G.R. No.

167571

November 25, 2008

LUIS PANAGUITON, JR., petitioner vs. DEPARTMENT OF JUSTICE, RAMON C. TONGSON and RODRIGO G. CAWILI, respondents. DECISION TINGA, J.: This is a Petition for Review1 of the resolutions of the Court of Appeals dated 29 October 2004 and 21 March 2005 in CA G.R. SP No. 87119, which dismissed Luis Panaguiton, Jr.'s (petitioner's) petition for certiorari and his subsequent motion for reconsideration.2 The facts, as culled from the records, follow. In 1992, Rodrigo Cawili (Cawili) borrowed various sums of money amounting to P1,979,459.00 from petitioner. On 8 January 1993, Cawili and his business associate, Ramon C. Tongson (Tongson), jointly issued in favor of petitioner three (3) checks in payment of the said loans. Significantly, all three (3) checks bore the signatures of both Cawili and Tongson. Upon presentment for payment on 18 March 1993, the checks were dishonored, either for insufficiency of funds or by the closure of the account. Petitioner made formal demands to pay the amounts of the checks upon Cawili on 23 May 1995 and upon Tongson on 26 June 1995, but to no avail.3 On 24 August 1995, petitioner filed a complaint against Cawili and Tongson4 for violating Batas Pambansa Bilang 22 (B.P. Blg. 22)5 before the Quezon City Prosecutor's Office. During the preliminary investigation, only Tongson appeared and filed his counter-affidavit.6 Tongson claimed that he had been unjustly included as partyrespondent in the case since petitioner had lent money to Cawili in the latter's personal capacity. Moreover, like petitioner, he had lent various sums to Cawili and in appreciation of his services, he was offered to be an officer of Roma Oil Corporation. He averred that he was not Cawili's business associate; in fact, he himself had filed several criminal cases against Cawili for violation of B.P. Blg. 22. Tongson denied that he had issued the bounced checks and pointed out that his signatures on the said checks had been falsified. To counter these allegations, petitioner presented several documents showing Tongson's signatures, which were purportedly the same as the those appearing on the checks.7 He also showed a copy of an affidavit of adverse claim wherein Tongson himself had claimed to be Cawili's business associate.8

In a resolution dated 6 December 1995,9 City Prosecutor III Eliodoro V. Lara found probable cause only against Cawili and dismissed the charges against Tongson. Petitioner filed a partial appeal before the Department of Justice (DOJ) even while the case against Cawili was filed before the proper court. In a letter-resolution dated 11 July 1997,10 after finding that it was possible for Tongson to co-sign the bounced checks and that he had deliberately altered his signature in the pleadings submitted during the preliminary investigation, Chief State Prosecutor Jovencito R. Zuo directed the City Prosecutor of Quezon City to conduct a reinvestigation of the case against Tongson and to refer the questioned signatures to the National Bureau of Investigation (NBI). Tongson moved for the reconsideration of the resolution, but his motion was denied for lack of merit. On 15 March 1999, Assistant City Prosecutor Ma. Lelibet S. Sampaga (ACP Sampaga) dismissed the complaint against Tongson without referring the matter to the NBI per the Chief State Prosecutor's resolution. In her resolution,11 ACP Sampaga held that the case had already prescribed pursuant to Act No. 3326, as amended,12 which provides that violations penalized by B.P. Blg. 22 shall prescribe after four (4) years. In this case, the four (4)-year period started on the date the checks were dishonored, or on 20 January 1993 and 18 March 1993. The filing of the complaint before the Quezon City Prosecutor on 24 August 1995 did not interrupt the running of the prescriptive period, as the law contemplates judicial, and not administrative proceedings. Thus, considering that from 1993 to 1998, more than four (4) years had already elapsed and no information had as yet been filed against Tongson, the alleged violation of B.P. Blg. 22 imputed to him had already prescribed.13 Moreover, ACP Sampaga stated that the order of the Chief State Prosecutor to refer the matter to the NBI could no longer be sanctioned under Section 3, Rule 112 of the Rules of Criminal Procedure because the initiative should come from petitioner himself and not the investigating prosecutor.14 Finally, ACP Sampaga found that Tongson had no dealings with petitioner.15 Petitioner appealed to the DOJ. But the DOJ, through Undersecretary Manuel A.J. Teehankee, dismissed the same, stating that the offense had already prescribed pursuant to Act No. 3326.16Petitioner filed a motion for reconsideration of the DOJ resolution. On 3 April 2003,17 the DOJ, this time through then Undersecretary Ma. Merceditas N. Gutierrez, ruled in his favor and declared that the offense had not prescribed and that the filing of the complaint with the prosecutor's office interrupted the running of the prescriptive period citing Ingco v. Sandiganbayan.18 Thus, the Office of the City Prosecutor of Quezon City was directed to file three (3) separate informations against Tongson for violation of B.P. Blg. 22.19 On 8 July 2003, the City Prosecutor's Office filed an information20 charging petitioner with three (3) counts of violation of B.P. Blg. 22.21

However, in a resolution dated 9 August 2004,22 the DOJ, presumably acting on a motion for reconsideration filed by Tongson, ruled that the subject offense had already prescribed and ordered "the withdrawal of the three (3) informations for violation of B.P. Blg. 22" against Tongson. In justifying its sudden turnabout, the DOJ explained that Act No. 3326 applies to violations of special acts that do not provide for a prescriptive period for the offenses thereunder. Since B.P. Blg. 22, as a special act, does not provide for the prescription of the offense it defines and punishes, Act No. 3326 applies to it, and not Art. 90 of the Revised Penal Code which governs the prescription of offenses penalized thereunder.23The DOJ also cited the case of Zaldivia v. Reyes, Jr.,24 wherein the Supreme Court ruled that the proceedings referred to in Act No. 3326, as amended, are judicial proceedings, and not the one before the prosecutor's office. Petitioner thus filed a petition for certiorari25 before the Court of Appeals assailing the 9 August 2004 resolution of the DOJ. The petition was dismissed by the Court of Appeals in view of petitioner's failure to attach a proper verification and certification of non-forum shopping. The Court of Appeals also noted that the 3 April 2003 resolution of the DOJ attached to the petition is a mere photocopy.26 Petitioner moved for the reconsideration of the appellate court's resolution, attaching to said motion an amended Verification/Certification of Non-Forum Shopping.27Still, the Court of Appeals denied petitioner's motion, stating that subsequent compliance with the formal requirements would not per se warrant a reconsideration of its resolution. Besides, the Court of Appeals added, the petition is patently without merit and the questions raised therein are too unsubstantial to require consideration.28 In the instant petition, petitioner claims that the Court of Appeals committed grave error in dismissing his petition on technical grounds and in ruling that the petition before it was patently without merit and the questions are too unsubstantial to require consideration. The DOJ, in its comment,29 states that the Court of Appeals did not err in dismissing the petition for non-compliance with the Rules of Court. It also reiterates that the filing of a complaint with the Office of the City Prosecutor of Quezon City does not interrupt the running of the prescriptive period for violation of B.P. Blg. 22. It argues that under B.P. Blg. 22, a special law which does not provide for its own prescriptive period, offenses prescribe in four (4) years in accordance with Act No. 3326. Cawili and Tongson submitted their comment, arguing that the Court of Appeals did not err in dismissing the petition for certiorari. They claim that the offense of violation of B.P. Blg. 22 has already prescribed per Act No. 3326. In addition, they claim that

the long delay, attributable to petitioner and the State, violated their constitutional right to speedy disposition of cases.30 The petition is meritorious. First on the technical issues. Petitioner submits that the verification attached to his petition before the Court of Appeals substantially complies with the rules, the verification being intended simply to secure an assurance that the allegations in the pleading are true and correct and not a product of the imagination or a matter of speculation. He points out that this Court has held in a number of cases that a deficiency in the verification can be excused or dispensed with, the defect being neither jurisdictional nor always fatal. 31 Indeed, the verification is merely a formal requirement intended to secure an assurance that matters which are alleged are true and correctthe court may simply order the correction of unverified pleadings or act on them and waive strict compliance with the rules in order that the ends of justice may be served,32 as in the instant case. In the case at bar, we find that by attaching the pertinent verification to his motion for reconsideration, petitioner sufficiently complied with the verification requirement. Petitioner also submits that the Court of Appeals erred in dismissing the petition on the ground that there was failure to attach a certified true copy or duplicate original of the 3 April 2003 resolution of the DOJ. We agree. A plain reading of the petition before the Court of Appeals shows that it seeks the annulment of the DOJ resolution dated 9 August 2004,33 a certified true copy of which was attached as Annex "A."34 Obviously, the Court of Appeals committed a grievous mistake. Now, on the substantive aspects. Petitioner assails the DOJ's reliance on Zaldivia v. Reyes,35 a case involving the violation of a municipal ordinance, in declaring that the prescriptive period is tolled only upon filing of the information in court. According to petitioner, what is applicable in this case is Ingco v. Sandiganbayan,36 wherein this Court ruled that the filing of the complaint with the fiscal's office for preliminary investigation suspends the running of the prescriptive period. Petitioner also notes that the Ingco case similarly involved the violation of a special law, Republic Act (R.A.) No. 3019, otherwise known as the AntiGraft and Corrupt Practices Act, petitioner notes.37 He argues that sustaining the DOJ's and the Court of Appeals' pronouncements would result in grave injustice to him since the delays in the present case were clearly beyond his control.38 There is no question that Act No. 3326, appropriately entitled An Act to Establish

Prescription for Violations of Special Acts and Municipal Ordinances and to Provide

When Prescription Shall Begin,is the law applicable to offenses under special laws

which do not provide their own prescriptive periods. The pertinent provisions read: Section 1. Violations penalized by special acts shall, unless otherwise provided in such acts, prescribe in accordance with the following rules: (a) x x x; (b) after four years for those punished by imprisonment for more than one month, but less than two years; (c) x x x Sec. 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy. We agree that Act. No. 3326 applies to offenses under B.P. Blg. 22. An offense under B.P. Blg. 22 merits the penalty of imprisonment of not less than thirty (30) days but not more than one year or by a fine, hence, under Act No. 3326, a violation of B.P. Blg. 22 prescribes in four (4) years from the commission of the offense or, if the same be not known at the time, from the discovery thereof. Nevertheless, we cannot uphold the position that only the filing of a case in court can toll the running of the prescriptive period. It must be pointed out that when Act No. 3326 was passed on 4 December 1926, preliminary investigation of criminal offenses was conducted by justices of the peace, thus, the phraseology in the law, "institution of judicial proceedings for its investigation and punishment,"39 and the prevailing rule at the time was that once a complaint is filed with the justice of the peace for preliminary investigation, the prescription of the offense is halted.40 The historical perspective on the application of Act No. 3326 is illuminating.41 Act No. 3226 was approved on 4 December 1926 at a time when the function of conducting the preliminary investigation of criminal offenses was vested in the justices of the peace. Thus, the prevailing rule at the time, as shown in the cases of U.S. v. Lazada42 and People v. Joson,43 is that the prescription of the offense is tolled once a complaint is filed with the justice of the peace for preliminary investigation inasmuch as the filing of the complaint signifies the institution of the criminal proceedings against the accused.44 These cases were followed by our declaration in People v. Parao and Parao45 that the first step taken in the investigation or examination of offenses partakes the nature of a judicial

proceeding which suspends the prescription of the offense.46Subsequently, in People v. Olarte,47 we held that the filing of the complaint in the Municipal Court, even if it be merely for purposes of preliminary examination or investigation, should, and does, interrupt the period of prescription of the criminal responsibility, even if the court where the complaint or information is filed cannot try the case on the merits. In addition, even if the court where the complaint or information is filed may only proceed to investigate the case, its actuations already represent the initial step of the proceedings against the offender,48 and hence, the prescriptive period should be interrupted. In Ingco v. Sandiganbayan49 and Sanrio Company Limited v. Lim,50 which involved violations of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019) and the Intellectual Property Code (R.A. No. 8293), which are both special laws, the Court ruled that the prescriptive period is interrupted by the institution of proceedings for preliminary investigation against the accused. In the more recent case of Securities and Exchange Commission v. Interport Resources Corporation, et al.,51 the Court ruled that the nature and purpose of the investigation conducted by the Securities and Exchange Commission on violations of the Revised Securities Act,52 another special law, is equivalent to the preliminary investigation conducted by the DOJ in criminal cases, and thus effectively interrupts the prescriptive period. The following disquisition in the Interport Resources case53 is instructive, thus: While it may be observed that the term "judicial proceedings" in Sec. 2 of Act No. 3326 appears before "investigation and punishment" in the old law, with the subsequent change in set-up whereby the investigation of the charge for purposes of prosecution has become the exclusive function of the executive branch, the term "proceedings" should now be understood either executive or judicial in character: executive when it involves the investigation phase and judicial when it refers to the trial and judgment stage. With this clarification, any kind of investigative proceeding instituted against the guilty person which may ultimately lead to his prosecution should be sufficient to toll prescription.54 Indeed, to rule otherwise would deprive the injured party the right to obtain vindication on account of delays that are not under his control.55 A clear example would be this case, wherein petitioner filed his complaint-affidavit on 24 August 1995, well within the four (4)-year prescriptive period. He likewise timely filed his appeals and his motions for reconsideration on the dismissal of the charges against Tongson. He went through the proper channels, within the prescribed periods. However, from the time petitioner filed his complaint-affidavit with the Office of the

City Prosecutor (24 August 1995) up to the time the DOJ issued the assailed resolution, an aggregate period of nine (9) years had elapsed. Clearly, the delay was beyond petitioner's control. After all, he had already initiated the active prosecution of the case as early as 24 August 1995, only to suffer setbacks because of the DOJ's flipflopping resolutions and its misapplication of Act No. 3326. Aggrieved parties, especially those who do not sleep on their rights and actively pursue their causes, should not be allowed to suffer unnecessarily further simply because of circumstances beyond their control, like the accused's delaying tactics or the delay and inefficiency of the investigating agencies. We rule and so hold that the offense has not yet prescribed. Petitioner 's filing of his complaint-affidavit before the Office of the City Prosecutor on 24 August 1995 signified the commencement of the proceedings for the prosecution of the accused and thus effectively interrupted the prescriptive period for the offenses they had been charged under B.P. Blg. 22. Moreover, since there is a definite finding of probable cause, with the debunking of the claim of prescription there is no longer any impediment to the filing of the information against petitioner. WHEREFORE, the petition is GRANTED. The resolutions of the Court of Appeals dated 29 October 2004 and 21 March 2005 are REVERSED and SET ASIDE. The resolution of the Department of Justice dated 9 August 2004 is also ANNULLED and SET ASIDE. The Department of Justice is ORDERED to REFILE the information against the petitioner. No costs. SO ORDERED.

[G.R. No. 131214. July 27, 2000]

BA SAVINGS BANK, petitioner, vs. ROGER T. SIA, TACIANA U. SIA and JOHN DOE, respondents. DECISION PANGANIBAN, J.: The certificate of non-forum shopping required by Supreme Court Circular 28-91 may be signed, for and on behalf of a corporation, by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such document. Unlike natural persons, corporations may perform physical actions only through properly delegated individuals; namely, its officers and/or agents.
The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the August 6, 1997 Resolution[1] of the Court of Appeals (CA) in CA-GR SP No. 43209.[2] Also challenged by petitioner is the October 24, 1997 CA Resolution[3] denying its Motion for Reconsideration.
The Facts

On August 6, 1997, the Court of Appeals issued a Resolution denying due course to a Petition for Certiorari filed by BA Savings Bank, on the ground that the Certification on anti-forum shopping incorporated in the petition was signed not by the duly authorized representative of the petitioner, as required under Supreme Court Circular No. 28-91, but by its counsel, in contravention of said circular x x x. A Motion for Reconsideration was subsequently filed by the petitioner, attached to which was a BA Savings Bank Corporate Secretarys Certificate,[4] dated August 14, 1997. The Certificate showed that the petitioners Board of Directors approved a Resolution on May 21, 1996, authorizing the petitioners lawyers to represent it in any action or proceeding before any court, tribunal or agency; and to sign, execute and deliver the Certificate of Non-forum Shopping, among others. On October 24, 1997, the Motion for Reconsideration was denied by the Court of Appeals on the ground that Supreme Court Revised Circular No. 28-91 requires that it

is the petitioner, not the counsel, who must certify under oath to all of the facts and undertakings required therein. Hence, this appeal.[5]
Issue

In its Memorandum, petitioner submits the following issues for the consideration of the Court: I Whether or not petitioner-corporations lawyers are authorized to execute and sign the certificate of non-forum shopping. x x x II Whether or not the certification of petitioners authorized lawyers will bind the corporation. III Whether or not the certification by petitioner corporations lawyers is in compliance with the requirements on non-forum shopping.[6] Simply stated, the main issue is whether Supreme Court Revised Circular No. 28-91 allows a corporation to authorize its counsel to execute a certificate of non-forum shopping for and on its behalf.
The Courts Ruling

The Petition is meritorious.

Main Issue:

Authority of Counsel

A corporation, such as the petitioner, has no powers except those expressly conferred on it by the Corporation Code and those that are implied by or are incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. Physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board of directors. All acts within the powers of a corporation may be performed by agents of its selection; and, except so far as limitations or restrictions which may be imposed by special charter, by-law, or statutory provisions, the same general principles of law which govern the relation of agency for a natural person govern the officer or agent of a corporation, of

whatever status or rank, in respect to his power to act for the corporation; and agents once appointed, or members acting in their stead, are subject to the same rules, liabilities and incapacities as are agents of individuals and private persons.[7] In the present case, the corporations board of directors issued a Resolution specifically authorizing its lawyers to act as their agents in any action or proceeding before the Supreme Court, the Court of Appeals, or any other tribunal or agency[;] and to sign, execute and deliver in connection therewith the necessary pleadings, motions, verification, affidavit of merit, certificate of non-forum shopping and other instruments necessary for such action and proceeding. The Resolution was sufficient to vest such persons with the authority to bind the corporation and was specific enough as to the acts they were empowered to do. In the case of natural persons, Circular 28-91 requires the parties themselves to sign the certificate of non-forum shopping. However, such requirement cannot be imposed on artificial persons, like corporations, for the simple reason that they cannot personally do the task themselves. As already stated, corporations act only through their officers and duly authorized agents. In fact, physical actions, like the signing and the delivery of documents, may be performed, on behalf of the corporate entity, only by specifically authorized individuals. It is noteworthy that the Circular does not require corporate officers to sign the certificate. More important, there is no prohibition against authorizing agents to do so. In fact, not only was BA Savings Bank authorized to name an agent to sign the certificate; it also exercised its appointing authority reasonably well. For who else knows of the circumstances required in the Certificate but its own retained counsel. Its regular officers, like its board chairman and president, may not even know the details required therein. Consistent with this rationale, the Court en banc in Robern Development Corporation v. Judge Jesus Quitain[8] has allowed even an acting regional counsel of the National Power Corporation to sign, among others, the certificate of non-forum shopping required by Circular 28-91. The Court held that the counsel was in the best position to verify the truthfulness and the correctness of the allegations in the Complaint and to know and to certify if an action x x x had already been filed and pending with the courts.[9] Circular 28-91 was prescribed by the Supreme Court to prohibit and penalize the evils of forum shopping. We see no circumvention of this rationale if the certificate was signed by the corporations specifically authorized counsel, who had personal knowledge of the matters required in the Circular. In Bernardo v. NLRC,[10] we explained that a literal interpretation of the Circular should be avoided if doing so would subvert its very rationale. Said the Court:

x x x. Indeed, while the requirement as to certificate of non-forum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum-shopping. Finally, we stress that technical rules of procedure should be used to promote, not frustrate, justice.[11] While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal. WHEREFORE, the Petition is GRANTED and the appealed Resolution is REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals, which is directed to continue the proceedings in CA-GR SP No. 43209 with all deliberate speed. No costs. SO ORDERED.

[G.R. No. 127064. August 31, 1999]

FIVE

STAR BUS COMPANY INC., and IGNACIO TORRES, petitioners, vs. COURT OF APPEALS, JUDGE JAIME F. BAUTISTA, RTC-Br. 75, Valenzuela, Metro Manila and SAMUEL KING SAGARAL II, respondents. SYNOPSIS

On 9 November 1991, the Suzuki Supercarry Mini-Van driven by private respondent collided with a passenger bus owned and operated by petitioner Five Star Bus Company and driven by co-petitioner Ignacio Torres. On 1 April 1992, private respondent filed a civil action for damages against petitioner before the Regional Trial Court of Valenzuela. Trial ensued. After private respondent rested his case, the trial court scheduled a total of six (6) hearing dates for the presentation of petitioners evidence. These were 25 April 1996, 9 May 1996, 2 July 1996, 16 July 1996, 8 August 1996 and 20 August 1996. The hearing set on May 9 was postponed when copetitioner Torres failed to appear in court because he was then incarcerated. The hearing on 2 July was moved to 16 July upon motion of petitioners. However, on said date, petitioners counsel failed to appear on time, thus prompting the trial court to declare petitioners right to present evidence as waived and considered the case submitted for resolution. Petitioners filed a motion for reconsideration of the said order. Pending a resolution of the said motion, petitioners again moved to reset the 8 August hearing, citing as reason the conflict of schedule of their counsel. The trial court granted the motion and transferred the hearing to August 10. It also set on the said date the hearing of petitioners motion for reconsideration. However, petitioners once again moved that the hearing be reset to 2 September 1996. The trial court cancelled the hearing set for 20 August 1996 and instead issued an order on that day denying petitioners motion for reconsideration of its Order dated 16 July. Petitioner filed a petition for certiorari before the Court of Appeals. However, the Court of Appeals, in its decision, summarily dismissed their petition on the ground that the certification on non-forum shopping required by Supreme Court Circular No. 28-91 was signed by counsel and not by petitioners themselves. Petitioners motion for reconsideration was denied by the appellate court. Hence, this petition. The Supreme Court is not unmindful of its ruling that substantial compliance with Supreme Court Circular No. 28-9 1 is sufficient. The Court, however, cannot apply the substantial compliance rule to petitioners and be as liberal minded. Counsel for petitioners gave a rather frail excuse for his non-compliance, i.e., oversight and haste in ensuring that the petition would be filed at the earliest possible time for the protection of his clients interests thereby overlooking the aforesaid circular.

Contrary to petitioners assertions, their failure to present their evidence was their own undoing. From the repeated resettings, it can be gleaned that the delay in the proceeding was largely, if not mainly, due to petitioners. The case has been pending for a long period of time, with the court often accommodating petitioners. Thus, there could be no grave abuse of discretion when the trial court finally ordered petitioners right to present evidence as waived to put an end to their footdragging. The Supreme Court, therefore, affirmed the decision of the appellate court. SYLLABUS 1. REMEDIAL LAW; CIVIL PROCEDURE; PLEADINGS; SUPREME COURT CIRCULAR NO. 28-91; FORUM SHOPPING; EXPLAINED. - Circular No. 28-91 has its roots in the rule that a party-litigant shall not be allowed to pursue simultaneous remedies in two (2) different fora, for such practice works havoc upon orderly judicial procedure. Forum shopping has been characterized as an act of malpractice that is prohibited and condemned as trifling with the courts and abusing their processes. It constitutes improper conduct which tends to degrade the administration of justice. It has also been aptly described as deplorable because it adds to the congestion of the already heavily burdened dockets of the courts. 2. ID.; ID.; ID.; ID.; SUBSTANTIAL COMPLIANCE RULE NOT APPLICABLE IN CASE AT BAR; REASON. - We are not unmindful of this Courts ruling in Gabionza v. Court of Appeals, Loyola v. Court of Appeals, and Kavinta v. Castillo, Jr. that substantial compliance with Circular No. 28-91 is sufficient. In the instant case, we cannot apply the substantial compliance rule to petitioners and be as liberal minded. For one thing, counsel for petitioners gave a rather frail excuse for his non-compliance, i.e., oversight and haste in ensuring that the petition would be filed at the earliest possible time for the protection of his clients interests thereby overlooking the aforesaid circular. 3. ID.; SPECIAL CIVIL ACTION; CERTIORARI; GRAVE ABUSE OF DISCRETION NOT COMMITTED BY TRIAL COURT WHEN IT ORDERED PETITIONERS RIGHT TO PRESENT EVIDENCE AS WAIVED. - We also do not miss the fact that petitioners were represented by a law firm which meant that any of its members could lawfully act as their counsel during the trial. As such petitioners frequent motions to reset hearings by reason of their counsels unavailability should be cautiously considered to make sure that these were not mere dilatory tactics. As observed by the lower court, a perusal of the records shows that the case has been pending for a long period of time, with the court often accommodating petitioners. Thus there could be no grave abuse of discretion when the trial court finally ordered petitioners right to present evidence as waived to put an end to their footdragging. Indeed, it is never too often to say that justice delayed is justice denied.

DECISION BELLOSILLO, J.: The threshold issue in this petition for review on certiorari is whether the Court of Appeals can summarily dismiss a petition on the ground that the certification on nonforum shopping required by Supreme Court Circular No. 28-91 was signed by counsel and not by petitioners themselves. On 9 November 1991, at around 11:00 oclock in the evening, along the MacArthur Highway in Valenzuela, Metro Manila, the Suzuki Supercarry Mini-Van driven by private respondent Samuel King Sagaral II collided with a passenger bus owned and operated by petitioner Five Star Bus Company and driven by co-petitioner Ignacio Torres.[1] On 1 April 1992 private respondent Sagaral filed a civil action for damages against petitioners and the case was assigned to Branch 171 of the Valenzuela Regional Trial Court and docketed as Civil Case No. 3812-V-92. When amicable settlement failed, trial ensued with private respondent Sagaral (plaintiff in the court a quo) initially presenting his evidence. Several years passed and on 26 December 1996 Sagaral finally rested his case.[2] On 12 March 1996 the trial court ordered petitioners herein (defendants in the court a quo) to present their evidence on 25 April 1996 and 9 May 1996.[3] The presentation of evidence by petitioners was snagged by several postponements. The first was when Presiding Judge Adriano R. Osorio reset the 25 April 1996 hearing to 9 May 1996 as he had to go on forced vacation leave from 23 April 1996 to 25 April 1996.[4] But during the 9 May 1996 hearing, petitioner Ignacio Torres failed to appear prompting the lower court to cancel the hearing. According to petitioners, Torres was then detained in jail due to a separate pending criminal case filed against him by Sagaral before Br. 172 of the RTC of Valenzuela. Petitioners further explained that Torres could not post bail earlier for his provisional liberty since no notice was sent to him regarding the criminal complaint.[5] On 4 June 1996 Judge Osorio ordered the civil case to be unloaded in view of his courts designation as a permanent special court to exclusively try heinous crimes under RA 7659.[6] On 17 June 1996 the case was re-raffled to Br. 75 of the same RTC, this time under Judge Jaime F. Bautista who immediately scheduled a hearing for the initial presentation of petitioners' evidence on 8 August 1996.[7] Nonetheless on 9 July 1996 petitioners filed a motion to reset the hearing scheduled on 8 August 1996 to 15 August 1996 citing as reason their counsels conflict of schedule.[8] It seemed however that even prior to the scheduled hearing of 8 August 1996, former Presiding Judge Osorio had already set a hearing for 2 July 1996 and 16 July 1996. But instead of conducting a hearing on said dates, Judge Bautista issued an order on 2 July 1996, thus -

It appearing from the records that this case had been previously set by Branch 171 today and July 16, 1996 and considering the Urgent Motion to Reset filed by the defendants thru counsel, the hearing set for today is hereby cancelled and is reset to July 16, 1996 as previously scheduled and August 8, 1996 both at 8:30 a.m. x x x x[9] When the case was called for hearing on 16 July 1996, counsel for petitioners was not present. In fact he arrived twenty (20) minutes late. Thus, upon motion of respondent Sagaral, the trial court issued the disputed OrderThere being no certainty as to what time defendants counsel would be in court, and upon manifestation of plaintiffs counsel that lawyer should be aware of his time x x x as prayed for, the defendants right to present their evidence is deemed waived and the case is now submitted for decision x x x x (underscoring supplied).[10] Petitioners forthwith filed a motion for reconsideration of the above-mentioned Order arguing that the right to be heard was a basic tenet guaranteed by the Constitution which the courts could not impinge upon in the absence of any justifying reason to do so. They also blamed the heavy traffic for their lawyer's tardiness. To simplify the proceedings due to the various motions filed by petitioners, Judge Bautista cancelled the 8 August 1996 hearing and reset it to 20 August 1996. He also set for hearing petitioner's motion for reconsideration on 20 August 1996.[11] However, as if trying to test the patience of the trial court, petitioners once again filed on 5 August 1996 an Urgent Motion to Reset the 20 August 1996 hearing. Their counsel pleaded that he could not make it on such date because he had previously committed himself to appear before the Antipolo Regional Trial Court. He prayed that the hearing be moved to 2 September 1996.[12] The hearing set for 20 August 1996 was cancelled[13] and the trial court on that day issued instead its Order denying petitioners' motion for reconsideration of its Order dated 16 July 1996 which considered the case submitted for resolution. The lower court noted that the case had been pending for more than four (4) years and it had always been at the "mercy" of petitioners when it acted favorably on their motions. There would be no end to this litigation if the court would give due course to this motion.[14] Undeterred, petitioners sought recourse in the Court of Appeals through a petition for certiorari. But in the assailed Resolution dated 23 September 1996 the appellate court summarily dismissed their petition on the ground that the affidavit of non-forum shopping was signed and executed by counsel for petitioners and not by petitioners themselves, or one of them, as required by Circular No. 28-91 of the Supreme Court.[15]

Petitioners moved for reconsideration which the Court of Appeals rejected in its Resolution of 31 October 1996.[16] Petitioners are now before us contending that the appellate court erred in affirming the Order of the trial court dated 16 July 1996 and in dismissing their petition for non-compliance with the requirement of Circular No. 2891. They pray that the appellate court remand the case to the court of origin for further proceedings. Circular No. 28-91, which took effect on 1 April 1994, provides inter alia: (1) (I)n every petition filed with the Supreme Court or the Court of Appeals, the petitioner, aside from complying with the pertinent provisions of the Rules of Court and existing circulars, must certify under oath all of the following facts or undertakings x x x x; (2) Any violation of this revised Circular will entail the following sanctions: (a) it shall be a cause for the summary dismissal of the multiple petitions or complaints; x x x x (underscoring supplied). Circular No. 28-91 has its roots in the rule that a party-litigant shall not be allowed to pursue simultaneous remedies in two (2) different fora, for such practice works havoc upon orderly judicial procedure. Forum shopping has been characterized as an act of malpractice that is prohibited and condemned as trifling with the courts and abusing their processes. It constitutes improper conduct which tends to degrade the administration of justice. It has also been aptly described as deplorable because it adds to the congestion of the already heavily burdened dockets of the courts.[17] Nonetheless, we are not unmindful of this Courts ruling in Gabionza v. Court of Appeals,[18] Loyola v. Court of Appeals,[19] and Kavinta v. Castillo, Jr.[20] that substantial compliance with Circular No. 28-91 is sufficient: It is scarcely necessary to add that Circular No. 28-91 must be so interpreted and applied to achieve the purposes projected by the Supreme Court when it promulgated that circular. Circular No. 28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all rules of procedure which is to achieve substantial justice as expeditiously as possible. The fact that the Circular requires that it be strictly complied with merely underscores its mandatory nature in that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances.

