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9. [G.R. No. 120334.

January 20, 1998]NORTHWEST AIRLINES,

INC. petitioner, vs. COURT OF APPEALS and ROLANDO I.


TORRES respondents.

[G.R. No. 120337. January 20, 1998]

ROLANDO I. TORRES, petitioner, vs. COURT OF APPEALS and


NORTHWEST AIRLINES, INC., respondents.
DECISION
DAVIDE, JR., J.:

Unable to accept the decision of the Court of Appeals in CA-G.R. CV No.


24068, petitioner Northwest Airlines, Inc., (hereafter NORTHWEST) and
petitioner Rolando I. Torres (hereafter TORRES) filed separate petitions for
review under Rule 45 of the Rules of Court, which were docketed as G.R. No.
120334 and G.R. No. 120337 and thereafter consolidated.
[1]

The antecedents of these cases were summarized by the Court of Appeals


as follows:
[2]

The plaintiff, [Torres], allegedly on a special mission to purchase


firearms for the Philippine Senate, purchased a round trip ticket from
defendant [Northwest] for his travel to Chicago and back to Manila. Via
defendants flight, plaintiff left for United States.
After purchasing firearms and on the way back to Manila, plaintiff
checked-in and presented before defendants representative his two
identical baggage, one of which contained firearms. Defendants
representative required the baggage to be opened and the supporting
evidence to be presented. Plaintiff showed them his authorization from
the Philippine government and the purchase receipts. Plaintiff
thereafter sealed the baggage and defendants representative placed a
red tag on the baggage with firearms with the marking "CONTAINS
FIREARMS".
Upon arrival in Manila on June 22, 1988 plaintiff was not able to claim
one of his baggages. Plaintiff was informed by defendants

representative that his baggage containing firearms was recalled back


to Chicago by defendant for US Customs verification. A telex to this
effect was shown to plaintiff.
On June 28, 1988, after being advised of the arrival of his other
baggage, plaintiff claimed and opened the baggage in the presence of
defendants representative and found out that the firearms were
missing. A Personal Property Missing Damage Report was issued by
defendant to plaintiff.
On account of the continuous refusal of defendant to settle amicably,
plaintiff then prayed before the trial court that defendant be ordered to
pay actual damages, moral damages, temperate damages, exemplary
damages and attorney's fees (pp. 1-6, Complaint; p. 1, Record).
In its answer, defendant pleaded: a) that it was the agents from the US
Customs who ordered for the return of the weapons which plaintiff
checked-in; b) that when opened in the presence of US Customs agents
the box contained no firearms; and c) that since the baggage which was
returned back to Chicago did not contain any firearms, then the
baggage which plaintiff received upon arrival in Manila must have
contained the firearms (pp. 3-5, Answer; pp. 32-34, Record).
After plaintiff had presented its evidence, defendant filed a "Motion to
Dismiss (By Way of Demurrer to the Evidence with Motion for Summary
Judgment)" dated April 24, 1989.
In said motion, defendant moved for the dismissal of the complaint in
so far as it prays for moral, exemplary and temperate damages and
attorney's fees and further moved for "Summary Judgment to be
rendered awarding the plaintiff $640.00 as actual damages." (Motion to
Dismiss By Way of Demurrer to Evidence with Motion for Summary
Judgment; p. 115, Records).
Plaintiff on the other hand, offered no objection to the submission of the
case for decision but insisted that he is entitled to damages as prayed
for (p. 1, Comment on Defendant's Motion to Dismiss by Way of
Demurrer to Evidence with Summary Judgment; pp. 136-169, Records).
We add to this summary the following relevant matters:
NORTHWEST argued in its motion for summary judgment that the Warsaw
Convention and the contract of carriage limited its liability to US$640 and that the

evidence presented by TORRES did not entitle him to moral, exemplary, and
temperate damages and attorneys fees.
[3]

Instead of just ruling on NORTHWESTs Motion to Dismiss (By Way of


Demurrer to Evidence) with Motion for Summary Judgment, which it considered
submitted for resolution in the order of 14 June 1989, the trial court rendered on
13 September 1989 a full-blown decision ordering NORTHWEST to pay
TORRES the following amounts:
[4]

[5]

1. The amount of $9,009.32, with legal interest thereon from the


date of the filing of the complaint, in its peso equivalent at the
official rate of exchange at the time payment is made,
representing the value of the goods lost by the plaintiff;
2. The amount of P100,000.00 by way of attorney's fees;
3. The amount of P5,181.09 as filing fees paid by the plaintiff and
the amount of P20,000.00 for expenses of litigation, representing
travel expenses and hotel accommodations of plaintiff's counsels;
and
4.

The amount of P50,000.00 as moral damages.

The award of US$9,009.32, representing the value of the lost firearms, was
grounded on the trial courts finding that the act of [NORTHWESTs] personnel
in Tokyo or Narita Airport in just guessing which baggage contained the firearms
was careless and imprudent, amounting to careless disregard for the safety of
the luggage of the passenger. According to the trial court, such act constituted
willful misconduct which brought the case beyond the application of Section 22(2)
of the Warsaw Convention, thereby depriving NORTHWEST of the limitation of
the liability provided for in said section.
The awards of attorneys fees and expenses of litigation were premised on
NORTHWESTs having ignored the demands of TORRES forcing the latter to
litigate in order to assert his right. TORRES was also awarded moral damages
because of the inconvenience, anxiety and worry he suffered by reason of
NORTHWESTs unjustifiable refusal to settle his claim.
Both TORRES and NORTHWEST appealed from the decision to the Court of
Appeals, which docketed the case as CA-G.R. CV No. 24068. Torres assailed
the failure of the trial court to award the actual, moral, and exemplary
damages prayed for by him. Northwest, on the other hand, alleged that in
prematurely resolving the case on the merits the court prevented it from
presenting evidence, thereby denying it due process; and that even assuming
that the trial court could resolve the entire case on the merits, it erred in awarding
damages, attorneys fees, and expenses of litigation.
[6]

[7]

In its Decision of 14 September 1994, the Court of Appeals sustained the


trial courts judgment that TORRES was entitled to actual damages, since
NORTHWEST had, in effect, admitted the loss of the firearms when it insisted
that its liability was limited to $9.07 per pound or $20 per kilo. The appellate
court then concluded that NORTHWESTs guessing of which luggage contained
the firearms amounted to willful misconduct under Section 25(1) of the Warsaw
Convention which entitled TORRES to claim actual damages in excess of the
limitation provided for under Section 22(2) of said Convention.
[8]

Nevertheless, the Court of Appeals held that while the trial court properly
ruled on the right of TORRES to actual damages, it erred in determining by way
of summary judgment the amount of damages; for under Section 3 of Rule 34 of
the Rules of Court, a summary judgment may be rendered upon proper motion
except as to the amount of damages.
As to the trial courts act of disposing of the entire case by way of summary
judgment, the Court of Appeals noted that NORTHWEST categorically moved for
summary judgment only on the issue of actual damages, but not on the claims for
moral damages and attorneys fees. NORTHWEST moved for the dismissal of
the latter claims by way of demurrer to evidence. That being so, the trial court
could not, by way of summary judgment, dispose of the case on its
entirety. Section 2 of Rule 34 of the Rules of Court required that summary
judgment should be issued only after the motion therefor has been heard. Since
there was no such motion as to the claims for moral damages and attorneys
fees, no summary judgment thereon could be made.
Anent the demurrer to evidence, the Court of Appeals held that the trial court
had to either grant or deny it. If granted, no award therefor could have been
validly made. If denied, then under Section 1 of Rule 35 of the Rules of Court,
NORTHWEST should have been allowed to present its evidence, as it was not
deemed to have waived that right. This section provided:
SECTION 1. Effect of judgment on demurrer to evidence. -- After the
plaintiff has completed the presentation of his evidence, the defendant without
waiving his right to offer evidence in the event the motion is not granted, may
move for a dismissal on the ground that upon facts and the law the plaintiff has
shown no right to relief. However, if the motion is granted and order of dismissal
is reversed on appeal, the movant loses his right to present evidence in his
behalf.
[9]

The Court of Appeals then held that since the demurrer was impliedly
denied by the trial court, NORTHWEST should have been allowed to present its
evidence in accordance with the above rule.
Accordingly, the Court of Appeals affirmed the trial courts finding as to the
right of TORRES to actual damages but set aside the rest of the appealed
decision. It then remanded the case to the court a quo for further proceedings.

On 23 May 1995, the Court of Appeals denied NORTHWESTs motion for a


partial reconsideration of the decision.
[10]

Hence, the present petitions.


NORTHWEST contests the right of TORRES to actual damages on the
following grounds: (1) the loss of firearms was disputed; (2) the finding of willful
misconduct was arbitrary; and (3) TORRES failed to produce a United States
license for the shipment of the firearms; hence, the importation was illegal and no
damages could arise therefrom.
TORRES, on the other hand, claims that the Court of Appeals erred (1) in
setting aside the appealed decision of the court a quo as to the awards of
damages, attorneys fees, and cost of suit; (2) in remanding the case to the
court a quo for further proceedings; and (3) in failing to award other damages for
breach of contract and willful misconduct committed by Northwest for
mishandling the cargo.
NORTHWESTs Motion to Dismiss (By Way of Demurrer to Evidence) with
Motion for Summary Judgment involved two distinct and separate processes, viz:
(1) demurrer to evidence, which was then governed by Rule 35, now by Rule 33;
and (2) motion for summary judgment, which was then governed by Rule 34, now
Rule 35, of the Rules of Court. The subject of the demurrer were the claims for
moral, exemplary, and temperate damages and attorneys fees; while the target
of the motion for summary judgment was the claim for actual damages.
We agree with the Court of Appeals in its holding that the trial court erred in
deciding the entire case on its merits. Indeed, as to the demurrer to evidence,
the trial court should have been solely guided by the procedure laid down in the
abovementioned rule on demurrer to evidence. It had no choice other than to
grant or to deny the demurrer. It could not, without committing grave abuse of
discretion amounting to excess of jurisdiction, deny the motion and then forthwith
grant TORRES claims on a finding that TORRES has established a
preponderance of evidence in support of such claims. In the instant case, the
trial court did just that insofar as moral damages, attorneys fees, and expenses
of litigation were concerned. What it should have done was to merely deny the
demurrer and set a date for the reception of NORTHWESTs evidence in chief.
As to the motion for summary judgment, both the trial court and the Court of
Appeals were in error . Summary judgments were formerly governed by Rule 34
of the Rules of Court. The rule is now Rule 35 of the 1987 Rules of Civil
Procedure with the amendments allowing the parties to submit not only affidavits
but also depositions or admissions in support of their respective contentions.
Motions for summary judgment may be filed by the claimant or by the
defending party. Sections 1, 2, and 3 of the old Rule 34, the governing law in this
case, provided as follows:
[11]

SECTION 1. Summary judgment for claimant. -- A party seeking to


recover upon a claim, counterclaim, or cross-claim or to obtain a

declaratory relief may, at any time after the pleading in answer thereto
has been served, move with supporting affidavits for a summary
judgment in his favor upon all or any part thereof.
SEC. 2. Summary judgment for defending party. -- A party against
whom a claim, counterclaim, or cross-claim is asserted or a declaratory
relief is sought may, at any time, move with supporting affidavits for a
summary judgment in his favor as to all or any part thereof.
SEC. 3. Motion and proceedings thereon. -- The motion shall be
served at least ten (10) days before the time specified for the
hearing. The adverse party prior to the day of hearing may serve
opposing affidavits. After the hearing, the judgment sought shall be
rendered forthwith if the pleadings, depositions, and admissions on file
together with the affidavits, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.
NORTHWEST, the defending party, moved for summary judgment on the
claim for actual damages after TORRES had presented his evidence in
chief. This was allowed by Section 2 where the motion may be filed at any
time, as distinguished from section 1 where theclaimant, like TORRES, may file
the motion at any time after the answer is filed.
Summary judgment is allowed if, except as to the amount of damages, there
is no genuine issue as to any material fact and the moving party is entitled to a
judgment as a matter of law.
In this case, NORTHWEST denied in its Answer the material allegations in
the complaint and asserted, in fact, that it was not liable for actual damages
because the box containing the alleged lost firearms was the one received by
TORRES when he arrived in Manila. It likewise contended that, even granting
that the firearms were lost, its liability was limited by the Warsaw Convention and
the contract of transportation to $9.07 per pound, or a total of $640 as the box
weighed 70 pounds. It also denied having acted fraudulently or in bad faith.
[12]

[13]

In thus submitting for summary judgment the matter of its liability only to the
maximum allowed in Section 22(2) of the Warsaw Convention, NORTHWEST
was deemed to have hypothetically admitted arguendo that the firearms were
lost. It did not waive the presentation of evidence that it was not in fact liable for
the alleged loss of firearms. And even if it were so liable, NORTHWEST could
still prove at the appropriate time that it was not liable beyond the maximum
provided in said Section 22(2). Notably, TORRES prayed for actual damages in
the amounts of (1) $9,009.32 representing the value of the lost firearms; and
(2) P39,065 representing the cost of his plane tickets.
[14]

Concretely then, there remained a genuine issue on the fact and amount of
actual damages. The motion for summary judgment was not therefore in
order. NORTHWEST must have resorted to it, in like manner as it did in filing the
demurrer, to delay the progress of the trial of the case. Verily, it was grave
abuse of discretion on the part of the trial court to grant such motion and award
TORRES actual damages commensurate to the value of the firearms and based
on his evidence alone.
We, however, agree with both the trial court and the Court of Appeals that
NORTHWESTs liability for actual damages may not be limited to that prescribed
in Section 22(2) of the Warsaw Convention. In Alitalia v. Intermediate Appellate
Court, we held:
[15]

The [Warsaw] Convention does not operate as an exclusive


enumeration of the instances of an airlines liability, or as an absolute
limit of the extent of that liability. Such a proposition is not borne out by
the language of the Convention, as this Court has now, and at an earlier
time, pointed out. Moreover, slight reflection readily leads to the
conclusion that it should be deemed a limit of liability only in those
cases where the cause of the death or injury to person, or destruction,
loss or damage to property or delay in its transport is not attributable to
or attended by any willful misconduct, bad faith, recklessness, or
otherwise improper conduct on the part of any official or employee for
which the carrier is responsible, and there is otherwise no special or
extraordinary form of resulting injury. The Conventions provisions, in
short, do not regulate or exclude liability for other breaches of contract
by the carrier or misconduct of its officers and employees, or for some
particular or exceptional type of damage.
IN VIEW WHEREOF, judgment is hereby rendered (1) PARTLY GRANTING
the petition in G.R. No. 120334 by setting aside that portion of the challenged
decision of the Court of Appeals in CA-G.R. CV No. 24068 affirming the
summary judgment as to the right of respondent ROLANDO I. TORRES to actual
damages; (2) DENYING for want of merit the petition in G.R. No. 120337; and (3)
REMANDING this case to the trial court for the reception of the evidence for
Northwest Airlines, Inc. in Civil Case No. 88-46117 and, thereafter, for the
rendition of the judgment therein on the merits.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Kapunan, and Vitug, JJ., concur.

Per Labitoria, E., J,, with Ramirez, P. and Abad Santos, Q., Jr., JJ., concurring. Rollo G.R. No.
120334, 42-50; Rollo G.R. No. 120337, 27-35.
[1]

[2]

Rollo G.R. No. 120334, 44-45; Rollo G.R. No. 120337, 29-30.

[3]

Original Record (OR) Civil Case No. 88-46117, 115.

[4]

Id., 189.

[5]

Per Judge Sergio D. Mabunay. OR, 191-204.

[6]

Rollo, CA-G.R. CV No. 24068, 11.

[7]

Id., unpaginated; Defendant-Appellants Brief, 6-7.

[8]

Supra note 1.

