum of P12.00. the trial court rendered judgment. Lucrecia Europa. the Court of Appeals set aside the default order and judgment by default and directed the trial court to conduct further proceedings for the adjudication of the case. Therefore. assigning the following errors: The Honorable Court. The autopsy conducted by Dr. Rollo) The petitioner filed a motion for reconsideration of the aforesaid decision but the same was denied. had validly acquired jurisdiction over the person of defendant-appellant.000. despite instructions to do so by her superior.) b) for actual expenses for the wake.00. Summons. arguendo. the sum of P5. the instant petition for certiorari. 1989 LUCIA EUROPA (Mother of Deceased Lucrecia Europa). who failed to forward the summons and the copy of the complaint to the company president.000. The trial court denied both motions. the latter certainly submitted to it when private respondent filed a motion for reconsideration of the judgment by default and a motion to admit answer on the ground of excusable negligence. the sum of P30. Mr. respondents. the funeral and burial expenses and other miscellaneous expenses. together with a copy of the complaint. erred in not ruling that defendant-appellant's failure to seasonably file its Answer was due to excusable negligence. that the Honorable Court. The temporary restraining order which we issued is hereby made permanent with regard to said paragraph 2.: This is a petition for certiorari to annul the Court of Appeals decision which set aside the order of default and judgment by default rendered by the Court of First Instance of Rizal Branch XIII in Civil Case No. a) for the death of Lucrecia. The facts of the case are briefly as follows: In 1973. and pay the costs. judgment is rendered against the defendant corporation ordering the latter to pay the plaintiff the following: Hence. d) for moral damages. The facts and circumstances of the case point to the reasonableness of the damages awarded. No. On April 8. WHEREFORE. Rollo. a quo. or on March 9. the dispositive portion of which reads. 1978. vs. Simplicio A. c) for loss of income. the sum of P5. Costs against the private respondents. (p. the petitioner's daughter. 41. HUNTER GARMENTS MFG. Thus.) INC. erred in declaring defendant-appellant in default and in allowing plaintiff-appellee to present her evidence ex parte despite the fact that summons had not been properly served. is annulled and set aside.00. Rollo) Finding that the trial court never acquired jurisdiction over the person of private respondent as summons was improperly served (the production manager not being the same "manager" referred to in Section 13 Rule 14 of the Revised Rules of Court for purposes of service of summons upon a domestic private corporation). and ordering the Register of Deeds of Virac. thus: . 1978. Private respondent likewise appealed from the judgment by default. 39.00. the plaintiff having established her cause of action. 22. (Soriano vs. Assuming. G. the production manager's secretary. the lower court's denial of both motions is binding on private respondent. the sum of P10. Assuming arguendo that the court below originally did not acquire jurisdiction over the private respondent. the petitioner filed an action for damages against private respondent based on quasidelict. No answer to the complaint was ever filed. private respondent appealed to the Court of Appeals. Garcia. (PHIL. (p. thus. private respondent was declared in default and the petitioner was allowed to present evidence ex parte. to recover the ownership and peaceful possession over 1/2 portion thereof to the plaintiffs-appellants. 37848 for Damages. J. 1980. We shall proceed to review the evidence presented and the propriety of damages awarded by the lower court. The Honorable Court. The evidence on record discloses that on March 9.2. 1981.000. Sometime during the course of her employment.R. and PARAS. Lilia Jimenez. SO ORDERED. alleging its failure to seasonably file an answer was due to the excusable negligence of Ms. Thus. Catanduanes to issue the corresponding title over said half portion in the names of plaintiffs-appellants. Palacio. 72827 July 18. Salvador confirmed that Lucrecia died from "shock probably secondary to electrocution" (Annex "A" of the complaint). Ordering the court of origin to cause the partition of the property into two equal parts. a quo. which is hereby ordered and declared a party in this appeal. Thus.580. Lucrecia Europa was electrocuted by the sewing machine owned by private respondent.000. a quo. Rollo) Private respondent filed a motion for reconsideration of the aforesaid decision and a motion to admit answer. it erred in rendering a decision which is not supported by law and the facts of the case. for the PNB Virac Branch.00. There is merit in this petition. Samuel S.. When the case called for pre-trial on September 27. Quasha & Associates for respondents. the respondent court found that the following facts had been established: From the evidence in the record. vs.' The defendant corporation does not employ a duly-licensed electrical engineer but only has three (3) electricians whose services clearly proved inadequate for maintaining the safety of the machines in the factory. There is no indication that the management had ever shown any serious concern for the safety of those operating said machines.. J. and on June 9. This is a verified petition for certiorari. 1954. Fornoza claimed that when her machine was grounded and she complained about it. "A-3". There are at least two incidents. 1959. but petitioner again failed to appear either personally or thru counsel. and documentary evidence relative to their contract. In the meantime plaintiff authorized defendant to pay the salaries of the members of said theatrical troupe and requested an accounting of the expenditures incurred as well as payment of whatever amount was due plaintiff by virtue of their contract (Exhibit "P"). and his motion for reconsideration thereof. 1960 disallowing petitioner's appeal from the order of denial of March 14. William H.00) Pesos. it appears that the plaintiff. Exhibits "A" to "K" of plaintiff's deposition show that plaintiff and defendant entered into a series of agreement by correspondence whereby the former undertook to provide the latter with the so-called "Bubla Continental Revue" for the purpose of presenting two nightly floor shows in said night club for a consideration of P2. Frank Bubla. the hearing of the case was reset for March 6. . and was an entrepreneur managing a theatrical troupe under the name of "Bubla Continental Revue" in 1954. it rendered judgment as follows: WHEREFORE. through his counsel and legal representative. 1957 respondent Bubla. defendant failed to render any accounting and to pay to plaintiff such amount as was due him.. "IV" and "V").. 2. Arsenio Solidum. and from September 29. arrived in Manila sometime in September.00 monthly. where high speed sewing machines of the defendant corporation were grounded. 1964 SAMUEL S. At one time. and ordering its execution. is a resident of 11 Shipley Street. 1960 in Civil Case No. with a prayer for a preliminary injunction filed by Samuel S. "A-36". comprising of six members excluding the plaintiff. (p. respectively. plaintiff and defendant reduced the terms of their agreement to a formal contract (Exhibit "P"). 1954 to January 15.R. 1959. WHEREFORE. but on September 17. and three or four stage shows daily at the Manila Grand Opera House under the management and sponsorship of herein defendant (Exhibits "A-28". filed a complaint with the respondent court to compel petitioner to render an accounting in connection with a written contract entered into between them (Civil Case No.. Commonwealth of Australia.. she was told by the management to get out of there. The "Bubla Continental Revue". In actions based on quasi-delict as in this case. SO ORDERED. 1958. DIZON.respondents. a non-resident alien. However. On August 15. for another P2. The court granted the motion. nothing was done by way of checking these grounded machines. Presiding Judge. South Yarra Melbourne. If the machines were frequently and regularly checked or properly maintained. No. thereby compelling the latter to engage the services of his lawyers for P5. Apparently.. 1958. Exhibits "II".000. less authorized expenditures and advances. 1955.500. judgment is hereby rendered ordering the defendant. 1959. petitioner failed to appear. despite notice sent to him at his address of record. Philippine Embassy at Sydney. 33461 denying petitioner's motion for new trial. the decision of the Court of Appeals is hereby set aside and the decision of the lower court is hereby reinstated except that the indemnity for the death itself is increased to Thirty Thousand (P30. to set aside the latter's orders of March 14 and April 11. the court received Bubla's evidence which consisted of Bubla's deposition taken before the Philippine Consul. As it was. Manila Grand Opera House and in other places in the Philippines covering the period of four (4) months under defendant's management. Manila. 1960 on the ground that the order aforesaid was already final and executory.00 for the purpose of instituting this action. FRANK BUBLA. (Article 2202 of the New Civil Code). William Quasha & Associates.00 a month. and the court set the case for trial on the judgments an December 1. for lack of merit. Sharuff as follows: Ernesto T. 1958 his counsel filed a motion to withdraw his appearance for the reason that he had been unable to get in touch with him. "A43" and "A-46"). despite such demands (Annex "A". Petitioner filed an answer denying the material allegations of the complaint and setting forth therein a counterclaim for damages.000. ARSENIO SOLIDUM. G. who was unable to enter this country because his visa was not approved. the death of Lucrecia by electrocution would surely not have come to pass. Frank Bubla. 33461). as well as three daily stage shows at the Manila Grand Opera House (Exhibits "E". L-17029 September 30. and "A-46"). Sharruf against Frank Bubla and the Hon. After several postponements. all damages for the natural and probable consequences of the act or omission complained of are recoverable. "III". . Zshornack for petitioner. On the basis thereof. "A-42". These incidents were brought to the attention of the management of the defendant corporation. petitioner. State of Victoria. management and operation of the theatrical venture and stipulation as to accounting.500.. according to De la Cruz. Branch XVII. Branch XVII. and his order of June 3. SHARRUF. Judge of the Court of First Instance of Manila. Australia. it performed floor shows at the "Riviera Night Club" twice nightly. Court of First Instance of Manila. an accounting of the gross receipts from the Theatrical performances of the "Bubla Continental Revue" at the "Riviera Night Club". Upon petitioner's failure to appear when the case was finally called for trial on that date. Notice thereof was sent to petitioner at his address of record. Samuel S. while the defendant. Subsequently. Instead of proceeding with the trial of the case — as His Honor could have done — he directed respondent Bubla's counsel to exert efforts to notify petitioner of the trial of the case on April 23. Decision). "net and free income tax".: a) To render to the plaintiff. Sharruf was then the operator and manager of the "Riviera Night Club" at Dewey Boulevard. the defendant corporation even tended to be apathetic to the plight of its employees manning the factory sewing machines. and ordered the issuance of a writ of execution. therefore.1awphîl. the respondent court disallowed petitioner's appeal from its order of March 14th. Vol II. rec. with costs. II. until fully paid. This Court erred in upholding the challenged order despite the fact that the proceedings conducted before the lower court partake of the nature of a hearing under Sec. the latter failed to appear on the aforesaid date. the respondent court committed no error in denying said motion. private respondents. whereas the Motion for New Trial was filed on March 7. We find this to be without merit. NALDOZA. Upon the facts before Us. rec.000. Anent the second assignment of error. the same is hereby DENIED. On March 18. Petitioners. 1968 in Civil Case No.. HONORABLE MANUEL L. Aside from this. 1983. The motion failed to show when the petitioners received notice of the decision sought to be reconsidered to enable the Supreme Court to determine whether or not it was filed on nine. Noe Cangco Zarate for petitioners. 648. Vol. it also appears that the respondent court. he filed a motion for new trial on the ground of mistake and/or excusable negligence which motion was denied by the court in its order of March 14. RT-1693 in the names of herein petitioners covering Lot No. 1960. petitioners. in the ultimate analysis. and 3. Rule 38 of the Rules of Court . directing Bubla's counsel to exert efforts to notify petitioner. 33461 filed against the herein petitioner.00 by way of attorney's fees. . Vol. 1005 which cancelled TCT No. of their property rights without due process of law (p. Bubla had never been able to enter the Philippines. c) To pay to plaintiff the amount of P2. Bubla was the plaintiff in Civil Case No. more than six months after the condition of such judgment. 659. and ATTY. Petitioner insists that the respondent court acquired no jurisdiction over the person of respondent Bubla. 657. It is settled law in this jurisdiction that a court may acquire jurisdiction over the person of a party either by his voluntary appearance in court demanding affirmative relief or by having him served. rec. and ANDRES ABAN and DOLORES GALOPE. and 2. We rendered a decision in this case dismissing the petition filed therein and affirming the order of the Court of First Instance. The cancellation of the Transfer Certificate of Title No.). By filing his complaint. 631. d) The costs of suit. With summons within the territorial jurisdiction of the Philippines. as a matter of fact. But this notwithstanding. petitioner filed another motion for reconsideration raising as additional grounds therefor that the decision rendered in said case was null and void for want of notice to him of the hearing thereof and that respondent Bubla had no legal capacity to sue before our courts. Heirs of ELEUTERIO CUENCA. 1960. private respondents allege that: 1. vs. 2. 427C-1 and lifting the temporary restraining order issued by this Court on July 9. 1960. Bubla submitted voluntarily to the jurisdiction of the respondent court and the latter acquired such jurisdiction even if. it can be fairly and justly stated that petitioners were not deprived of their property rights without due process of law. Branch II. in their motion for reconsideration filed on April 8. petitioner filed an urgent motion for reconsideration which was denied by the court on March 19. 1969. RESOLUTION Inasmuch as the Motion for New Trial and to set aside the decision in this case is not supported by affidavits of merit. G. Branch II. as District Judge of the Court of First Instance of Agusan. the allegations made therein do not appear to satisfy the rule as to proof of mistake or excusable negligence. in this connection. Petitioner's claim that the decision of the respondent court in Civil Case No. Consequently. on the ground that it was not filed within the reglementary period for appeal. WHEREFORE. went out of its way and deemed it wise to reset the trial for April 23 of the same year. On May 30. On February 5. J. No.b) To pay such sum as may be due the plaintiff as a result of such accounting. L-30666 September 28. now seek to have the aforesaid decision reconsidered on the basis of these grounds: 1.). Even if we were to agree with petitioner that. with all supporting authorities. In another order of June 3. They should be bound by the failure of their counsel to protect their interests and claim (pp. Chairman: On February 25. TIMOTEO D. instead of an ordinary civil action. copy of the above-quoted decision was served upon petitioner. as provided in Section 3. . In this case where petitioner's motion was based on mistake and/or excusable negligence. the petition for certiorari under consideration is dismissed. with interest thereon at the legal rate from January 31. instead of proceeding to receive the evidence of the plaintiff on March 6. the lower court found that the same was not supported by any affidavit of merit. Attorney-in-Fact and Counsel. II. for which reason the respondent court received Bubla's evidence and subsequently rendered judgment in his favor. 1960. 1960. it appears from the record that the decision was rendered on June 9. 1983. ENAGE. 1983.). we find no sufficient reason to grant the writ prayed for.. Said motion was denied on April 11. for they were given by the lower court an opportunity to be heard and submit evidence and were represented by counsel. 1960. 1960. thru Senecio Cuenca as heir and representative of the heirs of Eleuterio Cuenca. 1984 MAKASIAR. RT-1693 in the name of herein petitioners deprived them.. 112 of Act 496. The grounds or assignment of errors raised by petitioners in their motion were already fully and intelligently discussed. In opposition to the said motion. dated July 29. his answer to the complaint may be taken into account.R. 1960. 33461 is void because of lack of notice of trial served on him is likewise untenable.nèt The granting or denial of a motion for new trial is a matter addressed to the sound discretion of the trial court. On March 7. filed their comments on the motion for reconsideration. Four days later. 1955. The record shows that petitioner had a registered address in the record of said case at which repeated notices of trial were addressed to him.respondents. Concon for respondents Heirs of Eleuterio Cuenca. unanimously concurred in by all the members of the Second Division. as follows: Francisco T. Moreover. as required by the Rules. Petitioners thus pray for reconsideration of the aforesaid decision and the rendition of another one which would declare the proceedings in the lower court void (p. 1959. and independent action by itself.). its Managing Director Nicolas V. a retired police officer assigned at the Western Police District in Manila. 797). Intramuros. 5 to wit: SHERIFF’S RETURN This is to certify that on September 18. 00-97907. MACASAET. the serving officer must first attempt to effect the same upon the defendant in person. and its Columnist/Reporter Lily Reyes (petitioners). 17 SCRA 808. He returned in the afternoon of that day to make a second attempt at serving the summons. at the same time. Respondent. 1984 praying for the denial of aforesaid manifestation/motion and the termination of herein case for petitioners' failure to submit the transcript of records within the time requested for and their lack of interest to prosecute their cause after a lapse of over six months from June 20. were afforded them. Vol. 168-177. Respondents heirs of Eleuterio Cuenca filed. 1983 IS HEREBY DECLARED FINAL AND EXECUTORY. There is no plausible reason for petitioner Andres Aban to assume that the lot he claims (Lot No. including Abante Tonite. LILY REYES.On June 6. GALANG. RTC Sheriff Raul Medina proceeded to the stated address to effect the personal service of the summons on the defendants. JESUS R. their manifestation/motion to allow them two weeks to submit transcripts of proceedings in the lower court was granted in the Court resolution dated June 20. 1005. The suit. 666. Palacio. Again. Soriano Street. at their business address at Monica Publishing Corporation. I caused the service of summons together with copies of complaint and its annexes attached thereto. 156759 June 5. and by their act of filing an opposition to the motion as well as their voluntary appearance in court when the motion was get for hearing. This Court has waited for more than a year and it cannot waste its time waiting for parties like petitioners herein whose irresponsibility and apathy caused undue delay in the dispensation of justice and grave prejudice to the herein respondents. ISAIAS ALBANO. The Case Petitioners – defendants in a suit for libel brought by respondent – appeal the decision promulgated on March 8. 662.: To warrant the substituted service of the summons and copy of the complaint. SO ORDERED. docketed as Civil Case No. Besides.. but he was informed that petitioners were still out of the office. sued Abante Tonite. AND RANDY HAGOS. II. 1983. QUIJANO. 427C-1 is part and parcel (120 SCRA 769. II. as argued by the petitioners. 427 of Butuan Cadastre. respondent. of which Lot No. voluntarily submitted themselves to the jurisdiction of the court a quo. which in due course issued summons to be served on each defendant. 4 In the morning of September 18. 301-305 3rd Floor. 1964. vs. It has been more than one year now since June 20. Quijano. Neither can it be said that the petitioners' substantial rights were prejudiced thereby. 427-C-1) is not involved in Civil Case No.. Vol. the filing of petitioners' three motions for reconsideration is a further submission on their part to the jurisdiction Of the court. 2005. 811). JR. thus: WHEREFORE. was raffled to Branch 51 of the RTC. consequently. 1005 because what is precisely under litigation in said case is Lot No. J. and the denial of such motions was binding on petitioner herein (Soriano vs. The petitioners have had the fullest opportunity to lay before the court the merits of their claim when they. Galang and Randy Hagos. nevertheless. 2003. a daily tabloid of general circulation. WE have thoroughly considered petitioners' assigned errors and have resolved the same with finality. Macasaet. 427 as a whole. Branch 51. By not joining as party plaintiff in Civil Case No..). FRANCISCO R. 1983 when petitioners were allowed time (which they themselves requested for to submit transcripts of the lower court proceedings and yet. II rec. together with the submission of their memorandum (pp. its Editors Janet Bay.R. 12 SCRA 447. In its resolution of June 20. 2 whereby the Court of Appeals (CA) respectively dismissed their petition for certiorari. 20021 and the resolution promulgated on January 13. petitioner Andres Aban virtually toyed with his right to enforce and protect his claim over a portion of Lot No. 2001 denying their motion to dismiss because the substituted service of the summons and copies of the complaint on each of them had been valid and effective.). distinct. 2000. claiming damages because of an allegedly libelous article petitioners published in the June 6. 1983 IS HEREBY DENIED FOR LACK OF MERIT AND THE DECISION OF THIS COURT DATED FEBRUARY 25. asking that court to drop him as party-defendant (he was sued as one of the parties-defendants when his consent to have him joined as one of the parties-plaintiffs could not be secured) in the same case. 3 Antecedents On July 3. It must be noted that their motion for reconsideration was taken note of and thereafter. its Publisher Allen A. rec. JR. BF Condominium Building. the CA upheld the order the Regional Trial Court (RTC). which the court a quo granted in an order dated September 17. et al. as stated heretofore. It cannot be said that 'the petitioners-were denied their day in court. the petitioners are deemed to have submitted themselves to the jurisdiction of the court. in two instances. 1983. prohibition and mandamus and denied their motion for reconsideration. and explained why in his sheriff’s return dated September 22. Moreover. and. Solana Street corner A. petitioner Andres Aban's not being a party in Civil Case No. 2013 ALLEN A. 1983. et al. Thereby. PETITIONERS' MOTION FOR RECONSIDERATION DATED MARCH 29. 2000. petitioners defaulted in their bid to be heard by this Court which..). and. BERSAMIN. 1005 was of his own making. JANET BAY. 1983 (p. Caluag. petitioners filed their manifestation or motion to allow them to submit transcripts of records of proceedings in the lower court two weeks from date of filing of their manifestation (p. 667. Manila. To assert that the court had no jurisdiction because petitioner Andres Aban was not a party in Civil Case No. they are bound by the legal implications of the order of the court a quo. rec. its Circulation Manager Isaias Albano. they have not produced said transcripts nor have they submitted any explanation. 449). Jesus R. CO. by the service of summons upon herein petitioners. NICOLAS V. this Court granted the aforecited manifestation to allow petitioners to submit the transcripts of records (p. WE do not find merit in petitioners' motion for reconsideration. No. Petitioners. Vol. in Manila had issued on March 12. Only after the attempt at personal service has become futile or impossible within a reasonable time may the officer resort to substituted service. But his efforts to personally serve each defendant in the address were futile because the defendants were then out of the office and unavailable. 2000. He decided to resort to substituted service of the summons. DECISION For even assuming that the motion to cancel filed by private respondents in the court below is a separate. G. rec. 1005 would appear therefore to be a mere technicality that would not serve the interest of the administration of justice (Torres vs. a motion to dismiss on February 1. 2000 issue of Abante Tonite. upon the following: . otherwise it cannot be held liable for damages and injuries it may inflict to other persons. President/Publisher of defendant AbanteTonite. 2001. Jesus R. Soriano Streets. Jesus R. 7. the Motion to Dismiss is hereby DENIED for lack of merit. as follows: The allegations of the defendants that the Sheriff immediately resorted to substituted service of summons upon them when he was informed that they were not around to personally receive the same is untenable. Randy Hagos and Lily Reyes. 3. and that they were always out because they were roving around to gather news. Defendants Isaias Albano. Defendant Allen A. There are factual bases and legal justification for the assailed orders. served upon them and to relay the same to the defendants named therein (Sec. It is apparent in the Sheriff’s Return that on several occasions. SO ORDERED. respectfully returned duly served. through LuAnn Quijano. who was stated or implicated in the news. pursuant to the rules. Petitioners filed a motion for reconsideration. The rule is that certiorari will prosper only if there is a showing of grave abuse of discretion or an act without or in excess of jurisdiction committed by the respondent Judge. but the same were ineffectual and unavailing on the ground that per information of Ms. Bay. Macasaet. Janet Bay. prohibition. 1997 Rules of Civil Procedure). the CA promulgated its questioned decision. Considering that summonses cannot be served within a reasonable time to the persons of all the defendants. So he went back to serve said summons upon the defendants in the afternoon of the same day. Esleta said defendants is (sic) always roving outside and gathering news. BF Condominium Building. the RTC held. but the same were ineffectual and unavailing xxx. Manila. a person of sufficient age and discretion working therein. Editorial Assistant of defendant Abante Tonite (p. natural as well as juridical. 8 dismissing the petition for certiorari. to wit: We find petitioners’ argument without merit. mandamus. Manila. that he had returned in the afternoon of the same day to again attempt to serve on each defendant personally but his attempt had still proved futile because all of petitioners were still out of the office. September 22. 2002. the RTC denied petitioners’ motion for reconsideration. and directed petitioners to file their answers to the complaint within the remaining period allowed by the Rules of Court. Regarding the impleading of Abante Tonite as defendant.. Secretary of the President who is duly authorized to receive such document. Macasaet. Original copy of summons is therefore. Galang. but the same were ineffectual and unavailing on the ground that per information of (sic) Mr. efforts to served (sic) the summons personally upon all the defendants were ineffectual as they were always out and unavailable. but then again he was informed that the defendants were out and unavailable. WHEREFORE. Janet Bay. the sheriff certified that "effort to serve the summons personally xxx were made. Assuming arguendo that "Abante Tonite" is not registered with the Securities and Exchange Commission. "Abante Tonite" is a daily tabloid of general circulation. 2001 and June 29. They further moved to drop Abante Tonite as a defendant by virtue of its being neither a natural nor a juridical person that could be impleaded as a party in a civil action. thru his wife Lu-Ann Quijano. but the same were ineffectual and unavailing on the ground that per information of (sic) his wife said defendant is always out and not available. mandamusin the CA to nullify the orders of the RTC dated March 12. New Civil Code. Sheriff Raul Medina of this Branch of the Court testified that on September 18. that petitioners were out of the office at the time. On June 29. That effort (sic) to serve the said summons personally upon said defendant were made. through Rene Esleta. That effort (sic) to serve the said summons personally upon said defendants were made. Randy Hagos and Lily Reyes. . Intramuros. defendants are directed to file their Answers to the complaint within the period still open to them. They contended that the sheriff had made no prior attempt to serve the summons personally on each of them in accordance with Section 6 and Section 7. it is for public consumption. thus. Records show that the summonses were served upon Allen A. 7 It stated in respect of the service of summons. 2000. Quijano. it is deemed a corporation by estoppels considering that it possesses attributes of a juridical person. Rooms 301-305 3rd Floor. All of these facts imply that "Abante Tonite" falls within the provision of Art. 2000 in the morning. 44 (2 or 3). From the Return. Because of that information and because of the nature of the work of the defendants that they are always on field. Additional matters regarding the service of summons upon defendants were sufficiently discussed in the Order of this Court dated March 12. thru Rene Esleta. People all over the country could buy a copy of "Abante Tonite" and read it. Rule 14. That effort (sic) to serve the said summons personally upon said defendant were made. Defendant Nicolas V. 2000 to personally serve the summons on each defendant. asserting that the sheriff had immediately resorted to substituted service of the summons upon being informed that they were not around to personally receive the summons. petitioners brought a petition for certiorari. Rule 14 of the Rules of Court. the RTC denied the motion to dismiss. petitioners moved for the dismissal of the complaint through counsel’s special appearance in their behalf. at Monica Publishing Corporation. Solana corner A.1. substituted service was applied. 2000. upon defendants Isaias Albano. and that Abante Tonite. could not be made a party in the action. A judicious reading of the questioned orders of respondent Judge would show that the same were not issued in a capricious or whimsical exercise of judgment. 12. considering the difficulty to serve the summons personally to them because of the nature of their job which compels them to be always out and unavailable. During the hearing of the herein motion. who signed to acknowledge receipt thereof. a person of sufficient age and discretion working therein who signed to acknowledge receipt thereof. The persons who organized said publication obviously derived profit from it. viz: At the hearing of petitioners’ motion to dismiss. 2001. Galang. at the same address. 2001. and that he had then resorted to substituted service upon realizing the impossibility of his finding petitioners in person within a reasonable time. so the Sheriff served the summons by substituted service. thru his secretary Lu-Ann Quijano. so the sheriff resorted to substituted service of summons. were considered competent persons with sufficient discretion to realize the importance of the legal papers Ruling of the CA On March 8. Hagos and Reyes were always out roving to gather news. records). that some competent persons working in petitioners’ office had informed him that Macasaet and Quijano were always out and unavailable. 2001. the wife of the defendant and the Editorial Assistant of the defendant. The information written on the said newspaper will affect the person. Galang. at the same address. and that Albano. substituted service was applied. in view of the foregoing. being neither a natural nor a juridical person. he went to the office address of the defendants to personally serve summons upon them but they were out. hence. Medina testified that he had gone to the office address of petitioners in the morning of September 18. Accordingly. hence substituted service of summonses was validly applied. Quijano said defendant is always out and not available. There was substantial compliance with the rules. prohibition. who signed to acknowledge receipt thereof. 2. 6 relevantly stating: Undaunted. President/Publisher of defendant AbanteTonite. substituted service was applied. On March 12. On October 3. thus. alleging lack of jurisdiction over their persons because of the invalid and ineffectual substituted service of summons. Editorial Assistant of defendant AbanteTonite. thus. in denying petitioners’ motion for reconsideration. 17 To be attached to the original copy of the summons and all copies thereof is a copy of the complaint (and its attachments. if any) and the order. so that the defendant will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff. SO ORDERED. 14 As the initiating party. It contains the name of the court and the names of the parties to the action. is untenable. the ensuing trial and judgment are void. like voluntarily appearing in the action. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. except in actions in rem or quasi in rem. It has been held that an action in personam is a proceeding to enforce personal rights or obligations. The purpose of summons in such action is not the acquisition of jurisdiction over the defendant but mainly to satisfy the constitutional requirement of due process. and the court acquires jurisdiction over an actionas long as it acquires jurisdiction over the resthat is thesubject matter of the action. extraterritorial service of summons can be made upon the defendant. The respondent Judge. through the judgment of a court. The judgments therein are binding only upon the parties who joined in the action. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER HEREIN PETITIONERS. and by these only. WHEREFORE. an individual is named as defendant and the purpose of the proceeding is to subject his interests therein to the obligation or loan burdening the property. are aptly delineated in Domagas v. and such extraterritorial service of summons is not for the purpose of vesting the court with jurisdiction. Combs. 2. and an action inrem or quasi in rem. The service of the summons fulfills two fundamental objectives. or seek to compel him to control or dispose of it in accordance with the mandate of the court. the relief of prohibition is also unavailable. or quasi in rem for that matter. In the latter instance. the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. is determined by its nature and purpose. the CA ruled: Anent the issue raised by petitioners that "Abante Tonite is neither a natural or juridical person who may be a party in a civil case. 19 As to the former. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY IN THE INSTANT CASE. Jurisdiction over the defendantin an action in rem or quasi in rem is not required. if any. but when the case is an action in rem or quasi in rem enumerated in Section 15. will be estopped from denying its corporate capacity in a suit against it by a third person who relies in good faith on such representation. Furthermore. the instant petition is DENIED. a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. or jurisdiction in personam –the power of the court to render a personal judgment or to subject the parties in a particular action to the judgment and other rulings rendered in the action – is an element of due process that is essential in all actions.and upholding the trial court’s finding that there was a substantial compliance with the rules that allowed the substituted service. 11 Ruling The petition for review lacks merit.20 If the defendant knowingly does an act inconsistent with the right to object to the lack of personal jurisdiction as to him. and jurisdiction over the person of the non-resident defendant is not essential. In an action quasi in rem. the clerk of court forthwith issues the corresponding summons to the defendant. or by a voluntary appearance in the action. Actions for recovery of real property are in personam. 10 Issues Petitioners hereby submit that: 1. the CA denied petitioners’ motion for reconsideration. although it may involve his right to. An unincorporated association. Jurisdiction over the person. he is deemed to have submitted himself to the jurisdiction of the court. showing ostensibly its being a corporate entity. such action is brought against the person. and a notice that unless the defendant so answers. 2003. when jurisdiction in personam is not acquired in a civil action through the proper service of the summons or upon a valid waiver of such proper service. when the defendant in an action in personam does not reside and is not found in the Philippines. and (b) to afford to the defendant the opportunity to be heard on the claim brought against him. An action in personam is said to be one which has for its object a judgment against the person. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person. specific property. As far as suits for injunctive relief are concerned. Philippine courts cannot try any case against a defendant who does not reside and is not found in the Philippines because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. Whether a proceeding is in rem. As a rule. on the one hand. As to the defendant. the essence of due process lies in the reasonable opportunity to be heard and to submit any evidence the defendant may have in support of his . for the appointment of a guardian ad litem. or the exercise of ownership of.9 On January 13. namely: (a) to vest in the court jurisdiction over the person of the defendant. it is well-settled that it is an injunctive act in personam. our courts cannot try the case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. Jensen." and therefore the case against it must be dismissed and/or dropped. on the other hand. thus the doctrine of corporation by estoppel may appropriately apply. Actions quasi in rem deal with the status.16 The summons is directed to the defendant and signed by the clerk of court under seal. On the other hand. some responsibility or liability directly upon the person of the defendant. or in personam. held that: xxxx Abante Tonite’s newspapers are circulated nationwide. 12 The distinctions that need to be perceived between an action in personam. Philippine courts have jurisdiction to hear and decide the case because they have jurisdiction over the res. On the other hand. a direction that the defendant answers within the time fixed by the Rules of Court. the plaintiff will take judgment by default and may be granted the relief applied for. The purpose of a proceeding in personam is to impose. but for the purpose of complying with the requirements of fair play or due process. 21 As to the latter. civil as well as criminal. 13 thusly: The settled rule is that the aim and object of an action determine its character. the court acquires jurisdiction over his person either by the proper service of the summons. as distinguished from a judgment against the property to determine its state. the plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court by the act of filing the initiatory pleading. which represents itself to be a corporation. 15 Upon the filing of the complaint and the payment of the requisite legal fees. Rule 14 of the Rules of Court. There being no grave abuse of discretion committed by the respondent Judge in the exercise of his jurisdiction. and he can thereby take steps to protect his interest if he is so minded. ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. In Combs v. 18 The significance of the proper service of the summons on the defendant in an action in personam cannot be overemphasized. The assailed Orders of respondent Judge are AFFIRMED. It is the spirit of the procedural rules. RAUL E.29 There is no question that Sheriff Medina twice attempted to serve the summons upon each of petitioners in person at their office address. 174077 November 21.000. and ORDERS petitioners to pay the costs of suit.000. in tendering it to him. 23 Under the Rules of Court. DELFIN CHAN. the service of the summons may then be effected either (a) by leaving a copy of the summons at his residence with some person of suitable age and discretion then residing therein. Ellice Agro Industrial Corporation. Young. 24 The rule on personal service is to be rigidly enforced in order to ensure the realization of the two fundamental objectives earlier mentioned. 2012 ELLICE AGRO-INDUSTRIAL CORPORATION. Sariaya. respondents filed a Complaint 5 for specific performance. Hence. Such acts evinced their voluntary appearance in the action. *** Respondents. under certain terms and conditions. T-157038 in consideration of One Million and Fifty Thousand (P1. 2006 Resolution2 of the Court of Appeals (CA). EAIC failed to deliver to respondents the owner’s duplicate certificate of title of the subject property and the corresponding deed of sale as required under the Contract to Sell. vs. On November 8. prompted by the failure of EAIC to comply with its obligation. he may also waive the process. considering that he was expressly authorized to resort to substituted service should he be unable to effect the personal service within a reasonable time.28Nonetheless. he concluded that further attempts to serve them in person within a reasonable time would be futile. G. the CA concluded that the RTC did not gravely abuse its discretion in holding that the non-incorporation of Abante Tonite with the Securities and Exchange Commission was of no consequence. The circumstances fully warranted his conclusion. T-157038. Pursuant to the Contract to Sell. the CA categorized Abante Tonite as a corporation by estoppel as the result of its having represented itself to the reading public as a corporation despite its not being incorporated. WHEREFORE. including an answer with compulsory counterclaim ad cautelam and a pre-trial brief ad cautelam. in Civil Case No. Petitioner. and GUIA G. If.R. and any substituted service other than that authorized by statute is considered ineffective. Quezon and registered under EAIC’s name and covered by Transfer Certificate of Title (TCT) No. While we are strict in insisting on personal service on the defendant. or (b) by leaving the copy at his office or regular place of business with some competent person in charge thereof. 25 The latter mode of service is known as substituted service because the service of the summons on the defendant is made through his substitute. on November 18. Young.00) Pesos. considering that the editorial box of the daily tabloid disclosed that basis. 21 In other words. the impossibility of prompt personal service should be shown by stating the efforts made to find the defendant himself and the fact that such efforts failed.defense.26 This is because substituted service." The Facts On July 24. Nor can we sustain petitioners’ contention that Abante Tonite could not be sued as a defendant due to its not being either a natural or a juridical person. the first in the morning of September 18. being in derogation of the usual method of service. respondents had their Affidavit of Adverse Claim annotated in TCT No. Delfin Chan and Jim Wee v. Such personal service consists either in handing a copy of the summons to the defendant in person. respondents caused the annotation of a Notice of Lis Pendens involving Civil Case No. We cannot disagree with the CA. 2000 and the second in the afternoon of the same date. against EAIC and Domingo before the RTC. 96-177 in TCT No. nothing in the box indicated that Monica Publishing Corporation had owned Abante Tonite. faithfully and fully. 1996.30 In reality.27 Only when the defendant cannot be served personally within a reasonable time may substituted service be resorted to. With the proper service of the summons being intended to afford to him the opportunity to be heard on the claim against him. we do not cling to such strictness should the circumstances already justify substituted service instead. Guia G. Branch 60 (RTC). YOUNG. whoever of the public who would suffer any damage from the publication of articles in the pages of its tabloids would be left without recourse.3 respondents paid EAIC. 1999 Decision of the Regional Trial Court of Lucena City. In that regard. DECISION MENDOZA. Thereby. in CA-G. is extraordinary in character and may be used only as prescribed and in the circumstances authorized by statute. otherwise. represented by Guia G. They had also availed themselves of the modes of discovery available under the Rules of Court.00) Pesos as partial payment for the acquisition of the subject property. that governs. 1996. 1996. the defendant cannot be served in person within a reasonable time. petitioners’ insistence on personal service by the serving officer was demonstrably superfluous. Despite such payment. In rejecting their contention. SP No. 1995. Delfin Chan and Jim Wee (respondents) and Ellice Agro-Industrial Corporation (EAIC). represented by its alleged corporate secretary and attorney-in-fact. for justifiable reasons. for. not their letter. what was a reasonable time was dependent on the circumstances obtaining. 2003 Decision1 and the August 8. represented by its Chairman of the Board of Directors and President. Domingo. 2002. Consequently. compliance with the rules regarding the service of the summons is as much an issue of due process as it is of jurisdiction. JIM WEE. RODEL T." After Medina learned from those present in the office address on his second attempt that there was no likelihood of any of petitioners going to the office during the business hours of that or any other day. entitled "Rodel T. DOMINGO. the service of the summons should firstly be effected on the defendant himself whenever practicable. T-157038.: Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court are the July 1. 96-177. the Court AFFIRMS the decision promulgated on March 8. 96-177. as borne out by their filing of several pleadings in the RTC. J.R. 64421.000 square-meter portion of a parcel of land located in Lutucan. SO ORDERED. which statement should be found in the proof of service or sheriff’s return. entered into a Contract to Sell. Domingo (Domingo). Each attempt failed because Macasaet and Quijano were "always out and not available" and the other petitioners were "always roving outside and gathering news. He was not expected or required as the serving officer to effect personal service by all means and at all times. or. They had actually received the summonses served through their substitutes. It is no longer debatable that the statutory requirements of substituted service must be followed strictly. 4 On November 14. the aggregate amount of Five Hundred Forty Five Thousand (P545. if the defendant refuses to receive and sign for it. through Domingo. dismissing the petition and upholding the November 11. Rodel T. No. wherein EAIC agreed to sell to the respondents a 30.050. docketed as Civil Case No. the requisite showing of the impossibility of prompt personal service as basis for resorting to substituted service may be waived by the defendant either expressly or impliedly. 6 . GALA. therefore. successful. respondents countered that considering EAIC’s petition for relief from judgment under Rule 38 grounded on extrinsic fraud. for instance. This was in July. filed its Answer with Counterclaim. In its Reply21 filed before the CA. 2006. sent Wee a letter. No motion for reconsideration or notice of appeal was filed by EAIC. EAIC’s motion for reconsideration was denied by the CA in its Resolution. the CA dismissed the petition for annulment of judgment. 2003 Decision. These constructive notices ought to have spurred the corporation into action by filing an answer in Civil Case No. 96-177. But the corporation chose to keep quiet. the corporation had availed of the remedy of relief from the judgment in Civil Case No. represented by Gala. dated August 8. 1998. EAIC’s Chairman and President. as evidenced by the General Information Sheets17 (GIS) it filed with the Securities and Exchange Commission (SEC). 1999 RTC Decision before the CA. Furthermore.The initial attempt to serve the summons and a copy of the complaint and its annexes on EAIC. the applicable rule then. 96-177. In its July 12. making the trial court and everyone else concerned with said civil case believe that Guia G.13 the RTC denied the petition for relief from judgment for being clearly filed out of time under Section 3. at the inception of Civil Case No. the Robles Ricafrente Aguirre Sanvicente & Cacho Law Firm. 96-177. represented by Gala. informing him of Domingo’s lack of authority to represent EAIC. Gala since August 24. bound EAIC to Civil Case No. there was no reason why the corporation could not have proceeded with the pre-trial in Civil Case No. It even appears that she was. 1997.000 On the scheduled pre-trial conference on January 27. amounted to a waiver of its right to actively participate in the proper disposition of Civil Case No. . 14 On April 24.000 square-meter portion. 1996 Notice of Lis Pendens annotated at the back of TCT No. In their Answer with Counterclaim18 filed before the CA. room was provided for on the same title for the annotation of a notice of lis pendens. 1990 was held to be illegitimate. 1997.11 On July 10. 96-177 through proper or legitimate representations. hence. As a result of EAIC’s failure to appear in the pre-trial conference. 96-177 on November 14. rendered in SEC Cases Nos. On March 21. four (4) days after the inception of the civil case. T-157038 and to execute a final deed of sale in favor of respondents. pursuant to Section 5. with the exchange of letters. the residence of Domingo. respondent Jim Wee (Wee) sent Raul E. Singalong. 2000 (roughly seven months after the finality of the RTC Decision). T-157038 because this claim was duly registered and annotated on the said title even before this date. EAIC was informed of the pending civil case against it. Rule 38 of the Rules of Court. In response. 1999 RTC Decision before the same court. in effect.8 dated July 9. dated July 9. apprised the corporation. 96-177 because of the November 8. initiated the Petition for Annulment of Judgment 15 under Rule 47 of the Rules of Court of the November 11. Rule 14 16 of the 1964 Rules of Court which was. the said RTC decision became final and executory on December 8. this time. was unsuccessful as EAIC could not be located in the said address.9 dated July 18. 3747 and 4027. In its decision. 1996 Adverse Claim and the November 18. respondents were allowed to present their evidence ex parte. Domingo was not its President. According to EAIC. Be that as it may. The corporation. EAIC explained that the RTC did not touch upon the issue of fraud in the petition for relief from judgment as it was dismissed for being filed out of time. it could not be bound by the assailed RTC Decision pursuant to Section 13. a proper or legitimate representative of the corporation because in the decision. through Gala. It would serve no useful purpose then to delve into the issues of jurisdiction and fraud raised in the petition as the petition itself is unavailing under the circumstances. had already been rejected with finality. Domingo is its proper or legitimate representative. of their contract to sell. after all. the CA ratiocinated: x x x x. EAIC could not be permitted to invoke the same ground in a petition for annulment of judgment under Rule 47. T-157038 should be deemed constructive notices to the world of the pending litigation referred to therein and. to move for a new trial therein and to appeal from the decision rendered therein. x x x x. 96-177 from EAIC. represented by Domingo. Manila. Respondents insisted that the mentioned annotations in TCT No. 2001. Cashier. Gala. The second attempt to serve the alias summons to Domingo was. In addition. 1998. seeking a conference with the latter relating to the execution of an absolute deed of sale pursuant to the Contract to Sell entered into between EAIC and respondents. through Raul E. 2000 Order. defrauded EAIC of the potential gains it should have realized from the proceeds of the sale. these remedies no longer are available. Certainly. Quezon. The letter was duly acknowledged and the parties thereafter even tried to settle among themselves the consideration and conveyance of the 30. The fact that it was not able to prove that it was entitled thereto does not mean that it can now avail of the instant remedy. The corporation’s reticence in view of the constructive notices and its then incumbent board’s personal knowledge of the case had. Secretary. a letter. 1997. dated November 3. on Rizal Street. 1997 19 and July 18. 1997. already had constructive notice of the three (3) businessmen’s herein respondents adverse claim to a 30. through a letter signed by one of them. EAIC. 1996. square-meter portion of the land covered by TCT No. through Domingo. EAIC. T- Even without the constructive notices. 1997. Following the presentation of evidence ex parte. The petition was grounded on the RTC’s lack of jurisdiction over EAIC and the extrinsic fraud committed by Domingo. EAIC discarded any knowledge of the said sale and the suit filed by respondents against it. Gala (Gala). the businessmen herein respondents. introducing itself to be the counsel of EAIC. 1999 Decision ordering EAIC to deliver the owner’s duplicate copy of TCT No. 96177. Another attempt was made to serve the alias summons on EAIC at 996 Maligaya Street. Agent or Director. EAIC could not feign ignorance of Civil Case No. 7 Meanwhile. The petition for relief from judgment was premised on the alleged fraud committed by Domingo in concealing the existence of both the Contract to Sell and Civil Case No. EAIC. When this failed. Manager. Moreover. It did not. but only the corporation should be faulted for this. the RTC rendered its November 11. her misrepresentation that she was EAIC’s corporate secretary who was properly authorized to sell and receive payment for the subject property. the corporation’s board headed by Raul E. at the time the summons was served upon her and she did not possess the requisite authorization to represent EAIC in the subject transaction. 157038. Further. In its July 1. 1999. EAIC claimed that the exchange of letters between Wee and EAIC never stated anything whatsoever of any pending suit between them. filed its Petition for Relief from Judgment 12 under Rule 38 of the Rules of Court of the November 11. Moreover.20 between Wee and EAIC. Sariaya. Rule 18 10 of the Rules of Court. neither Domingo nor her counsel appeared. thus. Hence. The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. the Court is constrained to rule that there was no valid service of summons binding on it. or director. Domingo evidently acted in representation of Alicia E.— If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered. Domingo was clearly not an officer of EAIC. secretary. not EAIC. EAIC seeks relief from this Court raising the following errors: THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS VALID SERVICE OF SUMMONS UPON PETITIONER CORPORATION. Ricafort-Bautista. agent or director. 13. the Court is of the view that her honest belief that she was the authorized corporate secretary was clearly mistaken because she was evidently not the corporate secretary she claimed to be. The requirements of the rule on summons must be strictly followed. service of summons on anyone other than the president. should be made on the persons enumerated in the rule. at the time summons was served.26 contends that there was no valid service of summons because Domingo. secretary. the RTC still failed to validly acquire jurisdiction over EAIC. THE COURT OF APPEALS ERRED IN RULING THAT GUIA G. 96-177 by virtue of a General Power of Attorney. In their Memorandum. On the other hand. In advancing the said allegations. will readily reveal that she was not its president. manager. In view of the fact that EAIC was not validly served with summons and did not voluntarily appear in Civil Case No. 29 In the present case. The power of a corporation to sue and be sued is exercised by the board of directors. 96-177. the proceedings had before the RTC and ultimately its November 11. Domingo argues that EAIC. at any rate. EAIC is deemed to have voluntarily submitted itself to the jurisdiction of the RTC. this petition for review. cashier.Hence. she claims that she acted in utmost good faith in receiving the summons and filing the Answer in Civil Case No. cashier. otherwise. through Domingo. manager. agent." The Court cannot likewise subscribe to respondents argument that by filing its answer with counterclaim. but also to give notice to the defendant that an action has been commenced against it and to afford it an opportunity to be heard on the claim made against it. In view of Domingo’s lack of authority to properly represent EAIC. secretary. much less duly authorized by any board resolution or secretary’s certificate from EAIC to file the said Answer with Counterclaim in behalf of EAIC.28 Sec. Those annotations in the TCT merely serve to apprise third persons of the controversy or pending litigation relating to the subject property but do not place a party under the jurisdiction of the court. is not valid. with the RTC. manager. 24 25 In her Memorandum. provides: The Issues Not in conformity with the ruling of the CA. the pertinent document showing EAIC’s composition at the time the summons was served upon it. Consequently. EAIC cannot be bound or deemed to have voluntarily appeared before the RTC by the act of an unauthorized stranger. When the defendant does not voluntarily submit to the court’s jurisdiction or when there is no valid service of summons. defendant in Civil Case No. can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board.23 respondents argue that at the time the summons was served upon Domingo. 96-177 and. Rule 14 of the 1964 Rules of Civil Procedure.22 The main issue for the Court’s consideration is whether the RTC validly acquired jurisdiction over the person of EAIC. at the time she filed the Answer with Counterclaim. 31 it was held that "x x x jurisdiction of the court over the person of the defendant or respondent cannot be acquired notwithstanding his knowledge of the pendency of a case against him unless he was validly served with summons. Domingo lacked the necessary authority to bind EAIC to Civil Case No. her conduct in the filing of the Answer with Counterclaim cannot and should not be binding to EAIC. the purported beneficial owner of the subject property. The GIS filed with the SEC consistently showed that she never held any position with EAIC which could have authorized her to receive summons in behalf of EAIC. like the signing of documents. Due to this fact. secretary. agent. The physical acts of the corporation."33 In the same pleading. Respondents stress that the extrinsic fraud claimed by EAIC is not a valid ground for a petition for annulment of judgment because the latter had already availed of the said ground in a petition from relief from judgment in contravention to Section 2. Such is the important role a valid service of summons plays in court actions. It is a settled rule that jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. agent. service may be made on the president. Rule 47. EAIC’s filing of its Answer with Counterclaim and the petition for relief from judgment before the trial court constitutes voluntary appearance thereby submitting itself to the jurisdiction of the RTC. she was acting for and in behalf of EAIC. the trial court will not acquire jurisdiction over the defendant. 96-177 lodged against it. 96-177 for EAIC since she truly believed that she was authorized to do so. therefore. The Court’s Ruling The Court finds merit in the petition. They further point out that. or any of its directors. Moreover. [Underscoring supplied] Based on the above-quoted provision. the RTC did not validly acquire jurisdiction over the person of EAIC. 27 The purpose of summons is not only to acquire jurisdiction over the person of the defendant. the applicable rule on service of summons upon a private domestic corporation then. manager. the 1996 GIS30 of EAIC. Service upon private domestic corporation or partnership. 