In the instant case, we cannot apply the "substantial compliance" rule to petitioners and be as liberal minded. For one thing, counsel for petitioners gave a rather frail excuse for his non-compliance, i.e., oversight and haste in ensuring that the petition would be filed at the earliest possible time for the protection of his clients interests thereby overlooking the aforesaid circular.[21] In Ortiz v. Court of Appeals[22] which involves a similar set of facts, we ruled (I)t should be recalled that Revised Circular No. 28-91 provides that the party must certify under oath that he has not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or different Divisions thereof, or any other tribunal or agency, and that to the best of his knowledge, no such action or proceeding is pending in the Supreme Court x x x x Petitioners admit that their lawyer x x x signed the Certification on Non-Forum Shopping. Allegedly, Atty. Paulite has personal knowledge that the Ortizes had not commenced any other action or proceeding involving the same parties and causes of action. Petitioners now assert that their lawyers signature must be accepted as substantial compliance with the requirements of the Circular. Regrettably, we find that substantial compliance will not suffice in a matter involving strict observance as provided for in Circular No. 28-91. The attestation contained in the certification on non-forum shopping requires personal knowledge by the party who executed the same. To merit the Courts consideration, petitioners here must show reasonable cause for failure to personally sign the certification. The petitioners must convince the court that the outright dismissal of the petition would defeat the administration of justice. However, the petitioners did not give any explanation to warrant their exemption from the strict application of the rule utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction x x x x Finally, petitioners argue that the delay in the proceedings in the court below was not entirely their fault "as various circumstances and incidents beyond (their) control contributed to the delay."[23] Contrary to petitionerss assertions, their failure to present their evidence was their own undoing. A review of the records shows that the trial court had scheduled a total of six (6) hearing dates for the presentation of their evidence. These were 25 April 1996, 9 May 1996, 2 July 1996, 16 July 1996, 8 August 1996 and 20 August 1996. Five (5) of these trial dates were cancelled at the instance of petitioners. They themselves admitted that the 9 May 1996 hearing was postponed when Isagani Torres failed to appear in court because he was then incarcerated. Likewise, through a motion petitioners were able to have the hearing on 2 July 1996 moved to 16 July 1996. However on said date petitioners counsel failed to appear on time, thus

prompting the trial court to declare petitioners right to present evidence as waived. As to the 8 August 1996 hearing, they moved to have the same reset, citing as reason the conflict of schedule of their counsel. And when the trial court granted the motion and transferred the hearing to 20 August 1996, petitioners once again submitted a motion praying that the hearing be reset to 2 September 1996. From these repeated resettings, it can be gleaned that the delay in the proceedings was largely, if not mainly, due to petitioners. We also do not miss the fact that petitioners were represented by a law firm which meant that any of its members could lawfully act as their counsel during the trial. As such petitioners frequent motions to reset hearings by reason of their counsels unavailability should be cautiously considered to make sure that these were not mere dilatory tactics. As observed by the lower court, a perusal of the records shows that the case has been pending for a long period of time, with the court often accommodating petitioners. Thus there could be no grave abuse of discretion when the trial court finally ordered petitioners right to present evidence as waived to put an end to their foot dragging. Indeed, it is never too often to say that justice delayed is justice denied. WHEREFORE, there being no reversible error committed by the Court of Appeals, the petition for review on certiorari is DENIED and the assailed Resolution of 23 September 1996 summarily dismissing the petition for certiorari and the Resolution of 31 October 1996 denying reconsideration are AFFIRMED. Consequently, the Regional Trial Court of Valenzuela, Metro Manila, is DIRECTED forthwith to render its decision in Civil Case No. 3812-V-92 without delay. Costs against petitioners. SO ORDERED.

[G.R. No. 143016. August 30, 2000]

MR. & MRS. RONNIE DAR, MR. & MRS. RANDY ANGELES, MR. & MRS. JOY CONSTANTINO and MR. & MRS. LIBERTY CRUZ, petitioners, vs.HON. ROSE MARIE ALONZO-LEGASTO, in her capacity as the Presiding Judge in the Metropolitan Trial Court of Metro Manila, Branch 41, Quezon City and NENITA CO BAUTISTA represented by VICTORIO A. BAUTISTA, respondents. DECISION KAPUNAN, J.: If the petitioners are husband and wife and only one of them signs the petition (for review on certiorari and mandamus), is the petition dismissible for violation of the Rule on Certification of Non-Forum Shopping requiring all petitioners to certify it under oath? This is the sole issue raised by petitioners Mr. and Mrs. Ronnie Dar, Mr. and Mrs. Randy Angeles, Mr. and Mrs. Joy Constantino, and Mr. and Mrs. Liberty Cruz. In a resolution, dated January 25, 2000, the Court of Appeals ruled in the affirmative.[1] Said court dismissed petitioners petition for review on certiorari and mandamus for failure to comply with the Rule on Certification of Non-Forum Shopping after finding that the petition "was signed only by Ronnie Dar, Randy Angeles, Joy Constantino, and Liberty Cruz, without authority attached thereto to sign for and in behalf of their co-petitioners."[2] In other words, while petitioners Ronnie Dar, Randy Angeles, Joy Constantino and Liberty Cruz signed the Certification of Non-Forum Shopping, their respective spouses did not sign the same. It appears from the records that herein private respondent Nenita Co Bautista filed a case for unlawful detainer against herein petitioners in the Metropolitan Trial Court, Quezon City. They were sued as Mr. and Mrs. in the said case.[3] Petitioners now contend that since what is involved in the instant case is their common rights and interest to abode under the the system of absolute community of property, either of the spouses can sign the petition.[4] We find merit in the petition. Administrative Circular No. 04-94 issued by the Supreme Court on February 8, 1994 provides, among others: Revised Circular No. 28-91, dated February 8, 1994 applies to and governs the filing of petitions in the Supreme Court and the Court of Appeals and is intended to prevent the

multiple filing of petitions or complaints involving the same issues in other tribunals or agencies as a form of forum shopping. Complementary thereto and for the same purpose, the following requirements, in addition to those in pertinent provisions of the Rules of Court and existing circulars, shall be strictly complied with in the filing of complaints, petitions, applications or other initiatory pleadings in all courts and agencies other than the Supreme Court and the Court of Appeals and shall be subject to the same sanctions provided hereunder. 1. The plaintiff, petitioner, applicant or principal party seeking relief in the complaint, petition, application or other initiatory pleading shall certify under oath in such original pleading, or in a sworn certification annexed thereto and simultaneously filed therewith, to the truth of the following facts and undertakings: (a) he has not theretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action or proceedings is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding which is either pending or may have been terminated, he must state the status thereof; and (d) if he should thereafter learn that a similar action or proceedings has been filed or is pending before the Supreme Court, the Court of Appeals or any other tribunal or agency, he undertakes to report that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification contemplated herein have been filed. The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint, counter-claim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or application wherein a party asserts his claim for relief. xxx With respect to the contents of the certification which the pleader may prepare, the rule of substantial compliance may be availed of. While this section requires that it be strictly complied with, it merely underscores its mandatory nature in that it cannot be altogether dispensed with or its requirements completely disregarded but it does not thereby prevent substantial compliance on this aspect of its provisions under justifiable circumstances.[5] Circular No. 28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all rules of procedure - which is to achieve substantial justice as expeditiously as possible.[6]

In the instant case, the Court of Appeals should have taken into consideration the fact that the petitioners were sued jointly, or as Mr. and Mrs. over a property in which they have a common interest. Such being the case, the signing of one of them in the certification substantially complies with the rule on certification of non-forum shopping. WHEREFORE, the resolutions of the Court of Appeals, dated January 25, 2000 and April 24, 2000, are hereby REVERSED and SET ASIDE. The case is hereby REMANDED to the Court of Appeals for proper disposition. SO ORDERED.

[G.R. No. 135042. September 23, 1999]

ROBERN DEVELOPMENT CORPORATION, petitioner, vs. JUDGE JESUS V. QUITAIN, Regional Trial Court of Davao City, Br. 15; and NATIONAL POWER CORPORATION, respondents. SYNOPSIS Development Corporation, by way of a Petition for Review on Certiorari, challenged the decision of the Court of Appeals effectively affirming the Davao Regional Trial Courts denial of its Motion to Dismiss the complaint for expropriation. Likewise questioned in this petition is the corollary Writ of Possession issued by the said trial court in the same action. The issues raised in the Motion to Dismiss are: 1) the complaint did not show that the action bore the approval of the board of directors; 2) the one, who signed the verification and certification in the complaint was not an officer specifically authorized under the corporate charter; 3) the choice of property to be expropriated was improper as it had already been intended for a public purpose. Lack of verification is merely a formal defect that is neither jurisdictional nor fatal. Likewise, the rule requiring a certificate of non-forum shopping is deemed mandatory but not jurisdictional. Jurisdiction over the nature of the action is conferred by law. Besides, the signatories all signed on behalf of the Solicitor General in accordance with the charter of the National Power Corporation, the entity seeking expropriation. The Rules do not require that the complaint be expressly approved by the board of directors of a corporation. In any event, such authorization is a factual issue that can be threshed out during the trial. The assailed order of expropriation foreclosed any further objection to the NPCs right to expropriate and to the public purpose of the expropriation, leaving the matter of just compensation as the only remaining substantial issue. Nonetheless, the trial court may issue a writ of possession once the plaintiff deposits an amount equivalent to the assessed value of the property, without need of a hearing to determine the provisional sum to be deposited. SYLLABUS 1. REMEDIAL LAW; ACTIONS; PLEADINGS; VERIFICATION; ABSENCE THEREOF, A MERE FORMAL DEFECT; NOT JURISDICTIONAL OR FATAL.Verification is intended to assure that the allegations therein have been prepared in good faith or are true and correct, not mere speculations. Generally, lack of verification is merely a formal defect that is neither jurisdictional nor fatal. Its absence does not divest the trial court of jurisdiction. The trial court may order the correction of the pleading or act on the unverified pleading, if the attending Robern

circumstances are such that strict compliance with the rule may be dispensed with in order to serve the ends of justice. 2. ID.; ID.; ID.; CERTIFICATE OF NON-FORUM SHOPPING; RULE MANDATORY, NOT JURISDICTIONAL.- The certificate of non-forum shopping directs the plaintiff or principal party to attest under oath that (1) no action or claim involving the same issues have been filed or commenced in any court, tribunal or quasi-judicial agency and that, to the best of the plaintiffs knowledge, no such other action or claim is pending; (2) if there is such other pending action or claim, a complete statement of its present status shall be made; and (3) if it should be learned that the same or a similar action or claim has been filed or is pending, the plaintiff shall report this fact to the court where the complaint or initiatory pleading was filed. This rule is rooted in the principle that a party-litigant shall not be allowed to pursue simultaneous remedies in different forums, as this practice is detrimental to orderly judicial procedure. Administrative Circular No. 0494, which came before the 1997 Rules of Court, is deemed mandatory but not jurisdictional, as jurisdiction over the subject or nature of the action is conferred by law. 3. ID.; ID.; ID.; PERSON WHO SIGNED VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING NEED NOT BE PRESIDENT OR GENERAL MANAGER OF NPC.- In this case, the questioned verification stated that Atty. Caete was the acting regional legal counsel of NPC at the Mindanao Regional Center in Iligan City. He was not merely a retained lawyer, but an NPC in-house counsel and officer, whose basic function was to prepare legal pleadings and to represent NPC-Mindanao in legal cases. As regional legal counsel for the Mindanao area, he was the officer who was in the best position to verify the truthfulness and the correctness of the allegations in the Complaint for expropriation in Davao City. As internal legal counsel, he was also in the best position to know and to certify if an action for expropriation had already been filed and pending with the courts. Besides, Atty. Caete was not the only signatory to the Complaint; he was joined by Comie P. Doromal, OIC-Assistant General Counsel; and Catherine J. Pablo - both of the NPC Litigation & Land and Land Rights Department. They all signed on behalf of the Solicitor General in accordance with the NPC charter. Their signatures prove that the NPC general counsel and the Solicitor General approved the filing of the Complaint for expropriation. Clearly then, the CA did not err in holding that the Complaint was not dismissible on its face, simply because the person who had signed the verification and certification of non-forum shopping was not the president or the general manager of NPC. 4. ID.; ID.; EMINENT DOMAIN; COMPLAINT FILED BY NPC; EXPRESS APPROVAL OF BOARD OF DIRECTORS, NOT REQUIRED.- Next, petitioner asserts that NPC had no legal standing to file the expropriation case, because the Complaint did not allege that its board of directors had authorized its filing. It

added that under Section 6, RA 6395, only the board was vested with the corporate power to sue and be sued. The National Power Corporation explains that, like other corporate officers and employees whose functions are defined by the board, Atty. Caete is authorized to file the expropriation case. Even if he is not the general counsel, he has residual authority to prepare, verify and certify the Complaint for expropriation. Rule 67, Section 1 of the Rules of Court does not require that the Complaint be expressly approved by the board of directors of a corporation. In any event, such authorization is a factual issue that can be threshed out during the trial. As held by the appellate court, the issue of whether or not the expropriation proceedings [were] authorized by the Board of Directors or that those who signed the complaint [were] authorized representatives are evidentiary in character determinable only in [the] trial proper. 5. ID.; ID.; ID; APPROVAL OF PROVINCIAL BOARD AND MUNICIPAL COUNCIL, NOT REQUIRED.- The same ruling applies to the argument alleging prematurity of the Complaint. Petitioners insistence that NPC must secure the approval of the provincial board and the municipal council is unfounded. Section 3(j), RA 6395, merely requires that the Complaint be filed in the same manner as an expropriation case of the national, the provincial or the municipal government. At bottom, all that is needed is compliance with Rule 67 of the Rules of Court and the prevailing jurisprudence on expropriation. 6. ID.; ID.; ID.; MOTION TO DISMISS, NOT ALLOWED UNDER THE 1997 RULES OF CIVIL PROCEDURE.- Before the 1997 amendment, Section 3 of Rule 67 allowed a defendant in lieu of an answer, [to] present in a single motion to dismiss or for other appropriate relief, all of his objections and defenses to the right of the plaintiff to take his property xxx. A motion to dismiss was not governed by Rule 15 which covered ordinary motions. Such motion was the required responsive pleading that took the place of an answer and put in issue the plaintiffs right to expropriate the defendants property. Any relevant and material fact could be raised as a defense in a condemnation proceeding, such as that which tended to show that (1) the exercise of the power to condemn was unauthorized, or (2) there was cause for not taking defendants property for the purpose alleged in the petition, or (3) the purpose for the taking was not public in character. However, Rule 67 of the 1997 Rules of Civil Procedure no longer requires such extraordinary motion to dismiss. Instead, it provides: SEC. 3. Defenses and objections. - x x x If a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he shall serve his answer within the time stated in the summons. xxx 7. ID.; STATUTES REGULATING PROCEDURE; APPLICABLE TO ACTIONS PENDING AND UNDETERMINED AT TIME STATUTES WERE PASSED.Statutes regulating procedure in the courts are applicable to actions pending and

undetermined at the time those statutes were passed. New court rules apply to proceedings that take place after the date of their effectivity. 8. ID.; SPECIAL CIVIL ACTIONS; EMINENT DOMAIN; MOTION TO DISMISS, NOT ALLOWED UNDER 1997 RULES; PARTY, IN INTEREST OF SUBSTANTIAL JUSTICE, ALLOWED TO FILE ANSWER.- When petitioner filed its Motion to Dismiss, the 1997 Rules of Civil Procedure had already taken effect. On April 8, 1997, the Court en banc issued a Resolution in Bar Matter No. 803, declaring that the revisions in the Rules of Court were to become effective on July 1, 1997. Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds for a motion to dismiss the allotment of the disputed land for another public purpose or the petition for a mere easement of right-of-way in the complaint for expropriation. The grounds for dismissal are exclusive to those specifically mentioned in Section 1, Rule 16 of the Rules of Court, and an action can be dismissed only on a ground authorized by this provision. To be exact, the issues raised by the petitioner are affirmative defenses that should be alleged in an answer, since they require presentation of evidence aliunde. Section 3 of Rule 67 provides that if a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he should include them in his answer. Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. It would be precipitate to dismiss the Complaint on such grounds as claimed by the petitioner. Dismissal of an action upon a motion to dismiss constitutes a denial of due process if, from a consideration of the pleadings, it appears that there are issues that cannot be decided without a trial of the case on the merits. Inasmuch as the 1997 Rules had just taken effect when this case arose, we believe that in the interest of substantial justice, the petitioner should be given an opportunity to file its answer to the Complaint for expropriation in accordance with Section 3, Rule 67 of the 1997 Rules of Civil Procedure. 9. ID.; ID.; ID.; LIMITS OF JUDICIAL REVIEW.- Founded on common necessity and interest, eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn private property to public use upon payment of just compensation. It may appear to be harsh and encompassing, but judicial review limits the exercise of eminent domain to the following areas of concern: (1) the adequacy of the compensation, (2) the necessity of the taking, and (3) the public-use character of the purpose of the taking. 10. ID.; ID.; ID.; ID.; ORDER OF EXPROPRIATION SHOULD NOT BE ISSUED WHERE THERE ARE OBJECTIONS AND DEFENSES REQUIRING PRESENTATION OF EVIDENCE AND HEARING.- If there are objections and defenses that require the presentation of evidence and the hearing of arguments, the trial court should not immediately issue an order of expropriation. This is clearly implied in Section 4 of Rule 67, which mandates that [i]f the objections to and the

defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint x x x. 11. ID.; ID.; ID.; ID.; ID.; CASE AT BAR.- The Court of Appeals ruled that there were issues that required presentation of evidence during the trial proper; namely, whether the expropriation proceeding was authorized by the NPC board of directors, whether the property to be expropriated was already devoted to public use, and whether the choice of the property was arbitrary and erroneous in view of the other properties available in the area. The necessity of the taking and the public character of the purpose of the expropriation were still in issue and pending resolution by the trial court. To these we add the issue of whether the taking of the disputed property would require only an easement of right-of-way or would perpetually deprive Robern of its proprietary rights. Therefore, the trial court should not have issued the assailed Order of Expropriation, which foreclosed any further objection to the NPCs right to expropriate and to the pu blic purpose of the expropriation, leaving the matter of just compensation as the only remaining substantial issue. 12. ID.; ID.; ID.; NO PROHIBITION AGAINST ISSUANCE OF WRIT OF POSSESSION.- There is no prohibition against a procedure whereby immediate possession of the land involved in expropriation proceedings may be taken, provided always that due provision is made to secure the prompt adjudication and payment of just compensation to the owners. 13. ID.; ID.; ID.; IMMEDIATE ENTRY; REQUISITE.- However, the requirements for authorizing immediate entry in expropriation proceedings have changed. The Rules of Court of 1964 sanctioned this procedure. However, the 1997 Rules of Civil Procedure revised Section 2 of Rule 67 and clearly reverted to the San Diego, Daet

and Haguisan rulings allowing entry of plaintiff upon depositing value with authorized government depositary. In the present case, although the Complaint for
expropriation was filed on June 6, 1997, the Motion for the Issuance of the Writ of Possession was filed on July 28, 1997; thus, the issuance of the Writ is covered by the 1997 Rules. As earlier stated, procedural rules are given immediate effect and are applicable to actions pending and undetermined at the time they are passed; new court rules apply to proceedings that take place after the date of their effectivity. Therefore, Section 2, Rule 67 of the 1997 Rules of Civil Procedure, is the prevailing and governing law in this case. With the revision of the Rules, the trial courts issuance of the Writ of Possession becomes ministerial, once the provisional compensation mentioned in the 1997 Rule is deposited. Thus, in the instant case the trial court did not commit grave abuse of discretion when it granted the NPCs

Motion for the issuance of the Writ, despite the absence of hearing on the amount of the provisional deposit. 14. ID.; ID.; ID.; ID.; ID.; PROVISIONAL DEPOSIT SHOULD BE EQUIVALENT TO FULL ASSESSED VALUE OF PROPERTY TO BE CONDEMNED.- Under Section 2, Rule 67 of the 1997 Rules, the provisional deposit should be in an amount equivalent to the full assessed value of the property to be condemned, not merely ten percent of it. Therefore, the provisional deposit of NPC is insufficient. Hence, the amount of the provisional deposit should be increased, in order to conform to the requirement that it should be equivalent to the assessed value of the property. 15. ID.; ID.; ID.; ID.; REASONABLE RENTAL SHOULD BE MADE FROM DATE OF ENTRY UNTIL DEPOSIT OF FULL ASSESSED VALUE OF PROPERTY MADE.- In the interest of justice, NPC should in the meantime pay Robern reasonable rental, to be fixed by the trial court in its final decision, for the use and occupation of the disputed property from the date of entry until the deposit of the full assessed value of the property, as mandated by Rule 67. DECISION PANGANIBAN, J.: Expropriation proceedings are governed by revised Rule 67 of the 1997 Rules of Civil Procedure which took effect on July 1, 1997. Previous doctrines inconsistent with this Rule are deemed reversed or modified. Specifically, (1) an answer, not a motion to dismiss, is the responsive pleading to a complaint in eminent domain; (2) the trial court may issue a writ of possession once the plaintiff deposits an amount equivalent to the assessed value of the property, pursuant to Section 2 of said Rule, without need of a hearing to determine the provisional sum to be deposited; and (3) a final order of expropriation may not be issued prior to a full hearing and resolution of the objections and defenses of the property owner.
The Case

Before us is a Petition under Rule 45, challenging the Decision of the Court of Appeals[1] promulgated February 27, 1998 and its Resolution promulgated July 23, 1998 in CA-GR SP-46002, which (1) dismissed the action for certiorari and preliminary injunction filed by Robern Development Corporation ("Robern" for brevity); and (2) effectively affirmed the Orders (dated August 13, 1997; September 11, 1997; and November 5, 1997) and the Writ of Possession (dated September 19, 1997), all issued by the Regional Trial Court of Davao City in Civil Case No. 25356-97. The assailed Decision disposed as follows:[2]

IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED. Costs against the petitioner. In its assailed Resolution, the Court of Appeals denied reconsideration in this manner:[3] There being no compelling reason to modify, reverse or reconsider the Decision rendered in the case dated February 27, 1998[;] the Motion for Reconsideration posted by petitioner on March 23, 1998 is DENIED, it appearing further that the arguments raised therein were already considered and passed upon in the aforesaid Decision.
The Facts

The following facts are undisputed. 1. Robern is the registered owner of a parcel of land with an area of about 17,746.50 square meters, which the National Power Corporation ("NPC" for brevity) is seeking to expropriate. The property forms part of a proposed low-cost housing project in Inawayan, Binugao, Toril, Davao City. 2. On June 6, 1997, NPC filed a Complaint for Eminent Domain against Robern.[4] Instead of filing an answer, petitioner countered with a Motion to Dismiss,[5] alleging (a) that the Complaint suffered a jurisdictional defect for not showing that the action bore the approval of the NPC board of directors; (b) that Nemesio S. Caete, who signed the verification and certification in the Complaint, was not the president, the general manager or an officer specifically authorized under the NPC charter (RA 6395); (c) that the choice of property to be expropriated was improper, as it had already been intended for use in a low-cost housing project, a public purpose within the contemplation of law; and the choice was also arbitrary, as there were similar properties available within the area. 3. Before this Motion could be resolved, NPC filed a Motion for the Issuance of Writ of Possession based on Presidential Decree No. 42. On July 9, 1997, NPC deposited P6,121.20 at the Philippine National Bank, Davao Branch, as evidenced by PNB Savings Account No. 385-560728-9.[6] 4. In its Order of August 13, 1997, the trial court denied the petitioner's Motion to Dismiss in this wise: This refers to the motion to dismiss. The issues raised are matters that should be dealt with during the trial proper. Suffice it to say that [NPC] has the privilege as a utility to use the power of eminent domain.

The motion is denied for lack of merit. The pre-trial conference shall be on August 27, 1997 at 2:30 P.M.[7] 5. On September 2, 1997, petitioner filed a Motion for Reconsideration, pointing out that (a) the issues raised in the Motion to Dismiss could be resolved without trial, as they could be readily appreciated on the face of the Complaint itself vis--vis the applicable provisions of law on the matter; and (b) the grounds relied upon for dismissing the Complaint did not require evidence aliunde. 6. On September 11, 1997, the trial court denied the Motion, as follows: The xxx motion [of the petitioner] for reconsideration is denied for lack of merit. Finding the xxx motion [of NPC] to be meritorious[,] let a writ of possession issue.[8] 7. On September 22, 1997, petitioner filed a Motion for Reconsideration of the Order of September 11, 1997, arguing among others that Section 15-A of RA 6395 was virtually amended when Caete was allowed to verify and sign the certificate of nonforum shopping in regard to the Complaint for expropriation filed by NPC. 8. Without awaiting the outcome of the Motion for Reconsideration, NPC filed a Motion to Implement the Writ of Possession. 9. On September 19, 1997, in spite of petitioners opposition, the trial court issued a Writ of Possession as follows: WHEREAS, the applicant National Power Corporation in the above-titled case has presented to this Court a petition praying for the issuance of a Writ of Possession of the affected property of the xxx Robern Development Corporation, described hereinbelow, as follows: TCT No. T-251558 (T-141754) T-251559 (T-141755) T-251556 (T-14152) T-251555 TOTAL - Total Area in Area Affected in Square Meter Square Meter 11,469.00 10,000.00 30,000.00 45,000.00 97,371.00 3,393.00 2,124.00 3,402.00 8,827.50 17,746.50 Total

affected area WHEREAS, on September 11, 1997 the court issued an Order granting the issuance of a Writ of Possession in favor of the xxx National Power Corporation for the immediate possession and control of the parcels of land owned by the [petitioner] as aforestated for the construction of the Mantanao-New-Loon 138 KV Transmission Line Project to be undertaken by the petitioner affecting 17,746.50 sq.m. of the 97,371.00 sq. meters as shown above. NOW THEREFORE, you are hereby commanded to place [NPC] in possession and control of the affected property consisting 17,746.50 [s]quare [m]eters of the total area of 97,371.00 square meters described above and to eject therefrom all adverse occupants, Robern Development Corporation and [all other] persons xxx claiming under it.[9] 10. On November 5, 1997, before counsel for the petitioner received any order from the trial court directing the implementation of the Writ of Possession, NPC occupied the disputed property. 11. In a Petition for Certiorari before the Court of Appeals (CA), Robern assailed the Writ on the following grounds: (a) patent on the face of the complaint were its jurisdictional defect, prematurity and noncompliance with RA 6395; and (b) the issuance of the Writ of Possession was irregular, arbitrary and unconstitutional, as the trial court had yet to fix the appropriate value for purposes of taking or entering upon the property to be expropriated.
Ruling of the Court of Appeals

The Court of Appeals upheld the trial court on the following grounds. president or the general manager of NPC was not a fatal jurisdictional defect. It was enough to allege that the expropriating body had the right of eminent domain. The issues of whether the expropriation was properly authorized by the board of directors and whether Caetes verification and certification of the Complaint was likewise authorized were evidentiary and could be ruled upon only after the reception of evidence. already been intended to be used in a low-cost housing project and whether the choice of that lot was arbitrary and erroneous, given the availability of similar properties in the area, were factual issues that would entail presentation of evidence by both parties.