This is now Section 1 of Rule 33 of the 1997 Rules of Civil Procedure with modification in
the wordings to make the provision clearer.
[9]

[10]

Rollo, G.R. No. 120334, 52.

[11]

1 Florenz D. Regalado, Remedial Law Compendium 359-360 (Sixth Revised Edition 1997).

[12]

Paragraphs 21 and 22, Answer, OR, 33-34.

[13]

Paragraph 23, Answer, OR, 34.

[14]

Paragraph 13 of the Complaint and letter (b) of the Prayer thereof, OR, 5 and 6.

[15]

192 SCRA 9, 17 [1990].

THIRD DIVISION

[G.R. No. 138739. July 6, 2000]

10. RADIOWEALTH FINANCE COMPANY, petitioner, vs. Spouses


VICENTE and MA. SUMILANG DEL ROSARIO,respondents.
DECISION
PANGANIBAN, J.:

When a demurrer to evidence granted by a trial court is reversed on appeal,


the reviewing court cannot remand the case for further proceedings. Rather, it
should render judgment on the basis of the evidence proffered by the
plaintiff. Inasmuch as defendants in the present case admitted the due execution
of the Promissory Note both in their Answer and during the pretrial, the appellate
court should have rendered judgment on the bases of that Note and on the other
pieces of evidence adduced during the trial.
The Case

Before us is a Petition for Review on Certiorari of the December 9, 1997


Decision[1] and the May 3, 1999 Resolution [2] of the Court of Appeals in CA-GR
CV No. 47737. The assailed Decision disposed as follows:

WHEREFORE, premises considered, the appealed order (dated


November 4, 1994) of the Regional Trial Court (Branch XIV) in the City
of Manila in Civil Case No. 93-66507 is hereby REVERSED and SET
ASIDE. Let the records of this case be remanded to the court a quo for
further proceedings. No pronouncement as to costs.[3]
The assailed Resolution denied the petitioners Partial Motion for
Reconsideration.[4]
The Facts

The facts of this case are undisputed. On March 2, 1991, Spouses Vicente
and Maria Sumilang del Rosario (herein respondents), jointly and severally
executed, signed and delivered in favor of Radiowealth Finance Company
(herein petitioner), a Promissory Note [5] for P138,948. Pertinent provisions of the
Promissory Note read:

FOR VALUE RECEIVED, on or before the date listed below, I/We


promise to pay jointly and severally Radiowealth Finance Co. or order
the sum of ONE HUNDRED THIRTY EIGHT THOUSAND NINE
HUNDRED FORTY EIGHT Pesos (P138,948.00) without need of notice
or demand, in installments as follows:
P11,579.00 payable for 12 consecutive months starting on
________ 19__ until the amount of P11,579.00 is fully
paid. Each installment shall be due every ____ day of each
month. A late payment penalty charge of two and a half (2.5%)
percent per month shall be added to each unpaid installment
from due date thereof until fully paid.
xxxxxx

xxx

It is hereby agreed that if default be made in the payment of any of the


installments or late payment charges thereon as and when the same
becomes due and payable as specified above, the total principal sum
then remaining unpaid, together with the agreed late payment charges
thereon, shall at once become due and payable without need of notice
or demand.

xxxxxx

xxx

If any amount due on this Note is not paid at its maturity and this Note is
placed in the hands of an attorney or collection agency for collection,
I/We jointly and severally agree to pay, in addition to the aggregate of
the principal amount and interest due, a sum equivalent to ten (10%)
per cent thereof as attorneys and/or collection fees, in case no legal
action is filed, otherwise, the sum will be equivalent to twenty-five (25%)
percent of the amount due which shall not in any case be less than
FIVE HUNDRED PESOS (P500.00) plus the cost of suit and other
litigation expenses and, in addition, a further sum of ten per cent (10%)
of said amount which in no case shall be less than FIVE HUNDRED
PESOS (P500.00), as and for liquidated damages.[6]
Thereafter, respondents defaulted on the monthly installments. Despite
repeated demands, they failed to pay their obligations under their Promissory
Note.
On June 7, 1993, petitioner filed a Complaint[7] for the collection of a sum of
money before the Regional Trial Court of Manila, Branch 14.[8]During the trial,
Jasmer Famatico, the credit and collection officer of petitioner, presented in
evidence the respondents check payments, the demand letter dated July 12,
1991, the customers ledger card for the respondents, another demand letter and
Metropolitan Bank dishonor slips. Famatico admitted that he did not have
personal knowledge of the transaction or the execution of any of these pieces of
documentary evidence, which had merely been endorsed to him.
On July 4, 1994, the trial court issued an Order terminating the presentation
of evidence for the petitioner.[9] Thus, the latter formally offered its evidence and
exhibits and rested its case on July 5, 1994.
Respondents filed on July 29, 1994 a Demurrer to Evidence [10] for alleged
lack of cause of action. On November 4, 1994, the trial court dismissed[11] the
complaint for failure of petitioner to substantiate its claims, the evidence it had
presented being merely hearsay.
On appeal, the Court of Appeals (CA) reversed the trial court and remanded
the case for further proceedings.
Hence, this recourse.[12]
Ruling of the Court of Appeals

According to the appellate court, the judicial admissions of respondents


established their indebtedness to the petitioner, on the grounds that they
admitted the due execution of the Promissory Note, and that their only defense

was the absence of an agreement on when the installment payments were to


begin. Indeed, during the pretrial, they admitted the genuineness not only of the
Promissory Note, but also of the demand letter dated July 12, 1991. Even if the
petitioners witness had no personal knowledge of these documents, they would
still be admissible if the purpose for which [they are] produced is merely to
establish the fact that the statement or document was in fact made or to show its
tenor[,] and such fact or tenor is of independent relevance.
Besides, Articles 19 and 22 of the Civil Code require that every person must
-- in the exercise of rights and in the performance of duties -- act with justice, give
all else their due, and observe honesty and good faith. Further, the rules on
evidence are to be liberally construed in order to promote their objective and to
assist the parties in obtaining just, speedy and inexpensive determination of an
action.
Issue

The petitioner raises this lone issue:

The Honorable Court of Appeals patently erred in ordering the remand


of this case to the trial court instead of rendering judgment on the basis
of petitioners evidence.[13]
For an orderly discussion, we shall divide the issue into two parts: (a) legal
effect of the Demurrer to Evidence, and (b) the date when the obligation became
due and demandable.
The Courts Ruling

The Petition has merit. While the CA correctly reversed the trial court, it
erred in remanding the case "for further proceedings."
Consequences of a Reversal, on Appeal, of a Demurrer to Evidence

Petitioner contends that if a demurrer to evidence is reversed on appeal, the


defendant should be deemed to have waived the right to present evidence, and
the appellate court should render judgment on the basis of the evidence
submitted by the plaintiff. A remand to the trial court "for further proceedings"
would be an outright defiance of Rule 33, Section 1 of the 1997 Rules of Court.
On the other hand, respondents argue that the petitioner was not necessarily
entitled to its claim, simply on the ground that they lost their right to present
evidence in support of their defense when the Demurrer to Evidence was

reversed on appeal. They stress that the CA merely found them indebted to
petitioner, but was silent on when their obligation became due and demandable.
The old Rule 35 of the Rules of Court was reworded under Rule 33 of the
1997 Rules, but the consequence on appeal of a demurrer to evidence was not
changed. As amended, the pertinent provision of Rule 33 reads as follows:

SECTION 1. Demurrer to evidence.After the plaintiff has completed


the presentation of his evidence, the defendant may move for dismissal
on the ground that upon the facts and the law the plaintiff has shown no
right to relief. If his motion is denied, he shall have the right to present
evidence. If the motion is granted but on appeal the order of dismissal
is reversed he shall be deemed to have waived the right to present
evidence.[14]
Explaining the consequence of a demurrer to evidence, the Court
in Villanueva Transit v. Javellana[15] pronounced:

The rationale behind the rule and doctrine is simple and logical. The
defendant is permitted, without waiving his right to offer evidence in the
event that his motion is not granted, to move for a dismissal (i.e., demur
to the plaintiffs evidence) on the ground that upon the facts as thus
established and the applicable law, the plaintiff has shown no right to
relief. If the trial court denies the dismissal motion, i.e., finds that
plaintiffs evidence is sufficient for an award of judgment in the absence
of contrary evidence, the case still remains before the trial court which
should then proceed to hear and receive the defendants evidence so
that all the facts and evidence of the contending parties may be properly
placed before it for adjudication as well as before the appellate courts,
in case of appeal. Nothing is lost. The doctrine is but in line with the
established procedural precepts in the conduct of trials that the trial
court liberally receive all proffered evidence at the trial to enable it to
render its decision with all possibly relevant proofs in the record, thus
assuring that the appellate courts upon appeal have all the material
before them necessary to make a correct judgment, and avoiding the
need of remanding the case for retrial or reception of improperly
excluded evidence, with the possibility thereafter of still another appeal,
with all the concomitant delays. The rule, however, imposes the
condition by the same token that if his demurrer is granted by the trial
court, and the order of dismissal is reversed on appeal, the movant
losses his right to present evidence in his behalf and he shall have been
deemed to have elected to stand on the insufficiency of plaintiffs case
and evidence. In such event, the appellate court which reverses the

order of dismissal shall proceed to render judgment on the merits on the


basis of plaintiffs evidence. (Underscoring supplied)
In other words, defendants who present a demurrer to the plaintiffs evidence
retain the right to present their own evidence, if the trial court disagrees with
them; if the trial court agrees with them, but on appeal, the appellate court
disagrees with both of them and reverses the dismissal order, the defendants
lose the right to present their own evidence. [16] The appellate court shall, in
addition, resolve the case and render judgment on the merits, inasmuch as a
demurrer aims to discourage prolonged litigations. [17]
In the case at bar, the trial court, acting on respondents demurrer to
evidence, dismissed the Complaint on the ground that the plaintiff had adduced
mere hearsay evidence. However, on appeal, the appellate court reversed the
trial court because the genuineness and the due execution of the disputed pieces
of evidence had in fact been admitted by defendants.
Applying Rule 33, Section 1 of the 1997 Rules of Court, the CA should have
rendered judgment on the basis of the evidence submitted by the
petitioner. While the appellate court correctly ruled that the documentary
evidence submitted by the [petitioner] should have been allowed and appreciated
xxx, and that the petitioner presented quite a number of documentary exhibits
xxx enumerated in the appealed order,[18] we agree with petitioner that the CA
had sufficient evidence on record to decide the collection suit. A remand is not
only frowned upon by the Rules, it is also logically unnecessary on the basis of
the facts on record.
Due and Demandable Obligation

Petitioner claims that respondents are liable for the whole amount of their
debt and the interest thereon, after they defaulted on the monthly installments.
Respondents, on the other hand, counter that the installments were not yet
due and demandable. Petitioner had allegedly allowed them to apply their
promotion services for its financing business as payment of the Promissory
Note. This was supposedly evidenced by the blank space left for the date on
which the installments should have commenced.[19] In other words, respondents
theorize that the action for immediate enforcement of their obligation is
premature because its fulfillment is dependent on the sole will of the
debtor. Hence, they consider that the proper court should first fix a period for
payment, pursuant to Articles 1180 and 1197 of the Civil Code.
This contention is untenable. The act of leaving blank the due date of the
first installment did not necessarily mean that the debtors were allowed to pay as
and when they could. If this was the intention of the parties, they should have so
indicated in the Promissory Note. However, it did not reflect any such intention.

On the contrary, the Note expressly stipulated that the debt should be
amortized monthly in installments of P11,579 for twelve consecutive
months. While the specific date on which each installment would be due was left
blank, the Note clearly provided that each installment should be payable each
month.
Furthermore, it also provided for an acceleration clause and a late payment
penalty, both of which showed the intention of the parties that the installments
should be paid at a definite date. Had they intended that the debtors could pay
as and when they could, there would have been no need for these two clauses.
Verily, the contemporaneous and subsequent acts of the parties manifest
their intention and knowledge that the monthly installments would be due and
demandable each month.[20] In this case, the conclusion that the installments had
already became due and demandable is bolstered by the fact that respondents
started paying installments on the Promissory Note, even if the checks were
dishonored by their drawee bank. We are convinced neither by their avowals
that the obligation had not yet matured nor by their claim that a period for
payment should be fixed by a court.
Convincingly, petitioner has established not only a cause of action against
the respondents, but also a due and demandable obligation. The obligation of
the respondents had matured and they clearly defaulted when their checks
bounced. Per the acceleration clause, the whole debt became due one month
(April 2, 1991) after the date of the Note because the check representing their
first installment bounced.
As for the disputed documents submitted by the petitioner, the CA ruling in
favor of their admissibility, which was not challenged by the respondents,
stands. A party who did not appeal cannot obtain affirmative relief other than that
granted in the appealed decision. [21]
It should be stressed that respondents do not contest the amount of the
principal obligation. Their liability as expressly stated in the Promissory Note and
found by the CA is P13[8],948.00[22] which is payable in twelve (12) installments
at P11,579.00 a month for twelve (12) consecutive months. As correctly found
by the CA, the "ambiguity" in the Promissory Note is clearly attributable to human
error.[23]
Petitioner, in its Complaint, prayed for 14% interest per annum from May 6,
1993 until fully paid. We disagree. The Note already stipulated a late payment
penalty of 2.5 percent monthly to be added to each unpaid installment until fully
paid. Payment of interest was not expressly stipulated in the Note. Thus, it
should be deemed included in such penalty.
In addition, the Note also provided that the debtors would be liable for
attorneys fees equivalent to 25 percent of the amount due in case a legal action
was instituted and 10 percent of the same amount as liquidated
damages. Liquidated damages, however, should no longer be imposed for being
unconscionable.[24] Such damages should also be deemed included in the 2.5

percent monthly penalty. Furthermore, we hold that petitioner is entitled to


attorneys fees, but only in a sum equal to 10 percent of the amount due which
we deem reasonable under the proven facts.[25]
The Court deems it improper to discuss respondents' claim for moral and
other damages. Not having appealed the CA Decision, they are not entitled to
affirmative relief, as already explained earlier.[26]
WHEREFORE, the Petition is GRANTED. The appealed Decision
is MODIFIED in that the remand is SET ASIDE and respondents are ordered TO
PAY P138,948, plus 2.5 percent penalty charge per month beginning April 2,
1991 until fully paid, and 10 percent of the amount due as attorneys fees. No
costs.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

[1]

Rollo, pp. 23-30. Promulgated by the Third Division composed of J. Ramon Mabutas Jr., ponente; JJ
Emerito C. Cui, Division chairman, and Hilarion L. Aquino, member, both concurring.
[2]
Rollo, p. 20. In this Resolution, J. Cui was replaced by J. Corona Ibay-Somera.
[3]
Assailed Decision, p. 7; rollo, p. 29.
[4]
Rollo, p. 20.
[5]
Annex C; rollo, p. 31.
[6]
Annex C; rollo, p. 31.
[7]
Rollo, pp. 32-34.
[8]
Presided by Judge Inocencio D. Maliaman.
[9]
Appellants Brief before the CA, p. 4; rollo, p. 48.
[10]
Rollo, pp. 37-38.
[11]
Rollo, pp. 40-41.
[12]
This case was deemed submitted for decision upon receipt by this Court on April 28, 2000 of the
petitioners Memorandum, signed by Atty. Allan B. Gepty of Singson Valdez & Associates. Respondents
Memorandum, signed by Atty. Eduardo V. Bringas of Romeo R. Bringas & Associates, was received
earlier, on April 3, 2000.
[13]
Memorandum for the Petitioner, p. 4; rollo, p. 96. Original written in capital letters.
[14]
In the old Rules, the same provision is worded in Section 1 of Rule 35 as follows:
SECTION 1. Effect of judgment on demurrer to evidence.After the plaintiff has completed the
presentation of his evidence, the defendant without waiving his right to offer evidence in the event the
motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff
has shown no right to relief. However, if the motion is granted and the order of dismissal is reversed on
appeal, the movant loses his right to present evidence in his behalf.
[15]
33 SCRA 755, 761-762, June 30, 1970, per Zaldivar, J.
[16]
Siayngco v. Costibolo, 27 SCRA 272, 284, February 28, 1969; Tison v. Court of Appeals, 276 SCRA
582, 599-600, July 31, 1997.
[17]
Atun v. Nuez, 97 Phil. 762, 765, October 26, 1955; Arroyo v. Azur, 76 Phil. 493.
[18]
CA Decision, pp. 4-5; rollo, pp. 26-27.
[19]
Respondents Answer, p. 1; rollo, p. 35.
[20]
Article 1371 of the Civil Code provides that [i]n order to judge the intention of the contracting parties,
their contemporaneous and subsequent acts shall be principally considered.
[21]
Lagandaon v. Court of Appeals, 290 SCRA 330, May 21, 1998; Dio v. Concepcion, 296 SCRA 579,
September 25, 1998. Filflex Industrial & Manufacturing Corporation v. National Labor Relations
Commission, 286 SCRA 245, February 12, 1998; Philippine Tobacco Flue-Curing & Redrying Corporation

v. National Labor Relations Commission, 300 SCRA 37, December 10, 1998; Quezon Development Bank
v. Court of Appeals, 300 SCRA 206, December 16, 1998.
[22]
There was a typographical error in the CA Decision. As reflected in the Promissory Note, the amount
should be P138,948 not P130,948.
[23]
CA Decision, p. 5; rollo, p. 27.
[24]
Article 2226 of the Civil Code provides that [l]iquidated damages, whether intended as an indemnity or
a penalty, shall be equitably reduced if they are iniquitous or unconscionable.
[25]
Law Firm of Raymuncdo A. Armovit v. CA, 202 SCRA 16, September 27, 1991, Pascual v. CA, 300
SCRA 214, December 16, 1998.
[26]
See note 21.