96-177. THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER CAN NO LONGER AVAIL OF THE PRESENT PETITION HAVING EARLIER FILED A PETITION FOR RELIEF FROM JUDGMENT. cashier. 96-177 before the RTC despite the filing of an Answer with Counterclaim. DOMINGO WAS A DIRECTOR OF PETITIONER CORPORATION AT THE TIME SUMMONS WAS SERVED UPON HER AND IN DENYING PETITIONER’S MOTION FOR RECONSIDERATION. In Salenga v. cashier. Gala. or director. among others. Undoubtedly. Granting arguendo that EAIC had actual knowledge of the existence of Civil Case No.32 the Court stated: A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. EAIC. through Domingo. Gala is the real owner and possessor of all the real properties registered in the business name and style Ellice-Agro Industrial Corporation x x x. 1999 Decision were null and void. In this case. Domingo claimed that she was authorized by Alicia E. Conversely. Incidentally. In Cesar v. was not its president. to represent her in Civil Case No. The CA erred in considering the Adverse Claim and Notice of Lis Pendens annotated in TCT No. in its Memorandum. respondents’ duty to prosecute their case diligently includes ensuring that the proper parties are impleaded and properly served with summonses. T-157038 as constructive notice to EAIC of the pendency of Civil Case No. Section 13. Gala. Domingo alleged in her Answer with Counterclaim that "Alicia E. to be effective and valid. had invoked the jurisdiction of the same trial court that it now denies.1âwphi1 . Further. clothed the RTC with jurisdiction over the person of EAIC. for service of summons upon a private domestic corporation. Court of Appeals. any judgment of the court which has no jurisdiction over the person of the defendant is null and void. in filing its Answer with Counterclaim and Petition for Relief from Judgment. 1999 Decision of the Regional Trial Court of Lucena City. Crisologo charged Judge Omelio with the following: (a) gross ignorance of the law and interference with the proceedings of a co-equal and coordinate court in issuing a writ of preliminary injunction which frustrates the execution of a final and executory decision of RTC. Respondent. 26. in the following order: "Annotations on TCT No. (b) cancelling the registration of sale where Sps. Branch 60. Judge Omelio filed his Comment and Counter-complaint. Davao City. and giving due course to an action where the plaintiff merely impleads the indispensable parties as John Does and Jane Does despite full knowledge of their identities. SO KENG KOC. 27. Regional Trial Court. in Civil Case No.R. Psd-11-021976. and for other appropriate proceedings. along line 2-3 by lot 3465-A-1. Crisologo and Nannette B. the SW. SO ORDERED.. City of Davao. plan.. the petition is GRANTED. Island of Mindanao.. DECISION CARPIO. along line 4-1 by lot 650-A. if any. 2012 SPOUSES JESUS G.534-98 entitled EMMA SENG and ESTHER SY vs..029-98 entitled EVANGELINE JUSAY vs. City of Davao.811-98 entitled NANNETE B. No. J. to wit: (a) Civil Case No.. Complainants. In their Complaint-Affidavit. along line 5-1 by lot 650-B-2-A. (b) gross ignorance of the law and grave abuse of discretion for issuing a writ of preliminary injunction without an evidentiary hearing and in the absence of a clear and positive ground. 26.M. Psd-11-021976. Rule 4734 of the Rules of Court. Crisologo. in violation of the three-day notice requirement under Section 4. Psd-11-021976). Sps. A parcel of land (lot 650-B-2-A-2. Court. on SE. and (c) gross ignorance of the law.. along line 2-3 by lot 650-B-2-B. Psd-11-021976. but set for hearing on 8 December 2010. gross dereliction of duty and manifest bias for refusing to recognize them as indispensable parties.: The Case This is an administrative complaint tiled by Spouses Jesus G. claiming that the present administrative complaint was intended to harass him for unfavorable rulings he made against the Sps. v. Crisologo) against Judge George E. The November 11. (e) Civil Case No. situated in the Barrio of Bud-Bud. plan. Crisologo are buyers in another case without due process. on the SW. 26. a judgment of annulment shall set aside the questioned judgment or final order or resolution and render the same null and void. along the line 1-2 by lot 650-B-2-A-1 of the subd. SO KENG KOC.. Accordingly. Bounded on the NE. along the line 1-2 by lot 3465-A-1-A of the subd. RTJ-12-2321 : October 3. Psd-11-021976). Sps.5Ï‚rνll The Facts The Report of the Investigating Justice of the Court of Appeals of Cagayan de Oro provides the factual antecedents of this case: The case involves the following properties: Transfer Certificate of Title (TCT) No. xxx xxx Transfer Certificate of Title (TCT) No. WHEREFORE. SO KENG KOC. (d) Civil Case No. Branch 15. et al. 2003 Decision and August 8. 2006 Resolution of the Court of Appeals. CRISOLOGO. Psd-11-058939 being portion of lot 650-B-2-A. (f) Civil Case No. notices of levy on attachment were issued in the aforesaid cases. Crisologo and their counsel be administratively punished. Island of Mindanao. Branch 14. on the SE. (LRC) Psd-123024.. T-292597: .1Ï‚rνll In the Supplement to the Affidavit-Complaint and Reply. CRISOLOGO and NANNETTE B. Psd-11-021976. grave abuse of discretion. along line 4-5 by lot 3465-A-2. Crisologo likewise charged Judge Omelio with manifest bias for: (a) proceeding with the case despite non-compliance with the rules on summons.810-98 and 26. which was filed on 6 December 2010. SO KENG KOC. T-292597 and T-292600. The records of the case is hereby ordered remanded to the Regional Trial Court of Lucena City. T-325675 i. The July 1. T-292597 and T-292600. SO KENG KOC.. SO KENG KOC.792-98 entitled RENE ALVAREZ LIM vs. Crisologo (Sps.Pursuant to Section 7. xxx xxx Both aforesaid properties were originally owned by So Keng Koc under TCT Nos. 26. et al. et al. CRISOLOGO and JESUS CRISOLOGO vs. in CA-G. 26. and (c) issuing two conflicting orders. JUDGE GEORGE E. is hereby declared VACATED and SET ASIDE.2Ï‚rνll In their Memorandum. Branch 60.513-98 entitled SY SEN BEN vs. on the NW. for the proper service of summons to the petitioner and other parties.857-98 entitled LERLIN AGABIN vs. Bounded on the NE. Omelio (Judge Omelio) of the Regional Trial Court. T-325676 A.. 96-177. Psd-11-058938 being portion of lot 3465-A-1. on the NW. Sps. Crisologo charged Judge Omelio with gross ignorance of the law for granting the contentious Motion to Render Judgment Granting Plaintiff the Relief Prayed for with Memorandum Attached. with one showing prejudgment. 64421. Branch 14. OMELIO.. et al. are hereby REVERSED. (LRC) Psd-104282. So Keng Koc was the defendant [in] a number of cases. SP No. A parcel of land (lot 3465-A-1-B. (c) Civil Case Nos. Davao City. Rule 15 of the Rules of ii. (b) Civil Case No. 3Ï‚rνll In response.4Ï‚rνll Judge Omelio prayed that the case be dismissed and Sps. situated in the Barrio of Bud-Bud. along line 2-3-4 by lot 3254-B. respectively. The levies were annotated at the back of the TCT Nos. 513-98 on September 8. 2010.000.00 T-59197 5. 1998. 1169654 for Civil Case No. entered into a Compromise Agreement which the RTC.792-98 on July 12. 1998. the assailed Decision of the Regional Trial Court. Br. 4.980. 26.810-98) and September 23. The pertinent portion of the Decision states: "The parties filed a Compromise Agreement on October 15. 26. the subject properties were sold to one Nilda T. 1127625 and 1127626 for Civil Case No. finding the aforequoted Compromise Agreement to be in order and not otherwise contrary to law. 26. 1999.810-98 and Entry Nos. 2010. 26.810-98 on October 7. T-292600: T-292600 9. on appeal. 26. 1169654 for Civil Case No.811-98. Entry No." Sy Ben and So Keng Koc. 5. Entry No. the TCT Nos. The same became final and executory on March 3. 8 approved and made the basis of its Decision dated October 19.111. 1127627 and 1127629 for Civil Case No.810-98 and 26. 1169655 for Civil Case No.029-99 on July 12. xxxxxxxxx .857-98 on July 12. vii. 1999 is hereby MODIFIED in the sense that appellants loan obligations are subject to an interest of twelve percent (12%) per annum. 1999. Entry Nos. 1998 which is quoted as follows:chanroblesvirtuallawlibrary 1. Entry Nos. 26. the Honorable Court of Appeals modified this courts decision as follows:chanroblesvirtuallawlibrary WHEREFORE.00 2. Entry No.200. 5. Entry No. xxx xxx xxx Consequently. 27. Entry Nos. T-80757 600 square meters 297. 1127629 and 1127627 for Civil Case No. i. 1121178 and 1121179 for Civil Case No. 1169656 for Civil Case No. 1999. 26. 1999. Entry Nos. So Keng Koc as follows: TITLE NO. Entry No. 26. 1127625 and 1127626 for Civil Case No. Lam on August 26. 26. in view of the foregoing. 1998. T-206276 156 square meter(s) 624. defendants bind themselves to convey the properties of defendant So Keng Koc in favor of the plaintiff and/or his authorized representative.810-98 on October 7. 6. 1121178 and 1121179 for Civil Case No.654 square meters 1. these properties were sold to JEWM Agro-Industrial Corporation. Accordingly.792-98 on July 12. T-325675 and T-325676.513-98.00 T-292597 13.078 square meters 1. 1998. So Keng Koc shall execute the requisite deeds of transfer in favor of the plaintiff or his authorized representative. the instant appeal is partially GRANTED." SQUARE METER MARKET VALUE WHEREAS. 26.811-98 on October 7. Davao City dated July 1. the same is hereby approved and judgment is hereby rendered in accordance with its terms and conditions.00 T-80758 542 square meters 325. 26. As settlement of the aforecited claim of the plaintiff. 1169656 for Civil Case No.534-98 on September 8. Entry Nos. New titles were subsequently issued TCT Nos. The Writ reads: "x x x x x x x x x 3. ii. morals and public policy. 1127627 and 1127629 for Civil Case No. 26. 26. T-316182 and T-316181. 26. 1998. Pursuant thereto and upon the instance of the complainant-spouses. 1121176 and 1121177 for Civil Case No. Entry Nos.811-98 on October 7. Eventually. 26.513-98 on September 8. the complainant-spouses Crisologo obtained a favorable judgment in Civil Case Nos. 1998. Entry No.00 7. 1999. Meanwhile. vi.00 "Annotations on TCT No. thus. a Writ of Execution was issued by RTC. as FULL and FINAL settlement of the obligations of the defendants in instant case in favor of the herein plaintiff. xxx xxx xxx. 4. without pronouncement as to costs.000.029-99 on July 12. 1999. 1998. iv. and that the award for exemplary damages is hereby DELETED. the following properties of the defendant. Entry Nos. all inscribed on October 7.1. parties in Civil Case No. 1169655 for Civil Case No. 1997 (for Case No. 1998.811-98. Entry Nos. Entry Nos.534-98 on September 8. 1121176 and 1121177 for Civil Case No. were carried over to TCT Nos. 26. 1127625 and 1127626 for Civil Case No. 1998. 1999.020. 26. v. 11th Judicial Region. 1998 (for case No.292 square meter(s) 1.320. 1998. Parties are hereby directed to comply with the terms and conditions of the aforequoted agreement failure of which execution shall issue upon motion seasonably filed.00 T-195366 600 square meters 960. to be computed from December 16. 27. WHEREFORE. Branch 15. Upon execution of this Compromise Agreement.333.617. 26.857-98 on July 12.811-98) until fully paid. 3.390.ςηαοblενιrυαllαωlιbrαr iii. T-325675 and T-325676 were issued in JEWMs name. Branch 15 on June 15. 557-2010. the court issued an Order granting the Motion for Issuance of Writ of Execution. 2010. and all persons acting under their directions on September 16. the court is of its considered view and so hold to grant the ancillary relief for preliminary writ of injunction applied for. The issuance of the Writ of Preliminary Injunction enjoining the execution of a final and executory judgment of RTC Branch 15. because the annotations JEWM sought to cancel include their liens. 2010. 2010 directing the issuance of a preliminary writ of injunction enjoining the Register of Deeds. Sheriff Robert Medialdea. and for the reconsideration of the Order dated September 27. On January 3. 3. or until final order from this Court.811-98. Branch 15. 2010. the Very Urgent Omnibus Motion. filed an Affidavit of Third-Party Claim and an Urgent Motion Ad Cautelam before RTC. defendants-appellants filed a Petition for Review on certiorari to the Supreme Court which was DENIED by the Honorable Supreme Court per its Resolution dated August 17. 26. Sheriff Robert Medialdea. WHEREAS. dishonesty or corruption which complainantspouses allegedly failed to adduce. 2010. issued an Order dated September 27. 2010. JEWM. 2010 required respondent Judge to submit his Comment to the instant Affidavit-Complaint. They stressed that the subject properties are still encumbered. Saguisag. Rene Andrei Q. complainant-spouses again filed a Very Urgent Manifestation (ad cautelam) stating that they cannot be declared in default as they were not yet served with summons. THEREFORE.ςηαοblενιrυαllαωlιbrαr 2. however. accordingly. They obtained a favorable judgment which had become final and executory on March 3. a co-equal and coordinate court was without an evidentiary hearing. Davao City as early as 1998 in Civil Case Nos. 33. herein complainant-spouses filed a Motion for Reconsideration and a Very Urgent Omnibus Motion on October 4. He also posited that there exists no cause for the issuance of the writ as the bond they posted in Civil Case Nos.810-98 and 26. a derivative of TCT No. Instead. They insisted that they are indispensable parties. 2010 involving two (2) aforesaid properties covered by Transfer Certificates of Title (TCTs) Nos. let the preliminary writ of injunction issue xxx xxx xxx during the pendency or until final adjudication on the merit of this case. 26. Accordingly.810-98 and 26-811-98 raffled to RTC. but were all denied by RTC. 7. 2010." Dissatisfied. 325675 and 325676.557-2010. The case was docketed as Civil Case No. They are plaintiffs in a collection suit docketed as Civil Case Nos. Thus.000. Medialdea. a Writ of Execution dated June 15. to quote: "After a careful scrutiny and analysis on the evidence thus far shown by the plaintiff-applicant. herein complainant-spouses filed an Omnibus Motion reiterating their positions manifested during the hearing on the issuance of a preliminary writ of injunction. 33. The RTC. 6.810-98 and 26. JEWM filed an Affidavit of Third Party Claim and a Motion to Exclude the Subject Properties from the Auction Sale. T-325676. Branch 15.00. 2010 asking the RTC. Notice of Sale and publication requirements were allegedly complied with. which contained annotations. JOHN and JANE DOES. 26. Complainant-spouses Crisologo principally aver the following:chanroblesvirtuallawlibrary 1. on July 6. unappealable and executory. 33. 2011. T-325675. with Application for Writ of Preliminary Injunction against the Register of Deeds. In addition. 33-557-2016. 2010. 2011. Branch 15 in its Order dated August 25. . rescheduled to October 7. 2010 was issued for the satisfaction of said final judgment. After JEWM posted the required bond of Php500. Branch 15. 2010. Respondent Judges refusal to recognize complainants as indispensable parties being lien holders of the subject properties was tainted with manifest bias and partiality. intervention is no longer necessary. 2009 and an Entry of Judgment dated March 3. 2010 because the sheriff. He contends that to constitute gross ignorance of the law.811-98. you are commanded to implement the writ for the satisfaction of the judgment in the decision in accordance with the Rules of Court xxx xxx xxx. and was subsequently raffled to RTC-Branch 14." WHEREFORE. The auction sale was. to wit: xxxxxxxxx Aggrieved. Saguisag also filed in open court a Very Urgent Manifestation (ad cautelam) and he signified his clients intention to file a proper motion to intervene. 2010. 2010. through its representative. Davao City. 5. Regional Trial Court on the subject properties: (1) Lot 650-B-2-A-2 covered by TCT No. JEWM filed a complaint for Cancellation of Lien. on June 9. 26. They also argued that they are the John and Jane Does referred to in Civil Case No. and whoever buys encumbered property purchases the same subject to the attachment thereon. They prayed that respondent Judge be held administratively liable. Davao City.WHEREAS. Branch 14. Rule 39 of the Rules of Court. a Notice of Sale was issued by Sheriff Robert M. 2010 was issued declaring the said resolution to be final. The Office of the Court Administrator in its 1st Indorsement dated January 10.. As the foregoing properties are already in JEWMs name.810-98 and 26. On September 22. representing herein complainant-spouses. The subject properties are now in the name of JEWM but were formerly owned by SO KENG KOC and attached by order of the RTC.811-98 is substantial enough to cover any damage JEWM might sustain by reason of the implementation of the Writ of Execution. grave abuse of discretion and gross dereliction of duty and manifest bias. which ordered the execution of the decision in Civil Case Nos. The Notice included two (2) properties covered by Transfer Certificates of Title (TCTs) Nos. He argued that the issuance of the writ of injunction would interfere with the proceedings of a coequal court. the court directed the sheriff to proceed with the sale on August 26. RTC. 2010. T-292600. Davao City. Branch 14 to resolve the Omnibus Motion filed on September 27. On October 15. In his Comment dated February 8. Atty. John and Jane Does and all persons acting in their respective stead from enforcing the first and second notices of auction sale in so far as TCT Nos. These were denied by the said court in its Order dated August 26. on September 27. a Writ of Preliminary Injunction was issued on October 5. Atty. complainant-spouses filed this present case before the Office of the Court Administrator. Jr. Davao City. hence. T-292597. Branch 14 in its Order dated November 9.557-2010. Sheriff IV. a derivative of TCT No. complainant-spouses posited that JEWM failed to present evidence of damage it would suffer or the amount of damage it would sustain. and (2) Lot 3465-A-1-B covered by TCT No. T-325675 and T-325676 are concerned. JEWM filed an action for cancellation of liens with prayer for the issuance of a preliminary injunction on September 16. 2010 stating in part that it cannot issue a restraining order directing the sheriff to exclude the subject properties on the basis of AD CAUTELAM motions and affidavits of third party claim as these were not the proper mode of action prescribed by the Rules of Court to seek injunctive relief from the court. entered his appearance and manifested that spouses Crisologo are parties in interest in Civil Case No. Subsequently. being John and Jane Does of Civil Case No. orally demanded the posting of a bond in accordance with Section 16. his actions allegedly constitute gross ignorance of the law. The same was denied and ordered stricken off the records by RTC. 325675 and 325676. 2010. Branch 15. he vehemently denied the material allegations in the affidavit-complaint. 4. 2010. fraud. he must be moved by bad faith. Crisologo as indispensable parties.Furthermore. The Rules of Court allow the issuance of the writ of preliminary injunction based on the verified application. however.513-98 filed before RTC.8Ï‚rνll The Ruling of this Court On the charge of issuing a writ of preliminary injunction without evidentiary hearing. Crisologo failed to show they are the persons in control of the subject property or under the direct orders of defendants Register of Deeds and Sheriff Medialdea. with one showing prejudgment. Manifest bias for granting a contentious motion despite violation of the three-day notice rule. Gross ignorance of the law. Crisologo should have filed the proper Motion to Intervene. the Investigating Justice recommended admonishing Judge Omelio for his failure to notify the Sps. Crisologo and to order that they be impleaded in the petition for cancellation of liens annotated on the certificate of title. for as long as there is notice and hearing. He stresses that while he granted the assailed injunction and denied the appearance of the complainants. However. the Investigating Justice found Judge Omelio grossly ignorant of the law and recommended a fine of thirty thousand pesos (₱30.14Ï‚rνll 4. Crisologo raised seven issues in their Affidavit-Complaint.17Ï‚rνll and 7. 16Ï‚rνll 6. Crisologo were not able to adduce evidence to prove that he was moved by corruption in issuing the injunctive relief. Sps. Judge Bersamin. 26. respondent Judge avers that he did not interfere with the proceedings of a co-equal and coordinate court. JEWM is not a party to Civil Case Nos.00) as appropriate penalty. the same did not constitute gross ignorance of the law. We adopt the recommendation of the Investigating Justice with respect to the charges on: (a) interference with the proceedings of a co-equal and coordinate court. Branch 8. Crisologo as indispensable parties. the Investigating Justice recommended admonishing Judge Omelio for failure to notify the Sps. b) As to the issuance of a Writ of Preliminary Injunction without conducting an evidentiary hearing. In a Resolution dated September 12. the Investigating Justice. He also filed a Counter-Complaint where he emphasized the exhaustion of judicial remedies as pre-requisite to the filing of an administrative case. and (b) refusing to recognize Sps. He further claimed that the Sps. 13Ï‚rνll 3." He asserts that complainantspouses did not file a proper Motion to Intervene with Pleading-in-Intervention in observance of the requirements laid down in Rule 19 of the Rules of Court. Davao City pursuant to a final judgment in said case. 6Ï‚rνll Report of the Investigating Justice of the Court of Appeals After notice and hearing. In addition. grave abuse of discretion. (b) not complying with the rules on summons. 15Ï‚rνll 5. when he issued the Writ of Preliminary Injunction. and (c) rendering a decision in an indirect contempt case that cancels an annotation of a certificate of sale without notifying the buyer. Section 16. and c) Anent the charge of refusing to recognize the complainants as indispensable parties. citing Gonzales v.9Ï‚rνll We reverse the recommendation of the Investigating Justice with respect to the charge on issuance of the writ of preliminary injunction without an evidentiary hearing and dismiss this charge for lack of merit. as well as to order that they be impleaded. Crisologo and Jesus Crisologo vs.810-98 and 26. in violation of the latters right to due process. may issue a temporary restraining order. as follows: 1. to vindicate their claims to the property in a separate action with another court. Omelio be ordered to pay a FINE in the amount of P 30. found no merit in this argument because lack of malicious intent cannot completely free a respondent judge from liability. Crisologo as indispensable parties.811-98 both entitled "Nannette B. Robert Allan Limso and So Keng Koc. Supplement to Affidavit-Complaint and Reply. 2011. despite the absence of any testimonial or documentary evidence. it is respectfully recommended that:chanroblesvirtuallawlibrary a) The charge of interference with proceedings of a co-equal and coordinate court be dismissed for lack of merit. which in the exercise of its own jurisdiction. 26. The Issues In contrast to the three issues resolved by the Investigating Justice. the Investigating Justice found that there was no interference. Rule 39 of the Rules of Court allows third-party claimants of properties under execution.000. Gross ignorance of the law and interference with the proceedings of a co-equal and coordinate court in issuing a writ of preliminary injunction which frustrates the execution of a final and executory decision. He likewise points out Supreme Courts proscription on the filing of an administrative complaint before exhaustion of judicial remedies against questioned errors of a judge in the exercise of its jurisdiction. The Investigating Justice found that Judge Omelio conducted a summary hearing on 22 September 2010 and issued the writ of preliminary injunction on the same day. the Second Division of the Supreme Court resolved to refer the instant administrative complaint to a Justice of the Court of Appeals. Judge Omelio claimed that Sps. He prayed that complainant-spouses and their counsel be administratively punished for knowingly and unjustly filing the alleged unfounded administrative complaint against him. respondent Judge George E.000. the Investigating Justice of the Court of Appeals of Cagayan de Oro City recommended the following: IN VIEW OF THE FOREGOING. We find Judge Omelio guilty of gross ignorance of the law for the following acts: (a) granting a contentious motion that was in violation of the three-day notice rule. Crisologo. Cagayan de Oro City for investigation.10Ï‚rνll ruled that notice was required to be given to parties whose annotations appear on the back of the certificate of title in an action for cancellation of the annotations. 11Ï‚rνll For this reason. 7Ï‚rνll On the third issue of refusing to recognize Sps. Manifest bias in issuing two conflicting orders. the Investigating Justice found Judge Omelio guilty. gross dereliction of duty and manifest bias for refusing to recognize Sps. Judge Omelio argued that Sps. et al. Manifest bias for proceeding with the case despite non-compliance with the rules on summons. 1121176 and 1121177 made on September 8. 1998 for Civil Case No. Manifest bias for cancelling the registration of sale where Sps. report and recommendation within sixty (60) days from receipt of the records thereof. respondent Judge be ADMONISHED to be more careful and diligent in the discharge of his judicial functions. Crisologo are buyers in another case without due process.00 with a STERN WARNING that a repetition of the same or similar acts shall be dealt with more severely. (JEWM) in this case. and Memorandum enumerating the charges against Judge Omelio. 12Ï‚rνll 2. such as JEWM Agro Industrial Corp. The Investigating Justice. RTC. Gross ignorance of the law and grave abuse of discretion for issuing a writ of preliminary injunction without an evidentiary hearing and in the absence of a clear and positive ground. and giving due course to an action where the plaintiff merely impleads the indispensable parties as John Does and Jane Does despite full knowledge of their identities. 18Ï‚rνll On the charge of interference with the proceedings of a co-equal and coordinate court in issuing a writ of preliminary injunction which frustrates the execution of a final and executory decision. For this reason. Branch 15. The subject properties had already been made to satisfy the first annotated levy on attachment the Entry Nos. . The Rules of Court allow JEWM to vindicate its claim to the properties in a separate action. In Humol v. Judge Clapis. we dismiss the Sps. the court to which the application for preliminary injunction was made.00. 5. Crisologos charge against Judge Omelio for gross ignorance of the law due to interference with the proceedings of a co-equal and coordinate court. the Investigating Justice found Judge Omelio guilty of "gross ignorance of the basic and simple procedure of requiring an evidentiary hearing in application for the issuance of an injunctive writ" and recommended the penalty of a fine of P 30. the court must order said party or person to show cause. the court may issue a temporary restraining order effective for a period of 20 days.22Ï‚rνll We disagree. the officer shall not be bound to keep the property. Thereafter. may issue ex parte a temporary restraining order to be effective only for a period of twenty (20) days from service on the party or person sought to be enjoined. 90-2645 was her exclusive property. not that of the judgment obligor.We dismiss for lack of merit the charge of issuing conflicting orders. For this reason.000. The court issuing the writ of execution may enforce its authority only over properties of the judgment debtor. However. and subject to the provisions of the preceding sections. Execution of a judgment can only be issued against a party to the action. In fact. the same shall be determined by the court issuing the writ of execution.21Ï‚rνll JEWM can be considered a third-party claimant and stranger to the case. If it shall appear from facts shown by affidavits or by the verified application that great or irreparable injury would result to the applicant before the matter can be heard on notice. exception. the sheriff acts properly only when he subjects to execution property undeniably belonging to the judgment debtor. JEWMs properties are being executed for So Keng Kocs liabilities. No claim for damages for the taking or keeping of the property may be enforced against the bond unless the action therefor is filed within one hundred twenty (120) days from the date of the filing of the bond. on demand of the officer. unless such judgment obligee. Court of Appeals. the judge before whom the case is pending shall conduct a summary hearing to determine whether the temporary restraining order shall be extended until the application for preliminary injunction can be heard. Branch 14. enjoining the execution of JEWMs properties in satisfaction of So Keng Kocs liabilities. because. If the property levied on is claimed by any person other than the judgment obligor or his agent. except as herein provided. The court exercising jurisdiction over the separate action. Within the said twentyday period. 20Ï‚rνll Consistent with Naguit v. In no case shall the total period of effectivity of the temporary restraining order exceed twenty (20) days. and accordingly issue the corresponding order. 16. the court must notify the other party and order him to show cause why injunction should not be granted. may issue an injunction. why the injunction should not be granted. Although the general rule is that a sampling of evidence is required to be submitted during the hearing on the motion for preliminary injunction. Should great or irreparable injury result to the applicant based on affidavits or the verified application before the matter can be heard with prior notice to the parties. If the sheriff levies upon the assets of a third person in which the judgment debtor has no interest. . In case of disagreement as to such value. Preliminary injunction not granted without notice. stating the grounds of such right or title. Rule 39 of the Rules of Court allows for the institution of a separate action by a third-party claimant who seeks to protect his interests in an execution proceeding: SEC. if the matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury. to any third-party claimant if such bond is filed. the temporary restraining order is deemed automatically vacated. Non-interference with the proceedings of a co-equal and coordinate court As correctly pointed out by the Investigating Justice. at a specified time and place. For this reason. Discaya. the executive judge of a multiple-sala court or the presiding judge of a single-sala court may issue ex parte a temporary restraining order effective for only seventy-two (72) hours from issuance but he shall immediately comply with the provisions of the next preceding section as to service of summons and the documents to be served therewith. within the aforesaid seventy-two (72) hours. This is in consonance with the well-established principle that no man shall be affected by any proceeding to which he is a stranger. the issuance of the injunctive writ was based merely on testimonies of resource persons invited by the court. Without testimonial and documentary evidence. petitioner filed an independent action for the annulment of the certificate of sale issued in favor of private respondent. the filing of such an independent action cannot be considered an encroachment upon the jurisdiction of a co-equal and coordinate court. there was no presentation of witnesses to substantiate the allegations in the complaint or identification of documentary exhibits for evidentiary purposes. Pursuant to our ruling in Sy v. if issued by the Court of Appeals or a member thereof. despite not being the judgment obligor. The Investigating Justice found that a summary hearing was conducted on 22 September 2010. Issuance of a writ of preliminary injunction without an evidentiary hearing Section 5. provided there is notice and hearing. A restraining order issued by the Supreme Court or a member thereof shall be effective until further orders. In the event that the application for preliminary injunction is denied or not resolved within the said period. No preliminary injunction shall be granted without hearing and prior notice to the party or person sought to be enjoined. However. Proceedings where property claimed by third person. contending that the property levied upon and sold to private respondent by virtue of the writ of execution issued in Criminal Case No. which in this case is RTC. or prevent the judgment obligee from claiming damages in the same or a separate action against a third-party claimant who filed a frivolous or plainly spurious claim. The officer shall not be liable for damages for the taking or keeping of the property. the temporary restraining order shall be effective for sixty (60) days from service on the party or person sought to be enjoined. the Investigating Justice deemed the applicant of the injunctive writ to have failed to establish a clear and unmistakable right as pre-condition for the issuance of the writ of injunction. Section 16. Contrary to the stand taken by the trial court. and serves the same upon the officer making the levy and a copy thereof upon the judgment obligee. (Emphasis supplied) This provision provides for the general rule that writs of preliminary injunction shall only be issued with hearing and prior notice to the party or person sought to be enjoined. determine within the same period whether or not the preliminary injunction shall be granted. thus. Within the 20-day period. which action was not considered an encroachment upon the jurisdiction of a co-equal and coordinate court: In the case at bar.19Ï‚rνll the Court considered Naguit. whose exclusive property was executed for the debts of her husband. petitioner is deemed a stranger to the action wherein the writ of execution was issued and is therefore justified in bringing an independent action to vindicate her right of ownership over the subject property. then he is acting beyond the limits of his authority and is amenable to control and correction by a court of competent jurisdiction in a separate and independent action. In the hearing. files a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied on. and such person makes an affidavit of his title thereto or right to the possession thereof. x x x x (Emphasis supplied) In Naguit v. including the original seventy-two hours provided herein. Court of Appeals. a stranger to the case against the husband. The effectivity of a temporary restraining order is not extendible without need of any judicial declaration to that effect and no court shall have authority to extend or renew the same on the same ground for which it was issued. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separate action. there are also instances when the writ of preliminary injunction can be issued based on the verified application. Rule 58 of the Rules of Court provides for the procedure in issuing preliminary injunctions: SEC.23Ï‚rνll an administrative case was filed against respondent judge therein for issuing an injunction without the parties presenting or offering their respective evidences during the hearing. Naguit was allowed to institute a separate action to vindicate her right of ownership over her exclusive property. and not against one who has not yet had his day in court. For failing to cause the proper service of summons upon defendants John and Jane Does and Sps. However. 496. service of summons was made only upon the Register of Deeds and Sheriff Robert Medialdea. Otherwise. The rules and procedures on summons are very elementary. through their counsel. 496. Rule 58 of the Rules of Court. 24Ï‚rνll Despite the absence of the applicants offer of evidence in the hearing on the motion for issuance of preliminary injunction. This case concerns the cancellation of liens on the transfer certificates of title. Since defendants John and Jane Does are unidentified persons. service may. 26Ï‚rνll In this case. Both counsels were in agreement with regard to the facts: (a) that there were several liens over the properties.with counsels not being given the opportunity to cross-examine the resource persons. In case the lienholder is unknown. 35Ï‚rνll Sps. 36Ï‚rνll Judge Omelio. John & Jane Does and all persons acting under their directions. 39Ï‚rνll Judge Omelio claims that Sps. especially for judges who are supposed to exhibit more than just a cursory acquaintance with the procedural rules. . Crisologo. such as what the plaintiff claimed in the disputed case. Sps. We dismiss this charge of gross ignorance of the law for issuing a writ of preliminary injunction without evidentiary hearing for lack of merit. despite the Sps. We find that the hearing conducted by Judge Omelio in the motion for issuance of the writ of preliminary injunction was adequate and compliant with the Rules of Court.000. including the recommended penalty of fine of P 30. Clerk to issue summons. Sps. however. which prayed for the cancellation of liens annotated at the back of TCT Nos. prohibition or mandamus. especially when a clear and unmistakable right to the issuance of the injunctive writ can be gleaned from affidavits or the verified application and its supporting documents. For this reason. Crisologo claim that the case should not have proceeded because no summons were made upon the John and Jane Does impleaded in the complaint. Judge Omelios stubborn refusal to recognize Sps. Judge Omelio already received documentary evidences as supporting documents in the verified application and accorded both counsels the opportunity to be heard in oral arguments before him during the hearing. on the other hand. The Rules of Court. Crisologo. For this reason. Judge Omelios failure to effect proper service of summons upon the defendants John and Jane Does in the complaint constitutes gross ignorance of the law. The Order was silent on the declaration of default of the John and Jane Does. the clerk of court shall forthwith issue the corresponding summons to the defendants. the judgment cannot be considered binding on the unknown defendants.33Ï‚rνll The notice of hearing for the preliminary injunction was likewise served only upon defendants Register of Deeds and Sheriff Robert Medialdea. Service upon defendant whose identity or whereabouts are unknown. In an ordinary civil action. Crisologo were executing JEWMs property based on the second lien. Crisologo. every action must be prosecuted or defended in the name of the real party in interest. who claim to be defendants under John and Jane Does. special civil action for certiorari. claims that the requirements for service of summons are not applicable where the parties claiming entitlement to summons have already appeared in court during the hearing of the petition. On 9 November 2010. notice to the lienholder is a jurisdictional requirement.Rule 14 of the Rules of Court provides for the procedure on summons: SECTION 1. Crisologos voluntary appearance.00. by leave of court. 38Ï‚rνll In this case. we find Judge Omelio guilty of gross ignorance of the law. Register of Deeds. 34Ï‚rνll No procedure for service of summons was observed upon the John and Jane Does impleaded in the complaint. involving issues which can be comprehended by the judge based on a cursory examination of the verified application and its supporting documents. motion for inhibition or petition for change of venue.In any action where the defendant is designated as an unknown owner. the Court dismissed the charge of impropriety exhibited by the judge because the issue on the propriety of the issuance of the writ of injunction was judicial in nature and cannot be threshed out in an administrative action. considering the peculiar circumstances of this case. we find Judge Omelio not guilty of gross ignorance of the law in issuing a writ of preliminary injunction without requiring the parties to present testimonial evidences during the hearing. subject of the case. 28Ï‚rνll (b) that the property held by JEWM was a derivative title in satisfaction of the first lien.Upon the filing of the complaint and the requisite legal fees. appeal. service of summons to the lienholder is a jurisdictional requirement. . 31Ï‚rνll or (b) an ordinary civil action filed against the parties whose liens are sought to be cancelled. even if he knows of the case against him. or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry. Crisologo voluntarily appeared and submitted themselves to the jurisdiction of the court. Refusal to recognize Sps. in accordance with Section 5. 2.27Ï‚rνll Neither counsel raised the issue of authenticity of the titles. Crisologo in the case reflects an appearance of partiality in favor of JEWM. service of summons for unknown defendants should strictly be complied with. that non-observance and lack of knowledge on them constitute gross ignorance of the law. if the defendant voluntarily submits to the jurisdiction of the court by appearing through his counsel in filing the appropriate pleadings. . 37Ï‚rνll As a general rule. Manifest bias for proceeding with the case despite non-compliance with the rules on summons Another indispensable requirement for the issuance of a writ of preliminary injunction is the service of summons upon defendants.25Ï‚rνll Errors or irregularities committed by the judge in rendering his decision should be remedied first through a motion for reconsideration. which could be resolved from an examination of the verified application and its supporting documents. jurisdiction cannot be acquired over the defendant without service of summons. due to lack of legal standing. The liens annotated at the back of a certificate of title can be cancelled through: (a) a petition with the land registration court. The disputed case is entitled JEWM Agro-Industrial Corporation v. Sheriff Medialdea. Judge Omelios Order dated 19 November 2010 declared only defendants Register of Deeds and Sheriff Robert Medialdea in default. provide that a temporary restraining order may be issued not only based on affidavit. provided there is notice and hearing. or the party entitled to the avails of the suit. Crisologo must file the necessary pleading-in-intervention in order to be recognized in court. xxxx SEC. Parties in interest. however.A real party in interest is the party who stands to be benefited or injured by the judgment in the suit. were pleading before Judge Omelio to recognize their entry of appearance as real parties in interest under defendants John and Jane Does in the hearing for preliminary . Rule 3 of the Rules of Court provides:chanroblesvirtuallawlibrary SEC. During the hearing on 22 September 2010 (which is a requirement in the issuance of a writ of preliminary injunction). Crisologo as indispensable parties Section 2. but also based simply on the verified application and its supporting documents. under Section 112 of Act No. can be acquired without service of summons. Jurisdiction. we reverse the Investigating Justices finding of guilt in this charge. A clear and unmistakable right to the issuance of the writ of injunction in favor of JEWM could easily be gathered from examining the submitted pleadings and their supporting documents. 30Ï‚rνll With no factual issues or disputes. or the like. the issues raised by counsels before Judge Omelio were purely legal in nature. 29Ï‚rνll and (c) that the Sps. both counsels were given the opportunity to argue their case before Judge Omelio. be effected upon him by publication in a newspaper of general circulation and in such places and for such time as the court may order. summons must be made with leave of court and by publication.32Ï‚rνll In a petition under Section 112 of Act No. Judge Omelio issued an Order striking the omnibus motion and all pleadings filed by Sps. Judge Omelio is given a wide latitude of discretion in issuing the writ of preliminary injunction after the hearing. Unless otherwise authorized by law or these Rules. In this case. Judge Omelios argument on voluntary appearance presents a conflicting position in relation to his actions during the pendency of the case. Judge Omelio claims that service of summons to unknown defendants can be dispensed with because Sps. T-325675 and T-325676. 14. Crisologo charge Judge Omelio with gross ignorance of the law for issuing the writ of preliminary injunction without an evidentiary hearing and in the absence of a clear and positive ground. In this case. 46Ï‚rνll (Italicization in the original) In this case. Evidently. 55Ï‚rνll In this case. A motion to render judgment based on the pleadings is a litigious motion because the grant of such motion will eliminate trial and the case will be considered submitted for decision. Manifest bias for granting a contentious motion despite violation of the three-day notice rule The Investigating Justice failed to discuss the next four issues raised by Sps. However. Section 4. as mandated by Section 4. Crisologo on the ground of lack of the proper Motion to Intervene with Pleading-in-Intervention. Judge Omelio further claims that the complaint identifies the "John & Jane Does" as defendants who may or hereinafter be in control of the property of the subject complaint and/or those persons or agents who may be acting under the direct orders of the Register of Deeds and Sheriff Medialdea. however. Hearing of motion. Laurente. was heard on 8 December 2010. 2002. together with a copy of the motion. The cancellation of Sps.47Ï‚rνll Judge Omelio should be penalized for failing to recognize Sps. Crisologo are not yet in control of the property nor are they acting under the direct orders of the Register of Deeds and Sheriff Medialdea.Except for motions which the court may act upon without prejudicing the rights of the adverse party. Thus. Section 4. considering that a simple perusal of the certificates of title would show Sps. JEWM filed a motion to render judgment based on the pleadings on 6 December 2010. In this case. 2002. Laurente. to be delivered by registered mail to counsel for the plaintiff on or before July 5. Crisologos adverse rights because their liens are annotated at the back of the titles. Rule 15 of the 1997 Rules of Civil Procedure provides that the court. it has also been held that when the law violated is elementary. even granting that they acquired the interests of these persons annotated in the certificate of title. Judge Omelio refused to recognize Sps. respondent consented to hold a hearing on the motion at 11:20 of the very same morning of July 5. . Consistent with Southwestern University v. Rule 57 of the 1997 Rules of Civil Procedure. The principles of due notice and hearing are so basic that respondents inability to accord a litigant their right thereto cannot be excused. unless the court for good cause sets the hearing on shorter notice.52Ï‚rνll the Court held that the motion for reconsideration which contained a defective notice of hearing did not suspend the running of the period to appeal. x x x. and maintains that inasmuch as the law specifically provides notice to parties in interest. xxxx It has been oft repeated that judges cannot be held to account or answer criminally.. and the trial court exceeded its jurisdiction when it granted the defective motion: Finally. we find Judge Omelio guilty of gross ignorance of the law for refusing to recognize Sps. 53Ï‚rνll In J. Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing. for good cause. it should be limited to the parties annotated in the certificate of title itself. the plaintiff had no notice whatsoever of the filing of the motion and the hearing date for the same. 44Ï‚rνll We are not persuaded. Parties with liens annotated on the certificate of title are entitled to notice in an action for cancellation of their liens. 57Ï‚rνll The hearing was conducted on 8 December 2010. T-325675 and T-325676. Revilla. a judge is subject to disciplinary action. it is not disputed that Sps.43Ï‚rνll Judge Omelio argues that Sps. However. Judge Hontanosas. among others. including the liens in favor of Sps. Jr. This provision mandates service to the adverse party at least three days before the hearing date of a written motion required to be heard and its notice of hearing. 45Ï‚rνll adopted the following reasoning of the lower court: The Court is in accord with his contention (that if there should be notice. 56Ï‚rνllThe annotations on the copy furnished portion of the motion show that service was made to the Register of Deeds of Davao City and Sheriff Robert Medialdea on 6 December 2010. v. should be limited to the parties listed or annotated on the certificate of title. Rule 15 of the Rules of Court. The Court. and declared him guilty. of gross ignorance of the law for granting a motion that was in violation of the three-day notice rule: We agree with the Investigating Justices finding that respondent is guilty of gross ignorance of the law for not holding a full-blown hearing on the motion to lift attachment and for violating the three-day notice rule. Crisologo as indispensable parties and for requiring them to file a motion to intervene. such notice if any. mailed only on July 3. 2002. common knowledge dictates that it would be impossible for a copy of the motion. and of any affidavits and other papers accompanying it. Rule 15 of the Rules of Court provides that notice of a motion shall be served by the applicant to all parties concerned. 4. at least three (3) days before the hearing thereof. In this case. and Section 5 of the same Rule requires the notice to be directed to the parties concerned and to state the time and place for the hearing of the motion. Obviously.. in Southwestern University v. Crisologo due to lack of legal standing. 50Ï‚rνll The motion. and should not be extended to subsequent parties who. Crisologos liens were annotated at the back of JEWMs certificates of title. Yet. we find respondent guilty of gross ignorance of the law for violating the threedaynotice rule and failing to give herein complainant due notice and the opportunity to be heard on the matter as mandated by Section 12. Crisologos liens without notice to them is a violation of their right to due process. they should not be considered as the defendants in this case. For this reason. much less the holding of a hearing for said motion.42Ï‚rνll Since Sps. civilly or administratively for an erroneous judgment or decision rendered by him in good faith. Rule 15 of the Rules of Court provides for the procedure in hearing motions: SEC. Crisologo. the rule is explicit that notice of hearing cannot be altogether dispensed with. 2002. therefore. dishonesty or corruption. we believe that respondents actuations reek of malice and bad faith. every written motion shall be set for hearing by the applicant. Crisologo claim that JEWM filed a Motion to Render Judgment Granting Plaintiff the Relief Prayed for with Memorandum Attached on 6 December 2010. . For this reason. Crisologo as indispensable parties in the disputed case. the party filing the motion to lift attachment had already violated the three-day notice rule. service to the adverse parties of such litigious motion should be made at least three days before the date of the hearing. Crisologo are not indispensable parties because their participation is not indispensable in the determination of whether or not the subsequent liens annotated on the titles of the subject properties may be properly cancelled. may set the hearing on shorter notice. despite the fact that the notice of hearing for said motion stated that said motion would be set for hearing at 8:30 in the morning of July 5. Inc.51Ï‚rνll in violation of the three-day notice requirement. xxxx A perusal of the motion to lift attachment shows that a copy of the same was mailed to plaintiffs counsel only on July 3. 40Ï‚rνll Judge Omelio bases his refusal to recognize Sps. or in the absence of fraud.58Ï‚rνll Judge Omelio granted JEWMs motion on 13 December 2010. Crisologo in their Supplement to the Affidavit-Complaint and Reply48Ï‚rνll and their Memorandum. The case involved the cancellation of several liens carried over in TCT Nos.41Ï‚rνll In addition. despite said patent defects in the motion.49Ï‚rνll Sps. The courts receiving stamp showed that said motion was filed in court only at 11:02 in the morning of July 5. 2002. In Philippine Advertising Counselors v. Although Section 4. 54Ï‚rνll the Court suspended respondent judge for three months without pay. King & Sons Co. A motion which fails to comply with these requirements is nothing but a useless piece of paper.injunction on 22 September 2010. The proximity of the date of mailing of the copy of the motion to the other party and the hearing date indicated in the notice of hearing clearly shows that it is impossible for the other party to receive said motion at least three days before the date of hearing. Such circumstances should have already warned respondent that plaintiff in the subject case had not yet been apprised of the filing of such a motion. 2002. failed to have their rights accordingly annotated in said certificate of title) of petitioner Southwestern University. 72Ï‚rνll In Judge Omelios Order dated 7 October 2010. the lienholders who would be affected by the cancellation of the annotation. Judge Omelio should have notified the Sps. stating Sps. in a decision for indirect contempt. Manifest bias for cancelling the registration of sale without due process where Sps. The Register of Deeds for Davao City is hereby directed to cancel any registration or annotation of the subject Sheriffs Certificates of Sale at the back of TCT No.65Ï‚rνll The subject complaint for indirect contempt. instead of the mandatory three-day notice rule. In Almeron v. Saguisag. 67Ï‚rνll In his Decision dated 27 January 2011. In the first disputed case.63Ï‚rνll Such cancellation of Sps. T-325675 and TCT No. in violation of the elementary three-day notice rule on motions. but also directed the Register of Deeds of Davao City to cancel any registration or annotation of the Sheriffs Certificate of Sale at the back of TCT Nos. As provided in Section 112 of Act No. This is not the first time Judge Omelio has rendered a decision affecting third parties interests.00 and imprisoned for not more than six months. Judge Hontanosas. 71Ï‚rνll In this case. was filed on 14 October 2010 and entitled JEWM Agro-Industrial Corporation v. Similar offense in the future will be dealt with more severely. The notice of hearing was defective because it was only served two (2) days before the hearing date. 73Ï‚rνll In another Order likewise dated on 7 October 2010. in the indirect contempt complaint entitled JEWM Agro-Industrial Corporation v. Civil Case No. the Investigating Justice recommended admonishing Judge Omelio for failing to recognize the Sps.. the auction sale on October 8. constitutes gross ignorance of the law. Applying J. 496 and Southwestern University v. more so with legal principles and rules so elementary and basic that not to know them. we find Judge Omelio guilty of gross ignorance of the law for granting a contentious motion that was in violation of the three-day notice rule on motions.000. Only the Register of Deeds and Sheriff Medialdea were impleaded. JEWM Agro-Industrial Corporation v. Judge Omelio once again failed to notify the Sps. Register of Deeds. For this reason. John & Jane Does and all persons acting under their directions. T-325675 and TCT No. . constitute gross ignorance of the law. Although the case was an indirect contempt complaint. Judge Omelio held: Atty. SO ORDERED. 70Ï‚rνll notice is required to be given to parties whose annotations appear on the back of the certificate of title in an action for cancellation of annotations on the certificate of title. and (b) the auction sale annotated on TCT Nos. be declared illegal and the Register of Deeds of Davao City be directed to cancel such annotation of sale. claims that no notice was given to the Sps. Crisologo constitutes gross ignorance of the law. constitutes a denial of their right to due process. R. in a complaint for indirect contempt against Sheriff Medialdea. Crisologo. Crisologo are buyers. Sheriff Robert Medialdea and Register of Deeds for the City of Davao. on the other hand. Judge Omelio failed to cause the service of proper summons upon the John and Jane Does impleaded in the complaint. that not knowing and observing it. Crisologo are buyers Sps. For this reason.000. Crisologo because they are not parties to the complaint for indirect contempt. Sheriff Robert Medialdea and Register of Deeds for the City of Davao. Crisologo of the indirect contempt complaint because it included the prayer for cancellation of the annotation of sale on the subject titles. rendered a Decision. Crisologo. Crisologos pleadings.66Ï‚rνll JEWM. The three-day notice rule on motions is so elementary. 33. v. Judge Omelio should have denied the motion on the ground that it violated the three-day notice rule. Judge Sardido. especially in litigious and contentious motions.In this case. 2010 and the corresponding sheriffs certificates of sale pertaining to the property of plaintiff covered by TCT No. Crisologo claim that Judge Omelio. Laurente. with a warning that repetition of the same or similar act will merit a stiffer penalty in the future. hence he lacks locus standi in court to participate in the proceeding of the case x x x his very urgent omnibus motion dated October 1. Corollary thereto. Sps. Inc. however.69Ï‚rνll (Emphasis supplied) Judge Omelios decision in the indirect contempt complaint ordered the cancellation in TCT Nos. For this reason. Worse. which is submitted without argument. Crisologos annotation of the Sheriffs Certificate of Sale in the titles. without notifying the Sps. without prejudice to JEWMs re-filing of said motion in accordance with the Rules. Even when Sps. we dismiss this charge for lack of merit.62Ï‚rνll not only declaring Sheriff Medialdea guilty of indirect contempt. 61Ï‚rνll Judge Omelio is considered guilty of gross ignorance of the law for granting the defective motion.60Ï‚rνll In this case. T-325675 and T-325676. 68Ï‚rνll Judge Omelio granted JEWMs prayers. he declared: The Omnibus Motion dated October 1. as plaintiff in the indirect contempt complaint. Sheriff Medialdea. 74Ï‚rνll Sps. T-325676 are hereby declared null and void and without force and effect of the law. defendant Sheriff Robert Medialdea is hereby declared GUILTY of indirect contempt and is ordered to pay a fine of Five Thousand (P5. Crisologo claim that Judge Omelio exhibited manifest bias when he issued two conflicting orders on the same day. where the latter are buyers. counsel for the plaintiff is directed to file a comment within five (5) days x x x. Jr. which included a prayer for cancellation of annotations on the titles. in view of all the foregoing.. the cancellation of the annotation of the sale without notifying the buyers. T-325675 and T-325676 of the annotation of the Sheriffs Certificate of Sale in favor of the Sps. we find Judge Omelio guilty of gross ignorance of the law. without first filing a written formal notice of appearance pursuant to the Rules of Court. with one already showing prejudgment. Here.59Ï‚rνll the Court held:chanroblesvirtuallawlibrary Members of the judiciary are supposed to exhibit more than just a cursory acquaintance with the statutes and procedural rules. without even notifying the indispensable parties.1104-2010. 2010 filed by Rene Andrei Q. prayed that: (a) Sheriff Medialdea be found guilty of indirect contempt and be penalized a fine not exceeding ₱30.A. Crisologo as indispensable parties in that case. is a violation of the latters right to due process. Crisologo. Crisologo. 2010 therefore is denied x x x. Judge Omelio granted a litigious motion. no summons or notices were issued to Sps. Clearly. Judge Omelio granted the prayer for cancellation of the annotations of Sps. Application of Penalties Let copy of this decision be furnished the Office of the Court Administrator for proper administrative action. The dispositive portion of the decision reads as follows: WHEREFORE. it can still be considered a petition to cancel annotations because of its prayer. in accordance with Section 7. Crisologo voluntarily appeared in court to be recognized as the John and Jane Does. Crisologo allege that Judge Omelio exhibited manifest bias in issuing the conflicting orders. Since this is the second time that Judge Omelio has issued an order which fails to notify or summon the indispensable parties. Such motion should have been considered a mere scrap of paper. but failed to indicate which provision in the Rules of Court or the Code of Judicial Conduct Juge Omelio violated when he issued these orders.. Judge Omelio refused to acknowledge their appearance and ordered the striking out of Sps. Judge Omelio granted a contentious motion which contained a defective notice of hearing. Crisologos Sheriffs Certificate of Sale without notifying them of the complaint.Q. Jr. Failure to notify the Sps. for being illegal. Crisologo. T-325675 and T-325676. Saguisag. Rule 71 of the Rules of Court. or to act as if one does not know them. Manifest bias in issuing conflicting orders Sps. T-325676.00) Pesos. 