First, the verification and certification of the Complaint by someone other than the

Second, whether the disputed property could still be expropriated even if it had

right-of-way through the disputed property did not preclude its expropriation. Section 3-A of the NPC charter allowed the power company to acquire an easement of right-ofway or even the land itself if the servitude would injure the land. compliance with Section 2, Rule 67 of the 1997 Rules of Civil Procedure, by depositing with the Philippine National Bank an amount equivalent to the assessed value of the disputed property. expropriate the property was not final and could still be appealed by the aggrieved party. The availability of appeal ruled out certiorari. Hence, this Petition.[10]
The Issues

Third, the allegation in the Complaint that NPC sought to acquire an easement of

Fourth, the issuance of the Writ of Possession was proper in view of NPCs

Fifth, certiorari was not the proper remedy, as the Order sustaining the right to

In their Memorandum,[11] petitioner raises the following issues:[12] I WHETHER OR NOT THE QUESTIONED ORDER OF THE RESPONDENT JUDGE DATED SEPTEMBER 11, 1997 DIRECTING THE ISSUANCE OF A WRIT OF POSSESSION IS UNCONSTITUTIONAL, HIGHLY IRREGULAR, ARBITRARY, AND DESPOTIC. II WHETHER OR NOT THE COMPLAINT FILED IN THE INSTANT CASE IS DISMISSIBLE ON ITS FACE FOR LACK OF JURISDICTION, BEING FLAWED WITH PREMATURITY, AND VIOLATIVE OF RA 6395. III WHETHER OR NOT THE COURT OF APPEALS MADE A FINDING NOT BORNE OUT BY THE COMPLAINT, THUS IT EXCEEDED ITS JURISDICTION AMOUNTING TO LACK OF JURISDICTION. IV WHETHER OR NOT THE CHOICE OF THE PROPERTY TO BE EXPROPRIATED IS ARBITRARY. Simply stated, the petition raises the following issues: 1. Were there valid grounds to dismiss the Complaint? 2. Was the Writ of Possession validly issued, considering that the trial court had not conducted any hearing on the amount to be deposited?
This Courts Ruling

The Court of Appeals was correct in its rulings, but in the interest of substantial justice, the petitioner should be given an opportunity to file its answer.
First Issue:

Grounds for Dismissal

Jurisdiction

Petitioner contends that the trial court did not acquire jurisdiction over the case because, first, Atty. Caete who signed the verification and certification of non-forum shopping was neither the president nor the general manager of NPC; and second, under Section 15-A of RA 6395, only the NPC chief legal counsel, under the supervision of the Office of the Solicitor General is authorized to handle legal matters affecting the government power corporation. On the other hand, NPC argues that Caete, as its regional legal counsel in Mindanao, is authorized to prepare the Complaint on its behalf. We find the disputed verification and certification to be sufficient in form. Verification is intended to assure that the allegations therein have been prepared in good faith or are true and correct, not mere speculations.[13]Generally, lack of verification is merely a formal defect that is neither jurisdictional nor fatal. Its absence does not divest the trial court of jurisdiction.[14] The trial court may order the correction of the pleading or act on the unverified pleading, if the attending circumstances are such that strict compliance with the rule may be dispensed with in order to serve the ends of justice. The certificate of non-forum shopping directs the plaintiff or principal party to attest under oath that (1) no action or claim involving the same issues have been filed or commenced in any court, tribunal or quasi-judicial agency and that, to the best of the plaintiff's knowledge, no such other action or claim is pending; (2) if there is such other pending action or claim, a complete statement of its present status shall be made; and (3) if it should be learned that the same or a similar action or claim has been filed or is pending, the plaintiff shall report this fact to the court where the complaint or initiatory pleading was filed.[15] This rule is rooted in the principle that a party-litigant shall not be allowed to pursue simultaneous remedies in different forums, as this practice is detrimental to orderly judicial procedure.[16] Administrative Circular No. 04-94, which came before the 1997 Rules of Court, is deemed mandatory but not jurisdictional, as jurisdiction over the subject or nature of the action is conferred by law.[17]

In this case, the questioned verification stated that Atty. Caete was the acting regional legal counsel of NPC at the Mindanao Regional Center in Iligan City. He was not merely a retained lawyer, but an NPC in-house counsel and officer, whose basic function was to prepare legal pleadings and to represent NPC-Mindanao in legal cases. As regional legal counsel for the Mindanao area, he was the officer who was in the best position to verify the truthfulness and the correctness of the allegations in the Complaint for expropriation in Davao City. As internal legal counsel, he was also in the best position to know and to certify if an action for expropriation had already been filed and pending with the courts. Besides, Atty. Caete was not the only signatory to the Complaint; he was joined by Comie P. Doromal, OIC-assistant general counsel; and Catherine J. Pablo -- both of the NPC Litigation & Land and Land Rights Department. They all signed on behalf of the solicitor general in accordance with the NPC charter.[18] Their signatures prove that the NPC general counsel and the solicitor general approved the filing of the Complaint for expropriation. Clearly then, the CA did not err in holding that the Complaint was not dismissible on its face, simply because the person who had signed the verification and certification of non-forum shopping was not the president or the general manager of NPC.
Legal Standing and Condition Precedent

Next, petitioner asserts that NPC had no legal standing to file the expropriation case, because the Complaint did not allege that its board of directors had authorized its filing. It added that under Section 6, RA 6395, only the board was vested with the corporate power to sue and be sued. The National Power Corporation explains that, like other corporate officers and employees whose functions are defined by the board, Atty. Caete is authorized to file the expropriation case. Even if he is not the general counsel, he has residual authority to prepare, verify and certify the Complaint for expropriation. We rule for the private respondent. Rule 67, Section 1 of the Rules of Court, provides: SECTION 1. The complaint.The right of eminent domain shall be exercised by the filing of a verified complaint which shall state with certainty the right and purpose of expropriation, describe the real or personal property sought to be expropriated, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the separate interest of each defendant. xxxx.

The foregoing Rule does not require that the Complaint be expressly approved by the board of directors of a corporation. In any event, such authorization is a factual issue that can be threshed out during the trial. As held by the appellate court, the issue of whether or not the expropriation proceedings [were] authorized by the Board of Directors or that those who signed the complaint [were] authorized representatives are evidentiary in character determinable only in [the] trial proper.
Prematurity of the Complaint

The same ruling applies to the argument alleging prematurity of the Complaint. Petitioner's insistence that NPC must secure the approval of the provincial board and the municipal council is unfounded. Section 3(j), RA 6395, merely requires that the Complaint be filed in the same manner as an expropriation case of the national, the provincial or the municipal government. At bottom, all that is needed is compliance with Rule 67 of the Rules of Court and the prevailing jurisprudence on expropriation.
Defenses and Objections

Petitioner avers that the Complaint should be dismissed, because the subject property was already committed to be used in a low-cost housing project. Besides, there were other available properties in the area. Finally, the Complaint allegedly sought only an easement of a right-of-way, not essentially an expropriation. We disagree. Petitioner's argument in this case is premised on the old rule. Before the 1997 amendment, Section 3 of Rule 67 allowed a defendant in lieu of an answer, [to] present in a single motion to dismiss or for other appropriate relief, all of his objections and defenses to the right of the plaintiff to take his property xxx. A motion to dismiss was not governed by Rule 15 which covered ordinary motions. Such motion was the required responsive pleading that took the place of an answer and put in issue the plaintiff's right to expropriate the defendant's property.[19] Any relevant and material fact could be raised as a defense in a condemnation proceeding, such as that which tended to show that (1) the exercise of the power to condemn was unauthorized, or (2) there was cause for not taking defendants property for the purpose alleged in the petition, or (3) the purpose for the taking was not public in character.[20] This old rule found basis in the constitutional provisions on the exercise of the power of eminent domain, which were deemed to be for the protection of the individual property owner against the aggressions of the government.[21] Under the old rule, the hearing of the motion and the presentation of evidence followed.

However, Rule 67 of the 1997 Rules of Civil Procedure no longer requires such extraordinary motion to dismiss. Instead, it provides: SEC. 3. Defenses and objections. x x x x If a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he shall serve his answer within the time stated in the summons. The answer shall specifically designate or identify the property in which he claims to have an interest, state the nature and extent of the interest claimed, and adduce all his objections and defenses to the taking of his property. x x x x. In his book on remedial law, Justice Florenz D. Regalado writes that the old Rule was a bit confusing as the previous holdings under that former provision also allowed the filing of another motion to dismiss, as that is understood in Rule 16, to raise additionally the preliminary objections authorized by that Rule. Further, an answer, which is now required, gives more leeway. First, even if it still applies the omnibus motion rule, it allows amendments to be made within ten days from its filing.[22] Second, the failure to file an answer does not produce all the disastrous consequences of default in ordinary civil actions, because the defendant may still present evidence as to just compensation.[23] When petitioner filed its Motion to Dismiss, the 1997 Rules of Civil Procedure had already taken effect. Statutes regulating procedure in the courts are applicable to actions pending and undetermined at the time those statutes were passed.[24] New court rules apply to proceedings that take place after the date of their effectivity.[25] On April 8, 1997, the Court en banc issued a Resolution in Bar Matter No. 803, declaring that the revisions in the Rules of Court were to become effective on July 1, 1997. Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds for a motion to dismiss the allotment of the disputed land for another public purpose or the petition for a mere easement of right-of-way in the complaint for expropriation. The grounds for dismissal are exclusive to those specifically mentioned in Section 1, Rule 16 of the Rules of Court, and an action can be dismissed only on a ground authorized by this provision.[26] To be exact, the issues raised by the petitioner are affirmative defenses that should be alleged in an answer, since they require presentation of [27] evidence aliunde. Section 3 of Rule 67 provides that if a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he should include them in his answer. Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. It would be precipitate to dismiss the Complaint on such grounds as claimed by the petitioner. Dismissal of an action upon a motion to dismiss constitutes a denial

of due process if, from a consideration of the pleadings, it appears that there are issues that cannot be decided without a trial of the case on the merits.[28] Inasmuch as the 1997 Rules had just taken effect when this case arose, we believe that in the interest of substantial justice, the petitioner should be given an opportunity to file its answer to the Complaint for expropriation in accordance with Section 3, Rule 67 of the 1997 Rules of Civil Procedure.
Order of Condemnation

The Court will now tackle the validity of the trial court's assailed Order of August 13, 1997, which Respondent Court affirmed in this wise: xxxx The denial of Roberns Motion to Dismiss [is tantamount] to a confirmation or a determination of the authority of NPC to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the case. Under Section 4 of the present Rule 67, 1997 Rules, supra, an order sustaining the right to expropriate the property is a final one and may be appealed by any aggrieved party (Municipality of Bian v. Garcia, 180 SCRA 576 [1989]). xxxx.[29] We clarify. Founded on common necessity and interest, eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn private property to public use upon payment of just compensation. It may appear to be harsh and encompassing, but judicial review limits the exercise of eminent domain to the following areas of concern: (1) the adequacy of the compensation, (2) the necessity of the taking, and (3) the public-use character of the purpose of the taking.[30] If there are objections and defenses that require the presentation of evidence and the hearing of arguments, the trial court should not immediately issue an order of expropriation. This is clearly implied in Section 4 of Rule 67, which mandates that [i]f the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint x x x. The Court of Appeals ruled that there were issues that required presentation of evidence during the trial proper; namely, whether the expropriation proceeding was authorized by the NPC board of directors, whether the property to be expropriated was already devoted to public use, and whether the choice of the property was arbitrary and erroneous in view of the other properties available in the area. The necessity of

the taking and the public character of the purpose of the expropriation were still in issue and pending resolution by the trial court. To these we add the issue of whether the taking of the disputed property would require only an easement of right-of-way or would perpetually deprive Robern of its proprietary rights. Therefore, the trial court should not have issued the assailed Order of Expropriation which foreclosed any further objection to the NPCs right to expropriate and to the public purpose of the expropriation, leaving the matter of just compensation as the only remaining substantial issue. The nullity of the Order was glaring. While the trial court correctly denied the Motion to Dismiss, as the issues raised by the petitioner should be dealt with during the trial proper, it nonetheless ruled that NPC had the privilege as a [public] utility to use the power of eminent domain.
Second Issue

Requisites of a Writ of Possession

Petitioner objects to the issuance of the Writ of Possession for being highly irregular, arbitrary and despotic, because the Motion to Dismiss was yet to be resolved. It stresses that there was no hearing on the correct amount of just compensation for the taking of the disputed property, as required in Panes v. Visayas State College of Agriculture.[31] We cannot uphold this contention. There is no prohibition against a procedure whereby immediate possession of the land involved in expropriation proceedings may be taken, provided always that due provision is made to secure the prompt adjudication and payment of just compensation to the owners.[32] However, the requirements for authorizing immediate entry in expropriation proceedings have changed. To start with, in Manila Railroad Company v. Paredes,[33] the Court held that the railway corporation had the right to enter and possess the land involved in condemnation proceedings under Section 1, Act No. 1592,[34] immediately upon the filing of a deposit fixed by order of the court. The Rules of Court of 1964[35] sanctioned this procedure as follows: SEC. 2. Entry of plaintiff upon depositing value with National or Provincial Treasurer.- Upon the filing of the complaint or at any time thereafter the plaintiff shall have the right to take or enter upon the possession of the real or personal property involved if he deposits with the National or Provincial Treasurer its value, as provisionally and promptly ascertained and fixed by the court having jurisdiction of the proceedings, to

be held by such treasurer subject to the orders and final dispositon of the court. xxxx. (Underscoring ours.) Subsequently, former President Ferdinand E. Marcos signed into law Presidential Decree No. 42 and its companion decrees, which removed the court's discretion in determining the amount of the provisional value of the land to be expropriated and fixed the provisional deposit at its assessed value for taxation purposes. Hearing was not required; only notice to the owner of the property sought to be condemned.

Domain Proceedings To Take Possession Of The Property Involved Upon Depositing The Assessed Value, For Purposes of Taxation) provided:
WHEREAS, the existing procedure for the exercise of the right of eminent domain is not expeditious enough to enable the plaintiff to take or enter upon the possession of the real property involved as soon as possible, when needed for public purposes; xxx xxx xxx

On the issue of immediate possession, PD 42 (Authorizing The Plaintiff In Eminent

xxx [T]hat, upon filing in the proper court of the complaint in eminent domain proceedings or at anytime thereafter, and after due notice to the defendant, plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the Philippine National Bank, xxx an amount equivalent to the assessed value of the property for purposes of taxation, to be held by said bank subject to the orders and final disposition of the court. The provisions of Rule 67 of the Rules of Court and of any other existing law contrary to or inconsistent herewith are hereby repealed. Paragraph 3 of PD No. 1224 (Defining The Policy On The Expropriation Of Private Property For Socialized Housing Upon Payment Of Just Compensation) also authorized immediate takeover of the property in this manner: 3. Upon the filing of the petition for expropriation and the deposit of the amount of just compensation as provided for herein, the Government, or its authorized agency or entity, shall immediately have possession, control and disposition of the real property and the improvements thereon even pending resolution of the issues that may be raised whether before the Court of First Instance or the higher courts.

Paragraphs 1, 2, And 3 Of PD No. 1224 Further Defining The Policy On The Expropriation Of Private Property For Socialized Housing Upon Payment Of Just Compensation), amending the above-quoted paragraph, provided:

Where the taking was for socialized housing, Section 3, PD 1259 (Amending

Upon the filing of the petition for expropriation and the deposit of the amount of the just compensation provided for in Section 2 hereof, the Government, or its authorized agency or entity, shall immediately have possession, control and disposition of the real property and the improvements thereon even pending resolution of the issues that may be raised whether before the Court of First Instance, Court of Agrarian Relations or the higher courts.

Decree No. 1224 As Amended By Presidential Decree No. 1259, Defining The Policy On The Expropriation Of Private Property For Socialized Housing Upon Payment Of Just Compensation), amending paragraph 3 of PD 1224, decreed:
Upon the filing of the petition for expropriation and the deposit in the Philippine National Bank at its main office or any of its branches of the amount equivalent to ten percent (10%) of the just compensation provided for in Section 2 of Presidential Decree No. 1259, the government, or its authorized agency or entity, shall immediately have possession, control and disposition of the real property and the improvements thereon with the power of demolition, if necessary, even pending resolution of the issues that may be raised whether before the Court of First Instance, Court of Agrarian Relations, or the higher Courts.

Similarly, Section 1, PD No. 1313 (Further Amending Paragraph 3 Of Presidential

Land Reform In The Philippines And Providing For The Implementing Machinery Thereof), which reads:
x x x xxx xxx

In this connection, we also quote Section 7 of PD No. 1517 (Proclaiming Urban

Upon the filing of the petition for expropriation and the deposit in the Philippine National Bank at its main office or any of its branches of the amount equivalent to ten per cent (10%) of the declared assessment value in 1975, the Government, or its authorized agency or entity shall immediately have possession, control and disposition of the real property and the improvements thereon with the power of demolition, if necessary, even pending resolution of the issues that may be raised whether before the Court of First Instance, Court of Agrarian Relations, or the higher Courts.

And The Amount Of Deposit For Immediate Possession Of The Property Involved In Eminent Domain Proceedings)mandated the deposit of only ten percent (10%) of the

Finally, PD 1533 (Establishing A Uniform Basis For Determining Just Compensation

assessed value of the private property being sought to be expropriated, after fixing the just compensation for it at a value not exceeding that declared by the owner or determined by the assessor, whichever is lower. Section 2 thereof reads: SEC. 2. Upon the filing of the petition for expropriation and the deposit in the Philippine National Bank at its main office or any of its branches of an amount

equivalent to ten per cent (10%) of the amount of compensation provided in Section 1 hereof, the government or its authorized instrumentality agency or entity shall be entitled to immediate possession, control and disposition of the real property and the improvements thereon, including the power of demolition if necessary, notwithstanding the pendency of the issues before the courts. Accordingly, in San Diego v. Valdellon,[36] Municipality of Daet v. Court of Appeals,[37] and Haguisan v. Emilia,[38] the Court reversed itself and ruled that Section 2, Rule 67 of the 1964 Rules, was repealed by Presidential Decree No. 42. The judicial duty of ascertaining and fixing the provisional value of the property was done away with, because the hearing on the matter had not been expeditious enough to enable the plaintiff to take possession of the property involved as soon as possible, when needed for public purpose.[39] In Daet, the Court clarified that the provisional value of the land did not necessarily represent the true and correct one but only tentatively served as the basis for immediate occupancy by the condemnor. The just compensation for the property continued to be based on its current and fair market value, not on its assessed value which constituted only a percentage of its current fair market value. However, these rulings were abandoned in Export Processing Zone Authority v. Dulay,[40] because [t]he method of ascertaining just compensation under the aforecited decrees constitute[d] impermissible encroachment on judicial prerogatives. It tend[ed] to render this Court inutile in a matter which under the Constitution [was] reserved to it for final determination. The Court added: We return to older and more sound precedents. This Court has the duty to formulate guiding and controlling constitutional principles, precepts, doctrines, or rules. (See Salonga v. Cruz Pano, supra). The determination of just compensation in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the courts findings. Much less can the courts be precluded from looking into the just-ness of the decreed compensation. In Province of Camarines Sur v. Court of Appeals,[41] the Court reaffirmed the unconstitutionality of the presidential decrees that fixed the just compensation in an expropriation case at the value given to the condemned property either by the owners or by the assessor, whichever was lower. More precisely, Panes v. Visayas State College of Agriculture[42] ruled that the judicial determination of just compensation included the determination of the

provisional deposit. In that case, the Court invalidated the Writ of Possession because of lack of hearing on the provisional deposit, as required under then Section 2 of Rule 67, pre-1997 Rules. In the light of the declared unconstitutionality of PD Nos. 76, 1533 and 42, insofar as they sanctioned executive determination of just compensation, any right to immediate possession of the property must be firmly grounded on valid compliance with Section 2 of Rule 67, pre-1997 Rules; that is, the value of the subject property, as provisionally and promptly ascertained and fixed by the court that has jurisdiction over the proceedings, must be deposited with the national or the provincial treasurer.[43] However, the 1997 Rules of Civil Procedure revised Section 2 of Rule 67 and clearly reverted to the San Diego, Daet and Haguisan rulings. Section 2 now reads: SEC. 2. Entry of plaintiff upon depositing value with authorized government depositary.Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. xxxx xxx xxx xxx

After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties. [Underscoring ours.] In the present case, although the Complaint for expropriation was filed on June 6, 1997, the Motion for the Issuance of the Writ of Possession was filed on July 28, 1997; thus, the issuance of the Writ is covered by the 1997 Rules. As earlier stated, procedural rules are given immediate effect and are applicable to actions pending and undetermined at the time they are passed; new court rules apply to proceedings that take place after the date of their effectivity.[44] Therefore, Section 2, Rule 67 of the 1997 Rules of Civil Procedure, is the prevailing and governing law in this case.[45] With the revision of the Rules, the trial court's issuance of the Writ of Possession becomes ministerial, once the provisional compensation mentioned in the 1997 Rule is deposited. Thus, in the instant case the trial court did not commit grave abuse of discretion when it granted the NPCs Motion for the issuance of the Writ, despite the absence of hearing on the amount of the provisional deposit. The Court nonetheless hastens to add that PD 1533 is not being revived. Under Section 2, Rule 67 of the 1997 Rules, the provisional deposit should be in an amount equivalent to the full assessed value of the property to be condemned, not

merely ten percent of it. Therefore, the provisional deposit of NPC is insufficient. Since it seeks to expropriate portions, not the whole, of four parcels of land owned by Robern, the provisional deposit should be computed on the basis of the Tax Declarations of the property:[46] TCT No. Total Area Area Affected Assessed in Sq. M. in Sq. M. Value T-251558 (T-141754) T-251559 (T-141755) T-251556 (T-14152) T-251555 TOTAL 11,469.00 10,000.00 30,000.00 45,000.00 97,371.00 3,393.00 2,124.00 Provisional Deposit P1,257.32 1,903.10 2,144.39 3,619.28 P8,924.09

P4,250.00 8,960.00

3,402.00 8,827.50 17,746.50

18,910.00 18,450.00

Hence, the amount of the provisional deposit should be increased, in order to conform to the requirement that it should be equivalent to the assessed value of the property. In the interest of justice, NPC should in the meantime pay Robern reasonable rental, to be fixed by the trial court in its final decision, for the use and occupation of the disputed property from the date of entry until the deposit of the full assessed value of the property, as mandated by Rule 67. WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CAGR SP-46002 are AFFIRMED with the following MODIFICATIONS: (1) petitioner is granted a period of ten days from the finality of this Decision within which to file its answer, in accordance with Rule 67 of the 1997 Rules of Court; (2) NPC shall deposit, also within ten days from the finality if this Decision, the full amount required under the aforecited Rule; and (3) the trial court shall, in its final decision, fix the rental for the use and the occupation of the disputed property, from the date of NPCs entry until its deposit of the full amount required under the 1997 Rules. No costs. SO ORDERED. [G.R. No. 115734. February 23, 2000] RUBEN LOYOLA, CANDELARIA LOYOLA, LORENZO LOYOLA, FLORA LOYOLA, NICANDRO LOYOLA, ROSARIO LOYOLA, TERESITA LOYOLA and VICENTE LOYOLA, petitioners, vs. THE HONORABLE COURT OF APPEALS, NIEVES, ROMANA, ROMUALDO, GUILLERMO, LUCIA, PURIFICACION, ANGELES,

ROBERTO, ESTRELLA, all surnamed ZARRAGA and THE HEIRS OF JOSE ZARRAGA, namely AURORA, MARITA, JOSE, RONALDO, VICTOR, LAURIANO, and ARIEL, all surnamed ZARRAGA, respondents. DECISION QUISUMBING, J.: For review on certiorari is the decision of the Court of Appeals in CA-G.R. No. CV 36090, promulgated on August 31, 1993, reversing the judgment of the Regional Trial Court of Bian, Laguna, Branch 24, in Civil Case No. B-2194. In said decision, the appellate court decreed: "PREMISES CONSIDERED, the decision appealed from is hereby REVERSED and a new judgment rendered as follows: 1. 2. Dismissing the plaintiffs Complaint;

Declaring the "Bilihang Tuluyan ng Kalahati (1/2) ng Isang (1) Lagay na Lupa" dated August 24, 1980 (Exhibit 1) as well as Transfer Certificate of Title No. T-116067 of the Registry of Deeds for the Calamba Branch to be lawful, valid, and effective. "SO ORDERED."[1] The RTC decision reversed by the Court of Appeals had disposed of the complaint as follows: "WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the defendants as follows: 1. Declaring the simulated deed of absolute sale purportedly executed by the late Gaudencia Zarraga on August 24, 1980 as well as the issuance of the corresponding certificate of title in favor of the defendants null and void from the beginning; 2. Ordering the Register of Deeds of Laguna, Calamba Branch to cancel Transfer Certificate of Title No. T-116087 issued in favor of the defendants and to issue another one, if feasible, in favor of the plaintiffs and the defendants as co-owners and legal heirs of the late Gaudencia Zarraga;

3. Order(ing) the defendants to reconvey and deliver the possession of the shares of the plaintiff on (sic) the subject property; 4. Ordering the defendants to pay the amount of P20,000 as and for attorneys fees and the costs of this suit. 5. As there is no preponderance of evidence showing that the plaintiffs suffered moral and exemplary damages, their claim for such damages is hereby dismissed. The plaintiffs claim under the second cause of action is hereby dismissed on the ground of prescription. Likewise, the defendants counterclaim is hereby dismissed for lack of merit. "SO ORDERED."[2] We shall now examine the factual antecedents of this petition. In dispute here is a parcel of land in Bian, Laguna, particularly described as follows: "A PARCEL OF LAND (Lot 115-A-1) of the subdivision plan (LRC) Psd32117), being a portion of Lot 115-A, described on Plan Psd-55228, LRC (GLRO) Record No. 8374), situated in the Poblacion, Municipality of Bian, Province of Laguna, Island of Luzon. Bounded on the NE., points 3 to 4 by the Bian River; on the SE., points 4 to 1 by Lot 115-A-2 of the subd. Plan; on the SW., points 1 to 2 by the Road and on points 2 to 3 by Lot 115-B, Psd-55228 x x x containing an area of SEVEN HUNDRED FIFTY THREE (753) SQ. METERS, more or less x x x."[3] Originally owned in common by the siblings Mariano and Gaudencia Zarraga, who inherited it from their father, the parcel is covered by Transfer Certificate of Title (TCT) No. T-32007. Mariano predeceased his sister who died single, without offspring on August 5, 1983, at the age of 97. Victorina Zarraga vda. de Loyola and Cecilia Zarraga, are sisters of Gaudencia and Mariano. Victorina died on October 18, 1989, while Civil Case No. B-2194 was pending with the trial court. Cecilia died on August 4, 1990, unmarried and childless. Victorina and Cecilia were substituted by petitioners as plaintiffs. Private respondents, children of Mariano excepting those denominated as the "Heirs of Jose Zarraga," are first cousins of petitioners. Respondents designated as the "Heirs of Jose Zarraga" are first cousins once removed of the petitioners.