FIRST DIVISION

[G.R. No. 110223. April 8, 1997]

12. ARMY AND NAVY CLUB OF MANILA, INC., petitioner, vs.


HONORABLE COURT OF APPEALS, HON. WILFREDO D.
REYES, as Judge REGIONAL TRIAL COURT OF MANILA,
BRANCH 36 (formerly (Branch 17), HON. A. CAESAR
SANGCO, as Judge, METROPOLITAN TRIAL COURT,
BRANCH 17-MANILA and the CITY OF MANILA,
represented
herein
by
MAYOR
ALFREDO
LIM, respondents.
DECISION
KAPUNAN, J.:

The instant petition seeks to annul the decision of the Court of Appeals
affirming the decision of the Regional Trial Court, National Capital Region,
Branch 36, Manila which affirmed the summary judgment rendered by the
Metropolitan Trial Court of Manila, Branch 17.
On November 29, 1989 the City of Manila filed an action against herein
petitioner with the MTC for ejectment. The complaint alleged that:
1. That plaintiff is a municipal corporation duly organized and existing by virtue
of Rep. Act No. 409, as amended, with offices at City Hall Building, Manila,
represented in this action by its incumbent City Mayor, Hon. Gemiliano C.
Lopez, Jr., with the same address as plaintiff;
Defendant is likewise a corporation organized under the laws of the Philippines
with offices at the Army and Navy Club Building, Luneta, Manila, where it
may be served with summons;
2. That plaintiff is the owner of a parcel of land with an area of 12,705.30 sq. m.
located at South Boulevard corner Manila Bay, Manila, covered by TCT No.

156868/1059 of the Register of Deeds of Manila, together with the


improvements thereon known as the Army and Navy of Manila;
3. That defendant is occupying the above-described land and the Army and
Navy Club Building by virtue of a Contract of Lease executed between
plaintiff and defendant in January 1983, copy of which is attached hereto as
Annex "A";
4. That paragraph 1 of the said Contract of Lease provides that:

(1)
That the LESSEE shall construct, at its own expense, a modern multistoried hotel at a cost of not less than FIFTY MILLION PESOS (P50,000.00)
(sic), which shall automatically belong to the LESSOR upon the expiration
and/or termination of the lease agreement, without right of the LESSEE for
reimbursement for the costs of its construction; PROVIDED, HOWEVER, that
construction of the said hotel shall be commenced within one (1) year, and
completed as far as practicable within five (5) years, from date of approval by
proper government officials of this lease agreement; PROVIDED, FURTHER,
that the plans and specification for the same hotel shall be approved first by the
LESSOR before actual construction;
5. That in violation of the aforequoted provision, defendant has failed and/or
refused to construct a modern multi-storied hotel provided for therein, long
after the expiration period therein stipulated and despite demands of plaintiff,
to the prejudice of plaintiff who has agreed to defendant's continued
retention of the property on a lease-back agreement on the basis of the
warranties of defendant to put up a contemporary multi-storied building;
6. That paragraph 3 of the Contract of Lease also stipulates that:

(3)
That the LESSEE shall pay a rent of TWO HUNDRED FIFTY
THOUSAND PESOS (P250,000.00) a year, which may be paid by the
LESSEE in twelve (12) equally monthly installments within the first five
(5) days of each month, without the necessity of a demand, subject,
however, to rental adjustment after the first five (5) days of each month,
without the necessity of a demand, subject, however, to rental
adjustment after the first five years of this lease, at the rate of not more
than ten per centum (10%) per annum every two years, or on the basis of
the increase in the prevailing market value of the leased premises
whichever is higher of the two criteria;
7. That defendant also reneged on its rental obligation notwithstanding
plaintiff's demand to pay, for its use and occupancy of the plaintiff's property,
starting from January 1983 to the present, and its rental account stood
at P1,604,166.70 as of May, 1989;
8. That in paragraph 4 of the Contract of Lease, it is also provided that:

(4)
That the LESSEE shall pay the realty tax due on the land, including
those assessed against the improvements thereon, as well as all government
license, permits, fees and charges prescribed by law, Presidential decrees and
ordinances for the leased premises, including those for the establishment and
operation of a modern multi-storied hotel and all constructions and
modifications pursuant to the provisions of this Contract;
9.

That defendant violated its undertaking to pay the taxes due on the land
and improvement, so much so that as of December 1989, its aggregate
realty tax liability amounts to P3,818,913.81;

10.
That repeated demands of plaintiff had been made upon the
defendant to comply with its aforesaid contractual obligations, but defendant
however remained unfazed; it still failed to perform any of its contractual
obligations.
11.
That as a result, plaintiff rescinded their Contract of Lease and
demanded defendant to vacate, the last of which was contained in a letter
dated May 24, 1989, copy of which is attached hereto as ANNEX "B". To
date however, defendant however, has not budged an inch from the property
of plaintiff;
12.
That the reasonable rental value for defendant's continued use and
occupancy of the subject premises which is a prime property along Rozas
(sic) Boulevard in Luneta area is P636,467.00 a month in the context of the
prevailing rental rates of comparable real property;[1]

On December 29, 1989 or within the reglementary period, petitioner filed its
answer to the complaint. Subsequently, on February 22, 1990, it filed a "Motion
for Leave to File and for Admission of Amended Answer" allegedly asserting
additional special and affirmative defenses.
On May 23, 1990, the City of Manila filed a Motion for Summary
Judgment on the ground that there exists no genuine triable issue in the case.
[2]

On July 27, 1990, the MTC denied the petitioner's motion for leave to admit
its amended answer for lack of merit. Thus, on October 5, 1990, a decision was
rendered with the following dispositive portion:

WHEREFORE, premises considered, judgment is hereby rendered in favor of


the plaintiff, ordering the defendant:
a)
and all persons claiming rights or title under it, to immediate
(sic) vacate and surrender to the plaintiff, the premises more particularly
described as the Army and Navy Club Bldg. located at South Boulevard
corner Manila Bay, Manila;
b)
to pay, all with legal interest thereon, its rental arrearages at the rate
of P250,000.00 per year with a corresponding ten (10%) percent increase every

two years from January, 1983 until it finally vacates and surrenders the
premises to the plaintiff;
c)

the costs of suit.

SO ORDERED.

[3]

On appeal, the Regional Trial Court presided by Judge Wilfredo D. Reyes


affirmed in toto the summary judgment of the Metropolitan Trial Court.
[4]

Petitioner elevated its case to the Court of Appeals. On October 30, 1992,
the Court of Appeals dismissed the appeal.
On May 18, 1996, the Court of Appeals issued a resolution denying the
motion for reconsideration of the decision dated October 30, 1992. At the same
time, it also denied the City of Manila's motion for issuance of a writ of execution
pending appeal.
Petitioner filed the instant petition raising the following issues:

1.
RESPONDENT COURTS GRAVELY ERRED IN UPHOLDING THE
OUSTER OF HEREIN PETITIONER FROM THE DISPUTED PREMISES
WHICH IS A CLEAR TRANSGRESSION OF THE FORMAL
DECLARATION OF THE SITE OF HEREIN PETITIONER AS A
HISTORICAL LANDMARK.
2.
WHETHER OR NOT RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN AFFIRMING THE DECISIONS OF
RESPONDENT METROPOLITAN TRIAL COURT (MTC) AND
REGIONAL TRIAL COURT (RTC) JUDGES DENYING ADMISSION OF
PETITIONER'S AMENDED ANSWER.
3.
WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED
IN AFFIRMING THE SUMMARY JUDGMENT RENDERED BY
RESPONDENT MTC AND RTC JUDGES.
4.
WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED
IN NOT HOLDING THAT PETITIONER WAS DENIED DUE PROCESS
BY THE RENDITION OF SUMMARY JUDGMENT AGAINST IT.
5.
AS AN INCIDENT TO THE MAIN ISSUE, THE PROPERTY,
SUBJECT MATTER OF THIS CASE, IS OF PUBLIC DOMAIN AND
THEREFORE, THE CONTRACT OF LEASE EXECUTED BY THE CITY
OF MANILA IN FAVOR OF PETITIONER IS VOID.
[5]

There is no merit in the petition.


Amidst all the issues raised by the petitioner, the instant case is a simple
ejectment suit.
There is no dispute that the City of Manila is the owner of a prime parcel of
land with an area of 12,705.30 square meters located at South Boulevard corner
Manila Bay together with the improvement thereon known as Army and Navy
Club of Manila. Petitioner entered into a lease contract with private respondent
sometime in January, 1983. In said lease contract, it agreed to: 1) pay an annual
a rent of P250,000.00 with a 10% increase every two (2) years; 2) pay the realty
tax due on the land; and 3) construct a modern multi-storey hotel provided for
therein within five (5) years which shall belong to the City upon expiration or
termination of the lease without right of reimbursement for the cost of
construction.
[6]

Petitioner failed to pay the rents for seven (7) consecutive years. As of
October, 1989 when the action was filed, rental arrears ballooned toP7.2 million.
Real estate taxes on the land accumulated to P6,551,408.28 as of May,
1971. Moreover, petitioner failed to erect a multi-storey hotel in the site. For
violations of the lease contract and after several demands, the City of Manila had
no other recourse but to file the action for illegal detainer and demand petitioner's
eviction from the premises. Article 1673 of the New Civil Code is explicit:

ART. 1673. The lessor may judicially eject the lessee for any of the
following causes:
(1) When the period agreed upon, or that which is fixed for the duration of
leases under articles 1682 and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions agreed upon in the contract;
(4) When the lessee devotes the thing leased to any use or service not
stipulated which causes the deterioration thereof; or if he does not observe
the requirement in No. 2 of article 1657, as regards the use thereof.
The ejectment of tenants of agricultural lands is governed by special laws.
(emphasis supplied)

Petitioner invokes and capitalizes on the fact that the Army and Navy Club
has been declared a national historical landmark by the National Historical
Commission on June 29, 1992 which the lower courts allegedly never gave due
consideration. Thus, its existence should not in any way be undermined by the
simple ejectment suit filed against it. Petitioner contends that all parties are
enjoined by law to preserve its existence and site.
To support its claim, petitioner presented the Certificate of Transfer and
Acceptance of the Historical Marker granted to it pursuant to R.A. 4846, as
amended by PD 374 which provides that it shall be "the policy of the State to

preserve and protect the important cultural properties and National Cultural
Treasures of the nation and to safeguard their intrinsic value."
[7]

The Marker reads as follows:

CERTIFICATE OF TRANSFER
AND
ACCEPTANCE OF HISTORICAL MARKER
ARMY AND NAVY CLUB
TO ALL PERSONS TO WHOM THESE PRESENTS MAY COME:
Be it known that the National Historical Institute, in the exercise of its authority
vested by law and in compliance with its mandate to honor national heroes and
perpetuate the glory of their deeds, and to preserve historical sites, has
transferred this historical marker unto Administration of Army and Navy Club,
who has agreed to accept the same and to maintain it as a sacred duty.
IN WITNESS WHEREOF, the parties have hereunto set their hands this
29th day of June, 1992, in Manila.
NATIONAL HISTORICAL
INSTITUTE
by:
(SGD.) ILLEGIBLE
ILLEGIBLE
CAPT. VICENTE J.
BRILLANTES
Transferee
nsferor

(SGD.)
SERAFIN D. QUIASON
Tra

Attested:
(SGD) ILLEGIBLE
ILLEGIBLE
CHIEF SUPT JOSE PERCIVAL ADIONG
CASTANEDA

(SGD.)
AVELINA M.

SUBSCRIBED AND SWORN to before me in Manila, Philippines, this 29th


day of June, 1992 by the affiants.
(SGD.) ILLEGIBLE

(SGD.) ILLEGIBLE

BGEN ANTONIO V. RUSTIA


GUEVARA
(SGD.) ILLEGIBLE
RAMON J. SIYTANGCO, JR.
ARREOLA

COL MANUEL R.
(SGD.) ILLEGIBLE
CAPT. DANIEL A.
(SGD.) LOPE M. VELASCO
NOTARY PUBLIC

My Commission Expires Dec. 31, 1993


Not. Reg. No. 297
022088
Page 61
92, Manila
Book II
320197
Series of 1992
18-91, Pasig

PTR
1-2IBP
12-

[8]

While the declaration that it is a historical landmark is not objectionable, the


recognition is, however, specious. We take the occasion to elucidate on the
views of Fr. Joaquin Bernas who was invited as amicus curiae in the recent case
of Manila Prince Hotel v. GSIS where the historical character of Manila Hotel
was also dealt with. He stated that:
[9]

The country's artistic and historic wealth is therefore a proper subject for the
exercise of police power:". . . which the State may regulate." This is a function
of the legislature. And once regulation comes in, due process also comes into
play. When the classification of property into historical treasures or landmarks
will involve the imposition of limits on ownership, the Bill of Rights demands
that it be done with due process both substantive and procedural. In
recognition of this constitutional principle, the State in fact has promulgated
laws, both general and special, on the subject.
x x x the current general law on the subject is R.A. 4846, approved on June 18,
1966, and amended by P.D. No. 374. The Act prescribes the manner of
classifying historical and cultural properties thus:
Sec. 4. The National Museum, hereinafter referred to as the Museum shall be
the agency of the government which, shall implement the provisions of this
Act.