64Ï‚rνll Judge Omelio. King & Sons Co. Crisologo and Nannette B. vs. Contreras) as a retainer doctor at the Philippine National Bank (PNB) Head Office. in A. Dr. JR. Contreras for lack of merit. on July 3. SP No.75Ï‚rνll In Garcia v. Maxicare. she not only ratified the contract of service she signed but also waived all her rights under their previous agreement she is supposed to be entitled to enforce. reversing the decision 5 of the Labor Arbiter (LA) in this illegal dismissal case. Section 54(c) of the same Revised Uniform Rules states that the maximum of the penalty shall be imposed where only aggravating and no mitigating circumstances are present. Nubla. or 3. CONTRERAS. but not exceeding six (6) months. 2007 Decision 3 and June 29. Dr. 2007 Resolution4 of the National Labor Relations Com. 2010 Decision 1 of the Court of Appeals (CA) and its October 27. in violation of the latter's right to due process.D.76Ï‚rνll the Court found Alejo guilty of two offenses: (a) dereliction of duty. The controversy started when.00) on Judge Omelio for violation of a Supreme Court Circular with a stern warning that repetition of the same or similar act shall be dealt with more severely. Marian Brigitte A. Dismissal from the service. 2003. with no mitigating circumstances.00).R. 2003.A. Manila. A fine of more than P 20. Rule 140 of the Rules of Court considers gross ignorance of the law or procedure as a serious charge. M.: Challenged in this petition are the January 28. however. No. due to the presence of aggravating circumstances.000. and (d) rendering a decision in an On November 29.00 per hour. M. the sanction to be imposed is the penalty for the serious charge of gross ignorance of the law in its maximum. It may . 77Ï‚rνll imposed a fine of Ten Thousand Pesos (P 10. Crisologo as indispensable parties. 2003.In this case. MARIAN BRIGITTE A. The Court.00 per hour. and (b) violation of reasonable office rules and regulations. she could not have reported to that assignment under it in the first place. on the other hand. Section 11 of Rule 140. We find Judge George E. 2003. informed Dr. we impose the penalty of fine of Forty Thousand Pesos (P 40. from August 5. Contreras would render medical services for one year atP250. Judge Omelio is found guilty of four counts of gross ignorance of the law for the following acts: (a) refusal to recognize Sps. ASIS.00) on Judge Omelio for four counts of gross ignorance of the law. G. including government-owned or controlled corporations. (b) granting a contentious motion in violation of the three-day notice rule. which affirmed the March 16. Provided. Dr.D. Because of this previous violation. Contreras (Dr. The penalty imposed upon Alejo was the penalty for the more serious charge. The pertinent portions of the LA’s ruling read: If indeed complainant was forced to sign the contract of August 4. with a warning that repetition of the same or similar acts will be dealt with more severely. the Service Agreement between Dr. On August 8. In its Resolution dated 28 July 2008. Suspension from office without salary and other benefits for more than three (3) months. Judge Omelio is found guilty of four counts of the serious charge of gross ignorance of the law.6 In this case. No. provides for the sanctions on respondents guilty of serious charges: SEC. was executed. 2005. taking into consideration the fact that he had previously been admonished in an earlier case. If the respondent is guilty of a serious charge. Omelio the penalty of fine of Forty Thousand Pesos (P 40. the penalty to be imposed should be that corresponding to the most serious charge or count and the rest shall be considered as aggravating circumstances. forfeiture of all or part of the benefits as the Court may determine. (b) gross ignorance of the law for issuing a writ of preliminary injunction without an evidentiary hearing. (b) granting a contentious motion in violation of the three-day notice rule. and (d) cancelling the annotation of the Sheriffs Certificate of Sale on the titles without notifying the buyers. in violation of the latters right to due process.. 194352 January 30.M. . xxxx Section 55 of the Revised Uniform Rules on Administrative Cases in the Civil Service (Revised Uniform Rules) provides that if the respondent is found guilty of two or more charges or counts. in a number of cases. Omelio GUILTYof four counts of the serious charge of gross ignorance of the law for the following acts: (a) refusing to recognize Spouses Jesus G. MTJ-08-1701. Under their verbal agreement. Contreras and Dr.. M. 2003 to November 29. indirect contempt case that cancels an annotation of a Sheriffs Certificate of Sale on two titles without notifying the buyer. On August 4. we DISMISS the following charges against Judge George E. Contreras that she was going to be transferred to another account after a month. Alejo. Asis. Macapagal Avenue. Roxas Boulevard. Her retainer fee would be paid every 15th and 30th of each month based on her work schedule which was every Tuesday. ERIC S. and (c) manifest bias for issuing conflicting orders. with a retainer fee of P168. has adopted the Revised Uniform Rules in the discipline of erring court officers and judges. insisted that there was no constructive dismissal.000 but not exceeding P 40. Thursday and Friday from 6:00 o’clock in the morning to 5:00 o’clock in the afternoon. the LA rendered a decision dismissing the complaint of Dr. That the forfeiture of benefits shall in no case include accrued leave credits. entitled "Marian Brigitte Contreras v. 101066. Accordingly. any of the following sanctions may be imposed:chanroblesvirtuallawlibrary 1.000." The Facts Sometime in March 2003. Maxicare Healthcare Corporation (Maxicare) hired Dr. Maxicare’s VicePresident for Medical Services. and disqualification from reinstatement or appointment to any public office. and RUTH A. she filed a complaint before the LA claiming that she was constructively dismissed. Sanctions. dereliction of duty. Ruling of the Labor Arbiter WHEREFORE. we impose upon Judge George E. NUBLA. Contreras reported to Maybank for one (1) day only. Based on the rules on penalties in administrative cases. effecting the transfer of the former to Maybank Philippines (Maybank) for a period of four (4) months. Crisologo as indispensable parties.Ï‚rαlαωlιbrαr SO ORDERED. al. the Court. (c) non-compliance with the rules on summons. In reporting so.000. 2013 MAXICARE PCIB CIGNA HEALTHCARE (now MAXICARE HEALTHCARE CORPORATION). Section 8. Ruth A. 2003. Respondent.2 in CA-G. Omelio for lack of merit: (a) gross ignorance of the law for interfering with the proceedings of a co-equal and coordinate court.D. 11. J. on the other hand. 2010 Resolution. et. Eric S.nission (NLRC). Petitioners.000. DECISION 2. MENDOZA. A1axiCare PCJB CJGNA Health Care.R. (c) non-compliance with the rules on summons. Maxicare’s medical specialist on Corporate Accounts. A PLETHORA OF JURISPRUDENCE THAT LACK OR ABSENCE OF JURISDICTION MAY BE RAISED FOR THE FIRST TIME EVEN ON APPEAL.00 per hour. but also that such transfer was not unreasonable. through its Customer Care coordinator. and properties to Maxicare. and later repudiated it with a notice to Maxicare that she could not go on serving under such a disadvantageous situation. Contreras confirmed that it paid her retainer fees and deducted only 10% "withholding tax payable-expanded. IN RENDERING THE ASSAILED DECISION. or treated her patients. she even confirmed what she signed by reporting to duty thereafter.14 Maxicare filed a motion for reconsideration but it was denied by the CA in its Resolution. It contends that it could not have effectively exercised control over the means and method adopted by Dr. Thus. or upon termination of her services. as employer. Eric Nubla recognize to be fictitious. such records. 18 Maxicare claims that there could have been no employer-employee relationship arising from the oral medical retainership agreement between the parties. the above circumstances disprove the . complainant should have refused as she is at liberty. She signed the new agreement because it. complainant’s complaint for constructive dismissal can hardly be sustained by a later change of heart. Contreras submitted evidence to support not only her claim of constructive dismissal but also the existence of an employer-employee relationship. and the right to do so is not lost by waiver or by estoppel. It stated that Maxicare. Contreras was illegally dismissed and ordered her reinstatement to her former or substantially equivalent position and the payment of her backwages. and properties and from disclosing or reproducing these records and documents to anyone without proper authority. Instead. 2007. 2] Maxicare was the one who engaged her services. 2010. To a professional like her. Cecile Samonte. Contreras received. the said issue has been raised in the pleadings before the appellate court.12 The CA added that Maxicare impliedly admitted that an employer-employee relationship existed between both parties by arguing that she was not constructively dismissed. such as genuine business necessity. the NLRC disposed: WHEREFORE. And only after examining what she signed that she realized she thought of initiating the present complaint. Nonetheless. 15 dated October 27. being a contract of adhesion. II THE COURT OF APPEALS MISAPPLIED THE 4-TIERED TEST TO DETERMINE THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP WITHOUT CONCRETE BASIS. in refusing to sign even if what she claimed there appears a threat of dismissal. the CA ruled that the records showed that there existed an employer-employee relationship between Maxicare and Dr. gave her no realistic chance to haggle for her job. Maxicare was estopped from questioning her status as its employee. d) that Maxicare. but according to the amount of time she spent at the PNB clinic. 2003.00 per hour and that of Maybank with ₱168. Ms. In this regard. with more reason that the same should be allowed to be considered and decided upon by the appellate court when. she proceeded to sign or execute the questioned Service Agreement with the respondent under the terms and conditions therein stated. which were a) that she had to abide by the company rules and regulations.7 Ruling of the NLRC On March 16. documents. c) that she had to Maxicare argues that questions on jurisdiction "may be raised at any stage of the proceedings. Contreras signed the Service Agreement on August 4. was prejudicial to her interest and amounted to a constructive dismissal.13 On the issue of whether or not Dr. and that Maxicare did not deduct SSS contributions from the retainer fees that Dr. b) that she would keep inviolate all company records. upon appeal. At that then. Accordingly. 2003. a Doctor. Hence. had the burden of proving that not only was her transfer made for valid or legitimate grounds." 11 and 5] Maxicare prescribed the conditions of work for her. Finding substantial basis to support the validity of the Service Agreement of August 4. 2003 entered into by the parties. the CA affirmed the conclusions reached by the NLRC. She did not.be that there present under the circumstance of a breach of contractual obligation under the previous undertaking which partakes the nature of constructive dismissal based on evidence at hand. the CA ruled that Maxicare could not raise the said issue for the first time on appeal. documents. immunized. would monitor her work. It declared that Dr. The clear economic prejudice validated her claim of having reservation on the Service Agreement prior to her signature. 3] Maxicare determined and prepared her work assignments. Consequent claim as relief therefor has no basis." that she was not in the list of Maxicare’s payroll. which resulted in a diminution of her salary. or prejudicial to her. premises considered. Maxicare filed this petition anchored on the following GROUNDS I THE COURT OF APPEALS. surrender upon request for. that it did not determine the manner in which she conducted physical examination. the present complaint for constructive dismissal must necessarily fail. the Decision appealed from is hereby REVERSED and SET ASIDE and a new one entered declaring complainant was illegally dismissed. Contreras in accomplishing her work as a medical retainer. The disadvantage she was referring to was the disparity in remuneration between the PNB retainership with ₱250. Contreras was constructively dismissed. On the issue regarding the existence or non-existence of an employer-employee relationship. its act of raising said issue should be sufficient ground for the CA to consider and rule on the issue of jurisdiction. Contreras for the following reasons: 1] Maxicare exercised significant control in her hiring and the conduct of her work. Not in conformity with the adverse decision. Hence.10 Ruling of the Court of Appeals On January 28. ERRONEOUSLY SET ASIDE. The NLRC explained that the "execution of a Service Agreement for another retainership with lower salary does not negate constructive dismissal arising from the termination of complainant’s PNB retainership without either just or authorized cause but simply is anchored on alleged complaints which even Dr. complainant should have at such point ventilated the matter before this forum. as in the present petition. like attending to PNB members needing medical consultation and performing such other duties as may be assigned by Maxicare to her from time to time. absent any showing that she was forced to execute the disputed service agreement of August 4." Maxicare likewise asserts that "if the issue on jurisdiction may be resolved by an appellate tribunal motu propio when the same has not been raised in the courts below. the NLRC rendered a decision 8 reversing and setting aside the LA’s decision. EVEN CONTRADICTED. diagnosed."9 Dr. which was for her to render services from 1:00 to 5:00 o’clock in the afternoon "every Tuesday and Thursday. even on appeal. that Dr. inconvenient. and e) that she was compensated not according to the result of her efforts. 16 Maxicare’s position SO ORDERED. 2010. 4] Maxicare determined her specific work schedules. In this case. respondents are hereby ordered to reinstate complainant to her former or substantially equivalent position and to pay her backwages from the time her PNB retainership was terminated until the finality of this Decision."17 Considering that Dr. the CA ruled that her transfer to Maybank. On the contrary. but attack it for lack of jurisdiction. As the object of the pleadings is to draw the lines of battle. the defense it raised pertained to the nature of respondents' employment. If Maxicare was of the position that there was no employer-employee relationship existing between Maxicare and Dr. petitioner changed its theory when it elevated the NLRC decision to the CA. in its Position Paper. if favorable. they strongly indicate a case of an independent contractor. the LA decision favored Maxicare when it ruled that there was no illegal dismissal. In brushing aside this defense. it remained silent on the issue of jurisdiction while actively participating in both tribunals. The Court’s Ruling The petition has no merit at all. questions challenging the jurisdiction of courts will not be tolerated if the party questioning such jurisdiction actively participates in the court proceedings and allows the court to pass judgment on the case. The Court cannot tolerate this kind of procedural strategy on Maxicare’s part because it would be unfair to Dr. It was definitely too late for Maxicare to open up the issue of jurisdiction in the CA. It is. On appeal. Maxicare’s lapse in procedure has proved fatal to its cause and therefore. Contreras who would no longer be able to present further evidence material to the new issue raised on appeal. 21 Therefore... and amounts to an acknowledgment that respondents were indeed employed by petitioner. however. Acosta. justice and due process. It would be unfair to the adverse party who would have no more opportunity to present further evidence. Indeed. et al.. Notably. estopped from assailing the jurisdiction of the LA and the NLRC. petitioner. On appeal before the NLRC. petitioner even presented the company's payroll which will allegedly prove its allegations. The appellate court. Inc. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory.. which it could have done had it been aware earlier of the new theory before the LA and the NLRC. therefore. either party could terminate the arrangement upon one month’s advance notice. a party’s active participation in the proceedings before a court without jurisdiction will estop such party from assailing the lack of it.20 Finally. We cannot permit petitioner to change its theory on appeal. Maxicare only raised the subject issue for the first time when it filed a petition in the CA challenging the adverse decision of the NLRC. willingly and voluntarily signed the new Medical Retainership Agreement. aptly refused to consider the new theory offered by petitioner in its petition. Maxicare brought up the matter for the first time only in the CA. admitted that respondents worked for it. Such allegations are negative pregnant . Points of law. Manolito Q. the NLRC reversed and set aside the LA’s decision and ordered Dr. and would offend the basic rules of fair play. issues and arguments not brought to the attention of the lower court need not be. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. and then questions the propriety of said judgment after getting an unfavorable decision. material to the new theory.22 Dr.19 Maxicare went on further by stating that Dr. In support of these allegations. it never did. Surprisingly. it actively participated in the LA proceedings without bringing to the LA’s attention the issue of employer-employee relationship. More so in this case as the supposed employer of respondent which is DFP was not and is not a party to the present case. v.1âwphi1 In the first place. in the LA level and second. By setting forth these defenses. It must be noted that Maxicare had two (2) chances of raising the issue of jurisdiction: first. there is no truth to her claim that she was forced to sign said agreement. when adverse. Contreras’s reinstatement with payment of backwages. i. Dr. Maxicare definitely knows the basic rule that the LA can exercise jurisdiction over cases only when there is an employer-employee relationship between the parties in dispute. in the NLRC level. a party cannot subsequently take a position contrary to.presence of employer-employee relationship." It is an undesirable practice of a party to participate in the proceedings. Maxicare contends that Dr. The Court has consistently held that "while jurisdiction may be assailed at any stage. Contreras filed a complaint for illegal dismissal against Maxicare before the LA. submit his case for decision and then accept the judgment. Maxicare is already estopped from belatedly raising the issue of lack of jurisdiction considering that it has actively participated in the proceedings before the LA and the NLRC.e. it should have questioned the jurisdiction of the LA right away. giving her free time to pursue her private practice as a physician and that upon the terms of their agreement. Surely. which it could have done had it been aware of it at the time of the hearing before the trial court. between the litigants. Contreras’s position On the other hand. Thus. Inc. Maxicare elevated its case to the CA raising the issue of jurisdiction for the first time. or inconsistent. so to speak. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. In Pamplona Plantation Company v. Obviously. Maxicare was given the chance to defend its case before the LA. Contreras basically counters that Maxicare did not raise the issue of the existence of an employer-employee relationship before the LA. it should suffer the consequences. that in the interest of fairness. It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below. with its pleadings. whether they are seasonal employees. contractors. and some worked under the pakyaw system. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view. and ordinarily will not be. Tria. the subject issue was never raised either. WCC. or worked under the pakyaw system. v. some are contractors. the Court held: x x x Petitioner is estopped from denying that respondents worked for it. Contreras. Contreras. Unfortunately. Undeniably. therefore. Upon the denial of its motion for reconsideration. The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. he will not be permitted to change his theory on appeal. in effect. it never raised this defense in the proceedings before the Labor Arbiter. Contreras was an independent contractor because she rendered services for a few hours a week. Maxicare never questioned the LA’s jurisdiction from the very beginning and never raised the issue of employer-employee relationship throughout the LA proceedings. theories. Also in Telephone Engineering & Service Co. It also did not question such point in the NLRC. .23 In the case at bench. the latest of which is Duty Free Philippines Services. The Court has been consistent in its ruling in a long line of cases. the Court held that the lack of employeremployee relationship is a matter of defense that the employer should properly raise in the proceedings below. and to indicate fairly the nature of the claims or defenses of both parties. will not be permitted to change theory on appeal. a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court.denials pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It is also true. considered by a reviewing court. To permit Maxicare in this case to change its theory on appeal would thus be unfair to Dr. it may be recalled that Dr. as these cannot be raised for the first time at such late stage. It is true that questions of jurisdiction may be raised at any stage. As a rule. some are seasonal employees who worked as scoopers or lugiteros. Instead. however. petitioner therein raised for the first time in its appeal to the NLRC that respondents therein were not its employees but of another company. Contreras is a highly educated person who freely. Maxicare is not unaware of Article 217 of the Labor Code which enumerates the cases where the LA has exclusive and original jurisdiction. In fact.24 where it was written: It was only in petitioner’s Petition for Certiorari before the CA did it impute liability on DFP as respondent’s direct employer and as the entity who conducted the investigation and initiated respondent’s termination proceedings. petitioner alleged that some of the respondents are coconut filers and copra hookers or sakadors. albeit in different capacities. petitioner insisted that respondent was dismissed from employment for cause and after the observance of the proper procedure for termination. 79. 17. Series of 1958 of Notary Public Fermin Samson executed by Carme[n] Galvez married to Luis Cruz in favor of Florentino San Luis. Bulacan. Bulacan docketed as Civil Case No. RESPONDENT. July 3. The respondent further argued that the Amended Complaint was prematurely filed due to the fact that the Certification to File Action was issued in violation of the prescribed procedure. prescription. respondent Reynaldo De Belen filed a Motion to Dismiss 7 dated 22 June 1998. they represent the heirs of Jose and Antonia A. However. vs. Book XXIV. RO-487 (997) registered in the name of the late Jose. involving a parcel of land covered by Original Certificate of Title (OCT) No.000 square meters). Book No. petitioner cannot now deny that respondent is its employee. the respondent. Record No. not due to the strict application of procedural rules. setting forth the following grounds: (1) lack of jurisdiction. (3) ambiguity as to the portion of the lot De Belen occupies. therefore. from Carmen Galvez to Florentino San Luis to Reynaldo De Belen on 4 June 1979. Petitioner is bound by its submissions that respondent is its employee and it should not be permitted to change its theory. more or less. married to Lucila Tinio and Apolonia Fernando. without their knowledge and permission.R.838 square meters of a parcel of land designated as Lot 1303-B per approved subdivision plan in Cad. 2013 HEIRS OF JOSE FERNANDO. averring that the complaint states a cause of action and respondent need not be confused because the estate under OCT No. with the trial court ordering herein petitioners to amend the complaint by indicating the details desired by the respondent in order for the latter to file a responsive pleading. 945.000. 180-M-98 to assert and defend their right over the subject property and for the respondent to In addition. 1979 executed by Florentino R. REYNALDO DE BELEN. location.994 square meters. San Luis married to Agripina Reyes in favor of defendant Reynaldo Santos de Belen. petitioner's belated denial that it is the employer of respondent is obviously an afterthought. thus. were co-owners pro-indiviso of the subject property and that as indicated in their demand letter. which is conclusive and binding and not subject to review by this Court. Jose and the latter’s sister.521 square meters). Instead of filing an Answer. 186366 The petitioners filed their Opposition8 on 17 July 1998. personal circumstances and relationship of the individual heirs of the decedent. 199.11 specifically questioning the legal basis for the complaint since the entire property appears to be co-owned by Jose and Antonia Fernando and it was not particularized in the complaint as to what specific portion belongs to each of the co-owners.00 and exemplary damages ofP20. open and public possession of said parcel of land. "Kasulatan Ng Pagbibiling Tuluyan Ng Tumana dated July 28. Branch 10 of Malolos City. judgment is hereby RENDERED: (a) Declaring as null and void and without legal force and effect the "Kasulatan Ng Pagbibilihang Tuluyan Ng Tumana" dated March 11. Consequently. but as a matter of fairness. the Amended Complaint10 with its attachment was filed to which the respondent moved for a Bill of Particulars. 788 submitted before the defunct CFI of Bulacan and granted in a Decision dated December 29. in his Answer. Although. herein respondent.00. estoppel and laches had set in as against the petitioners. they could not properly accomplish the partition due to the presence of the respondent who intruded into a portion of their property and conducted quarrying operations in its immediate vicinity for so many years. thus. In the said complaint. a barangay conciliation was resorted to. before the RTC. petitioners nonetheless advanced that Antonia Fernando predeceased her brother Jose and she died without issue. Fernando. vacate the premises and pay rental arrearages in the amount of P24. Bulacan. (2) lack of cause of action. he has been in exclusive. wrote a letter5 dated 8 April 1997 to the respondent which was unheeded. J. [Emphases supplied] WHEREFORE.00 dated 19 June 1979. and the receipt for the purchase price of P60. her undivided share was consolidated with that of her brother.760 square meters). Antonia A. and. 41. Finding lack of merit. He asserted that from the date of his purchase.000. Trial on the merits ensued which eventually resulted in the 28 October 2005 Decision of the RTC which is favorable to the petitioners. No. Also. entered as Doc. (4) incomplete statement of material facts. CV No. location and area of the lot sought to be recovered. continuous. Such change of theory cannot be tolerated on appeal. Series of 1979 covering 9. both deceased many years ago. 180-M-98. It is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below. and "Kasulatan Ng Bilihang Tuluyan Ng Lupang Tumana" dated June 04. 1958. which is situated in Baliuag. Page No. G. wife of Felipe Galvez. the petition is DENIED.The determination of this relationship involves a finding of fact. RO-487 (997) is actually known as Psu39080 with an area of 124.994 square meters divided into Lot 1 (80. Lot 2 (22. 87588. the complaint having failed to state the identity. Fernando. While indeed. a Certification 6 was issued by the Barangay Lupon that led to the filing of the complaint before the RTC of Malolos. . PETITIONERS. Branch 10 of Malolos.000. Thus: IN VIEW OF THE FOREGOING. it was alleged that petitioners are the children of the late Jose and they are in the process of partitioning their inheritance. Likewise. For failure of the respondent to appear. and Lot 3 (21. a devise to defeat the law and evade its obligations. SO ORDERED. Bulacan. setting aside the 28 October 2005 Decision2 of the Regional Trial Court (RTC). Page 59. DECISION PEREZ. The Facts This case emanated from a complaint for Recovery of Possession 3 filed on 6 March 1998 by the petitioners against Reynaldo De Belen. attorney’s fees of P10.00 In this case. registered as Doc. On 12 February 1999. No. a matter of proof to be presented in the course of the trial. Case No.: This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks the reversal of the 11 February 2009 Decision1 of the Court of Appeals in CA-G. which rendered a favorable finding for the petitioners in a complaint for recovery of possession docketed as Civil Case No. the motion was denied in an Order 9 dated 3 November 1998. No. but ventilated for the first time only in a motion for reconsideration or on appeal. The respondent likewise insisted on his right of possession over the subject property as evidenced by the successive transfer from Felipe Galvez to Carmen Galvez on 11 March 1955.12 claimed that even the Bill of Particulars13 did not clearly show the exact identity.000. petitioners also stated that their father. jurisdiction cannot be conferred by acts or omission of the parties. 1929. 4 Petitioners.R. area and size of the subject property. consisting of 124. 1955 executed by Felipe Galvez in favor of Carmen Galvez. (b) therefore, did not acquire jurisdiction over instant action. The Amended Complaint does not state a valid cause of action.18 Ordering the reconveyance of the disputed subject property in question including all improvements thereon as above-described by the defendant to the plaintiffs herein; (c) Ordering the defendant to pay plaintiffs the amount of P10,000.00 a month from March 06, 1998 with legal interest until the subject property is actually returned to the plaintiffs; Facially, the above disposition finds support from the provisions of Republic Act 7691 (RA 7691), 19 the law in effect when the case was filed. Section 1 of RA 7691, amending Section 19 of Batas Pambansa Bilang 129, pertinently states: "Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: "Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction. (d) Ordering the defendant to pay plaintiffs the amount of P10,000.00 as attorney’s fees; (e) Ordering the defendant to pay plaintiff’s the costs of suit. 14 Aggrieved, respondent appealed to the Court of Appeals raising the issues on jurisdiction for failure of the petitioners to state the assessed value of the subject property, absence of evidence proving the lawful ownership of the petitioners and the grant of affirmative reliefs which were not alleged or prayed for. On 11 February 2009, the Court of Appeals issued the assailed decision setting aside the decision of the RTC for want of jurisdiction and declaring further that the Amended Complaint must be dismissed. Hence, the petition at bench seeking the reversal of the aforementioned decision. The Issue The core issue for resolution is whether or not the Court of Appeals committed reversible error in holding that the RTC did not acquire jurisdiction for failure to allege in the complaint the assessed value of the subject property. Our Ruling The general rule is that the jurisdiction of a court may be questioned at any stage of the proceedings. 15 Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if they were not raised in the answer or in a motion to dismiss.16 So that, whenever it appears that the court has no jurisdiction over the subject matter, the action shall be dismissed. This defense may be interposed at any time, during appeal or even after final judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not within the courts, let alone the parties, to themselves determine or conveniently set aside. 17 A reading of both the complaint and the amended complaint shows that petitioners failed to state the assessed value of the disputed lot. This fact was highlighted by the Court of Appeals when it ruled: Instant complaint for Recovery of Possession failed to specify the assessed value of the property subject matter of the action. "What determines the nature of the action as well as which court has jurisdiction over it are the allegations of the complaint and the character of the relief sought." (Bejar, et. al. v. Caluag, G.R. No. 171277, February 12, 2007). The allegations in the complaint and the relief sought by the party determine the nature of the action if the title or designation is not clear. The complaint, in the case at bar, is bereft of any allegation which discloses the assessed value of the property subject matter thereof. The court a quo "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x x. Thereby guided, the Court of Appeals no longer dwelt on the other issues and matters raised before it.1âwphi1 Jurisprudence has it that in a petition for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be raised.20 As held in the case of Solmayor v. Arroyo,21 it is not the function of this Court to analyze and weigh evidence all over again. This is premised on the presumed thorough appreciation of the facts by the lower courts. Such that, when the trial court and the appellate court, as in this case, reached opposite conclusions, a review of the facts may be done. There is a permissible scope of judicial review on the factual findings of the lower courts as crystallized in Treñas v. People of the Philippines, 22 where the Court cited contradictory findings of the Court of Appeals and the trial court as one of the instances where the resolution of the petition requires a review of the factual findings of the lower courts and the evidence upon which they are based. So too are we reminded that procedural rules are intended to ensure the proper administration of law and justice and the rules of procedure ought not to be applied in a very rigid sense, for they are adopted to secure, not override, substantial justice.23 We, accordingly, review the records of this case and note the facts and evidence ignored by the appellate court. We observe that at the initial stage of this case when the respondent questioned the jurisdiction of the RTC in a Motion to Dismiss, he solely assailed the vagueness of the complaint for failure to allege the specific identity of the subject property and for being prematurely filed. The trial court in its 3 November 1998 Order, settled the issue by declaring that the allegations in the complaint make out for a case of recovery of ownership and that the petitioners need not wait for the lapse of one year from the 8 April 1997 demand letter to maintain the accion reinvidicatoria. The trial court went on to explain that the complaint clearly gives the defendant, herein respondent, notice of their exclusive and absolute claim of ownership over the entire property covered by the OCT No. RO-487 (997). From the said Order, the respondent never raised any objection and did not even opt to elevate the matter to a higher court via a certiorari case which is a remedy for the correction of errors of jurisdiction. If indeed respondent was not convinced of the trial court’s ruling, he could have availed of such remedy which is an original and independent action that does not proceed from the trial that would lead to the judgment on the merits. As aptly cited in the case of New Frontier Sugar Corporation v. RTC, Branch 39, Iloilo City,24 when the issue is jurisdiction, an original action for certiorari may be directed against an interlocutory order of the lower court prior to an appeal from the judgment. On the contrary, the respondent acquiesced to the 3 November 1998 Order of the trial court for him to file his Answer,25 whereby, he asserted ownership over the portion of the subject property which he occupied. He attached the following proof of his ownership, to wit: a) Deed of Absolute Sale by Felipe Galvez in favor of Carmen Galvez dated 11 March 1955;26 b) Deed of Absolute Sale by Carmen Galvez in favor of Florentino San Luis dated 28 July 1958;27 c) Deed of Absolute Sale by Florentino San Luis in favor of Reynaldo Santos De Belen dated 4 June 197928 and the corresponding receipt of the purchase price of P60,000.00 dated 19 June 1979.29 When the pre-trial conference was concluded, the trial court issued several Pre-Trial Orders, 30 specifying the identity and coverage of the subject property being claimed by the petitioners as well as that portion occupied by the respondent, simplification of facts involved, and the issues which primarily centered on the validity of the transfer or disposition made by Felipe Galvez of the paraphernal property of his wife Antonia Fernando from which transfer the respondent succeeded his right over the portion he occupied. During the trial, the petitioners were able to prove that indeed they are the rightful heirs of Jose and Antonia Fernando and that they have right of ownership over the property covered by OCT No. RO-487 (997) as described in Plan Psu-39080 of Lots 1302-B and 1303 prepared by Geodetic Engineer Alfredo C. Borja on 15 September 1997.31 It was also proved through the admission of the respondent that he has been occupying a portion of Lot 1303 which is the Sapang Bayan, the old river, titled in the name of Jose and Antonia Fernando. Thus, it was ruled that the Deed of Sale in respondent’s favor which was traced from the transfer made by Felix Galvez on 11 March 1955, without any participation of Antonia Fernando was likewise without any settlement of property between the said husband and wife and the property remained to be the paraphernal property of Antonia. Consequently, the trial court declared that the sale between Felipe Galvez and Carmen Galvez and its subsequent transfers are void ab initio, as Felipe Galvez was neither the owner nor administrator of the subject property.1âwphi1 "16. That the defendant’s ownership and possession over the parcel of land ought to be recovered by the plaintiff is valid and legal as evidenced by the following: 35 xxxx (c) Deed of Absolute Sale by Florentino San Luis in favor of Reynaldo Santos de Belen dated June 4, 1979 (Annex "3" hereof)36 and the corresponding receipt of the purchase price of P60,000.00 dated June 19, 1979 (Annex "4" hereof)."37 thereby showing that way back in 1979 or nineteen (19) years before this case was instituted, the value of the property was already well covered by the jurisdictional amount for cases within the jurisdiction of the RTC. WHEREFORE, we GRANT the petition and REVERSE the assailed Decision of the Court of Appeals. The Regional Trial Court Decision is AFFIRMED. Let the records of this case be remanded to the RTC, Branch 10, Malolos, Bulacan for execution. SO ORDERED. Further, the trial court went on to state that respondent has not proved his status as a purchaser in good faith and for value taking cue from the facts and circumstances as well as the numerous entries found at the dorsal sides of OCT No. RO-487 (997) which should have put any of the buyers on guard. After the entire proceedings fully participated in by the respondent, he cannot be allowed to question the result as having been rendered without jurisdiction. This is the teaching in Tijam v. Sibonghanoy, et al. 32 as reiterated in Soliven v. Fastforms Philippines, Inc.,33 where the Court ruled: "While it is true that jurisdiction may be raised at any time, "this rule presupposes that estoppel has not supervened." In the instant case, respondent actively participated in all stages of the proceedings before the trial court and invoked its authority by asking for an affirmative relief. Clearly, respondent is estopped from challenging the trial court’s jurisdiction, especially when an adverse judgment has been rendered." (Italics ours) 34 Similarly, as this Court held in Pantranco North Express, Inc. v. Court of Appeals, participation in all stages of the case before the trial court, that included invoking its authority in asking for affirmative relief, effectively barred the respondent by estoppel from challenging the court’s jurisdiction. The Court has consistently upheld the doctrine that while jurisdiction may be assailed at any stage, a litigant who participated in the court proceedings by filing pleadings and presenting his evidence cannot later on question the trial court’s jurisdiction when judgement unfavorable to him is rendered. Moreover, and of equal significance, the facts of this case demonstrate the inapplicability of RA 7691. The argument of respondent that the assessed value of the subject property places the case outside the jurisdiction of the Regional Trial Court is belied by respondent’s own Answer which states that: xxxx G.R. No. 176838 June 13, 2013 DEPARTMENT OF AGRARIAN REFORM, as represented by Fritzi C. Pantoja, in her capacity as the Provincial Agrarian Reform Officer, DAR-Laguna, Petitioner, vs. PARAMOUNT HOLDINGS EQUITIES, INC., JIMMY CHUA, ROJAS CHUA, BENJAMIN SIM, SANTOS C. TAN, WILLIAM C. LEE and STEWART C. LIM, Respondents. DECISION REYES, J.: This resolves the Petition for Review1 filed by petitioner Department of Agrarian Reform (DAR) to assail the Decision2 dated Oct8ber 12, 2006 and Resolution3 dated January 10, 2007 of the Court of Appeals (CA) in CAG.R. SP No. 89693, which granted Paramount Holdings Equities, Inc., Jimmy Chua, Rojas Chua, Benjamin Sim, Santos C. Tan, William C. Lee and Stewart C. Lim's (respondents) appeal from the rulings of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 12284. The Antecedents otherwise, jurisdiction lies on the Regional Trial Court acting as Special Agrarian Court as clearly provided by law.8 (Underscoring ours) The case stems from the petition4 docketed as DARAB Case No. R 0403-0009-02, filed with the Office of the Provincial Adjudicator (PARAD) by the DAR through Provincial Agrarian Reform Officer (PARO) Felixberto Q. Kagahastian. The petition sought to nullify the sale to the respondents of several parcels of land, with details of the sale as follows: Vendee Title No. Area Covered New Title Vendor Jimmy C. Chua and Rojas Chua T-37140 71,517 square meters T-196706 Golden Mountain Agricultural Development Corporation Paramount Holdings Equities, Inc. T-37141 14,634 sq m T-196705 Golden Mountain Agricultural Development Corporation Paramount Holdings Equities, Inc. T-37139 17,203 sq m T-196704 Golden Mountain Agricultural Development Corporation William C. Lee and Steward C. Lim T-37137 68,078 sq m T-196707 Green Mountain Agricultural Development Corporation Benjamin Sim and Santos C. Tan T-37138 66,114 sq m T-196708 Green Mountain Agricultural Development Corporation The PARO argued that the properties were agricultural land yet their sale was effected without DAR Clearance as required under Republic Act No. 6657 (R.A. No. 6657), otherwise known as the Comprehensive Agrarian Reform Law (CARL). Allegedly, the PARO came to know of the transactions only after he had received a directive from the Secretary of Agrarian Reform to investigate the matter, following the latter’s receipt of a letter-request from persons5 who claimed to be the tenant-farmers of the properties’ previous owners. 6 The respondents opposed the petition, contending that since the matter involves an administrative implementation of R.A. No. 6657, the case is cognizable by the Secretary of Agrarian Reform, not the DARAB. They also sought the petition’s dismissal on the grounds of prescription, litis pendentia, res judicata and forum shopping. The Ruling of the PARAD On October 16, 2002, Provincial Adjudicator Virgilio M. Sorita (PA Sorita) issued a Resolution 7 dismissing the petition for lack of jurisdiction. He explained: Petitioner further argued that the jurisdiction of the Department of Agrarian Reform Adjudication Board includes and is not limited to those involving sale, alienation, mortgage, foreclosure, preemption and redemption of agricultural lands under the coverage of CARP or other agrarian laws. These provisions were originally lifted from Presidential Decree 946. The emphasis is on the phrase under the coverage of CARP or other agrarian laws which definitely refers to land already placed under the Comprehensive Agrarian Reform Program under R.A. 6657, lands already placed under Presidential Decree 27, landed estate acquired by Land Bank of the Philippines and administered by the Department of Agrarian Reform pursuant to the Provision of R.A. 3844 as amended and lands under the Settlement and Resettlement Project also administered by the Department of Agrarian Reform for the simple reason that disputes and controversies arising from these areas are agrarian reform matters. It does not include the sale, disposition or alienation of private lands not administered by the DAR to private individuals such as in this instant case. Petitioner also argued that jurisdiction of the Adjudication Board also covers violation of the Rules and Guidelines in the implementation of the Comprehensive Agrarian Reform Program. This is true but such violation is only confined to violations committed by beneficiaries of the program not like in the instant case, Furthermore, PA Sorita cited the absence of any showing that the petition was filed with the knowledge and authority of the Solicitor General, as the official counsel of the government being the aggrieved party in the dispute. The DAR’s motion for reconsideration was denied, prompting the filing of an appeal with the DARAB. The Ruling of the DARAB The DARAB granted the appeal via a Decision 9 dated August 18, 2004. The dispositive portion of the Decision reads: WHEREFORE, premises considered, the assailed Decision is hereby REVERSED and/or SET ASIDE. A new judgment is rendered nullifying the Deeds of Sale in question dated September 5, 1989 and ordering the Register of Deeds of Laguna to cancel the aforesaid Deeds of Sale, as well as the Transfer Certificates of Title issued to the respective private respondents concerned. SO ORDERED.10 Contrary to the findings of PA Sorita, the DARAB ruled that: first, the failure of the parties to the sale to obtain the required clearance indicates that their transactions were fraudulent; 11 second, the PARO had the personality to file the petition even in the absence of the Solicitor General’s assistance, citing Memorandum Circular No. 2, series of 2001 (Circular No. 2), and the policy of DAR to "acquire and distribute all lands covered by RA 6657, including those subject of illegal transfers x x x"; 12 and third, the DARAB has the jurisdiction over the case, since its jurisdiction under Circular No. 2 covers the cancellation of deeds of conveyance and corresponding transfer certificates of title over agricultural lands. 13 The denial14 of the respondents’ motion for reconsideration led to the filing of a petition with the CA. The Ruling of the CA On October 12, 2006, the CA rendered the assailed Decision, 15 the dispositive portion of which reads: WHEREFORE, the instant petition is GRANTED. The appealed Decision (dated August 18, 2004) and Resolution (dated March 16, 2005) of the Department of Agrarian Reform Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City are ANNULLED and SET ASIDE. The Petition in DARAB Case No. R0403-0009-02 is hereby DISMISSED. No pronouncement as to costs. SO ORDERED.16 The CA emphasized that the DARAB’s jurisdiction over the dispute should be determined by the allegations made in the petition. Since the action was essentially for the nullification of the subject properties’ sale, it did not involve an agrarian suit that is within the DARAB’s jurisdiction. DAR’s motion for reconsideration was denied in a Resolution 17 dated January 10, 2007. Hence, this petition. The Present Petition The Court has issued on June 6, 2007 a Resolution 18 denying the petition on the following grounds: (a) DAR’s failure to attach proof of service of the petition upon the CA as required by Section 3, Rule 45 in relation to Section 5(d), Rule 56 of the Rules of Court; (b) the DAR’s failure to accompany the petition with clearly legible duplicate original or certified true copies of the assailed CA decision and resolution, in violation of Sections 4(d) and 5 of Rule 45, in relation to Section 5(d) of Rule 56; (c) the petition was prepared by the DAR Region 1994 and came into effect on June 21. disputes. whether natural or juridical. The PARO’s petition merely states: 3. h) And such other agrarian cases. Basic is the rule that the "jurisdiction of a tribunal. determine and adjudicate all agrarian cases and disputes. No. matters or concerns referred to it by the Secretary of the DAR. nor a categorical statement or allegation as to a determined tenancy relationship by the PARO or the Secretary of Agrarian Reform. as they read: SECTION 1. Jurisdiction of the Regional and Provincial Adjudicator. both original and appellate. (Emphasis supplied) Consistent with the aforequoted legal provisions. The limitation on the authority of it to mere agrarian reform matters is only consistent with the extent of DAR’s quasi-judicial powers under R. No. and shall have exclusive original jurisdiction over all matters involving implementation of agrarian reform. f) Those involving the issuance. No. or connected with membership or representation in compact farms. after it filed its compliance and the OSG. cultivation and use of all agricultural lands covered by the CARP and other agrarian laws. following its failure to file the required reply despite the Court’s grant of its several motions for extension. 6389. 21 The main issue for the Court’s resolution is: Whether or not the DARAB has jurisdiction over the dispute that seeks the nullification of the subject properties’ sale. over lands devoted to agriculture. or lessor and lessee. Executive Order Nos. to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. Primary and Exclusive Original and Appellate Jurisdiction. 6657.O.A. 22 Significantly. No. SECTION 17 [of E. tenancy. 6657].O. 229 and E. 229]. amortization payments.IV-Legal Assistance Division without the concurrence of the Office of the Solicitor General (OSG). farmers’ cooperatives and other registered farmers’ associations or organizations. No. Quasi-Judicial Powers of the DAR. including a quasi-judicial office or government agency. and incidents in connection therewith. including disputes concerning farmworkers associations or representation of persons in negotiating. otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules shall be the exclusive prerogative of and cognizable by the Secretary of the DAR. such jurisdiction shall include but not be limited to cases involving the following: a) The rights and obligations of persons. 815. 6657. No. 1994."24 Upon the Court’s perusal of the records. reinstate the petition. SECTION 2.) No.O. 2007.3 That the Provincial Office only came to know very recently about such transaction when the Office received on two separate occasions a memorandum directive dated 22 October and 25 April 2002 from the Office of the DAR Secretary to investigate and if warranted file a corresponding petition for nullification of such transaction anent the petition for coverage of the actual occupants farmers-tillers led by spouses Josie and . changing or seeking to arrange terms or conditions of such tenurial arrangements.—The DAR is hereby vested with quasijudicial powers to determine and adjudicate agrarian reform matters. mortgage. except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture (DA). as it was created under Executive Order (E. b) The valuation of land.20 On April 20. Presidential Decree No. disturbance compensation.A. whether the disputants stand in the proximate relation of farm operator and beneficiary. e) Those involving the sale. 228. c) The annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under the administration and disposition of the DAR or LBP.—The DAR is hereby vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). This Court’s Ruling The Court answers in the negative. On October 15. alienation. which was adopted and promulgated on May 30. Specifically. its appearance and manifestation that it was adopting the petition and motion for reconsideration filed by DAR. 2008. Rule II of the DARAB New Rules of Procedure. related to lands covered by the CARP and other agrarian laws. 6657 and E. except sub-paragraph (q) thereof and Presidential Decree No. pre-emption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws. Quasi-Judicial Powers of the DAR. and (d) the petition failed to sufficiently show that the appellate court committed any reversible error in the challenged decision and resolution as to warrant the exercise by the Court of its discretionary appellate jurisdiction. and similar disputes concerning the functions of the Land Bank of the Philippines (LBP).A. over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. fixing. arising within their assigned territorial jurisdiction. Del Rosario23that the jurisdiction of the PARAD and the DARAB is only limited to cases involving agrarian disputes. identify the specific extent of the DARAB’s and PARAD’s jurisdiction. we emphasized in Heirs of Candido Del Rosario v. foreclosure.O. Thus. fixing and collection of lease rentals. 946. 27 and other agrarian laws and their implementing rules and regulations. It includes any controversy relating to compensation of lands acquired under R.19 the Court resolved to grant DAR’s motion to reconsider the dismissal. Sections 1 and 2. It is understood that the aforementioned cases.A. stewardship or otherwise. 6657 and other terms and conditions of transfer of ownership from landowners to farmworkers. 3844 as amended by Republic Act No. the Court resolved to grant DAR’s motion for reconsideration and accordingly.O. it has determined that the PARO’s petition with the PARAD failed to indicate an agrarian dispute. 229 and 129-A. Specifically. the Court again resolved to deny the petition on the ground of the OSG’s failure to obey a lawful order of the Court. Matters involving strictly the administrative implementation of Republic Act No. correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority. 2009. complaints or petitions were filed with the DARAB after August 29. 129-A specifically to assume powers and functions with respect to the adjudication of agrarian reform cases under E. 1987. it was organized under the Office of the Secretary of Agrarian Reform. 229. On December 10.—The Board shall have primary and exclusive jurisdiction. 129-A.—The RARAD and the PARAD shall have concurrent original jurisdiction with the Board to hear. g) Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations under Section 12 of Presidential Decree No. No. Although it mentioned a pending petition for coverage filed with DAR by supposed farmers-tillers. whether leasehold. including incidents arising from the implementation of agrarian laws. maintaining. Section 3(d) of R. there was neither such claim as a fact from DAR. tenants and other agrarian reform beneficiaries. landowner and tenant. The jurisdiction of the DARAB is limited under the law. 6657 defines an agrarian dispute in this manner: (d) Agrarian dispute refers to any controversy relating to tenurial arrangements. engaged in the management. and the preliminary determination and payment of just compensation. Republic Act No. d) Those cases arising from. which read: SECTION 50 [of R. the PARO’s petition failed to sufficiently allege any tenurial or agrarian relations that affect the subject parcels of land. Lourdes Samson who informed the Office of the DAR Secretary about such transaction." (Suarez vs." (Section 3 (d). 2004 on the authority of the PARO to file petitions with the PARAD in case of illegal transfers presupposes the fulfillment of the conditions in the cited Section 1. alienation. 2003. for prosecution of the appeal. The records indicate that when the matter was elevated to the CA via the petition docketed as CA G. that even the petition filed with the PARAD failed to indicate otherwise. Laguna. Our finding on the DARAB’s lack of jurisdiction over the PARO’s petition renders it needless for the Court to discuss the other issues that are raised in the petition. 89693 are AFFIRMED. SP No. In the event of an adverse decision or a denial of the petition. pre emption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws. Given the foregoing. The pertinent provisions of Circular No. hence. an appeal from the decision of the Municipal Trial Court of Santa Rosa. The CA reversed and set aside the Decision 3 dated 26 April 2005 of the Department of Agrarian Reform and Adjudication Board (DARAB) and reinstated the Decision4 dated 2 January 2002 of the Provincial Agrarian Reform and Adjudication Board (PARAB). shall have the following responsibilities: xxxx 2. x x x 25 (Emphasis ours) 6657 and Section 1. the CA correctly ruled that the DARAB had no jurisdiction over the PARO’s petition. over lands devoted to agriculture. b) The Chief.: Before us is a Petition for Review on Certiorari 1 of the Decision2 dated 24 September 2009 issued by the Court of Appeals (CA) in CA-G. In any case. the DARAB’s jurisdiction over such disputes is limited by the qualification under Rule II. Laguna of Civil Case No. While the Court recognizes the legal requirement for clearances in the sale and transfer of agricultural lands. e) Those involving the sale. 68110 reads in part: As to the nature of the subject lands. 27 (Emphasis ours) It is also undisputed. Thus. as certified by the Municipal Agrarian Reform Office of Sta. 2002 in CA-G. the respondents correctly argued that since the subject properties were already classified as "industrial" long before the effectivity of the CARL. mortgage. 27. fixing. Chapter XII. the subject lands are outside the ambit of existing agricultural tenancy laws. the annual receipts for real estate taxes paid. Bureau of Agrarian Legal Assistance (BALA). 2478. 2 cited in the Decision26 dated August 18. Clearly. As legal basis therefor. which read: c) The annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under the administration and disposition of the DAR or LBP. premises considered. Laguna. 2013 RODULFO VALCURZA AND BEATRIZ LASAGA. SP No. providing for the Town Comprehensive Land Use Plan of Sta.R. Thus. PETITIONERS. file a petition for annulment of the deed of conveyance in behalf of the PARO before the Provincial Agrarian Reform Adjudicator (PARAD). for being industrial in nature. As the CA correctly ruled: It is easily discernable x x x that the cause of action of the DAR sufficiently established a suit for the declaration of the sale of the subject landholdings null and void (in violation of Administrative Order No. Series of 1989). The Decision dated October 12. tenancy. xxxx 6. AND SPOUSES HENRY MEDIO AND ROSALINDA ALOLHA. 1981. vs. Clearly. ATTY. 1991 that the zoning ordinance referred to was approved on December 2. whether leasehold.28 (Citations omitted) Even Circular No. paragraphs (c) and (e). the petition shall cite Section 50 of RA 6657 and Rule II. including disputes concerning farmworkers associations or representation of persons in negotiating. SPOUSES ALLAN VALCURZA AND GINA LABADO. SPOUSES ADELARDO VALCURZA AND PRISCILLA LAGUE. SP No. the tax declarations of real property.R. 473 SCRA 628). Rule II. SPOUSES MARIO VALCURZA AND EDITHA MARBA. SO ORDERED. SP No. (Emphasis ours) Even during the proceedings before the PARAD. SPOUSES RONALDO GADIAN & JULIETA TAGALOG. B-5862. Chapter I in relation to Section 50. file a Notice of Appeal within the 15-day reglementary period with the DARAB. SPOUSES LORETO NAELGA AND REMEDIOS DAROY. not every sale or transfer of agricultural land would warrant DARAB’s exercise of its jurisdiction. SPOUSES VERGILIO VALCURZA AND ROSARIO SINELLO. stewardship or otherwise. an allegation to declare null and void a certain sale of a landholding does not ipso facto make the case an agrarian dispute. Obviously. Here. . DAR failed to refute said allegation. their sale could not have been covered by the CARP and the requirement for a clearance. CIRILA PANTUHAN. SPOUSES PATRICIO EBANIT AND OTHELIA CABANDAY. Moreover. Saul. nor are the same covered by Operation Land Transfer pursuant to P. maintaining. it does not involve an agrarian suit. TAMPARONG. SPOUSES CARMEN MAGTRAYO AND MEDIO MAGTRAYO. Legal Division. of the Provincial Agrarian Reform Office.R. thereafter. which the Court finds duly supported by documents that form part of the case records. DECISION SERENO. Rosa. 1. JR. the appellate court declared the subject properties to have long been reclassified from "agricultural" to "industrial".D. changing or seeking to arrange terms or conditions of such tenurial arrangements. Operating Procedures. the petition is DISMISSED. RESPONDENT. Thus.