Private respondents allege that they are the lawful owners of Lot 115-A-1, the one-half share inherited by their father, Mariano and the other half purchased from their deceased aunt, Gaudencia. Transfer Certificate of Title No. 116067 was issued in their names covering Lot 115-A-1. The records show that the property was earlier the subject of Civil Case No. B-1094 before the then Court of First Instance of Laguna, Branch 1, entitled "Spouses Romualdo Zarraga, et al. v. Gaudencia Zarraga, et al." Romualdo Zarraga, one of the private respondents now, was the plaintiff in Civil Case No. B-1094. The defendants were his siblings: Nieves, Romana, Guillermo, Purificacion, Angeles, Roberto, Estrella, and Jose, all surnamed Zarraga, as well as his aunt, the late Gaudencia. The trial court decided Civil Case No. B-1094 in favor of the defendants. Gaudencia was adjudged owner of the one-half portion of Lot 115-A-1. Romualdo elevated the decision to the Court of Appeals and later the Supreme Court. The petition, docketed as G.R. No. 59529, was denied by this Court on March 17, 1982. The present controversy began on August 24, 1980, nearly three years before the death of Gaudencia while G.R. No. 59529 was still pending before this Court. On said date, Gaudencia allegedly sold to private respondents her share in Lot 115-A-1 for P34,000.00. The sale was evidenced by a notarized document denominated as "Bilihang Tuluyan ng Kalahati (1/2) ng Isang Lagay na Lupa."[4] Romualdo, the petitioner in G.R. No. 59529, was among the vendees. Meanwhile, the decision in Civil Case No. B-1094 became final. Private respondents filed a motion for execution. On February 16, 1984, the sheriff executed the corresponding deed of reconveyance to Gaudencia. On July 23, 1984, however, the Register of Deeds of Laguna, Calamba Branch, issued in favor of private respondents, TCT No. T-116067, on the basis of the sale on August 24, 1980 by Gaudencia to them. On January 31, 1985, Victorina and Cecilia filed a complaint, docketed as Civil Case No. B-2194, with the RTC of Bian, Laguna, for the purpose of annulling the sale and the TCT. The trial court rendered judgment in favor of complainants. On appeal, the appellate court REVERSED the trial court. On September 15, 1993, herein petitioners (as substitute parties for Victorina and Cecilia, the original plaintiffs) filed a motion for reconsideration, which was denied on June 6, 1994. Hence, the instant petition. Petitioners submit the following issues for resolution by this Court: 1. WHETHER OR NOT THERE ARE STRONG AND COGENT REASON(S) TO DISTURB THE FINDINGS AND CONCLUSIONS OF THE TRIAL COURT THAT

THE CONTRACT DENOMINATED AS DEED OF ABSOLUTE SALE IS SIMULATED AND THEREFORE NULL AND VOID. 2. WHETHER THE ACTS OF PRIVATE RESPONDENTS IS (SIC) CONSISTENT WITH THE ACTS OF VENDEES WHEN THEY DEFIED LOGIC AS FOUND BY THE TRIAL COURT... 3. WHETHER THE ALLEGED VENDORS (SIC) GAUDENCIA ZARRAGA WHO WAS THEN 94 YEARS OLD, ALREADY WEAK AND WHO WAS UNDER THE CARE OF ONE OF THE VENDEES PRIVATE RESPONDENT ROMANA ZARRAGA, SINGLE AND WITHOUT ANY CHILD BUT HAS SISTERS AND OTHER NEPHEWS AND NIECES WILL SELL HER PROPERTY THEN WORTH P188,250.00 IN 1980 FOR ONLY P34,000, AND WHETHER A CONTRACT OF SALE OF REALTY IS PERFECTED, VALID AND GENUINE WHEN ONE OF THE VENDEES ROMUALDO ZARRAGA DOES NOT KNOW OF THE TRANSACTION, THE OTHER VENDEE JOSE ZARRAGA WAS ALREADY LONG DEAD BEFORE THE EXECUTION OF THE BILIHAN IN QUESTION AND YET WAS INCLUDED AS ONE OF THE VENDEES, LIKEWISE, OTHER SUPPOSED VENDEES NIEVES ZARRAGA AND GUILLERMO ZARRAGA ASIDE FROM ROMUALDO WERE NOT PRESENT WHEN THE TRANSACTION TOOK PLACE. 4. THE LEGAL MEANING AND IMPORT OF SIMULATED CONTRACT OF SALE WHICH INVALIDATES A TRANSACTION IS ALSO A LEGAL ISSUE TO BE THRESHED OUT IN THIS CASE AT BAR. 5. WHETHER PETITIONERS HAVE THE LEGAL PERSONALITY TO SUE.[5] Notwithstanding petitioners formulation of the issues, we find the only issue for resolution in this case is whether or not the deed of absolute sale is valid. Petitioners vigorously assail the validity of the execution of the deed of absolute sale suggesting that since the notary public who prepared and acknowledged the questioned Bilihan did not personally know Gaudencia, the execution of the deed was suspect. However, the notary public testified that he interviewed Gaudencia prior to preparing the deed of sale.[6] Petitioners failed to rebut this testimony. The rule is that a notarized document carries the evidentiary weight conferred upon it with respect to its due execution,[7] and documents acknowledged before a notary public have in their favor the presumption of regularity.[8] By their failure to overcome this presumption, with clear and convincing evidence, petitioners are estopped from questioning the regularity of the execution of the deed.[9]

Petitioners also charge that one of the vendees, Jose Zarraga, was already dead at the time of the sale. However, the records reveal that Jose died on July 29, 1981.[10] He was still alive on August 24, 1980, when the sale took place. Petitioners then contend that three of the vendees included in the deed, namely, Romualdo, Guillermo, and Nieves, were not aware of the transaction, which casts doubt on the validity of the execution of the deed. Curiously, Romualdo who questioned Gaudencias ownership in Civil Case No. B-1094, was one of those included as buyer in the deed of sale. Romana, however, testified that Romualdo really had no knowledge of the transaction and he was included as a buyer of the land only because he was a brother. Petitioners suggest that all the aforecited circumstances lead to the conclusion that the deed of sale was simulated. Simulation is "the declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purposes of deception, the appearances of a juridical act which does not exist or is different what that which was really executed."[11] Characteristic of simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. Perusal of the questioned deed will show that the sale of the property would convert the co-owners to vendors and vendees, a clear alteration of the juridical relationships. This is contrary to the requisite of simulation that the apparent contract was not really meant to produce any legal effect. Also in a simulated contract, the parties have no intention to be bound by the contract. But in this case, the parties clearly intended to be bound by the contract of sale, an intention they did not deny. The requisites for simulation are: (a) an outward declaration of will different from the will of the parties; (b) the false appearance must have been intended by mutual agreement; and (c) the purpose is to deceive third persons.[12] None of these are present in the assailed transaction. Anent Romualdos lack of knowledge and participation in the sale, the rule is that contracts are binding only upon the parties who execute them.[13] Romualdo had no knowledge of the sale. He was a stranger and not a party to it. Article 1311 of the Civil Code[14] clearly covers this situation. Petitioners fault the Court of Appeals for not considering that at the time of the sale in 1980, Gaudencia was already 94 years old; that she was already weak; that she was living with private respondent Romana; and was dependent upon the latter for her daily needs, such that under these circumstances, fraud or undue influence was exercised by Romana to obtain Gaudencias consent to the sale.

The rule on fraud is that it is never presumed, but must be both alleged and proved.[15] For a contract to be annulled on the ground of fraud, it must be shown that the vendor never gave consent to its execution. If a competent person has assented to a contract freely and fairly, said person is bound. There also is a disputable presumption, that private transactions have been fair and regular.[16] Applied to contracts, the presumption is in favor of validity and regularity. In this case, the allegations of fraud was unsupported, and the presumption stands that the contract Gaudencia entered into was fair and regular. Petitioners also claim that since Gaudencia was old and senile, she was incapable of independent and clear judgment. However, a person is not incapacitated to contract merely because of advanced years or by reason of physical infirmities.[17] Only when such age or infirmities impair his mental faculties to such extent as to prevent him from properly, intelligently, and fairly protecting his property rights,[18] is he considered incapacitated. Petitioners show no proof that Gaudencia had lost control of her mental faculties at the time of the sale. The notary public who interviewed her, testified that when he talked to Gaudencia before preparing the deed of sale, she answered correctly and he was convinced that Gaudencia was mentally fit and knew what she was doing. On whether or not Gaudencia was under the undue influence of the private respondents, Article 1337 of the Civil Code states: "There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. The following circumstances shall be considered: confidential, family, spiritual, and other relations between the parties, or the fact that the person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or in financial distress." Undue influence depends upon the circumstances of each case[19] and not on bare academic rules.[20] For undue influence to be established to justify the cancellation of an instrument, three elements must be present: (a) a person who can be influenced; (b) the fact that improper influence was exerted; (c) submission to the overwhelming effect of such unlawful conduct.[21] In the absence of a confidential or fiduciary relationship between the parties, the law does not presume that one person exercised undue influence upon the other.[22] A confidential or fiduciary relationship may include any relation between persons, which allows one to dominate the other, with the opportunity to use that superiority to the others disadvantage.[23] Included are those of attorney and client,[24] physician and patient,[25] nurse and invalid,[26] parent and child,[27] guardian and ward,[28] member of a church or sect and spiritual adviser,[29] a person and his confidential adviser,[30] or whenever a confidential relationship exists as a fact.[31] That Gaudencia looked after Romana in her old age is not sufficient to show

that the relationship was confidential. To prove a confidential relationship from which undue influence may arise, the relationship must reflect a dominant, overmastering influence which controls over the dependent person.[32] In the present case, petitioners failed to show that Romana used her aunts reliance upon her to take advantage or dominate her and dictate that she sell her land. Undue influence is not to be inferred from age, sickness, or debility of body, if sufficient intelligence remains.[33] Petitioners never rebutted the testimony of the notary public that he observed Gaudencia still alert and sharp. In Baez v. Court of Appeals, 59 SCRA 15 (1974), we had occasion to say that solicitation, importunity, argument, and persuasion are not undue influence. A contract is not to be set aside merely because one party used these means to obtain the consent of the other. We have likewise held in Martinez v. Hongkong and Shanghai Bank, 15 Phil. 252 (1910), that influence obtained by persuasion, argument, or by appeal to the affections is not prohibited either in law or morals, and is not obnoxious even in courts of equity. Absent any proof that Romana exerted undue influence, the presumption is that she did not. Petitioners also seek the annulment of the sale due to gross inadequacy of price. They contend that Gaudencia, in her right senses, would never have sold her property worth P188,250.00 in 1980 for only P34,000.00. The records show that much of petitioners evidence was meant to prove the market value of the lot at the time of the sale.[34] A review of the records will show that lesion was not an issue raised before the lower courts. An issue which was neither averred in the complaint nor raised in the court below, cannot be raised for the first time on appeal. To do so would be offensive to the basic rules of fair play. Petitioners seem to be unsure whether they are assailing the sale of Lot 115-A-1 for being absolutely simulated or for inadequacy of the price. These two grounds are irreconcilable. If there exists an actual consideration for transfer evidenced by the alleged act of sale, no matter how inadequate it be, the transaction could not be a "simulated sale."[35] No reversible error was thus committed by the Court of Appeals in refusing to annul the questioned sale for alleged inadequacy of the price. WHEREFORE, the petition is DENIED, and the assailed decision of the Court of Appeals AFFIRMED. Costs against petitioners. SO ORDERED.

[G. R. No. 155875 April 3, 2003]

AGAPITO CRUZ FIEL, AVELINO QUIMSON REYES and ROY CONALES BONBON, petitioners, vs. KRIS SECURITY SYSTEMS, INC., NATIONAL LABOR RELATIONS COMMISSION and the COURT OF APPEALS, respondents. DECISION VITUG, J.: Before the Court is a petition for review on certiorari which seeks the nullification of the resolution of the Court of Appeals, dated 16 April 2002, as well as its reiterative resolution of 29 October 2002, dismissing the case brought to it by petitioners for noncompliance with the requirements of Section 5, Rule 7, of the 1997 Rules of Civil Procedure. Petitioners were employed by private respondent Kris Security Systems, Inc., as security guards and were assigned posts at Dunkin Donut, lmus Central Kitchen Department, in lmus, Cavite. On different dates in October 1998, private respondent terminated the services of petitioners. On 13 October 1998, petitioners filed a complaint for illegal dismissal before the Regional Arbitrating Branch of the National Labor Relations Commission (NLRC). Private respondent contended that it did not dismiss petitioners but that they were pulled out from their assignments due to the request of the client. The Labor Arbiter rendered his decision on 30 June 2000; he concluded: WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered declaring that herein complainants have indeed been constructively dismissed from their employment. Accordingly, respondent Kris Security Systems, Inc. is hereby directed to reinstate said complainants to their former position(s) without loss of seniority rights and to pay them their full backwages as follows: Full Backwages 1) 2) 3) 4) Agapito C. Fiel P139,799.66 Avelino Q. Reyes Roy C.Bonbon Diomedes Uray P139,799.66 P137,583.16 P139,128.00

The other monetary claims are hereby DISMISSED for lack of merit.[1] Private respondent appealed the decision of the Labor Arbiter to the NLRC which, on 08 August 2001, set aside the questioned decision of the Labor Arbiter, it held: WHEREFORE, the appealed decision dated 30 June 2000 is SET ASIDE. The complaints for illegal dismissal are dismissed for being without merit.[2] Petitioners motion for reconsideration was denied by the NLRC in its resolution of 28 November 2001. Petitioners forthwith filed a petition for certiorari under Rule 65 with the Court of Appeals. In a resolution, dated 16 April 2002, the appellate court dismissed the petition on the ground that it violated Section 5, Rule 7, of the 1997 Rules of Civil Procedure because only three of the four petitioners signed the mandatory verification and certification of non-forum shopping. Petitioners motion for reconsideration was denied by the Court of Appeals in its resolution of 29 October 2002. The instant petition raises the issue of: Whether or not the Court of Appeals acted correctly and in the interest of substantial justice when it dismissed a petition for certiorari under Rule 65 of the Rules of Court on the mere technicality that said petition was signed, certified and verified by only three (3) out of four (4) named petitioners (all of whom claim to have been illegally dismissed by their employer) considering the following circumstances: (a) The ruling in the case of Loquias, et al. vs. Office of the Ombudsman (338 SCRA 62) where only 1 out of 5 petitioners signed the certification of their petition is not properly applicable to the present case where 3 out of 4 petitioners signed the verification of their petition. (b) The later ruling in DAR vs. Alonzo-Legasto (339 SCRA 306), (where the petition was signed by only one of each of the four (4) couples) that the requirement of a certification of non-forum shopping should not be interpreted with such absolute literalness as to subvert the goal of achieving substantial justice supplanted or modified the earlier strict ruling in Loquias vs. Office of the Ombudsman (338 SCRA 62). (c) In St. Michael Academy vs. NLRC (292 SCRA 478) it was ruled that technical rules of pleading are not enforced strictly in labor cases especially where they will defeat the substantive rights of employees and in De Ysasi Ill vs. NLRC (231 SCRA 173), it was declared that courts must heed the underlying policy in the labor code relaxing the application of technical rules of procedure in labor cases.

(d) The three (3) petitioners who signed the petition filed with the Court of Appeals are differently situated from the fourth (4th) named petitioner who failed and omitted to sign the petition; consequently, such failure and omission by the fourth (4th) petitioner should not prejudice the three (3) other petitioners who are without fault. (e) The failure or omission to delete from the petition filed with the Court of Appeals the name of Diomedes Uray (the 4th named petitioner who failed or omitted to sign the petition) was an excusable oversight or lapse by petitioners attorneys pro bono. (f) Giving due course to the petition only insofar as the three (3) petitioners who signed the petition are concerned but dismissing the petition only insofar as the fourth (4th) petitioner who failed or omitted to sign the petition is concerned would be a fair, reasonable and equitable disposition of the petition filed with the Court of Appeals. (g) An outright dismissal of the petition on a procedural or technical omission (not attributable to the three (3) petitioners who signed the petition filed with the Court of Appeals) would deprive petitioners of their right to be heard on the merits of their petition which calls for the rectification of acts of grave abuse of discretion by the NLRC.[3] In its brief comment, dated 09 January 2003, respondent company prays for the denial of the petition and an affirmance of the action taken by the Court of Appeals. The Court grants the petition. The greater interest of justice would be served if the petition for certiorari filed by petitioners before the Court of Appeals is adjudicated on its merits with respect to the three petitioners who have signed the verification and certification on non-forum shopping, namely, Agapito C. Piel, Avelino Q. Reyes and Roy C. Bonbon, than to make them all pay for the failure of their co-petitioner Diomedes Uray to observe his own compliance with the rules. The three petitioners who have faithfully observed the rules mandated in Section 5, Rule 7, of the 1997 Rules of Civil Procedure, by signing the requisite verification and certification on non-forum shopping, should not be unduly prejudiced by the fault of their co-petitioner who apparently has lost interest in pursuing his case. Once again, we must stress that the technical rules of procedure should be used to promote, not frustrate, the cause of justice. While the swift unclogging of court dockets is a laudable aim, the just resolution of cases on their merits, however, cannot be sacrificed merely in order to achieve that objective.[4] Rules of procedure are tools designed not to thwart but to facilitate the attainment of justice; thus, their strict and rigid application may, for good and deserving reasons, have to give way to, and be subordinated by, the need to aptly dispense substantial justice in the normal course.[5]

WHEREFORE, the petition is GRANTED. The assailed resolutions of the Court of Appeals, dated 16 April 2002 and 29 October 2002, are SET ASIDE. The case is REMANDED to the Court of Appeals for adjudication on the merits of the petition before it. SO ORDERED.

[G.R. No. 125671. January 28, 2000] CONDO SUITE CLUB TRAVEL, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Third Division) and FLORENCIO LALO, respondents. DECISION QUISUMBING, J.: This special civil action for certiorari assails the decision of public respondent dated January 29, 1996 in NLRC NCR Case 09-06751-94, and its resolution dated June 28, 1996, which denied petitioners motion for reconsideration. The records show that private respondent was first employed by Sunette Realty Development Corporation as "housekeeper" with a monthly compensation of P8,000.00. After two months, private respondent signed a new employment contract with petitioner, Condo Suite Club Travel Inc., under the same terms of employment. Both firms belong to ARCON Group of Companies, run by the same management and board of directors. In July 1992, private respondents salary was reduced to P6,000.00 because of adverse business conditions. Expectedly, private respondent complained with the management. To placate him, private respondents salary was adjusted to P6,500.00. Private respondent was receiving such salary until his dismissal although he was then already performing the duties and responsibilities of a front desk supervisor in petitioners hotel. Aside from his employment with petitioner, private respondent owned a car-forhire, which he regularly rented to a certain Joselito Landrigan at the rate of P400.00 a day. Landrigan, in turn, operated the car as a taxi with himself as driver. On August 15, 1994, Landringan approached Editha Mariano, front desk clerk at petitioners hotel. He requested Mariano that his alleged collectible from a certain In Hu, a Korean guest in the hotel, be included in the hotel bill of said guest. He claimed that Mr. Hu owed him P2,000.00 for two-day rental of private respondents car. Acceding to Landrigans request, Mariano entered the amount in the statement of account of the guest to make the total billing of P16,710.00. Upon checking-out from the hotel, Mr. Hu paid his bill through his credit card. As he was in a hurry, he left without verifying his statement of account. This incident is reflected in the handwritten account of Mariano dated September 23, 1994, herein below quoted: "I was the front desk clerk on duty when Mr. In Hu Rm. 2002 checked-out on August 15, 1994. Before he checked-out Lito (driver) approached me

and told me that a Korean from Room 2002 hired him for two days. He told me to charged (sic) him (the guest) P2,000.00 I entered P2,000.00 to his Statement of Account and inform him of the total. He was so much in a hurry that he didnt get the latest Statement of Account for P16,710.00. I gave him the Card Holders Copy and Companys Receipt for the same amount."[1] While in Korea, Mr. Hu noticed the discrepancy between the statement of account issued by petitioner and the charge slip of his credit card. Thus, on coming back to the Philippines, he dropped by at petitioners hotel and complained about the overbilling. The report of Allan Padua dated September 13, 1994, regarding the incident states: "Last August 8, 1994, Mr. In Hu checked in at Rm. 2002. He stayed for seven (7) days. He was so in a hurry when he checked out on August 15, 1994. He was charged thru his Visa card the amount of P16,710.00 without noticing that the written amount on his Statement of Account is only P14,710.00. He only noticed the discrepancy when he reached Korea. Yesterday, September 12, 1994 in the morning, he came to the Front Desk and was complaining. I approached him and he showed me his charge slip and Statement of Account. Both seem not to tally. I made an investigation and found out that Front Desk personnel made a big mistake by charging him P2,000.00 higher than his actual bill in his (Mr. Hu) Statement of Account which is only P14,710.00. Upon further investigation, I found out that the P2,000.00 in contention was entered as a transportation account which the guest denied because he (Mr. Hu) paid for his own transportation from the airport to [the] Condo Suite. This incident resulted to Mr. Hus transfer to the competitor, Suite Shine."[2] In response to the abovequoted report, private respondent averred that although Paduas report did not mention him as the one responsible for the overbilling, he had to explain his side being the front desk supervisor and owner of the car involved in the controversy. He pointed out that the statement of account referred to by Mr. Hu was given a day before he checked out and did not reflect the latest charges, hence, the total billing shown amounted only to P14,710.00. Private respondent related that on his last day at the hotel, Mr. Hu was informed of his total account amounting to P16,710.00 which the latter acknowledged by signing and accepting the corresponding receipt. He recalled that Mr. Hu was indeed in a hurry so that the Korean did not get

his latest statement of account which by then reflected the additional P2,000.00 and making the total charges P16,710.00.[3] In the investigation that ensued, it was shown that there was really no car accommodation as claimed by Landringan. In his handwritten statement dated September 16, 1994, Landrigan admitted that he approached Mariano at the front desk and demanded payment for Mr. Hus alleged transportation expense. He also claimed to have received the amount P2,000.00 through a check issued by petitioner on August 17, 1994 or two days after Mr. Hu left for Korea. However, he asserted that he returned the said amount on September 16, 1994, in order not to tarnish the image of petitioner hotel.[4] Eventually, petitioners staff confirmed the error in the billing of Mr. Hu. Upon return of the P2,000.00 by Landrigan, petitioner refunded the amount to the Korean. On September 26, 1994, petitioner terminated the services of private respondent on the ground of loss of confidence for the latters malicious intent to defraud a guest of the hotel.[5] On September 14, 1994, before his dismissal, private respondent filed a complaint for diminution of salary before the Arbitration Branch of NLRC. Subsequently, after having been dismissed, private respondent amended aforesaid complaint and included the charge of illegal dismissal from employment. During the arbitration proceedings, petitioner offered to reinstate private respondent which the latter rejected. Thereafter, the labor arbiter, in a decision dated July 6, 1995, dismissed said complaint for diminution of salary and illegal dismissal for lack of merit. On appeal, public respondent NLRC affirmed the order dismissing the complaint for diminution of salary, but modified the decision of the labor arbiter as regards illegal dismissal. It held that the overbilling incident is the singular handiwork of Landrigan as there is no evidence linking private respondent with the anomaly. It also ordered the reinstatement of private respondent with backwages but only up to the time when the offer of reinstatement was made on January 31, 1995. It disposed of the case as follows: "WHEREFORE, premises considered, the respondents are hereby ordered to reinstate herein complainants with backwages in the amount of P26,866.64. Accordingly, the dismissal of the complaint for diminution of salary is affirmed. The appealed Decision is thus accordingly modified. SO ORDERED."[6]

Its motion for reconsideration having been denied, petitioner filed the present petition. It seeks to annul the decision of public respondent ordering the reinstatement of private respondent. However, petitioner does not state the grounds relied upon for said annulment. We note that petitioner imputes neither lack or excess of jurisdiction, nor grave abuse of discretion, on the part of public respondent in rendering the Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion amounting to lack of jurisdiction.[7] The respondent acts without jurisdiction if he does not have the legal power to determine the case. There is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps his authority as determined by law. And there is grave abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction.[8] Since petitioner neither assails the jurisdiction of public respondent nor attributes grave abuse of discretion on part of the labor tribunal, this petition must fail. Besides, petitioner did not comply with the rule on certification against forum shopping. The certification in this petition was improperly executed by the external legal counsel of petitioner. For a certification of non-forum shopping must be by the petitioner, or any of the principal parties and not by counsel unless clothed with a special power of attorney to do so. This procedural lapse on the part of petitioner is also a cause for the dismissal of this action.[9] Even if the abovementioned procedural defects were to be set aside, the petition would still not prosper. Public respondent cannot be faulted for grave abuse of discretion. For we find its assailed judgment supported by factual and legal bases. In its memorandum petitioner raises the following queries: 1. Whether there were just causes to terminate the private respondent? 2. Whether the reinstatement order by the Hon. NLRC is legal and proper? 3. Whether the award of backwages in the amount of P 26, 866.64 by the Hon. NLRC is legal and proper?"[10] Simply stated, the proper issue now for resolution is whether or not public respondent committed grave abuse of jurisdiction in modifying the decision of the labor arbiter and in ordering the reinstatement of private respondent.

The fundamental guarantee of security of tenure dictates that no worker shall be dismissed except for just and authorized cause provided by law, and after due process. The just and authorized causes are enumerated under Articles 282, 283 and 284 of the Labor Code. The due process requirement of notice and hearing is set-out in Article 277 (b) of the said Code. As provided for in the Labor Code: "ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes: xxx (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. xxx" But it must be stressed that loss of confidence as a just cause for termination of employment is premised by the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property. In the case of supervisory personnel occupying positions of responsibility, this Court has repeatedly held that loss of trust and confidence justifies termination.[11] Termination of an employment on this ground does not require proof beyond reasonable doubt of the employees misconduct. It is sufficient that there is some basis for the loss of trust or that the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him unworthy of the trust and confidence demanded by his position.[12] The Court, however, has repeatedly stressed that the right of an employer to dismiss employees on account of loss of trust and confidence must not be exercised arbitrarily. Just cause must be shown, so as not to render the employees constitutional right to security of tenure nugatory. Besides, for loss of confidence to be a valid ground for dismissal, the basis thereof must arise from particular proven facts. In other words, this ground must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise the dismissal will be rendered illegal.[13] In the instant case, petitioner failed to prove by ample evidence that private respondent intended to defraud Mr. Hu, as herein explained. Hence, there is no basis for petitioner to claim it lost the trust and confidence it had reposed upon private respondent. Noteworthy are the following circumstances that favor private respondents innocence:

First. Mariano admitted in her written statement that she was the one responsible for
entering the amount of P2,000.00 in Mr. Hus statement of account. Nowhere in her written statement did she declare that private respondent directed her to make such

entry. Further, petitioner failed to refute Marianos declaration that the statement of account which she gave to Mr. Hu reflected only the total charges due up to August 14, 1994, albeit he actually checked out of the hotel on August 15, 1994. This shows that the billing reflected on August 14, 1994 statement was not yet complete as the P2,000.00 outstanding account of Mr. Hu had yet to be incorporated therein.

Second. Landrigan, in his written statement admitted that he approached Mariano and
he demanded payment of the transportation fee due him because he was previously hired by Mr. Hus group for two days. Private respondent had nothing to do with Landrigans demand for such payment. Landrigan believed in good faith that Mr. Hu actually owed him P2,000.00 when he served as driver for two days. That Landrigan returned the amount to petitioner did not in any way prove private respondents wrongdoing.

Furthermore, the second statutory requirement for a valid dismissal stipulates notice and hearing. Before an employee can be dismissed, the employer must furnish the worker with two notices: (1) notice which apprises the employee of the particular acts or omissions for which dismissal is sought and (2) subsequent notice which informs the employee of the employers decision to dismiss him. The twin requirements of notice and hearing constitute essential elements of the statutory process, and neither of these elements can be eliminated without running afoul of the procedural mandate.[14] In this case, the evidence on record is devoid of any indication that petitioner complied with the requirements of due process prior to termination, as shown in the following discussion.

First. Petitioner did not notify private respondent of the particular acts or omissions for
which he was dismissed. The incident report prepared by Mr. Padua is not the notice contemplated by law. Such report merely narrates the complaint aired by Mr. Hu against the front desk personnel. And, nowhere in said incident report did petitioner pinpoint private respondent as the person responsible for overcharging. In fact, it was only upon service of termination order that private respondent realized that the complaint of Mr. Hu was directed at him.