Sec. 5. The Director of the Museum, hereinafter referred to as the Director,


shall undertake a census of the important cultural properties of the Philippines,
keep a record of their ownership, location, and condition, and maintain an upto-date register of the same. Private collectors and owners of important cultural
properties and public and private schools in possession of these items, shall be
required to register their collections with the Museum when required by the
Director and to report to the same office when required by the Director any new
acquisitions, sales, or transfers thereof.
Sec. 6. The Director is authorized to convene panels of experts, as often as
the need for their services may arise, each to be composed of three competent
men in the specialized fileds of anthropology, natural sciences, history and
archives, fine arts, philately and numismatics, and shrines and monuments,
etc. Each panel shall, after careful study and deliberation, decide which among
the cultural properties in their field of specialization shall be designated as
"National Cultural Treasures" or "Important Cultural Properties." The Director
is further authorized to convene panels of experts to declassify designated
"National Cultural Treasures."
The Director shall within ten days of such action by the panel transmit their
decision and cause the designation-list to be published in at least two
newspapers of general circulation. The same procedure shall be followed in the
declassification of important cultural properties and national treasures.
Sec. 7. In designation of a particular cultural property as a "national cultural
treasure," the following procedure shall be observed:
a. Before the actual designation, the owner, if the property is privately
owned, shall be notified at least fifteen days prior to the intended designation,
and he shall be invited to attend the deliberation and given a chance to be
heard. Failure on the part of the owner to attend the deliberation shall not bar
the panel to render its decision. Decision shall be given by the panel within a
week after its deliberation. In the event that the owner desires to seek
reconsideration of the designation made by the panel, he may do so within days
from the date that the decision has been rendered. If no request for
reconsideration is filed after this period, the designation is then considered final
and executory. Any request for reconsideration filed within thirty days and
subsequently again denied by the panel, may be further appealed to another
panel chairmanned by the Secretary of Education, with two experts as members
appointed by the Secretary of Education. Their decision shall be final and
binding.

b.
Within each kind or class of objects, only the rare
and unique objects may be designated as "National Cultural
Treasures." The remainder, if any, shall be treated as cultural property.
c. Designated "National Cultural Treasures" shall be marked, described, and
photographed by the National Museum. The owner retains possession of the
same but the Museum shall keep a record containing such information as: name
of article, owner, period, source, location, condition, description, photograph,
identifying marks, approximate value, and other pertinent data.
Thus, for Manila Hotel to be treated as special cultural or historical property, it
must go through the procedure described above. Eloquent nationalistic
endorsements of classification will not transform a piece of property into a
legally recognized historical landmark. . . .
In the case at bar, there is no showing that the above procedure has been
complied with. The City of Manila even observed that the signatories thereto are
officers and members of the Club making such certification self-serving. It
behooves us to think why the declaration was conferred only in 1992, three (3)
years after the action for ejectment was instituted. We can only surmise that this
was merely an afterthought, an attempt to thwart any legal action taken against
the petitioner. Nonetheless, such certification does not give any authority to the
petitioner to lay claim of ownership, or any right over the subject
property. Nowhere in the law does it state that such recognition grants
possessory rights over the property to the petitioner. Nor is the National
Historical Commission given the authority to vest such right of ownership or
possession of a private property to the petitioner. The law merely states that it
shall be the policy of state to preserve and protect the important cultural
properties and National Cultural Treasures of the nation and to safeguard their
intrinsic value. In line with this, any restoration, reconstruction or preservation of
historical buildings shall only be made under the supervision of the Director of the
National Museum. The authority of the National Historical Commission is limited
only to the supervision of any reconstruction, restoration or preservation of the
architectural design of the identified historical building and nothing more. Even
assuming that such recognition made by the National Historical Commission is
valid, the historical significance of the Club, if any, shall not be affected if
petitioner's eviction from the premises is warranted. Unfortunately, petitioner is
merely a lessee of the property. By virtue of the lease contract, petitioner had
obligations to fulfill. Petitioner can not just hide behind some recognition
bestowed upon it in order to escape from its obligation or remain in
possession. It violated the terms and conditions of the lease contract. Thus,
petitioner's eviction from the premises is inevitable.
[10]

[11]

Anent the procedural issues raised, the Court finds no reversible error in the
summary judgment rendered by the trial court.

A summary judgment is one granted by the court upon motion by a party for
an expeditious settlement of the case, there appearing from the pleadings,
depositions, admissions, and affidavits that there are no important questions or
issues of fact involved (except as to the amount of damages), and that therefore
the moving party is entitled to a judgment as a matter of law.
[12]

In the case at bar, there is clearly no substantial triable issue. In the Answer
filed on December 29, 1989, petitioner does not deny the existence of the lease
contract executed with the City of Manila in January 1983. It admitted that it
failed to pay the rents and real estate taxes and construction of a multi-storey
building.
It put up the defense that it was unable to fulfill its obligations of the contract
due to economic recession in 1984 as an aftermath of the Ninoy Aquino
assassination. Considering that there is no genuine issue as to any material fact,
a summary judgment is proper. The argument that it was declared a historical
landmark, is not a substantial issue of fact which does not, in any way, alter or
affect the merit of the ejectment suit.
Likewise, we find no error much less any abuse of authority on the part of the
lower court in not admitting the Amended Answer. Aside from the fact that it was
filed one (1) year after the original answer was filed, it put up defenses which are
entirely in contradiction to its original answer. This is in contravention of the rules
of procedure. Having admitted in the original answer that the City of Manila is
the registered owner of the property and that it leased the property from it,
petitioner can not now deny such claim of ownership. The Court of Appeals
correctly observed on this point:
[13]

Be that as it may, at this last stage, after herein petitioner has dealt with the
private respondent as the owner of the leased premises and obtained benefits
from said acknowledgment of such ownership for almost half a century, herein
petitioner cannot be permitted to assume an inconsistent position by denying
said private respondent's ownership of the leased premises when the situation
calls for it. Herein petitioner cannot be allowed to double deal, recognizing
herein private respondent's title over the leased premises and entering into a
lease contract and other covenants, and thereafter after failing to comply with
its obligation provided for in the lease agreement attempt to repudiate the
ownership of private respondent of the subject property.
[14]

WHEREFORE, the decision of the Court of Appeals is AFFIRMED. The


instant petition is DENIED, for lack of merit.
SO ORDERED.
Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Vitug, J., in the result.

[1]

Rollo, pp. 81-84.

[2]

Id., at 108.

[3]

Id., at 125.

[4]

Id., at 127.

[5]

Id., at 27-28.

[6]

Id., at 203-204.

PRESIDENTIAL DECREE NO. 374 AMENDING CERTAIN SECTIONS OF


REPUBLIC ACT NO. 4846. OTHERWISE KNOWN AS THE "CULTURAL
PROPERTIES PRESERVATION AND PROTECTION ACT:
[7]

xxx
Sec. 2. It is hereby declared to be the policy of the state to preserve and protect the
important cultural properties and National Cultural Treasures of the nation and to safeguard their
intrinsic value.
Sec. 3. x x x
a. Cultural properties are old buildings, monuments, shrines, documents, and objects
which may be classified as antiques, relics, or artifacts, landmarks, anthropological and historical
sites, and specimens of natural history which are of cultural, historical, anthropological or
scientific value and significance to the nation; such as physical, anthropological, archaeological
and ethnographical materials, meteorites and tektites; historical objects and manuscripts;
household and agricultural implements; decorative articles or personal adornment; works of art
such as paintings, sculptures, carvings, jewelry, music architecture, sketches, drawings, or
illustrations in part or in whole; works of industrial and commercial art such as furniture, pottery,
ceramics, wrought iron, gold, bronze, silver, wood or other heraldic items, metals, coins, medals,
badges, insignias, coat of arms, crests, flags, arms and armor; vehicles or ships or boats in part
or in whole.
b. cultural properties which have been singled out from among the innumerable cultural
properties as having exceptional historical and cultural significance to the Philippines, but are not
sufficiently outstanding to merit the classification "National Cultural Treasures" are important
cultural properties.
c. A National Cultural Treasure is a unique object found locally, possessing
outstanding historical, cultural artistic and/or scientific value which is highly significant and
important to this country and nation.
xxx
i. A historical site is any place, province, city, town and/or any location and structure
which has played a significant and important role in the history of our country and nation. Such
significance and importance may be cultural, political, sociological or historical.
[8]
[9]

Id., at 193.
G.R. No. 122156, February 3, 1997.

[10]

Comment, Rollo, p. 208.

Sec. 13. All restorations, reconstructions, and preservations of government historical buildings,
shrines, landmarks, monuments, and sites, which have been designated as 'National Cultural
Treasures,' and 'important cultural properties' shall only be undertaken with the written permission
of the Director of the National Museum who shall designate the supervision of the same.
[11]

Secs. 1, 2, 3, Rule 34. Philippine National Bank vs. Noah's Ark Sugar Refinery, 226 SCRA 36
(1993); Vergara, Sr. vs. Suelto, 156 SCRA 753 (1987); Mercado v. Court of Appeals, 162 SCRA
75 (1988).
[12]

[13]

Rule 10, Sec. 3.

[14]

Rollo, pp. 75-76.

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Republic of the Philippines


SUPREME COURT
Baguio City
SECOND DIVISION
13. G.R. No. 153827

April 25, 2006

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,


vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.
DECISION
GARCIA, J.:

In this petition for review under Rule 45 of the Rules of Court, petitioner Asian Construction and Development
Corporation or "ASIAKONSTRUKT," seeks the reversal and setting aside of the decision 1dated March 15, 2002 and
the Resolution2 dated June 3, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 68189. The assailed decision
affirm with modification the Summary Judgment rendered by the Regional Trial Court (RTC) of Makati City in an
action for a sum of money thereat commenced by the herein respondent, Philippine Commercial International Bank
(PCIBANK) against the petitioner, while the challenged resolution denied petitioners motion for reconsideration.
The facts:
On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a complaint3 for a sum of money with
prayer for a writ of preliminary attachment against petitioner ASIAKONSTRUKT. Docketed as Civil Case No. 99-432,
the complaint alleged, inter alia, as follows:
FIRST CAUSE OF ACTION
2.01 On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated credit accommodations from
PCIBANK in the amount of Four Million Four Hundred Eighty Seven Thousand U.S. dollars (US$4,487,000.00),
exclusive of interests, charges and fees thereon and the cost of collecting the same. These credit accommodations
are covered by the following promissory notes:
xxx xxx xxx
2.02 Prompt and faithful payment of all the foregoing promissory notes was secured by the following deeds of
assignment executed by ASIAKONSTRUKT in favor of PCIBANK:
(a) Deed of Assignment of Receivables/Contract Proceeds dated 20 July 1994 where ASIAKONSTRUKT
assigned its receivables from its Contract with the National Power Corporation (NPC) in the amount of
.P54,500,000;
(b) Deed of Assignment of Receivables dated 28 June 1995 where ASIAKONSTRUKT assigned its
receivables from its Contract with the NPC in the amount of P26,281,000.00;
(c) Deed of Assignment of Receivables dated 28 August 1995 where ASIAKONSTRUKT assigned its
receivables from its Sub-Contract with ABB Power, Inc., in the amount of P43,000,000.00;
(d) Deed of Assignment of Contract Proceeds dated 27 March 1996 where ASIAKONSTRUKT assigned its
receivables from its contracts with PNOC in the aggregate amount of P46,000,000.00; and
(e) Deed of Assignment of Contract Proceeds dated 20 February 1997 where ASIAKONSTRUKT
assigned its receivables from the Ormat Philippines, Inc., in the aggregate amount of US$3,350,000.00;
2.03 All the foregoing deeds of assignments stipulate, among others, the following terms and conditions:
a) The assignment is for the purpose of securing payment of the principal amount and the interests and bank
charges accruing thereon, the costs of collecting the same and all other expenses which PCIBANK may be put
in connection with or as an incident of the assignment;

b) That the assignment secures also any extension or renewal of the credit which is the subject thereof as any
and all other obligations of ASIAKONSTRUKT of whatever kind and nature as appear in the records of
PCIBANK, which ASIAKONSTRUKT accepts as the final and conclusive evidence of such obligations to
PCIBANK, "whether contracted before, during or after the constitution of [the assignment agreement]";
c) That PCIBANK authorizes ASIAKONSTRUKT, at the latters expense, to "collect and receive for [PCIBANK]
all the Receivables"; and
d) That ASIAKONSTRUKT "shall have no right, and agrees not to use any of the proceeds of any collections, it
being agreed by the parties that [ASIAKONSTRUKT] divests itself of all the rights, title and interest in said
Receivables and the proceeds of the collection received thereon."
1avvphil.net

2.04 The promissory notes have remained not fully paid despite their having become due and demandable. Repeated
verbal and written demands were made upon ASIAKONSTRUKT, but to no avail. It has failed and refused, and
continues to fail and refuse, to pay its outstanding obligations to PCIBANK;
2.05 As a result of ASIAKONSTRUKTs refusal to pay its outstanding obligations, PCIBANK was constrained to refer
the matter to counsel and thus incur attorneys fees and legal costs.
2.06 The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31 December 1998, amounts to
US$4,553,446.06, broken down as follows:
Principal

US$ 4,067,867.23

Interest

US$ 291,263.27

Penalties

US$ 194,315.56

TOTAL

US$ 4,553,446.06

For its second cause of action, PCIBANK alleged in the same complaint as follows:
SECOND CAUSE OF ACTION
4.02 as a result of the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the following damages, all of which
ASIAKONSTRUKT must be held to pay PCIBANK:
4.02.1 Exemplary damages, in the interest of public good and purposes of correction, in the amount of not less than
.P50,000.00;
4.02.2 Attorneys fees in the amount of not less than . P1,800,000.00; and
4.02.3 Costs of suit.
In support of its prayer for a writ of preliminary attachment embodied in the complaint, plaintiff PCIBANK alleges the
following:

3.02 ASIAKONSTRUKT is guilty of fraud in contracting the debt, in the performance thereof, or both, xxx;
303. PCIBANK agreed to enter into the above-mentioned credit accommodations primarily because of the existence
of the deeds of assignment listed above. However, from telephone inquiries made with responsible officers of the
National Power Corporation, ABB Power, Inc., PNOC and Ormat Philippines, Inc., PCIBANK was surprised to learn
that ASIAKONSTRUKT had long ago collected the contract proceeds, or portions thereof, which were previously
assigned to PCIBANK. However, to date, it has yet to turn over these proceeds to PCIBANK. Worse, PCIBANK
learned that the contract proceeds were used by ASIAKONSTRUKT for its own purposes clear evidence of fraud,
which has deprived PCIBANK of its security. ASIAKONSTRUKTs unauthorized use of the contract proceeds for its
own purposes was subsequently confirmed by Mr. Napoleon Garcia, Vice President for Finance of
ASIAKONSTRUKT, in a telephone discussion on 12 January 1999 with Ms. Maricel E. Salaveria of PCIBANK. xxx
Needless to say, ASIAKONSTRUKT has fraudulently collected such receivables to the prejudice of PCIBANK.
3.04 it is evident that ASIAKONSTRUKT never had any intention of complying with the deeds of assignment.
ASIAKONSTRUKT only misled PCIBANK into believing that it had sufficient security to ensure payment of its loan
obligations.
3.05 Alternatively, granting, in argumenti gratia, that ASIAKONSTRUKT, at the time it executed the foregoing deeds of
assignment, really intended to abide by their terms and conditions, it nevertheless committed manifest fraud when it
collected the contract proceeds, and instead of remitting them to PCIBANK, used them for its own purposes.
In an order4 dated April 13, 1999, the trial court, after receiving ex parte PCIBANKs evidence in support of its prayer
for preliminary attachment, directed the issuance of the desired writ, thus:
WHEREFORE, let a writ of preliminary attachment issue against all the property of defendant not exempt from
execution or so much thereof as may be sufficient to satisfy plaintiffs principal claim of US$4,553,446.06,
representing the alleged unpaid obligation of defendant, inclusive of interest and penalty charges, as of December 31,
1998, which is equivalent to P174,260,380.72, upon plaintiffs filing of a bond in an equal amount to answer for all it
may sustain by reason of the attachment if the Court shall finally adjudge that plaintiff was not entitled thereto.
SO ORDERED.
With plaintiff PCIBANK having posted the requisite bond, a writ of preliminary attachment was thereafter issued by the
trial court. Per records, defendant ASIAKONSTRUKT did not file any motion for the quashal or dissolution of the writ.
Meanwhile, on August 27, 1999, defendant ASIAKONSTRUKT filed its Answer, 5 thereunder making admissions and
denials. Defendant admits, subject to its defenses, the material allegations of the Complaint as regards its
indebtedness to plaintiff PCIBANK and its execution of the various deeds of assignment enumerated therein. It,
however, denies, for lack of knowledge sufficient to form a belief as to the truth thereof, the averments in the
Complaint that it has not paid, despite demands, its due and demandable obligations, as well as the amounts due the
plaintiff as itemized in paragraph 2.06, supra, of the Complaint. It likewise denies PCIBANKs allegations in the same
Complaint in support of its prayer for a writ of preliminary attachment, particularly its having fraudulently
misappropriated for its own use the contract proceeds/receivables under the contracts mentioned in the several deeds
of assignments, claiming in this respect that it has still remaining receivables from those contracts.
By way of defenses, defendant pleads in its Answer the alleged "severe financial and currency crisis" which hit the
Philippines in July 1997, which adversely affected and ultimately put it out of business. Defendant adds that the deeds