—The procedures for annulment of deeds of conveyance executed in violation of RA 6657 are as follows: The Housing Land Use Regulatory Board has affirmed through a Certification 30 dated May 22. the CA Decision dated September 23. 2006 and Resolution dated January 10. Significantly. WHEREFORE.R. the Court finds it worthy to discuss that the original petition remains dismissible on the merits. which were claimed in the petition to be agricultural. it is necessary that the controversy must relate to "tenurial arrangements. Rule II of the DARAB Rules and Section 50 of R. SPOUSES DANIEL VALCURZA AND JOVETA RODELA. does not fall under the jurisdiction of the DARAB. 01244-MIN. G. 68110. No.A. The law is specific that the property must be shown to be under the coverage of agrarian reform laws. Section 1. No. 29 SECTION 4. 189874 September 4. foreclosure. SPOUSES EMPERATREZ VALCURZA AND ENRIQUE VALCURZA. paragraphs (c) and (e) of the DARAB New Rules of Procedure. Section 1(c) and (e) of the DARAB New Rules of Procedure. the respondents have raised the pendency with the Regional Trial Court of Biñan. there is no record of tenancy or written agricultural leasehold contract with respect to the subject lands. SPOUSES ROLDAN JUMAWAN AND RUBY VALCURZA. The petition shall state the material facts constituting the violation and pray for the issuance of an order from the PARAD directing the ROD to cancel the deed of conveyance and the TCT generated as a result thereof. and zoning ordinance. Also. SPOUSES VICTOR VALCURZA AND MERUBELLA BEHAG. Rosa. If there was illegal transfer. It must be emphasized that. DARAB Rules of [Procedure]). SPOUSES ABNER MEDIO AND MIRIAM TAGALOG. 6657. CASIMIRO N. "(t)here must be a tenancy relationship between the party litigants for the DARAB to validly take cognizance of a controversy. CJ.R. transmit the records of the case to the Director. 2007 of the Court of Appeals in CA-G.A. and. have always classified the lands as "industrial". 2 read: An appeal from the CA’s decision was denied by the Court in a Resolution dated June 18.. R. that the subject parcels of land had not been the subject of any notice of coverage under the Comprehensive Agrarian Reform Program (CARP). Laguna in Civil Case No. the PARO’s cause of action was merely founded on the absence of a clearance to cover the sale and registration of the subject parcels of land. de Vera on 9 October 2000. Othelia Cabanday.Resolution No. Emperatrez Valcurza. Series of 1997. Allan Valcurza. Jr. we required respondent to comment. 1100.15 In the Complaint filed with the Provincial Adjudication Reform and Adjudication Board (PARAB) of Misamis Oriental on 6 July 2001. the Resolution and Zoning Ordinance reclassifying the land from agricultural to industrial was not shown to have been approved by the Housing and Land Use Regulatory Board (HLURB) or cleared by the DAR as required by DAR Administrative Order No.) No.27 In a Resolution dated 11 January 2010. premises considered. 51-98. this Petition. Editha Marba. from the disputed landholding and to surrender their possession thereof to the plaintiff. 10 As a result.7 The Sangguniang Bayan of Villanueva. 18 The dispositive portion of the Decision is as follows: WHEREFORE. its authority to cancel CLOAs is based on the ground that the land was found to be exempted or excluded from CARP coverage by the DAR Secretary or the latter’s authorized representatives. It was also covered by Presidential Proclamation No. Miriam Tagalog. 00102751 over the land in favor of Rodulfo Valcurza.classifying respondent’s land from agricultural to industrial. which were in force at the time of the filing of the complaint. Series of 1982 had reclassified Lot No. E-4640. 2. Ruby Valcurza. 1. happened before the survey plan was approved by the DENR. Decision is hereby rendered in favor of the plaintiff Casimiro N. 51-98. which ruled that the annulment of duly registered CLOAs with the Land Registration Authority falls within the exclusive jurisdiction of the DARAB and not of the regional director. Series of 1982 . and 3. Joveta Rodela. Henry Medio. Petitioners claim that respondent’s complaint before the PARAB concerns the DAR’s implementation of the agrarian law and implementation of CLOA as an incident thereof. The immediate annulment and cancellation of CLOA No. Julieta Tagalog. 23 The PARAB had no jurisdiction. never unequivocally stated that all the landholdings within the PHIVIDEC area had been classified as industrial. Ronaldo Gandian.16 The PARAB declared that Comprehensive Zoning Ordinance No. This ruling is consistent with the power of local governments to reclassify lands through a local ordinance. the DARAB held that the identification of lands that are subject to CARP and the declaration of exemption therefrom are within the exclusive jurisdiction of the DAR Secretary. Rosario Sinello. and dismissed the complaint for lack of merit. Tamparong. 00102751 and Cancellation of OCT No.O.32 Section 50 of Executive Order (E. 34 The DARAB’s New Rules of Procedure issued in 1994. The jurisdiction of a court or tribunal over the nature and subject matter of an action is conferred by law. Series of 1982. As the PARAB exercised delegated authority from the DARAB. It held that the complaint was not a protest or an application for exemption. 2252 from agricultural to industrial land prior to the effectivity of the Comprehensive Agrarian Reform Law. Cirila Pantuhan. the issues or questions that are the subject of the controversy. provide. Jr. The cancellation of Subdivision Plan Bsd-10-002693 (AR). respondent filed a Complaint for Annulment of Certificate of Land Ownership Award No.411 square meters of land were collectively designated as Lot No. The 276. which he did. and was thus exempted from CARP coverage. the DARAB concluded that the DAR Secretary had exclusive jurisdiction over the matter. Misamis Oriental. 123. in connection with. et al. The ejectment of the sixteen (16) private-defendants farmer beneficiaries led by Sps. Misamis Oriental. (respondent) is the registered owner of a landholding with an area of 412.Casimiro N.20 Hence. by the PHIVIDEC Industrial Authority Certification that the land is outside the industrial area of PHIVIDEC. Misamis Oriental allegedly passed a Comprehensive Zoning Ordinance . 28 Upon noting his Comment. Misamis Oriental.22 Thus. 00102751 and OCT No. in pertinent part: . Carmen Magtrayo. and by reason of the fraudulent and perjured coverage of the disputed land by the DAR. the DARAB reversed the PARAB. 30 The court or tribunal must look at the material allegations in the complaint. the dispute must be addressed and resolved by the said court or tribunal. Daniel Valcurza. The Resolution denied respondent’s protest because Zoning Ordinance No. and by the letter of the Deputized Zoning Administrator of Villanueva. 26 Moreover. issued a letter to the Municipal Agrarian Reform Office (MARO) stating that Lot No. Tamparong.21 Dissatisfied. Vergilio Valcurza. PHIVIDEC certified that the same lot is located outside the PHIVIDEC Industrial Estate. Merubella Behag. Series of 1997. and Rosalinda Alolha (petitioners). 0-363 6 pursuant to a judicial decree rendered on 24 June 1962. We rule in the negative. Loreto Naelga. Also. Furthermore. and all other derivative titles that may have been issued pursuant to. 51-98.19 On appeal. 229 vests the DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters. 123. and they complied.25The subject landholding has also been declared as agricultural by various government agencies as evidenced by the Department of Environment and Natural Resources-City Environment and Natural Resources Office Certification declaring the land to be alienable and disposable and not covered by any public land application. because matters strictly involving the administrative implementation of the CARL and other agrarian laws are the exclusive prerogative of and are cognizable by the DAR Secretary. Remedios Daroy. but also for annulment and cancellation of title over which DARAB had jurisdiction. which is not subject to DAR’s approval. it was but proper for the former to rule on the complaint. as well as its registration with the Register of Deeds. the PARAB found the CARP coverage irregular and anomalous because the issuance of the CLOA. Abner Medio. Rodulfo Valcurza. Patricio Ebanit. Series of 1990. Gina Labado. 17 In the exercise of this jurisdiction.411 square meters out of the 412. Victor Valcurza. saying that the land is classified as agricultural. the Municipal Planning and Development Council of Villanueva. E-4640 with Prayer for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order. OCT No. 11 Respondent filed a protest against the Comprehensive Agrarian Reform Program (CARP) coverage on the ground that his land was industrial. As the grounds relied upon by petitioners in their complaint partook of a protest against the coverage of the subject landholding from CARP and/or exemption therefrom. 1962.33 while the former’s jurisdiction over agrarian reform implementation was assigned to its regional offices. prior to 15 June 1988. Beatriz Lasaga. Mario Valcurza. maintained the validity of the CLOA.004 square meters of respondent’s land. 1100 was classified as agricultural per Municipal Ordinance No. and the character of the relief prayed for in order to determine whether the nature and subject matter of the complaint is within its jurisdiction. Furthermore. as well as with exclusive original jurisdiction over all matters involving the implementation of agrarian reform. being adjacent to the PHIVIDEC Industrial Estate. 14 Aggrieved. Priscilla Lague. being found within the industrial estate of PHIVIDEC per Zoning Ordinance No. 31 If the issues between the parties are intertwined with the resolution of an issue within the exclusive jurisdiction of a court or tribunal. Medio Magtrayo. supposing that PARAB had jurisdiction. Adelardo Valcurza. the subject landholding was considered industrial because of a zoning classification issued by the Municipal Council of Villanueva.004 square meters5 and covered by Original Certificate of Title (OCT) No. he questioned the issuance of the CLOA on the ground that his land had long been classified by the municipality as industrial. Roldan Jumawan. we asked petitioners to file their reply.8 A Notice of Coverage was issued by the Department of Agrarian Reform (DAR) on 3 November 1992 over 276. respondent filed a Petition for Review under Rule 43 with the CA.24 Yet. and against the defendants ordering as follows: 1. E-4640 was issued in favor of petitioners on 30 May 1994.12 His protest was resolved in a Resolution13 issued by Regional Director Benjamin R. 29 The determination of issues brought by petitioners before this Court revolves around the sole question of whether the DARAB has jurisdiction over the subject matter of the case. Enrique Valcurza. which is not the case here.9 The DAR Secretary eventually issued Certificate of Land Ownership Award (CLOA) No. The jurisdiction of the DAR over the adjudication of agrarian reform cases was later on delegated to the DARAB. or lessor and lessee.1âwphi1 First.Section 1. much less proven. 229 and 129-A. stewardship or otherwise. Presidential Decree No. in cases concerning the cancellation of CLOAs that involve parties who are not agricultural tenants or lessees – cases related to the administrative implementation of agrarian reform laws.37 Section 3(d) of Republic Act (R. fixing. 35 It is clear from the last clause of the afore-quoted provision that a land is not agricultural. tenants and other agrarian reform beneficiaries. the CA was mistaken in upholding the PARAB’s Decision that the land is industrial based on a zoning ordinance. 2264 (The Local Autonomy Act of 1959) specifically empowers municipal and/or city councils to adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. PARO. the only other instance when respondent mentioned petitioners in his complaint was when they informed him that he could no longer harvest the fruits of the land. and apportion the land within its political jurisdiction into specific uses based not only on the present. He only said that their stay on his land was based on mere tolerance. commercial or industrial. and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential. . Republic Act No. tenancy. – The Board shall have primary and exclusive jurisdiction. Afable as follows: 40 The meaning of "agricultural lands" covered by the CARL was explained further by the DAR in its AO No. reclassifying any agricultural lands within the zone for non-agricultural use.36 Here. the land has been classified in town plans and zoning ordinances as residential. and 2. correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority x x x. changing. Primary and Exclusive Original and Appellate Jurisdiction. he did not specify the nature of his relationship with them. be reasonably presumed that when city and municipal boards and councils approved an ordinance delineating an area or district in their cities or municipalities as residential. ensuring the implementation of and compliance with their zoning ordinances. assuming arguendo that the DARAB had jurisdiction. Second. therefore. commercial. In reality. maintaining. rules and regulations . over lands devoted to agriculture. whether the disputants stand in the proximate relation of farm operator and beneficiary. such jurisdiction shall include but not be limited to cases involving the following: xxxx f) Those involving the issuance. Series of 1990. He never stated the circumstances that would have shown that the harvest of the fruits was in relation to a tenurial arrangement. (Emphases supplied) Thus. 3) There is consent between the parties to the relationship. 39 Nevertheless. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. 38 Furthermore. because they were already the owners thereof. However. By virtue of a zoning ordinance. or seeking to arrange terms or conditions of such tenurial arrangements. (Emphasis omitted) The subject matter of the relationship is an agricultural land. the town plan and zoning ordinance embodying the land classification has been approved by the HLURB or its predecessor agency prior to 15 June 1988. Thus: Agricultural land refers to those devoted to agricultural activity as defined in RA 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies. including disputes concerning farmworkers' associations or representation of persons in negotiating. and not the DARAB. and 6) The harvest is shared between the landowner and the tenant or agricultural lessee. 2) Also. landowner and tenant. without a prior finding on whether the ordinance had been approved by the HLURB. dated 22 March 1990. Executive Order Nos. Section 3 of RA No. at the same time. Although he admitted that they occupied his land. Specifically. We ruled in Heirs of Luna v." issued pursuant to Section 49 of the CARL. the issue of whether the CLOA issued to petitioners over respondent’s land should be cancelled hinges on that of whether the subject landholding is exempt from CARP coverage by virtue of two zoning ordinances. to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. the DARAB has jurisdiction over cases involving the cancellation of registered CLOAs relating to an agrarian dispute between landowners and tenants. 1.) No. It may. commercial or industrial use. 6389. (Emphasis supplied) A tenurial arrangement exists when the following are established: 1) The parties are the landowner and the tenant or agricultural lessees. both original and appellate. 27 and other agrarian laws and their implementing rules and regulations. define. 6657 defines an agrarian dispute as x x x any controversy relating to tenurial arrangements. hence.A. outside the ambit of the CARP if the following conditions concur: 1. respondent only mentioned petitioners twice in his complaint. entitled "Revised Rules and Regulations Governing Conversion of Private Agricultural Land to Non-Agricultural Uses. they were.the jurisdiction is with the DAR. 228. and the regional director that led to the issuance of the CLOA. 4) The purpose of the agricultural relationship is to bring about agricultural production. petitioner is correct in alleging that it is the DAR and not the DARAB that has jurisdiction. AIDTHC It is undeniable that local governments have the power to reclassify agricultural into non-agricultural lands. whether leasehold. This question involves the DAR’s determination of whether the subject land is indeed exempt from CARP coverage – a matter involving the administrative implementation of the CARP Law. 5) There is personal cultivation on the part of the tenant or agricultural lessees. and therefore. prescribe. The complaint is centered on the fraudulent acts of the MARO. the local legislature may arrange. but also on the future projection of needs. 6657. or industrial zone pursuant to the power granted to them under Section 3 of the Local Autonomy Act of 1959. respondent’s complaint does not allege that the prayer for the cancellation of the CLOA was in connection with an agrarian dispute. the elements showing that a tenurial relationship existed between respondent and petitioners were never alleged. 3844 as amended by Republic Act No. 1998 to December 31. dated 9 August 1978. a Value-Added Tax (VAT) taxpayer engaged in the importation and exportation business. respondent alleged by way of special and affirmative defenses that the request for tax credit certificate is still under examination by respondent's examiners. that taxes paid and collected are presumed to have been made in accordance with law and regulations. in view of respondent's inaction. Hence. 123. . Petitioner alleged that the accumulated input taxes of P9. 2002. WHEREFORE. 1998 TO DECEMBER 31.85 for the period of September 1. 2000.528. as follows: THE COURT’S RULING The Petition has no merit. 51-98. from which the petitioner was able to generate export sales amounting to P114. Respondent. Series of 1982. 43 of the BIR in Pasig City (BIR-Pasig) as. Petitioner further claimed that the aforestated export sales which transpired from April 1. THE FACTS Petitioner alleged that from September 1998 to December 31.R. EB No. 6 Trial ensued and the CTA First Division rendered a Decision on 13 June 2007. local governments are required to submit their existing land use plans. the records of the case show the absence of HLURB Certifications approving Comprehensive Zoning Ordinance Resolution No. 2000 were "zero-rated" sales. Inc. the CTA En Banc likewise denied the claim of petitioner on the same ground and ruled that the latter’s sales for the subject period could not qualify for VAT zero-rating. among others. (petitioner). in view of the foregoing. On March 26. docketed as C. Ordinance No.32 and P4.85 for its importation of food ingredients. petitioner must prove that it has complied with the governing rules with reference to tax recovery or refund. The proceeds thereof were inwardly remitted to petitioner's dollar accounts with Equitable Bank Corporation and with Australia New Zealand Bank-Philippine Branch. On July 24. In his Answer filed on August 28. 184266 certificate representing its alleged excess input taxes attributable to zero-rated sales for the period 1 April 2000 to 31 December 2000. the Petition dated 19 November 2009 is hereby GRANTED. these imported food ingredients were exported between the periods of April 1. THE ISSUES Petitioner raises this sole issue for the consideration of this Court: WHETHER OR NOT THE PETITIONER IS ENTITLED TO THE ISSUANCE OF A TAX CREDIT CERTIFICATE OR REFUND OF THE AMOUNT OF P9. and Zoning Ordinance No. hence not refundable. DECISION SERENO.A. pursuant to Section 106(A (2)(a)(1) of the N1RC of 1997.143. INC. 2000 to December 31. 2002. According to this issuance. 2000.528. 7 Considering that there are no factual issues in this case. petitioner's allegation that it erroneously and excessively paid the tax during the year under review does not ipso facto warrant the refund/credit or the issuance of a certificate thereto.85 REPRESENTING CREDITABLE INPUT TAXES INCURRED FOR THE PERIOD OF SEPTEMBER 1. (Emphasis supplied) Here. petitioner elevated the case before this Court by way of a Petition for Review. COMMISSIONER OF INTERNAL REVENUE. must have been approved by the HLURB prior to 15 June 1988 — is the result of Letter of Instructions No. It denied petitioner’s claim for failure to comply with the invoicing requirements prescribed under Section 113 in relation to Section 237 of the National Internal Revenue Code (NIRC) of 1997 and Section 4. CJ: This is a Petition for Review on Certiorari 1 under Rule 45 of the 1997 Rules of Civil Procedure filed by Applied Food Ingredients. The 24 September 2009 Decision of the Court of Appeals in CA-G. 01244-MIN is REVERSED and SET ASIDE. consequently. as amended. Petitioner is registered with the Regional District Office (RDO) No.565. The second requirement — that a zoning ordinance. 2000 to December 31.528. Case No.The regulation by local legislatures of land use in their respective territorial jurisdiction through zoning and reclassification is an exercise of police power. SP No. 2000. The 26 April 2005 Decision of the Department of Agrarian Reform and Adjudication Board is REINSTATED. G.565. The assailed Decision and Resolution affirmed the Decision 4 dated 13 June 2007 and Resolution5 dated 16 January 2008 rendered by the CTA First Division in C. 6513 which denied petitioner's claim for the issuance of a tax credit Decision 2 G. which are found in Sections 204(C) and 229 of the Tax Code. it paid an aggregate sum of input taxes ofP9. 184266 November 11. Series of 1997. 6513. petitioner filed two separate applications for the issuance of tax credit certificates in the amounts of P5.357. SO ORDERED." and 3) BIR’s permit number. as reported in its Quarterly Vat Return. respectively. 2000 have not been applied against any output tax.TA. Subsequently. 729. The power to establish zones for industrial.R.. we adopt the findings of fact of the CTA En Banc. No. zoning ordinances. commercial and residential uses is derived from the police power itself and is exercised for the protection and benefit of the residents of a locality. 2000 WHICH ARE ATTRIBUTABLE TO ZERO-RATED SALES FOR THE PERIOD OF APRIL 1.565. all in violation of the invoicing requirements. a valid exercise of police power by the local government of Calapan. as the export sales invoices did not bear the following: 1) the imprinted word "zero-rated.53.108-1 of Revenue Regulations No.577. vs. The Petition assails the Decision 2 dated 4 June 2008 and Resolution3 dated 26 August 2008 of the Court of Tax Appeals En Bane (CTA En Bane in C. 2002. in order to validly reclassify land. 2000 TO DECEMBER 31.937. Our VAT Law provides for a mechanism that would allow VAT-registered persons to recover the excess input taxes over the output taxes they had paid in relation to their sales." 2) "TIN-VAT. 2002 and June 28. 21 of the Sangguniang Bayan of Calapan was issued pursuant to Section 3 of the Local Autonomy Act of 1959 and is. Petitioner. Case No. No. enforcement systems and procedures to the Ministry of Human Settlements — one of the precursor agencies of the HLURB — for review and ratification.R.T. as a pure buy-sell trader.TA. 7-95. Company. it cannot be said that the land is industrial and outside the ambit of CARP.385. On appeal.24. 208. 359. 2013 APPLIED FOOD INGREDIENTS COMPANY. "17 Furthermore. Commissioner of Internal Revenue. inasmuch as no jurisdiction was acquired by the CTA. with the effect that the CTA does not acquire jurisdiction over the taxpayer’s petition. the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. held thus: "Failure to comply with the 120-day waiting period violates a mandatory provision of law. the CIR’s 120-day period to decide on petitioner’s administrative claim commenced to run on 26 March 2002 and 28 June 2002. This Court finds it appropriate to first determine the timeliness of petitioner’s claim in accordance with the above provision. an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases. xxxx (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. petitioner claims that from April 2000 to December 2000 it had zero-rated sales to which it attributed the accumulated input taxes it had incurred from September 1998 to December 2000. within which a VAT-registered person whose sales are zero-rated or effectively zero-rated may apply for the issuance of a tax credit certificate or refund of creditable input tax. Therefore. Records. can take cognizance only of matters that are clearly within its jurisdiction. fees or other charges. however. . the jurisdiction of the CTA over petitioner’s appeal may still be considered and determined by this Court. At the outset. whose sales are zero-rated or effectively zero-rated may. Commissioner of Internal Revenue12 (hereby collectively referred as San Roque). – In relation thereto. Commissioner of Internal Revenue. bearing in mind that tax refunds or credits − just like tax exemptions − are strictly construed against taxpayers. it is presumed that in order to discharge its burden. we are constrained to apply the dispositions therein to similar facts as those in the present case. Although the ponente in this case expressed a different view on the mandatory application of the 120+30 day period as prescribed in the above provision.In Panasonic Communications Imaging Corporation of the Philippines v. or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue. (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments.A. 9282. San Roque Power Corporation. SEC. Thus. It violates the doctrine of exhaustion of administrative remedies and renders the petition premature and thus without a cause of action. the CIR had until 26 October 2002 within which to decide on petitioner’s claim for refund filed on 28 June 2002. Section 112(A) provides for a two-year prescriptive period after the close of the taxable quarter when the sales were made. and Philex Mining Corporation v. refunds of internal revenue taxes. being a court of special jurisdiction.11 Therefore. show that the judicial claim of petitioner was filed on 24 July 2002. respectively. Taganito Mining Corporation v. the premature filing of its claim for refund/credit of input VAT before the CTA warranted a dismissal. — The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal. it shall be allocated proportionately on the basis of the volume of sales. On the other hand. which is invoice-based. .16 In San Roque. inputs and imports. however. apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. penalties in relation thereto. (A) Zero-rated or Effectively Zero-rated Sales.20 specifically provides: SEC.A. Under the VAT method of taxation. 7. of this Court’s pronouncement on the consolidated tax cases of Commissioner of Internal Revenue v. Consequently. within two (2) years after the close of the taxable quarter when the sales were made. Applying Section 112(A). 15 Petitioner clearly failed to observe the mandatory 120-day waiting period. the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided.Any VAT-registered person. to wit: The Commissioner of Internal Revenue (CIR) had one hundred twenty (120) days from the date of submission of complete documents in support of the application within which to decide on the administrative claim. to the extent that such input tax has not been applied against output tax: Provided. at any time.8 this Court explained that "the VAT is a tax on consumption. 112. and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions. Well-settled is the rule that the issue of jurisdiction over the subject matter may. the taxpayer affected may. within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period. absent any evidence to the contrary and bearing in mind that the burden to prove entitlement to a tax refund is on the taxpayer. Jurisdiction. appeal the decision or the unacted claim with the Court of Tax Appeals. 1125.19 as amended by R.10 the latter have the burden to prove strict compliance with the conditions for the grant of the tax refund or credit. 9 To begin with. 30 September 2002 and 31 December 2002 − or the close of the taxable quarter when the zero-rated sales were made − within which to file its administrative claim for refund. or for the period covering October to December 2000. Section 112 of the NIRC of 1997 laid down the manner in which the refund or credit of input tax may be made. we find sufficient compliance with the two-year prescriptive period when petitioner filed its claim on 26 March 200213 and 28 June 200214 covering its zero-rated sales for the period April to September 2000 and October to December 2000. as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments. however. That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services. the CTA.In proper cases. although the sellers in these transactions charge no output tax. be raised by the parties or considered by the Court motu proprio. Counting 120 days from 26 March 2002. petitioner had attached complete supporting documents necessary to prove its entitlement to a refund in its application filed on 26 March 2002 and 28 June 2002. Philippine jurisprudence is replete with cases upholding and reiterating these doctrinal principles. the CIR had until 24 July 2002 within which to decide on the claim of petitioner for an input VAT refund attributable to the its zero-rated sales for the period April to September 2000. respectively. In this case. fees or other charges. or the failure on the part of the Commissioner to act on the application within the period prescribed above. an indirect tax that the provider of goods or services may pass on to his customers. In case of full or partial denial of the claim for tax refund or tax credit. (2) and (B) and Section 108(B)(1) and (2). further." For zero-rated or effectively zero-rated sales. penalties in relation thereto. or other matters arising under the National Internal Revenue Code or . That in the case of zero-rated sales under Section 106(A)(2)(a)(1). Refunds or Tax Credits of Input Tax. with the advent. petitioner had until 30 June 2002.18 Section 7 of R. except transitional input tax. they can claim a refund of the VAT that their suppliers charged them. this Court. refunds of internal revenue taxes. .60 5. Thus..1âwphi1 One of the conditions for a judicial claim of refund or credit under the VAT System is with the 120+ 30 day mandatory and jurisdictional periods. Aklan.. This Court further ruled: The old rule that the taxpayer may file the judicial claim... 2012 in CA-G..000 for the design and construction of passenger terminal... Petitioner.. in view of the absence of jurisdiction of the Court of the Tax Appeals over the judicial claim of petitioner.Php 884.... respondent made a demand for the total amount of P22.... and P20. such "inaction shall be deemed a denial" of the application for tax refund or credit. during. To repeat. when the 120+30 day mandatory periods were already in the law and BIR Ruling No..other laws administered by the Bureau of Internal Revenue.. 1998." that the taxpayer can take to the CTA for review..... 9 On August 17. without waiting for the Commissioner’s decision if the two-year prescriptive period is about to expire...60 6. Original Contract. Nos. the CTA. 3 as approved by the Office of Provincial Governor.700. J... 114073. petitioner does not have an excuse for not observing the 120+ 30 day period. Refund of taxes levied despite it not being covered by original contract. whether the CIR renders a decision (which must be made within 120 days) or there was inaction.507.. as a court of special jurisdiction. WHEREFORE.. Thus.b of the Original Contract .Php 3.143..000 for the design and construction of the jetty port facility.. vs..714. 2011 and Resolution4 dated June 27....09 2...98 4.5. The scope of work under these change orders were agreed upon by petitioner and respondent.101..... DECISION VILLARAMA.. The Facts On January 12... SP No....59 3. 2001......: These consolidated petitions for review on certiorari seek to reverse and set aside the following: (1) Decision1dated October 18..... strict compliance with the 120+30 day periods is necessary for such a claim to prosper... arises only after the lapse of 120 days.... 8 SO ORDERED.. It asserted that the sums being claimed by respondent were not indicated in Change Order No..3. is construed strictly against the taxpayer... respondent sued petitioner in the Regional Trial Court (RTC) of Marikina City (Civil Case No. 2013 Petitioner denied any unpaid balance and interest due to respondent. The period of 120 days is a prerequisite for the commencement of the 30-day period to appeal to the CTA... premises considered. Failure to observe 120 days prior to the filing of a judicial claim is not a mere non-exhaustion of administrative remedies..291.. the taxpayer can no longer file a judicial claim for refund or credit of input VAT without waiting for the Commissioner to decide until the expiration of the 120-day period.900.. 197592 & 20262 November 27... the period of 120 days is material. THE PROVINCE OF AKLAN.Php 12.. except for the period from the issuance of BIR Ruling No DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted..162.. which again reinstated the 120+ 30 day periods as mandatory and jurisdictional. 06-1122-MK) to collect the aforesaid amounts. Without a decision or an "inaction x x x deemed a denial" of the Commissioner. JR.Php 1.475. 2011 of the Court of Appeals (CA) in CA-G.50.. Additional Labor Cost resulting [from] numerous change orders issued sporadically ... the Province of Aklan (petitioner) and Jody King Construction and Development Corp. JODY KING CONSTRUCTION AND DEVELOPMENT CORP.." 21 Considering further that the 30-day period to appeal to the CTA is dependent on the 120-day period..303.200. In both instances. or after the effectivity of the Atlas doctrine. petitioner issued variation/change orders for additional works. 2006. Additional Overhead Cost resulting [from] numerous Orders issued sporadically ... a claim for tax refund or credit.....Php 1.. The Court finds..22 (Emphasis supplied) In accordance with San Roque and considering that petitioner s judicial claim was filed on 24 July 2002...96 covering the following items which petitioner allegedly failed to settle: 1... x x x.. Unpaid accomplishments on additional works undertaken .. both periods are hereby rendered jurisdictional. prior thereto and without a decision of the CIR.. "The charter of the CTA also expressly provides that if the Commissioner fails to decide within "a specific period" required by law. the trial court issued a writ of preliminary attachment. the instant Petition is DENIED.7 On October 22..... and (2) Decision3 dated August 31... . 2010 and Resolution 2 dated July 5. petitioner entered into a negotiated contract with respondent for the construction of Passenger Terminal Building (Phase II) also at Caticlan Jetty Port in Malay...112. whether before.. 2001.. 6 On January 5.. 111754.54.396. but is likewise considered jurisdictional. has no jurisdiction to entertain claims for the refund or credit of creditable input tax..486.. cannot apply because that rule was adopted before the enactment of the 30-day period.. where the National Internal Revenue Code provides a specific period of action.. On July 13. Respondent. the CTA has no jurisdiction over a petition for review. in which case the inaction shall be deemed a denial.R...5 In the course of construction. With the 30-day period always available to the taxpayer. Interest resulting [from] payment delays consistent with Section 7.R... (respondent) entered into a contract for the design and -construction of the Caticlan Jetty Port and Terminal (Phase I) in Malay. SP No.. or inaction "deemed a denial. like a claim for tax exemption. or does not act at all during the 120-day period...10 G.. Price escalation (Consistent with Section 7.. The total project cost is P38. Aklan. The 30-day period was adopted precisely to do away with the old rule.. It is the Commissioner’s decision.. The contract price for Phase II is P2.345. DA-489-03 had not yet been issued....419.098. so that under the VAT System the taxpayer will always have 30 days to file the judicial claim even if the Commissioner acts only on the 120th day......442.. 2006..R..(Emphases supplied) "Inaction by the CIR" in cases involving the refund of creditable input tax.Php 3.000: P 18.. that there is no need to discuss the other issues raised. Failure of petitioner to observe the mandatory 120-day period is fatal to its claim and rendered the CT A devoid of jurisdiction over the judicial claim. 162. 2001 to date of actual payment pursuant to Section 7.303.5 of the original contract. the trial court denied the motion for reconsideration upon verification from the records that as shown by the return card.714.000.396. WHETHER OR NOT THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 WHICH WAS HASTILY ISSUED IN VIOLATION OF SUPREME COURT ADMINISTRATIVE CIRCULAR NO. ordering the defendant to pay to the plaintiff the amount of Php7.486.R. It stressed that there was no intention to mislead the trial court nor cause undue prejudice to the case. 114073. 2010. citing the relevant provisions of statutes.291.R. The CA also held that petitioner is estopped from invoking the doctrine of primary jurisdiction as it only raised the issue of COA’s primary jurisdiction after its notice of appeal was denied and a writ of execution was issued against it. 2009.R.000. 2009 Order was likewise denied. Sheriff Gamboa served notices of garnishment on Land Bank of the Philippines. circulars and jurisprudence on the determination of government monetary liabilities. On the matter of execution of the trial court’s decision. 2009. On November 24. Said banks. the appellate court said that it was rendered moot by respondent’s filing of a petition before the Commission on Audit (COA). docketed as CA-G. Petitioner filed a motion for reconsideration which was likewise denied by the CA. 114073. the dispositive portion of which reads: WHEREFORE. ordering the defendant to pay the plaintiff the sum of Php200.09 representing the unpaid accomplishment on additional works undertaken by the plaintiff. the trial court denied petitioner’s notice of appeal filed on December 1. copy of the decision was actually received by both Assistant Provincial Prosecutor Ronaldo B.442. petitioner filed another petition for certiorari in the CA questioning the aforesaid orders denying due course to its notice of appeal. 17 Petitioner filed in the CA a petition for certiorari with application for temporary restraining order (TRO) and preliminary injunction assailing the Writ of Execution dated November 24. 2009 was filed one day after the finality of the decision.19 .101. The Cases 8. Gamboa.Also cited was respondent’s June 10. SP No. On December 7.50 representing interest resulting from payment delays up to October 15. BRANCH 273. Since petitioner only had until October 8. BRANCH 273. 4. the CA’s First Division dismissed the petition in CA-G. ordering the defendant to pay to the plaintiff the amount of Php3. ordering the defendant to pay interest of 3% per month from unpaid claims as of October 16. judgment is hereby rendered in favor of plaintiff Jody King Construction And Development Corporation and against defendant Province of Aklan.143. its motion filed on October 9. these were insufficient for a ruling that grave abuse of discretion had been committed. Aklan for the satisfaction of the judgment debt from the funds deposited under the account of petitioner.000. Manares and Prosecutor Ingente to mislead the court and make it appear that their motion for reconsideration was filed on time.11 After trial. Petitioner’s motion for reconsideration of the December 7. their enforcement and satisfaction.098. 2009. Petitioner filed its motion for reconsideration 14 on October 9. as and for attorney’s fees. 2009 stating that it received a copy of the decision on September 25. Lee T. 2001 pursuant to Section 7. as in fact its counsel immediately corrected the error upon discovery by explaining the attendant circumstances in the Rejoinder dated October 29. 2009. In its Order 15 dated October 27. however.00. ordering the defendant to pay to the plaintiff the sum of Php1. By Decision dated October 18.] Consequently. 2011. The CA stressed that even assuming as true the alleged errors committed by the trial court. WHETHER OR NOT THE REGIONAL TRIAL COURT.b of the original contract. to demand from petitioner the immediate payment of P67.R. 197592. 10-2000 SHOULD BE RENDERED VOID.R. MARIKINA CITY GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RENDERING THE DECISION DATED 14 AUGUST 2009 AND ISSUING THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 EVEN IT FAILED TO DISPOSE ALL THE ISSUES OF THE CASE BY NOT RESOLVING PETITIONER’S "URGENT MOTION TO DISCHARGE EX-PARTE WRIT OF PRELIMINARY ATTACHMENT" DATED 31 AUGUST 2006. Manares on September 23. I. SO ORDERED.00 as moral damages. MARIKINA CITY AND THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 SHOULD BE RENDERED VOID FOR LACK OF JURISDICTION OVER THE SUBJECT MATTER OF THE CASE.378.59 representing additional 2% tax levied upon against the plaintiff. ordering the defendant to pay the cost of suit. and 11.00 as exemplary damages.507. 2009. III. 2009 because it was handed to him by his personnel only on that day is not a justifiable excuse that would warrant the relaxation of the rule on reglementary period of appeal. Jr. refused to give due course to the court order. 2. 10.34 and tender the same to the respondent. 2009. the CA’s Sixteenth Division rendered its Decision dismissing the petition in CA-G.b[. 5.98 pursuant to Section 7. 18 On May 20. ordering the [defendant] to pay to the plaintiff the sum of Php500. ordering the defendant to pay to the plaintiff the sum of Php300. 111754. 7. 2010. 3. ordering the defendant to pay to the plaintiff price escalation in the amount of Php1. counsel’s explanation that he believed in good faith that the August 14. 2009. SP No. 2009.027. In G. 6. No. ordering the defendant to pay the sum of Php3.00 overhead cost resulting from change orders issued by the defendant. The trial court further noted that there was a deliberate attempt on both Atty. docketed as CA-G. the trial court rendered its Decision12 on August 14. 2009. Ingente and Atty.3. petitioner submits the following issues: 9. ordering the defendant to refund to the plaintiff the amount of Php884. Philippine National Bank and Development Bank of the Philippines at their branches in Kalibo. 2009 within which to file a motion for reconsideration. On August 31. SP No. SP No. foregoing premises considered. 111754 as it found no grave abuse of discretion in the lower court’s issuance of the writ of execution.60 representing additional labor cost resulting from change orders issued by the defendant. as follows: 1. WHETHER OR NOT THE DECISION DATED 14 AUGUST 2009 RENDERED BY THE REGIONAL TRIAL COURT.3. 2009 Decision of the trial court was received on September 25.13 II. 2003 letter absolving petitioner from liability for any cost in connection with the Caticlan Passenger Terminal Project. the trial court issued a writ of execution ordering Sheriff IV Antonio E. The CA said that petitioner failed to provide valid justification for its failure to file a timely motion for reconsideration. Petitioner filed a Manifestation16 reiterating the explanation set forth in its Rejoinder to respondent’s comment/opposition and motion to dismiss that the wrong date of receipt of the decision stated in the motion for reconsideration was due to pure inadvertence attributable to the staff of petitioner’s counsel. The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures. v. 1445. Section 1 further provides: In Euro-Med Laboratories Phil. (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant. and papers relating to those accounts. General jurisdiction.000. such money claim should have been first brought to the COA. the circumstances surrounding petitioner’s claim brought it clearly within the ambit of the COA’s jurisdiction.23 The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.) Respondent’s collection suit being directed against a local government unit. b) request for concurrence in the hiring of legal retainers by government agency. that respondent could no longer question the RTC’s jurisdiction over the matter after it had filed its answer and participated in the subsequent proceedings. audit.20 a) money claim against the Government. the amount thereof was readily determinable from the receipts. experience and expertise of most judges but within the special competence of COA auditors and accountants.The petition in G. In such a case. 24 As can be gleaned. amounting to lack of jurisdiction. the preservation of vouchers pertaining thereto for a period of ten years. c) write off of unliquidated cash advances and dormant accounts receivable in amounts exceeding one million pesos (P1. The scope of the COA’s authority to take cognizance of claims is circumscribed. the claim was well within the COA’s jurisdiction under the Government Auditing Code of the Philippines.000. and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions. including non-governmental entities subsidized by the government. To this. agencies and instrumentalities. Petitioner’s claim was for a fixed amount and although respondent took issue with the accuracy of petitioner’s summation of its accountabilities. such as: (a) where there is estoppel on the part of the party invoking the doctrine. as well as the examination. No. a local government unit.The Commission Proper shall have original jurisdiction over: Petitioner is not estopped in questioning the jurisdiction of the Regional Trial Court. if the parties would not be unfairly disadvantaged. (Emphasis supplied. and (2) the propriety of the issuance of the writ of execution. the COA promulgated the 2009 Revised Rules of Procedure of the Commission on Audit. Branch 273. or those determined or readily determinable from vouchers. Our Ruling The petitions are meritorious. out of fidelity to the doctrine of primary jurisdiction. Petitioner’s claim therefore involved compliance with applicable auditing laws and rules on procurement.25 as amended by Section 26 of Presidential Decree No. Such matters are not within the usual area of knowledge. Both parties agreed that these transactions were governed by the Local Government Code provisions on supply and property management and their implementing rules and regulations promulgated by the COA pursuant to Section 383 of said Code. theft. agencies. and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions. commissions. however. Province of Batangas. Such jurisdiction may not be waived by the parties’ failure to argue the issue nor active participation in the proceedings. There are established exceptions to the doctrine of primary jurisdiction.000. The said jurisdiction extends to all government-owned or controlled corporations. (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice. Rule II. audit. or agencies of the Government. Thus. the keeping of the general accounts of the Government. and those for which the government has put up a counterpart fund or those partly funded by the government. 327. (f) where judicial intervention is urgent. and such other papers within reach of accounting officers. First. This brought the case within the COA’s domain to pass upon money claims against the government or any subdivision thereof under Section 26 of the Government Auditing Code of the Philippines: The authority and powers of the Commission [on Audit] shall extend to and comprehend all matters relating to x x x the examination.000. COA has primary jurisdiction over private respondent’s money claims Petitioner is not estopped from raising the issue of jurisdiction The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise.R. and instrumentalities. (g) when its application may cause great and irreparable damage.30 Hence. Thus. invoices. in amounts in excess of Five Million pesos (P5.00). for the RTC to dismiss petitioner’s complaint. Original Jurisdiction . d) request for relief from accountability for loses due to acts of man. 202623 sets forth the following arguments: Section 1. those required to pay levies or government share.00).21 The Issues The controversy boils down to the following issues: (1) the applicability of the doctrine of primary jurisdiction to this case. (d) where the amount involved is relatively small so as to make the rule impractical and oppressive. it was but proper. relief must first be obtained in an administrative proceeding before a remedy is supplied by the courts even if the matter may well be within their proper jurisdiction. systems and controls. i.662." Rule VIII. Inc. which include "money claims due from or owing to any government agency. (i) when the issue of non-exhaustion . Second. and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity. we need only state that the court may raise the issue of primary jurisdiction sua sponte and its invocation cannot be waived by the failure of the parties to argue it as the doctrine exists for the proper distribution of power between judicial and administrative bodies and not for the convenience of the parties. however. petitioner was seeking the enforcement of a claim for a certain amount of money against a local government unit. (h) where the controverted acts violate due process. respondent seeks to enforce a claim for sums of money allegedly owed by petitioner. 28 we ruled that it is the COA and not the RTC which has primary jurisdiction to pass upon petitioner’s money claim against respondent local government unit. invoices and other documents. etc. x x x. and comes into play whenever enforcement of the claim requires the resolution of issues which. by an unbroken line of cases holding statutes of similar import to mean only liquidated claims. petitioner is not estopped from raising the issue of jurisdiction even after the denial of its notice of appeal and before the CA. Section 1 specifically enumerated those matters falling under COA’s exclusive jurisdiction. Thus: This case is one over which the doctrine of primary jurisdiction clearly held sway for although petitioner’s collection suit for P487. arson. Section 26. 26 it is the COA which has primary jurisdiction over money claims against government agencies and instrumentalities. Moreover.e. dismiss the case without prejudice. Petitioner argues. Under Commonwealth Act No.. those funded by donations through the government. and other self-governing boards. the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or. have been placed within the special competence of an administrative agency.80 was within the jurisdiction of the RTC. 29 (Emphasis supplied. The petition for certiorari filed before the CA due to the RTC’s denial of petitioner’s Notice of Appeal was in accord with jurisprudence. the examination and inspection of the books. Marikina City over the subject matter of the case. and as herein prescribed. including their subsidiaries. the RTC should have suspended the proceedings and refer the filing of the claim before the COA. under a regulatory scheme. records.22 It applies where a claim is originally cognizable in the courts. (b) where the challenged administrative act is patently illegal.) Pursuant to its rule-making authority conferred by the 1987 Constitution 27 and existing laws. robbery. petitioner’s money claim was founded on a series of purchases for the medical supplies of respondent’s public hospitals. specialized training and knowledge of the proper administrative bodies. INC. SP No. 34 All acts pursuant to it and all claims emanating from it have no legal effect and the void judgment can never be final and any writ of execution based on it is likewise void. 19 SO ORDERED. On 24 September 2004. 2 dated 1 August 2006 of the Court of Appeals in CA-G. both petitions in G. even for the first time on appeal. However. of the Regional Trial Court (RTC) of Manila.16 The trial court. counsel for herein respondent was given a period of fifteen days within which to file a demurrer to evidence. By timely raising the issue on jurisdiction in her motion to dismiss x x x respondent is not estopped from raising the question on jurisdiction.35 Clearly. The Facts On 24 December 1997.3Based on this finding. The challenged decision granted herein respondent's petition for certiorari upon a finding that the trial court committed grave abuse of discretion in denying respondent's motion to dismiss the complaint against her. Nos. the RTC should have exercised utmost caution. Branch 24.of administrative remedies has been rendered moot.11 Petitioner then filed a Motion for Substitution. of evidence that would constitute a ground for dismissal of the case. 173946 June 19. and Decision dated August 31. 13 Pre-trial thereafter ensued and on 18 July 2001.5 respectively. vs. denied the motion to dismiss for having been filed out of time. On 26 May 2004. As a result.R. citing Section 1. Rule 86 of the Rules of Court. The Court of Appeals granted the petition based on the following grounds: G. the CA erred in ruling that the RTC committed no grave abuse of discretion when it ordered the execution of its judgment against petitioner and garnishment of the latter’s funds. dated 8 November 20044 and 22 December 2004.R. x x x it is well-settled that issue on jurisdiction may be raised at any stage of the proceeding. SP No. a motion to dismiss may be made x x x. respondent filed a petition for certiorari with the Court of Appeals alleging that the trial court seriously erred and gravely abused its discretion in denying her motion to dismiss despite discovery. In this case. 2013 BOSTON EQUITY RESOURCES. praying that Manuel be substituted by his children as party-defendants. as plaintiff. hence. 12 dated 18 January 2000. SP No. (2) that the trial court did not acquire jurisdiction over the person of Manuel pursuant to Section 5. Toledo. prudence and judiciousness in issuing the writ of execution and notices of garnishment against petitioner. she filed a Motion for Leave to Admit Amended Answer 7 in which she alleged.1âwphi1 The CA. on 7 October 2004. DECISION PEREZ. 1997.14 The trial of the case then proceeded. dated 5 August 1999. x x x. Petitioner. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. 2010 and Resolution dated July 5 2011 of the Court of Appeals in CA-G. No. 36 Such act violated the express directives of this Court under Administrative Circular No. Rule 86 of the Revised Rules of Court. (j) when there is no other plain. the case must be dismissed for failure to state a cause of action. the reception of evidence for herein respondent was cancelled upon agreement of the parties. 114073 are hereby REVERSED and SET ASIDE.8 The death certificate9 of Manuel states "13 July 1995" as the date of death."38 WHEREFORE. (3) that the trial court erred in ordering the substitution of the deceased Manuel by his heirs. respondent submitted the required names and addresses of the heirs. 1445."17Respondent’s motion for reconsideration of the order of denial was likewise denied on the ground that "defendants’ attack on the jurisdiction of this Court is now barred by estoppel by laches" since respondent failed to raise the issue despite several chances to do so. 2011 and Resolution dated June 27. among others. The Decision dated August 14 2009. 6 Herein respondent filed an Answer dated 19 March 1998 but on 7 May 1998. 88586. 10 In compliance with the verbal order of the court during the 11 October 1999 hearing of the case. (l) in quo warranto proceedings.R. 111754. It is elementary that courts acquire jurisdiction over the person of the defendant x x x only when the latter voluntarily appeared or submitted to the court or by coercive process issued by the court to him. 061122-MK are all SET ASIDE. Finally.: Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside: (1) the Decision. respondent instead filed a motion to dismiss the complaint. the court a quo could not have acquired jurisdiction over the person of defendant Manuel S. as well as of the rules and procedures of the COA. it is undisputed that when petitioner Boston filed the complaint on December 24.R. and (4) that the court must also dismiss the case against Lolita Toledo in accordance with Section 6. is already dead. Toledo was already dead. 31 However. The RTC had no authority to direct the immediate withdrawal of any portion of the garnished funds from petitioner's depositary banks. in an Order dated 8 November 2004.15 However. petitioner filed a complaint for sum of money with a prayer for the issuance of a writ of preliminary attachment against the spouses Manuel and Lolita Toledo.1 dated 28 February 2006 and (2) the Resolution. presented its evidence and its exhibits were thereafter admitted. TOLEDO. petitioner filed a motion. the dates of hearing of the case. it cannot be the source of any right or the creator of any obligation. simply stated that the issue had become moot by respondent's filing of the proper petition with the COA.32 All the proceedings of the court in violation of the doctrine and all orders and decisions rendered thereby are null and void. respondent's belated compliance with the formal requirements of presenting its money claim before the COA did not cure the serious errors committed by the RTC in implementing its void decision. 197592 and 202623 are GRANTED. The RTC's orders implementing its judgment rendered without jurisdiction must be set aside because a void judgment can never be validly executed. No pronouncement as to costs. in denying petitioner's motion for reconsideration. 37 which was issued "precisely in order to prevent the circumvention of Presidential Decree No. Rule 16 of the 1997 Rules of Court which states that: "Within the time for but before filing the answer to the complaint or pleading asserting a claim. petitioner argued that it is the COA and not the RTC which has original jurisdiction over money claim against government agencies and subdivisions.. to require respondent to disclose the heirs of Manuel. defendant Manuel S. 10-2000. 33 Writ of Execution issued in violation of COA’s primary jurisdiction is void Since a judgment rendered by a body or tribunal that has no jurisdiction over the subject matter of the case is no judgment at all. Herein petitioner. Writ of Execution and subsequent issuances implementing the said decision of the Regional Trial Court of Marikina City in Civil Case No. that her husband and co-defendant. the trial court issued its pre-trial order containing. It appears that this motion was granted by the trial court in an Order dated 9 October 2000. x x x. J. x x x the court a quo’s denial of respondent’s motion to dismiss was based on its finding that respondent’s attack on the jurisdiction of the court was already barred by laches as respondent failed to raise the said ground in its [sic] amended answer and during the pre-trial. .18 Aggrieved. among others.R. Respondents. despite her active participation in the proceedings. COURT OF APPEALS AND LOLITA G. none of the foregoing circumstances is applicable in the present case. However. the Court of Appeals reversed and set aside the Orders. The Decision dated October 18. citing the following as grounds: (1) that the complaint failed to implead an indispensable party or a real party in interest. Such being the case.G. In its Supplement to the Motion for Reconsideration. 2012 in CA. speedy and adequate remedy. during the trial of the case. (k) when strong public interest is involved. Manuel Toledo (Manuel). and. when issue on jurisdiction was raised by respondent. . It appears that she had filed an earlier motion to dismiss 26 on the sole ground of the unenforceability of petitioner’s claim under the Statute of Frauds. what is at issue here is the correctness of the trial court’s orders denying respondent’s motion to dismiss. It is not designed to correct erroneous findings and conclusions made by the courts. 2004. For the sake of clarity. respondent’s motion to dismiss was filed after petitioner has completed the presentation of its evidence in the trial court. jurisdiction over the person of Manuel should not be an issue in this case. This circumstance alone already warranted the outright dismissal of the motion for having been filed in clear contravention of the express mandate of Section 1. as well as several motions for postponement. 