Second. Private respondent was not afforded his right to be heard. The hearing affords
the employee an opportunity to answer the charge against him and to defend himself personally or with the help of a representative before dismissal is effected. Private respondents reply letter addressed to Mr. Padua does not satisfy the requirement of ample opportunity to be heard. The said reply letter was written by private respondent in his capacity as front desk supervisor in order to shed light on the events that transpired involving Mariano and Landrigan. Private respondent was not then aware that the complaint was directed at him. Moreover, as there was no investigation

conducted by petitioner, private respondent was not afforded an opportunity to confront Landrigan, Mariano or Mr. Hu. In sum, there is no valid and just cause in terminating the employment of private respondent. With the finding that private respondent was illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.[15] Hence, aside from reinstatement, private respondent here is entitled to full backwages. However, the backwages awarded by public respondent was inadequate compensation for his travail. Public respondent limited private respondents backwages from the date of his dismissal and up to the time when petitioner allegedly offered to reinstate private reinstatement. It explained that the failure of private respondent to work, after the supposed offer was made, can no longer be attributed to the fault of petitioner. This, in our view, does not suffice to provide complete relief to the painful socioeconomic dislocation of the employee and his family. As previously stated, an employee who is unjustly dismissed is entitled to his full backwages computed from the time his compensation was withheld from him up to the time of his reinstatement. Mere offer to reinstate a dismissed employee, given the circumstances in this case, is not enough. If petitioner were sincere in its intention to reinstate private respondent, petitioner should have at the very least reinstated him in its payroll right away. We are thus constrained to conclude that private respondent should be paid by petitioner not only the sum of P26,866.64 awarded by the NLRC, but the petitioner should be held liable for the entire amount of backwages due the private respondent from the day he was illegally dismissed up to the date of his reinstatement. Only then could observance of labor laws be promoted and social justice upheld. WHEREFORE, the instant petition is DISMISSED. The assailed DECISION of NLRC is AFFIRMED with the MODIFICATION that petitioner is hereby ordered not only to reinstate private respondent to his position but also to pay his full backwages from the day of his illegal dismissal until his actual reinstatement. Public respondent NLRC is hereby directed to make the computation of said full backwages including allowances and other benefits owing to the private respondent, and inform soonest all parties as well as this Court accordingly, within thirty days after receipt of this decision. Costs against petitioner. SO ORDERED.

G.R. No. 170049

March 14, 2008

GENEROSO A. JUABAN and FRANCIS M. ZOSA, Petitioners, vs. RENE ESPINA and CEBU DISCOVERY BAY PROPERTIES, INC., Respondents. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by the late Generoso A. Juaban (Juaban), now substituted by his heirs, and Francis M. Zosa (Zosa), assailing the Decision1 dated 31 January 2005 of the Court of Appeals in CA-G.R. CV No. 60721, wherein the appellate court (1) made permanent the Writ of Preliminary Injunction it had earlier issued, enjoining petitioners from exercising rights of ownership over Lots No. 6720-C-2 and 6720-B-2, respectively, covered by Transfer Certificates of Title (TCTs) No. 36425 and No. 36426 of the Registry of Deeds of LapuLapu City; (2) set aside the Decision of the Lapu-Lapu City Regional Trial Court (RTC), Branch 54, in Civil Case No. 4871-L which ordered the dismissal of the case; and (3) directed the RTC to undertake further proceedings in Civil Case No. 4871-L insofar as the issue of damages was concerned. The present Petition stems from the proceedings in Civil Case No. 4871-L before the Lapu-Lapu City RTC, Branch 54, but is still directly related to two other cases, particularly, Civil Case No. 2309-L before the Lapu-Lapu RTC, Branch 27, and (2) A.M. No, P-02-1580 before this Court, which we cannot simply overlook. The direct antecedent of the present petition, Civil Case No. 4871-L before the Lapu-Lapu City RTC, Branch 54, is the last of the three cases we are presenting hereunder: CASE No. 1: Bancale v. Paras, Civil Case No. 2309-L, Lapu-Lapu City RTC, Branch 27 The Heirs of Conrado Bancale filed before the Lapu-Lapu City RTC, Branch 27, a case for the recovery of the properties subject of the present Petition against a certain Eva Paras and other persons, which was docketed as Civil Case No. 2309-L. On 22 January 1996, petitioners Juaban and Zosa entered their appearance as counsels for the Heirs of Bancale. The Heirs of Bancale later entered into a 31 January 1997 Agreement to Sell and to Buy with respondent Rene Espina (Espina), paragraph 5 of which states: That after the title is transferred to their names, the First Party [Heirs of Bancale] will execute an absolute deed of sale in favor of the second party [herein respondent Rene Espina] or whoever will be designated by him as the vendee for the consideration

mentioned in paragraph 2 hereof. The amount of P2,000,000.00 advanced by the Second Party shall form part of said consideration.2 In accordance with said Agreement, respondent Espina paid petitioners P2,000,000.00 as an advance on the purchase price for the subject properties for the benefit of the Heirs of Bancale. Respondent Espina then designated the other respondent in this case, Cebu Bay Discovery Properties, Inc. (CDPI), as the vendee of the said properties. Later, on 1 September 1997, respondents learned that petitioners, counsels Juaban and Zosa, had filed on 26 August 1997, at around 1:10 p.m., a Motion to fix their attorneys fees in Civil Case No. 2309-L. They also learned that the Lapu-Lapu City RTC, Branch 27, had issued an Order on the very same date of 26 August 1997, at around 2:20 p.m., granting the motion and fixing petitioners attorneys fees in the amount of P9,000,000.00. The Heirs of Bancale filed a Motion for Reconsideration, but the same was denied in an Order dated 22 September 1997. The Heirs of Bancale received a copy of the Order denying their Motion for Reconsideration on 9 October 1997, after which they filed a Notice of Appeal dated 15 October 1997. However, without waiting for the expiration of the period to appeal of the Heirs of Bancale, the Lapu-Lapu City RTC, Branch 27, issued on 10 October 1997 an Order, which states: Considering that the Order of this Court dated 26 August 1997 has already become final and executory, not having been appealed, the motion for execution is hereby GRANTED. Let a Writ of Execution issue to satisfy the Order dated August 26, 1997 to enforce the same fixing the attorneys fees. Sheriff Juan A. Gato of this Branch is hereby directed to implement the Writ.3 The Heirs of Bancale filed another Motion for Reconsideration, this time, of the 10 October 1997 Order. Without directly ruling on this Motion, the Lapu-Lapu City RTC, Branch 27, issued on 14 October 1997 a Writ of Execution directing Sheriff Juan A. Gato (Gato) to satisfy the judgment for attorneys fees in the amount of P9,000,000.00 in favor of petitioners. On 23 October 1997, Sheriff Gato served notice that the rights, shares, interests and participation of the Heirs of Bancale in the subject properties were being levied on execution to satisfy the Writ of Execution dated 14 October 1997. This was done despite the fact that the Writ of Execution issued by the trial court specifically directed that the attorneys fees were "to be taken from the money due from the buyer to the sellers under the agreement to buy and sell." Thereafter, Sheriff Gato issued a Notice of Sale on Execution dated 24 October 1997, announcing that the subject properties were to be sold at a public auction on 28 November 1997 at 2:00 p.m.

On 18 November 1997, respondents filed a Third Party Claim with the office of Sheriff Gato. On motion of petitioners, the Lapu-Lapu City RTC, Branch 27 fixed the sheriffs indemnity bond at P500,000.00. On 28 November 1997, the subject properties were sold at public auction to petitioners for P9,000,000.00. The sale was registered on 3 December 1997. On 1 December 1998, the Lapu-Lapu City RTC, Branch 27, under a new presiding judge, issued an Order resolving the Motions of the Heirs of Bancale seeking reconsideration of the previous Orders of the same court dated 22 September 1997 and 10 October 1997, and disposing thus: WHEREFORE, in view of the foregoing premises, this Court hereby sets aside the order issued in this case on October 10, 1997 which considered as final and executory the August 26, 1997 order and, in its stead, hereby gives due course to the appeal filed by the [Heirs of Bancale] from the order issued in this case on September 22, 1997, which in effect is an appeal from the said August 26, 1997 order.4 This 1 December 1998 Order is currently on appeal with the Nineteenth Division of the Court of Appeals, where it is docketed as CA- G.R. CEB CV No. 61696. The Court of Appeals Resolutions granting due course to said appeal were elevated via a Petition for Certiorari, docketed as G.R. No. 156011, still pending before this Court. On 27 January 1999, petitioners wrote a letter to Sheriff Gato requesting him to execute a final deed of sale in their favor since no redemption of the subject properties was made. Sheriff Gato, in a letter dated 4 February 1999, answered that he no longer had any authority to issue the final deed of sale by virtue of the 1 December 1998 Order of the Lapu-Lapu City RTC, Branch 27. Nonetheless, in direct contravention of the contents of his letter, Sheriff Gato still transmitted to petitioners the final Deed of Conveyance without the approval of the trial court. CASE No. 2: Espina v. Gato, A.M. No. P-02-1580, Supreme Court The second case is an administrative complaint filed against Sheriff Gato by respondents, for allegedly acting with manifest bias and partiality in Civil Case No. 2309-L while it was still pending with the Lapu-Lapu City RTC, Branch 27. On 9 April 2003, this Court, speaking through Associate Justice Adolfo Azcuna, held: Firstly, the haste with which respondent levied upon the plaintiffs property is unexplained. Furthermore, despite a third-party claim filed by complainant Espina for CDPI on November 18, 1997, the property was sold at public auction to Attys. Juaban and Zosa on November 28, 1997. It is true that sheriffs are responsible for the prompt service and implementation of writs and other orders issued by the court. They cannot

afford to be inefficient in the work assigned to them. However, prompt service and efficiency should not be reasons to compromise the integrity of the court and the proper administration of justice. By the very nature of their duties, sheriffs perform a very sensitive function in the dispensation of justice. Thus, their conduct must, at all times, be above suspicion. Secondly, as stated earlier, the trial court ordered in the writ of execution that the P9 million to be paid to Attys. Juaban and Zosa as attorneys fees "be taken from the money due from the buyer to the sellers under the agreement to buy and sell." Nevertheless, respondent levied upon the aforementioned property in blatant disregard of this order. It is a well-settled rule that the duty of a sheriff is merely ministerial. When a writ is placed in the hands of the sheriff, it is his ministerial duty to proceed to execute in accordance with the terms of its mandate. Thirdly, when Attys. Juaban and Zosa requested respondent to issue a Final Deed of Conveyance to them, respondent already knew that he no longer had authority to issue the same. He had already been appraised of the fact that a subsequent order, dated December 1, 1998, set aside the orders that were the basis of the writ of execution. This was admitted by him in his letter to Attys. Juaban and Zosa. Despite this knowledge, he still issued a final deed of sale in favor of the said lawyers without the approval of the court. From all these facts, it is clear that respondent showed manifest partiality in favor of Attys. Juaban and Zosa, giving them unwarranted benefit, advantage and preference and that, with evident bad faith, he caused undue injury to complainants. Respondent thereby failed to comply with the strict standards required of public officers and employees. WHEREFORE, respondent Sheriff Juan Gato is found GUILTY of grave abuse of official functions and manifest partiality amounting to grave misconduct and conduct prejudicial to the administration of justice, and is hereby SUSPENDED FROM SERVICE FOR THREE (3) MONTHS WITHOUT PAY, with the warning that repetition in the future of the same or similar misconduct will be dealt with more severely.5 CASE No. 3: Espina v. Gato, Civil Case No. 4871-L, Lapu-Lapu City RTC, Branch 54 On 28 November 1997, respondents filed a complaint for injunction and damages with an application for the issuance of a temporary restraining order to enjoin, at whatever stage, the sale in a public auction of the subject properties by Sheriff Gato. Said complaint was docketed as Civil Case No. 4871-L before the Lapu-Lapu City RTC, Branch 54. Respondents claim that they were, as of the institution of said case, unaware that the subject properties had already been sold at a public auction.

On 19 December 1997, petitioners filed a Motion to Dismiss, which was granted by the Lapu-Lapu City RTC, Branch 54, in an Order dated 30 July 1998. On 2 September 1998, respondents filed a Notice of Appeal, which was given due course by the LapuLapu City RTC, Branch 54, in an Order dated 7 September 1998. Respondents appeal before the Court of Appeals was docketed as CA-G.R. CV No. 60721. Respondents filed therein an Urgent Motion for Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction dated 19 October 1998. On 26 November 1998, the Court of Appeals issued a Resolution granting respondents application for the issuance of a temporary restraining order, restraining Sheriff Gato from consolidating ownership over the subject properties in favor of petitioners. On 1 December 1998, respondents filed an Urgent Manifestation/Motion dated 1 December 1998 wherein they tendered the amount of P10,962,347.20 as payment for the redemption price of the subject properties, on the condition that if the application for preliminary injunction was denied or if the case is finally resolved in favor of petitioners, the said amount shall be considered as valid tender of the redemption price of the subject properties retroacting to the date of the filing of the Manifestation/Motion. In a comment dated 17 December 1998, petitioners interposed no objection to the deposit of said amount, but excepted to respondents claim that the tender would stop the running of interest on the redemption price. On 15 June 1999, the Court of Appeals issued a Resolution stating that respondents application for a writ of preliminary injunction to enjoin Sheriff Gato from consolidating ownership over the subject properties in favor of petitioners had been rendered moot in view of the 1 December 1998 Order by the Lapu-Lapu City RTC, Branch 27, in Civil Case No. 2309-L setting aside its Order dated 10 October 1997 and giving due course to respondents appeal therein. In the meantime, petitioners were able to acquire the Definite Deed of Sale of the subject properties from Sheriff Gato. Hence, respondents filed a Motion for Clarification and/or Reconsideration to Cite [Petitioners] in Contempt. Petitioners, however, proceeded to register the Definite Deed of Sale issued by Sheriff Gato with the Register of Deeds in Lapu-Lapu City. In a Resolution dated 30 September 1999, the Court of Appeals granted respondents application for a writ of preliminary injunction and enjoined petitioners from exercising rights of ownership over the subject properties, such as alienating or encumbering the same. On 31 January 2005, the Court of Appeals rendered the assailed Decision, the dispositive portion of which reads:

WHEREFORE, the Order dated July 30 1998 issued by the Regional Trial Court, Branch 54, Lapu-Lapu City, in Civil Case No. 4871-L dismissing the complaint, is hereby REVERSED and SET ASIDE. The Writ of Preliminary Injunction issued pursuant to the Courts resolution promulgated on September 30, 1999, subject to the conditionalities therein, is hereby made PERMANENT. The Regional Trial Court, Branch 54, Lapu-Lapu City is directed to undertake further proceedings in Civil Case No. 4871-L sofar as the issue on damages is concerned. Costs against appellees.6 Petitioners Motion for Reconsideration of the foregoing decision was denied in a Resolution dated 20 September 2005. Hence, the present recourse, wherein petitioners bring forth the following issues for this Courts consideration: 1. Whether or not Rene Espina had a cause of action to file the Injunction and Damages Case against petitioners; 2. Whether or not the trial court acquired jurisdiction over the complaint and over CDPI in said case; 3. Whether or not only questions of law were raised in respondents appeal, which allegedly required the Court of Appeals to dismiss said appeal; 4. Whether or not the Court of Appeals erred in taking cognizance of the records in another case which were not offered and admitted as evidence as basis for its findings of facts; 5. Whether or not the Court of Appeals erred in issuing a permanent injunction against petitioners considering that there was allegedly no prayer in the complaint therefor. We find no merit in the present Petition. Authority of Rene Espina to File the Case and the Jurisdiction of the RTC Only respondent Espina signed the Verification and Certification of Non-Forum Shopping attached to the complaint in the third case, Civil Case No. 4178-L, before the Lapu-Lapu City RTC, Branch 54; and apart from him, there was no signatory of the Verification and Certification of Non-Forum Shopping on behalf of respondent CDPI. Petitioners claim that the complaint should have been dismissed by the trial court since (1) respondent Espina had no more personal interest in the case, having assigned his

rights to the subject properties to respondent CDPI; and (2) there was no authority or board resolution authorizing respondent Espina to file the complaint on behalf of his co-respondent CDPI. Sec. 2, Rule 3 of the Rules of Court requires that parties to a civil case must be real parties in interest, to wit: SEC. 2. Parties in interest.A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. We quote with approval the following ruling of the Court of Appeals on the issue of respondent Espinas personality to institute Civil Case No. 4178-L: The personality of appellant Rene Espina to sue in his personal capacity finds basis in the Agreement to Sell and to Buy. It is readily apparent in the Agreement that he has been designated as the "Second Party", in his personal capacity, and not as agent or representative of a corporate entity. On the other hand, the Deed of Sale which was subsequently executed, is based on the aforesaid Agreement. Therefore, there is no gainsaying that appellant Rene Espina has a personal interest in the case.7 Respondents right to the subject properties is based on the 31 January 1997 Agreement to Sell and to Buy executed between the Heirs of Bancale and respondent Espina. Hence, the said Agreement is the very source of the right, the violation of which constituted the cause of action in respondents complaint for injunction before the court a quo. It was respondent Espina who entered into the Agreement, and his rights as a party to the said contract were not extinguished just because he designated his co-respondent CDPI as vendee of the subject properties, pursuant to the authority given to him in paragraph 5 thereof. Among respondent Espinas rights as a party to the Agreement is his right to the full realization of the purpose of the contract, which in this case, would be the transfer of the ownership of the subject properties from the Heirs of Bancale either to him or to his designated vendee. The public auction sale of the subject properties to petitioners would not only prevent the intended transfer of ownership under the Agreement, but would also render inutile respondent Espinas designation of respondent CPDI as a vendee. Moreover, it was undisputed that respondent Espina advanced P2,000.000 to the Heirs of Bancale, which formed part of the consideration for the ensuing sale of the subject properties. There was no proof that respondent Espina had already been reimbursed for the said amount. Having paid part of the purchase price for the subject properties, then respondent Espina has an interest therein.

Having been established as a real party in interest, respondent Espina has not only the personality to file the complaint in Civil Case No. 4178-L, but also the authority to sign the certification against forum shopping as a plaintiff therein. We held in Mendigorin v. Cabantog,8 Escorpizo v. University of Baguio9 and Condo Suite Club Travel, Inc. v. National Labor Relations Commission10 that the certification against forum shopping must be signed by the plaintiff or any of the principal parties and not by counsel.11 We have also held in Cua v. Vargas,12 that: The general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs or petitioners in a case and the signature of only one of them is insufficient. Nevertheless, the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert their own ultimate and legitimate objective. Strict compliance with the provisions regarding the certificate of non-forum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. Under justifiable circumstances, the Court has relaxed the rule requiring the submission of such certification considering that although it is obligatory, it is not jurisdictional. Thus, when all the petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the rules. In Bases Conversion and Development Authority v. Uy,13 we held: Signature of a principal party sufficient for verification and certification Anent the assailed verification and certification of non-forum shopping, it is shown that it substantially complied with the requirements of the Rules. Dismissal of appeals that is purely on technical grounds is frowned upon. While only petitioner Ramon P. Ereneta signed the verification and certification of non-forum shopping such is not fatal to the instant petition. In Calo, we agreed with petitioners that the signature of only one petitioner in the verification and certification of non-forum shopping satisfies the requirement under Section 2, Rule 42 of the Revised Rules on Civil Procedure. In Calo, we relied on Condo Suite Club Travel, Inc., v. NLRCwhere we ruled that the certification of non-forum shopping may be signed not only by the petitioners but also any of the principal parties. In the instant case, Mr. Ramon P. Erenta, a member of the Investment Committee of the Heritage Park Management Corporation, is a principal party in the instant case having been impleaded in Civil Case No. 99-0425 pending in the RTC. More so, in Calo, we also cited Cavile, et al. v. Heirs of Clarita Cavile, et. al.where we held that there was substantial compliance with the Rules when only petitioner

Thomas George Cavile, Sr. signed in behalf of all the other petitioners of the certificate of non-forum shopping as the petitioners, being relatives and co-owners of the properties in dispute, shared a common interest in them, had a common defense in the complaint for partition, and filed the petition as a collective, raising only one argument to defend their rights over the properties in question. We reasoned that there was sufficient basis for Cavile, Sr., to speak for and in behalf of his copetitioners, stating that they had not filed any action or claim involving the same issues in another court or tribunal, nor was there other pending action or claim in another court or tribunal involving the same issues. In the same vein, this is also true in the instant case where petitioners have filed their petition as a collective, sharing a common interest and having a common single defense. Thus, the certificate against forum shopping is not rendered invalid by the absence of the signature of an authorized official of respondent CDPI. The signature of respondent Espina as one of the plaintiffs therein suffices. Furthermore, the allegation concerning the defect in the Certificate against Forum Shopping was raised for the first time on appeal. The Motion to Dismiss filed by petitioners was based only on the following grounds: I - That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or otherwise extinguished; II - That there is another cause of action pending between the parties for the same cause; III - That plaintiff Rene Espina has no legal capacity to sue.14 The grounds alleged by petitioners and ruled upon by the trial court are thus (1) extinguishment, (2) litis pendentia, and (3) lack of legal capacity to sue on the part of Rene Espina. Of these grounds, only litis pendentia is related to the present allegation of petitioners concerning the defect in the Certification against Forum Shopping. Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other. However, forum shopping as a ground for the dismissal of actions is distinct and separate from the failure to submit a proper Certificate against Forum Shopping. One need not be held liable for forum shopping for his complaint to be dismissed on the ground of an absence or a defect in the Certificate against Forum Shopping. Conversely, one can be liable for forum shopping regardless of the presence or absence of a Certification against Forum Shopping. The presence of a Certification in such a case would only have the effect of making the person committing forum shopping additionally liable for perjury. Thus, we held in Spouses Melo v. Court of Appeals15:

Indeed, compliance with the certification against forum shopping is separate from, and independent of, the avoidance of forum shopping itself. Thus, there is a difference in the treatment - in terms of imposable sanctions - between failure to comply with the certification requirement and violation of the prohibition against forum shopping. x x x. There being no allegation of a defect in the Certification against Forum Shopping on the part of respondents, neither the RTC nor the Court of Appeals was able to rule thereon. Both courts only ruled on the issue concerning litis pendentia, on which the Court of Appeals correctly held that: Litis pendentia is not present in this case vis--vis Civil Case No. 2309-L. The requisites of litis pendentia are: (a) identity of parties, or at least such parties who represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; (c) identity with respect to the two (2) preceding particulars in the two (2) cases is such that any judgment that may be rendered in the present case, regardless of which party is successful, would amount to res judicata in another case. The appellants herein are not parties in Civil Case No. 2309-L. There is no identity of rights asserted and reliefs prayed for. Civil Case No. 2309 is for recovery of ownership and possession; while the instant case is for injunction and damages. The judgment in one will not be a bar to the other case. These cases were conjoined only because of the incident in Civil Case No. 2309-L, i.e. the fixing of the attorneys fees and the subsequent execution on the subject properties which were, in the meantime, sold to and purchased by the appellants pursuant to an Agreement to Sell and to Buy. Appellees charge that appellants are guilty of forum shopping is without legal basis. It has been held that "where the elements of litis pendentia are not present or where final judgment in one will not amount to res judicata in the other, there is no forum shopping.16 Propriety of the Mode of Appeal Petitioners also claim that since only questions of law were raised in respondents appeal to the Court of Appeals, the proper remedy should have been a Petition for Review filed directly with this Court under Rule 45 of the Rules of Court. Petitioners cite the Assignment of Errors raised by respondents before the Court of Appeals in CA-G.R. CV No. 60721: ASSIGNMENT OF ERRORS I. The court a quo erred in dismissing the complaint on the ground of litis pendentia.

II. The court a quo erred in dismissing the complaint on the ground that the appellant Rene Espina has no legal capacity to sue. III. The court a quo should have issued a temporary restraining order, and after due hearing should have issued an injunction to enjoin appellee Sheriff Gato from erroneously levying on and selling at public auction the Subject Property to satisfy the Writ of Execution dated 14 October 1997 issued by the Trial Court in Civil Case No. 2309-L. Petitioners contend that since no evidence was presented by the parties in the lower court, the complaint having been dismissed on the timely motion by the petitioners, the appeal of the dismissal of the complaint required no determination by the appellate court of the probative value of the evidence presented by the parties. The Court of Appeals addressed this issue, thus: Appellees [Juaban and Espina] contend that since the assignment of errors raises only questions of law, the proper course of action is a Petition for Review direct to the Supreme Court in accordance with Rule 45, Revised Rules of Court. The appellees unduly limit themselves to the assignment of errors in the appeal and close their eyes to the glaring fact that, from the narration of facts above, certain acts taken by RTC Br. 27 before then Presiding Judge Risos, which are immoral, devious, and patently illegal, has constrained the Court to take a second look at the circumstances which gave rise to the instant appeal. As succinctly observed by the Court in its Resolution on appellants prayer for the issuance of a writ of preliminary injunction, However, inspite full knowledge that the appeal has been given due course and that therefore there is no more basis for further action on the execution sale, appellees Zosa and Juaban caused the consolidation of ownership and the issuance of new titles in their names. Said appellees are even aware that the redemption money for the properties in the sum of P10,962,347.20 has been deposited with this Court by the appellants. In fact, appellees when asked to comment on the deposit, manifested that they have no objection to the deposit although they disagreed that interest or the redemption price would stop running. "It is therefore without legal basis that notwithstanding those circumstances, the appellees, upon expiration of the temporary restraining order issued by this Court, immediately asked for the execution of a deed of sale in their favor since no redemption has been made and managed to obtain titles in their names. Such consolidation of ownership is patently erroneous as the decision granting them attorneys fees is not yet final and executory and is in fact the subject of appeal in this Court under CA-GR CV No. 61696."17

We have held in Microsoft Corporation v. Maxicorp, Inc.18 and Morales v. Skills International Company,19 that: The distinction between questions of law and questions of fact is settled. A question of law exists when the doubt or difference centers on what the law is on a certain state of facts. A question of fact exists if the doubt centers on the truth or falsity of the alleged facts. Though this delineation seems simple, determining the true nature and extent of the distinction is sometime problematic. For example, it is incorrect to presume that all cases where the facts are not in dispute automatically involve purely questions of law. There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The resolution of the issue must rest solely on what the law provides on a given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to each other, the issue in that query is factual. In the fairly recent case of First Bancorp Inc. v. Court of Appeals,20 we discussed the implications of the allegation by a party of the lack of jurisdiction of the Court of Appeals based on the ground that the appeal was based solely on questions of law: If the aggrieved party appeals by writ of error under Rule 41 of the Rules of Court to the CA and it turns out, from the brief of appellant, that only questions of law are raised, the appeal shall be dismissed: Sec. 2. Dismissal of improper appeal to the Court of Appeals. An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be dismissed. An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright. The nature of the issues to be raised on appeal can be gleaned from the appellants notice of appeal filed in the trial court and in his or her brief as appellant in the appellate court. The provision relied upon by respondent, Section 15, Rule 44 of the Rules of Court, reads:

Sec. 15. Questions that may be raised on appeal. Whether or not the appellant has filed a motion for new trial in the court below, he may include in his assignment of errors any question of law or fact that has been raised in the court below and which is within the issues framed by the parties. This rule, however, does not relate to the nature of the issues that may be raised on appeal by the aggrieved party, whether issues of fact or issues of law, or the mode of appeal of the aggrieved party from a final order or resolution of the trial court in the exercise of its original jurisdiction; it merely provides the nature of the issues appellant may include in his assignment of error incorporated in his Brief as appellant. It may happen that the appellant may have raised in the trial court errors of fact or law or both, and need not include all said issues in his appeal in the appellate court. The appellant has the right to choose which issues of law he or she may raise in the CA in addition to factual issues already raised. A question of fact exists when a doubt or difference arises as to the truth or falsity of alleged facts. If the query requires a reevaluation of the credibility of witnesses or the existence or relevance of surrounding circumstances and their relation to each other, the issue in that query is factual. On the other hand, there is a question of law when the doubt or difference arises as to what the law is on certain state of facts and which does not call for an existence of the probative value of the evidence presented by the parties-litigants. In a case involving a question of law, the resolution of the issue rests solely on what the law provides on the given set of circumstances.Ordinarily, the determination of whether an appeal involves only questions of law or both questions of law and fact is best left to the appellate court. All doubts as to the correctness of the conclusions of the appellate court will be resolved in favor of the CA unless it commits an error or commits a grave abuse of discretion. In case of doubt, therefore, the determination of the Court of Appeals of whether an appeal involves only questions of law or both questions of law and fact shall be affirmed. As explained by the Court of Appeals, it was only after the appellate courts painstaking review of the facts surrounding the dispute that the "immoral, devious and patently illegal" acts which attended the transfer of the subject properties to petitioners were brought to light. This Court finds no error or grave abuse of discretion on the part of the Court of Appeals in making the aforesaid finding. No less than this Court, in the second case, A.M. No. P-02-1580, found that Sheriff Gato "showed manifest partiality in favor of Attys. Juaban and Zosa, giving them unwarranted benefit, advantage and preference and that, with evident bad faith, he caused undue injury to complainants [Espina and CDPI]."21 Irrefragably, respondents appeal before the Court of Appeals involved not only questions of law, because for the determination thereof, the appellate court was first called upon to make its own findings of facts which were significant to its complete and judicious resolution of the appeal.