of assignments it executed in favor of PCIBANK were standard forms proposed by the bank as pre-condition for the
release of the loans and therefore partake of the nature of contracts of adhesion, leaving the defendant to the
alternative of "taking it or leaving it." By way of counterclaim, defendant prayed for an award of P1,000,000.00 as and
for attorneys fees and P200,000.00 as litigation expenses.
On January 24, 2000, plaintiff PCIBANK filed a verified Motion for Summary Judgment, 6 therein contending that the
defenses interposed by the defendant are sham and contrived, that the alleged financial crisis pleaded in the Answer
is not a fortuitous event that would excuse debtors from their loan obligations, nor is it an exempting circumstance
under Article 1262 of the New Civil Code where, as here, the same is attended by bad faith. In the same motion,
PCIBANK also asserts that the deeds of assignments executed in its favor are not contracts of adhesion, and even if
they were, the same are valid.
To the Motion for Summary Judgment, defendant interposed an Opposition 7 insisting that its Answer tendered or
raised genuine and substantial issues of material facts which require full-blown trial, namely:
1. Whether or not defendant received all or part of the proceeds/receivables due from the contracts mentioned
in the deeds of assignment at the time the complaint was filed;
2. Granting that defendant received those proceeds/receivables, whether or not defendant fraudulently
misappropriated the same;
3. Whether or not defendant is virtually insolvent as a result of the regionwide economic crisis that hit Asia,
causing the Philippine peso to depreciate drastically; and
4. Whether the parties dealt with each other on equal footing with respect to the execution of the deeds of
assignment as to give the defendant an honest opportunity to reject the onerous terms imposed therein.
Significantly, defendant did not append to its aforementioned Opposition any affidavit in support of the alleged
genuine issues of material facts mentioned therein.
Before the pending incident (motion for summary judgment) could be resolved by the trial court, plaintiff PCIBANK
waived its claim for exemplary damages and agreed to reduce its claim for attorneys fees from P1,800,000.00
toP1,260,000.00, but made it clear that its waiver of exemplary damages and reduction of attorneys fees are subject
to the condition that a full and final disposition of the case is obtained via summary judgment.
On May 16, 2000, the trial court, acting favorably on PCIBANKs motion for summary judgment, came out with its
Summary Judgment,8 the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff:
1. the sum of US$4,553,446.06, or its equivalent in Philippine currency at the time of payment, with interest
thereon at the rate of 8.27% per annum from February 24, 1999 until fully paid;
2. P1,260,000.00 as and for attorneys fees; and
3. the costs of suit.

SO ORDERED.
Explains the trial court in rendering its Summary Judgment:
A thorough examination of the parties pleadings and their respective stand in the foregoing motion, the court finds
that indeed with defendants admission of the first cause of action there remains no question of facts in issue. Further,
the proffered defenses are worthless, unsubstantial, sham and contrived.
Considering that there is no more issue to be resolved, the court hereby grants plaintiffs Motion and renders
Judgment in favor of the plaintiff against the defendant based on their respective pleadings in accordance with
Section 4, Rule 35 of the Rules of Court.
In time, petitioner went to the CA whereat its appellate recourse was docketed as CA-G.R. CV No. 68189. As stated
at the threshold hereof, the CA, in its decision9 of May 15, 2002, affirmed with modification the Summary Judgment
rendered by the trial court, the modification being as regards the award for attorneys fees which the CA reduced
to P1,000,000.00, to wit:
IN THE LIGHT OF ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The "Decision" appealed from is
AFFIRMED with the MODIFICATION THAT THE AWARD FOR ATTORNEYS FEES is reduced to P1,000,000.00.
SO ORDERED.
With its motion for reconsideration having been denied by the CA in its Resolution 10 of June 3, 2002, petitioner is now
with us via the present recourse, raising the following issues:
I WHETHER OR NOT THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES OUT THE
PROPRIETY OF A SUMMARY JUDGMENT.
II WHETHER OR NOT THE AWARD OF ATTORNEYS FEES IS EXORBITANT OR UNCONSCIONABLE.
We DENY.
As in the two courts below, it is petitioners posture that summary judgment is improper in this case because there are
genuine issues of fact which have to be threshed out during trial, to wit: (a) whether or not petitioner was able to
collect only a portion of the contract proceeds/receivables it was bound to deliver, remit and tender to respondent
under the several deeds of assignment it executed in favor of the latter; and (b) whether or not petitioner fraudulently
misappropriated and used for its benefit the said proceeds/receivables. Ergo, so petitioner maintains, genuine triable
issues of fact are present in this case, which thereby precludes rendition of summary judgment.
We are not persuaded.
Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of damages, when there is no
genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law, summary
judgment may be allowed. 11 Summary or accelerated judgment is a procedural technique aimed at weeding out sham
claims or defenses at an early stage of litigation thereby avoiding the expense and loss of time involved in a trial. 12
Under the Rules, summary judgment is appropriate when there are no genuine issues of fact which call for the

presentation of evidence in a full-blown trial. Even if on their face the pleadings appear to raise issues, when the
affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as prescribed
by the Rules must ensue as a matter of law. The determinative factor, therefore, in a motion for summary judgment, is
the presence or absence of a genuine issue as to any material fact.
A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed, then there is no real
or genuine issue or question as to the facts, and summary judgment is called for. The party who moves for summary
judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in
the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited
authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material
fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot
take the place of trial.13
The CA, in its challenged decision, stated and we are in full accord with it:
In the present recourse, the [petitioner] relied not only on the judicial admissions in its pleadings, more specifically
its "Answer" to the complaint, the testimony of Maricel Salaveria as well as Exhibits "A" to "T-3", adduced in evidence
by the [respondent], during the hearing on its plea for the issuance, by the Court a quo, of a writ of preliminary
attachment. Significantly, the [petitioner] did not bother filing a motion for the quashal of the "Writ" issued by the
Court a quo.
It must be borne in mind, too, that the [petitioner] admitted, in its "Answer" the due execution and authenticity of the
documents appended to the complaint . The [petitioner] did not deny its liability for the principal amount claimed by
the [respondent] in its complaint. The [petitioner] merely alleged, by way of defenses, that it failed to pay its account
because of the region-wide economic crisis that engulfed Asia, in July, 1997, and the "Deeds of Assignment"
executed by it in favor of the [respondent] were contracts of adhesion:
xxx xxx xxx
The [petitioner] elaborated on and catalogued its defenses in its "Appellants Brief" what it believed, as "genuine
issues".
"(i) Whether or not [petitioner] received all or part of the proceeds/receivables due from the construction
contracts at the time the civil action was filed;
(ii) Granting that [petitioner] received the proceeds/receivables from the construction contracts, whether or not
[petitioner] fraudulently misappropriated the same;
(iii) Whether or not [petitioner] had become virtually insolvent as a result of the region-wide economic crisis that
hit Asia, causing the Philippine peso to depreciate dramatically; and
(iv) Whether or not [respondent] and [petitioner] dealt with each other on equal footing with respect to the
execution of the deeds of assignment of receivables as to give [petitioner] an honest opportunity to reject the
onerous terms imposed on it."
However, the [petitioner] failed to append, to its "Opposition" to the "Motion for Summary Judgment", "Affidavits"

showing the factual basis for its defenses of "extraordinary deflation," including facts, figures and data showing its
financial condition before and after the economic crisis and that the crisis was the proximate cause of its financial
distress. It bears stressing that the [petitioner] was burdened to demonstrate, by its "Affidavits" and documentary
evidence, that, indeed, the Philippines was engulfed in an extraordinary deflation of the Philippine Peso and that the
same was the proximate cause of the financial distress, it claimed, it suffered.
xxx xxx xxx
Where, on the basis of the records, inclusive of the pleadings of the parties, and the testimonial and documentary
evidence adduced by the [respondent], supportive of its plea for a writ of preliminary attachment, the [respondent] had
causes of action against the [petitioner], it behooved the [petitioner] to controvert the same with
affidavits/documentary evidence showing a prima facie genuine defense. As the Appellate Court of Illinois so aptly
declared:
The defendant must show that he has a bona fide defense to the action, one which he may be able to establish. It
must be a plausible ground of defense, something fairly arguable and of a substantial character. This he must show
by affidavits or other proof.
The trial court, of course, must determine from the affidavits filed whether the defendant has interposed a sufficiently
good defense to entitle it to defend, but where defendants affidavits present no substantial triable issues of fact, the
court will grant the motion for summary judgment.
xxx xxx xxx
The failure of the [petitioner] to append to its "Opposition" any "Affidavits" showing that its defenses were not
contrived or cosmetic to delay judgment created a presumption that the defenses of the [petitioner] were not
offered in good faith and that the same could not be sustained (Unites States versus Fiedler, et al., Federal Reported,
2nd, 578).
If, indeed, the [petitioner] believed it that was prevented from complying with its obligations to the [respondent], under
its contracts, it should have interposed a counterclaims for rescission of contracts, conformably with the
pronouncement of our Supreme Court, thus:
xxx xxx xxx
The [petitioner] did not. This only exposed the barrenness of the pose of the [petitioner].
The [petitioner] may have experienced financial difficulties because of the "1997 economic crisis" that ensued in Asia.
However, the same does not constitute a valid justification for the [petitioner] to renege on its obligations to the
[respondent]. The [petitioner] cannot even find solace in Articles 1266 and 1267 of the New Civil Code for, as
declared by our Supreme Court:
It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations arising therefrom
have the force of law between the parties and should be complied with in good faith. But the law recognizes
exceptions to the principle of the obligatory force of contracts. One exception is laid down in Article 1266 of the Civil
Code, which reads: The debtor in obligations to do shall also be released when the prestation becomes legally or

physically impossible without the fault of the obligor.


Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only to obligations "to do,"
and not obligations "to give." An obligation "to do" includes all kinds of work or service; while an obligation "to give" is
a prestation which consists in the delivery of a movable or an immovable thing in order to create a real right, or for the
use of the recipient, or for its simple possession, or in order to return it to its owner.
xxx xxx xxx
In this case, petitioner wants this Court to believe that the abrupt change in the political climate of the country after the
EDSA Revolution and its poor financial condition "rendered the performance of the lease contract impractical and
inimical to the corporate survival of the petitioner." (Philippine National Construction Corporation versus Court of
Appeals, et al., 272 SCRA 183, at pages 191-192, supra)
The [petitioner] even failed to append any "Affidavit" to its "Opposition" showing how much it had received from its
construction contracts and how and to whom the said collections had been appended. The [petitioner] had personal
and sole knowledge of the aforesaid particulars while the [respondent] did not.
In fine, we rule and so hold that the CA did not commit any reversible error in affirming the summary judgment
rendered by the trial court as, at bottom, there existed no genuine issue as to any material fact. We also sustain the
CAs reduction in the award of attorneys fees to only P1,000,000.00, given the fact that there was no full-blown trial.
WHEREFORE, the assailed CA decision is AFFIRMED in toto and this petition is DENIED for lack of merit.
Costs against petitioner.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
(On leave)
REYNATO S. PUNO
Associate Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
ADOLFO S. AZCUNA
Associate Justice
ATTESTATION

RENATO C. CORONA
Asscociate Justice

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
Acting Chairperson, Second Division
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified
that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of
the opinion of the Court.
ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes
Penned by then Associate Justice Romeo J. Callejo, Sr. (now a member of this Court), with Associate
Justices Remedios J. Salazar-Fernando and Perlita Tirona, (ret.), concurring; Rollo, pp. 34-58.
1

Id. at 59.

Id. at 61-69.

Original Records, p. 320.

Rollo, pp. 70-75.

Rollo, pp. 78-85.

Id. at pp. 88-94.

Id. at 102-107.

Rollo, pp. 34-58.

10

Rollo, p. 59.

11

Northwest Airlines vs. CA, G.R. No. 120337, January 20, 1998, 284 SCRA 408.

12

Excelsa Industries, Inc, vs. CA,G.R. No. 105455, August 23, 1995, 247 SCRA 560.

13

Evadel Realty and Development Corporation vs. Soriano, G.R. No. 144291, April 20, 2001, 357 SCRA 395,

401.
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Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
14.G.R. No. 153867

February 17, 2005

WOOD TECHNOLOGY CORPORATION, CHI TIM CORDOVA AND ROBERT TIONG KING
YOUNG, petitioners,
vs.
EQUITABLE BANKING CORPORATION, Respondent.
DECISION

QUISUMBING, J.:
This petition for review seeks to reverse and set aside the Decision1 dated April 11, 2001 of the Court of Appeals in
CA-G.R. CV No. 57371 and its Resolution2 dated June 3, 2002 which denied the motion for reconsideration.
The case originated from a Complaint for Sum of Money filed on October 21, 1996, before the Regional Trial Court of
Manila, Branch 29, by respondent Equitable Banking Corporation3 against the petitioners, Wood Technology
Corporation (WTC), Chi Tim Cordova, and Robert Tiong King Young.
The Complaint alleged that on December 9, 1994, WTC obtained from respondent a loan in the amount of
US$75,000, with 8.75% interest per annum, as evidenced by a Promissory Note, No. FXBD94-00881, signed by
Cordova and Young as representatives of WTC. Cordova and Young executed a Surety Agreement binding
themselves as sureties of WTC for the loan. Respondent bank made a final demand on April 19, 1996, for WTC to
pay its obligation, but petitioners failed to pay. Respondent prayed that petitioners be ordered to pay it $75,603.65 or
P2,018,617.46 (computed as of October 10, 1995) plus interest, penalty, attorneys fees and other expenses of
litigation; and the cost of suit.
In their Answer, petitioners stated that WTC obtained the $75,000 loan; that Cordova and Young bound themselves
as its sureties. They claimed that only one demand letter, dated April 19, 1996, was made by respondent. They added
that the promissory note did not provide the due date for payment. Petitioners also claimed that the loan had not yet
matured as the maturity date was purposely left blank, to be agreed upon by the parties at a later date. Since no
maturity date had been fixed, the filing of the Complaint was premature, and it failed to state a cause of action. They
further claimed that the promissory note and surety agreement were contracts of adhesion with terms on interest,
penalty, charges and attorneys fees that were excessive, unconscionable and not reflective of the parties real intent.
Petitioners prayed for the reformation of the promissory note and surety agreement to make their terms and
conditions fair, just and reasonable. They also asked payment of damages by respondent.
On May 5, 1997, respondent moved for a judgment on the pleadings. The RTC, Branch 29 rendered judgment 4and
disposed as follows:
WHEREFORE, in view of the foregoing, and to abbreviate this case, judgment is hereby rendered based on the
pleading[s] filed by the opposing parties and the documents annexed thereto. The defendant[s] Wood Technology
Corporation, Robert Tiong King Young and Chi Tim Cordova are hereby ordered to pay solidarily to herein plaintiff the
sum of $75,000.00 or its equivalent in Philippine Currency and to pay the stipulated interest of 8.75% per annum to be
reckoned from the date that the obligation was contracted until the filing of this suit. Thereafter, the legal rate shall
apply.
SO ORDERED.
Petitioners appealed, but the Court of Appeals affirmed the RTCs judgment. The appellate court noted that
petitioners admitted the material allegations of the Complaint, with their admission of the due execution of the
promissory note and surety agreement as well as of the final demand made by the respondent. The appellate court
ruled that there was no need to present evidence to prove the maturity date of the promissory note, since it was
payable on demand. In addition, the Court of Appeals held that petitioners failed to show any ambiguity in the
promissory note and surety agreement in support of their contention that these were contracts of adhesion. Finally, it
ruled that the interest rate on the loan was not exorbitant.