2004 x x x . Reception of defendants’ evidence was again deferred to May 26. and in order to finally settle the controversy and fully dispose of all the issues in this case. The complaint should have impleaded the estate of Manuel S. On September 24. the trial court. defendants sought the issuance of subpoena ad testificandum and duces tecum to one Gina M. x x x xxxx Respondent’s motion to dismiss the complaint should have been granted by public respondent judge as the same was in order. Toledo was already dead. Under this provision. finally. Well settled is the rule that the special civil action for certiorari is not the proper remedy to assail the denial by the trial court of a motion to dismiss. therefore. 2004. reception of defendants’ evidence was set on March 31. 20 The Court of Appeals denied petitioner’s motion for reconsideration. it likewise erred in ruling that the trial court committed grave abuse of discretion when it denied respondent’s motion to dismiss. it must be here stated that. 2004. Comm. to appear and testify for the defendants on April 23. On April 14. reception of defendants [sic] evidence was cancelled upon the agreement of the parties. it is not necessary that petitioner file its claim against the estate of Manuel. defendant Manuel S. 2004 was cancelled. nevertheless. "the proper remedy in such a case is to appeal after a decision has been rendered. In essence. The order of the trial court denying a motion to dismiss is merely interlocutory. considering that the estate of Manuel S. the court a quo had not yet decided the case. counsel for defendants was given a period of fifteen (15) days to file a demurrer to evidence. demanded by the fact that jurisdiction has been raised as an issue from the lower court. Considering that the obligation of Manuel S. in conformity with the provision of Section 6. (Emphasis supplied) Even assuming that certiorari is the proper remedy. Madulid. A protracted discourse on jurisdiction is. and April 23. Rule 16." 28 Thus. "not only improper but also dilatory.Moreover. with the admission of plaintiff’s exhibits. there is no basis for the court a quo to invoke estoppel to justify its denial of the motion for reconsideration. as it neither terminates nor finally disposes of a case and still leaves something to be done by the court before a case is finally decided on the merits. On May 13. not only the wife. 2004. in fact. It should be stressed that when the complaint was filed. On whether or not respondent is estopped from questioning the jurisdiction of the trial court At the outset. Toledo is solidary with another debtor. it is resorted only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of jurisdiction. 2. The Ruling of the Court courts or judges have no power or authority in law to perform. Its function is limited to keeping an inferior court within its jurisdiction and to relieve persons from arbitrary acts – acts which deliberately impeding the early disposition of this case. such as the first and earlier motion to dismiss and then the motion to dismiss at issue here. a motion to dismiss shall be filed within the time for but before the filing of an answer to the complaint or pleading asserting a claim. More telling is the following narration of the trial court in its Order denying respondent’s motion for reconsideration of the denial of her motion to dismiss: As can be gleaned from the records. 2004. Since the estate of Manuel is not an indispensable party. Toledo as defendant. which stands to be benefited or be injured in the outcome of the case. x x x. Rule 86 of the Rules of Court. Petitioner never failed to implead an indispensable party as the estate of Manuel is not an indispensable party. lends credibility to the position taken by petitioner. which is shared by the trial court. Toledo is an indispensable party. before this Court."22 As the Supreme Court held in Indiana Aerospace University v. x x x. which motion was denied by the trial court. hence. on Higher Education: 23 A writ of certiorari is not intended to correct every controversial interlocutory ruling.24 More importantly. The Issues Petitioner claims that the Court of Appeals erred in not holding that: 1. Motion to dismiss filed out of time To begin with. 21 Therefore. hearing was reset to September 24 and October 8. this petition. the Court of Appeals erred in granting the writ of certiorari in favor of respondent. The inclusion of Manuel as party-defendant is a mere misjoinder of party not warranting the dismissal of the case before the lower court. The filing of the second motion to dismiss was. the trial court did not commit grave abuse of discretion in denying respondent’s motion to dismiss. On October 7. On May 26. as the succeeding discussions will demonstrate. the claim x x x should be filed against the estate of Manuel S. of the Revised Rules of Court. 2004. in the absence of defendants’ witness. 27 Respondent’s act of filing multiple motions. June 2 and June 30. 3. "far from deviating or straying off course from established jurisprudence on the matter. It. Hence. erred not only in entertaining respondent’s petition for certiorari. On motion of the defendants. it was deemed imperative to resolve the issue of jurisdiction. x x x had in fact faithfully observed the law and legal precedents in this case. Toledo. giving credence to petitioner’s and the trial court’s conclusion that the filing of the motion to dismiss was a mere ploy on the part of respondent to delay the prompt resolution of the case against her. Also worth mentioning is the fact that respondent’s motion to dismiss under consideration herein is not the first motion to dismiss she filed in the trial court."29 The Court of Appeals. 2004 x x x. Respondent is already estopped from questioning the trial court’s jurisdiction. 2004. and 4. to the Court of Appeals and. that respondent is We find merit in the petition. x x x. 2004. defendants sought again the issuance of a subpoena duces tecum and ad testificandum to the said Gina Madulid. defendants filed instead a Motion to Dismiss x x x. therefore. acted correctly when it issued the questioned orders as respondent’s motion to dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE FILED HER AMENDED ANSWER. On July 28. the hearing on March 31. he filed an omnibus motion to dismiss citing. what respondent was questioning in her motion to dismiss before the trial court was that court’s jurisdiction over the person of defendant Manuel. namely: (1) jurisdiction over the subject matter. Legaspi City. being subject to waiver. falls within the concurrent jurisdiction of municipal courts or city courts and the then courts of first instance. therefore. it being argued therein that jurisdiction is vested in the Housing and Land Use Regulatory Board pursuant to PD 957 (The Subdivision and Condominium Buyers Protective Decree). in the Sarsaba Case. where one of the named defendants was already dead at the time of its filing. is a personal defense which can only be asserted by the party who can thereby waive it by silence. the petitioner in that case. jurisdiction over the person of Manuel was never acquired by the trial court. stating that "issue on jurisdiction may be raised at any stage of the proceeding. respondent cannot claim the defense since "lack of jurisdiction over the person. the trial court should have dismissed the complaint against all the defendants and the claim should be filed against the estate of the deceased defendant. respondent had several opportunities. The issues presented in this case are similar to those in the case of Sarsaba v. judgment.35 In the case at bar. and all objections not so included shall be deemed waived. not only against Sereno. the "objection on jurisdictional grounds which is not waived even if not alleged in a motion to dismiss or the answer is lack of jurisdiction over the subject matter. Rogelio Sarsaba. at various stages of the proceedings. the trial court did not acquire jurisdiction over the person of Manuel since there was no valid service of summons upon him. declaring that parties cannot be allowed to belatedly adopt an inconsistent posture by attacking the jurisdiction of a court to which they submitted their cause voluntarily. the NLRC rendered a decision declaring that Patricio Sereno was illegally dismissed from employment and ordering the payment of his monetary claims. even for the first time on appeal" and that. a motion attacking a pleading. precisely because he was already dead even before the complaint against him and his wife was filed in the trial court. Citing the doctrine laid down in the case of Tijam. After his motion to dismiss was denied by the trial court. The petitioner in Sarsaba. accompanied by Sereno and his lawyer. in Spouses Gonzaga v. jurisdiction over the res or the thing which is the subject of the litigation. et al. In subsequent cases citing the ruling of the Court in Tijam. within the exclusive original jurisdiction of the municipal courts. prayed that the complaint be dismissed. Based on the foregoing provisions.34 accused-appellant claimed that the crime of grave slander. trial court did not acquire jurisdiction over the person of Manuel Toledo In the first place. considering that the RTC did not acquire jurisdiction over the person of Sereno. – Subject to the provisions of Section 1 of Rule 9. in People v. petitioner Sarsaba filed his answer. In Lee v. however. Aspects of Jurisdiction Petitioner calls attention to the fact that respondent’s motion to dismiss questioning the trial court’s jurisdiction was filed more than six years after her amended answer was filed. Thus. The Rules of Court provide: RULE 9 EFFECT OF FAILURE TO PLEAD Section 1.1. to the principle of estoppel by laches.908. Instead.38 The Court of Appeals. and (4) in cases involving property. et al. the issue involved was the authority of the then Court of First Instance to hear a case for the collection of a sum of money in the amount of P1. Sec. but as to all the defendants. that since one of the defendants died before summons was served on him. 37 If the objection is not raised either in a motion to dismiss or in the answer. however. Defenses and objections not pleaded. the principles relating to jurisdiction over the person of the parties are pertinent herein. or that the action is barred by a prior judgment or by statute of limitations. not estopped from raising the question of jurisdiction. the Supreme Court barred the attack on the jurisdiction of the respective courts concerned over the subject matter of the case based on estoppel by laches. Casuga. v. as one of the grounds. MTC. A complaint for recovery of motor vehicle and damages. erred when it made a sweeping pronouncement in its questioned decision. "Summons is a writ by which the defendant is notified of the action brought against him."39 2. Petitioner’s argument is misplaced. resolved the issue in this wise: . As the question of jurisdiction involved here is that over the person of the defendant Manuel. The petitioner in the Sarsaba Case claimed. – Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. In Sarsaba. Thus. To satisfy the claim. to assail the trial court’s jurisdiction but never did so for six straight years. RULE 15 MOTIONS Although the factual milieu of the present case is not exactly similar to that of Sarsaba. Omnibus motion.33 petitioners argued that the respondent municipal trial court had no jurisdiction over the complaint for ejectment because the issue of ownership was raised in the pleadings. what was likewise at issue was the jurisdiction of the trial court over the subject matter of the case. since jurisdictional issues cannot be waived x x x subject." 36 Since the defense of lack of jurisdiction over the person of a party to a case is not one of those defenses which are not deemed waived under Section 1 of Rule 9. at that time. as did respondent herein. order.41 Here. the same is deemed waived if not raised in the answer or a motion to dismiss. Sereno.31 The aspect of jurisdiction which may be barred from being assailed as a result of estoppel by laches is jurisdiction over the subject matter.00 which amount was. to which she had appealed the municipal court's conviction. even for the first time on appeal. should be dismissed so that the claim may be pursued instead in the proceedings for the settlement of the estate of the deceased defendant.30 petitioner claimed that respondent’s failure to raise the question of jurisdiction at an earlier stage bars her from later questioning it. (2) jurisdiction over the parties. or proceeding shall include all objections then available. the court shall dismiss the claim. According to petitioner. In any case.42 This is exactly the same prayer made by respondent herein in her motion to dismiss. Accordingly. Finally. such defense must be invoked when an answer or a motion to dismiss is filed in order to prevent a waiver of the defense. in Tijam. it failed to consider that the concept of jurisdiction has several aspects. x x x Lack of jurisdiction over the subject matter can always be raised anytime. of which she was charged. and that the judgment of the court of first instance. Sibonghanoy. Jurisdiction over the person of a defendant is acquired through a valid service of summons. in view of the fact that Sereno was already dead when the complaint for recovery of possession was filed. Court of Appeals. therefore. Service of such writ is the means by which the court acquires jurisdiction over his person. 8. respondent timely raised the issue in her motion to dismiss and is. the NLRC sheriff and the NLRC by the registered owner of the truck. Later on. Vda. a truck in the possession of Sereno’s employer was levied upon by a sheriff of the NLRC. the case relied upon by petitioner. A defendant is informed of a case against him when he receives summons. (3) jurisdiction over the issues of the case. the objection to the jurisdiction over the person of the plaintiff or the defendant is deemed waived by virtue of the first sentence of the above-quoted Section 1 of Rule 9 of the Rules of Court. with prayer for the delivery of the truck pendente lite was eventually filed against Sarsaba. Presiding Judge. in that. The Court. that there is another action pending between the same parties for the same cause. when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter. However. de Te. therefore. lack of jurisdiction over one of the principal defendants. consequently. the principle of estoppel by laches finds no application in this case."40 In all of these cases. should be deemed null and void for want of jurisdiction as her appeal should have been filed with the Court of Appeals or the Supreme Court. one of the issues submitted for resolution in both cases is similar: whether or not a case. 32 the issue for consideration was the authority of the regional trial court to hear and decide an action for reformation of contract and damages involving a subdivision lot. especially since she actively participated in the proceedings conducted by the trial court. Rule 87] was taken. respondent herein. it is now impossible for Sereno to invoke the same in view of his death. on the other. the collection case can proceed and the demands of petitioner can be satisfied by respondent only. the other defendants in the complaint were given the chance to raise all possible defenses and objections personal to them in their respective motions to dismiss and their subsequent answers.. In other words. barred. for the simple reason that the obligation of Manuel and his wife. However. the Court of Appeals. Said provision gives the creditor the right to "proceed against anyone of the solidary debtors or some or all of them simultaneously. without injuring or affecting that interest.. it is clear that the estate of Manuel is not an indispensable party to the collection case. Also. 44 On the other hand. on behalf of Sereno. v. is solidary. should the creditor choose to demand payment from the latter. must be filed within the time limited in the notice. 43 (Emphasis supplied. but "an interest of such nature that a final decree cannot be made without affecting that interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. otherwise. 5. Where the obligation of the decedent is solidary with another debtor. The aforementioned provision states: "The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. Thus. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective. except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants. Said provision merely sets up the procedure in enforcing collection in case a creditor chooses to pursue his claim against the estate of the deceased solidary debtor. Section 7 of the 1997 Rules of Court states: In construing Section 6. a person is not an indispensable party if his presence would merely permit complete relief between him or her and those already parties to the action. proceed against the surviving solidary debtors without necessity of filing a claim in the estate of the deceased debtors. (Emphasis supplied. It is evident from the foregoing that Section 6 of Rule 87 provides the procedure should the creditor desire to go against the deceased debtor. Neither can petitioner invoke such ground. or contingent. x x x." Construing Section 698 of the Code of Civil Procedure from whence [Section 6. instead of instituting a proceeding for the settlement of the estate of the deceased debtor wherein his claim could be filed. exceptions. Solidary obligation of decedent. making it a condition precedent for any collection action against the surviving debtors to prosper. express or implied. there is no basis for dismissing the complaint against respondent herein. agreeing with the contention of respondent. It is not mandatory for him to have the case dismissed as against the surviving debtors and file its claim against the estate of the deceased solidary debtor. without prejudice to the right of the estate to recover contribution from the other debtor.) . would deprive him of his substantive rightsprovided by Article 1216 of the New Civil Code. Inc. 6. 49 held:50 SEC. Upon the other hand. in the case of Manila Surety & Fidelity Co.) Hence. Consequently. he (the creditor) may. There is. 45 Applying the foregoing pronouncements to the case at bar. the Supreme Court. x x x the sum of PESOS: [ONE MILLION FOUR HUNDRED (P1. the trial court correctly denied her motion to dismiss.00)] x x x. Villarama. The aforementioned provisions provide: SEC. but there is certainly nothing in the said provision making compliance with such procedure a condition precedent before an ordinary action against the surviving solidary debtors. – Parties-in-interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. an indispensable party is one who must be included in an action before it may properly proceed. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others. Rule 86 of the Revised Rules of Court reveals that nothing therein prevents a creditor from proceeding against the surviving solidary debtors. Obviously. all claims for funeral expenses and judgment for money against the decedent. 47 The provisions and stipulations of the contract were then followed by the respective signatures of respondent as "MAKER" and her husband as "CO-MAKER. 7. arising from contract. INC. In case of the death of one of the solidary debtors. Failure to serve summons on Sereno’s person will not be a cause for the dismissal of the complaint against the other defendants. complete or equitable. Rule 86 of the Revised Rules of Court. The contract between petitioner. Claims which must be filed under the notice. x x x. Rule 87 of the old Rules of Court. on the one hand and respondent and respondent’s husband. considering that the RTC never acquired jurisdiction over the person of Sereno.x x x We cannot countenance petitioner’s argument that the complaint against the other defendants should have been dismissed. al. x x x xxxx It is crystal clear that Article 1216 of the New Civil Code is the applicable provision in this matter. Asuncion51where the Supreme Court pronounced: A cursory perusal of Section 6. held that the claim of petitioner should have been filed against the estate of Manuel in accordance with Sections 5 and 6 of Rule 86 of the Rules of Court." Further. the estate of Manuel is not an indispensable party to petitioner’s complaint for sum of money. et." It is not a sufficient reason to declare a person to be an indispensable party simply because his or her presence will avoid multiple litigations. x x x. petitioner may collect the entire amount of the obligation from respondent only. The court’s failure to acquire jurisdiction over one’s person is a defense which is personal to the person claiming it. could be entertained to the extent that failure to observe the same would deprive the court jurisdiction to take cognizance of the action against the surviving debtors. the precursor of Section 6. the Supreme Court affirmed the dismissal by the trial court of the complaint against Sereno only. pursuant to Article 1216 of the Civil Code. Based on the foregoing pronouncements. An indispensable party is one who has such an interest in the controversy or subject matter of a case that a final adjudication cannot be made in his or her absence. a "person is not an indispensable party if his interest in the controversy or subject matter is separable from the interest of the other parties. whether the same be due. On whether or not the estate of Manuel SEC. states: FOR VALUE RECEIVED. The foregoing ruling was reiterated and expounded in the later case of Philippine National Bank v. so as to reap the benefit of having the case dismissed against all of the defendants. this Court held that where two persons are bound in solidum for the same debt and one of them dies. He or she is a party who has not only an interest in the subject matter of the controversy." 48 Thus. so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. which latter provision has been retained in the present Rules of Court without any revisions. Compulsory joinder of indispensable parties. If not filed. the claim shall be filed against the decedent as if he were the only debtor. as already emphasized above. even without impleading the estate of Manuel. considering that they have been served with copies of the summons and complaints and have long submitted their respective responsive pleadings.000. Rule 3. All claims for money against the decedent. therefore. or if he or she has no interest in the subject matter of the action. x x x." The choice is undoubtedly left to the solidary creditor to determine against whom he will enforce collection. The rule has been set forth that a creditor (in a solidary obligation) has the option whether to file or not to file a claim against the estate of the solidary debtor. For to require the creditor to proceed against the estate. I/We jointly and severally46 (in solemn) promise to pay BOSTON EQUITY RESOURCES. the Civil Code expressly allows the creditor to proceed against any one of the solidary debtors or some or all of them simultaneously. not due. Toledo is an indispensable party The Court of Appeals erred in its interpretation of the above-quoted provisions. so long as the debt has not been fully collected. if he so chooses. the decedent’s liability being absolute and primary. they are barred forever. the whole indebtedness can be proved against the estate of the latter. In fact. nothing improper in the creditor’s filing of an action against the surviving solidary debtors alone.400. Article 1216 of the New Civil Code would. the action would have proceeded against him had he been alive at the time the collection case was filed by petitioner. be repealed since under the Rules of Court. Obviously. 9786672. That petitioner opted to collect from respondent and not from the estate of Manuel is evidenced by its opposition to respondent’s motion to dismiss asserting that the case. as expressly provided for by Section 16. SP No.As correctly argued by petitioner. Such a construction is not sanctioned by principle. It has even been held that the question of the legal personality of a party defendant is a question of substance going to the jurisdiction of the court and not one of procedure. there was no party to be substituted. substantive. the Supreme Court agreed with the trial court when it resolved the issue of jurisdiction over the person of the deceased Sereno in this wise: As correctly pointed by defendants. (Emphasis supplied. Patricio Sereno died before the summons. x x x. the former being merely procedural. should be followed herein. the Court. that a substantive law cannot be amended by a procedural rule. Considering that capacity to be sued is a correlative of the capacity to sue. respectively. if Section 6. while the latter.)53 As a result. resemble those of this case. Instead. Be it recalled that the three (3) answering defendants have previously filed a Motion to Dismiss the Complaint which was denied by the Court. in effect. the Honorable Court has not acquired jurisdiction over the person of Patricio Sereno since there was indeed no valid service of summons insofar as Patricio Sereno is concerned. . as against her. this provision diminishes the [creditor’s] right under the New Civil Code to proceed against any one. It is incumbent upon a plaintiff. SO ORDERED. which states that: only natural or juridical persons. the failure to effect service of summons unto Patricio Sereno. Sulpicia Ventura" as the defendant. in accordance with the above pronouncements of the Court. the complaint may be dismissed on the ground that the pleading asserting the claim states no cause of action or for failure to state a cause of action pursuant to Section 1(g) of Rule 16 of the Rules of Court. when he institutes a judicial proceeding. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. only the case against Patricio Sereno will be DISMISSED and the same may be filed as a claim against the estate of Patricio Sereno. The Decision dated 28 February 2006 and the Resolution dated 1 August 2006 of the Court of Appeals in CA-G. one of the defendants herein. Rule 3 of the Rules of Court.R. Otherwise stated. There. the plaintiff must have an actual legal existence. In this case. On whether or not the inclusion of Manuel as party defendant is a misjoinder of party Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Substitution is proper only where the party to be substituted died during the pendency of the case.duty of counsel. a decedent does not have the capacity to be sued and may not be named a party defendant in a court action. de Te. thus did the trial court err when it ordered the substitution of Manuel by his heirs. in Civil Case No. in effect. the estate of Manuel is not an indispensable party and the case can proceed as against respondent only. the case. Rule 86 of the Revised Rules of Court were applied literally." Applying this provision of law. and the claim is not thereby extinguished. in the case of Ventura v. were validly served with summons and the case with respect to the answering defendants may still proceed independently. Manila is hereby DIRECTED to proceed with the trial of Civil Case No. and no suit can be lawfully prosecuted save in the name of such a person." Based on the last sentence of the afore-quoted provision of law. which states: Death of party. Based on the foregoing. are REINSTATED. The Orders of the Regional Trial Court dated 8 November 2004 and 22 December 2004. The Regional Trial Court. petitioner has no choice but to proceed against the estate of [the deceased debtor] only.) Indeed. considering that the three (3) other defendants. The name of Manuel as party-defendant cannot simply be dropped from the case. (Emphasis supplied. without requiring the appointment of an executor or administrator x x x. Militante. to the same extent. he. therefore. Hence. In order to maintain an action in a court of justice. 88586 are REVERSED and SET ASIDE. which is too well settled to require citation. the court never acquired jurisdiction over his person and. (Emphases supplied. The original complaint of petitioner named the "estate of Carlos Ngo as represented by surviving spouse Ms. This being the case. the petition is GRANTED. Rule 86 of the Revised Rules of Court cannot be made to prevail over Article 1216 of the New Civil Code.1âwphi1 Petitioner moved to dismiss the same on the ground that the defendant as named in the complaint had no legal personality. because a complaint cannot possibly state a cause of action against one who cannot be a party to a civil action. the dismissal of the case against Manuel is further warranted by Section 1 of Rule 3 of the Rules of Court. Section 6. WHEREFORE. However. and to decide the case with dispatch. The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice. x x x. together with a copy of the complaint and its annexes. 55 Since the proper course of action against the wrongful inclusion of Manuel as party-defendant is the dismissal of the case as against him. as in fact. Toledo only. x x x The heirs of the deceased may be allowed to be substituted for the deceased. the procedure taken by the Court in Sarsaba v. as against Manuel. In a suit or proceeding in personam of an adversary character. since Manuel was already dead at the time of the filing of the complaint. Any claim against a misjoined party may be severed and proceeded with separately. could be served upon him. In addition.) Here. should be dismissed so that petitioner can proceed against the estate of Manuel. We agree. must be dismissed. is brought before it. but the case with respect to the three (3) other accused [sic] will proceed. Vda. 97-86672 against respondent Lolita G. – Whenever a party to a pending action dies. that is. the inclusion of Manuel in the complaint cannot be considered a misjoinder. where the defendant is neither a natural nor a juridical person or an entity authorized by law. x x x. the court can acquire no jurisdiction for the purpose of trial or judgment until a party defendant who actually or legally exists and is legally capable of being sued. it shall be the duty of his counsel to inform the court within thirty (30) days after such death of the fact thereof. Branch 24. some or all of the solidary debtors. to name the proper party defendant to his cause of action. she or it must be a person in law and possessed of a legal entity as either a natural or an artificial person. a misjoined party must have the capacity to sue or be sued in the event that the claim by or against the misjoined party is pursued in a separate case. or entities authorized by law may be parties in a civil action. as mentioned earlier. The rule is no different as regards party defendants. and to give the name and address of his legal representative or representatives. 54 held: Parties may be either plaintiffs or defendants. does not render the action DISMISSIBLE. the remedy provided by Section 11 of Rule 3 does not obtain here.52 whose facts. but the latter refused. 625-A to Lot No. Sibonghanoy finds no application in the case at bar. 134785 in the name of the plaintiffs-appellants is REVIVED. Sibonghanoy 12 was present in the case. and the revival of respondents’ own title. 137466 issued in the name of petitioner were fraudulently issued and. 13 Petitioner maintains that the case of Tijam v. The CA found that petitioner purchased the property in bad faith from Lorna. thereafter. Third Judicial Region. Thus. 134932 issued in the name of Lorna Ong and Transfer Certificate of Title No. the CA rendered a Decision 8 in favor of the respondent. Branch 2. TCT No.G. Unlike in Tijam. On April 5. petitioner neither moved for a reconsideration of the order nor did she avail of any remedy provided by the Rules. 2005 of the Regional Trial Court. docketed as Civil Case No. WHETHER OR NOT PETITIONER IS A BUYER IN GOOD FAITH AND FOR VALUE. with an aggregate area of 82. 134932 issued in the name of Lorna and TCT No. the RTC issued an Order6 denying petitioner’s motion to dismiss and declared her in default. Summons was. the CA reversed and set aside the Decision of the RTC and ordered the cancellation of the TCT issued in the name of Lorna and the petitioner. Hence. CV No. 438-ML is hereby REVERSED and SET ASIDE. While on board a jeepney. and the Resolution 2 dated October 23. the brother of petitioner. or sometime in August 1990. The CA opined that although a purchaser is not expected to go beyond the title. 86983. through counsel. 2007.4 On January 17. the petition assigning the following errors: I WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE PERSON OF THE PETITIONER. 438-ML. Through a falsified deed of sale bearing the forged signature of Elenita and her husband Felicisimo. Elenita’s mother. Lilia Baluyot (Lilia). Nevertheless. dismissed the complaint. After learning what had happened. the CA concluded that respondents sufficiently established that TCT No. Petitioner argued that not only did the complaint lacks merit. Consequently. the RTC rendered a Decision7 finding petitioner to be a buyer in good faith and. Aggrieved. Maura sold Lot No. No. 134932 was cancelled and TCT No. wherein the petitioner therein actively . 137466 issued in the name of defendant-appellee Editha Padlan are CANCELLED and Transfer Certificate of Title No. 625K. CV No. 1990. she kept silent and only became interested in the case again when the CA rendered a decision adverse to her claim. Maura then subdivided the property into several lots from Lot No. Respondents. Maura Passion 10 and the testimonies of respondents. 625 of the Limay Cadastre which is covered by Transfer Certificate of Title (TCT) No. A few months later. therefore. Petitioner maintained that she has long been residing in Japan after she married a Japanese national and only comes to the Philippines for a brief vacation once every two years. On April 26. entitled People of the Philippines v. It reasoned that when the RTC denied petitioner’s motion to dismiss the case for lack of jurisdiction.000.972 square meters.00. T-105602. null and void. under the name of Elenita and her husband Felicisimo Dinglasan (Felicisimo). No. in view of the foregoing. Not satisfied.R. 2007 of the Court of Appeals (CA) in CA-G. On October 23. With the submission of the Judgment in Criminal Case No. 2007 denying petitioner's Motion for Reconsideration.000square-meter property for only P4. Mariveles. PERALTA. Bataan (Stationed in Balanga. Bataan for the Cancellation of Transfer Certificate of Title No. II WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF THE CASE. 86983. ELENITA DINGLASAN and FELICISIMO DINGLASAN. 134932 for the subject property under her name. Balanga.R. Maura was able to sell the lots to different buyers. Bataan) in Civil Case No. 2000.000. to wit: WHEREFORE. Thereafter. 2001. SO ORDERED. Anita Padlan. respondents sought recourse before the CA. because the summons was not validly served upon her person. 2013 EDITHA PADLAN. J. 137466 was issued in the name of petitioner. respondents moved to declare petitioner in default and prayed that they be allowed to present evidence ex parte. had a conversation with one Maura Passion (Maura) regarding the sale of the said property. Lorna sold the lot to petitioner Editha Padlan for P4. DECISION On June 29. vs. The fact that Lorna bought a 5. Charlie Padlan. petitioner filed a Motion for Reconsideration. On December 13.3 The Transfer Certificate of Title No. Believing that Maura was a real estate agent.9 The factual and procedural antecedents are as follows: Elenita Dinglasan (Elenita) was the registered owner of a parcel of land designated as Lot No. respondents demanded petitioner to surrender possession of Lot No. Lilia borrowed the owner’s copy of the TCT from Elenita and gave it to Maura. served to petitioner through her mother. 5 Petitioner claimed that the court did not acquire jurisdiction over her. Respondents were then forced to file a case before the Regional Trial Court (RTC) of Balanga. Bataan. 1999. consequently. 2001. the lower court failed to acquire jurisdiction over the subject matter of the case and the person of the petitioner. 4326 rendered by the RTC. petitioner. 625-K to one Lorna Ong (Lorna). based on the circumstances surrounding the sale. Petitioner. The CA concluded that the rationale for the exception made in the landmark case of Tijam v. 2005. Branch 4. but only by means of substituted service through her mother.00 and selling it after four months for the same amount should have put petitioner on guard. trial ensued. the CA issued a Resolution 11 denying the motion. Instead. filed an Opposition to Declare Defendant in Default with Motion to Dismiss Case for Lack of Jurisdiction Over the Person of Defendant. 180321 March 20. 625-O.R. who later caused the issuance of TCT No. on April 5. docketed as CA-G. 2007. testified that his sister is still in Japan and submitted a copy of petitioner’s passport and an envelope of a letter that was allegedly sent by his sister.: This is a petition for review on certiorari assailing the Decision 1 dated June 29. petitioner should have conducted further inquiry before buying the disputed property. the Decision dated July 1. III On July 1. since the said case is not on all fours with the present case. 137466. In fact. the only basis of valuation of the subject property is the value alleged in the complaint that the lot was sold by Lorna to petitioner in the amount of P4. was already amended by Republic Act (RA) No.00) or. Without their knowledge and consent. except actions for forcible entry into and unlawful detainer of lands or buildings. in civil actions in Metro Manila.16 Respondents’ Complaint17 narrates that they are the duly registered owners of Lot No. is determined based on the allegations contained in the complaint of the plaintiff. Jurisdiction in civil cases. petitioner stresses that she was a buyer in good faith. hence. Section 33 of the same law BP Blg. Respondents filed the complaint in 1999.participated in the proceedings. Respondents filed their Complaint with the RTC. where such assessed value does not From the Complaint. service may be effected out of the Philippines by personal service or by publication in a newspaper of general circulation. which was covered by TCT No. in one of the hearings. Municipal Trial Courts. enjoyment. and Municipal Circuit Trial Courts.000. 18 An action "involving title to real property" means that the plaintiff's cause of action is based on a claim that he owns such property or that he has the legal rights to have exclusive control.00) exclusive of interest. respondents’ counsel informed the court that they will present the tax declaration of the property in the next hearing since . 134785 was cancelled and TCT No. thus: Section 3. Lorna sold the lot to petitioner for a consideration in the amount of P4.000. or possession of. Once vested by the allegations in the complaint. summons was served only by substituted service to her mother. – Metropolitan Trial Courts. One of the lots was Lot 625-K. the issue of who between the two contending parties has the valid title to the subject lot must first be determined before a determination of who between them is legally entitled to the certificate of title covering the property in question. and Municipal Circuit Trial Courts shall exercise: xxxx (3) Exclusive original jurisdiction in all civil actions which involve title to. T-105602 which was originally issued and registered in the name of the respondents. Municipal Trial Courts. jurisdiction over which is determined by the assessed value of such lot. However. Finally. argue that the CA was correct in ruling in their favor. 129. or any interest therein. attorney's fees. Respondents were thus constrained to engage the services of a lawyer and incur expenses for litigation. (BP) 129. Respondents prayed for the RTC (a) to declare TCT No. Sometime in August 1990. plus cost of suit. where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20. an examination of the complaint is essential. litigation expenses and costs: Provided.00 and litigation expenses ofP20. right or interest in real property. irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. It was Maura who defrauded the respondents by selling the property to Lorna without their authority. x x x exceed Fifty Thousand Pesos (P50.000. 15 What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. or any interest therein where the assessed value of the property or interest therein does not exceed Twenty Thousand Pesos (P20. the court did not acquire jurisdiction over her person. possession.00) or for civil actions in Metro Manila. petitioner posits that the court lacks jurisdiction of the subject matter. – Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation. T-105602." is hereby amended to read as follows: Sec. While title is the claim. or disposition of the same. That in cases of land not declared for taxation purposes. Jurisdiction of Metropolitan Trial Courts. Rule 14 of the Rules of Civil Procedure. Despite demands from the respondents. An Act Expanding the Jurisdiction of the Metropolitan Trial Courts. 137466 null and to revive TCT No. which was the amount alleged by respondents that the property was sold to petitioner by Lorna. Title is the "legal link between (1) a person who owns property and (2) the property itself. 137466 was issued in the name of petitioner. Respondents. at the time Batas Pambansa Blg. 134932 was later cancelled and TCT No. Municipal Trial Courts. 129. The averments in the complaint and the character of the relief sought are the ones to be consulted. amending BP Blg. it is essential to ascertain whether the RTC has jurisdiction over the subject matter of this case based on the above-quoted provisions. The determination of such issue merely follows after a court of competent jurisdiction shall have first resolved the matter of who between the conflicting parties is the lawful owner of the subject property and ultimately entitled to its possession and enjoyment.00. Also. original jurisdiction over which is conferred upon the Metropolitan Trial Courts. the value of such property shall be determined by the assessed value of the adjacent lots. 129. 134785. real property.00). about ascertaining which of these parties is the lawful owner of the subject lot. the Judiciary Reorganization Act of 1980." "Title" is different from a "certificate of title" which is the document of ownership under the Torrens system of registration issued by the government through the Register of Deeds.000. and Municipal Circuit Trial Courts. the Court has already held that a complaint must allege the assessed value of the real property subject of the complaint or the interest thereon to determine which court has jurisdiction over the action. and (b) to order petitioner to pay attorney’s fees in the sum of P50.000.00. the case filed by respondent is not simply a case for the cancellation of a particular certificate of title and the revival of another.000. 1990. TCT No. therefore. The nature of an action. petitioner refused to surrender possession of the subject property. The action is. a certificate of title is the evidence of such claim.00. Section 19 of Batas Pambansa Blg.000. 625 of the Limay Cadastre which was covered by TCT No. on the other hand. petitioner herein asserts that she did not participate in any proceedings before the RTC because she was declared in default. when the defendant does not reside in the Philippines and the subject of the action is property within the Philippines of the defendant. the land was divided into several lots under their names through the fraudulent manipulations of Maura. before proceeding any further with any other issues raised by the petitioner. Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's cause of action. 14 Section 1 of RA 7691. in order to determine which court has jurisdiction over the action. or possession of.000. TCT No. Petitioner insists that summons was not validly served upon her. Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The petition is meritorious. considering that at the time summons was served. By virtue of the fictitious sale. otherwise known as the "Judiciary Reorganization Act of 1980. she was residing in Japan. 7691. before the relief prayed for by the respondents in their complaint can be granted. 19. 33. real property. provides that the RTC shall exercise exclusive original jurisdiction on the following actions: Section 1. On April 26. it can be inferred that the value of the property was only P4. 19 In the present controversy.1âwphi1 Section 3 of RA 7691 expanded the exclusive original jurisdiction of the first level courts. as well as which court or body has jurisdiction over it. considering that from the complaint. Maura sold the subject lot to Lorna. No tax declaration was even presented that would show the valuation of the subject property. damages of whatever kind. Petitioner contends that pursuant to Section 15. 134932 was issued in the name of Lorna.21 In the case at bar. where such value exceeds Fifty Thousand Pesos (P50. The averments therein and the character of the relief sought are the ones to be consulted.20 In no uncertain terms.00. amending for the purpose BP Blg. Hence. In this case. 129 is hereby amended to read as follows: Sec. (2) In all civil actions which involve the title to.000. Contrary to law. did. Fernando Alcala and his brother Armando. SO ORDERED. to indemnify the complaining witness. J. 24.000. Fernando's testimony was corroborated by Wilfredo Davan. it was established that said complainant is a mental retardate (Exhs. named Armando. the following facts are gathered: As per result of the psychiatric and psychological examination conducted by Dr. Recognizing the female partner of the accused as his mentally retarded sister. An internal examination showed congestion of the posterior of the vestibular mucosa. 2007. senior NBI medico-legal officer did a physical and genital examination on the person of the complainant on October 26. 34. He also saw the legs of a woman around the waist of the accused with the latter making some movements. they did not present such copy. That he did not rape complainant is allegedly supported by the findings of Dr. In ordinary parlance. He told Joy Alcala to go to the house of his sister to get his clothes as he was going home to Bulacan.e. 2007. When he was on his way home.they have not yet obtained a copy from the Provincial Assessor’s Office. 4. a day after the alleged commission of the offense charged. the remaining issues raised by petitioner need not be discussed further. stopped him and then boxed him until he fell down. and its Resolution dated October 23. In fact whenever he saw her playing with herself he usually gave her a spanking. "A". 1981 at around 3:00 o'clock in the afternoon. by means of force and intimation upon the person of the undersigned. Through his testimony as the sole witness for the defense. When Dr. 2005. she did not go at once because she was asking money from him. 1981 at about 3:00 p. Fernando Alcala and Wilfredo Davan. or that the sexual intercourse was against her will and . Maximo Reyes. CV No. While he and Joy were talking. rendered a decision 1 the dispositive portion reading as follows: WHEREFORE. Maximo Reyes that there was no tear or laceration in her hymen. Rollo) I The trial court erred in convicting the accused-appellant of the crime of rape despite the insufficiency of evidence adduced by the prosecution to prove his guilt beyond reasonable doubt. Erlinda Marfil. in the Municipality of Mandaluyong. He asked them why they hit him but they did not answer. The complaint in Civil Case No. 86983. ROMEO ESTREBELLA. labia majora and labia minora) showed healing abrasions on the posterior aspect and the presence of bleeding. there is however. dated July I. His sister who was frightened ran away while the neighbors tried to pacify Fernando and Romeo Estrebella. as he was about to take a bath. On October 25. (Exh. The two brothers then brought the accused to the police precinct of Mandaluyong. Dr. but another brother of complainant. "B-3") Fernando Alcala. there was no complete penetration as the hymen was intact. all proceedings in the RTC are null and void. 71464 August 4. The Decision of the Regional Trial Court. the court. brother of the complainant. witness Fernando immediately went to where accused was and boxed him. where the ultimate objective of the plaintiffs is to obtain title to real property. Joy Alcala suddenly arrived.m. in the sum of P30. plaintiff-appellee.000. is their neighbor. He did not do anything because Fernando was drunk. Reyes concluded that the complainant could have had sexual intercourse with a man on or about the alleged date of commission. WHEREFORE. (p. "A-1" and "A-2") whose chronological age is thirteen but her mental age is below that (only six or seven). such irritation in the genitalia of the complainant could be caused only by the sex organ of a male in erection. Accused denied that he had sexual intercourse with complainant.: Accused Romeo Estrebella pleaded not guilty to the crime of rape allegedly committed as follows: That on or about the 25th day of October. (P.) JOY ALCALA Y ADVINCULA Complainant (p. ran after Romeo Estrebella and was able to catch up with him. meaning there was reddening and inflammation of that particular portion. submitting before Us the following: ARGUMENTS To reiterate. he found that the outer genitalia (i. Metro Manila. the above-named accused. No. Philippines and within the jurisdiction of this Honorable Court.00. accused-appellant. 24 Consequently. testified that Romeo Estrebella. is declared NULL and VOID. dated June 29.. Dr. Mandaluyong. Joy Alcala y Advincula. Therefore. He did not readily recognize who the woman was until he went to the faucet and saw accused stand up. Appellant's defense is denial of the offense charged. Accused assails said decision. then and there wilfully. are REVERSED and SET ASIDE. he saw the accused under the house of Crisanto Cuevas sitting on a long bench with the zipper of his pants opened. 23 Since the amount alleged in the Complaint by respondents for the disputed lot is only P4. The latter was able to disengage himself from the former.R. another witness for the prosecution. 22 However. (Sgd. it should be filed in the proper court having jurisdiction over the assessed value of the property subject thereof. SO ORDERED. Rollo) After due trial. her brother Fernando Alcala arrived and suddenly hit him. 1981. He further averred that he used to see Joy Alcala play with her private part by inserting her two fingers. 1988 THE PEOPLE OF THE PHILIPPINES. 438-ML is dismissed without prejudice. 1982. Maximo Reyes. the petition is GRANTED. G. accused alleged that while he was resting under the house of his godfather on October 25. II The trial court gravely erred in trying the case on ground of lack of jurisdiction. vs. Rollo) From the testimonies of the witnesses for the prosecution Dr. He called her and the latter sat on the bench where he was sitting. unlawfully and feloniously have carnal knowledge of the undersigned against her will and consent. Metro Manila. and elastic. 1981. the MTC and not the RTC has jurisdiction over the action. The Decision of the Court of Appeals in CA-G.R. However. PARAS. no evidence adduced that complainant was forced or intimidated by the accused". March 24. Erlinda Marfil of the National Bureau of Investigation (NBI) on the person of complainant Joy Alcala y Advincula.00 and to pay the costs. however. premises considered the Court finds accused Romeo Estrebella guilty beyond reasonable doubt of the crime of Rape and hereby sentences him to suffer the penalty of reclusion perpetua. He further argues that "(g)ranting arguendo but without admitting that rape is committed. WHEREFORE. rape or acts of lasciviousness shall not be prosecuted except upon a complaint filed by the offended party or her parents. she deserves the protection of the law. to have the private offense committed against the latter publicly tried. which deals primarily with the definition of crimes and the factors pertinent to the punishment of the culprits. or guardian. independently of her parents. while the complaint may have been technically in the sense that complainant was incompetent. by undergoing trial. Appellant's arguments deserve no consideration. premises considered. General. 5. People. Court of First Instance of Pangasinan. Article 344 of the Revised Penal Code) Again.. The fact that the hymen was not lacerated does not negate rape. the trial court had jurisdiction to try the case. has the right to institute the prosecution for the above offenses.) xxx xxx xxx The offenses of seduction. because the same with respect to the instant crime is governed by the Judiciary Act of 1948. as gleaned from the testimonies of Fernando Alcala and Wilfredo Davan who testified to the effect that they did not hear any word or conversation between the two (accused and complainant) while performing the sexual act. it was mutually voluntary. "B"). Sec. even if she were a minor. 20 Phil. Surely. But the aforementioned provision of Art. The brother's testimony shows the consent and willingness of the family of complainant. the guilt of the accused has been proved beyond reasonable doubt. the pertinent portions reading as follows: The offended party. 304. unless she is incompetent or incapable of doing so upon grounds other than her minority. if the offender has been expressly pardoned by the abovenamed persons. 523. nor. Physical evidence is of the highest order and speaks more eloquently than all witnesses put together. It could not affect said jurisdiction. In the instant case the fact that complainant did not offer any resistance did not mean that she consented. Joy Alcala had sexual intercourse with a man on October 25. In this type of rape the employment of force or intimidation on the part of the man and resistance on the part of the woman are not essential. and that jurisdiction over a given crime not vested by law upon a particular court. as the case may be. a physical condition consistent with sexual intercourse. grandparents or guardian. 4 and 5 of the Revised Rules of Court and Art. Roxas. 57 Phil. Secs. It is of course well-settled that jurisdiction over the subject matter of an action—in this case the crime of rape— is and may be conferred only by law. Undoubtedly. Ytac 95 SCRA 644). who can not give her consent obviously. cited in Valdepenas v. The complaint required in said Art. appellant's argument holds no water. for clearly she could not comprehend the fun implications of the libidinous act. 344 of the Revised Penal Code. 344 is merely a condition precedent to the exercise by the proper authorities of the power to prosecute the guilty parties. therefore. . We have held that penetration by entry of the lips of the female organ even without rapture of hymen suffices to warrant conviction for rape (People vs. 298. 16 SCRA 871).consent but that. (Manila Railroad v. Maximo Reyes (Exh. cited in Valdepenas vs. And such condition has been imposed out of consideration for the offended woman and her family who might prefer to suffer the outrage in silence rather than go through with the scandal of a public trial. ardoje 99 SCRA 388). Rules of Court. 1981 due to the presence of abrasion and congestion and bleeding in the genitalia. 4. People. Perkins v. 72 Phil. People v. It is established by the medical and phychological examination that complainant is a mental retardate. (People vs. this defect has been cured when complainant's brother Fernando Alcala took the witness stand for the prosecution. 88 SCRA 683. Atty. grandparents. Evidently. 344 does not determine the jurisdiction of our courts over the offenses therein enumerated. abduction. may not be conferred thereon by the parties involved in the offense. (Rule 110. supra) In the case at bar.. appellant insists that the trial court did not acquire jurisdiction to try the case because the complaint was filed by complainant who was a minor and a mental retardate contrary to the provisions of Rule 110. (Samilin v. In his second assignment of error. the family of complainant chose to denounce the injustice committed against the latter in public and thus agreed to bear the personal effects of said exposure. SO ORDERED. Sexual intercourse with a woman who is deprived of reason or one who is weak in intellect to the extent that she is incapable of giving rational consent to the carnal intercourse constitutes rape. 1985 Rules on Criminal Procedure. in any case. Conchada. . not by the Revised Penal Code. this is what is required by the rules. Substantially. Rule 110. Sec. Based on the medical and physical examination of the genital organ of complainant conducted by Dr. 514. such medical findings confirm the testimonies of Femando Alcala and Wilfredo Davan that they saw accused Romeo Estrebella having carnal knowledge with Joy Alcala on said date under the house of Crisanto Cuevas. (Also. The assailed decision is hereby AFFIRMED. Furthermore. petitioner sought a more speedy remedy in questioning said orders by filing this petition for certiorari before this Court. 116028 was dismissed on May 21. L-54287 September 28. consequently. claiming that res judicata does not apply because the summons and complaint in Civil Case No.000. MOLINA. 116028 had the effect of an adjudication upon the merits. 129829 dismissed on the ground of resjudicata it appearing that Civil Case No. 116028 does not have the effect of an adjudication on the merits of the case because the court that rendered the same did not have the requisite jurisdiction over the persons of the defendants therein.: The principal issue raised in this case is whether the trial court committed a grave abuse of discretion when it ordered Civil Case No. 8 Trial courts have the duty to dispose of controversies after trial on the merits whenever possible. 1980. the trial court never acquired jurisdiction over the persons of private respondents. 129829 supporting private respondent's motion to dismiss on the ground of res judicata are without cogent basis. 116028 was of no moment. petitioner reiterated its allegation that in Civil Case No. the obligation was already P429. 1970. Judge Alfredo C. is an adjudication on the merits.R. Petitioner opposed the motion to dismiss. improper. as such. which is appropriate for resolution by the instant petition. Reyes for respondents. and must be rendered by a court of competent jurisdiction. This decision is immediately executory. Florendo) and in Civil Case No. 5 Petitioner appealed to the Court of Appeals both questioned orders of respondent court in Civil Case No. 116028 disregarded the fundamental principles of remedial law and the meaning and the effect of jurisdiction. but jurisdiction could not be acquired over defendants-private respondents. 116028 for failure of the petitioner "to prosecute its case within a reasonable length of time. in its order dated May 8. or dismiss the case with prejudice which. 7 The controverted orders in Civil Case No. 129829 are hereby REVERSED and SET ASIDE. Petitioner correctly states that its appeal to the Court of Appeals in CA-G.219. The sheriff had not yet submitted his return of the alias summons when the action was precipitately dismissed by the trial court. 4 The motion for reconsideration was denied by the trial court on June 26. We sustain petitioner's claim that respondent trial judge acted without or in excess of jurisdiction when he issued said orders because he thereby traversed the constitutional precept that "no person shall be deprived of property without due process of law" and that jurisdiction is vitally essential for any order or adjudication to be binding. the judgment is a nullity. 1981. for the collection of a sum of money based on a promissory note dated January 26. Gutierrez. Otherwise. If at all. 1 A motion for reconsideration of that order was denied on January 15.R.00.00 but petitioner claims that as of March 5. it must acquire jurisdiction over the subject matter and the parties. For the court to have authority to dispose of the case on the merits. Court of First Instance of Manila. It is a cardinal rule that no one must be allowed to enrich himself at the expense of another without just cause. 1980 and June 26. J. were issued with grave abuse of discretion amounting to excess of jurisdiction. favorable or adverse to them. These are proven circumstances that negate the action of respondent judge that the dismissal of Civil Case No. No. Molina) were filed by petitioner Republic Planters Bank against private respondent.. the court did not acquire jurisdiction over private respondents and that at the time the court ordered its dismissal. a motion to dismiss was submitted by private respondents on the ground that the cause of action is barred by a prior judgment (res judicata) in Civil Case No. 1979. The records of the case are ordered returned to the trial court for trial and disposition on the merits. 116028. 1980. in effect. the action for collection of the loan. 1980 issued in Civil Case No. WHEREFORE. Judge Alfredo C. 1979 and June 15. Private respondents opined that said order was an adjudication upon the merits. The questioned orders of the trial court in Civil Case No. Asia & Associates for petitioner. No. Originally. The trial court (Branch XX). 