Taking Cognizance of Records in Another Case Petitioners claim that the Court of Appeals, in resolving CA-G.R. CV No. 60721, the appeal of the dismissal of Civil Case No. 4178-L by Lapu-Lapu City RTC, Branch 54, erred in taking cognizance of the records in another case as basis for its findings of facts. According to petitioners, the Court of Appeals based its findings of facts on the records of the first case, Civil Case No. 2309-L, pending before another Branch (Branch 27) of the RTC of Lapu-Lapu City. In Bongato v. Malvar,22 we held: Second, as a general rule, courts do not take judicial notice of the evidence presented in other proceedings, even if these have been tried or are pending in the same court or before the same judge. There are exceptions to this rule. Ordinarily, an appellate court cannot refer to the record in another case to ascertain a fact not shown in the record of the case before it, yet, it has been held that it may consult decisions in other proceedings, in order to look for the law that is determinative of or applicable to the case under review. In some instances, courts have also taken judicial notice of proceedings in other cases that are closely connected to the matter in controversy. These cases "may be so closely interwoven, or so clearly interdependent, as to invoke" a rule of judicial notice. We find that the circumstances in Case No. 1 (Civil Case No. 2309-L) are too closely interwoven and so clearly interdependent with those in Case No. 3 (Civil Case No. 4178-L). Petitioners and respondents are claiming the very same subject properties. Case No. 3, the case at bar, calls for a determination of who has the superior right to the subject properties, petitioners or respondents. Petitioners are the ones who actually rely on Case No. 1 because their right to the subject properties is rooted in the proceedings therein. It should be recalled that they served as the counsels of the Heirs of Bacale in Case No. 1; they had the subject properties sold at a public auction to satisfy the award in their favor of attorneys fees; and they were the successful bidders at the auction. Petitioners cannot insist on their right to the subject properties, yet prevent the Court of Appeals from looking into the basis or source of said right, as well as the circumstances surrounding their acquisition of the same. They cannot invoke orders, rulings or findings of the trial court in Case No. 1 which are supportive of their right to the subject properties but suppress those which are damaging. Even assuming for the sake of argument that the proceedings in Case No. 1 cannot be stated in our narration of facts on the ground that said proceedings have not yet been terminated, there is certainly nothing that prevents us from consulting Case No. 2 (A.M. No. P-02-1580) wherein Sheriff Gato was suspended by this Court for acting with "grave abuse of official functions and manifest partiality amounting to grave misconduct and conduct prejudicial to the administration of justice" in selling to

petitioners the subject properties at a public auction despite respondents third-party claim. It bears to emphasize that Case No. 2 has already been decided with finality by this Court.1avvphi1 Lack of Prayer for the Issuance of a Permanent Injunction Petitioners argue that the respondents did not make any allegation in their Complaint that they were the owners of the disputed properties and there was no prayer in their Complaint for the issuance of a permanent injunction against petitioners prohibiting them from exercising acts of ownership. An inspection of respondents Complaint, however, reveals that petitioners actually alleged ownership of the property in dispute: The defendants are doing, threatening, and/or attempting to conduct the said public auction sale which is in violation of the rights of the plaintiffs, as the property sought to be sold now belong to the plaintiffs, and not of Concordia Bancale et. al., and this tends to render whatever favorable judgment the Honorable Court may grant to the plaintiffs ineffectual.23 As regards the alleged lack of prayer for the court to issue a permanent injunction prohibiting petitioners from exercising acts of ownership, it is necessary to examine the actual Prayer made by the respondents in their Complaint, which reads: WHEREFORE, plaintiffs most respectfully pray this Honorable Court, that upon filing of this complaint, a temporary restraining order be issued enjoining defendants from proceeding with the auction sale, or at whatever stage it is, of Lot 6720-C-2 of the subdivision plan Psd-07-05-012144, containing an area of 13,677 sq. meters and covered by Transfer Certificate of Title No. 36425 and Lot No. 6720-B-2 of the same subdivision plan, containing an area of 4,560 sq. meters and covered by Transfer Certificate of Title No. 36426, all located at Lapulapu City, and upon notice to all the concerned, to issue the writ of preliminary injunction for the same purpose; After trial on the merits to make the injunction permanent, and to order the defendants, jointly and severally: 1. To reimburse the plaintiffs, jointly and severally the sum of P35,000,000.00 representing the purchase price of the properties, subject matter of this case, which were already paid by the plaintiffs to the Bancales; 2. To pay the plaintiffs the sum of P5,000,000.00 for moral damages;

3. To reimburse plaintiffs the sum of P20,000.00 for attorneys fees, plus the sum of P2,000.00 per court appearance, and the sum of P20,000.00 for litigation expenses; Plaintiffs further pray for such orders as may be just, appropriate and equitable under the premises.24 We hold that the issuance by the Court of Appeals of a permanent injunction prohibiting petitioners from exercising acts of ownership is included in respondents prayer for such orders as may be just and equitable under the circumstances. Such a prayer in the complaint justifies the grant of a relief not otherwise specifically prayed for.25More importantly, we have ruled that it is the allegations in the pleading which determine the nature of the action and the Court shall grant relief warranted by the allegations and proof even if no such relief is prayed for.26 It is the material allegations of the fact in the complaint, not the legal conclusions made in the prayer, that determine the relief to which the plaintiff is entitled.27 If respondents were seeking to enjoin the sale of the subject properties, in effect, to prevent the transfer of ownership of the subject properties to others, then such prayer must be deemed to logically and reasonably include the prayer to enjoin others from exercising rights of ownership over the subject properties, for if the ownership of the subject properties are not transferred to any one else, then no one else has the right to exercise the rights appurtenant thereto. WHEREFORE, the Petition is DENIED. The Decision dated 31 January 2005 of the Court of Appeals in CA-G.R. CV No. 60721 is AFFIRMED. Costs against petitioners. SO ORDERED.

G.R. No. 163707

September 15, 2006

MICHAEL C. GUY, petitioner, vs. HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge, RTC, Branch 138, Makati City and minors, KAREN DANES WEI and KAMILLE DANES WEI, represented by their mother, REMEDIOS OANES, respondents. DECISION YNARES-SANTIAGO, J.: This petition for review on certiorari assails the January 22, 2004 Decision1 of the Court of Appeals in CA-G.R. SP No. 79742, which affirmed the Orders dated July 21, 20002 and July 17, 20033 of the Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No. 4549 denying petitioner's motion to dismiss; and its May 25, 2004 Resolution4 denying petitioner's motion for reconsideration. The facts are as follows: On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes Wei, represented by their mother Remedios Oanes (Remedios), filed a petition for letters of administration5 before the Regional Trial Court of Makati City, Branch 138. The case was docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei (a.k.a. Rufino Guy Susim). Private respondents alleged that they are the duly acknowledged illegitimate children of Sima Wei, who died intestate in Makati City on October 29, 1992, leaving an estate valued at P10,000,000.00 consisting of real and personal properties. His known heirs are his surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina, George and Michael, all surnamed Guy. Private respondents prayed for the appointment of a regular administrator for the orderly settlement of Sima Wei's estate. They likewise prayed that, in the meantime, petitioner Michael C. Guy, son of the decedent, be appointed as Special Administrator of the estate. Attached to private respondents' petition was a Certification Against Forum Shopping6 signed by their counsel, Atty. Sedfrey A. Ordoez. In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He asserted that his deceased father left no debts and that his estate can be settled without securing letters of administration pursuant to Section 1, Rule 74 of the Rules of Court. He further argued that private respondents should have established their status as illegitimate children during the lifetime of Sima Wei pursuant to Article 175 of the Family Code.

The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on the ground that the certification against forum shopping should have been signed by private respondents and not their counsel. They contended that Remedios should have executed the certification on behalf of her minor daughters as mandated by Section 5, Rule 7 of the Rules of Court. In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss,9 petitioner and his co-heirs alleged that private respondents' claim had been paid, waived, abandoned or otherwise extinguished by reason of Remedios' June 7, 1993 Release and Waiver of Claim stating that in exchange for the financial and educational assistance received from petitioner, Remedios and her minor children discharge the estate of Sima Wei from any and all liabilities. The Regional Trial Court denied the Joint Motion to Dismiss as well as the Supplemental Motion to Dismiss. It ruled that while the Release and Waiver of Claim was signed by Remedios, it had not been established that she was the duly constituted guardian of her minor daughters. Thus, no renunciation of right occurred. Applying a liberal application of the rules, the trial court also rejected petitioner's objections on the certification against forum shopping. Petitioner moved for reconsideration but was denied. He filed a petition for certiorari before the Court of Appeals which affirmed the orders of the Regional Trial Court in its assailed Decision dated January 22, 2004, the dispositive portion of which states: WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit. Consequently, the assailed Orders dated July 21, 2000 and July 17, 2003 are hereby both AFFIRMED. Respondent Judge is hereby DIRECTED to resolve the controversy over the illegitimate filiation of the private respondents (sic) minors [-] Karen Oanes Wei and Kamille Oanes Wei who are claiming successional rights in the intestate estate of the deceased Sima Wei, a.k.a. Rufino Guy Susim. SO ORDERED.10 The Court of Appeals denied petitioner's motion for reconsideration, hence, this petition. Petitioner argues that the Court of Appeals disregarded existing rules on certification against forum shopping; that the Release and Waiver of Claim executed by Remedios released and discharged the Guy family and the estate of Sima Wei from any claims or liabilities; and that private respondents do not have the legal personality to institute the petition for letters of administration as they failed to prove their filiation during the lifetime of Sima Wei in accordance with Article 175 of the Family Code.

Private respondents contend that their counsel's certification can be considered substantial compliance with the rules on certification of non-forum shopping, and that the petition raises no new issues to warrant the reversal of the decisions of the Regional Trial Court and the Court of Appeals. The issues for resolution are: 1) whether private respondents' petition should be dismissed for failure to comply with the rules on certification of non-forum shopping; 2) whether the Release and Waiver of Claim precludes private respondents from claiming their successional rights; and 3) whether private respondents are barred by prescription from proving their filiation. The petition lacks merit. Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum shopping should be executed by the plaintiff or the principal party. Failure to comply with the requirement shall be cause for dismissal of the case. However, a liberal application of the rules is proper where the higher interest of justice would be served. InSy Chin v. Court of Appeals,11 we ruled that while a petition may have been flawed where the certificate of non-forum shopping was signed only by counsel and not by the party, this procedural lapse may be overlooked in the interest of substantial justice.12 So it is in the present controversy where the merits13 of the case and the absence of an intention to violate the rules with impunity should be considered as compelling reasons to temper the strict application of the rules. As regards Remedios' Release and Waiver of Claim, the same does not bar private respondents from claiming successional rights. To be valid and effective, a waiver must be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. A waiver may not be attributed to a person when its terms do not explicitly and clearly evince an intent to abandon a right.14 In this case, we find that there was no waiver of hereditary rights. The Release and Waiver of Claim does not state with clarity the purpose of its execution. It merely states that Remedios received P300,000.00 and an educational plan for her minor daughters "by way of financial assistance and in full settlement of any and all claims of whatsoever nature and kind x x x against the estate of the late Rufino Guy Susim."15 Considering that the document did not specifically mention private respondents' hereditary share in the estate of Sima Wei, it cannot be construed as a waiver of successional rights. Moreover, even assuming that Remedios truly waived the hereditary rights of private respondents, such waiver will not bar the latter's claim. Article 1044 of the Civil Code, provides:

ART. 1044. Any person having the free disposal of his property may accept or repudiate an inheritance. Any inheritance left to minors or incapacitated persons may be accepted by their parents or guardians. Parents or guardians may repudiate the inheritance left to their wards only by judicial authorization. The right to accept an inheritance left to the poor shall belong to the persons designated by the testator to determine the beneficiaries and distribute the property, or in their default, to those mentioned in Article 1030. (Emphasis supplied) Parents and guardians may not therefore repudiate the inheritance of their wards without judicial approval. This is because repudiation amounts to an alienation of property16 which must pass the court's scrutiny in order to protect the interest of the ward. Not having been judicially authorized, the Release and Waiver of Claim in the instant case is void and will not bar private respondents from asserting their rights as heirs of the deceased. Furthermore, it must be emphasized that waiver is the intentional relinquishment of a known right. Where one lacks knowledge of a right, there is no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be established by a consent given under a mistake or misapprehension of fact.17 In the present case, private respondents could not have possibly waived their successional rights because they are yet to prove their status as acknowledged illegitimate children of the deceased. Petitioner himself has consistently denied that private respondents are his co-heirs. It would thus be inconsistent to rule that they waived their hereditary rights when petitioner claims that they do not have such right. Hence, petitioner's invocation of waiver on the part of private respondents must fail. Anent the issue on private respondents' filiation, we agree with the Court of Appeals that a ruling on the same would be premature considering that private respondents have yet to present evidence. Before the Family Code took effect, the governing law on actions for recognition of illegitimate children was Article 285 of the Civil Code, to wit: ART. 285. The action for the recognition of natural children may be brought only during the lifetime of the presumed parents, except in the following cases:

(1) If the father or mother died during the minority of the child, in which case the latter may file the action before the expiration of four years from the attainment of his majority; (2) If after the death of the father or of the mother a document should appear of which nothing had been heard and in which either or both parents recognize the child. In this case, the action must be commenced within four years from the finding of the document. (Emphasis supplied) We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the time the Family Code took effect and whose putative parent died during their minority are given the right to seek recognition for a period of up to four years from attaining majority age. This vested right was not impaired or taken away by the passage of the Family Code.19 On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded Article 285 of the Civil Code, provide: ART. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or (2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime and shall be transmitted to the heirs should the child die during minority or in a state of insanity. In these cases, the heirs shall have a period of five years within which to institute the action. The action already commenced by the child shall survive notwithstanding the death of either or both of the parties.

ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same, evidence as legitimate children. The action must be brought within the same period specified in Article 173, except when the action is based on the second paragraph of Article 172, in which case the action may be brought during the lifetime of the alleged parent. Under the Family Code, when filiation of an illegitimate child is established by a record of birth appearing in the civil register or a final judgment, or an admission of filiation in a public document or a private handwritten instrument signed by the parent concerned, the action for recognition may be brought by the child during his or her lifetime. However, if the action is based upon open and continuous possession of the status of an illegitimate child, or any other means allowed by the rules or special laws, it may only be brought during the lifetime of the alleged parent. It is clear therefore that the resolution of the issue of prescription depends on the type of evidence to be adduced by private respondents in proving their filiation. However, it would be impossible to determine the same in this case as there has been no reception of evidence yet. This Court is not a trier of facts. Such matters may be resolved only by the Regional Trial Court after a full-blown trial. While the original action filed by private respondents was a petition for letters of administration, the trial court is not precluded from receiving evidence on private respondents' filiation. Its jurisdiction extends to matters incidental and collateral to the exercise of its recognized powers in handling the settlement of the estate, including the determination of the status of each heir.20 That the two causes of action, one to compel recognition and the other to claim inheritance, may be joined in one complaint is not new in our jurisprudence.21 As held in Briz v. Briz:22 The question whether a person in the position of the present plaintiff can in any event maintain a complex action to compel recognition as a natural child and at the same time to obtain ulterior relief in the character of heir, is one which in the opinion of this court must be answered in the affirmative, provided always that the conditions justifying the joinder of the two distinct causes of action are present in the particular case. In other words, there is no absolute necessity requiring that the action to compel acknowledgment should have been instituted and prosecuted to a successful conclusion prior to the action in which that same plaintiff seeks additional relief in the character of heir. Certainly, there is nothing so peculiar to the action to compel acknowledgment as to require that a rule should be here applied different from that generally applicable in other cases. x x x

The conclusion above stated, though not heretofore explicitly formulated by this court, is undoubtedly to some extent supported by our prior decisions. Thus, we have held in numerous cases, and the doctrine must be considered well settled, that a natural child having a right to compel acknowledgment, but who has not been in fact acknowledged, may maintain partition proceedings for the division of the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs. Tiamson, 32 Phil., 62); and the same person may intervene in proceedings for the distribution of the estate of his deceased natural father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil., 855). In neither of these situations has it been thought necessary for the plaintiff to show a prior decree compelling acknowledgment. The obvious reason is that in partition suits and distribution proceedings the other persons who might take by inheritance are before the court; and the declaration of heirship is appropriate to such proceedings. WHEREFORE, the instant petition is DENIED. The Decision dated January 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79742 affirming the denial of petitioner's motion to dismiss; and its Resolution dated May 25, 2004 denying petitioner's motion for reconsideration, are AFFIRMED. Let the records be REMANDED to the Regional Trial Court of Makati City, Branch 138 for further proceedings. SO ORDERED.

G.R. No. 128099

December 20, 2006

FELIX CAMITAN, FRANCISCO CAMITAN, SEVERO CAMITAN and VICTORIA CAMITAN, petitioners, vs. THE HONORABLE COURT OF APPEALS and THE FIDELITY INVESTMENT CORPORATION, respondents

DECISION

TINGA, J.: On 13 December 1967, the spouses Mateo Camitan and Lorenza Alcazar (spouses Camitan) sold to Fidelity Investment Corporation (respondent) a parcel of land covered by Transfer Certificate of Title (TCT) No. T-(11982)T-3188 located in Barangay Maunong, Calamba, Laguna. Upon the execution of the Deed of Absolute Sale, the spouses Camitan delivered to respondent corporation (respondent) the owners duplicate certificate of title (Owners Copy). From then on, respondent has been paying the real estate taxes due on the property and has remained in actual physical possession thereof.1 On 29 December 1993, after the death of the spouses Camitan, without the knowledge of respondent, the heirs of the spouses-petitioners herein - filed a petition for the issuance of a new Owners Copy,2 However, it appears that respondent was not given notice of such proceedings. The trial court issued an order of general default.3 After anex parte presentation of evidence by the petitioners, the trial court granted the petition and directed the Register of Deeds of Laguna to issue a new Owners Copy, while at the same time declaring void the first Owners Copy, per its Order dated 08 March 1995.4 When respondent learned of the petition and order for the first time in March 1995, it caused the annotation of a notice of sale on the title of the property. Thereafter, on 26 April 1995, it filed a Notice of Adverse Claim with the Register of Deeds of Calamba, Laguna.5 In a Petition6 for annulment of judgment and cancellation of title before the Court of Appeals, respondent argued that the Order dated 08 March 1995 is null and void, having been issued by the trial court without jurisdiction since the Owners Copy of

TCT No. T-(11982)T-3188 exists and has been in its possession, and not lost as petitioners alleged. Moreover, it claimed that petitioners have no standing to file the petition, not being the registered owners of the property, nor persons in interest, since all the rights and interest of the spouses Camitan had already been transferred to respondent upon the sale of the property. Respondent further accused petitioners of perjury; intentionally suppressing from the trial court the fact that they were not in possession of the property; and not serving notice on respondent despite knowledge that it was in actual possession of the property.7 The Court of Appeals granted the petition and ordered the annulment of the impugned Order.8 It found that the Owners Copy is in the possession of respondent since 1967. Thus, petitioners do not own the property, nor do they have any interest thereon that could have been the subject of succession. Moreover, the Court of Appeals found that petitioners committed perjury in executing their Joint Affidavit of Loss in support of their petition before the trial court as they made it appear that the Owners Copy was still in the possession of the spouses Camitan, when in fact, as early as 1967, the same had already been given to respondent. Finally, citing Demetriou v. Court of Appeals9 the Court of Appeals concluded that the trial court could not have acquired jurisdiction over the petition because the Owners Copy was never lost in the first place.10 Petitioners sought reconsideration of the Resolution, but the motion was denied for lack of merit.11 Petitioners now claim that they have no knowledge of the purported sale and that they were not aware of any claim whatsoever over the property in question for over twentyseven-(27) years, stressing that property is still registered, declared for taxation, and realty taxes paid thereon in the name of the spouses Camitan.12 They argue that the Court of Appeals erred in finding that the Owners Copy was not lost but was in fact in the possession of respondent since there was no documentary proof to support such conclusion. According to petitioners, respondent was not able to present even a photocopy of the Owners Copy to prove its possession thereof since 1967 and thus the Court of Appeals did not acquire jurisdiction over the petition for annulment.13 Petitioners add that respondent is guilty of estoppel and laches in asserting its alleged rights over the property. The unexplained concealment for a long time of its possession of the purported deed of absolute sale and Owners Copy, and its nonregistration of the deed in its name run counter to the natural course of things and are devoid of credence.14 Lastly, petitioners allege that the property in question could be a portion of the land surrendered to the Presidential Commission on Good Government (PCGG) as part of the ill-gotten wealth of former President Ferdinand Marcos, and that the sole purpose

of respondents concealment of the deed of absolute sale is to prevent sequestration thereof.15 On the other hand, respondent argues that its non-registration of title does not affect its ownership of the property because by the execution of the deed of absolute sale, the spouses Camitan had effectively divested themselves of all the rights, title and interest over the property. Moreover, save for their bare allegations, petitioners have not been able to rebut the presumptive authenticity of the deed of absolute sale. Lastly, respondent posits that there is no basis for the allegation that the property in question is part of the former Presidents ill-gotten wealth.16 Anent the claim that it failed to attach even a photocopy of the Owners Copy, respondent claims that there is no rule which requires that the such document should be included in a petition for annulment of judgment. Besides, petitioners never disputed respondents possession of the title, but in fact merely categorized such possession as one in bad faith. More importantly, the argument that respondents should have attached the Owners Copy of the title was raised for the first time in petitioners motion for reconsideration of this Courts resolution dated 18 June 1997 dismissing the instant petition.17 Finally, respondent maintains that petitioners are estopped from questioning the jurisdiction of the Court of Appeals since they actively participated in the proceedings therein.18 In a nutshell, the petition presents a very simple question: Whether the Court of Appeals erred when it ordered the annulment of the 08 March 1995 Order of the trial court which directed the Register of Deeds to issue a second Owners Copy of the title. The Court of Appeals did not. The petition must be denied. Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy.19 An action for annulment of judgment is grounded only on two justifications: (1) extrinsic fraud; and (2) lack of jurisdiction or denial of due process. The purpose of such action is to have the final and executory judgment set aside so that there will be a renewal of litigation.20 The annulment of the Order dated 08 March 1995 was premised on the lack of jurisdiction of the trial court, apparently brought about by the fact that, as found by the Court of Appeals, the duplicate certificate of the title was not lost nor destroyed, but has remained in the possession of respondent which purchased the real property from the spouses Camitan in 1967. The Court finds no reason to disturb the finding of the appellate court.

The petition for issuance of the new Owners Copy before the trial court was filed pursuant to Presidential Decree No. 1529, otherwise known as the "Property Registration Decree," Section No. 109 of which provides: SEC. 109. Notice and replacement of lost duplicate certificate.In case of loss or theft of an owners duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered. Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall thereafter be regarded as such for all purposes of this decree. Thus, before a duplicate certificate of title can be replaced, the petitioner under the foregoing provision must establish that the duplicate certificate was lost or destroyed. This Court has consistently held that a trial court does not acquire jurisdiction over a petition for the issuance of a new owners duplicate certificate of title, if the original is in fact not lost but is in the possession of an alleged buyer.21 In other words, the fact of loss of the duplicate certificate is jurisdictional. Petitioners question the Court of Appeals Resolution, claiming that respondent failed to attach to its petition for annulment of judgment of the Owners Copy itself, or even a photocopy thereof. Thus, they argue there was no proof that respondent has been in possession of the duplicate certificate. That being the situation, the trial court validly acquired jurisdiction over their petition for issuance of a new Owners Copy, petitioners conclude. Respondent, so it appears, did not attach to its petition for annulment of judgment the Owners Copy of the title. This lapse, however, does not suffice as basis to set aside the questioned resolutions of the Court of Appeals. A review of the records of the case shows that petitioners never questioned respondents possession of the Owners Copy, its actual and physical possession and occupation of the property, as well as its payment of real estate taxes due on the property.

In its petition for annulment before the Court of Appeals, respondent alleged that: 4. On December 13, 1967, the spouses Camitan sold the Property to petitioner, as documented by a "Deed of Absolute Sale" dated 13 December 1967, a copy of which is attached hereto as annex "C". Pursuant to the said Deed of Absolute Sale, petitioner paid the purchase price in full. 5. Upon the execution of the Deed of Absolute Sale, the vendors delivered to petitioner the owners duplicate copy of the Title, which Title has since been in the possession of petitioner. Also, since 1967 and to this day, petitioner has been in actual physical possession and continuous occupation of the above-described Property. Moreover, petitioner has been the one paying the real estate taxes due on the Property.22 While for its part, respondent treated the allegations perfunctorily in this wise in its Comment: SPECIFIC DENIALS xxxx 2. Private respondents deny specifically paragraphs 4 and 5 of the said petition for lack of knowledge and information sufficient to form a belief as to the truth of falsity of the allegations contained therein and as heretofore substantiated.23 The relevant provisions of the Rules of Court are Sections 10 and 11, Rule 8, which read: SEC. 10. Specific denial. A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is true and material and shall deny only the remainder. Where a defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state, and this shall have the effect of a denial. (Emphasis supplied) SEC.11. Allegation not specifically denied deemed admitted. Material averment in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. Allegations of usury in a complaint to recover usurious interest are deemed admitted if not denied under oath. (Emphasis supplied)

Although petitioners put their unmistakably sparse denial of respondents allegations relative to the execution of the deed of sale in its favor and its possession of the Owners Copy under the heading "SPECIFIC DENIALS" and anteceding it with the adverb "specifically, the same cannot function as an operative denial within the purview of the Rules. A denial is not specific simply because it is so qualified by the defendant. A general denial does not become specific by the use of the word "specifically." When the matters of whether the defendant alleges having no knowledge or information sufficient to form a belief, are plainly and necessarily within the defendants knowledge, his alleged ignorance or lack of information will not be considered as a specific denial.24 In one case, it was held that when a respondent makes a "specific denial" of a material allegation of the petition without setting forth the substance of the matters relied upon to support its general denial, when such matters were plainly within its knowledge and the defendant could not logically pretend ignorance as to the same, said defendant fails to properly tender an issue.25 Petitioners "specific denial" in this case is ineffective and amounts to an admission pursuant to Rule 8, Sec. 11 of the Rules of Court. Petitioners make an issue of the lack of material evidence to support the Court of Appeals conclusion that the Owners Copy was not lost, because respondent failed to attach the said Owners Copy or even a photocopy thereof. The argument is unavailing. Firstly, there is no need of proof because of petitioners implied admission thereof. Secondly, the matter should have been raised in the proceedings before the Court of Appeals and not before this Court. Despite various opportunities, petitioners failed to do so before the Court of Appeals. In fact, it was only in petitioners Motion for Reconsideration of our Resolution dated 18 June 1997 dismissing their petition26 that they claimed that the Court of Appeals committed "grave error tantamount to lack of jurisdiction thereof when it declared annulled the contested Order x x x x for lack of material evidence to support that the said title was lost."27 We have consistently held that matters, theories or arguments not brought out in the original proceedings cannot be considered on review or appeal where they are raised for the first time.28 Finally, having actively participated in the proceedings before the Court of Appeals, petitioners can no longer question its authority.29 Everything considered, the Court of Appeals was satisfied that the Owners Copy of the TCT No. (T-11982) T-3188 is not lost, but rather, as admitted by petitioners, it has

been in the possession of another person. We find no reason to disturb the said finding. Petitioners other claims, to wit: (i) respondent is guilty of estoppel and laches in asserting its rights over the property; (ii) respondent is guilty of fraud and bad faith when it concealed the possession of the deed of absolute sale of the property and the Owners Copy, and when it failed to register and have the title of the property transferred to its name; and (iii) the property in question could be a part of ill-gotten wealth surrendered to the PCGG, are immaterial and irrelevant to the case. Thus, there is no need to dwell on them. The instant petition merely questions the propriety of the annulment order on the ground of the trial courts lack of jurisdiction. Any other issues, such as the ownership of the property, or the motives for the non-registration of the sale or the non-transfer of the title are beyond the ambit of the petition. Besides, the determination of said issues necessitates a factual inquiry which this Court does not perform in a petition for review.30 WHEREFORE, the petition is DENIED and the challenged resolution of the Court of Appeals is AFFIRMED, with costs against petitioners. SO ORDERED.

May 14, 1958 G.R. No. L-9531 WARNER BARNES and CO., LTD., plaintiff-appellee, vs. GUILLERMO C. REYES, ET AL., defendants-appellants.

Ozaeta, Lichauco and Picazo for appellee. Mariano M. de Joya for appellants. Paras (Edgardo), J.:
The plaintiff-appellee filed against the defendants-appellants an action for foreclosure of mortgage on August 20, 1954. The deed of mortgage sued upon was attached to the complaint as Annex "A". After having been granted an extension, the appellants filed an answer on September 30, 1954, alleging: 1. That they admit paragraph 1 of the complaint; 2. That the defendants are without knowledge or information sufficient to form a belief as to the truth of the material averments of the remainder of the complaint; and 3. That they hereby reserve the right to present an amended answer with special defenses and counterclaim. As the appellants did not file any amended answer, the appellee moved on November 15, 1954 for judgment on the pleadings on the ground that the answer failed to tender an issue. The lower court granted appellee's motion in the order dated December 28, 1954 and thereafter (on December 29, 1954) rendered judgment in favor of the appellee. In granting the motion for judgment on the pleadings, the lower court held "that the denial by the defendants of the material allegations of the complaint under the guise of lack of knowledge is a general denial so as to entitle the plaintiff to judgment on the pleadings." In the present appeal taken by the defendants, the question raised is whether the allegation of want of knowledge or information as to the truth of the material averments of the complaint amounts to a mere general denial warranting judgment on the pleadings or is sufficient to tender a triable issue.