The appellate court also denied petitioners motion for reconsideration.


Before us, petitioners now raise the following issues:
1. WHETHER OR NOT THE ANSWER OF PETITIONERS WITH SPECIAL AND AFFIRMATIVE DEFENSES
FAILS TO TENDER AN ISSUE OR ADMITS THE MATERIAL ALLEGATIONS IN THE COMPLAINT SO AS
TO JUSTIFY THE RENDITION OF JUDGMENT ON THE PLEADINGS BY TRIAL COURT;
2. WHETHER OR NOT PETITIONERS SHOULD HAVE BEEN GIVEN THE RIGHT TO PRESENT EVIDENCE
ON THEIR SPECIAL AND AFFIRMATIVE DEFENSES;
3. WHETHER OR NOT THE PROMISSORY NOTE IS A CONTRACT OF ADHESION CONTAINING
UNREASONABLE CONDITIONS WHICH PETITIONERS SIGNED WITHOUT REAL FREEDOM OF WILL TO
CONTRACT THE OBLIGATIONS THEREIN; AND
4. WHETHER OR NOT THE FILING OF THE COMPLAINT WAS PREMATURE AND/OR THE COMPLAINT
FAIL[ED] TO STATE A CAUSE OF ACTION.5
Simply put, the basic issue is whether the appellate court erred when it affirmed the RTCs judgment on the pleadings.
Petitioners argue that a judgment on the pleadings cannot be rendered because their Answer tendered genuine
issues and disputed the material allegations in the Complaint. They claim that they did not totally or unqualifiedly
admit all the material allegations in the Complaint, and that they had alleged special and affirmative defenses. If they
were given the chance, they could have presented witnesses to prove their special and affirmative defenses. 6
For its part, respondent Equitable Banking Corporation states that the Court of Appeals was correct in affirming the
judgment on the pleadings granted by the RTC. It adds that petitioners had admitted the material allegations of the
Complaint and they did not raise genuine issues of fact that necessitate submission of evidence. It also contends that
the special and affirmative defenses raised by petitioners concern the proper interpretation of the provisions of the
promissory note and surety agreement. Respondent asserts that these defenses may be resolved based on the
pleadings and the applicable laws and jurisprudence, without the need to present evidence. 7
1awphi1.nt

At the outset, we must stress the Courts policy that cases and controversies should be promptly and expeditiously
resolved. The Rules of Court seeks to shorten the procedure in order to allow the speedy disposition of a case.
Specifically, we have rules on demurrer to evidence, judgment on the pleadings, and summary judgments. In all these
instances, a full blown trial is dispensed with and judgment is rendered on the basis of the pleadings, supporting
affidavits, depositions and admissions of the parties. 8
In this case, at issue is the propriety and validity of a judgment on the pleadings. A judgment on the pleadings is
proper when an answer fails to tender an issue, or otherwise admits the material allegations of the adverse partys
pleading.9
Both the RTC and Court of Appeals recognize that issues were raised by petitioners in their Answer before the trial
court. This may be gleaned from their decisions which we partly quote below:
RTCs ORDER:

...
Defendants raised the following defenses:
a. That the contract is one of adhesion and they were "forced to sign the same";
b. That the interest [8.75% per annum], penalties and fees are unconscionable;
c. That plaintiffs demand is premature.10
...
Court of Appeals DECISION:
. . . They neither raise genuine issues of fact needing submission of evidence. Rather, these issues hoist questions
concerning the proper interpretation of the provisions of the promissory note and the surety agreement11 (Emphasis
supplied.)
Petitioners also contend that their Answer below raised issues that "are very material and genuine."12 Hence,
according to petitioners, judgment on the pleadings was not proper. Respondent, on the other hand, argues that the
special and affirmative defenses raised by Petitioners are not genuine issues that needed a hearing.13
We note now that (1) the RTC knew that the Answer asserted special and affirmative defenses; (2) the Court of
Appeals recognized that certain issues were raised, but they were not genuine issues of fact; (3) petitioners insisted
that they raised genuine issues; and (4) respondent argued that petitioners defenses did not tender genuine issues.
However, whether or not the issues raised by the Answer are genuine is not the crux of inquiry in a motion for
judgment on the pleadings. It is so only in a motion for summary judgment. 14 In a case for judgment on the pleadings,
the Answer is such that no issue is raised at all. The essential question in such a case is whether there are issues
generated by the pleadings.15 This is the distinction between a proper case of summary judgment, compared to a
proper case for judgment on the pleadings. We have explained this vital distinction inNarra Integrated Corporation v.
Court of Appeals,16 thus,
The existence or appearance of ostensible issues in the pleadings, on the one hand, and their sham or fictitious
character, on the other, are what distinguish a proper case for summary judgment from one for a judgment on the
pleadings. In a proper case for judgment on the pleadings, there is no ostensible issue at all because of the failure of
the defending partys answer to raise an issue . On the other hand, in the case a of a summary judgment, issues
apparently existi.e. facts are asserted in the complaint regarding which there is as yet no admission, disavowal or
qualification; or specific denials or affirmative defenses are in truth set out in the answerbut the issues thus
arising from the pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. . . .
(Underscoring and emphasis supplied.)
Indeed, petitioners Answer apparently tendered issues. While it admitted that WTC obtained the loan, that Cordova
and Young signed the promissory note and that they bound themselves as sureties for the loan, it also alleged special
and affirmative defenses that the obligation had not matured and that the promissory note and surety agreement were
contracts of adhesion.
Applying the requisites of a judgment on the pleadings vis--vis a summary judgment, the judgment rendered by the

RTC was not a judgment on the pleadings, but a summary judgment. Although the Answer apparently raised issues,
both the RTC and the Court of Appeals after considering the parties pleadings, petitioners admissions and the
documents attached to the Complaint, found that the issues are not factual ones requiring trial, nor were they genuine
issues.
1vvphi1.nt

Summary judgment17 is a procedure aimed at weeding out sham claims or defenses at an early stage of the litigation.
The proper inquiry in this regard would be whether the affirmative defenses offered by petitioners constitute genuine
issues of fact requiring a full-blown trial. 18 In a summary judgment, the crucial question is: are the issues raised by
petitioners not genuine so as to justify a summary judgment? 19 A "genuine issue" means an issue of fact which calls
for the presentation of evidence, as distinguished from an issue which is fictitious or contrived, an issue that does not
constitute a genuine issue for trial.20
We note that this is a case for a sum of money, and petitioners have admitted that they obtained the loan. They also
admitted the due execution of the loan documents and their receipt of the final demand letter made by the
respondent. These documents were all attached to the Complaint. Petitioners merely claimed that the obligation has
not matured. Notably, based on the promissory note, the RTC and the Court of Appeals found this defense not a
factual issue for trial, the loan being payable on demand. We are bound by this factual finding. This Court is not a trier
of facts.
When respondent made its demand, in our view, the obligation matured. We agree with both the trial and the
appellate courts that this matter proferred as a defense could be resolved judiciously by plain resort to the stipulations
in the promissory note which was already before the trial court. A full-blown trial to determine the date of maturity of
the loan is not necessary. Also, the act of leaving blank the maturity date of the loan did not necessarily mean that the
parties agreed to fix it later. If this was the intention of the parties, they should have so indicated in the promissory
note. They did not show such intention.
l^vvphi1.net

l^vvphi1.net

Petitioners likewise insist that their defense tendered a genuine issue when they claimed that the loan documents
constituted a contract of adhesion. Significantly, both the trial and appellate courts have already passed upon this
contention and properly ruled that it was not a factual issue for trial. We agree with their ruling that there is no need of
trial to resolve this particular line of defense. All that is needed is a careful perusal of the loan documents. As held by
the Court of Appeals, petitioners failed to show any ambiguity in the loan documents. The rule is that, should there be
ambiguities in a contract of adhesion, such ambiguities are to be construed against the party that prepared it.
However, if the stipulations are clear and leave no doubt on the intention of the parties, the literal meaning of its
stipulations must be held controlling.21
In sum, we find no cause to disturb the findings of fact of the Court of Appeals, affirming those of the RTC as to the
reasonableness of the interest rate of 8.75% per annum on the loan. We also find no persuasive reason to contradict
the ruling of both courts that the loan secured by petitioner WTC, with co-petitioners as sureties, was payable on
demand. Certainly, respondents complaint could not be considered premature. Nor could it be said to be without
sufficient cause of action therein set forth. The judgment rendered by the trial court is valid as a summary judgment,
and its affirmance by the Court of Appeals, as herein clarified, is in order.
WHEREFORE, the Petition is DENIED for lack of merit.
SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

Footnotes
Rollo, pp. 40-47. Penned by Associate Justice Conrado M. Vasquez, Jr., with Associate Justices Martin S.
Villarama, Jr., and Eliezer R. delos Santos concurring.
1

Id. at 57.

Now Equitable PCI Bank.

Records, p. 48.

Rollo, p. 11.

Id. at 85-87.

Id. at 103-106.

Evadel Realty and Development Corporation v. Soriano, G.R. No. 144291, 20 April 2001, 357 SCRA 395,
400.
8

Rules of Court, Rule 34, Section 1. Judgment on the pleadings. Where an answer fails to tender an issue,
or otherwise admits the material allegations of the adverse partys pleading, the court may, on motion of that
party, direct judgment on such pleading. However, in actions for declaration of nullity or annulment of marriage
or for legal separation, the material facts alleged in the complaint shall always be proved.
9

10

Records, p. 48.

11

Rollo, p. 44.

12

Id. at 86.

13

Id. at 106.

14

Evangelista v. Mercator Finance Corp., G.R. No. 148864, 21 August 2003, 409 SCRA 410, 415.

15

Garcia v. Llamas, G.R. NO. 154127, 8 December 2003, 417 SCRA 292, 306.

16

G.R. No. 137915, 15 November 2000, 344 SCRA 781, 786.

Rules of Court, rule 35, Section 1. Summary judgment for claimant. A party seeking to recover upon a
claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in
answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary
17

judgment in his favor upon all or any part thereof.


18

Supra, note 14.

19

Supra, note 16 at 787.

20

Supra, note 14.

21

Pilipino Telephone Corporation v. Tecson, G.R. No. 156966, 7 May 2004, p. 4.

The Lawphil Project - Arellano Law Foundation

THIRD DIVISION

[G.R. No. 120040. January 29, 1996]

16. SPS. CAMILO Y. GO and DELIA L. GO, petitioners,


vs. COURT OF APPEALS, HON. MARCELINO F. BAUTISTA,
JR.
and
MANUELA
REALTY
DEVELOPMENT
CORP., respondents.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; MANDAMUS; DOES NOT
LIE IN DOUBTFUL CASES; CASE AT BAR. - Mandamus lies to compel
the performance, when refused, of a ministerial duty, but not to compel the
performance of a discretionary duty. The propriety of rendering summary
judgment under Rule 34 of the Rules of Court rests on the sound exercise
of the courts discretion. Petitioners failed to establish a mandatory and
ministerial duty on the part of the trial court to render summary judgment.
Likewise, they failed to show a clear legal right to the relief sought. Mand
2. amus will not issue to enforce a right which is in substantial dispute or to
which a substantial doubt exist. Litigants, like the herein petitioners, may
not be permitted to impose upon the court their notions of how cases
should be resolved. Neither may they be allowed to direct the exercise of
judgment or discretion by the court in a particular way. The court has to
decide a question or issue according to its own judgment or understanding
of the law, as well as the laws applicability to the attendant facts and
circumstances.

2. ID.; CIVIL PROCEDURE; SUMMARY JUDGMENTS; PRESENCE OR


ABSENCE OF ANY GENUINE ISSUE AS TO ANY MATERIAL FACT THAT
WOULD REQUIRE THE PRESENTATION OF EVIDENCE; CONTROLLING
FACTOR IN DETERMINING WHETHER A SUMMARY JUDGMENT
SHOULD ISSUE. - The Court of Appeals correctly ruled that the controlling
factor in a motion for summary judgment is not the submission or nonsubmission of counter-affidavits, but the presence or absence of any genuine
issue as to any material fact that would require the presentation of evidence.
Where the facts pleaded by the parties are disputed or contested,
proceedings for summary judgment can not take the place of trial.
APPEARANCES OF COUNSEL
Ramon A. Gonzales for petitioners.
M.R. Pamaran & Associates for private respondent.

DECISION
FRANCISCO, J.:

In this petition for review on certiorari, petitioners spouses Camilo and Delia
Go, through counsel, posed this query: May respondent court be compelled by
mandamus to grant the motion for summary judgment when there is no genuine
issue as to a material fact raised in the opposition thereto? 1 The antecedent
facts are as follows:
To secure a loan of P93,200.00 with 14% interest p/a, petitioners on June 15,
1978, constituted a real estate mortgage over their house and lot covered by
TCT No. 30532 of the Registry of Deeds of Pasay City in favor of herein private
respondent Manuela Realty Development Corporation (Manuela). For alleged
petitioners failure to heed Manuelas repeated demands for payment of the loan,
Manuela moved for the extrajudicial foreclosure of the subject properties
pursuant to a provision in the deed of mortgage. The ex-officio sheriff of Makati
City conducted a public auction sale on September 9, 1989, where Manuela
submitted the lone and winning bid of P251,15 1.74, petitioners alleged
outstanding debt at the time. After the expiration of the redemption period,
Manuela filed its affidavit of consolidation of ownership before the Register of
Deeds. Thus, ownership of the mortgaged properties was consolidated in
Manuela and a new Transfer Certificate of Title (TCT No. T-1884) was thereafter
issued in its name.
Petitioners filed on August 21, 1989, and later amended on November 20,
1989, a complaint for recovery of ownership of the subject properties against
Manuela before the Regional Trial Court of Makati City, Branch 136, docketed as
Civil Case No. 89-4839. They alleged payment of five hundred dollars ($500) to
Manuela sometime in 1982 by money transfer order through Security Pacific
National Bank, and payment of the entire loan as all their installment payments, if
added, will amount to P95, 946.67 which sum is more than their contracted loan.
Petitioners also raised as an issue the alleged invalidity of the extra-judicial