129829. In the very order of dismissal of Civil Case No. 116028 (Branch XXXVI. Florendo. as Presiding Judge. It is not disputed that both complaints in Civil Case No. A judgment. that the dismissal was with prejudice since the order was unconditional. Florendo dismissed Civil Case No. it held that it was of no moment as to the dismissal of the case. 116028. SO ORDERED. SARMIENTO SECURITIES CORPORATION and FELICIANO SARMIENTO.6 But then. The order of dismissal in Civil Case No. 129829 on the ground that the orders dated May 21. 11 6028 never became final as against private respondents. 3 In a motion for reconsideration of the order of May 8. was only for P100. Manila. must be binding. 1988 REPUBLIC PLANTERS BANK petitioner. CONRADO M. and. 116028 has the effect of an adjudication upon the merits and constitutes a bar to the prosecution of Civil Case No. 116028.G. such a dismissal may be considered as one without prejudice. Justice cannot be sacrificed for technicality. 129829 (Branch XX. the Court finds this petition to be impressed with merit. Petitioner maintains that the order of dismissal in Civil Case No. although in the said case. a motion for an alias writ of summons was pending resolution inasmuch as the sheriff had not acted on the same. 129829 was filed by petitioner. The trial court ruled that the dismissal of Civil Case No. On May 21. it cannot be the basis of res judicata and it cannot be a bar to a lawful claim. JR. HON. dismissed the complaint in Civil Case No. over the case. 2 When Civil Case No. it cannot render any binding decision. 116028 were never served upon private respondents and. The delay could not be attributed to its fault. evidenced by a promissory note. SARMIENTO EXPORT CORPORATION. the trial court admitted that it did not acquire jurisdiction over the persons of private respondents and yet. 116028. had become final. We disagree. .000.74. the trial court never acquired jurisdiction over private respondents and. The sole issue involved in this case is one of jurisdiction. In this case. for failure of petitioner to prosecute within a reasonable length of time. because petitioner was not able to present evidence in the trial court. the questioned orders dated May 8. to be considered res judicata. 1980 in Civil Case No. vs. dismissing Civil Case No. If it did not acquire jurisdiction over the private respondents as parties to Civil Case No. GANCAYCO. Paco. and by reason of the foregoing. 129829. and that the lack of jurisdiction over defendants (private respondents) in Civil Case No. respondents. in the amount of P100. there are no indications that petitioner intentionally failed to prosecute the case. 129829. 1979 issued by Judge Alfredo C. Benjamin M. Dorado. Petitioner pursued the case with diligence. No costs. The court finds that the two questioned orders of the trial court are irregular. Judge Conrado M. Branch XX. 1979. Under the foregoing undisputed facts. 67288 pertaining to the questioned orders of the trial court is not an adequate remedy. Manila. This being so. 116028. 1979. Represented By BELLO M.R. SR. Hermogenes Caluag. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. the respondent judge denied the motion. compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection. 1986 which expired on August 13. the temporary mandatory order dated July 24. hours of work and other terms and conditions of employment.000.. except in cases where the employer contests the findings of the labor regulations officer and raise issues which cannot be resolved without co considering evidentiary matters that are not verifiable in the normal course of inspection.500 hogs and with 8. Bukidnon.. it filed a complaint for various offenses against the private respondent ranging from unfair labor practice to non-payment of the minimum wages. That is basic and elementary. as a consequence of a controversy arising from charges of unfair labor practices against the respondent. 1986 the decretal portion of which is quoted above. whether agricultural or non-agricultural: Francisco D. thus: ART. the petition is granted. RODRIGO CATIPAY. 1986 as stated in the Order of August 19. HONORABLE ANTONIO V. Also on August 14. Jurisdiction of Labor Arbiters and the Commission. respondents. On the same date." The petitioner opposed the motion.] The petitioner then came to this Court. BELYCA Corporation. SARMIENTO. 1067 (1956).000 fowls with a total value of about P10. 1986 would be September 2. the respondent judge issued a temporary restraining order (TRO) "commanding herein defendants [the striking workers]. is in point: It appearing that the issue involved in the main case is interwoven with the unfair labor case pending before the CIR as to which its jurisdiction is exclusive. medicare and maternity benefits. overtime compensation. 3." 3 On August 4.. Jurisdiction to try and adjudicate such cases pertains exclusively to the proper labor officials of the Department of Labor. the private respondent commenced suit for injunction with the respondent Regional Trial Court. preventing said workers from giving feeds and/or food to the hogs and fowls which would kill all of said hogs and fowls if not attended to this very day . Thus: . 217. President & General Manager. the Associated Labor Unions. the respondent judge granted it stating: WHEREFORE. at Cagayan de Oro City. 5. 1986. and It appears that on June 24. intimidation and coercion as averred in the complaint. These acts come within the purview of Section 9 (d) of RA 875 which may be enjoined by CIR. including those based on non. 1 986. 1 986. 1986.. No. On July 2. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision. CASANOVA. J. after the twenty-day extension (from August 13). vs. [Please note the erroneous reckoning of the expiration date of the TRO which should be September 2. It is self-evident that twenty (20) days from August 13. with the exclusive power to issue a temporary restraining order to enjoin acts in connection therewith.. Filipino Pipe & Foundry Corporation. the following cases involving all workers. In a long line of decided cases. however. 1986. 1. 99 Phil. ASSOCIATED LABOR UNIONS (ALU-TUCP). It will expire on October 2. the petitioner filed a motion for reconsideration (to lift TRO as well as for the dismissal of the case on the ground of lack of jurisdiction. Done this 19th day of August.500) hogs and eight thousand (8.000) fowls. Alas for petitioners.. 5 It was only very recently that the Court promulgated Silva Pipe Workers Union NATU v. except claims for employees' compensation. On July 24. 4. their agents and/or representatives to allow plaintiff [the private-respondent) or workers or authorized representatives free passage to and from Belyca Farms. 1986. (b) The Minister of Labor or his duly authorized representatives shall have the power to order and administer. located at Kalasungay Malaybalay. The ruling laid down in National Garments and Textile Workers' Union-PAFLU.. On August 14. On August 19. 1986. BORROMEO AND BELYCA CORPORATION. it is evident that it does not come under the jurisdiction of the trial court even if it involves acts of violence. 1986 at Malaybalay." 2) On the same day. vs.. is not well-taken. GILBERTO REDOBLADO ROBERTO RONOLO and 134 Others). the petitioner filed a notice of strike with the then Ministry of Labor and Employment. 1986. 2. separation pay and other benefits provided by law or appropriate agreement. The courts of law have no jurisdiction to act on labor cases or various incidents arising therefrom. it struck. L-9104. "preventing workers of Belyca farms from entering the business establishments . and not October 2. social security. Region X. 75736 September 29.00. this Court has also invariably held that the Court of Industrial Relations has exclusive jurisdiction over labor disputes involving unfair labor practice. 1988 As the Court has indicated at the outset. et al. All money claims of workers. 6 where it was held: The contention of the Company that the CFI had jurisdiction over the civil case inasmuch as it was brought principally to prevent the further commission of unlawful acts. 1986. Bukidnon to feed plaintiffs seven thousand five hundred (7. for the sake of justice and fairness. etc. Cases arising from any violation of Article 265 of this Code. 1986." 1 (The private respondent maintains "about 7. 128 . including questions involving the legality of strikes and lockouts. WARREN MAPUTI. It alleged that the petitioner had obstructed free ingress to the firm's premises. Soriano-Arafia & Balbiran Law Office for respondents. Namely. Belyca Corporation filed an urgent motion "for extension of the life of the restraining order previously issued to another twenty days. 1986 is hereby extended to another period of twenty (20) days to be counted from August 13. petitioners. (For And In Behalf Of Its Direct Members. Unfair labor practice cases.payment or underpayment of wages. 4 xxx xxx xxx ART.. 1986 which is the date of the hearing of the main petition. 1986 and not October 2. and to issue writs of execution to the appropriate authority for the enforcement of their order.: The Court issues the writs prayed for in this petition for certiorari and prohibition filed by the petitioner. after due notice and hearing. Cases involving household services.G. a firm engaged in livestock farming. Hon. Those that workers may file involving wages. Tan. that the private respondent had cause for complaint and that the strike was illegal or had become illegal as a result of the strikers' resort to illegal acts the courts are not the proper forum for it. Court of first Instance of South Cotabato. H. and in the exercise of its jurisdiction said court has the exclusive power to issue a temporary restraining order to enjoin any acts committed in connection with said labor dispute. and Erlanger and Galinger. it dies a natural death. of course. all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the. to say that the strike was illegal. Electronic and Electricity Workers Federation vs. 1986—as stated in the order itself. No. 854. reinstatement and other demands fall within the exclusive original jurisdiction of the National Labor Relations Commission or Labor Arbiters of the Ministry of Labor.1968. 1986 to October 2. with which the challenged TRO was issued (it was issued on the same day the complaint was filed)—and based on the bare word alone of Belyca (that the strikers had behaved unlawfully in the course of the strike)—has not eluded this Court. It is likewise a serious abuse of discretion on the part of the respondent judge to extend such a TRO. 99 Phil. friendly and diplomatic manner and they should never resort to force. July 29. The defendants are likewise advised to have a diplomatic conference with the management of plaintiff. in a lawful and diplomatic manner in the proper forum which is the National Labor Relations Commission. (In this case. Assuming. The foregoing notwithstanding. The reason for such exclusive jurisdiction is that since picketing and strikes may be mere incidents or consequences of an unfair labor practice. companies engaged in the generation or distribution of energy. 12 The provisions referred to are as follows: (g) When in his opinion there exists a labor dispute causing or likely to cause strikes or lockouts adversely affecting the national interest. It does not lie save in those cases as the Labor Code provides. converted the writ from an instrument in furtherance of justice to a shield for injustice. hospitals. 15 This is not. it is but proper that a Writ of Injunction prayed for in connection with that labor dispute originate from the Court having jurisdiction over the main case inasmuch as it is that Court that has cognizance of all relevant facts (Erlanger & Galinger. in cases where the parties are not residents of Metro Manila. Thereunder. not the judiciary. 7 That the case in question involves a labor dispute is patent from the records. The philosophy of this step is to avoid trouble. the application for preliminary injunction is denied. 17 we thus said: The above-quoted amendatory provision (BP 224) was adopted as a reaction against the indiscriminate issuance of ex parte preliminary injunctions which. and from intervening at any time and assuming jurisdiction over any labor dispute adversely affecting the national interest in order to settle or terminate the same.—No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity." 9) To say indeed that the workers had obstructed free passage to the strike-bound firm. If before the expiration of the 20day period. or its Chairman or Vice Chairman when the Commission is not in session and as may be prescribed by its rules.. not infrequently. It did not confer on him the competence he did not have. concerted acts of labor are the do of the labor officials. Inc. 1067. except as otherwise providede in Article 218 and 264 of this Code. and export-oriented industries. Injunction prohibited. it denied the workers due process of law. friendly and diplomatic manner. 17 [19581). furthermore. Erlanger and Galinger Employees Association-NATU G. and should instead apply the law of the land. 14 The fact that the poultry and piggery maintained by the private respondent required close care and attention does not warrant the respondent judge's assumption of jurisdiction. (e) To enjoin or restrain any actual or threatened commission of any or all Prohibited or unlawful acts in any labor dispute which. Branch II. The Minister may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. Inc. banks. further. There is no shadow of a doubt that defendants are workers or employees of plaintiff Belyca Corporation and likewise it is undisputed that their demands for increase of wages. coercion. an impasse cognizable alone by the National Labor Relations: .R. inasmuch as the power to decide on said legal question properly belongs to the National Labor Relations Commission. National Garment and Textile Workers' Union vs. may cause grave or irreparable damage to any patty or render ineffectual any decision in favor of such party. It does not mean that this Court has ruled on the legality or illegality of the said strike. finally. except after due notice and hearing and in accordance with its rules: Provided. That the receipt of evidence for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters who shall. In rendering his ruling. Nolasco. to say that the strike in question was. Provided. 10 This is clear from his very order: This provision of law is cited in order to guide the defendants that their demands from their employer should be made in lawful. vs.. if it appears that great or irreparable injury would result to the applicant before his application for preliminary injunction could be heard on notice. the President of the Philippines shall not be precluded from determining the industries where in his opinion labor disputes may adversely affect the national interest. Nevertheless.corporation in order that their demands can be ventilated and heard in a lawful. This is a grave abuse of discretion. That any ex parte restraining order issued by the Commission. (PAFLU. including those within export processing zones. or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes. That no temporary injunction against the commission of acts Prohibited under Article 265 of this Code shall be issued by the Commission. Erlanger & Galinger Employees Association-NATU 104 Phil. The gross haste. No. violence and intimidation or they should not apply the law of jungle. assuming that the TRO itself was valid) upon the expiration of which. 1. The rule is absolute. vs. then. shall be valid for a period not exceeding twenty (20) days Provided. the respondent judge himself was aware that the dispute was the result of an impasse between employer and employees.strike or lockout. Under the Rules of Court as amended 16 a TRO has a non-extendible lifetime of twenty days (that is.11907. 99 Phil. the Minister of Labor and Employment shall assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. such as may occur in but not limited to public utilities. This Court agrees in toto with the defendants that it has no jurisdiction to decide on the question of legality or illegality of strikes and lockouts. For under the Labor Code: (E) No person engaged in picketing shall commit any act of violence. reinstatement and the like. Plainly. If one has already taken place at the time of assumption or certification. Communications. or obstruct public thoroughfares. 21 [19581). the respondent judge extended the life of the TRO to fifty (50)—days from August 13. 8 The respondent judge can not enjoin acts carried out as a consequence of the strike without unavoidably ruling on the legality of the strike itself.Cases involving unfair labor practices fall within the exclusive jurisdiction of the CIR.. conduct such hearings in such places as he may determine to be accessible to the parties and its witnesses and shall submit thereafter his recommendation to the Commission. is. L-24984. injunction itself stands as an exceptional remedy. As we said.104 Phil. et al. notwithstanding the judge's own words of caution (that he was not ruling on the legality or illegality of the strike). Jurisdiction is vested by law and not by the demands of emergency. Such assumption or certification shall have the effect artifical of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order.) If a writ of preliminary injunction is granted. in no case may a preliminary injunction be issued without notice. Defendants are hereby advised to ventilate their demands for increase of wages. the judge could issue a temporary restraining order with a limited life of 20 days from date of issue.9104. disorder. 13 xxx xxx xxx It is clear then that the Court a quo acted without jurisdiction in the case before it. Phil. I. The issuance of "perpetual" TROs was precisely the motivating factor behind the amendment of the Rules. . if not restrained forthwith. chaos and bloodshed which are unwarranted and unnecessary among educated and civilized people like the defendants and officers of plaintiff-corporation. legal. ergo. Ministry of Labor. vs.. Ministry of Labor. the writ then takes its place. But it cannot substitute for the writ (if one is not granted within the twenty-day period) by the simple expedient of "extending" its life. Hon. In Dionisio v.. 11 What is even clearer is the fact that in labor cases. 255. Caluag. Thus: ART. the temporary restraining order would thereby . by necessity. ("The strike can continue. 2005 Order 3 of the Regional Trial Court (RTC) of Makati. plaintiff is not really a delinquent member. 7. x x x. no judicial declaration to that effect being necessary. It diminishes in no small measure the rights of the workingman enshrined in the Constitution. 13. x x x. 2007 and Resolution2 dated January 25. What has become increasingly apparent is the fact that the respondent judge had allowed himself to be the private respondent 's intrument.R. G. Inc. Plaintiff. as per the letter of defendant Meridien. to demand for the payment of said unpaid association dues and other assessments imposed on the condominium unit and being claimed by defendant [MPMCC]. dated July 24.42 as of November 30. 9. 10. it has become truly temporary. 2008 in CA-G. 1201. 20 The courts. the petition is GRANTED. No. the Code has left the discretion to the Secretary of Labor to determine which strikes are subject to injunction and State intervention. x x x. The said letter x x x sought an explanation on the fact that. Verification with the defendant [MPMCC] resulted to the issuance of a certification stating that Condominium Unit 1201 has an outstanding unpaid obligation in the total amount of P145. Defendant [MPMCC]’s ominous silence when confronted with claim of payment made by defendant Meridien is tantamount to admission that indeed.567. The factual and procedural antecedents are as follows: Respondent Robert H. anent the said delinquency. Petitioner failed to make such explanation. SO ORDERED. CULLEN. 21 But let. demanded from respondent payment for alleged unpaid association dues and assessments amounting to P145. the Complaint for Damages 8 filed by respondent against petitioner and MLHI. In any event. Said title was later cancelled and Condominium Certificate of Title No. since a strike is designed precisely to stop the wheels of the factory.R. 2002. to reiterate. Dr.be deemed automatically vacated. x x x. August 14. Cullen purchased from MLHI condominium Unit No. have no business interposing their intruding finger. 224. As a consequence. the matter was referred to counsel. The orders. 14. 1201 and religiously paid all the corresponding monthly contributions/association dues and other assessments imposed on the same.42.: This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals (CA) Decision1 dated July 10. 8. This is evident from the orders now complained of. likewise. 1986. Respondent disputed this demand claiming that he had been religiously paying his dues shown by the fact that he was previously elected president and director of petitioner. contrary to the claim of defendant [MPMCC]. vs. Plaintiff thus caused to be sent a letter to defendant [MPMCC] x x x. respondent was prevented from exercising his right to vote and be voted for during the 2002 election of petitioner’s Board of Directors. the issuance of a TRO founded on management's concern for animals (or other properties of the firm) is to open posterns behind the ban (or regulation) of injunction under the Labor Code. and serious anxiety. Costs against the private responent. being a doctor of medicine and respected in the community further suffered from social humiliation and besmirched reputation . The said letter further stressed that plaintiff is considered a delinquent member of the defendant Medical Plaza Makati. the counsels for the respondent firm be reprimanded for what would appear as an attempt on their paret to mainpuate the courts and the court processes. was attributed by defendant [MPMCC] to defendant Meridien. on the other hand. moral shock. demanding payment of alleged unpaid association dues and assessments arising from plaintiff’s condominium unit no. Dimayuga. On September 19. plaintiff occupied the said condominium unit no. by the terms of Batas Pambansa Blg. on September 19. in its (the private respondent's) effort to counter the impact of the strike. x x x. 2003. 03-1018. no explanation was given by defendant [MPMCC]. Hence. 5 Consequently. defendant Meridien had already paid the said delinquency. plaintiff was not allowed to file his certificate of candidacy as director.6Respondent thus clarified from MLHI the veracity of petitioner’s claim. the pertinent portions of which read: xxxx 6. which again. Jose Giovanni E. witting or unwitting. 64218 was issued in the name of respondent. who accordingly sent a letter to defendant Meridien. DECISION why he was considered a delinquent payer despite the settlement of the obligation. x x x Again. Clearly. a temporary restraining order can no longer exist indefinitely. 1986 are hereby declared NULL AND VOID. and to date however. through its corporate secretary. and to frustrate the right to strike itself. and the feeling that defendant Meridien made false representations considering that it fully warranted to plaintiff that condominium unit 1201 is free and clear from all liens and encumbrances. The branding of plaintiff as delinquent member was willfully and deceitfully employed so as to prevent plaintiff from exercising his right to vote or be voted as director of the condominium corporation. plaintiff was also barred from exercising his right to vote in the election of new members of the Board of Directors x x x. explaining that the said unpaid amount is a carry-over from the obligation of defendant Meridien. claimed that respondent’s obligation was a carry-over of that of MLHI. 86614. Thus. plaintiff was shocked/surprised to receive a letter from the incumbent Corporate Secretary of the defendant Medical Plaza Makati. Nonetheless. For the years 2000 and 2001. petitioner. CV No. 1986. plaintiff experienced/suffered from mental anguish. if any. Being considered a delinquent. WHEREFORE. x x x. while the assailed resolution denied the separate motions for reconsideration filed by petitioner Medical Plaza Makati Condominium Corporation (MPMCC) and Meridien Land Holding. 15.567. But if no action is taken by the judge on the application for preliminary injunction within the said 20 days. to the damage and prejudice of plaintiff who is again obviously being barred from voting/participating in the election of members of the board of directors for the year 2003. PERALTA. the delinquency of unit 1201 was already fully paid and settled. Res ipsa loquitur. 181416 November 11. as a direct and proximate result of the said acts of defendant [MPMCC]. 11. The assailed decision reversed and set aside the September 9. plaintiff served as President and Director of the Medical Plaza Makati Condominium Corporation. Due to the seriousness of the matter. furthermore. that the obligation does not exist considering that the matter was already settled and paid by defendant Meridien to defendant [MPMCC]. Branch 58 in Civil Case No. prior to the said election date. 4 Petitioner. 2002. but MLHI allegedly claimed that the same had already been settled. 1201 of the Medical Plaza Makati covered by Condominium Certificate of Title No. Despite receipt of said letter on April 24. ROBERT H. J. defendant [MPMCC] acted maliciously by insisting that plaintiff is a delinquent member when in fact. 17. 7 This prompted respondent to demand from petitioner an explanation 12. 19 To permit. x x x defendant Meridien claimed however. Respondent. 2002. Thereafter. (MLHI). 45808 of the Register of Deeds of Makati. and August 19. Petitioner. the temporary restraining order would automatically expire on the 20th day by the sheer force of law. x x x counsel for the defendant [MPMCC] sent a demand letter to plaintiff. 16. 18 Neither can we countenance the respondent judge's resort to military assistance in order to implement his order. 2013 MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION. Accordingly. Respondent contested the alleged unpaid dues and assessments demanded by petitioner. 11 On September 9. the relationship test and the nature of the controversy test. (3) prematurity for failure of respondent to exhaust all intra-corporate remedies. (2) between the corporation. petitioner comes before the Court based on the following grounds: I. The trial court agreed with MLHI that the action for specific performance filed by respondent clearly falls within the exclusive jurisdiction of the HLURB. 14 It explained that the case hinged on petitioner’s refusal to confirm MLHI’s claim that the subject obligation had already been settled as early as 1998 causing damage to respondent. partnership or association and the State insofar as its franchise. does the controversy involve intra-corporate issues as would fall within the jurisdiction of the RTC sitting as a special commercial court or an ordinary action for damages within the jurisdiction of regular courts? In determining whether a dispute constitutes an intra-corporate controversy.00 and for which defendant [MPMCC] should be held liable. 2002 as well as the above damages. The averments in the complaint and the character of the relief sought are the ones to be consulted. In sustaining the denial of the motion to dismiss. there is an intra-corporate relationship between the corporation and a stockholder/member. the Court held that the dispute as to the validity of the assessments is purely an intra-corporate matter between petitioner and respondent and is thus within the exclusive jurisdiction of the RTC sitting as a special commercial court. NOT THERETOFORE DETERMINED BY THE SUPREME COURT. "the controversy must not only be rooted in the existence of an intracorporate relationship. petitioner is a condominium corporation duly organized and existing under Philippine laws.500. THE COURT A QUO HAS DECIDED THE INSTANT CASE IN A WAY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT TOOK COGNIZANCE OF THE APPEAL WHILE RAISING ONLY PURE QUESTIONS OF LAW. consequently.: 19 Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff’s cause of action.000. The issue is not novel. is determined based on the allegations contained in the complaint of the plaintiff.10MLHI claims that it is the Housing and Land Use Regulatory Board (HLURB) which is vested with the exclusive jurisdiction to hear and decide the case.567. by ordering the same to pay the said delinquency of condominium unit 1201 in the amount of P145. jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. the Court uses two tests. 22 Thus. It obviously arose from the intra-corporate relations between the parties.12 As to petitioner. as well as which court or body has jurisdiction over it. OR HAS DECIDED IT IN A WAY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT DECLARED THE INSTANT CASE AN ORDINARY ACTION FOR DAMAGES INSTEAD OF AN INTRA-CORPORATE CONTROVERSY COGNIZABLE BY A SPECIAL COMMERCIAL COURT. the existence of any of the above intra-corporate relations makes the case intra-corporate. however. partnership or association and its stockholders. 18. and (4) the case is already moot and academic. Respondent. partners or associates themselves. plaintiff was constrained to hire the services of counsel. It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint. we find and so hold that the case involves intra-corporate controversy."24 In other words. defendant [MPMCC] should be ordered to pay plaintiff exemplary damages in the amount of P200.00 per every court hearing attended by counsel.000. The nature of an action involving any dispute as to the validity of the assessment of association dues has been settled by the Court in Chateau de Baie Condominium Corporation v. 26 Admittedly. the court held that the complaint states no cause of action. Otherwise. partnership or association and the public. 20.thereby warranting the grant of moral damages in the amount of P500.00 plus P2. Distinction Properties Development and Construction.13 On appeal. irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. an examination of the allegations made by respondent in his complaint shows that the case principally dwells on the propriety of the assessment made by petitioner against respondent as well as the validity of petitioner’s act in preventing respondent from participating in the election of the corporation’s Board of Directors.42 as of November 30.16 Aggrieved. is the registered owner of Unit No. In the event that the claim of defendant [MPMCC] turned out to be true. but must as well pertain to the enforcement of the parties’ correlative rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation. Once vested by the allegations in the complaint. moved for the dismissal of the case on the ground of lack of jurisdiction alleging that since the complaint was against the owner/developer of a condominium whose condominium project was registered with and licensed by the HLURB. considering that respondent’s obligation had already been settled by MLHI. on the other hand. the latter has the exclusive jurisdiction. respondents therein filed a complaint for intra-corporate dispute against the petitioner therein to question how it calculated the dues assessed against them. Petitioner. on the other hand. namely. (3) between the corporation. and so as to protect his rights and interests. As a consequence. It is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. ruled that the issues raised are intra-corporate between the corporation and member.000. THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE. raises the following specific grounds for the dismissal of the complaint: (1) estoppel as respondent himself approved the assessment when he was the president. and as a stern warning to all similarly situated. (2) lack of jurisdiction as the case involves an intra-corporate controversy. and the questions involved pertain to their rights and obligations under the Corporation Code and matters relating to the regulation of the corporation. Petitioner. 19. Inc. 2005. 18 Also illuminating is the Court’s pronouncement in Go v. 27 In that case. Contrary to the RTC conclusion. jurisdiction should be determined by considering both the relationship of the parties as well as the nature of the question involved. however. 25 Applying the two tests. 21 An intra-corporate controversy is one which pertains to any of the following relationships: (1) between the corporation. It. permit or license to operate is concerned. the CA held that the controversy is an ordinary civil action for damages which falls within the jurisdiction of regular courts. Moreno. the CA reversed and set aside the trial court’s decision and remanded the case to the RTC for further proceedings. the RTC rendered a Decision granting petitioner’s and MLHI’s motions to dismiss and. for an acceptance fee of P100. likewise. the herein defendant Meridien should be held liable instead. and to ask an accounting of association dues. The nature of an action. Clearly. More so in this case as respondent repeatedly questioned his characterization as a . II. x x x 20 Based on the allegations made by respondent in his complaint. 9 Petitioner and MLHI filed their separate motions to dismiss the complaint on the ground of lack of jurisdiction. 23 Under the nature of the controversy test. under the relationship test. The nature of the action is determined by the body rather than the title of the complaint. partners. dismissing respondent’s complaint.00. the obligation having been settled between petitioner and MLHI. and (4) among the stockholders.1âwphi1 Though denominated as an action for damages. 15 Petitioner’s and MLHI’s motions for reconsideration had also been denied. charged with the management of the Medical Plaza Makati. jurisdiction would become dependent almost entirely upon the whims of the defendant. members or officers. considering that the non-payment thereof would be the proximate cause of the damages suffered by plaintiff. By way of example or correction for the public good. 1201 and is thus a stockholder/member of the condominium corporation.17 The petition is meritorious. Being corporate in nature. It will become complicated.2 of Republic Act No. Although I agree that they should be looked after and their problems be looked into. ZIALCITA). this action partakes of the nature of an intra-corporate controversy. I think our views are similar. 902-A has been transferred to RTCs designated by this Court as Special Commercial Courts. the jurisdiction of the SEC over all cases enumerated under Section 5 of Presidential Decree No. May we ask our resource persons to also probably give comments? xxxx Atty. and c) Controversies in the election or appointment of directors. it might create a. what is their final decision on the definition of homeowners? THE ACTING CHAIRMAN (REP. Your Honor. These issues are clearly corporate and the demand for damages is just incidental. it does not seem to be the legislative intent. we cannot apply the same in the present case as it involves a controversy between a condominium unit owner and a condominium corporation. We quote hereunder the pertinent portion of the Bicameral Conference Committee’s deliberation. to wit: THE CHAIRMAN (SEN. It’s a catchall phrase. THE CHAIRMAN (SEN. hindi. Your Honor. THE ACTING CHAIRMAN (REP.paano ba iyon? To the extent that it is practicable and applicable. So we’d like to put it on record that we’re very much concerned about the plight of the Condominium Unit Homeowners’ Association. However. Pursuant to Section 5. practices in their provisions in the Condominium Law that may be conflicting with this version of ours. members. There are certain issues that we have to reconcile with this version.mayroon naman silang protection sa ano eh. consequently. ZUBIRI).. for example. And it is only when the city or municipality gives the approval or the conformity that this is donated to the homeowners’ association. or managers of such corporations. I think the --. Mr. they are usually owned by the condominium corporation. I don’t know. the rights and benefits of the homeowners. 28 Moreover. 2010 and became effective on July 10. it’s donated. is hereby extended.delinquent member and. But this could very well be addressed on a separate bill that I’m willing to co-sponsor with the distinguished Senator Zubiri. rather than address it here because it might just create a red herring into the entire thing and it will just complicate matters. Considering that the RTC of Makati City. especially common areas. ZIALCITA). THE ACTING CHAIRMAN (REP.. or associates. or associations. ZIALCITA). between and among stockholders. it’s three years. something like that. the so-called common areas and/or maybe so called open spaces that they may have. 9904. 29 To be sure. the issues should be threshed out before the RTC sitting as a special commercial court. let’s say. ZUBIRI). But generally. huwag na lang. I’ll just ask for a one-minute suspension so we can talk. officers. But then again. Dayrit. The issues on damages can still be resolved in the same special commercial court just like a regular RTC which is still competent to tackle civil law issues incidental to intra-corporate disputes filed before it. JALANDONI. I’m sure there are provisions there eh. THE ACTING CHAIRMAN (REP. Let’s go back. whereas here. So iyon na lang final proposal naming ‘yung catchall phrase. Okay. it was not vested with jurisdiction over cases previously cognizable by the SEC.Well. the condominium. are hereby extended to the --. between any or all of them and the corporation. However. At saka. Mr. Presidential Decree No. approved on January 7. trustees. to address in the Condominium Act of the Philippines. ZIALCITA). in the case of. And because they have a law pertaining to the condominium housing units. MR. Branch 58 was not designated as a special commercial court. Something like.mayroon kaming ginamit na phrase eh. Probably we can ask our staff.generally these are donated to the municipality or to the city. and between such corporation. So that’s one main issue that can be conflicting. Kaya nga eh. the case should have been filed not with the regular court but with the branch of the RTC designated as a special commercial court. very quickly on homeowners. Unless you want to put a catchall phrase like what we did in the Senior Citizen’s Act. Yeah.. b) Controversies arising out of intra-corporate or partnership relations. to the extent --. ZUBIRI). I personally feel that it would complicate matters if we include them. MR. members or associates. In the Condominium Corporation.to the extent that it be practicable and applicable to the unit homeoweners. ZUBIRI). But I agree with the sentiments and the inputs of the Honorable Chair of the House panel. Indeed. 2010.. DAYRIT. JALANDONI. partnership or association of which they are stockholders. Thank you. Yes I agree with you. xxx And so. petitioner’s decision to bar him from exercising his rights to vote and be voted for. Senator Zubiri. Chair. Lahat ng mga open spaces and common areas like corridors. the function rooms and everything.30 While the CA may be correct that the RTC has jurisdiction. the jurisdiction over which pertains to the SEC. respectively.31 The CA. "With respect to the. So there would already be violation or there will be already a problem with their version and our version. Chairman. di ba? Buyers decree doon sa Condominium Act. 902-A enumerates the cases over which the Securities and Exchange Commission (SEC) exercises exclusive jurisdiction: So I agree that has to be studied further. Republic Act (RA) No. While the term association as defined in the law covers homeowners’ associations of other residential real property which is broad enough to cover a condominium corporation. There are many. For instance. the entry of the condominium units might just complicate the whole matters.. THE ACTING CHAIRMAN (REP. . otherwise known as the Securities Regulation Code. I think. There will be a lot of conflict of laws between the two laws.Condominium Corporation Act. I also agree with you although I sympathize with them---although we sympathize with them and we feel that many times their rights have been also violated by abusive condominium corporations.1âwphi1 I think that would be --. or the Magna Carta for Homeowners and Homeowners’ Associations. empowers the HLURB to hear and decide inter-association and/or intra-association controversies or conflicts concerning homeowners’ associations. are owned by the corporation.. there are certain things that we have to reconcile. Hopefully we can tackle this again on the 15th Congress. In the Condominium Code. It’s five years the proxy." 32 xxxx THE CHAIRMAN (SEN. ZIALCITA). partnership or association and the State insofar as it concerns their individual franchise or right to exist as such entity. Ang sa akin lang. hindi ba? THE CHAIRMAN (SEN. that would be the best course of action with all due respect. gravely erred in remanding the case to the RTC for further proceedings. under PD [Presidential Decree] 957. they just raised a very peculiar situation under the Condominium Code --. Because sometimes --. therefore. Sino ang matutupad doon? Will it be our version or their version? MR. Huwag na lang. to come up already with the bill although we have no more time. partnerships. 8799. Unlike a subdivision where the open spaces and/or the common areas are not necessarily owned by the association. A thorough review of the deliberations of the bicameral conference committee would show that the lawmakers did not intend to extend the coverage of the law to such kind of association. I think it would be best if your previous comments that you’d be supporting an amendment. So with that – we skipped. Said law sanctions the creation of the condominium corporation which is especially formed for the purpose of holding title to the common area. The Complaint was filed before the Municipal Trial Court (MTC) of La Trinidad. the MTC found respondent Monzon guilty of fraud in obtaining an OCT over petitioner’s property.: Petitioner filed a Notice of Appeal15 from the RTC’s May 4. Her prayer before the CA reads: WHEREFORE. But we just like to put on record. Benguet.10 declaring the MTC without jurisdiction over petitioner’s cause of action. 2006 Resolution 5 denying petitioner’s Motion for Reconsideration. xxxx SO ORDERED. and REGISTRY OF DEEDS OF BENGUET. Benguet. Appeal from orders dismissing case without trial. 86614. in proportion to the appurtenant interest of their respective units. Respondents appealed to the Regional Trial Court (RTC) of La Trinidad. Benguet is set aside. 9 33 To be sure. 2007 and Resolution dated January 25. The Resolution disposed of the case as follows: Petitioner assailed the RTC’s May 4. [Petitioner] is ordered to turn over the possession of the 4. premises considered. Both parties acknowledged receipt of the October 22. it is most respectfully prayed that the decision of the Regional Trial Court. Judge Diaz De Rivera issued a Resolution 13 reversing the MTC Decision. 2013 DARMA MASLAG. The Complaint before the Regional Trial Court of Makati City. 83365. and to pay damages and costs of suit. which dismissed petitioner Darma Maslag's (petitioner) ordinary appeal to it for being an improper remedy. CA 36 is still a good law. issued its October 22.11 but neither presented additional evidence before the new judge.14 DEL CASTILLO. and the Appeal is hereby DISMISSED. WHEREFORE. J. petitioner filed a Complaint7 for reconveyance of real property with declaration of nullity of original certificate of title (OCT) against respondents Elizabeth Monzon (Monzon). Rule 40 of the Rules of Court. condominium corporations are not covered by the amendment.4 The Petition also assails the CA’s September 22. I am not authorized. docketed as Civil Case No. 2006 Resolution3 of the Court of Appeals (CA) in CAG. 8 It ordered her to reconvey the said property to petitioner.415 square meter land she presently occupies to [Monzon]. Benguet. Further reliefs just and equitable under the premises are prayed for.R. the RTC of La Trinidad. Jr. So just quickly going back to Page 7 because there are amendments to the definition of homeowners. DECISION SO ORDERED. RA 4726 or the Condominium Act was enacted to specifically govern a condominium. Let the case be REMANDED to the Executive Judge of the Regional Trial Court of Makati City for re-raffle purposes among the designated special commercial courts. we hereby GRANT the petition and REVERSE the Court of Appeals Decision dated July 10." 1 This is a Petition for Review on Certiorari 2 of the May 31. Petitioner. 2004. Branch 10 of La Trinidad. THE CHAIRMAN (SEN. several months on the floor. This case is remanded to the court a quo for further proceedings to determine whether [Maslag] is entitled to the remedies afforded by law to a builder in good faith for the improvements she constructed thereon. to the exclusion of others. by our counterparts to include the condominium owners. we have to go back to homeowners’ association definition. SO ORDERED. Your Honor. they can blame no one but themselves. 2004 Resolution. After trial. We’ll just open up a whole can of worms and a whole new ball game will come into play. It further held that it will take cognizance of the case pursuant to Section 8.We stick to the original. in which the holders of separate interests shall automatically be members or shareholders. neither are you. In the mistaken choice of their remedy. through Acting Presiding Judge Fernando P. ELIZABETH MONZON. the Judgment appealed from the Municipal Trial Court of La Trinidad. 2003 Order.R. 2004 Resolution for reversing the MTC’s factual findings 16 and prayed that the MTC Decision be adopted. the Motion to Dismiss is GRANTED. "It is incumbent upon x x x appellants to utilize the correct mode of appeal of the decisions of trial courts to the appellate courts. CV No. Branch 58. appealed from be reversed in toto and that the Honorable Court adopt the decision of the Municipal Trial Court. The doctrine laid down by the Court in Chateau de Baie Condominium Corporation v. vs. WILLIAM GESTON. 031018 is ordered DISMISSED for lack of jurisdiction. without prejudice to the admission of amended pleadings and additional evidence in the interest of justice. – x x x If the case was tried on the merits by the lower court without jurisdiction over the subject matter.12 On May 4. (Judge Diaz De Rivera). If it is alright with the House Panel. Benguet. et al v. the Regional Trial Court on appeal shall not dismiss the case if it has original jurisdiction thereof. Besides. And we don’t have the authority as well for other Bicam members to add a provision to include a separate entity that has already their legal or their established Republic Act tackling on that particular issue. Moreno35 which in turn cited Wack Wack Condominium Corporation. Thus. We are not authorized by the Senate nor – because we have discussed this lengthily on the floor. which reads: SECTION 8. adopt the opening phrase of Subsection 7 of the Senate version as opening phrase of Subsection 10 of the reconciled version. CV No. Chairman. 2008 in CA-G. the intra-corporate dispute between petitioner and respondent is still within the jurisdiction of the RTC sitting as a special commercial court and not the HLURB. Respondents. 174908 WHEREFORE. that is correct. Benguet.17 . which is not a special commercial court. William Geston and the Registry of Deeds of La Trinidad. June 17. but shall decide the case in accordance with the preceding section. because we had skipped it altogether. lack of jurisdiction. actually. No pronouncement as to damages and costs. Basically that is correct. The fallo reads as follows: WHEREFORE. Branch 10. Mr. ZUBIRI). we sympathize with the plight of our friends in the condominium associations and we will just guarantee them that we will work on an amendment to the Condominium Corporation Code. 2003 Order. Clearly. Edgardo B. Cabato (Judge Cabato). No. G.R.6 Factual Antecedents In 1998. After going over the MTC records and the parties’ respective memoranda. Diaz De Rivera.34 The rights and obligations of the condominium unit owners and the condominium corporation are set forth in the above Act. Respondents moved to dismiss petitioner’s ordinary appeal for being the improper remedy. is a petition for review under Rule 42 and not an ordinary appeal under Rule 41. depending on the assessed value of the subject property. the title to the property. She averred: Ruling of the Court of Appeals 7. enjoyment. 2004 Resolution in its original jurisdiction. where such assessed value does not exceed Fifty thousand pesos (P50. which was later marked as petitioner’s Exhibit "A". original jurisdiction over which is conferred upon Metropolitan Trial Courts. RULE 40 OF THE RULES OF COURT OF THE PHILIPPINES. — Metropolitan Trial Courts. Sometime in the year 1987.000. will contribute to a common fund for the surveying and subsequent titling of the land. following Section 8. BENGUET. Since plaintiff had. 28 Pertinent provisions of Batas Pambansa Blg. or possession of. or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20. They asserted that the proper mode of appeal is a Petition for Review under Rule 42 because the RTC rendered its May 4. 25 (2) In all civil actions which involve the title to. original and exclusive jurisdiction belongs to either the RTC or the MTC. the RTC declared that the MTC has no jurisdiction over the subject matter of the case based on the supposition that the same is incapable of pecuniary estimation. SO ORDERED. The CA dismissed petitioner’s appeal. We cannot.00) or. AS TO THE COURSE OF REMEDY THAT MAY BE AVAILED OF BY THE PETITIONER – A PETITION FOR REVIEWUNDER RULE 42 OR AN ORDINARY APPEAL UNDER RULE 41. xxxx SEC. 33. for so long. gloss over this jurisdictional faux pas of the RTC. annexed to the Complaint is a Declaration of Real Property 31 dated November 12. The parties bowed to this ruling of the RTC and. or possession of. Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. 23 10. the owner of the adjacent parcel of land being occupied by plaintiff [Maslag]. 2004 Resolution in its appellate jurisdiction. Thus. As a relief. eventually. CONSIDERING THAT THE REGIONAL TRIAL COURT. the proper remedy. 19. real property. notorious and exclusive possession of the disputed property since the 1940’s. 9. Rule 40 of the Rules of Court. In the case at bench. the respective areas of the plaintiff and the defendants were defined and delimited – all for purposes of titling. 29 as amended by Republic Act (RA) No. that those who were interested to have their lands titled. An action "involving title to real property. deliberately and in bad faith omitted.18 In her Complaint26 for reconveyance of real property with declaration of nullity of OCT. submitted the case for its decision after they had submitted their respective memoranda. The May 31. WHEN IT DECIDED A CASE APPEALED BEFORE IT UNDER THE PROVISION OF SECTION 8. or disposition of the same. She argued. x x x The CA denied petitioner’s Motion for Reconsideration in its September 22. when the title was finally issued by the Registry of Deeds. BENGUET HELD THAT THE ORIGINAL COMPLAINT AS FILED BEFORE THE MUNICIPAL TRIAL COURT OF LA TRINIDAD. the same was only in the name of Elizabeth Monzon and WILLIAM GESTON. Thus. was defined as an action where "the plaintiff’s cause of action is based on a claim that she owns such property or that she has the legal rights to have exclusive control. or any interest therein.24 Our Ruling In its October 22. real property. for the first time. despite the assurance of subdivided titles. petitioner’s complaint involves title to real property. 1991. 2006 Resolution of this Court is hereby AFFIRMED in toto. WHETHER X X X THE COURT OF APPEALS WAS CORRECT IN DISMISSING THE APPEAL FILED BY THE PETITIONER. the instant Motion for Reconsideration is DENIED. and Municipal Circuit Trial Courts. continuous. A subdivision survey was made and in the survey. where the assessed value of the property involved exceeds Twenty thousand pesos (P20. it took cognizance of the case and directed the parties to adduce further evidence if they so desire. Jurisdiction of Metropolitan Trial Courts.00) x x x. 19 Petitioner sought reconsideration. Since it involves a question of jurisdiction. IN ORDERING THAT THE CASE SHALL BE DECIDED PURSUANT TO THE PROVISION OF SECTION 8 OF RULE 40 OF THE RULES OF COURT. she contributed to the amount being requested by Elizabeth Monzon. Indubitably. the proper remedy is a Petition for Review under Rule 42. BRANCH 10 OF LA TRINIDAD. thereafter made.000. Elizabeth Monzon. premises considered. Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: xxxx (3) Exclusive original jurisdiction in all civil actions which involve title to. BENGUET WAS DECIDED BY THE LATTER WITHOUT ANY JURISDICTION AND. 7691. however. yearned for a title to the land she occupies. we may motu proprio review and pass upon the same even at this late stage of the proceedings. (BP) 129. 2003 Order of the RTC declaring the MTC without jurisdiction over the case. where x x x the assessed value of the property exceeds Fifty thousand pesos ([P]50. She cited the earlier October 22.000.295 square meters. was titled solely in the name of ELIZABETH MONZON. 20 8.00) or for civil actions in Metro Manila. that the RTC rendered its May 4. It observed that the RTC’s May 4. 2004 Resolution of the RTC." on the other hand. 2006 Resolution: 21 A perusal of the May 4. Consequently. 30 provides: Issues Sec. petitioner claimed that she and her father had been in open."27 Under the present state of the law. possession. 2004 Resolution (the subject matter of the appeal before the CA) set aside an MTC Judgment. WHEREFORE.000. and not an ordinary appeal. A suggestion was. petitioner prayed that Monzon be ordered to reconvey the portion of the property which she claimed was fraudulently included in Monzon’s title. The name of Darma Maslag was fraudulently. 2003 Order. But alas. as We have previously enunciated. BRANCH 10 OF LA TRINIDAD. 32 showing that the disputed property has an assessed value . in civil actions in Metro Manila. informed the plaintiff that the respective parcels of land being claimed by them can now be titled. which is the subject matter of the appeal.00) except actions for forcible entry into and unlawful detainer of lands or buildings. Municipal Trial Courts. hence. IT DECIDED THE CASE NOT ON ITS APPELLATE JURISDICTION BUT ON ITS ORIGINAL JURISDICTION WHAT WILL BE THE EFFECT OF THE DECISION OF THE REGIONAL TRIAL COURT. Her primary relief was to recover ownership of real property. clearly reveals that it took cognizance of the MTC case in the exercise of its appellate jurisdiction.22 Hence this Petition wherein petitioner prays that the CA be ordered to take cognizance of her appeal. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: Petitioner set forth the following issues in her Petition: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation. to the extent of 18. in cases involving title to real property. the RTC Resolution was a continuation of the proceedings that originated from the MTC. petitioner Alfeo D. but we obviously cannot go into that where the mode of appeal was improper to begin with. the Integrated Supervision Department II (ISD II) of the BSP conducted a general examination on ECBI with the cut-off date of December 31. This is but logical. 2008.38 Thus. the Petition for Review is DENIED for lack of merit. the determinative factor is the type of jurisdiction actually exercised by the RTC in rendering its Decision or Resolution. thru Judge Cabato. 2006 Resolutions of the Court of Appeals in CA-G. Besides. Vivas appealed the cancellation to BSP. Court issuances cannot seize or appropriate jurisdiction.R. an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be dismissed. Cagayan. DECISION MENDOZA. petitioner resorts to arguing for what the RTC should have done. With regard to the RTC’s earlier October 22. 2008. Thus. neither the courts nor the petitioner could alter or disregard the same. 7653. 4 Sometime in April 2008. Incorporated. 2006. to themselves determine or conveniently set aside. Incorporated (RBFI) was a duly registered rural banking institution with principal office in Centro Sur. the Monetary Board (MB) issued Resolution No. It is done by filing a Petition for Review with the CA. In view of those findings. in fact and in law. Vivas (Vivas) and his principals acquired the controlling interest in RBFI sometime in January 2006. placing ECBI under Prompt Corrective Action (PCA) framework because of the following serious findings and supervisory concerns noted during the general examination: 1] negative capital of ?14." 39 By parity of reasoning. We do not look into what type of jurisdiction the RTC should have exercised. the Chairman and President of ECBI. there is no other way the RTC could have taken cognizance of the case and review the court a quo’s Judgment except in the exercise of its appellate jurisdiction. The ECBI submitted its comments on BSP’s consolidated findings and risk asset classification through a letter. G. No. erred in applying Section 19(1) of BP 129 in determining which court has jurisdiction over the case and in pronouncing that the MTC is divested of original and exclusive jurisdiction. Besides.A.ofP12.: This is a petition for prohibition with prayer for the issuance of a status quo ante order or writ of preliminary injunction ordering the respondents to desist from closing EuroCredit Community Bank. only statutes can confer jurisdiction. 2003 Order.7 . It cannot be overemphasized that jurisdiction over the subject matter is conferred only by law and it is "not within the courts. 2] CAMEL (Capital Asset Management Earnings Liquidity) composite rating of "2" with a Management component rating of "1". It is done by filing a Notice of Appeal with the RTC. the Bangko Sentral ng Pilipinas (BSP) issued the Certificate of Authority extending the corporate life of RBFI for another fifty (50) years. as well as the other bank officers and members of its BOD. 2004 Resolution in its original jurisdiction because it had earlier ruled that the MTC had no jurisdiction over the cause of action. the CA is correct in holding that the proper mode of appeal should have been a Petition for Review under Rule 42 of the Rules of Court.1Notwithstanding. the same should be disregarded for it produces no effect (other than to confuse the parties whether the RTC was invested with original or appellate jurisdiction). the distinction between these two modes of appeal lies in the type of jurisdiction exercised by the RTC in the Order or Decision being appealed. It amounts to usurpation of jurisdiction which cannot be countenanced.6 Vivas claimed that the BSP took the above courses of action due to the joint influence exerted by a certain hostile shareholder and a former BSP examiner. The petition likewise prays that the management and operation of ECBI be restored to its Board of Directors (BOD) and its officers. as well as the increase in the number of the members of its BOD. 2013 ALFEO D.40033 only. 83365 are AFFIRMED. The assailed May 31.1âwphi1 (Emphasis supplied) There are two modes of appealing an RTC decision or resolution on issues of fact and law. the MTC has original and exclusive jurisdiction over the subject matter of the case. Shortly after the completion of the general examination. and not an ordinary appeal under Rule 41. 2004 Resolution. vs. Since BP 129 already apportioned the jurisdiction of the MTC and the RTC in cases involving title to property. Similarly. Inquiring into what the RTC should have done in disposing of the case is a question which already involves the merits of the appeal. 2003 Order. VIVAS. At the initiative of Vivas and the new management team. To reiterate." In the dispositive portion of said Resolution. She maintains that the RTC should have issued its May 4. order or resolution issued without jurisdiction is void and cannot be given any effect. from five (5) to eleven (11). or in the exercise of its appellate jurisdiction? In short. In fine. 2007. Judge Diaz de Rivera. SO ORDERED. CV No. Such assessed value of the property is well within the jurisdiction of the MTC. Simply put. dated April 8. Record shows that the corporate life of RBFI expired on May 31. Petitioner’s argument lacks merit. an exit conference was held on March 27. "This is an appeal from the Judgment rendered by the Municipal Trial Court (MTC) of La Trinidad Benguet" 35 and then proceeded to discuss the merits of the "appeal. Niño. J. an order issued by a court declaring that it has original and exclusive jurisdiction over the subject matter of the case when under the law it has none cannot likewise be given effect. of the advance findings noted during the said examination. As discussed above. THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE PHILIPPINE DEPOSIT INSURANCE CORPORATION. dated September 25. otherwise known as The New Central Bank Act. actually treated the case as an appeal despite the October 22. certain measures calculated to revitalize the bank were allegedly introduced. Section 2. the new RTC Judge who penned the May 4. WHEREFORE. 