Section 7 of Rule 9 of the Rules of court, in allowing the defendant to controvert material averments not within his knowledge or information, provides that "where the defendant is without knowledge or information sufficient to form a belief as to the truth of material averment, he shall so state and this shall have the effect of a denial. This form of denial was explained in one case as follows: Just as the explicit denials of an answer should be either general or specific, so all denials of knowledge or information sufficient to form a belief should refer either generally to all the averments of the complain" thus intended to be denied, or specifically to such as are to be denied by that particular form of plea. The would be so definite and certain in its allegation that the pleaders' adversary should not be left in doubt as to what is admitted, what is denied, and what is covered by denials of knowledge or information sufficient to form a belief. Under this form of denial employed by the defendant, it would be difficult, if not impossible to convict him of perjury if it should transpire that some of his denials of knowledge, etc., were false, for he could meet the charge by saying that his denials referred only to matters of which he had in fact no knowledge or information. (Kirachbaum Eschmann, 98 NE 328, 329330.). This is a foreclosure suit. It is alleged that the severally indebted in the sum of P9,906.88, secured by a mortgage. A copy of the mortgaged deed was attached and made a part of the complaint. There are also allegations of partial payments, defaults in the payment of outstanding balance, and a covenant to pay interest and attorney's fees. It is hard to believe that the appellants could not have had knowledge or information as to the truth or falsity of any of said allegations. As a copy of the deed of mortgage formed part of the complaint, it was easy for and within the power of the appellants, for instance, to determine and so specifically allege in their answer whether or not they had executed the alleged mortgage. The appellants could be aided in the matter by an inquiry or verification as to its registration in the Registry of Deeds. "An unexplained denial of information and belief of a matter of records, the means of information concerning which are within the control of the pleader, on are readily accessible to him, is evasive and is insufficient to constitute an effective denial. (41 Am. Juris., 399, citing Dahlstrom vs. Gemunder, 92, NE 106.)

It is noteworthy that the answer was filed after an extension granted by the lower court, and that while a reservation was made to file an amended answer, no such pleading was presented. If these show anything, it is that the appellants obviously did not have any defense or wanted to delay the proceedings. The form of denial adopted by the appellants, although allowed by the Rules of Court, must be availed of with sincerity and in good faith,-certainly neither for the purpose of confusing the adverse party as to what allegations of the complaint are really put in issue nor for, the purpose of delay. . . . no court will permit its process to be trifled with and its intelligence affronted by the offer of pleadings which any reasoning person knows can not possibly be true. . . ."The general rule that the Court is not bound to accept statements in pleadings which are, to the common knowledge of all intelligent persons, untrue, applies just as well to the provisions of Rule 8(b), 28 U.S.C.A. following section 723c, as to pleadings under the, State statute." (Nieman vs. Long, 51 F. Supp. 30, 31.) This rule, specifically authorizing an answer that defendant has no knowledge or information sufficient to form a belief his to the truth of an averment and giving such answer is not the effect of a denial, does not apply where the fact as to which want of knowledge is asserted is to the knowledge of the court as plainly and necessarily within the defendants knowledge that his averment of ignorance must be palpably untrue. (Icle Plant Equipment Co. vs. Martocello, D.C. Pa. 1941, 43 F. Supp. 281.) Wherefore, the decision appealed from is hereby affirmed with costs against the appellants. So ordered.

G.R. No. L-37309 March 30, 1982 RAMON AGTON, petitioner, vs. COURT OF APPEALS and SANTIAGO ANGAYAO, respondents. FERNANDEZ, J.:p This is a petition for certiorari to review and set aside the decision of the Court of Appeals in CA-G.R. No. 42635-R entitled "Santiago Angayao, plaintiff-appellee versus Ramon Agton, defendant-appellant", 1 which affirmed the decision of the Court of First Instance of Davao in Civil Case No. 5977 entitled "Santiago Angayao, Plaintiff-Appellee versus Ramon Agton, Defendant-Appellant", the dispositive part of which reads: WHEREFORE, judgment is hereby rendered directing the defendant to deliver to the plaintiff three hectares of the land covered by Transfer Certificate of Title No. T-2528 of the Register of Deeds of Davao and to pay him P2,500.00 as attorney's fees, with costs. SO ORDERED. Given in Davao City, this 2nd day of August, 1968. (SGD VICENTE N. CUSI, JR. J u d g e
2

On April 5, 1968 Santiago Angayao filed a complaint for recovery of real property and damages against Ramon Agton in the Court of First Instance of Davao, Branch I, docketed as Civil Case No. 5977. 3 The land sought to be recovered is a portion containing three (3) hectares being a portion of Lot 184 of the cadastral survey of Davao, located in Toril, City of Davao. 4 The trial court rendered judgment ordering the defendant to deliver to the plaintiff the land sought to be recovered. The defendant appealed to the Court of Appeals which affirmed the decision of the trial court. The antecedent facts, as found by the Court of Appeals, are: It appears that previous to the filing of this suit, a civil case was filed for and in behalf of the herein plaintiff-appellee (while he was then a minor) on or about Oct. 10, 1951, with the Court of First Instance of Davao for the recovery of possession of real property with damages against the herein defendant-appellant Ramon Agton and several others. The case involved a parcel of land known as Lot No. 786, Cadastral 102 of Davao City, situated in Baliok Davao City, and was docketed as Civil Case No. 726. An amicable

settlement was entered into, among the terms of which appellant obligated himself to deliver to the appellee a parcel of land, more particularly described in paragraph 3 of the said amicable settlement, reflected in paragraph 5 of the complaint in the instant case as follows: That plaintiff hereby accepts three (3) hectares portion of the land in question as a settlement in full of his claim against the Defendant, and in consideration thereof hereby agrees to the complete termination of this case. Judgment was rendered in accordance with this amicable settlement, and immediately thereafter, the defendant therein (appellant herein), pointed out to a parcel of land situated in Toril, Davao, more particularly described in paragraph 8 of the instant complaint as follows: A parcel of land (Lot 184-A of the subdivision plan Psd-28181 being a portion of Lot 184 of the cadastral survey of Davao, G.L.R.O. Cad. Record No. 318), situated in the City of Davao. Bounded on the NE. by Lot 180 of Davao Cad. and Lot 184-B of the subdivision plan; on the SW by Provincial Road and on the NW. by Lot 182 of Davao; ...; containing an area of Seventeen Thousand Eight Hundred Eleven Square meters (I 7,81 1) more or less. as the parcel of land subject of the said amicable settlement. The herein plaintiff made demands for the delivery of the said parcel of land situated in Toril but the defendant herein promised to deliver the said parcel of land to the appellee when the latter attains the age of majority. On the occasion, the appellant, in fact, invited the appellee to the premises of the land in question in order to be present in the survey thereof for the segregation of that portion which was to be given to him. After said survey, defendant told plaintiff to wait for a little while as the delivery of the land would be made after the approval of the said survey. The defendantappellant continued making such promises in fraud of the appellee, taking undue advantage of the latter's minority and ignorance, the appellee being an unlettered Bagobo Inspite of repeated demands, no delivery of the said parcel of land was made, thus prompting the appellee to file this case before the Court a quo. 5 As stated by the Court of Appeals, the main issue is whether the land promised to be delivered by Ramon Agton to Santiago Angayao is the parcel of land described in paragraphs 5 and 6 of the complaint or a parcel of land described in paragraph 8 thereof. 6

The petitioner, Ramon Agton, assigned the following errors allegedly committed by the Court of Appeals: I RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER HAS NOT SPECIFICALLY DENIED THE MATERIAL ALLEGATIONS OF FACTS CONSTITUTING RESPONDENT ANGAYAO'S CAUSE OF ACTION IN THE PRESENT CASE. II RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE DECISION OF THE COURT OF FIRST INSTANCE OF DAVAO IN THE INSTANT CASE. 7 Anent the first error assigned, the petitioner submits: The trial court and the Court of Appeals erred in ruling that the answer of herein petitioner Agton does not specifically deny the material allegations of the complaint and, therefore, admits the same. "Paragraph 2 of petitioner Agton's answer entered the following denial 2. That the defendant specifically denies the allegations in paragraphs 7, 9, 10, 11, 12, 13, 14 and 15 of the complaint. and then proceeded to aver the truth of the matters involved, in the following 'Special & Affirmative Defenses' Special and Affirmative Defenses 1. That all the foregoing allegations are hereby incorporated by reference to form part of these affirmative and special defenses. 2. That since as alleged in paragraph 6 of the complaint 'the defendant in Civil Case No. 726 did not own nor had any interest, right or participation in Lot No. 786, Cad. 102, or any portion thereof', the plaintiff herein and the plaintiff in Civil Case No. 726 had no cause of action in fact against the defendant in said Civil Case No. 726 so the defendant could not have offered as he did not in fact offer, to the plaintiff, a portion of 3 hectares of the land described in paragraph 8 of the complaint which was then covered by Transfer Certificate of Title No. T-2528 in the name of the defendant, and which parcel of land was not involved in Civil Case No. 726.

3. That in Civil Case No. 726 the defendant was actually a TRUSTEE of the heirs of one CERILA BAGOBA with whose heirs the defendant was made a joint defendant. 4. That in the Amicable Settlement in Civil Case No.726,the plaintiff herein was represented by his counsel, who then also represented the Guardian Ad Litem. 5. That the said Amicable Settlement was approved by this Honorable Court and as a matter of fact a decision based thereon was rendered by this Honorable Court which decision had long ago become final and executed. 6. That way back on July 8, 1953, the said Amicable Settlement was confirmed and ratified by the plaintiff through his counsel when said counsel filed a 'PETITION FOR DETACHMENT OF EXHIBIT paragraph 3 of which reads: 3. That said exhibit is needed for the survey of the portion of the land alloted to the plaintiff. 7. That way back on November 26, 1962, the plaintiff confirmed and ratified the termination of Civil Case No. 726 when he filed through counsel an 'EX-PARTE MOTION TO WITHDRAW EXHIBITS' paragraph I of which reads: 1. That the above-entitled case has already been terminated as early as 1952, on which date of confirmation and ratification the plaintiff was more than 28 years old, hence, this complaint states no cause of action against the defendant. 8. That the plaintiff became of the age of majority way back in 1954, hence, if at all the plaintiff has a cause of action against the defendant, it should have been filed at the latest, four years after 1954 or in 1958 to be exact. 9. That the present action assailing the validity of the Amicable Settlement in Civil Case No. 726 has already prescribed. (pp, 1-13, R.A.) It is significant to note from the above-quoted portions of the answer of petitioner Agton, that the same tender issues. 8

It is to be noted that the allegations in the special and affirmative defenses refer to paragraphs 6 and 8 of the complaint which read: 6. That defendant Ramon Agton, who was also the defendant in Civil Case No. 726, did not own nor had any interest, right or participation in Lot No. 786, Cad. 102, or in any portion thereof, and he could not have possibly ceded or transferred a portion of THREE (3) HECTARES of said Lot to plaintiff Santiago Angayao in consideration of the amicable settlement (Annex "A") on February 28, 1952, as in fact, up to the present date, no delivery of the portion mentioned in the amicable settlement has been made by defendant Ramon Agton to plaintiff; xxx xxx xxx 8. That plaintiff herein, on or about February 28, 1952, signed the document, amicable settlement, without understanding fully the contents thereof, and when the same was read, interpreted and explained to him by the defendant, plaintiff was made to understand that the portion of 3 hectares mentioned in said amicable settlement was a separate lot situated in the poblacion of Toril, Davao City, more particularly described as follows: A parcel of land (Lot 184-A of the subdivision plan Psd-28181 being a portion of Lot 184 of the cadastral survey of Davao, G.L.R.O. Cad. Record No. 318), situated in the City of Davao. Bounded on the NW... by Lot 180 of Davao Cad. on the SE., by Lot 180 of Davao Cad. and Lot 184-B of the subdivision plan; on the SW by the Provincial plan: on the SW by the Provincial Road and on the NW. by Lot 182 of Davao Cad. ...; containing an area of SEVENTEEN THOUSAND EIGHT HUNDRED ELEVEN SQUARE METERS (17,811) more or less. 9 The foregoing allegations are partly admitted and denied in paragraphs 4 and 5 of the answer which allege: 4. That the defendant partly admits and partly denies the allegations in paragraph 6 of the complaint, the facts being as they are recited in the affirmative and special defenses herein. 5. That the defendant specifically denies the allegations in paragraph 8 of the complaint, the facts being as they are recited in the affirmative and special defenses herein. 10

Paragraph 2 of the answer only generally denies paragraphs 7, 9, 10, 11, 12, 13, 14 and 15 of the complaint which read: 7. That the true circumstance that transpired during the discussion of the settlement in Civil Case No. 726 was that, Santiago Angayao, a minor and an uneducated Bagobo and who was not assisted by his guardian ad litem in the discussion was offered by defendant Ramon Agton, a portion of three (3) hectares in the poblacion of Toril, Davao City, for and in consideration of the amicable settlement; xxx xxx xxx 9. That in the afternoon of February 28, 1952, after the amicable settlement was signed by Santiago Angayao, defendant Ramon Agton brought the plaintiff in defendant's car to Toril, Davao City, and upon arriving thereat, defendant pointed to the plaintiff the very portion of 3 hectares in the poblacion of Toril, Davao City, particularly the property above-mentioned; 10. That defendant promised the plaintiff that the former would deliver the possession of the said 3 hectares portion of his land to plaintiff upon plaintiff's reaching the age of majority; 11. That for several instances, defendant had assured the plaintiff, a distant relative of defendant, that possession of the 3 hectares of land in the Toril poblacion would be delivered when plaintiff, upon reaching the age of majority, demanded on the defendant the delivery of the parcel of land; 12. That defendant, in utter bad faith and in an inequitable act, after offering various pre-texts, later on assured plaintiff that delivery of the land would finally be made by him (defendant) after all his children are through with their studies; 13. That defendant is holding and possessing the abovementioned property in trust for the benefit of plaintiff; that said property has not passed to the hands of any purchaser for value and in good faith; 14. That sometime in September, 1962, defendant requested the plaintiff, who was then in Baliok Davao City, to come to Toril poblacion, Davao City, in order to be present in the survey of the land and the segregation of that portion to be given to him; that upon plaintiff's arrival in Toril poblacion, he joined the defendant who was with four other men with survey chains and

poles and who were introduced by defendant to plaintiff as the survey party; that plaintiff was with the defendant when they were locating the concrete monuments marking the points of the land during the said survey; and that after said survey, defendant again told plaintiff to wait for a little time because the delivery of the land would be made after the approval of the survey; 15. That defendant has committed fraud taken undue advantage over plaintiff's minority and ignorance when, in order that plaintiff would sign the amicable settlement in Civil Case No. 726, defendant promised to cede in favor of plaintiff a portion of 3 hectares of his land in the Toril poblacion and that, later on, when plaintiff began demanding the fulfillment of the obligation, defendant acted inequitably by leading the plaintiff to believe that delivery of the land would be made as promised. 11 The denial in paragraph 2 of the answer is not supported by the substance of the matters which the defendant will reply upon to support his denial as required by Section 10, Rule 8, Revised Rules of Court. The petitioner's special and affirmative defenses do not controvert the allegations in paragraph 7, 9, 10, 11, 12, 13, 14 and 15 of the complaint. The allegations in the special and affirmative defenses refer to paragraphs 6 and 8 of the complaint. It is clear from the foregoing that paragraph 2 of the answer is not a specific denial. An answer which merely "denies generally and specifically each and every allegation contained in each and every paragraph of the complaint" is but a general denial. 12 A denial does not become specific merely because it is qualified by that word. 13The effect is that the material allegations in paragraphs 7, 9, 10, 11, 12, 13, 14 and 15 of the complaint are deemed admitted. 14 The Court of Appeals did not commit the first error assigned. The petitioner submits that the Court of Appeals erred in affirming the decision of the trial court and sustaining "respondent Angayao's claim, in spite of clear evidence to the contrary, and the absence of evidence to establish the fact that petitioner Agton obligated himself to deliver 3 hectares of the Toril Lot (Lot No. 184- A), virtually ignoring the final decision between the parties in Civil Case No. 726 which constitutes res judicata." 15 The issue raised is factual. The trial court ruled in favor of the plaintiff Santiago Angayao in view of the following: The Court is convinced that the three hectares mentioned in the amicable settlement have never been delivered to plaintiff Santiago Angayao. And as

stated elsewhere in this decision, the defendant is deemed to have admitted in his answer that he made the plaintiff understand that the three hectares mentioned in the amicable settlement are a portion of a lot situated in Toril, Davao City, Lot No. 184-A) of the subdivision plan Psd28181 being a portion of Lot 184 of the Cadastral Survey of Davao, G.L.R.O. Cad. Record No. 318 covered by Transfer Certificate of Title No. T-2528 of the Register of Deeds of Davao in the name of the defendant, which he promised to deliver to the plaintiff but has not delivered up to now. The defendant set up the defense that the action assailing the validity of the amicable settlement had prescribed. But the above-entitled case is not an action for annulment of the amicable settlement. It is an action for recovery of real property which the defendant promised to deliver to the plaintiff and which action prescribes in thirty years. The judgment in Civil Case No. 726 based on the amicable settlement was novated by the promise of the defendant to deliver the three hectares covered by Transfer Certificate of Title No. 2528 of the Register of Deeds of Davao in his name. 16 The Court of Appeals found that the land promised by Ramon Agton to be delivered to Santiago Angayao is the land described in paragraph 8 of the complaint because: Regarding error 2, suffice it to say that enough testimonial evidence was introduced, apart from that already judicially admitted by the appellant, that the land sought to be recovered was not the same land mentioned in the amicable settlement in Civil Case No. 726 but the parcel of land in the poblacion of Toril, Davao, which was described in paragraph 8 of the appellee's complaint, as gleaned from the testimony of Angayao, as follows: Q Mr. Angayao, you alleged in your complaint and had been admitted by the defendant in his answer, that you had been offered by the defendant 3 hectares of his land in the, poblacion of Toril in consideration of the settlement in Civil Case No. 726, how many times did you make demands from the defendant for the delivery to you of the three hectares which were in consideration of that amicable settlement of Civil Case No. 726? xxx xxx xxx A Many times. (tsn.,p.16, 18). COURT:

Q Did you receive the land consisting of three hectares mentioned in the amicable settlement? A No, sir. Q Did you receive the three hectares in the poblacion of Toril which according to you defendant pointed to you to be the three hectares mentioned in the document, in the amicable settlement? A He just pointed it to me, but he did not give it to me. (tsn., p. 37) Unfortunately, the foregoing testimony stands uncontradicted by the records. It therefore follows that the allegations in paragraph 8 of the complaint have been preponderantly proven. 17 The record shows that the findings of fact of the trial court and the Court of Appeals on the Identity of the land which Ramon Agton promised to deliver to Santiago Angayao are supported by the evidence. Said land has not been delivered by Ramon Agton to Santiago Angayao. There is no basis for the Supreme Court to set aside said factual findings. WHEREFORE, the petition for certiorari is denied and the decision of the Court of Appeals in CA-G.R. No. 42635-R sought to be reviewed is hereby affirmed, without pronouncement as to costs. SO ORDERED.

[G.R. No. 148376. March 31, 2005]

LEONARDO ACABAL and RAMON NICOLAS, petitioners, vs. VILLANER ACABAL, EDUARDO ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL, ARMIN ACABAL, RAMIL ACABAL, and BYRON ACABAL, respondents. DECISION CARPIO MORALES, J.: Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision[1] of the Court of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35.[2] In dispute is the exact nature of the document[3] which respondent Villaner Acabal (Villaner) executed in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990. Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in Tax Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971,[5] his parents transferred for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan.[6] Sometime after the foregoing transfer, it appears that Villaner became a widower. Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of Leonardo. Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his wife Lacorte, what he signed was a document captioned Lease Contract[9] (modeled after a July 1976 lease agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro[11]) wherein he leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was witnessed by two women employees of one Judge Villegas of Bais City. Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale. At the witness stand, Villaner declared: Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant Leonardo Acabal on April 19, 1990, please tell the court whether

you have really agreed to sell this property to the defendant on or before April 19, 1990? A: Q: A: We had some agreement but not about the selling of this property.

What was your agreement with the defendant Leonardo Acabal? Our agreement [was] that he will just rent.[14] x Q: x x

Now, please tell the court how were you able to sign this document on April 19, 1990?

A: Q:

I do not know why I signed that, that is why I am puzzled. Why, did you not read the contents of this document? A: Q: I have not read that. I only happened to read the title of the Lease Contract. And do you recall who were the witnesses of the document which you signed in favor of Leonardo Acabal?

A: Q: A:

Employees of Judge Villegas of Bais City. Did you see them sign that document? Yes, sir. Q: These signatures appearing in this document marked as Exhibit C for the plaintiff and Exhibit 1 for the defendant, please examine over (sic) these signatures if these were the signatures of these witnesses who signed this document?

A:

These are not the signatures of the two women. Q: And after signing this document on April 19, 1990, did you appear before a notary public to have this notarized?

A:

No, I went home to San Carlos.[15] x x x

Q: A:

According to this document, you sell (sic) this property at P10,000.00, did you sell this property to Leonardo Acabal?

No, sir. Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal?

A:

No, sir.[16] x Q: x x

Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he promised to you, what did you do of (sic) his refusal to pay that amount? I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared the papers and to ask Leonardo Acabal why he will not comply with our agreement.

A:

Q: A: Q: A:

By the way, who is this Mellie Cadalin? Mellie Cadalin is also working in the sala of Judge Villegas. Who requested Mellie Cadalin to prepare this document? Maybe it was Leonardo Acabal. Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your agreement to lease this property to him?

A:

March 14, 1990, in San Carlos. Q: A: And what document did you give to him in order that that document will be prepared? I have given (sic) some papers and contract of lease that I have signed to (sic) Mrs. Montenegro.[17] (Emphasis and underscoring supplied) x Q: x x

Now, Carmelo Cadalin [Mellie] also testified before this court that in fact he identified the document marked as Exhibit C for the plaintiff that

what you executed on April 19, 1990 was a deed of sale and not a contract of lease, what can you say to that statement? A: Q: That is a lie. And whats the truth then? A: Q: A: What really (sic) I have signed was the document of lease contract. Now, can you explain to the Honorable Court why it so happened that on April 19, you were able to sign a deed of sale? What I can see now is that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the lease contract. But why is it that it has already a deed of sale when what I have signed was only the lease of contract or the contract of lease. Now, Mr. Cadalin also stated before this court that he handed over to you this Deed of Sale marked as Exhibit C and according to him you read this document, what can you say to this statement? Yes, there was a document that he gave me to read it (sic)but it was a contract of lease. How sure are you that what you signed on April 19, 1990 was really a contract of lease and not a contract of sale? Because when I signed the contract of lease the witnesses that witnessed my signing the document were the employees of Judge Villegas and then I am now surprised why in the deed of sale which I purportedly signed are witnessed by Carmelo Cadalin and his wife Lacorte.[18] (Emphasis and underscoring supplied)

Q:

A: Q: A:

On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a consideration of P10,000.00 which he had already paid,[19] and as he had become the absolute owner of the property, he validly transferred it to Ramon Nicolas on May 19, 1990.[20] Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness, along with his wife, to the execution of the document corroborated Leonardos claim: Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?

A:

Yes, I know.[21] x Q: A: x x

And I would like to ask you Mr. witness why do you know Villaner Acabal? At the time that he went to our house together with Leonardo Acabal he requested me to prepare a deed of sale as regards to a sale of the property.[22] x x x

Q: A: Q:

And after they requested you to prepare a document of sale, what did you do? At first I refused to [do] it because I have so many works to do, but then they insisted so I prepared the deed.

After you prepared the document, what did you do? A: After I prepared it I gave it to him so that he could read the same.

Q: A: Q: A: Q: A:

When you say him, whom do you refer to? Villaner Acabal. And did Villaner Acabal read the document you prepared? Yes, he read it. And after reading it what did Villaner Acabal do? He signed the document. Q: Showing to you a document which is marked Exhibit C for the plaintiff and Exhibit 1 for the defendants, please tell the Honorable Court what relation this document has to the document which you described earlier?

COURT INTERPRETER: Witness is confronted with the said document earlier marked as Exhibit C for the prosecution and Exhibit 1 for the defense.

A:

Yes, this is the one.[23] x Q: x x

Also stated in the document is the phrase Signed in the presence of and there is a number and then two signatures, could you please examine the document and say whether these signatures are familiar to you? Yes, number one is my signature and number 2 is the signature of my wife as witness.[24] x x x

A:

Q: A:

After Villaner Acabal signed the document, what did Villaner Acabal do?

He was given the payment by Leonardo Acabal.[25] x Q: x x

Aside from the document, deed of absolute sale, that you mentioned earlier that you prepared for Villaner Acabal and Leonardo Acabal, what other documents, if any, did you prepare for them? Affidavit of non-tenancy and aggregate underscoring supplied) area.[26] (Emphasis and

A:

The complaint was later amended[27] to implead Villaners eight children as party plaintiffs, they being heirs of his deceased wife. By Decision of August 8, 1996, the trial court found for the therein defendantsherein petitioners Leonardo and Ramon Nicolas and accordingly dismissed the complaint. Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was simulated and fictitious.[28] Leonardo and Ramon Nicolas present petition on certiorari, anchored on the following assignments of error:
[29]

Hence,

for

review

I. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF

ABSOLUTE SALE WHEN THE LATTER KNOWINGLY, FREELY AND VOLUNTARILY EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO ACABAL. II. THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE DEED OF ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS UNUSUALLY LOW AND INADEQUATE, ESPECIALLY TAKING INTO ACCOUNT THE LOCATION OF THE SUBJECT PROPERTY. III. THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT VILLANER ACABAL ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF PETITIONER RAMON NICOLAS IN COURT AFTER THE LATTER WAS IN OPEN, CONTINUOUS AND PEACEFUL POSSESSION OF THE SUBJECT PROPERTY FOR ALMOST THREE (3) YEARS. IV. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED TO DECLARE PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE LATTER TOOK THE NECESSARY STEPS AN ORDINARY AND PRUDENT MAN WOULD HAVE TAKEN BEFORE BUYING THE QUESTIONED PROPERTY. V. THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER ACABAL WHEN THE LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE ALLEGED CONTRACT OF LEASE WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY THE EMPLOYEES OF JUDGE VILLEGAS. VI. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED THAT RULE 8, SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT APPLICABLE IN THE CASE AT BAR, CONTRARY TO THE RULING OF THE LOWER COURT. VII. THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY RESPONDENTS JOINTLY AND SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00 PER YEAR FROM 1990 UP TO THE TIME THEY VACATE THE PREMISES.[30]

Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8, Rule 8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness and due execution of the April 19, 1990 Deed of Absolute Sale. Petitioners contention does not persuade. The failure to deny the genuineness and due execution of an actionable document does not preclude a party from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration.[31] On the merits, this Court rules in petitioners favor. It is a basic rule in evidence that the burden of proof lies on the party who makes the allegations[32] ei incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis probatio nulla sit.[33] If he claims a right granted by law, he must prove it by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent. More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or undue influence are never presumed but must be established not by mere preponderance of evidence but by clear and convincing evidence.[34] For the circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it in each case, assuming different shapes and forms and may be committed in as many different ways.[35] In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction was one of lease, he failed to adduce evidence in support thereof. His conjecture that perhaps those copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract of lease,[36] must fail, for facts not conjectures decide cases. Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized the document. While on direct examination, Atty. Real virtually corroborated Villaners claim that he did not bring the document to him for notarization,[37] on cross-examination, Atty. Real conceded that it was impossible to remember every person who would ask him to notarize documents: Q: A: And in the course of your notarization, can you remember each and every face that come (sic) to you for notarization?

No, it is impossible. Q: In the case of Villaner Acabal which you have his document notarized (sic) in 1990, can you remember his face when he came to you?

A:

No. Q: And can you also say, if a person who came to you having a document to be notarized and if he will appear again after a month, can you remember whether he was the one who came to you? Not so much because everyday there are many people who appear with documents to be notarized, So, it is safe to say that if Villaner Acabal came to you on April 25 or rather April 16, 1990 andhave (sic) his document notarized if he comes back in, say May 25, can you still remember if he was the one who came to you? I cannot be sure but at least, there are times I can remember persons because he seems to be close to me already.

A: Q:

A: Q:

Is this Villaner close to you? A: Q: Because he has been frequenting the house/asking for a copy of the document. So, he became close to you after you notarized the document?