foreclosure of the subject properties and usury on the ground that the stipulated
14% interest p/a exceeds the 12% applicable interest ceiling. In its answer,
Manuela countered that petitioners failed to pay their obligation and, in fact,
argued that it was their continued default thereof which caused their outstanding
debt to increase. Manuela maintained that the extra-judicial foreclosure sale in
question was valid and the 14% stipulated interest was not usurious. Petitioners
subsequently moved for summary judgment attaching their joint affidavit which
Manuela opposed, albeit without attaching its own counter-affidavit. The trial
court found that there are genuine issues of facts that need to be fully ventilated,
thus the motion was denied. Petitioners elevated the case before public
respondent Court of Appeals2 by way of mandamus to compel the trial court to
render summary judgment, but to no avail. Their motion for reconsideration was
denied; hence, the instant petition posing the above query.
The petition lacks merit. Mandamus lies to compel the performance, when
refused, of a ministerial duty, but not to compel the performance of a
discretionary duty. The propriety of rendering summary judgment under Rule 34
of the Rules of Court rests on the sound exercise of the Courts discretion.
Petitioners failed to establish a mandatory and ministerial duty on the part of the
trial court to render summary judgment. Likewise, they failed to show a clear
legal right to the relief sought. Mandamus will not issue to enforce a right which is
in substantial dispute or to which a substantial doubt exists. Litigants, like the
herein petitioners, may not be permitted to impose upon the court their notions of
how cases should be resolved. Neither may they be allowed to direct the
exercise of judgment or discretion by the court in a particular way. The court has
to decide a question or issue according to its own judgment or understanding of
the law, as well as the laws applicability to the attendant facts and
circumstances.
Moreover, even if we were to gloss over petitioners erroneous recourse we
find no reversible error in both the trial courts and respondent courts
dispositions. Rule 34 of the Rules of Court authorizes the rendition of a summary
judgment when on motion of the plaintiff, after the answer to the complaint had
been filed, it would appear at the hearing for such a judgment, from the
pleadings, depositions and admissions on file, together with the affidavits that,
except as to the amount of damages, there is no genuine issue as to any
material fact and that the winning party is entitled to a judgment as a matter of
law.3 Petitioners failed to show the absence of any genuine issue that could
necessitate summary judgment. The Court of Appeals correctly ruled that the
controlling factor in a motion for summary judgment is not the submission or nonsubmission of counter-affidavits, but the presence or absence of any genuine
issue as to any material fact that would require the presentation of evidence.
Where the facts pleaded by the parties are disputed or contested, proceedings
for summary judgment can not take the place of trial. 4We quote with approval, in
this connection, respondent courts observation:

x x x. Pleadings on hand show that private respondent duly raised substantial and triable
issues of fact, to wit: that there was no overpayment of petitioners loan; that petitioners
delinquency or breach in the settlement of their obligation, despite demands, caused
private respondent to extrajudicially foreclose the mortgage.
The respondent court correctly pointed out genuine triable issues of fact. Its assailed
order reads, in part:
a perusal of the pleadings will clearly show that there are genuine issues of facts that
need to be fully ventilated. Samples are: how much was actually paid by the plaintiffs?
Were the plaintiffs paying in accordance with the terms and conditions of the promissory
note? What were the months where the plaintiffs defaulted? How much is the
accumulated interests? And so on and so forth. There, (sic) aside from the legal issues, of
course, e.g. the validity of the extrajudicial foreclosure sale.
Clearly, the aforesaid factual issues can be resolved only after trial on the merits, and
not by a perfunctory resolution which, in effect, would deprive the litigant of his day in
court. It is desirable that evidence pro and con, be presented by the parties, to show
whose claim is valid, a process which is not long to conclude.5
Summary judgment can be resorted to only where there are no questions of
fact in issue or where the material allegations of the pleadings are not
disputed.6 A party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, or that the issue
posed in the complaint is so patently unsubstantial as not to constitute a genuine
issue for trial, and any doubt as to the existence of such an issue is resolved
against the movant,7 as in this case.
WHEREFORE, the decision appealed from is hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

Petition, p. 1; Rollo, p. 6.

Second Division, Purisima, J., Ponente; Isnani, Ibay-Somera, JJ., concurring.

Archipelago Builders v. Intermediate Appellate Court, 194 SCRA 207, 210 (1991).

Excelsa industries Inc. v. Court of Appeals, et al., G.R. No. 105455, August 23, 1995.

CA Decision, pp. 3-4; Rollo, pp. 82-83.

6
7

National irrigation Administration v. Gamit, 215 SCRA 436, 454 (1992).


Guevarra v. Court of Appeals, 124 SCRA 297, 314(1983).

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Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 88709 February 11, 1992


20. NICOS INDUSTRIAL CORPORATION, JUAN COQUINCO and CARLOS COQUINCO, petitioners,
vs.
THE COURT OF APPEALS, VICTORINO P. EVANGELISTA, in his capacity as Ex-Officio Sheriff of Bulacan,
UNITED COCONUT PLANTERS BANK, MANUEL L. CO, GOLDEN STAR INDUSTRIAL CORPORATION and THE
REGISTER OF DEEDS FOR THE PROVINCE OF BULACAN, respondents.
Manuel T. Ubarra for petitioners.
Encanto, Mabugat & Associates for UCPB.
Mangalindan and Bermas Law Offices for private respondent.

Federico Reyes for Manuel L. Co.

CRUZ, J.:
We are asked once again to interpret the constitutional provision that no decision shall be rendered by any court
without stating therein clearly and distinctly the facts and the law on which it is based, 1 this time in connection with an
order of the trial court sustaining demurrer to the evidence. 2 The order has been affirmed by the respondent Court of
Appeals, 3 and the appellant has come to this Court in this petition for review on certiorari, invoking the said provision
and alleging several reversible errors.
In the complaint filed by the petitioners before the Regional Trial Court of Bulacan, it was alleged that on January 24,
1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from private respondent United Coconut
Planters Bank and to secure payment thereof executed a real estate mortgage on two parcels of land located at
Marilao, Bulacan. The mortgage was foreclosed for the supposed non-payment of the loan, and the sheriff's sale was
held on July 11, 1983, without re-publication of the required notices after the original date for the auction was changed
without the knowledge or consent of the mortgagor. UCPB was the highest and lone bidder and the mortgaged lands
were sold to it for P3,558,547.64. On August 29, 1983, UCPB sold all its rights to the properties to private respondent
Manuel Co, who on the same day transferred them to Golden Star Industrial Corporation, another private respondent,
upon whose petition a writ of possession was issued to it on November 4, 1983. On September 6, 1984, NICOS and
the other petitioners, as chairman of its board of directors and its executive vice-president, respectively, filed their
action for "annulment of sheriff's sale, recovery of possession, and damages, with prayer for the issuance of a
preliminary prohibitory and mandatory injunction."
Golden Star and Victorino P. Evangelista, as ex officio sheriff of Bulacan, moved to dismiss the complaint on the
grounds of lack of jurisdiction, prescription, estoppel, and regularity of the sheriff's sale. Co denied the allegations of
the plaintiffs and, like the other defendants, counterclaimed for damages. In its answer with counterclaim, UCPB
defended the foreclosure of the mortgage for failure of NICOS to pay the loan in accordance with its promissory note
and insisted that the sheriff's sale had been conducted in accordance with the statutory requirements.
The plaintiffs presented two witnesses, including petitioner Carlos Coquinco, who testified at three separate hearings.
They also submitted 21 exhibits. On April 30, 1986, Golden Star and Evangelista filed a 7-page demurrer to the
evidence where they argued that the action was a derivative suit that came under the jurisdiction of the Securities and
Exchange Commission;
that the mortgage had been validly foreclosed; that the sheriff's sale had been held in accordance with Act 3135; that
the notices had been duly published in a newspaper of general circulation; and that the opposition to the writ of
possession had not been filed on time. No opposition to the demurrer having been submitted despite notice thereof to
the parties, Judge Nestor F. Dantes considered it submitted for resolution and on June 6, 1986, issued the
following
ORDER
Acting on the "Demurrer to Evidence" dated April 30, 1986 filed by defendants Victorino P. Evangelista
and Golden Star Industrial Corporation to which plaintiff and other defendants did not file their
comment/opposition and it appearing from the very evidence adduced by the plaintiff that the Sheriff's

Auction Sale conducted on July 11, 1983 was in complete accord with the requirements of Section 3,
Act 3135 under which the auction sale was appropriately held and conducted and it appearing from the
allegations in paragraph 13 of the plaintiff's pleading and likewise from plaintiff Carlos Coquinco's own
testimony that his cause is actually-against the other officers and stockholders of the plaintiff Nicos
Industrial Corporation ". . . for the purpose of protecting the corporation and its stockholders, as well as
their own rights and interests in the corporation, and the corporate assets, against the fraudulent ants
and devices of the responsible officials of the corporation, in breach of the trust reposed upon them by
the stockholders . . ." a subject matter not within the competent jurisdiction of the Court, the court finds
the same to be impressed with merit.
WHEREFORE, plaintiff's complaint is hereby dismissed. The Defendants' respective counterclaims are
likewise dismissed.
The Writ of Preliminary Injunction heretofore issued is dissolved and set aside.
It is this order that is now assailed by the petitioners on the principal ground that it violates the aforementioned
constitutional requirement. The petitioners claim that it is not a reasoned decision and does not clearly and distinctly
explain how it was reached by the trial court. They also stress that the sheriff's sale was irregular because the notices
thereof were published in a newspaper that did not have general circulation and that the original date of the sheriff's
sale had been changed without its consent, the same having been al
legedly given by a
person not authorized to represent NICOS. It is also contended that the original P2 million loan had already been paid
and that if there was indeed a second P2 million loan also secured by the real estate mortgage, it was for UCPB to
prove this, as well as its allegation that NICOS had defaulted in the payment of the first quarterly installment on the
first loan.
The petitioners complain that there was no analysis of their testimonial evidence or of their 21 exhibits, the trial court
merely confining itself to the pronouncement that the sheriff's sale was valid and that it had no jurisdiction over the
derivative suit. There was therefore no adequate factual or legal basis for the decision that could justify its review and
affirmance by the Court of Appeals.
Rejecting this contention, the respondent court held:
In their first assignment of error, appellants faults the court for its failure to state clearly and distinctly
the facts and the law on which the order of dismissal is based, as required by Section 1, Rule 36, of the
Rules of Court and the Constitution.
An order granting a demurrer to the evidence is in fact an adjudication on the merits and consequently
the requirements of Section 1, Rule 36, is applicable. We are not however prepared to hold that there is
a reversible omission of the requirements of the rule in the Order appealed from, it appearing from a
reading thereof that there is substantial reference to the facts and the law on which it is based.
The Order which adverts to the Demurrer to the Evidence expressly referred to the evidence adduced
by the plaintiff as showing that the Sheriff's auction sale conducted on July 11, 1983, was in complete
accord with the requisites of Section 3, Act 3135 under which the auction sale was apparently held and
conducted. It likewise makes reference to the allegations in paragraph 13 of plaintiff's pleadings and
plaintiff Carlos Coquinco's own testimony that the case is actually against the other officers and
stockholders of plaintiff NICOS Industrial Corporation and concludes, rightly or wrongly, that the subject

matter thereof is not within the competent jurisdiction of the Court.


We hold that the order appealed from as framed by the court a quo while leaving much to be desired,
substantially complies with the rules.
This Court does not agree. The questioned order is an over-simplification of the issues, and violates both the letter
and spirit of Article VIII, Section 14, of the Constitution.
It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation
of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is
rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The
losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the
decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is
based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is
unable to pinpoint the possible errors of the court for review by a higher tribunal.
It is important to observe at this point that the constitutional provision does not apply to interlocutory orders, such as
one granting a motion for postponement or quashing a subpoena, because it "refers only to decisions on the merits
and not to orders of the trial court resolving incidental matters." 4 As for the minute resolutions of this Court, we have
already observed in Borromeo v. Court of Appeals 5 that
The Supreme Court disposes of the bulk of its cases by minute resolutions and decrees them as final
and executory, as where a case is patently without merit, where the issues raised are factual in nature,
where the decision appealed from is supported by substantial evidence and is in accord with the facts of
the case and the applicable laws, where it is clear from the records that the petitions were filed merely
to forestall the early execution of judgment and for non-compliance with the rules. The resolution
denying due course or dismissing a petition always gives the legal basis.
xxx xxx xxx
The Court is not duty bound to render signed decisions all the time. It has ample discretion to formulate
decisions and/or minute resolutions, provided a legal basis is given, depending on its evaluation of a
case.
The order in the case at bar does not come under either of the above exceptions. As it is settled that an order
dismissing a case for insufficient evidence is a judgment on the merits, 6 it is imperative that it be a reasoned decision
clearly and distinctly stating therein the facts and the law on which it is based.
It may be argued that a dismissal based on lack of jurisdiction is not considered a judgment on the merits and so is
not covered by the aforecited provision. There is no quarrel with this established principle. However, the rule would be
applicable only if the case is dismissed on the sole ground of lack of jurisdiction and not when some other additional
ground is invoked.
A careful perusal of the challenged order will show that the complaint was dismissed not only for lack of jurisdiction
but also because of the insufficiency of the evidence to prove the invalidity of the sheriff's sale. Regarding this second
ground, all the trial court did was summarily conclude "from the very evidence adduced by the plaintiff" that the
sheriff's sale "was in complete accord with the requirements of Section 3, Act 3135." It did not bother to discuss what

that evidence was or to explain why it believed that the legal requirements had been observed. Its conclusion was
remarkably threadbare. Brevity is doubtless an admirable trait, but it should not and cannot be substituted for
substance. As the ruling on this second ground was unquestionably a judgment on the merits, the failure to state the
factual and legal basis thereof was fatal to the order.
Significantly, the respondent court found that the trial court did have jurisdiction over the case after all. This made
even more necessary the factual and legal explanation for the dismissal of the complaint on the ground that the
plaintiff's evidence was insufficient.
In People v. Escober, 7 the trial court in a decision that covered only one and a half pages, single spaced found the
defendant guilty of murder and sentenced him to death. Holding that the decision violated the constitutional
requirement, the Court observed through then Associate Justice Marcelo B. Fernan:
The above-quoted decision falls short of this standard. The inadequacy stems primarily from the
respondent judge's tendency to generalize and to form conclusions without detailing the facts from
which such conclusions are deduced. Thus, he concluded that the material allegations of the Amended
Information were the facts without specifying which of the testimonies or the exhibits supported this
conclusion. He rejected the testimony of accused-appellant Escober because it was allegedly replete
with contradictions without pointing out what these contradictions consist of or what "vital details"
Escober could have recalled as a credible witness. He also found the crime to be attended by the
aggravating circumstances of cruelty, nighttime, superior strength, treachery, in band, "among others"
but did not particularly state the factual basis for such findings.
While it is true that the case before us does not involve the life or liberty of the defendant, as in Escober, there is still
no reason for the constitutional short-cut taken by the trial judge. The properties being litigated are not of
inconsequential value; they were sold for three and a half million pesos in 1983 and doubtless have considerably
appreciated since then, after more than eight years. These facts alone justified a more careful and thorough drafting
of the order, to fully inform the parties and the courts that might later be called upon to review it of the reasons why
the demurrer to the evidence was sustained and the complaint dismissed.
In Romero v. Court of Appeals, 8 the Court, somewhat reluctantly, approved a memorandum decision of the Court of
Appeals consisting of 4 pages, single-spaced, which adopted by reference the findings of fact and conclusions of law
of the Court of Agrarian Relations. While holding that the decision could be considered substantial compliance with
PD 946, Section 18, 9 and BP 129, Section 40, 10 Justice Jose Y. Feria nevertheless expressed the misgiving that "the
tendency would be to follow the line of least resistance by just adopting the findings and conclusions of the lower court
without thoroughly studying the appealed case."
Obviously, the order now being challenged cannot qualify as a memorandum decision because it was not issued by
an appellate court reviewing the findings and conclusions of a lower court. We note that, contrary to the impression of
the respondent court, there is not even an incorporation by reference of the evidence and arguments of the parties,
assuming this is permitted. No less importantly, again assuming arguendo that such reference is allowed and has
been made, there is no immediate accessibility to the incorporated matters so as to insure their convenient
examination by the reviewing court. In Francisco v. Permskul, 11 which is the latest decision of the Court on the issue
now before us, we categorically required:
. . . Although only incorporated by reference in the memorandum decision of the regional trial court,
Judge Balita's decision was nevertheless available to the Court of Appeals. It is this circumstance, or