2006 and September 22.674 million and capital adequacy ratio of negative 18. An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright. TYPES/ Classes of Jurisdiction SECTION 2. It was a judgment issued by the RTC in the exercise of its appellate jurisdiction. 2005. in determining the proper mode of appeal from an RTC Decision or Resolution.) No.R. Was it rendered by the RTC in the exercise of its original jurisdiction.42%. Sto. The Facts The Rural Bank of Faire. 2 On December 8. hence. the examiners from the Department of Loans and Credit of the BSP arrived at the ECBI and cancelled the rediscounting line of the bank. premises considered. Seeing the futility of arguing against what the RTC actually did."37 Neither would the active participation of the parties nor estoppel operate to confer original and exclusive jurisdiction where the court or tribunal only wields appellate jurisdiction over the case. The second mode is a petition for review under Rule 42 in cases where the RTC exercised its appellate jurisdiction over MTC decisions. we look at what type of jurisdiction was actually exercised by the RTC. let alone the parties.3 Pursuant to Section 28 of Republic Act (R. It has been repeatedly held that "any judgment. 2008 at the BSP during which the BSP officials and examiners apprised Vivas. Dismissal of improper appeal to the Court of Appeals. an internal audit was conducted on RBFI and results thereof highlighted the dismal operation of the rural bank. Incorporated (ECBI) and from pursuing the receivership thereof. he reversed the MTC’s findings and conclusions and remanded residual issues for trial with the MTC. and 3] serious supervisory concerns particularly on activities deemed unsafe or unsound. He started his Resolution by stating. ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF EUROCREDIT COMMUNITY BANK. 1255. 34 The first mode is an ordinary appeal under Rule 41 in cases where the RTC exercised its original jurisdiction. 191424 August 7. – An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed. PETITIONER. The BSP also approved the change of its corporate name to EuroCredit Community Bank. RESPONDENTS. Rule 50 of the Rules of Court provides for the dismissal of an improper appeal: 5. the RTC.5 Thereafter. This brings to fore the next issue of whether the CA was correct in dismissing petitioner’s appeal. issues purely of law not being reviewable by said court. The ISD II. 2009. 2009. 7653. in its memorandum dated 17 February 2010.A.20 dated August 13.21 On December 7. According to Vivas. dated September 30. 726. hence. 2009 Letter-Reply. including Vivas. and 3] take appropriate action necessary to address the violations/exceptions noted in the examination. 2009. which findings showed that the Eurocredit Community Bank.A. ECBI asked for the deferment of the examination pending resolution of its appeal before the MB. the MB issued Resolution No. the BSP directed ECBI to explain why it transferred the majority shares of RBFI without securing the prior approval of the MB in apparent violation of Subsection X126. Assailing MB Resolution No. The proposed meeting.2 of the Manual of Regulation for Banks (MORB). 12 To prohibit the Eurocredit Bank from doing business in the Philippines and to place its assets and affairs under receivership. In addition. the MB issued Resolution No. and (d) has willfully violated a cease and desist order of the Monetary Board for acts or transactions which are considered unsafe and unsound banking practices and other acts or transactions constituting fraud or dissipation of the assets of the institution. advising ECBI to comply with MB Resolution No. 8 Vivas moved for a reconsideration of Resolution No. In its letter. and from doing such other acts or transactions constituting fraud or might result in the dissipation of its assets. 2009. approving the issuance of a cease and desist order against ECBI. 2009 general examination of the books. 2009. and considering the failure of the Board of Directors/management of Eurocredit Bank to restore the bank’s financial health and viability despite considerable time given to address the bank’s financial problems. and The MB. 726. No. the BSP officials and examiners met with the representatives of ECBI. dated February To designate the Philippine Deposit Insurance Corporation as Receiver of the bank. 7353. (b) has insufficient realizable assets to meet liabilities. 2009. the BSP furnished ECBI with a copy of the Report of Examination (ROE) as of December 31. the ISD II informed ECBI of MB Resolution No. – a Rural Bank (Eurocredit Bank) (a) is unable to pay its liabilities as they become due in the ordinary course of business. 7653. the MB issued Resolution No. 13 dated May 8. 276 23 placing ECBI under receivership in accordance with the recommendation of the ISD II which reads: On the basis of the examination findings as of 30 September 2009 as reported by the Integrated Supervision Department (ISD) II. in violation of Section 2. Meanwhile. On November 18. and because Vivas was then out of the country. 2009. 276. 1. imposing monetary penalty/fine on ECBI. the MB issued Resolution No. 7653 (The New Central Bank Act). 2] book the amount of ?28. it is still the gravest abuse of discretion amounting to lack or excess of jurisdiction to execute the law with manifest arbitrariness. The petitioner presents the following In view of ECBI’s refusal to comply with the required examination. did not materialize due to postponements sought by Vivas. 7653.9 In its letter. inadequacies and oversights in the conduct of the affairs of ECBI. the OSI filed with the Department of Justice (DOJ) a complaint for Estafa Through Falsification of Commercial Documents against certain officials and employees of ECBI. 2009. 24 Vivas submits that the respondents committed grave abuse of discretion when they erroneously applied Section 30 of R. 2009. the ISD II required ECBI to explain why it did not obtain the prior approval of the BSP anent the establishment and operation of the bank’s sub-offices.10 Still in another letter. and that the bank had been accorded due process.22 In a letter. On May 28. No. posited that ECBI unjustly refused to allow the BSP examiners from examining and inspecting its books and records. did not push through. the BSP directed the bank’s BOD and senior management to: 1] infuse fresh capital of ?22. and discussed their findings. the ISD II reiterated its demand upon the ECBI BOD to allow the BSP examiners to conduct a general examination on June 3.11 dated March 31. 2009. records and general condition of ECBI with the cut-off date of December 31. No. instead of Sections 11 and 14 of the Rural Bank Act of 1992 or R. dated February 20. ascribing grave abuse of discretion to the MB for prohibiting ECBI from continuing its banking business and for placing it under receivership. and bad faith.A. 2009. had invited the BOD of ECBI to discuss matters pertaining to the placement of the bank under PCA framework and other supervisory concerns before making the appropriate recommendations to the MB. 1548 which denied its request for reconsideration of Resolution No. The BSP also wrote a letter. No. On March 4. which enjoined it from pursuing certain acts and transactions that were considered unsafe or unsound banking practices. violation of constitutional rights and to further execute a mandate well in excess of its parameters. 19 dated June 4. Even if it assumed that Section 30 of the New Central Bank Act is applicable. (c) cannot continue in business without involving probable losses to its depositors and creditors. in accordance with Section 30 of Republic Act No. Vivas believed that he was being treated unfairly because the letter of authority to examine allegedly contained a clause which pertained to the Anti-Money Laundering Law and the Bank Secrecy Act. it has not committed any financial fraud and. Later.17 ECBI asked for another deferment of the examination due to the pendency of certain unresolved issues subject of its appeal before the MB. ARGUMENTS: It is grave abuse of discretion amounting to loss of jurisdiction to apply the general law embodied in Section 30 of the New Central Bank Act as opposed to the specific law embodied in Sections 11 and 14 of the Rural Banks Act of 1992. was commenced and ended in December 2009. its placement under receivership was unwarranted and improper. the scheduled March 31. 2008. 16 (a) In its June 2. however. the general examination of the books and records of ECBI with the cut-off date of September 30. Vivas filed this petition for prohibition before this Court. 823. 2008. the Board. Article VIII of the Philippine Constitution. The ISD II denied ECBI’s request and ordered the general examination to proceed as previously scheduled. instead.A.563 million representing unbooked valuation reserves on classified loans and other risks assets on or before October 31. He argues that despite the deficiencies.Through its letter. 2008. On June 10. 14 dated May 14. (c) The power delegated in favor of the Bangko Sentral ng Pilipinas to place rural banks under receiverships is unconstitutional for being a diminution or invasion of the powers of the Supreme Court. Inc. and referred the matter to the Office of the Special Investigation (OSI) for the filing of appropriate legal action. on the other hand. the ISD II reminded ECBI of the non-submission of its financial audit reports for the years 2007 and 2008 with a warning that failure to submit those reports and the written explanation for such omission shall result in the imposition of a monetary penalty. 2010. on several instances. which essentially required the bank to follow its directives. 1164. 2009. the BSP informed ECBI that it was already due for another annual examination and that the pendency of its appeal before the MB would not prevent the BSP from conducting another one as mandated by Section 28 of R. 2009. denying the appeal of ECBI from Resolution No. He posits that. in violation of Sections 25 and 34 of R. abuse of discretion. approved the recommendation of ISD II as follows: Also.643 million. 771.18 (b) Thereafter.15 dated May 26. the BSP should have taken over the management of ECBI and extended . 1255 on the grounds of non-observance of due process and arbitrariness. 2007. 2010. 1255 which placed it under PCA framework. When and where petition filed. Section 4 of Rule 65 reads: Vivas Availed of the Wrong Remedy To begin with. the petition shall be filed in and cognizable only by the Court of Appeals. Under Section 30 thereof. or with grave abuse of discretion amounting to lack or excess of jurisdiction. in the exercise of its power under R. 276. Settled is the rule that prohibition does not lie to restrain an act that is already a fait accompli. Vivas assails the constitutionality of Section 30 of R. The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory. The petitioner has not advanced any special or important reason which would allow a direct resort to this Court. the proper function of a writ of prohibition is to prevent the doing of an act which is about to be done. It is not intended to provide a remedy for acts already accomplished. the CA and the RTC have original concurrent jurisdiction to issue writs of certiorari.29 The Petition Should Have Been Filed in the CA Even if treated as a petition for certiorari. No. to wit: Sec. receivership or liquidation may not be restrained or set aside except on a petition for certiorari. 26 In our jurisdiction. officer or person. or where exceptional and compelling circumstances. a person aggrieved thereby may file a verified petition in the proper court. and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. board. 7653 read: Section 30. The concurrence of jurisdiction. does not grant the party seeking any of the extraordinary writs the absolute freedom to file a petition in any court of his choice. the Court. Prohibition or a "writ of prohibition" is that process by which a superior court prevents inferior courts. 32 The judicial policy must be observed to prevent an imposition on the precious time and attention of the Court. [Emphases supplied] That the MB is a quasi-judicial agency was already settled and reiterated in the case of Bank of Commerce v. prohibition is a preventive remedy seeking that a judgment be rendered which would direct the defendant to desist from continuing with the commission of an act perceived to be illegal.A. the sixty (60) day period shall be counted from notice of the denial of said motion. Section 4.A. quasi-judicial or ministerial functions. order or resolution. and confines them to the exercise of those powers legally conferred. No. Resolution No. prohibition. 27 As a rule. justify the availment of the extraordinary remedy of writ of certiorari. He is of the view that such power goes way beyond its constitutional limitation and has transformed the BSP to a sovereign in its own "kingdom of banks. Indeed. Apparently. – x x x x. this petition for prohibition apparently seeks to prevent the acts of closing of ECBI and placing it under receivership. the petition should have been filed with the CA. a party may directly appeal to this Court only on pure questions of law. The MB Committed No Grave Abuse of Discretion In any event. tribunals or persons from exercising jurisdiction over matters not within its cognizance or exceeding its jurisdiction in matters of which it has cognizance.A.When the proceedings of any tribunal. True. the Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate lower courts. The petition shall be filed in the Supreme Court or. He contends that the implementation of the questioned resolution was tainted with arbitrariness and bad faith. 7653. if it relates to the acts or omissions of a lower court or of a corporation. and there is no appeal or any other plain. In case a motion for reconsideration or new trial is timely filed. whether exercising judicial. or mandamus calling for the exercise of its primary jurisdiction. speedy. any act of the MB placing a bank under conservatorship. unless otherwise provided by law or these Rules. 276. no grave abuse of discretion can be attributed to the MB for the issuance of the assailed Resolution No. or persons from usurping or exercising a jurisdiction with which they have not been vested by law.A. dated March 4. the special action for the obtainment of such writ must be presented to either court. 7353 because the BSP’s power is limited only to supervision and management take-over of banks. it is already an ineffective remedy under the circumstances obtaining. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership. had already been issued by the MB and the closure of ECBI and its placement under receivership by the PDIC were already accomplished. 28 Though couched in imprecise terms. Strict observance of the policy of judicial hierarchy demands that where the issuance of the extraordinary writs is also within the competence of the CA or the RTC. No. however. and adequate remedy in the ordinary course of law. Petition for prohibition . The MB issued Resolution No. 2010. If it involves the acts or omissions of a quasi-judicial agency. 2. Under the Rules of Court. such as cases of national interest and with serious implications. x x x x. 30 Doctrine of Hierarchy of Courts Even in the absence of such provision. Planters Development Bank And Bangko Sentral Ng Pilipinas. Rule 65 of the Rules on Civil Procedure. [Emphases supplied] Prohibition is already unavailing Granting that a petition for prohibition is allowed. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction. or in the Sandiganbayan if it is in aid of its appellate jurisdiction. board. the rule on prohibition is enshrined in Section 2. Lastly. the petition is also dismissible because it simply ignored the doctrine of hierarchy of courts. 276. however. tribunals. He adds that respondent PDIC actually closed ECBI even in the absence of any directive to this effect. As a rule.loans to the financially distrained bank pursuant to Sections 11 and 14 of R. are without or in excess of its or his jurisdiction. officers. liquidation or conservatorship. or otherwise granting such incidental reliefs as the law and justice require. stressing that ECBI was placed under receivership without due and prior hearing in violation of his and the bank’s right to due process. prohibition and mandamus. Pertinent portions of R. x x x x. Its office is to restrain subordinate courts. — The petition shall be filed not later than sixty (60) days from notice of the judgment. corporation. 31 In the case at bench. . officer or person. whether such motion is required or not. 7653 claiming that said provision vested upon the BSP the unbridled power to close and place under receivership a hapless rural bank instead of aiding its financial needs. in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. Vivas availed of the wrong remedy. the remedy of prohibition is no longer appropriate. alleging the facts with certainty and praying that the judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein." 25 The Court’s Ruling The petition must fail. there are certainly factual issues as Vivas is questioning the findings of the investigating team. Section 30 of R. 726. 36 the Court reiterated the doctrine of "close now. 11. 33 and 34 of Republic Act No. as amended. Vivas argues that implementation of the questioned resolution was tainted with arbitrariness and bad faith.A. a hearing or an opportunity to be heard may be subsequent to the closure.No. The power to supervise the operation of any rural bank by the Monetary Board as herein indicated shall consist in placing limits to the maximum credit allowed to any individual borrower. and the general public.39 The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the bank’s assets and as a valid exercise of police power to protect the depositors. audits. 7653. 30. the depositors. Hear Later At any rate. creditors and stockholders. upon proof that the rural bank or its Board of Directors. 37 [Emphasis supplied] In Rural Bank of Buhi. as determined by the Bangko Sentral. That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community. upon report of the head of the supervising or examining department. instructions.A. hear later" doctrine has already been justified as a measure for the protection of the public interest. thereafter. 7353 because the BSP’s power is limited only to supervision and management take-over of banks. 1548 denying its request for reconsideration of Resolution No. hence. Court of Appeals. the power of the MB over banks. to meet its liabilities. and not receivership. In the process. including rural banks. 7653 provides. in prescribing the interest rate. in indicating the manner in which technical assistance shall be extended to rural banks. In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Obviously.] x x x x. instructions. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits. was increased and expanded.38 the Court also wrote that The Court has taken this into account. Unless adequate and determined efforts are taken by the government against distressed and mismanaged banks. in which cases. v. under R. 7353 is a special law. viz: Sec. 7353. rules and regulations promulgated by the Monetary Board or in a manner substantially prejudicial to the interest of the Government. which provides: Sec. or (d) has wilfully violated a cease and desist order under Section 37 that has become final. not to mention the losses suffered by the bank depositors. Hon. Having been heard on its motion for reconsideration. but it appears from all over the records that ECBI was given every opportunity to be heard and improve on its financial standing. to take over the management of such bank when specifically authorized to do so by the Monetary Board after due hearing process until a new board of directors and officers are elected and qualified without prejudice to the prosecution of the persons responsible for such violations under the provisions of Sections 32. in supervising the business operations of the rural banks. officers and agents to conduct and manage the affairs of the rural banks in a lawful and orderly manner. stockholders. invoking Section 11 of R. Accordingly. public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself. creditors. ECBI cannot claim that it was deprived of its right under the Rural Bank Act. the MB came out with Resolution No. or (c) cannot continue in business without involving probable losses to its depositors or creditors. [Emphases supplied. who all deserve the protection of the government. or officers are conducting and managing the affairs of the bank in a manner contrary to laws. x x x x.A. there is no conflict which would call for the application of the doctrine that a special law should prevail over a general law. Inc. Close Now. Such action of the MB shall be final and executory. or because the bank’s continuance in business would probably result in the loss to depositors or creditors. 265. No. No.A . (b) has insufficient realizable assets. stressing that ECBI was placed under receivership without due and prior hearing. in imposing a uniform accounting system and manner of keeping the accounts and records of rural banks. the MB may forbid a bank from doing business and place it under receivership without prior notice and hearing. and discussed their findings. – Whenever. the bank itself and the general public.A. the Monetary Board finds that a bank or quasi-bank: x x x due process does not necessarily require a prior hearing. and stockholders. The Court. this procedure is designed to protect the interest of all concerned. in several cases. the BSP should have taken over the management of ECBI and extended loans to the financially distrained bank pursuant to Sections 11 and 14 of R. (a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided. orders. It is not necessary inasmuch as the law entrusts to the MB the appreciation and determination of whether any or all of the statutory grounds for the closure and receivership of the erring bank are present. .Vivas insists that the circumstances of the case warrant the application of Section 11 of R. creditors. appoint the PDIC as receiver. 7353 which states that the BSP may take over the management of a rural bank after due hearing. and. Antonio-Valenzuela. if circumstances warrant it.35More importantly. their directors.A. including Vivas. Accordingly. resulting in panic and hysteria. For failure of ECBI to comply. He asserts that. The Central Bank shall have the power to enforce the laws. No. has been invested with more power of closure and placement of a bank under receivership for insolvency or illiquidity. One can just imagine the dire consequences of a prior hearing: bank runs would be the order of the day. 7653 is a later law and under said act. No. adequate and determined actions must be taken against financially distressed and mismanaged banks by government agencies lest the public faith in the banking system deteriorate to the prejudice of the national economy. in instituting periodic surveys of loan and lending procedures. the same should prevail over R. It must be emphasized that R. applicable to rural banks. The procedure for the involuntary closure of a bank is summary and expeditious in nature. upheld the power of the MB to take over banks without need for prior hearing. 33 He adds that because R. the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution. hear later. rules and regulations promulgated by the Monetary Board. The thrust of Vivas’ argument is that ECBI did not commit any financial fraud and. The records disclose that BSP officials and examiners met with the representatives of ECBI. to require rural banks. 34 There were also reminders that ECBI submit its financial audit reports for the years 2007 and 2008 with a warning that failure to submit them and a written explanation of such omission shall result in the imposition of a monetary penalty. but may be later subjected to a judicial scrutiny via a petition for certiorari to be filed by the stockholders of record of the bank representing a majority of the capital stock. its placement under receivership was unwarranted and improper. depositors or creditors. in conducting training courses for personnel of rural banks. orders.40 Swift. involving acts or transactions which amount to fraud or a dissipation of the assets of the institution. No. The MB. No. that is.A. instead.A. Proceedings in Receivership and Liquidation. and." stating that it was justified as a measure for the protection of the public interest. No. ECBI was heard on its motion for reconsideration. the MB can immediately implement its resolution prohibiting a banking institution to do business in the Philippines and. 7653 which is a general law. Thus: The "close now. fortunes may be wiped out and disillusionment will run the gamut of the entire banking community. The protection afforded public interest warrants the exercise of a summary closure. test-check of cash and other transactions of the rural banks. in general. in determining the loan period and loan procedures. R. No. 42 Be that as it may. the legal presumption of its validity stands. He claims that the said provision was an undue delegation of legislative power. The memorandum underscored the inability of ECBI to pay its liabilities as they would fall due in the usual course of its business.R.A. Besides. 276 placing ECBI under receivership. alienated or encumbered in any manner during the pendency of this petition. No. Sto. 99791. (PAFIN).A.A. there was no undue delegation of legislative authority in the issuance of R. the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is enforce it. 2009 Resolution. its liabilities being in excess of the assets held. the Motion for the Issuance of a Restraining Order and Application for a Writ of a Preliminary Injunction scheduled today is hereby considered moot and academic. Plaintiffversus-Evelyn Castañeda Yanagisawa. Promulgated: Respondent.”[6] In 1996. Unless a law or rule is annulled in a direct proceeding.) The above Order was annotated on the title of the Parañaque townhouse unit or TCT No. the MB was given a wide discretion and latitude only as to how the law should be implemented in order to attain its objective of protecting the interest of the public. and had disregarded the BSP rules and directives. 7653 was proper and justified. 41 A collateral attack on a presumably valid law is not permissible. The latter may seek the annulment of actions that are done in violation of such undertaking. Factual Antecedents Respondent Eiji Yanagisawa (Eiji). 2012 x-------------------------------------------------------------------x DECISION DEL CASTILLO. 96-776. placing ECBI under receivership would effectively put a stop to the further draining of its assets. WHEREFORE. Both tests are intended to prevent a total transference of legislative authority to the delegate. ordering the defendant in Civil Case No. 175303 Petitioner. Present: EIJI* YANAGISAWA. to forbid them to do business. 99791 to “Evelyn P. counsel for the defendant [Evelyn]. not what the law shall be. if circumstances warrant. 1989 in the City Hall of Manila. viz. 8729 – Order – issued by Hon. Japanese citizen[. Parañaque City. The contention deserves scant consideration. The complaint. it was found that ECBI had willfully violated the cease-and-desist order of the MB issued in its June 24. No. Filipino. Evelyn purchased a 152 square-meter townhouse unit located at Bo.1âwphi1 The rationale for the constitutional proscription is that "legislative discretion as to the substantive contents of the law cannot be delegated. 1998 in favor of defendant Pacific Ace Finance Ltd. 78944. 7653 constitutes collateral attack on the said provision of law. married to Ejie Yanagisawa. as the legislature granted the MB a broad and unrestrained power to close and place a financially troubled bank under receivership.] both of legal age. Vivas’ attempt to assail the constitutionality of Section 30 of R. 1995. 96-776 – entitled Eiji Yanagisawa. Lupo Leyva. a Filipina. under the two tests. 2009. alienated or encumbered in any manner during the . contracted marriage on July 12. 1996: ORDER In view of the commitment made in open court by Atty. In other words. J. Judge. Castañeda (Evelyn). Eiji filed a complaint for the declaration of nullity of his marriage with Evelyn on the ground of bigamy (nullity of marriage case). During the pendency of the case. Under the sufficient standard test.A. the ISD II submitted its memorandum. the Makati RTC rendered the following Order dated October 2. and Evelyn F.: An undertaking not to dispose of a property pending litigation. containing the findings noted during the general examination conducted on ECBI with the cut-off date of September 30. the petitioner challenges the constitutionality of Section 30 of R. Branch 149. In addition. Eiji filed a Motion for the Issuance of a Restraining Order against Evelyn and an Application for a Writ of a Preliminary Injunction. Makati City. who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative. was raffled to Branch 149 of the Regional Trial Court of Makati (Makati RTC). to take over their management or to place them under receivership. which held: WHEREFORE. there must be adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot. Parañaque. that the properties registered in the name of the defendant would not be disposed of. that the properties registered in the name of the defendant would not be disposed of. 7653. Under the first test. the banking industry and the economy. docketed as Civil Case No. G. No. is hereby ANNULLED and SET ASIDE and a new one entered annulling the Real Estate Mortgage executed on August 25. there is no violation of the non-delegation of legislative power. April 11. Niño. No. PACIFIC ACE FINANCE LTD. Management take-over under Section 11 of R.In the case at bench. The legislature has clearly spelled out the reasonable parameters of the power entrusted to the MB and assigned to it only the manner of enforcing said power. On top of these. SO ORDERED. dated February 17.[7] (Emphasis supplied. thus: Entry No. SO ORDERED.A. Josefina Guevara Salonga. No. thus rendering Eiji’s application and motion moot. At the hearing on the said motion. made in open court and embodied in a court order. the MB stressed that it accorded ECBI ample time and opportunity to address its monetary problem and to restore and improve its financial health and viability but it failed to do so. This prerogative cannot be abdicated or surrendered by the legislature to the delegate. Nothing is more settled than the rule that the constitutionality of a statute cannot be collaterally attacked as constitutionality issues must be pleaded directly and not collaterally.[4] On August 23. the petition for prohibition is DENIED. 2006 Decision[2] of the Court of Appeals (CA) in CA-G. What can be delegated is the discretion to determine how the law may be enforced. CV No. Evelyn and her lawyer voluntarily undertook not to dispose of the properties registered in her name during the pendency of the case. On the basis of said commitment. the MB was forced to issue the assailed Resolution No. together with his client. 7353 was no longer feasible considering the financial quagmire that engulfed ECBI showing serious conditions of insolvency and illiquidity. creates a right in favor of the person relying thereon. To address the growing concerns in the banking industry." 43 "There are two accepted tests to determine whether or not there is a valid delegation of legislative power. Also. the application of the corrective measures enunciated in Section 30 of R. a Japanese national. He asked that Evelyn be enjoined from disposing or encumbering all of the properties registered in her name. the legislature has sufficiently empowered the MB to effectively monitor and supervise banks and financial institutions and. 2003 of the RTC. No Undue Delegation of Legislative Power Lastly. RTC. the completeness test and the sufficient standard test. 7653. 2010. the Decision dated April 20. Metro Manila (Parañaque townhouse unit).[3] Preliminarily. Castañeda. Before us is a Petition for Review[1] of the August 1." 44 In this case. For said reasons. Branch 258. The ascertainment of the latter subject is a prerogative of the legislature. In light of the circumstances obtaining in this case. the defendant in this case. SO ORDERED. and duly annotated on the title of the said property. it was noted that ECBI’s continued banking operation would most probably result in the incurrence of additional losses to the prejudice of its depositors and creditors.[5] The Registry of Deeds for Parañaque issued Transfer Certificate of Title (TCT) No. Eiji also emphasized that Evelyn had made a commitment to him and to the Makati RTC that she would not dispose of.[27] The appellate court determined that the Parañaque RTC’s Decision was improper because it violated the doctrine of non-interference. Second. 2006 Resolution. Deeming the mortgage as a violation of the Makati RTC’s October 2. [12] The Makati RTC had dissolved Eiji and Evelyn’s marriage. Since Evelyn’s commitment was annotated on TCT No. .[34] Evelyn also denied having knowledge of the October 2. Courts of equal jurisdiction. Petitioner seeks a reversal of the CA Decision. alienate. 99791 that Evelyn committed herself not to encumber the same. premises considered. He added that the Makati RTC has even recognized his contribution in the purchase of the property by its declaration that he is entitled to half of the proceeds that would be obtained from its sale. Eiji learned of the REM upon its annotation on TCT No. including the Parañaque townhouse unit. the CA annulled the REM executed by Evelyn in favor of PAFIN. [20] Petitioner’s Arguments Parañaque Regional Trial Court Decision[21] The Parañaque RTC determined that the only issue before it is “whether x x x [Eiji] has a cause of action against the defendants and x x x is entitled to the reliefs prayed for despite the fact that he is not the registered owner of the property being a Japanese national. Without ownership. that it did not conduct any verification of the title with the Registry of Deeds of Parañaque City “because x x x Evelyn was a good. As the sole owner. Evelyn obtained a loan of P500. For its defense. Meanwhile. PAFIN filed this petition for review.”[16] PAFIN maintained that Eiji has no personality to seek the annulment of the REM because a foreign national cannot own real properties located within the Philippines. Evelyn was aware of her legal impediment to encumber and dispose of the Parañaque townhouse unit. this case is DISMISSED.) Sometime in March 1997. To secure the loan.[8] (Emphasis supplied. Who is entitled to the real property mentioned above when the marriage is declared void? Court of Appeals Decision[25] The CA found merit in Eiji’s appeal. or any other law or contract binding the defendants to him. 99791.[39] Issues Eiji appealed the trial court’s decision arguing that the trial court erred in holding that his inability to own real estate property in the Philippines deprives him of all interest in the mortgaged property. or encumber the properties registered in her name while the case was pending. Corollarily. It was determined therein that the registered properties should be sold at public auction and the proceeds thereof to be divided between Eiji and Evelyn. Our Ruling The petition has no merit.[13] and had ordered the liquidation of their registered properties. The CA then proceeded to resolve Eiji’s complaint.[15] The complaint. the Parañaque RTC dismissed Eiji’s complaint: WHEREFORE. Eiji filed a complaint for the annulment of REM (annulment of mortgage case) against Evelyn and PAFIN. all those who deal with the said property are charged with notice of the burdens on the property and its registered owner.pendency of the petition. [30] The CA noted that Eiji anchored his complaint upon Evelyn’s violation of her commitment to the Makati RTC and to Eiji that she would not dispose of.[31] On the basis of Evelyn’s commitment and its annotation on TCT No. the CA annulled and set aside the Parañaque RTC’s decision to dismiss Eiji’s complaint. 1996 Order against Evelyn.[18] Evelyn asserted that she paid for the property with her own funds[19] and that she has exclusive ownership thereof. was raffled to Branch 258 of the Regional Trial Court of Parañaque City (Parañaque RTC). The CA noted that the Makati RTC ruled on Eiji’s and Evelyn’s ownership rights over the properties that were acquired during their marriage. which allegedly affirmed the Makati RTC ruling that Eiji is a co-owner of the mortgaged property. 2003[36] and prays that this Court render a decision that Eiji cannot have ownership rights over the mortgaged property and that Evelyn enjoys exclusive ownership thereof.00 from petitioner Pacific Ace Finance Ltd. including the Parañaque townhouse unit. even as the same issue was already ruled upon by the Makati RTC and is pending appeal in the CA. Eiji has no cause of action to seek the REM’s annulment. Evelyn made a commitment in open court that she will not encumber the Parañaque townhouse unit during the pendency of the case. 1996 Order. 99791. Evelyn executed on August 25. have no appellate jurisdiction over each other. PAFIN denied prior knowledge of the October 2.[35] Petitioner also seeks the reinstatement of the Parañaque RTC’s Decision dated April 20. Eiji has no cause of action that may be asserted against [23] them. Evelyn can validly mortgage the same to PAFIN without need of Eiji’s consent. 1996 Order on Evelyn’s commitment not to dispose of or encumber the properties registered in her name. [28] For this reason. 2.[29] [9] At the time of the mortgage. Whether the Parañaque RTC can rule on the issue of ownership. 3. 99791. 1996 Date of Inscription – March 17. including the Parañaque townhouse unit.[37] Respondent’s Arguments Respondent argues that he has an interest to have the REM annulled on two grounds: First. 1996 Order.[26] 4. as a foreign national. friendly and trusted neighbor. which was bought with his money.m.[32] Thus. Thus.[24] Respondent also insists that petitioner is in bad faith for entering into the mortgage contract with Evelyn despite the annotation on TCT No. [33] which were both denied for lack of merit by the appellate court in its November 7. It admitted.[38] The counterclaim and cross-claim are likewise DISMISSED. This commitment incapacitates Evelyn from entering into the REM contract. 99791. with its proceeds to be divided between the parties. (PAFIN). the CA determined that Eiji has a cause of action to annul the REM contract. Eiji’s appeal in the nullity of marriage case was pending before the CA. PAFIN insists that the CA sustained a violation of the constitution with its declaration that an alien can have an interest in real property located in the Philippines. or encumber the properties registered in her name. [14] The Decision of the Makati RTC did not lift or dissolve its October 2. EVELYN CASTAÑEDA YANAGISAWA and Pacific Ace Finance Ltd.[11] Contrary to this ruling. docketed as Civil Case No. the Motion for the Issuance of a Restraining Order and Application for a Writ of Preliminary Injunction is hereby considered moot and academic. Whether a real property registered solely in the name of the Filipina wife is paraphernal or conjugal. Whether a real property in the Philippines can be part of the community property of a Filipina and her foreigner spouse. SO ORDERED. This commitment created a right in favor of Eiji to rely thereon and a correlative obligation on Evelyn’s part not to encumber the Parañaque townhouse unit. 1998 a real estate mortgage (REM) [10] in favor of PAFIN over the Parañaque townhouse unit covered by TCT No.”[22] The Parañaque RTC explained that Eiji. 98-0431. PAFIN displayed a wanton disregard of ordinary prudence when it admitted not conducting any verification of the title whatsoever.000. 1997 – 11:21 a. Petitioner raises the following issues: [40] 1. The CA determined that PAFIN was a mortgagee in bad faith. Date of Instrument – October 2. cannot possibly own the mortgaged property. alienate. however. such as regional trial courts. (PAFIN). 2006. The instrument was submitted to the Register of Deeds of Parañaque City for annotation on the same date. for failure of the plaintiff to state a cause of action against defendants. the Makati RTC’s decision declared that he is entitled to share in the proceeds of the Parañaque townhouse unit.[17] The parties to the annulled mortgage filed separate motions for reconsideration on August 22. the Parañaque RTC ruled that Eiji has no ownership rights over the Parañaque townhouse unit in light of the constitutional prohibition on foreign ownership of lands and that the subject property is Evelyn’s exclusive property. and VILLARAMA*. the crime of “other forms of swindling” in the Information. with Preliminary Injunction” filed by petitioners. Instead. It was Evelyn and PAFIN that raised Eiji’s incapacity to own real property as their defense to the suit. PERALTA. Petitioner maintains that it was imperative for the Parañaque RTC to rule on the ownership issue because it was essential for the determination of the validity of the REM. conspiring and confederating together and mutually helping and aiding one another. 2009. which held that Evelyn and PAFIN executed the REM in complete disregard and violation of the October 2. On September 29. WHEREFORE.R. Petitioners are assailing the decision of the Regional Trial Court (RTC) of Makati City convicting them of the offense “Other Forms of Swindling” punishable under Article 316. embodying Evelyn’s commitment not to dispose of or encumber the property. who deal with the registered property. the above-named accused. 6 of the Subdivision Plan . NACHURA. it does not rest upon such considerations exclusively. Present: CORONA. Cojuangco v. to the annotations entered on the title. BRANCH 66 OF THEREGIONAL TRIAL COURT OFMAKATI CITY and THE PEOPLE OF THE PHILIPPINES. The principle is essential to the proper and orderly administration of the laws. The CA only clarified that it was improper for the Parañaque RTC to have reviewed the ruling of a co-equal court. A review of the complaint shows that Eiji did not claim ownership of the Parañaque townhouse unit or his right to consent to the REM as his bases for seeking its annulment. has a cause of action to seek the annulment of the offending actions. G. LLAMAS and CARMELITA C. Respondents. and within the jurisdiction of this Honorable Court. No. 1996 Order.. Metro Manila. having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction. 1978. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice. LLAMAS. should not. expensive. vacated.versus THE HONORABLE COURT OF APPEALS. the Petition is DENIED for lack of merit. BRION. Chairperson.[48] In view of the foregoing discussion. cannot and are not permitted to interfere with their respective cases. we find no need to discuss the other issues raised by the petitioner. 99791. also. 1996 Order of the Makati RTC and to hold third persons. The October 2. the Parañaque RTC effectively interfered with the Makati RTC’s resolution of the issue and created the possibility of conflicting decisions. Eiji invoked his right to rely on Evelyn’s commitment not to dispose of or encumber the property (as confirmed in the October 2. The issue of ownership and liquidation of properties acquired during the cohabitation of Eiji and Evelyn has been submitted for the resolution of the Makati RTC. until the matter is finally and completely disposed of. Jurisprudence holds that all acts done in violation of a standing injunction order are voidable as to the party enjoined and third parties who are not in good faith. Llamas and Carmelita C. and dangerous conflicts of jurisdiction and of the process. to criminal prosecutions.J. [46] The party. this Court promulgated a Decision [1] in the abovecaptioned case. but is enforced to prevent unseemly. in whose favor the injunction is issued.R. 11787. [47] The following is instructive: An injunction or restraining order must be obeyed while it remains in full force and effect until the injunction or restraining order has been set aside. and that no court of co-ordinate authority is at liberty to interfere with its action. docketed as Criminal Case No. Petitioner did not question the rest of the appellate court’s ruling. premises considered.[44] FRANCISCO R. Promulgated: August 16. and is pending [41] appeal before the CA. denying the petition for “Annulment of Judgment and Certiorari. or modified by the court which granted it. This doctrine is applicable to civil cases. They maintained that Eiji. well knowing that their parcel of land known as Lot No. Llamas. the CA did not make any disposition as to who between Eiji and Evelyn owns the Parañaque townhouse unit. and no matter how unreasonable and unjust the injunction may be in its terms. 1984. 78944 is AFFIRMED. Villegas[43] states: “The various branches of the [regional trial courts] of a province or city.” The matter is further explained thus: It has been held that "even in cases of concurrent jurisdiction. But this argument is beside the point and is not a proper defense to the right asserted by Eiji. C. JJ. it is. as an alien incapacitated to own real estate in the Philippines. its authority continues. 1996 Order of the Makati RTC). 99791. petitioners were charged before the Regional Trial Court (RTC) of Makati with. as aforesaid. in the Municipality of Parañaque. or until the order or decree awarding it has been reversed on appeal. 2010 x------------------------------------------------------------------------------------x RESOLUTION NACHURA. 11. of the Revised Penal Code (RPC). This defense does not negate Eiji’s right to rely on the October 2. and the annotation of the said commitment on TCT No. the RTC erred in dismissing the complaint based on this defense. and while its observance might be required on the grounds of judicial comity and courtesy. which reads: That on or about the 20th day of November. need not consent to the REM contract for its validity. J. 2006 Decision of the Court of Appeals in CA-G.: Before this Court is a Motion for Reconsideration filed by herein petitioner-spouses Francisco R.Contrary to petitioner’s stance. is akin to an injunction order against the disposition or encumbrance of the property. and to courts-martial. [42] By insisting on ruling on the same issue. The Court agrees with the CA. It simply ruled that the Makati RTC had acquired jurisdiction over the said question and should not have been interfered with by the Parañaque RTC. Briefly. Block No. the antecedent facts are as follows: On August 14. axiomatic that the court first acquiring jurisdiction excludes the other courts. subject only to the appellate authority. The injuction must be obeyed irrespective of the ultimate validity of the order. Philippines. Petitioners. SO ORDERED.[45] The Court disagrees. it is a familiar principle that when a court of competent jurisdiction acquires jurisdiction over the subject matter of a case. The August 1. CV No. 1996 Order on Evelyn’s capacity to encumber the Parañaque townhouse unit nor the CA’s finding that petitioner is a mortgagee in bad faith. Thus. much less with their orders or judgments. paragraph 2. It did not dispute the legal effect of the October 2." In addition. 1996 Order of the Makati RTC and the annotation on TCT No. The doctrine of judicial stability or non-interference dictates that the assumption by the Makati RTC over the issue operates as an “insurmountable barrier” to the subsequent assumption by the Parañaque RTC. 149588 . consequently.895. AND Contrary to law. “It appearing that Atty. WITH ALL DUE RESPECT. The Court likewise rejected petitioners’ contention that the trial court had no jurisdiction over the case. Avila in the aforementioned amount of P12. in its February 19. 2001. the judgment of conviction became final and executory. Llamas. has failed to file their reply to the Solicitor General’s comment on the petition for review on certiorari within the extended period x x x. In the interest of justice and for humanitarian reasons. among other instances. PETITIONERS HAD PURSUED THEIR MORE THAN TWENTY FIVE (25) YEARS QUEST FOR JUSTICE AS INNOCENT MEN. SET ASIDE AND/OR ANNUL.085. 2001 Warrant of Arrest. GIVEN THE VERY UNIQUE AND COMPELLING JUSTIFICATIONS HEREOF[. shall be imposed upon: xxx 2. PETITIONERS ARE NOT BARRED FROM RAISING SUCH QUESTION OF JURISDICTION AT ANY TIME AND IN FACT MAINTAIN THAT RESPONDNET COURTS HAD NO JURISDICTION IN LAW AND ENLIGHTENING DOCTRINES TO TRY AND DECIDE THIS CASE.” In particular. 2001. failed to arrest petitioner Francisco R. CR No. N-26926. was mortgaged to the Rural Bank of Imus. situated at Barrio San Dionisio. – The penalty of arresto mayor in its minimum and medium periods and a fine of not less than the value of the damage caused and not more than three times such value. this Court held that. finding petitioners guilty beyond reasonable doubt of the crime charged and sentencing them to suffer the penalty of imprisonment for two months and to pay the fine of P18. the appellate court further denied petitioners’ motion for reconsideration. rather than dispose of the case on technicality and cause grave injustice to the parties. Case No. [6] It has allowed some meritorious cases to proceed despite inherent procedural defects and lapses on the principle that rules of procedure are mere tools designed to facilitate the attainment of justice. 2000. xxx . PETITIONERS VERY HUMBLY BESEECH THIS HONORABLE COURT’S HIGHEST SENSE OF MAGNANIMITY. their petition for review. on March 13. The strict and rigid application of rules that tend to frustrate rather than promote substantial justice must always be avoided. petitioner Carmelita C. nevertheless. Next. Francisco R. petitioners instituted.[4] petitioners ask this Court to “revisit and take a second look” at the issues in the case “without being unduly hampered by any perceived technical shortfalls of a beleaguered innocent litigant. 1999 Decision in CA-G. the Court deems it necessary to re-examine Assailing the aforesaid issuances of the appellate court. the Court. falsely representing the same to be free from all liens and encumbrances whatsoever.R. AGAIN IN LIGHT OF APPLICABLE JURISPRUDENCE ON THE ISSUE OF JURISDICTION. on February 11. considering petitioners’ advanced age. raising for the first time the issue that the trial court had no jurisdiction over the offense charged. at the first instance. [2] Thus. issues and arguments adduced in the petition for review on certiorari x x x. Bitanga[9] no longer finds application in this case. docketed as G. Municipality of Parañaque. in his own behalf and as counsel for petitioners. the annulment of their conviction by the trial court. we proceed to resolve the substantive issues raised by petitioners. 2. the RTC rendered its Decision on June 30. 2009 Decision. knowing that real property is encumbered. to the damage and prejudice of said Conrado P. HAD NOT CONSEQUENTLY BEEN PASSED UPON.] [5] After trial on the merits. LRC Record No. liberty. THE VERY JUSTIFYING MERITS OF PETITIONERS’ APPROPRIATE INSTANT REMEDY. However. Llamas for her to serve her 2-month jail term. but reinstated the same. petitioners took many procedural missteps in this case. 2004 Resolution. EXCEPT ONLY UPON ESTABLISHED AND ADMISSIBLE EVIDENCE BEYOND REASONABLE DOUBT. all of which could serve as enough basis to dismiss the present motion for reconsideration. in the October 22. The police. 2001. and the imminent loss of personal liberty as a result of petitioners’ conviction. the Court resolves to grant pro hac vice the motion for reconsideration. 316. although captioned differently. the remedy of annulment of judgment cannot be availed of in criminal cases. Any person who. No. AGAIN WITH ALL DUE RESPECT AND UNFORTUNATELY. It is far better and more prudent for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of justice. [8] the Court said. 2001 Resolution. JUDICIOUS WISDOM AND COMPASSION. on September 13. SO THAT JUSTICE MAY TRULY AND JUSTLY BE RENDERED IN FAVOR OF PETITIONERS AS IT MUST. In its December 22. ANY TECHNICAL SHORTFALLS [OR] DEFECTS NOTWITHSTANDING[. The Court.” Likewise.00 each. the police arrested. affirmed the decision of the trial court. did then and there willfully. AND IN LIGHT OF THE CORRECT APPLICATIONS OF DOCTRINAL JURISPRUDENCE.895. and said Conrado P. in its February 10. on occasion. honor or property. Avila. 1994. are at stake. from the time it was pending in the trial court until it reached this Court. TO UPHOLD THE PARAMOUNT CONSTITUTIONAL CHERISED MANDATE. 2003 Resolution. 1999 Resolution. IS IN LINE WITH JURISPRUDENCE AND LAW. this case. With the consequent issuance by the trial court of the April 19. however. WITH ALL DUE RESPECT. [7] On July 16. On appeal. 2001 Resolution. 18270. the doctrine in People v. Metro Manila. the Court of Appeals.00 which was paid to the accused. 4. “THE PRESUMPTION OF INNOCENCE MUST BE UPHELD.R. Since it subsequently denied petitioners’ motion for reconsideration on June 28. suspended the application of technical rules of procedure where matters of life. Other forms of swindling. There being no action taken by the trial court on the said motion. 3. 141208. had recognized that the petition. the instant proceedings for the annulment of the trial and the appellate courts’ decisions. Admittedly. This Court notes that the case was allowed to run its course as a petition for certiorari. In its September 29. Llamas because he was nowhere to be found.] Since we have resolved to treat the petition as one for certiorari. Cadastral Survey of Parañaque. UNDERSTANDING. on motion for reconsideration. although such encumbrance be not recorded. shall dispose of the same. petitioners filed before this Court. on April 27. [3] Petitioners are now before this Court seeking the reversal of the September 29. it said “Considering the allegations. Bitanga. 2000.(LRC) Psd 67036. Avila bought the aforementioned property for the sum of P12. Article 316 (2) of the Revised Penal Code states: ART. was indeed one for certiorari. petitioner Francisco moved for the lifting or recall of the warrant of arrest. In their Verified Motion for Reconsideration.00. This Court has. No.” The Court initially dismissed on technical grounds the petition in the September 24. the length of time this case has been pending. 4896. 2009 Decision and. Petitioners likewise pray for a referral of the case to the Court En Banc for oral argument or to be allowed to submit written supplementary pleadings for them to state the compelling reasons why their motion for reconsideration should be allowed. they raise the following issues: 1. AND HAD HONESTLY MAINTAINED THAT THEIR RESORT TO REVERSE. following the ruling in People v. 2000. denied the same for petitioners’ failure to state the material dates. unlawfully and feloniously sell said property to one Conrado P. such that in its April 12. Section 41 states that citizens' complaints should be brought before the People's Law Enforcement Board (PLEB). that the offender knew that the real property was encumbered.A. In Samalio v. therefore. respondent-movant's arguments and the fact that the administrative case against respondent was filed way back in 1997. A formal or trial-type hearing is not at all times and in all instances essential. Rule 1 of the Rules of Court provides that the Rules shall be liberally construed in order to promote their objective of securing a just. however. The requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. 4 DEPUTY DIRECTOR GENERAL ROBERTO LASTIMOSO. respondent. arguing that said evidence is insufficient to prove respondent's guilt of the charges against him.A. that there must be express representation by the offender that the real property is free from encumbrance. No. The present case clearly involves the honor of a police officer who has rendered years of service to the country. when the Court resolved the issue of which body has jurisdiction over cases that fall under both Sections 41 and 42 of R. 154243 Respondent insists that the summary hearing officer did not conduct any hearing at all but only relied on the affidavits and pleadings submitted to him.7 promulgated in 2005 or after respondent had already filed the petition for certiorari with the trial court. G.: Before the Court is respondent’s Motion for Reconsideration of the Decision promulgated on March 6. the State must prove beyond reasonable doubt all the elements of the crime charged and the complicity or participation of the accused.[12] If no damage should result from the sale. ACTING CHIEF PHILIPPINE NATIONAL POLICE (PNP). This. therefore. 2009 is SET ASIDE and a new one is entered ACQUITTING petitioners of the crime charged on the ground of the prosecution’s failure to prove their guilt beyond reasonable doubt. In addition. be borne in mind that the fact that there was no full-blown trial before the summary hearing officer does not invalidate said proceedings. and 4. 6975. However. On the contrary.R. speedy and inexpensive disposition of every action and proceeding.2(Emphasis supplied) The first issue presented by respondent must. [13] The inevitable conclusion. it is not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers. that the thing disposed of be real property. 3. To resolve the second issue. while Section 42 states that it is the PNP Chief who has authority to immediately remove or dismiss a PNP member who is guilty of conduct unbecoming a police officer.In every criminal prosecution. 2007 The general rule is that the filing of a petition for certiorari does not toll the running of the period to appeal. The Court held that the PLEB and the PNP Chief and regional directors have concurrent jurisdiction over administrative cases filed against . SO ORDERED. whether the encumbrance is recorded or not. the Court granted the petition. paragraph 2. be struck down. ELMER REJANO. no crime of estafa would have been committed by the vendor. Nowhere in the Decision of the RTC or that of the CA is there any discussion that there was damage suffered by complainant Avila. Court of Appeals. Yet. as the element of damage would then be lacking. J.) No. In other words. however. is that petitioners should be acquitted of the crime charged. neither the trial court nor the CA made any finding of any damage to the offended party. 2. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. His possession and right to exercise dominion over the property was not disturbed. there is no denial of procedural due process. 2007. Respondent argues that the decision should be reconsidered for the following reasons: 1. holding that the Philippine National Police (PNP) Chief had jurisdiction to take cognizance of the civilian complaint against respondent and that the latter was accorded due process during the summary hearing. The complaint filed against respondent could fall under both Sections 41 and 42 of Republic Act (R. Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Court of Appeals5 and Sanchez v. it must be emphasized that the action commenced by respondent before the Regional Trial Court is one for certiorari under Rule 65 of the Rules of Court and as held in People v. the Motion for Reconsideration is GRANTED. However. it is also understandable why respondent immediately resorted to the remedy of certiorari instead of pursuing his motion for reconsideration of the PNP Chief’s decision as an appeal before the National Appellate Board (NAB). vs. It should. In said Decision. RAMSEY OCAMPO and P/SUPT. The summary proceeding was null and void because no hearing was conducted. are at stake. InGinete v. Court of Appeals. WHEREFORE. P/SENIOR INSPECTOR JOSE J. It was only in Quiambao v. the prosecution had the burden to prove the confluence of the following essential elements of the crime: 1. which was eventually decided in petitioners’ favor. [11] One of the essential elements of swindling under Article 316.6 the Court saw it proper to suspend rules of procedure in order to promote substantial justice where matters of life. petitioners. was the subject of a separate case. It was quite easy to get confused as to which body had jurisdiction over his case. Court of Appeals. Where opportunity to be heard either through oral arguments or through pleadings is accorded. liberty. RESOLUTION AUSTRIA-MARTINEZ. In this case. without propounding further questions to complainant's witnesses. Section 1. or calling in other witnesses such as PO2 Villarama. affidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimony. DIRECTORATE FOR PERSONNEL AND RECORDS MANAGEMENT (DPRM). convinced the Court to suspend the rules of procedure. that the act of disposing of the real property be made to the damage of another. P/CHIEF SUPT. 6975 or the Department of the Interior and Local Government Act of 1990. respondent would have the Court re-calibrate the weight of evidence presented before the summary hearing officer. Court of Appeals. is that the act of disposing the encumbered real property is made to the damage of another. complainant had possession and control of the land even as the cases were being heard. the foregoing premises considered. ASAYO. among other instances.1 the Court reiterated the time-honored principle that: December 22. or any finding that his rights over the property were prejudiced. there was delay in the delivery of the title. and 2. honor or property. No. The assailed Decision dated September 29. INSPECTOR GENERAL.3 where the issue or question involved affects the wisdom or legal soundness of the decision – not the jurisdiction of the court to render said decision – the same is beyond the province of a special civil action for certiorari.