A:

Yes.[38] (Emphasis and underscoring supplied)

On Villaners claim that two women employees of Judge Villegas signed as witnesses to the deed[39] but that the signatures appearing thereon are not those of said witnesses,[40] the same must be discredited in light of his unexplained failure to present such alleged women employee-witnesses. In another vein, Villaner zeroes in on the purchase price of the property P10,000.00 which to him was unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax Declarations covering the property for the years 1971,[41] 1974,[42] 1977,[43] 1980,[44] 1983,[45] 1985,[46] as well as a Declaration of Real Property executed in 1994.[47] It bears noting, however, that Villaner failed to present evidence on the fair market value of the property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it was sold was inadequate.[48] Inadequacy of price must be proven because mere speculation or conjecture has no place in our judicial system.[49]

Victor Ragay, who was appointed by the trial court to conduct an ocular inspection[50] of the property and to investigate matters relative to the case,[51] gave an instructive report dated December 3, 1994,[52] the pertinent portions of which are hereby reproduced verbatim: a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was never cultivated; b) the soil is reddish and somewhat sandy in composition; c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate); d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10 hectares of the land in question is plain or flat; e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the defendant Nicolas) were planted to sugar cane by the owners Kadusales; f) the road going to the land in question (as claimed to be the road) is no longer passable because it has been abandoned and not maintained by anyone, thus it makes everything impossible for anybody to get and haul the sugar cane from the area; g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot, along the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks to the scene of the harvest; h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were three (3) feet in height and their structural built was thin or lean; i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and not suitable for planting to sugarcane.[53] Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6hectare property adjoining that of the subject property for [54] only P1,600.00 or P266.67 per hectare. Given that, had the 18-hectare subject property been sold at about the same time, it would have fetched the amount of P4,800.00,[55] hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990 document is more than reasonable. Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale. For the price must be grossly inadequate or

shocking to the conscience such that the mind revolts at it and such that a reasonable man would neither directly nor indirectly be likely to consent to it.[56] Still in another vein, Villaner submits that Leonardos transfer of the property to Nicolas in a span of one month for a profit of P30,000.00 conclusively reflects Leonardos fraudulent intent. This submission is a non sequitur. As for Villaners argument that the sale of the property to Leonardo and the subsequent sale thereof to Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions of said law read: SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may retain, directly or indirectly, any public or agricultural land, the size of which may vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder:[57] Provided further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead. x x x

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void: Provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares. x x x

SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands retained by a land owner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this Act.

Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary to the provisions hereof shall be null and void. Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land without the submission of his sworn statement together with proof of service of a copy thereof to the BARC. (Emphasis and underscoring supplied) As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private lands devoted to or suitable for agriculture are covered by it.[58] As priorly related, Victor Ragay, who was appointed by the trial court to conduct an ocular inspection of the property, observed in his report that only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was not suitable for planting as the soil was full of limestone.[59] He also remarked that the sugarcanes were only 3 feet in height and very lean,[60] whereas sugarcanes usually grow to a height of 3 to 6 meters (about 8 to 20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick.[61] It is thus gathered that the property was not suitable for agricultural purposes. In any event, since the area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4 hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no violation of the Comprehensive Agrarian Reform Law. Even assuming that the disposition of the property by Villaner was contrary to law, he would still have no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to afirmative relief one who seeks equity and justice must come to court with clean hands. In pari delicto potior est conditio defendentis.[62] The proposition is universal that no action arises, in equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or the money agreed to be paid, or damages for its violation. The rule has sometimes been laid down as though it were equally universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other. [63] (Emphasis and underscoring supplied) The principle of pari delicto is grounded on two premises: first, that courts should not lend their good offices to mediating disputes among wrongdoers;[64] and second, that denying judicial relief to an admitted wrongdoer is an effective means of deterring illegality.[65] This doctrine of ancient vintage is not a principle of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v. Johnson:[66]

The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this; ex dolo malo non oritur actio.[67] No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa,[68] or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault potior est conditio defendentis.[69] Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal agreement and will leave them where it finds them. The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of the Civil Code. ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered. Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is allowed only when the following requisites are met: (1) the contract is not illegal per se but merely prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced thereby.[70] The exception is unavailing in the instant case, however, since the prohibition is clearly not for the protection of the plaintiff-landowner but for the beneficiary farmers.[71] In fine, Villaner is estopped from assailing and annulling his own deliberate acts.[72] More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone assert that he is less guilty than Leonardo. Under Article 3 of the Civil Code, ignorance of the law excuses no one from compliance therewith. And now, Villaners co-heirs claim that as co-owners of the property, the Deed of Absolute Sale executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code[73] provides:

ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.[74] The presumption, this Court has held, applies to all properties acquired during marriage. For the presumption to be invoked, therefore, the property must be shown to have been acquired during the marriage.[75] In the case at bar, the property was acquired on July 6, 1971 during Villaners marriage with Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering the property was solely in the name of Villaner it is his personal and exclusive property. In Bucoy v. Paulino[76] and Mendoza v. Reyes[77] which both apply by analogy, this Court held that registration alone of the properties in the name of the husband does not destroy the conjugal nature of the properties.[78] What is material is the time when the land was acquired by Villaner, and that was during the lawful existence of his marriage to Justiniana. Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden is on petitioners then to prove that it is not. This they failed to do. The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal partnership became actual and vested with respect to an undivided one-half portion.[80] Justiniana's rights to the other half, in turn, vested upon her death to her heirs[81] including Villaner who is entitled to the same share as that of each of their eight legitimate children.[82] As a result then of the death of Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the property.[83] With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited, applying the provisions on the law of succession, her eight children and Villaner each receives one-ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or one eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half (1/2) or nineeighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or fiveninths (5/9). While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite portion of the community property until its actual partition by agreement or judicial decree. Prior to partition, all that he has is an ideal or abstract quota or proportionate share in the property.[85] Villaner, however, as a co-owner of

the property has the right to sell his undivided share thereof. The Civil Code provides so: ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the coowners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Thus, every co-owner has absolute ownership of his undivided interest in the coowned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot alienate the shares of his other co-owners nemo dat qui non habet.[86] Villaner, however, sold the entire property without obtaining the consent of the other co-owners. Following the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest[87] the disposition affects only Villaners share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common.[88] As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to this grantor in the partition of the thing owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof. From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-ownerseller are transferred., thereby making the buyer a co-owner of the property.

The proper action in cases like this is not for the nullification of the sale or the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION

of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it.[89]
Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of the common property claimed.[90] (Italics in the original; citations omitted; underscoring supplied) This Court is not unmindful of its ruling in Cruz v. Leis[91] where it held: It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the property owned in common. Article 493 of the Civil Code provides: x x x

Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely in the name of Gertrudes Isidro, widow. Where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the Torrens system.[92] (Citation omitted)

Cruz, however, is not applicable for the simple reason that in the case at bar the
property in dispute is unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land.[93] One who purchases an unregistered land does so at his peril.[94] Nicolas claim of having bought the land in good faith is thus irrelevant.[95]

WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-G.R. CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor of petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but only insofar as five-ninths (5/9) of the subject property is concerned. No pronouncement as to costs.

SO ORDERED. JOSELANO GUEVARRA, Complainant, A.C. No. 7136 PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., and NACHURA, JJ. Promulgated: August 1, 2007 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION PER CURIAM: Joselano Guevarra (complainant) filed on March 4, 2002 a Complaint for Disbarment[1] before the Integrated Bar of the Philippines (IBP) Committee on Bar Discipline (CBD) against Atty. Jose Emmanuel M. Eala a.k.a. Noli Eala (respondent) for grossly immoral conduct and unmitigated violation of the lawyers oath. In his complaint, Guevarra gave the following account: He first met respondent in January 2000 when his (complainants) then-fiancee Irene Moje (Irene) introduced respondent to him as her friend who was married to Marianne (sometimes spelled Mary Ann) Tantoco with whom he had three children. After his marriage to Irene on October 7, 2000, complainant noticed that from January to March 2001, Irene had been receiving from respondent cellphone calls, as

versus

ATTY. JOSE EMMANUEL EALA, Respondent.

well as messages some of which read I love you, I miss you, or Meet you at Megamall. Complainant also noticed that Irene habitually went home very late at night or early in the morning of the following day, and sometimes did not go home from work. When he asked about her whereabouts, she replied that she slept at her parents house in Binangonan, Rizal or she was busy with her work. In February or March 2001, complainant saw Irene and respondent together on two occasions. On the second occasion, he confronted them following which Irene abandoned the conjugal house. On April 22, 2001, complainant went uninvited to Irenes birthday celebration at which he saw her and respondent celebrating with her family and friends. Out of embarrassment, anger and humiliation, he left the venue immediately. Following that incident, Irene went to the conjugal house and hauled off all her personal belongings, pieces of furniture, and her share of the household appliances. Complainant later found, in the masters bedroom, a folded social card bearing the words I Love You on its face, which card when unfolded contained a handwritten letter dated October 7, 2000, the day of his wedding to Irene, reading: My everdearest Irene, By the time you open this, youll be moments away from walking down the aisle. I will say a prayer for you that you may find meaning in what youre about to do. Sometimes I wonder why we ever met. Is it only for me to find fleeting happiness but experience eternal pain? Is it only for us to find a true love but then lose it again? Or is it because theres a bigger plan for the two of us? I hope that you have experienced true happiness with me. I have done everything humanly possible to love you. And today, as you make your vows . . . I make my own vow to YOU!

I will love you for the rest of my life. I loved you from the first time I laid eyes on you, to the time we spent together, up to the final moments of your single life. But more importantly, I will love you until the life in me is gone and until we are together again. Do not worry about me! I will be happy for you. I have enough memories of us to last me a lifetime. Always remember though that in my heart, in my mind and in my soul, YOU WILL ALWAYS . . . AND THE WONDERFUL THINGS YOU DO! BE MINE . . . . AND MINE ALONE, and I WILL ALWAYS BE YOURS AND YOURS ALONE! I LOVE YOU FOREVER, I LOVE YOU FOR ALWAYS. AS LONG AS IM LIVING MY TWEETIE YOULL BE![2] Eternally yours, NOLI

Complainant soon saw respondents car and that of Irene constantly parked at No. 71-B 11th Street, New Manila where, as he was to later learn sometime in April 2001, Irene was already residing. He also learned still later that when his friends saw Irene on or about January 18, 2002 together with respondent during a concert, she was pregnant. In his ANSWER,[3] respondent admitted having sent the I LOVE YOU card on which the above-quoted letter was handwritten. On paragraph 14 of the COMPLAINT reading: 14. Respondent and Irene were even FLAUNTING THEIR ADULTEROUS RELATIONSHIP as they attended social functions together. For instance, in or about the third week of September 2001, the couple attended the launch of the Wine All You Can promotion of French wines, held at the Mega Strip of SM Megamall B at Mandaluyong City. Their attendance was reported in Section B of the Manila Standard issue of 24 September 2001, on page 21. Respondent

and Irene were photographed together; their picture was captioned: Irene with Sportscaster Noli Eala. A photocopy of the report is attached as Annex C.[4] (Italics and emphasis in the original; CAPITALIZATION of the phrase flaunting their adulterous relationship supplied),

respondent, in his ANSWER, stated: 4. Respondent specifically denies having ever flaunted an adulterous relationship with Irene as alleged in paragraph 14 of the Complaint, the truth of the matter being that their relationship was low profile and known only to the immediate members of their respective families, and that Respondent, as far as the general public was concerned, was still known to be legally married to Mary Anne Tantoco.[5] (Emphasis and underscoring supplied)

On paragraph 15 of the COMPLAINT reading: 15. Respondents adulterous conduct with the complainants wife and his apparent abandoning or neglecting of his own family, demonstrate his gross moral depravity, making him morally unfit to keep his membership in the bar. He flaunted his aversion to the institution of marriage, calling it a piece of paper. Morally reprehensible was his writing the love letter to complainants bride on the very day of her wedding, vowing to continue his love for her until we are together again, as now they are.[6] (Underscoring supplied),

respondent stated in his ANSWER as follows: 5. Respondent specifically denies the allegations in paragraph 15 of the Complaint regarding his adulterous relationship and that his acts demonstrate gross moral depravity thereby making him unfit to keep his membership in the bar, the reason being that Respondents relationship with Irene was not under scandalous circumstances and that as far as his relationship with his own family: 5.1 Respondent has maintained a civil, cordial and peaceful relationship with [his wife] Mary Anne as in fact they still occasionally

meet in public, even if Mary Anne is aware of Respondents special friendship with Irene. xxxx 5.5 Respondent also denies that he has flaunted his aversion to the institution of marriage by calling the institution of marriage a mere piece of paper because his reference [in his above-quoted handwritten letter to Irene] to the marriage between Complainant and Irene as a piece of paper was merely with respect to the formality of the marriage contract.[7] (Emphasis and underscoring supplied)

Respondent admitted[8] paragraph 18 of the COMPLAINT reading: 18. The Rules of Court requires lawyers to support the Constitution and obey the laws. The Constitution regards marriage as an inviolable social institution and is the foundation of the family (Article XV, Sec. 2).[9]

And on paragraph 19 of the COMPLAINT reading: 19. Respondents grossly immoral conduct runs afoul of the Constitution and the laws he, as a lawyer, has been sworn to uphold. In pursuing obsessively his illicit love for the complainants wife, he mocked the institution of marriage, betrayed his own family, broke up the complainants marriage, commits adultery with his wife, and degrades the legal profession.[10] (Emphasis and underscoring supplied),

respondent, in his ANSWER, stated: 7. Respondent specifically denies the allegations in paragraph 19 of the Complaint, the reason being that under the circumstances the acts of Respondent with respect to his purely personal and low profile special relationship with Irene is neither under scandalous circumstances nor tantamount to grossly immoral conduct as would be a ground for disbarment pursuant to Rule 138,

Section 27 of the Rules of Court.[11] (Emphasis and underscoring supplied)

To respondents ANSWER, complainant filed a REPLY,[12] alleging that Irene gave birth to a girl and Irene named respondent in the Certificate of Live Birth as the girls father. Complainant attached to the REPLY, as Annex A, a copy of a Certificate of Live Birth[13] bearing Irenes signature and naming respondent as the father of her daughter Samantha Irene Louise Moje who was born on February 14, 2002 at St. Lukes Hospital. Complainants REPLY merited a REJOINDER WITH MOTION TO DISMISS[14] dated January 10, 2003 from respondent in which he denied having personal knowledge of the Certificate of Live Birth attached to the complainants Reply.[15] Respondent moved to dismiss the complaint due to the pendency of a civil case filed by complainant for the annulment of his marriage to Irene, and a criminal complaint for adultery against respondent and Irene which was pending before the Quezon City Prosecutors Office. During the investigation before the IBP-CBD, complainants Complaint-Affidavit and REPLY to ANSWER were adopted as his testimony on direct [16] [17] examination. Respondents counsel did not cross-examine complainant. After investigation, IBP-CBD Investigating Commissioner Milagros V. San Juan, in a 12-page REPORT AND RECOMMENDATION[18] dated October 26, 2004, found the charge against respondent sufficiently proven. The Commissioner thus recommended[19] that respondent be disbarred for violating Rule 1.01 of Canon 1 of the Code of Professional Responsibility reading: Rule 1.01: A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct (Underscoring supplied),

and Rule 7.03 of Canon 7 of the same Code reading:

Rule 7.03: A lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor shall he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession. (Underscoring supplied)

The IBP Board of Governors, however, annulled and set aside the Recommendation of the Investigating Commissioner and accordingly dismissed the case for lack of merit, by Resolution dated January 28, 2006 briefly reading: RESOLUTION NO. XVII-2006-06 CBD Case No. 02-936 Joselano C. Guevarra vs. Atty. Jose Emmanuel M. Eala a.k.a. Noli Eala

RESOLVED to ANNUL and SET ASIDE, as it is hereby ANNULLED AND SET ASIDE, the Recommendation of the Investigating Commissioner, and to APPROVE the DISMISSAL of the above-entitled case for lack of merit.[20] (Italics and emphasis in the original)

Hence, the present petition[21] of complainant before this Court, filed pursuant to Section 12 (c), Rule 139[22] of the Rules of Court. The petition is impressed with merit. Oddly enough, the IBP Board of Governors, in setting aside the Recommendation of the Investigating Commissioner and dismissing the case for lack of merit, gave no reason therefor as its above-quoted 33-word Resolution shows. Respondent contends, in his Comment[23] on the present petition of complainant, that there is no evidence against him.[24] The contention fails. As the IBP-CBD Investigating Commissioner observed: While it may be true that the love letter dated October 7, 2000 (Exh. C) and the news item published in the Manila Standard (Exh. D), even taken together do not sufficiently prove that respondent is carrying on an adulterous relationship with

complainants wife, there are other pieces of evidence on record which support the accusation of complainant against respondent. It should be noted that in his Answer dated 17 October 2002, respondent through counsel made the following statements to wit: Respondent specifically denies having [ever] flaunted an adulterous relationship with Irene as alleged in paragraph [14] of the Complaint, the truth of the matter being [that] their relationship was low profile and known only to immediate members of their respective families . . . , and Respondent specifically denies the allegations in paragraph 19 of the complaint, the reason being that under the circumstances the acts of the respondents with respect to his purely personal and low profile relationship with Irene is neither under scandalous circumstances nor tantamount to grossly immoral conduct . . . These statements of respondent in his Answer are an admission that there is indeed a special relationship between him and complainants wife, Irene, [which] taken together with the Certificate of Live Birth of Samantha Louise Irene Moje (Annex H-1) sufficiently prove that there was indeed an illicit relationship between respondent and Irene which resulted in the birth of the child Samantha. In the Certificate of Live Birth of Samantha it should be noted that complainants wife Irene supplied the information that respondent was the father of the child. Given the fact that the respondent admitted his special relationship with Irene there is no reason to believe that Irene would lie or make any misrepresentation regarding the paternity of the child. It should be underscored that respondent has not categorically denied that he is the father of Samantha Louise Irene Moje.[25] (Emphasis and underscoring supplied)

Indeed, from respondents ANSWER, he does not deny carrying on an adulterous relationship with Irene, adultery being defined under Art. 333 of the Revised Penal Code as that committed by any married woman who shall have sexual intercourse with a man not her husband and by the man who has carnal knowledge of her, knowing her to be married, even if the marriage be subsequently declared void.[26] (Italics supplied) What respondent denies is having flaunted such

relationship, he maintaining that it was low profile and known only to the immediate members of their respective families. In other words, respondents denial is a negative pregnant, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it in affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, it has been held that thequalifying circumstances alone are denied while the fact itself is admitted.[27] (Citations omitted; emphasis and underscoring supplied)

A negative pregnant too is respondents denial of having personal knowledge of Irenes daughter Samantha Louise Irene Mojes Certificate of Live Birth. In said certificate, Irene named respondent a lawyer, 38 years old as the childs father. And the phrase NOT MARRIED is entered on the desired information on DATE AND PLACE OF MARRIAGE. A comparison of the signature attributed to Irene in the certificate[28] with her signature on the Marriage Certificate[29] shows that they were affixed by one and the same person. Notatu dignum is that, as the Investigating Commissioner noted, respondent never denied being the father of the child. Franklin A. Ricafort, the records custodian of St. Lukes Medical Center, in his January 29, 2003 Affidavit[30] which he identified at the witness stand, declared that Irene gave the information in the Certificate of Live Birth that the childs father is Jose Emmanuel Masacaet Eala, who was 38 years old and a lawyer.[31] Without doubt, the adulterous relationship between respondent and Irene has been sufficiently proven by more than clearly preponderant evidence that evidence adduced by one party which is more conclusive and credible than that of the other party and, therefore, has greater weight than the other[32] which is the quantum of evidence needed in an administrative case against a lawyer.

Administrative cases against lawyers belong to a class of their own. They are distinct from and they may proceed independently of civil and criminal cases. . . . of proof for these types of cases differ. In a criminal case, proof beyond reasonable doubt is necessary; in an administrative case for disbarment or suspension, clearly preponderant evidence is all that is required.[33] (Emphasis supplied)

Respondent insists, however, that disbarment does not lie because his relationship with Irene was not, under Section 27 of Rule 138 of the Revised Rules of Court, reading: SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a willful disobedience appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinatory agency in a foreign jurisdiction where he has also been admitted as an attorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated. The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension (Emphasis and underscoring supplied),

under scandalous circumstances.[34] The immediately-quoted Rule which provides the grounds for disbarment or suspension uses the phrase grossly immoral conduct, not under scandalous

circumstances. Sexual intercourse under scandalous circumstances is, following Article 334 of the Revised Penal Code reading: ART. 334. Concubinage. - Any husband who shall keep a mistress in the conjugal dwelling, or, shall have sexual intercourse, under scandalous circumstances, with a woman who is not his wife, or shall cohabit with her in any other place, shall be punished by prision correccional in its minimum and medium periods. x x x x,

an element of the crime of concubinage when a married man has sexual intercourse with a woman elsewhere.

Whether a lawyers sexual congress with a woman not his wife or without the benefit of marriage should be characterized as grossly immoral conduct depends on the surrounding circumstances.[35] The case at bar involves a relationship between a married lawyer and a married woman who is not his wife. It is immaterial whether the affair was carried out discreetly. Apropos is the following pronouncement of this Court in Vitug v. Rongcal:[36] On the charge of immorality, respondent does not deny that he had an extra-marital affair with complainant, albeit brief and discreet, and which act is not so corrupt and false as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree in order to merit disciplinary sanction. We disagree. xxxx While it has been held in disbarment cases that the mere fact of sexual relations between two unmarried adults is not sufficient to warrant administrative sanction for such illicit behavior, it is not so with respect to betrayals of the marital vow of fidelity. Even if not all forms of extra-marital relations are punishable under penal law, sexual relations outside marriage is considered disgraceful and immoral as it manifests deliberate disregard of the sanctity of marriage and

the marital vows protected by the Constitution and affirmed by our laws.[37] (Emphasis and underscoring supplied) And so is the pronouncement in Tucay v. Atty. Tucay:[38] The Court need not delve into the question of whether or not the respondent did contract a bigamous marriage . . . It is enough that the records of this administrative case substantiate the findings of the Investigating Commissioner, as well as the IBP Board of Governors, i.e., that indeed respondent has been carrying on an illicit affair with a married woman, a grossly immoral conduct andindicative of an extremely low regard for the fundamental ethics of his profession. This detestable behavior renders him regrettably unfit and undeserving of the treasured honor and privileges which his license confers upon him.[39] (Underscoring supplied)

Respondent in fact also violated the lawyers oath he took before admission to practice law which goes: I _________, having been permitted to continue in the practice of law in the Philippines, do solemnly swear that I recognize the supreme authority of the Republic of the Philippines; I will support its Constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, nor give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion with all good fidelity as well as to the courts as to my clients; and I impose upon myself this voluntary obligation without any mental reservation or purpose of evasion. So help me God. (Underscoring supplied)

Respondent admittedly is aware of Section 2 of Article XV (The Family) of the Constitution reading: Section 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be protected by the State.

In this connection, the Family Code (Executive Order No. 209), which echoes this constitutional provision, obligates the husband and the wife to live together, observe mutual love, respect and fidelity, and render mutual help and support.[40] Furthermore, respondent violated Rule 1.01 of Canon 1 of the Code of Professional Responsibility which proscribes a lawyer from engaging in unlawful, dishonest,immoral or deceitful conduct, and Rule 7.03 of Canon 7 of the same Code which proscribes a lawyer from engaging in any conduct that adversely reflects on his fitness to practice law. Clutching at straws, respondent, during the pendency of the investigation of the case before the IBP Commissioner, filed a Manifestation[41] on March 22, 2005 informing the IBP-CBD that complainants petition for nullity of his (complainants) marriage to Irene had been granted by Branch 106 of the Quezon City Regional Trial Court, and that the criminal complaint for adultery complainant filed against respondent and Irene based on the same set of facts alleged in the instant case, which was pending review before the Department of Justice (DOJ), on petition of complainant, had been, on motion of complainant, withdrawn. The Secretary of Justices Resolution of January 16, 2004 granting complainants Motion to Withdraw Petition for Review reads: Considering that the instant motion was filed before the final resolution of the petition for review, we are inclined to grant the same pursuant to Section 10 of Department Circular No. 70 dated July 3, 2000, which provides that notwithstanding the perfection of the appeal, the petitioner may withdraw the same at any time before it is finally resolved, in which case the appealed resolution shall stand as though no appeal has been taken.[42] (Emphasis supplied by complainant)

That the marriage between complainant and Irene was subsequently declared void ab initio is immaterial. The acts complained of took place before the marriage was declared null and void.[43] As a lawyer, respondent should be aware that a man and a woman deporting themselves as husband and wife are presumed, unless proven

otherwise, to have entered into a lawful contract of marriage.[44] In carrying on an extra-marital affair with Irene prior to the judicial declaration that her marriage with complainant was null and void, and despite respondent himself being married, he showed disrespect for an institution held sacred by the law. And he betrayed his unfitness to be a lawyer. As for complainants withdrawal of his petition for review before the DOJ, respondent glaringly omitted to state that before complainant filed his December 23, 2003 Motion to Withdraw his Petition for Review, the DOJ had already promulgated a Resolution on September 22, 2003 reversing the dismissal by the Quezon City Prosecutors Office of complainants complaint for adultery. In reversing the City Prosecutors Resolution, DOJ Secretary Simeon Datumanong held: Parenthetically the totality of evidence adduced by complainant would, in the fair estimation of the Department, sufficiently establish all the elements of the offense of adultery on the part of both respondents. Indeed, early on, respondent Moje conceded to complainant that she was going out on dates with respondent Eala, and this she did when complainant confronted her about Ealas frequent phone calls and text messages to her. Complainant also personally witnessed Moje and Eala having a rendezvous on two occasions. Respondent Eala never denied the fact that he knew Moje to be married to complainant[.] In fact, he (Eala) himself was married to another woman. Moreover, Mojes eventual abandonment of their conjugal home, after complainant had once more confronted her about Eala, only served to confirm the illicit relationship involving both respondents. This becomes all the more apparent by Mojes subsequent relocation in No. 71B, 11th Street, New Manila, Quezon City, which was a few blocks away from the church where she had exchange marital vows with complainant. It was in this place that the two lovers apparently cohabited. Especially since Ealas vehicle and that of Mojes were always seen there. Moje herself admits that she came to live in the said address whereas Eala asserts that that was where he held office. The happenstance that it was in that said address that Eala and Moje had decided to hold office for the firm that both had formed smacks too much of a coincidence. For one, the said address appears to be a residential house, for that was where Moje stayed all throughout after her separation from complainant. It was both respondents love nest, to put short; their illicit affair that was carried out

there bore fruit a few months later when Moje gave birth to a girl at the nearby hospital of St. Lukes Medical Center. What finally militates against the respondents is the indubitable fact that in the certificate of birth of the girl, Moje furnished the information that Eala was the father. This speaks all too eloquently of the unlawful and damning nature of the adulterous acts of the respondents. Complainants supposed illegal procurement of the birth certificate is most certainly beside the point for both respondents Eala and Moje have not denied, in any categorical manner, that Eala is the father of the child Samantha Irene Louise Moje.[45] (Emphasis and underscoring supplied)

It bears emphasis that adultery is a private offense which cannot be prosecuted de oficio and thus leaves the DOJ no choice but to grant complainants motion to withdraw his petition for review. But even if respondent and Irene were to be acquitted of adultery after trial, if the Information for adultery were filed in court, the same would not have been a bar to the present administrative complaint. Citing the ruling in Pangan v. Ramos,[46] viz: x x x The acquittal of respondent Ramos [of] the criminal charge is not a bar to these [administrative] proceedings. The standards of legal profession are not satisfied by conduct which merely enables one to escape the penalties of x x x criminal law. Moreover, this Court, in disbarment

proceedings is acting in an entirely different capacity from that which courts assume in trying criminal case[47] (Italics in the original),

this Court in Gatchalian Promotions Talents Pools, Inc. v. Atty. Naldoza,[48] held: Administrative cases against lawyers belong to a class of their own. They are distinct from and they may proceed independently of civil and criminal cases.

WHEREFORE, the petition is GRANTED. Resolution No. XVII-2006-06 passed on January 28, 2006 by the Board of Governors of the Integrated Bar of the Philippinesis ANNULLED and SET ASIDE.

Respondent, Atty. Jose Emmanuel M. Eala, is DISBARRED for grossly immoral conduct, violation of his oath of office, and violation of Canon 1, Rule 1.01 and Canon 7, Rule 7.03 of the Code of Professional Responsibility. Let a copy of this Decision, which is immediately executory, be made part of the records of respondent in the Office of the Bar Confidant, Supreme Court of thePhilippines. And let copies of the Decision be furnished the Integrated Bar of the Philippines and circulated to all courts. This Decision takes effect immediately. SO ORDERED.