[10] For petitioners to be convicted of the crime of swindling under Article 316 (2) of the Revised Penal Code. The evidence presented at the summary hearing does not prove that respondent is guilty of the charges against him. Admittedly. No. 6713. Maj.[12] Theorizing that the Sandiganbayan. 1379 insofar as they acted as conspirators. respondent's Motion for Reconsideration is partly GRANTED. 1606 and R. 1606 and R. CHICO-NAZARIO. No.A. In appropriate cases.D. Garcia. Graft Investigation and Prosecution Officer II of the Field Investigation Office of the Office of the Ombudsman. Ian Carl. No.A. and that the jurisdiction of the Sandiganbayan in civil actions pertains only to separate actions for recovery of unlawfully acquired property against President Marcos. 6713. the rules may be construed liberally in order to meet and advance the cause of substantial justice. On 17 November 2004.) No. namely: (1) E. WHEREFORE. 14 [11] and 14-A. may proceed independently of the criminal action. 14-A whch further amended E. (3) and (20) of the Civil Service Law. a case for Violations of R.[5] Petitioner’s wife Clarita Depakakibo Garcia. Gen. J6. and their three sons. No.) No. 183 of the Revised Penal Code. et al. Garcia. No. MAJOR GENERAL G. since during his incumbency as a soldier and public officer he acquired huge amounts of money and properties manifestly out of proportion to his salary as such public officer and his other lawful income. nowhere in the amendments to P. No. Maria Olivia Elena A. entitled “Republic of the Philippines vs.D. under P.A. and Executive Orders (E. with.A.R. seeking the forfeiture of unlawfully acquired properties under Sec. docketed as Case No. his family and cronies. 165835 On the same day. The petition was docketed as Civil Case No. his wife. 4 of Presidential Decree (P. No.A. JJ. conduits. 1379 does it provide that the Sandiganbayan has been vested jurisdiction over . No. with no jurisdiction over separate civil actions. (2) E. 27 October 2004. and three sons. OMB-P-C-04-1132-I. According to petitioner. 6925. Promulgated: June 22. his family and cronies. No.x DECISION Acting on the Republic’s prayer for issuance of a writ of preliminary attachment. the Civil Code and other existing laws.A.D. petitioner (as respondent a quo) filed a Motion to Dismiss[8] in Civil Case No. Garcia was the Deputy Chief of Staff for Comptrollership. 1606.O. filed a complaint against petitioner with public respondent Office of the Ombudsman. 2 of R. Petitioner argues in this Petition that the Sandiganbayan is without jurisdiction over the “civil action” for forfeiture of unlawfully acquired properties under R. his family and cronies based on R. his family and cronies. or on behalf of. Atty. regardless of whether these civil actions were for recovery of unlawfully acquired property under R. and to enjoin public respondents Sandiganbayan and Petitioner gathers from the presidential issuances that the Sandiganbayan has been granted jurisdiction only over the separate civil actions filed against President Marcos. and Sec. 1379 which may be filed against President Marcos. and (3) E. has determined that a prima facie case exists against Maj. using and disposing of his ill-gotten wealth.members of the PNP which may warrant dismissal from service. 1379 by transferring to the Sandiganbayan jurisdiction over civil actions filed against President Marcos.: Petitioner Major General Carlos F.[10] as amended.” It was alleged that the Office of the Ombudsman. On 27 September 2004. 1379.O. No. No. [3] violation of Art.[4] Art. dummies and fronts of petitioner in receiving. technical rules of procedure and evidence are not strictly applied. said authorities shall acquire exclusive original jurisdiction over the case. No.D. 1379. Thus.O. but once a complaint is filed with the PNP Chief or regional directors. GARCIA. 1606 and R. 11 of R. 1379. were impleaded in the complaint for violation of R.D.A. The Decision of the Court dated March 6. after conducting an inquiry similar to a preliminary investigation in criminal cases. 1379 or for restitution. Based on this complaint. No. 2005 x -----------------------------------------------------------------. P. of the Armed Forces of the Philippines. No. the Republic of the Philippines. Marcos. 8 In Land Bank of the Philippines v. No. Celada. the opportunity to pursue an appeal before the NAB should be deemed available to respondent in the higher interest of substantial justice. 14. was intended principally as a criminal court. 1606 or the law creating it. 183 of the Revised Penal Code. maintaining that such jurisdiction actually resides in the Regional Trial Courts as provided under Sec. Petitioner filed this Petition for certiorari and prohibition under Rule 65 to annul and set aside public respondent Sandiganbayan’s Resolution[1]dated 29 October 2004 and Writ of Preliminary Attachment[2] dated 2 November 2004. SO ORDERED. No. all surnamed Garcia. reparation of damages or indemnification for consequential damages or other civil actions under the Civil Code or other existing laws. J. 0193 on the ground of lack of jurisdiction of the Sandiganbayan over forfeiture proceedings under R. accumulating. No.A. raising the same issue of lack jurisdiction on the part of the Sandiganbayan. the Sandiganbayan issued the questioned Resolutiongranting the relief prayed for. 10 Office of the Ombudsman from further proceeding with any action relating to the enforcement of the assailed issuances.O.) Nos. No. Gen. filed before the Sandiganbayan. technical rules of procedure are not ends in themselves but are primarily devised to help in the proper and expedient dispensation of justice. On even date. He may file an appeal before the NAB. 2 [9] of the law. in relation to Sec. Maj. No. No.O. Petitioner SANDIGANBAYAN and AZCUNA. No. petitioner points to President Corazon C. a Petition with Verified Urgent Ex Parte Application for the Issuance of a Writ of Preliminary Attachment [6] against petitioner. With the foregoing peculiar circumstances in this case. The corresponding writ of preliminary attachment was subsequently issued on 2 November 2004 upon the filing of a bond by the Republic. Gen. Juan Paolo and Timothy Mark. Roxas.A.[7] CARLOS F. 1379.A.A. and Respondents. the OFFICE OF THE TINGA. 1379 by providing that the civil action under R. petitioner filed the present Petition.A. his family. Garcia and the other respondents therein who hold such properties for. Aquino’s issuances after the EDSA Revolution. 1379.A.9 the Court stressed thus: After all. GARCIA. was filed against petitioner. after due investigation. and cronies as can be gleaned from Sec. 0193. TINGA. and violation of Section 52 (A)(1). It is a settled jurisprudence that in administrative proceedings. if any. 8. pursuant to Section 45. for violation of Sec. therefore. 1 creating the Presidential Commission on Good Government (PCGG) for the recovery of ill-gotten wealth amassed by President Ferdinand E. 2007 is MODIFIED such that respondent is hereby allowed to file his appeal with the National Appellate Board within ten (10) days from finality of herein Resolution. 14 which amended P. 8 in relation to Sec. No.A. 11 of Republic Act (R. acting through public respondent Office of the Ombudsman. OMBUDSMAN. as amended. R. Carlos F. respondent should not be deprived of the opportunity to fully ventilate his arguments against the factual findings of the PNP Chief. Respondents point to Sec. and Chapter II. as the prevailing law on the jurisdiction of the Sandiganbayan. when reference was made to “violations of [R. he filed the instant Petition raising exactly the same issue. No. that the use of the phrase “violations of [R. 4.” [18] Respondents argue that under the Constitution [19] and prevailing statutes. No.[15] He argues that only informations for perjury were filed and there has been no information filed against him for violation of R. [25] In arguing that it has authority to investigate and initiate forfeiture proceedings against petitioner. petitioner concludes. Petitioner also points out in his Reply[32] to the Comment of the Office of the Ombudsman. 1606. No. Jurisdiction. [14] namely: (a) an inquiry similar to a preliminary investigation conducted by the prosecution arm of the government. unjust. whether in a permanent. it appears that the Motion to Dismiss and the instant Petition were filed on the same day.A. The Ombudsman explains that the grant to the Sandiganbayan of jurisdiction over violations of R. petitioner does not rule out cases where the .D. No. 1379 did not change even under the amendments of R. 15 (11)[28] of R.A. as amended. and (c) an action filed by the Solicitor General on behalf of the Republic of the Philippines. The petition for forfeiture should not be confused with the cases initiated and prosecuted by the PCGG pursuant to E. 3019 and 1379 now rests with the Sandiganbayan. 6770. 1379 have been strictly complied with. No. R. No. otherwise classified as Grade ‘27’ and higher of the Compensation and Position Classification Act of 1989 (Republic Act No. Of course.A. 1606. it is impossible for the Office of the Ombudsman to certify that there is reasonable ground to believe that a violation of the said law had been committed and that he is guilty thereof. Petitioner refutes these arguments in his Reply[31] and enunciates that the Sandiganbayan’s criminal jurisdiction is separate and distinct from its civil jurisdiction. Furthermore. is actually no longer required since the Office of the Ombudsman is endowed with the authority to investigate and prosecute the case as discussed above. No. and that the Sandiganbayan’s jurisdiction over forfeiture cases had been removed without subsequent amendments expressly restoring such civil jurisdiction. and the authority to file a petition for forfeiture to the Solicitor General. respondents stress that E. to which petitioner belongs. the clear intent of which is to separate the prima facie determination in forfeiture proceedings from the litigation of the civil action.[27] The constitutional power of investigation of the Office of the Ombudsman is plenary and unqualified. 1606. Respondents also brush off as inconsequential petitioner’s argument that the petition for forfeiture is “civil” in nature and the Sandiganbayan. 1379. Worse. the Office of the Ombudsman refers to both the Constitution [26] and R. naval captains. 0193 is still pending resolution. and all officers of higher ranks. No. the Sandiganbayan has no jurisdiction over any separate civil action against him.A. 3019.[20] Further. An inquiry similar to a preliminary investigation was conducted by a Prosecution Officer of the Office of the Ombudsman. In their Comment. acting or interim capacity. as amended.A.D. Nos. and cronies. 1379 is a special law which is primarily civil and remedial in nature. Sandiganbayan to argue that the Sandiganbayan has jurisdiction over the petition for forfeiture filed against petitioner. No. irrespective of whether these cases are civil or criminal in nature.A. thereby highlighting respondent Sandiganbayan’s lack of jurisdiction over the “civil case” for forfeiture of ill-gotten wealth.[16] respondents submit the contrary. his family. 8294 [24].[30] In addition.A. 17 November 2004.c thereof. having allegedly no jurisdiction over civil actions.A. its power to investigate any act of a public official or employee which appears to be “illegal. not civil jurisdiction. This authority of the Ombudsman has been affirmed also in Republic vs.A. 1379 filed against petitioner. therefore has no jurisdiction over the petition. [13] Hence. Furthermore. the petition for forfeiture filed against him is fatally defective for failing to comply with the jurisdictional requirements under Sec.] Nos. 2 of R. No. 3019 and 1379” in P. His thesis is that R. Book II of the Revised Penal Code. 3019 and 1379.D. the petition for forfeiture should be within the jurisdiction of the Sandiganbayan. It asserts that all the requirements of R. otherwise known as the Anti-Graft and Corrupt Practices Act. claimed by petitioner to be necessary. (d) Philippine army and air force colonels.” since it has been held that petitions for forfeiture are deemed criminal or penal and that it is only the proceeding for its prosecution which is civil in nature. 6770 expressly empowers the Ombudsman to investigate and prosecute such cases of unlawful acquisition of wealth. Section 2. thus: Sec. Republic Act No.[22] likewise relying on Republic v. including Philippine army and air force colonels. Sandiganbayan[17] which categorically ruled that “there is no issue that jurisdiction over violations of [R.] Nos. [21] The Office of the Ombudsman filed a separate Comment. This intent is further demonstrated by Sec.D. Title VII. No. It would also not be accurate to refer to a petition for forfeiture as a “civil case.A. (b) a certification to the Solicitor General that there is reasonable ground to believe that there has been violation of the said law and that respondent is guilty thereof. as amended. 1606 encompasses all cases involving violations of R. No. No. The petition being fatally defective.A.O.A. the Office of the Ombudsman alleges that the present Petition should be dismissed for blatant forum-shopping. Nos. Violations of Republic Act No. at the time of the commission of the offense: (1) Officials of the executive branch occupying the positions of regional director and higher. improper or inefficient” covers the unlawful acquisition of wealth by public officials as defined under R. 2. The petition is also supposedly bereft of the required certification which should be made by the investigating City or Provincial Fiscal (now Prosecutor) to the Solicitor General.A.A. in particular Sec. Hence.A. he maintains. No. 3019. as these are dealt with under a separate subparagraph of P. As petitioner falls squarely under the category of public positions covered by the aforestated law. 14 and 14-A.A. 1379 which grants the authority to make an inquiry similar to a preliminary investigation being done by the City or Provincial Fiscal. Sandiganbayan. 4.—The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving: a. where one or more of the accused are officials occupying the following positions in the government. his family and cronies. 0193) before the Sandiganbayan on the ground of the Sandiganbayan’s alleged lack of jurisdiction.O. Petitioner further contends that in any event. 1379. as amended. 6758). 14 and 14-A exclusively apply to actions for recovery of unlawfully acquired property against President Marcos. Consequently. The participation of the Office of the Solicitor General. implies jurisdiction over cases which are principally criminal or penal in nature because the concept of “violation” of certain laws necessarily carries with it the concept of imposition of penalties for such violation. Sec. No.” the only jurisdiction that can supposedly be implied is criminal jurisdiction. specifically including: …. even though the Motion to Dismiss in Civil Case No. No.] Nos. naval captains. since the same P.separate civil actions other than those filed against President Marcos. 1379. the same should have been dismissed. even if such separate civil action is for recovery of unlawfully acquired property under R. 4. although it came to be limited to cases involving high-ranking public officials as enumerated therein. noting that the issues raised by petitioner are not novel as these have been settled in Republic vs. he opines that it should have been the Office of the Solicitor General which filed the petition and not the Office of the Ombudsman as in this case.A. and all other officers of higher rank.[29] The Office of the Ombudsman then refutes petitioner’s allegation that the petition for forfeiture filed against him failed to comply with the procedural and formal requirements under the law. 1379. Even as petitioner had filed a Motion to Dismiss as regards the petition for forfeiture (docketed as Civil Case No. the Sandiganbayan is vested with authority and jurisdiction over the petition for forfeiture under R. No. 1379.a (1) (d) of P. 7975 [23] and R. A.A. civil in nature. but by the lawmaking power. No. No. initiate and prosecute such petitions for forfeiture. No.A. Originally. where one or more of the accused are officials occupying the following positions whether in a permanent.D.. 8249[44] since both statutes which also amended the jurisdiction of the Sandiganbayan were not yet enacted at the time. and other city department heads. Petitioner points to P. 129 abolished the concurrent jurisdiction of the Sandiganbayan and the regular courts and expanded the exclusive original jurisdiction of the Sandiganbayan over the offenses enumerated in Sec. (d) Philippine army and air force colonels. Petitioner however did not raise any argument to refute the charge of forum-shopping.D. the civil action for enforcement of the civil liability is impliedly instituted with it.A. 1606 was again amended by P. 1379 do not terminate in the imposition of a penalty but merely in the forfeiture of the properties illegally acquired in favor of the State. as amended. 1379. and other city department heads. Batas Pambansa Blg. No. (b) City mayor.A. (3) Members of the judiciary without prejudice to the provisions of the Constitution. 1606[36] was later issued expressly repealing P. No. In Cabal v. otherwise classified as Grade '27' and higher. vice-governors. engineers. The subsequent enactments only serve to buttress the conclusion that the Sandiganbayan indeed has jurisdiction over violations of R. petitioner’s argument—that the Sandiganbayan has no jurisdiction over the petition for forfeiture it being “civil” in nature and the Sandiganbayan allegedly having no jurisdiction over civil actions— collapses completely. The issues for resolution are: (a) whether the Sandiganbayan has jurisdiction over petitions for forfeiture under R. 1379. P.D. Jr. No. which treats of independent civil actions only in the last paragraph of Sec. 1379. No. Under R.A. 1379. The effect of such a forfeiture is to transfer the title to the specific thing from the owner to the sovereign power. recovery of instruments and effects of the crime. and the term is used in such a sense in this article. No. without prejudice to the provisions of the Constitution. (c) Officials of the diplomatic service occupying the position of consul and higher. and the criminal case is hereafter filed with the Sandiganbayan or the appropriate court. as thus defined. (b) whether the Office of the Ombudsman has the authority to investigate. for consolidation and joint determination with the criminal action. otherwise the separate civil action shall be deemed abandoned. It noted that the procedure outlined in the law leading to forfeiture is that provided for in a civil action. The petition is patently without merit. No. consideration R. directors or trustees. Rather. 1379. 1861. Jur. the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action. It should be dismissed. No. 599) . state universities or educational institutions or foundations. Sr. 7975 [43] and R. v. as the case may be. it was the Solicitor General who was authorized to initiate forfeiture proceedings before the then Court of First Instance of the city or province where the public officer or employee resides or holds office. (23 Am.D. city treasurers. the Court has had occasion to rule that forfeiture of illegally acquired property partakes the nature of a penalty. and forfeiture proceedings provided for under R. (2) Members of Congress and officials thereof classified as Grade '27' and up under the Compensation and Position Classification Act of 1989. No. No. Upon the creation of the Sandiganbayan pursuant to P. however. No. the Sandiganbayan is vested with exclusive original jurisdiction in all cases involving violations of R. is imposed by way of punishment not by the mere convention of the parties. the same proceeding by the Sandiganbayan or the appropriate courts. However. A forfeiture. a forfeiture is a divestiture of property without compensation. 4 of P. 1606. No. No. 3019. the Court in Republic v. and provincial treasurers. (e) Officers of the Philippine National Police while occupying the position of provincial director and those holding the rank of senior superintended or higher. and (c) whether petitioner is guilty of forum-shopping. 2 of R. in consequence of a default or an offense.”[46] Then. 1379. Perez.D. assessors. No. engineers. assessors. and (5) All other national and local officials classified as Grade '27' and higher under the Compensation and Position Classification Act of 1989. (4) Chairmen and members of Constitutional Commission. [34] original and exclusive jurisdiction over such violations was vested in the said court. Since this change resulted in the proliferation of the filing of cases before the Sandiganbayan where the offense charged is punishable by a penalty not higher than prision correccional or its equivalent. [35] P. Book II of the Revised Penal Code. civil actions under Articles 32 and 34 of the Civil Code. No.[41] [39] On the foregoing premises alone. 4 thereof: Any provisions of law or Rules of Court to the contrary notwithstanding. 8249. Kapunan. pursuant to Sec. naval captains. specifically including: (a) Provincial governors. to insure a prescribed course of conduct. and Chapter II.crime carries with it the corresponding civil liability such that when the criminal action is instituted.A. 1486. Sandiganbayan. No. 1606 to embrace all such offenses irrespective of the imposable penalty. members of the sangguniang panlalawigan. Sec. [38] Subsequently.A. acting or interim capacity. (g) Presidents. as well as modifying the jurisdiction of the Sandiganbayan by removing its jurisdiction over civil actions brought in connection with crimes within the exclusive jurisdiction of said court. R. [45] In the face of the prevailing jurisprudence and the present state of statutory law on the jurisdiction of the Sandiganbayan. 3019 and R. the Court therein resolved the question of jurisdiction by the Sandiganbayan over violations of R. Almeda.viz: In a strict signification. therefore.D. at the time of the commission of the offense: (1) Officials of the executive branch occupying the positions of regional director and higher. No. the criminal action and the corresponding civil action for the recovery of civil liability shall at all times be simultaneously instituted with. said civil action shall be transferred to the Sandiganbayan or the appropriate court. or managers of government-owned or controlled corporations. [42] It could not have taken into The civil nature of an action for forfeiture was first recognized in Republic v. [48] However. and no right to reserve the filing of such civil action separately from the criminal action shall be recognized: Provided. 6758).A. 3019 and 1379 is lodged with the Sandiganbayan. Sandiganbayan. (f) City and provincial prosecutors and their assistants. 1860[40] and eventually by P.A.D. and all officers of higher rank. That where the civil action had heretofore been filed separately but judgment therein has not yet been rendered. It is a method deemed necessary by the legislature to restrain the commission of an offense and to aid in the prevention of such an offense. and jointly determined in. Title VII.A. the petition for forfeiture is an independent civil action over which the Sandiganbayan has no jurisdiction. No.[37] Such civil actions removed from the jurisdiction of the Sandigabayan include those for restitution or reparation of damages. vice-mayors.[49] the Court cited voluminous authorities in support of its declaration of the criminal or penal nature of forfeiture proceedings. No.A. of the Compensation and Position Classification Act of 989 (R.[47] followed. 1486.A. deduced that jurisdiction over violations of R. holding that the proceedings under R. and such cases not being of a serious nature. No. The seminal decision of Republic v. and officials and prosecutors in the Office of the Ombudsman and special prosecutor.D. thus: “[T]he rule is settled that forfeiture proceedings are actions in rem and. Sandiganbayan[33] squarely rules on the issues raised by petitioner concerning the jurisdiction of the Sandiganbayan and the authority of the Office of the Ombudsman.A. After reviewing the legislative history of the Sandiganbayan and the Office of the Ombudsman. 2. members of the sangguniang panlungsod. petitioner argues that the action for forfeiture subject of this case is not the ancillary civil action impliedly instituted with the criminal action. and the court having jurisdiction over the criminal action also acquires jurisdiction over the ancillary civil action. D.D.A. Hence.D. as well as against the goods. however. and direct and control the prosecution of said . Sec. No. file and prosecute petitions for forfeiture under R. P. 1486 was enacted. Solicitor General. since the forfeiture of the illegally acquired Following the same analysis.D. 612) …." (15 Am.[59] Under Sec.[51] The Court in Cabal held that the doctrine laid down in Almedarefers to the purely procedural aspect of the forfeiture proceedings and has no bearing on the substantial rights of respondents.D. repeals by implication are not favored and will not be so declared unless it be manifest that the legislature so intended. 114 S. No. We come then to the question of authority of the Office of the Ombudsman to investigate.D. . are so far considered as quasicriminal proceedings as to relieve the owner from being a witness against himself and to prevent the compulsory production of his books and papers.D. This may be taken as an implied repeal by P.” [63] This is not an express repealing clause because it fails to identify or designate the statutes that are intended to be repealed.D.A. No. . p. 104.A. The language used in the latter statute must be such as to render it irreconcilable with what had been formerly enacted. 1486. 1379. No.A. “Proceedings for forfeitures are generally considered to be civil and in the nature of proceedings in rem. Agoncillo[53] and Katigbak v. [62] P. 1607 [66]which amended the powers of the Tanodbayan to investigate administrative complaints[67] and created the Office of the Chief Special Prosecutor. 2. Rather. it is a clause which predicates the intended repeal upon the condition that a substantial conflict must be found in existing and prior laws. The statute providing that no judgment or other proceedings in civil causes shall be arrested or reversed for any defect or want of form is applicable to them. 4 of P. Jur. Perez.A. 1379. . 1487 [65] creating the Office of the Ombudsman (then known as the Tanodbayan) was passed. 1486 gave the Chief Special Prosecutor the authority to file and prosecute forfeiture cases. for it is his breach of the laws which has to be proved to establish the forfeiture and his property is sought to be forfeited. it does not penalize the officer or employee for making the unlawful acquisition. rule or regulation inconsistent with the provisions of this Decree is hereby repealed or modified accordingly. P. as observed in Almeda. even though the proceeding is civil in nature. it imposes the penalty of forfeiture of the properties unlawfully acquired upon the respondent public officer or employee. 1486 grants exclusive jurisdiction and authority to the Sandiganbayan and the Chief Special Prosecutor. 368)[50] Cabal v. No. that portion of the Fifth Amendment which declares that no person shall be compelled in any criminal case to be a witness against himself. his family and cronies. vs. P. that violations of R. [61] As a rule. No. particularly their constitutional right against self-incrimination.A. v. In some aspects. v.A. An inconsistency that falls short of that standard does not suffice.A. Issued on the same date was P. 1379. .D. [55] Section 12[56] of the law provides a penalty but it is only imposed upon the public officer or employee who transfers or conveys the unlawfully acquired property. Sec. No.[64] The conflict between P..” What acts would constitute a violation of such a law? A reading of R. P. No. No.D.A. No. According to the authorities such proceedings.D. 12 of P. 1379 refers to the jurisdiction over the forfeiture proceeding and the authority to file the petition for forfeiture. Such proceedings are criminal in nature to the extent that where the person using the res illegally is the owner of rightful possessor of it the forfeiture proceeding is in the nature of a punishment. respectively. suits for penalties and forfeitures are of quasi-criminal nature and within the reason of criminal proceedings for all the purposes of . it must be shown that the statutes or statutory provisions deal with the same subject matter and that the latter be inconsistent with the former. 1486 contains a repealing clause which provides that “[A]ny provision of law. 2 of R.) property amounts to a penalty. Sandiganbayan. "Generally speaking. On 11 June 1978. On 10 December 1978. 1486 was later issued on 11 June 1978 vesting the Sandiganbayan with jurisdiction over R. 1379 are inconsistent with each other and the former should be deemed to have repealed the latter.D. order. 1379 forfeiture proceedings. This is in line with the purpose behind the creation of the Sandiganbayan as an anti-graft court—to address the urgent problem of dishonesty in public service. French. 1607 provided said Office of the Chief Special Prosecutor with exclusive authority to conduct preliminary investigation of all cases cognizable by the Sandiganbayan. Instead." (23 Am. 1379 was committed during the respondent officer or employee’s incumbency and in relation to his office.D. the same day that P. No. 1379 establishes that it does not enumerate any prohibited acts the commission of which would necessitate the imposition of a penalty. it was the Solicitor General who was authorized to initiate forfeiture proceedings before the then Courts of First Instance.W. Sr. petitioner should therefore abandon his erroneous belief that the Sandiganbayan has jurisdiction only over petitions for forfeiture filed against President Marcos. Before such repeal is deemed to exist. The Tanodbayan initially had no authority to prosecute cases falling within the jurisdiction of the Sandiganbayan as provided in Sec. 1379 by transferring said jurisdiction and authority to the Sandiganbayan and the Chief Special Prosecutor. file informations therefor. No. As P. No. [57] It is logically congruent. such jurisdiction being vested in the Chief Special Prosecutor as earlier mentioned.D. Kapunan modified the earlier ruling in Almeda. 1486 of the jurisdiction of the former Courts of First Instance and the authority of the Solicitor General to file a petition for forfeiture under Sec.[54] The Sandiganbayan is vested with jurisdiction over violations of R. [52] This was reaffirmed and reiterated in Republic v. but do not expressly repeal those of a former law. No.' It may be said to be a penalty imposed for misconduct or breach of duty. No. What is needed is a manifest indication of the legislative purpose to repeal. 2 of R. [58] …. the then Courts of First Instance and Solicitor General cannot exercise concurrent jurisdiction or authority over such cases. 1606 was enacted expressly repealing P. 1486.A. No. Jur. They have been held to be so far in the nature of criminal proceedings that a general verdict on several counts in an information is upheld if one count is good. entitled “An Act Declaring Forfeiture In Favor of the State Any Property Found to Have Been Unlawfully Acquired By Any Public Officer or Employee and Providing For the Proceedings Therefor. This was the main issue resolved in Republic v. 1486 and Sec. No. In effect. Perez. where the owner of the property appears. No. No. therefore. No.'" (Com. informations for the forfeiture of goods that seek no judgment of fine or imprisonment against any person are deemed to be civil proceedings in rem. No. ."In Black's Law Dictionary a 'forfeiture' is defined to be 'the incurring of a liability to pay a definite sum of money as the consequence of violating the provisions of some statute or refusal to comply with some requirement of law. The soundness of this reasoning becomes even more obvious when we consider that the respondent in such forfeiture proceedings is a public officer or employee and the violation of R. 1486 and R.[68] P. 255. it provides the procedure for forfeiture to be followed in case a public officer or employee has acquired during his incumbency an amount of property manifestly out of proportion to his salary as such public officer or employee and to his lawful income and income from legitimately acquired property. No. No. 1379 are placed under the jurisdiction of the Sandiganbayan. Sr. [60] An implied repeal is one which takes place when a new law contains some provisions which are contrary to. The proceeding is one against the owner. R. Decree No. No. cases.[69] P.D. No. 1607 also removed from the Chief Special Prosecutor the authority to file actions for forfeiture under R.A. No. 1379.[70] The rule is that when a law which expressly repeals a prior law is itself repealed, the law first repealed shall not be thereby revived unless expressly so provided. From this it may fairly be inferred that the old rule continues in force where a law which repeals a prior law, not expressly but by implication, is itself repealed; and that in such cases the repeal of the repealing law revives the prior law, unless the language of the repealing statute provides otherwise. [71] Hence, the repeal of P.D. No. 1486 by P.D. No. 1606 necessarily revived the authority of the Solicitor General to file a petition for forfeiture under R.A. No. 1379, but not the jurisdiction of the Courts of First Instance over the case nor the authority of the Provincial or City Fiscals (now Prosecutors) to conduct the preliminary investigation therefore, since said powers at that time remained in the Sandiganbayan and the Chief Special Prosecutor.[72] The Tanodbayan’s authority was further expanded by P.D. No. 1630 [73] issued on 18 July 1990. Among other things, the Tanodbayan was given the exclusive authority to conduct preliminary investigation of all cases cognizable by the Sandiganbayan, to file informations therefore and to direct and control the prosecution of said cases.[74] The power to conduct the necessary investigation and to file and prosecute the corresponding criminal and administrative cases before the Sandiganbayan or the proper court or administrative agency against any public personnel who has acted in a manner warranting criminal and disciplinary action or proceedings was also transferred from the Chief Special Prosecutor to the Tanodbayan. against him. The contention that the procedural requirements under Sec. 2 of R.A. No. 1379 were not complied with no longer deserve consideration in view of the foregoing discussion. Now to the charge that petitioner is guilty of forum-shopping. Forum-shopping is manifest whenever a party “repetitively avail[s] of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in, or already resolved adversely by, some other court.”[83] It has also been defined as “an act of a party against whom an adverse judgment has been rendered in one forum of seeking and possibly getting a favorable opinion in another forum, other than by appeal or the special civil action of certiorari, or the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition.”[84] Considered a pernicious evil, it adversely affects the efficient administration of justice since it clogs the court dockets, unduly burdens the financial and human resources of the judiciary, and trifles with and mocks judicial processes.[85] Willful and deliberate forum-shopping is a ground for summary dismissal of the complaint or initiatory pleading with prejudice and constitutes direct contempt of court, as well as a cause for administrative sanctions, which may both be resolved and imposed in the same case where the forumshopping is found.[86] There is ample reason to hold that petitioner is guilty of forum-shopping. The present petition was filed accompanied by the requisiteVerification and Certification Against Forum Shopping [87] in which petitioner made the following representation: [75] Thereafter, P.D. No. 1606 was amended by P.D. Nos. 1860 and 1861 [76] which granted the Tanodbayan the same authority. The present Constitution was subsequently ratified and then the Tanodbayan became known as the Office of the Special Prosecutor which continued to exercise its powers except those conferred on the Office of the Ombudsman created under the Constitution. [77] The Office of the Ombudsman was officially created under R.A. No. 6770. [78] At present, the powers of the Ombudsman, as defined by R.A. No. 6770, corollary to Sec. 13, Art. XI of the Constitution, include the authority, among others, to: (1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of this primary jurisdiction, may take over, at any stage, from any investigatory agency of Government, the investigation of such cases; [79] … …. 3.] As Petitioner, I have not heretofore commenced any other action or proceeding in the Supreme Court, the Court of Appeals, or any other tribunal or agency, involving the same issues as that in the above-captioned case. 4.] To the best of my knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency. 5.] If I should hereafter learn that such proceeding has been commenced or is pending before the Supreme Court, the Court of Appeals, or any other tribunal or agency, I undertake to report that fact to this Honorable Court within five (5) days from knowledge thereof. (11) Investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained wealth amassed after 25 February 1986 and the prosecution of the parties involved therein.[80] Ostensibly, it is the Ombudsman who should file the petition for forfeiture under R.A. No. 1379. However, the Ombudsman’s exercise of the correlative powers to investigate and initiate the proper action for recovery of ill-gotten and/or unexplained wealth is restricted only to cases for the recovery of ill-gotten and/or unexplained wealth amassed after 25 February 1986.[81] As regards such wealth accumulated on or before said date, the Ombudsman is without authority to commence before the Sandiganbayan such forfeiture action —since the authority to file forfeiture proceedings on or before 25 February 1986 belongs to the Solicitor General—although he has the authority to investigate such cases for forfeiture even before 25 February 1986, pursuant to the Ombudsman’s general investigatory power under Sec. 15 (1) of R.A. No. 6770.[82] It is obvious then that respondent Office of the Ombudsman acted well within its authority in conducting the investigation of petitioner’s illegally acquired assets and in filing the petition for forfeiture However, petitioner failed to inform the Court that he had filed a Motion to Dismiss[88] in relation to the petition for forfeiture before the Sandiganbayan. The existence of this motion was only brought to the attention of this Court by respondent Office of the Ombudsman in its Comment. A scrutiny of the Motion to Dismiss reveals that petitioner raised substantially the same issues and prayed for the same reliefs therein as it has in the instant petition. In fact, the Arguments and Discussion [89] in the Petition of petitioner’s thesis that the Sandiganbayan has no jurisdiction over separate civil actions for forfeiture of unlawfully acquired properties appears to be wholly lifted from the Motion to Dismiss. The only difference between the two is that in the Petition, petitioner raises the ground of failure of the petition for forfeiture to comply with the procedural requirements of R.A. No. 1379, and petitioner prays for the annulment of the Sandiganbayan’s Resolution dated 29 October 2004 andWrit of Preliminary Attachment dated 2 November 2004. Nevertheless, these differences are only superficial. Both Petition and Motion to Dismisshave the same intent of dismissing the case for forfeiture filed against petitioner, his wife and their sons. It is undeniable that petitioner had failed to fulfill his undertaking. This is incontestably forum-shopping which is reason enough to dismiss the petition outright, without prejudice to the taking of appropriate action against the counsel and party concerned.[90] The brazenness of this attempt at forum-shopping is even demonstrated by the fact that both the Petition and Motion to Dismiss were filed on the same day, 17 November 2004. Petitioner should have waited for the resolution of his Motion to Dismiss before resorting to the petition at hand. Petitioner’s counsel of record, Atty. Constantino B. De Jesus, needs to be reminded that his primary duty is to assist the courts in the administration of justice. As an officer of the court, his duties to the court are more significant and important than his obligations to his clients. Any conduct which tends to delay, impede or obstruct the administration thereof contravenes his oath of office. [91] Atty. De Jesus failed to accord due regard, as he must, the tenets of the legal profession and the mission of our courts of justice. For this, he should be penalized. Penalties imposed upon lawyers who engaged in forum-shopping range from severe censure to suspension from the practice of law.[92] In the instant case, we deem the imposition of a fine in the amount of P20,000.00 to be sufficient to make Atty. De Jesus realize the seriousness of his naked abuse of the judicial process. WHEREFORE, in view of the foregoing, the Petition is DISMISSED. Atty. Constantino B. De Jesus is DECLARED in CONTEMPT of this Court and meted a fine of Twenty Thousand Pesos ( P20,000.00) to be paid within ten (10) days from the finality of this Decision. Costs against petitioner. During the anti-water pilferage operation, the PNP-CIDG discovered that MICO’s car-wash boys indeed had been illegally getting water from an MWSI fire hydrant. The PNP-CIDG arrested the car-wash boys and confiscated the containers used in getting water. At this point, the petitioner, Alfredo’s father and the Barangay Chairman or punong barangay of Barangay 293, Zone 28, Binondo, Manila, interfered with the PNP-CIDG’s operation by ordering several men to unload the confiscated containers. This intervention caused further commotion and created an opportunity for the apprehended car-wash boys to escape. 7 On August 5, 2003, the respondent Office of the Ombudsman Fact-Finding and Intelligence Bureau, after conducting its initial investigation, filed with the Office of the Overall Deputy Ombudsman an administrative complaint against the petitioner for his blatant refusal to recognize a joint legitimate police activity, and for his unwarranted intervention.8 In its decision9 dated August 20, 2004, the Office of the Deputy Ombudsman found the petitioner guilty of grave misconduct and ordered his dismissal from the service. The Deputy Ombudsman ruled that the petitioner cannot overextend his authority as Barangay Chairman and induce other people to disrespect proper authorities. The Deputy Ombudsman also added that the petitioner had tolerated the illegal acts of MICO’s car-wash boys.10 The petitioner filed a motion for reconsideration which the Office of the Deputy Ombudsman denied in its order11of November 2, 2004. SO ORDERED. The petitioner appealed to the CA via a petition for review under Rule 43 of the Rules of Court. In its decision12dated February 21, 2006, the CA dismissed the petition for premature filing. The CA ruled that the petitioner failed to exhaust proper administrative remedies because he did not appeal the Deputy Ombudsman’s decision to the Ombudsman. The petitioner moved for the reconsideration of the CA ruling. On June 15, 2006, the CA denied the motion. 13 G.R. No. 173121 April 3, 2013 The Petition FRANKLlN ALEJANDRO, Petitioner, vs. OFFICE OF THE OMBUDSMAN FACT-FINDING AND INTELLIGENCE BUREAU, represented by Atty. Maria Olivia Elena A. Roxas, Respondent. DECISION BRION, J.: We resolve the petition for review on certiorari,1 filed by Franklin Alejanctro (petitioneJ), assailing the February 21, 2006 decision2 and the June 15, 2006 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 88544. The CA dismissed for prematurity the petitioner's appeal on the August 20, 2004 decision 4 of the Office of the Deputy Ombudsman in OMB-C-A-03-0310-I finding him administratively liable for grave misconduct. The petitioner posits that the CA erred in dismissing his petition outright without considering Rule 43 of the Rules of Court and Administrative Order No. 07 (otherwise known as the Rules of Procedure of the Office of the Ombudsman),14 on the belief that the filing of a motion for reconsideration of the decision of the Office of the Overall Deputy Ombudsman can already be considered as an exhaustion of administrative remedies. The petitioner further argues that the Office of the Ombudsman has no jurisdiction to order his dismissal from the service since under Republic Act No. (RA) 7160 (otherwise known as the Local Government Code of 1991), an elective local official may be removed from office only by the order of a proper court. Finally, he posits that the penalty of dismissal from the service is not warranted under the available facts. The Office of the Deputy Ombudsman, through the Office of the Solicitor General, pointed out in its Comment15that the petitioner failed to exhaust administrative remedies since he did not appeal the decision of the Deputy Ombudsman to the Ombudsman. The Office of the Deputy Ombudsman maintained that under RA 677016 (The Ombudsman Act of 1989), the Office of the Ombudsman has disciplinary authority over all elective and appointive officials. It also asserted that sufficient evidence exists to justify the petitioner’s dismissal from the service. The Factual Antecedents As framed by the parties, the case poses the following issues: On May 4, 2000, the Head of the Non-Revenue Water Reduction Department of the Manila Water Services, Inc. (MWSI) received a report from an Inspectorate and Special Projects team that the Mico Car Wash (MICO), owned by Alfredo Rap Alejandro, has been illegally opening an MWSI fire hydrant and using it to operate its car-wash business in Binondo, Manila. 5 On May 10, 2000, the MWSI, in coordination with the Philippine National Police Criminal Investigation and Detection Group (PNP-CIDG), conducted an anti-water pilferage operation against MICO. 6 I. WHETHER THE PRINCIPLE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES REQUIRES A REQUEST FOR RECONSIDERATION FROM THE OFFICE OF THE DEPUTY OMBUDSMAN TO THE OMBUDSMAN FOR THE PURPOSE OF A RULE 43 REVIEW. II. WHETHER THE OFFICE OF THE OMBUDSMAN HAS JURISDICTION OVER ELECTIVE OFFICIALS AND HAS THE POWER TO ORDER THEIR DISMISSAL FROM THE SERVICE. III. WHETHER PETITIONER’S ACT CONSTITUTES GRAVE MISCONDUCT TO WARRANT HIS DISMISSAL. The Court’s Ruling In Hagad v. Gozo-Dadole,21 we pointed out that "there is nothing in the Local Government Code to indicate that it has repealed, whether expressly or impliedly, the pertinent provisions of the Ombudsman Act. The two statutes on the specific matter in question are not so inconsistent x x x as to compel us to only uphold one and strike down the other." The two laws may be reconciled by understanding the primary jurisdiction and concurrent jurisdiction of the Office of the Ombudsman. The Ombudsman has primary jurisdiction to investigate any act or omission of a public officer or employee who is under the jurisdiction of the Sandiganbayan. RA 6770 provides: Section 15. Powers, Functions and Duties. — The Office of the Ombudsman shall have the following powers, functions and duties: We deny the petition for lack of merit. The CA committed no reversible error in affirming the findings and conclusions of the Deputy Ombudsman. (1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of this primary jurisdiction, it may take over, at any stage, from any investigatory agency of Government, the investigation of such cases. [italics supplied; emphasis and underscore ours] No further need exists to exhaust administrative remedies from the decision of the Deputy Ombudsman because he was acting in behalf of the Ombudsman The Sandiganbayan’s jurisdiction extends only to public officials occupying positions corresponding to salary grade 27 and higher.22 We disagree with the CA’s application of the doctrine of exhaustion of administrative remedies which states that when there is "a procedure for administrative review, x x x appeal, or reconsideration, the courts x x x will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum."17 Consequently, as we held in Office of the Ombudsman v. Rodriguez, 23 any act or omission of a public officer or employee occupying a salary grade lower than 27 is within the concurrent jurisdiction of the Ombudsman and of the regular courts or other investigative agencies.24 Preliminary Issues Section 7, Rule III of Administrative Order No. 07, dated April 10, 1990, provides that: Section 7. FINALITY OF DECISION. — Where the respondent is absolved of the charge and in case of conviction where the penalty imposed is public censure or reprimand, suspension of not more than one (1) month, or a fine equivalent to one (1) month salary, the decision shall be final and unappealable. In all other cases, the decision shall become final after the expiration of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration or petition for certiorari shall have been filed by him as prescribed in Section 27 of RA 6770. [italics supplied; emphasis and underscore ours] Administrative Order No. 07 did not provide for another appeal from the decision of the Deputy Ombudsman to the Ombudsman. It simply requires that a motion for reconsideration or a petition for certiorari may be filed in all other cases where the penalty imposed is not one involving public censure or reprimand, suspension of not more than one (1) month, or a fine equivalent to one (1) month salary. This post-judgment remedy is merely an opportunity for the Office of the Deputy Ombudsman, or the Office of the Ombudsman, to correct itself in certain cases. To our mind, the petitioner has fully exhausted all administrative remedies when he filed his motion for reconsideration on the decision of the Deputy Ombudsman. There is no further need to review the case at the administrative level since the Deputy Ombudsman has already acted on the case and he was acting for and in behalf of the Office of the Ombudsman. In administrative cases involving the concurrent jurisdiction of two or more disciplining authorities, the body where the complaint is filed first, and which opts to take cognizance of the case, acquires jurisdiction to the exclusion of other tribunals exercising concurrent jurisdiction. 25 In this case, the petitioner is a Barangay Chairman, occupying a position corresponding to salary grade 14. 26 Under RA 7160, the sangguniang panlungsod or sangguniang bayan has disciplinary authority over any elective barangay official, as follows: Section 61. Form and Filing of Administrative Complaints. – A verified complaint against any erring local elective official shall be prepared as follows: xxxx (c) A complaint against any elective barangay official shall be filed before the sangguniang panlungsod or sangguniang bayan concerned whose decision shall be final and executory. [italics supplied] Since the complaint against the petitioner was initially filed with the Office of the Ombudsman, the Ombudsman's exercise of jurisdiction is to the exclusion of the sangguniang bayan whose exercise of jurisdiction is concurrent. The Ombudsman has the power to impose administrative sanctions The Ombudsman has concurrent jurisdiction over administrative cases which are within the jurisdiction of the regular courts or administrative agencies The Office of the Ombudsman was created by no less than the Constitution. 18 It is tasked to exercise disciplinary authority over all elective and appointive officials, save only for impeachable officers. While Section 21 of The Ombudsman Act19 and the Local Government Code both provide for the procedure to discipline elective officials, the seeming conflicts between the two laws have been resolved in cases decided by this Court.20 Section 15 of RA 677027 reveals the manifest intent of the lawmakers to give the Office of the Ombudsman fulladministrative disciplinary authority. This provision covers the entire range of administrative activities attendant to administrative adjudication, including, among others, the authority to receive complaints, conduct investigations, hold hearings in accordance with its rules of procedure, summon witnesses and require the production of documents, place under preventive suspension public officers and employees pending an investigation, determine the appropriate penalty imposable on erring public officers or employees as warranted by the evidence, and, necessarily, impose the corresponding penalty.28 even lead to conclusions beyond interference and defiance. Apolonio29 that: It is likewise apparent that under RA 6770. 30 (italics supplied. taken together with the investigation report of the Police Superintendent and the testimonies of the witnesses. under the obligation to prevent the commission of a crime and to effect the arrest. as it actually did." The PNP-CIDG’s anti-water pilferage operation against the car-wash boys was affecting the peace and order of the community and he was duty-bound to investigate and try to maintain public order. of criminal offenders.43 We make this observation though as his son owns MICO whose car-wash boys were engaged in water pilferage. or a flagrant disregard of established rules. police authority is superior to the punong barangay’s authority in a situation where the maintenance of peace and order has metamorphosed into crime prevention and the arrest of criminal offenders.32 The petitioner. His open interference in a legitimate police activity.1âwphi1 From another perspective. WHEREFORE.34 The maintenance of peace and order in the community is a general function undertaken by the punong barangay. they were creating a commotion. the prevention of crimes and the arrest of criminal offenders.35 On the other hand. . the maintenance of peace and order carries both general and specific functions on the part of the police. In addition to the maintenance of peace and order. "Grave misconduct necessarily includes the lesser offense of simple misconduct. The police was.R. which must all be supported by substantial evidence. The Office was granted the power to punish for contempt in accordance with the Rules of Court. emphasis and underscore ours) Substantive Issue The petitioner is liable for grave misconduct At the outset. but crime prevention is largely a police matter. to respect the PNP-CIDG’s authority even if he is not in the direct position to give aid." and are charged with the enforcement of "laws and ordinances relative to the protection of lives and properties. he actually ordered several bystanders to defy the PNP-CIDG’s whole operation. in pursuance thereof. It was given disciplinary authority over all elective and appointive officials of the government and its subdivisions.36as amended. the peace and order function of the punong barangay must also be related to his function of assisting local executive officials (i. in view of the foregoing. 31 After the petitioner introduced himself and inquired about the operation. the person charged may only be held liable for simple misconduct. The petitioner’s act stirred further commotion that unfortunately led to the escape of the apprehended car-wash boys. instead of assisting the PNP-CIDG. in the same manner that the police is bound to maintain peace and order within the community. with police authority being predominant 33 especially when the police has began to act on an enforcement matter. instrumentalities and agencies (with the exception only of impeachable officers. at the very least. it can preventively suspend any officer under its authority pending an investigation when the case so warrants. What we can conclusively confirm is that the petitioner violated the law by directly interfering with a legitimate police activity where his own son appeared to be involved. bring offenders to justice and assist in their prosecution. Section 24 of RA 6975 (otherwise known as "the Department of the Interior and Local Government Act of 1990"). SP No.''42 Sufficient records exist to justify the imposition of a higher penalty against the petitioner. As Barangay Chairman.e. By interfering with a legitimate police operation. 41 If the misconduct does not involve any of the additional elements to qualify the misconduct as grave. as Barangay Chairman. is tasked to enforce all laws and ordinances which are applicable within the barangay. the lawmakers intended to provide the Office of the Ombudsman with sufficient muscle to ensure that it can effectively carry out its mandate as protector of the people against inept and corrupt government officers and employees. Misconduct is considered grave if accompanied by corruption. in the maintenance of peace and order. the city mayor). although we cannot make this conclusive finding at this point. its power is not merely recommendatory. 40 Accordingly. Under Section 389(b)(3) of RA 7160. Section 52(A)(3). the police has the authority to "investigate and prevent crimes. members of Congress and the Judiciary).39 Local executive officials have the power to employ and deploy police for the maintenance of peace and order.. we hereby DENY the petition for lack of merit. We held in Office of the Ombudsman v. assist the city or municipal mayor and the sanggunian members in the performance of their duties and functions.37 enumerates the powers and functions of the police. At the time when the police officers were hauling the confiscated equipment. we point out that the maintenance of peace and order is a function of both the police and the Barangay Chairman. the petitioner himself could have been involved in corrupt activities. effect the arrest of criminal offenders. a criminal act was actually taking place and the situation was already beyond the general maintenance of peace and order. 88544."38Examined side by side. and AFFIRM the decision of the Court of Appeals in CA-G. Also. the law provides that a punong barangay must "maintain public order in the barangay and.These powers unmistakably grant the Office of the Ombudsman the power to directly impose administrative sanctions. the police officers immediately showed their identifications and explained to him that they were conducting an anti-water pilferage operation. The photographs. In this case. the petitioner was clearly in the performance of his official duty when he interfered. Chapter III of the Local Government Code. we are left with no other conclusion other than to rule that Alejandro is liable for misconduct in the performance of his duties. Rule IV of the Revised Uniform Rules on Administrative Cases in the Civil Service provides that the penalty for grave misconduct is dismissal from the service. the maintenance of peace and order is largely a police matter. and defiance of the police's authority only show his clear i1itent to violate the law. However. in fact. under Section 389(b). he reneged on his first obligation as the grassroot official tasked at the first level with the enforcement of the law. This act qualifies the misconduct as grave. a clear intent to violate the law. he effectively interfered with this hierarchy of authority.1âwphi1 Thus. the petitioner is bound. While the petitioner has general charge of the affairs in the barangay. It is a task expressly conferred to the punong barangay under Section 389(b)(3) of RA 7160. at that point. SO ORDERED.