even happenstance, if you will, that has validated the memorandum decision challenged in this case
and spared it from constitutional infirmity.
That same circumstance is what will move us now to lay down the following requirement, as a condition
for the proper application of Section 40 of BP Blg. 129. The memorandum decision, to be valid, cannot
incorporate the findings of fact and the conclusions of law of the lower court only byremote reference,
which is to say that the challenged decision is not easily and immediately available to the person
reading the memorandum decision. For the incorporation by reference to be allowed, it must provide
for direct access to the facts and the law being adopted, which must be contained in a
statement attached to the said decision. In other words, the memorandum decision authorized under
Section 40 of BP Blg. 129 should actually embody the findings of fact and conclusions of law of the
lower court in an annex attached to and made an indispensable part of the decision.
It is expected that this requirement will allay the suspicion that no study was made of the decision of the
lower court and that its decision was merely affirmed without a proper examination of the facts and the
law on which it was based. The proximity at least of the annexed statement should suggest that such an
examination has been undertaken. It is, of course, also understood that the decision being adopted
should, to begin with, comply with Article VIII, Section 14 as no amount of incorporation or adoption will
rectify its violation.
In Escober, the Court observed that the flawed decision "should have been remanded to the court a quo for the
rendition of a new judgment" but decided nevertheless to decide the case directly, the records being already before it
and in deference to the right of the accused to a speedy trial as guaranteed by the Bill of Rights. However, we are not
so disposed in the case now before us.
It is not the normal function of this Court to rule on a demurrer to the evidence in the first instance; our task comes
later, to review the ruling of the trial court after it is examined by the Court of Appeals and, when proper, its decision is
elevated to us. In the present case, we find that the respondent court did not have an adequate basis for such
examination because of the insufficiency of the challenged order. It must also be noted that we deal here only with
property rights and, although we do not mean to minimize them, they do not require the same urgent action we took in
Escober, which involved the very life of the accused. All things considered, we feel that the proper step is to remand
this case to the court a quo for a revision of the challenged order in accordance with the requirements of the
Constitution.
Review by the Court of the other issues raised, most of which are factual, e.g., the allegation of default in the payment
of the loan, the existence of a second loan, the nature of the newspapers where the notices of the sale were
published, the authority of the person consenting to the postponement of the sale, etc., is impractical and
unnecessary at this time. These matters should be discussed in detail in the revised order to be made by the trial
court so that the higher courts will know what they are reviewing when the case is appealed.
In one case, 12 this Court, exasperated over the inordinate length of a decision rife with irrelevant details, castigated
the trial judge for his "extraordinary verbiage." Kilometric decisions without much substance must be avoided, to be
sure, but the other extreme, where substance is also lost in the wish to be brief, is no less unacceptable either. The
ideal decision is that which, with welcome economy of words, arrives at the factual findings, reaches the legal
conclusions, renders its ruling and, having done so, ends.
WHEREFORE, the challenged decision of the Court of Appeals is SET ASIDE for lack of basis. This case is

REMANDED to the Regional Trial Court of Bulacan, Branch 10, for revision, within 30 days from notice, of the Order
of June 6, 1986, conformably to the requirements of Article VIII, Section 14, of the Constitution, subject to the appeal
thereof, if desired, in accordance with law. It is so ordered.
Narvasa, C.J., Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 1987 Constitution, Article VIII, Section 14.
2 Rollo, p. 9.
3 Ibid., p. 43.
4 Mendoza v. Court of First Instance of Quezon, 51 SCRA 369 at 375.
5 186 SCRA 1 at 5.
6 Nepomuceno v. Commission on Elections, 126 SCRA 472 at 478.
7 157 SCRA 541 at 555.
8 147 SCRA 183 at 194.
9 Sec. 18. Appeals. . . .
All cases of the Court of Agrarian Relations now pending before the Court of Appeals shall remain in
the Divisions to which they have been assigned, and shall be with sixty (60) days from the effectivity of
this Decree. Provided, however, That if the decision or order be an affirmance in toto of the dispositive
conclusion of the judgment appealed from, then the Court of Appeals may, instead of rendering an
extended opinion, indicate clearly the trial court's findings of fact and pronouncements of law which
have been adopted as basis for the
affirmance. . . .
10 Sec. 40. Form of decision in appealed cases. Every decision or final resolution of a court in
appealed cases shall clearly and distinctly state the findings of fact and the conclusions of law on which
it is based which may be contained in the decision or final resolution itself, or adopted by reference from
those set forth in the decision, order or resolution appealed therefrom.
11 173 SCRA 335.
12 People v. Molina, 184 SCRA 597.
The Lawphil Project - Arellano Law Foundation

SECOND DIVISION

[A.M. No. MTJ-05-1583. March 11, 2005]

23. MANUEL B. ARCENAS, complainant, vs. JUDGE HENRY B.


AVELINO, MCTC, PONTEVEDRA, CAPIZ,respondent.
DECISION
CHICO-NAZARIO, J.:

Judge Henry B. Avelino of the 2 nd Municipal Circuit Trial Court (MCTC) of


Pontevedra-Panay, Pontevedra, Capiz, was charged [1] by Manuel B. Arcenas
with gross inefficiency for failure to decide an ejectment case within the
reglementary period of thirty (30) days.
Complainant Arcenas is the attorney-in-fact of Demetrio Arcenas and Leah
Arcenas, plaintiffs in Civil Case No. 391 for Unlawful Detainer and Damages. He
narrated that defendants therein spouses Manolo and Rosemarie Amador, were
served with summons requiring them to file their answer within ten (10) days
which they failed to do so.[2]
On 21 June 2001, respondent Judge issued an Order directing the
Department of Environment and Natural Resources (DENR), Capiz, to conduct a
relocation survey to determine the extent of the twenty (20) meters reservation
for public easement as noted in Transfer Certificate of Title No. T-21277 in order
to ascertain the exact location of the house of the defendants.
Respondent Judge issued on 22 August 2001 another order [3] directing the
Department of Public Works and Highways (DPWH) in coordination with the
DENR, to conduct a relocation survey, to determine anew the metes and bounds
of the twenty (20) meters public easement.
On 05 May 2003, Jurlie D. Zubiaga, Chief, Survey Party of the Provincial
Environment and Natural Resources Office (PENRO) for Capiz, filed a
Commissioners Report dated 14 April 2003. Dissatisfied, respondent Judge,
together with May D. Baldomar, the court stenographer, Julius Abella, Engineer
II, DPWH-Capiz Engineering District of Roxas City, Ana Desales, a casual of
DPWH, Roxas City, Elmer Acolentaba, Carthographer-Surveyman of the DENR,
Roxas City, and plaintiff Manuel Arcenas, proceeded to the place and conducted
an ocular inspection on 18 June 2003.

On 17 November 2003, plaintiffs filed an Ex Parte Motion[4] to Render


Judgment pursuant to the Revised Rules on Summary Procedure. Respondent
Judge did not act on the motion.
On 16 March 2004, plaintiffs filed another motion [5] to remind respondent
Judge of his failure to decide the case. Up to the time of filing of this
administrative case, respondent Judge has not rendered any judgment.
On 02 July 2004, the Office of the Court Administrator (OCA)
required[6] respondent Judge to comment within ten (10) days from receipt of
notice.
In his comment dated 31 August 2004, respondent Judge admitted that he
knew that the Revised Rules on Summary Procedure provides that if no answer
has been filed, the court, motu proprio, or upon motion of the accused, shall
render judgment within ten (10) days. Respondent Judge, however, argued that
since plaintiffs title contains a 20-meter public easement reservation, he sought
the assistance of other government entities, i.e., the DENR, the DPWH, and the
PENRO, to determine if defendants house is within the lot of plaintiffs and within
the 20-meter public easement. He claims that if defendants house is inside said
public easement, he would be exceeding his authority if he will immediately rule
on the ownership thereon. He added that because he was not satisfied with the
reports on the surveys he ordered, he personally conducted his own ocular
inspection. His inspection revealed that defendants house was not within the
plaintiffs titled property but was within the twenty meters public easement. He
concluded that plaintiffs filed the two motions to render judgment because they
knew of the adverse result of the ocular inspection he conducted. Respondent
Judge also reasoned out the additional workloads in other courts and lack of
typewriters, as cause of delay in deciding the case. He disclosed that he already
rendered judgment on the case on 07 May 2004 and the records thereof have
already been transmitted to the Office of the Clerk of Court, Regional Trial Court
of Roxas City.
On 05 January 2005, the OCA submitted its report, [7] recommending -

. . . that this case be redocketed as a regular administrative matter and that the
respondent be found guilty of undue delay in the rendition of judgment. For this
he should be SUSPENDED from office without salary and other benefits for a
period of TWO (2) MONTHS and warned that a repetition of the same or the
commission of another violation of Rule 140, will be dealt with more severely.
We agree in the recommendation of the Court Administrator.
As a general principle, rules prescribing the time within which certain acts
must be done, or certain proceedings taken, are considered absolutely
indispensable to the prevention of needless delays and the orderly and speedy
discharge of judicial business. By their very nature, these rules are regarded as
mandatory.[8]

The rules require courts to decide cases submitted for decision generally
within three (3) months from the date of such submission. [9] With respect to cases
falling under the Rules on Summary Procedure, first level courts are only allowed
thirty (30) days following the receipt of the last affidavit and position paper, or the
expiration of the period for filing the same, within which to render judgment.
[10]
Moreover, Rule 3.05, Canon 3 of the Code of Judicial Conduct provides that a
judge shall dispose of the courts business promptly and decide cases within the
required periods.[11]
Section 6 of the Rules on Summary Procedure clearly provides:

SEC. 6. Effect of failure to answer. - Should the defendant fail to answer the
complaint within the period above provided, the court, motu proprio, or on
motion of the plaintiff, shall render judgment as may be warranted by the facts
alleged in the complaint and limited to what is prayed for therein: Provided,
however, that the court may in its discretion reduce the amount of damages and
attorneys fees claimed for being excessive or otherwise unconscionable.
In the case at bar, respondent Judge failed to render judgment after
defendants failed to file their answer (which he duly acknowledged in his Order
dated 26 June 2001) or even after PENRO officer, Dionisio S. Molina, Jr., filed
his report[12] or even after the two (2) motions dated 17 November 2003 [13] and 16
March 2004[14] filed by plaintiffs requesting him to render judgment. It took
respondent Judge almost three (3) years, counted from the time of his knowledge
that defendants failed to file answer or on 27 May 2004 to finally dispose of the
case.
Respondent Judges act of seeking assistance from other government
agencies in order to justify the delay will not excuse him from complying with
Section 10 of the Revised Rules on Summary Procedure. Section 10 of the
Rules on Summary Procedure explicitly provides:

SEC.10. Rendition of judgment. Within thirty (30) days after receipt of the
last affidavits and position papers, or the expiration of the period for filing the
same, the court shall render judgment.
However, should the court find it necessary to clarify certain material facts, it
may, during the said period, issue an order specifying the matters to be
clarified, and require the parties to submit affidavits or other evidence on the
said matters within ten (10) days from receipt of said order. Judgment shall be
rendered within fifteen (15) days after the receipt of the last clarificatory
affidavits, or the expiration of the period for filing the same.
The court shall not resort to the clarificatory procedure to gain time for the
rendition of the judgment.

The above-quoted rule allows the court to clarify matters if the same is
necessary, in the manner provided therein. The respondent Judge starkly
deviated from the required procedure and instead conducted his own inspection
after the agency submitted its report. There is no logic behind the respondent
Judges act of seemingly taking up the cudgels for the defendants. There was
already a report submitted by the PENRO officer who, without doubt, is more
knowledgeable on the issue of whether or not defendants house is within the
public easement.
Clearly, respondent Judge failed to decide the aforementioned case within
the thirty-day period prescribed by the Revised Rules on Summary Procedure.
Respondent Judges act is contrary to the rationale of the Rules on Summary
Procedure, which in particular, was promulgated for the purpose of achieving an
expeditious and inexpensive determination of cases.[15] For this reason, he
should be administratively sanctioned. As held in Sanchez v. Vestil:[16]

This Court has constantly impressed upon judges the need to decide cases
promptly and expeditiously, for it cannot be gainsaid that justice delayed is
justice denied. Delay in the disposition of cases undermines the peoples faith
and confidence in the judiciary. Hence, judges are enjoined to decide cases with
dispatch. Their failure to do so constitute gross inefficiency and warrants the
imposition of administrative sanction on them.
Respondent Judge also attempted to excuse the delay by citing his duties in
the courts of Panitan, Maayon, Pres. Roxas-Pilar, Mambusao, Sigma-SapianJamindan, and Dumalag-Dao-Ivisan, Capiz. This will not exonerate him. His
inaction to decide the case on time cannot be ignored. As ruled in Espanola v.
Panay,[17] if the caseload of the judge prevents the disposition of cases within the
reglementary periods, he should ask this Court for a reasonable extension of
time to dispose of the cases involved. This is to avoid or dispel any suspicion
that something sinister or corrupt is going on. The records of this administrative
matter do not show that any attempt was made by respondent Judge to make
such a request. Instead, he preferred to keep the case pending, enshrouding the
same by his silence.
All told, we find respondent Judge guilty of undue delay in rendering a
decision which, under Section 9(1), [18] Rule 140, of the Revised Rules of Court, is
classified as a less serious charge. Under Section 11(B) of the same Rule, the
penalty for such charge is suspension from office without salary and other
benefits for not less than one (1) nor more than three (3) months, or a fine of
more than P10,000 but not exceeding P20,000. [19] In the Report on the Judicial
Audit Conducted in the RTC, Branches 29 and 59, Toledo City,[20] the Court
observed the factors considered in the determination of the proper penalty for
failure to decide a case on time:

We have always considered the failure of a judge to decide a case within ninety
(90) days as gross inefficiency and imposed either fine or suspension from
service without pay for such. The fines imposed vary in each case, depending
chiefly on the number of cases not decided within the reglementary period and
other factors, to wit: the presence of aggravating or mitigating circumstancesthe damage suffered by the parties as a result of the delay, the health and age of
the judge, etc.
In the present case, there is a mitigating circumstance of admission by
respondent Judge of his fault to decide the case on time, and the aggravating
circumstance of undue damage to the complainant caused by the delay. Thus,
the recommendation of two (2) months suspension by the OCA is proper.
WHEREFORE, Judge Henry B. Avelino is found guilty of gross inefficiency
and
is
hereby
ordered
to
pay
a FINE of TWENTY
THOUSAND(P20,000.00) PESOS. He is warned that a repetition of the same or
similar act shall be dealt with more severely. Let a copy of this decision be
attached to his personal records.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

[1]

Rollo, pp. 1-7, Complaint dated 22 April 2004.

[2]

Rollo, p. 11, Order dated 16 June 2001.

[3]

Rollo, p. 17.

[4]

Rollo, pp. 26-32.

[5]

Rollo, pp. 33-38.

[6]

Rollo, p. 39.

[7]

Rollo, pp. 52-55.

[8]

Gachon v. Devera, Jr., G.R. No. 116695, 20 June 1997, 274 SCRA 540, citing Cf. Valdez v.
Ocumen, et.al., 106 Phil. 929, 933 (1960) and Alvero v. De la Rosa, 76 Phil. 428, 434
(1946).

[9]

Section 15, Article VIII, Constitution of the Philippines.

[10]

Section 10, Revised Rules on Summary Procedure.

[11]

RE: Cases Left Undecided by Retired Judge Antonio E. Arbis, Regional Trial Court, Branch 48,
Bacolod City, AM No. 99-1-01-RTC, 20 January 2003, 395 SCRA 398.

[12]

Rollo, p. 45.

[13]

Rollo, p. 32.

[14]

Rollo, pp. 33-39.

[15]

Supra, note 8.

[16]

A.M. No. RTJ-98-1419, 13 October 1998, 298 SCRA 1; Office of the Court Administrator v.
Judge Walerico Butalid, A.M. No. RTJ-96-1337, 05 August 1998, 293 SCRA 589; Atty.
Nelson Ng v. Judge Leticia Ulibari, A.M. No. MTJ-98-1158 , 30 July 1998, 293 SCRA
342; Jocelyn Grefaldeo v. Judge Rica Lacson, A.M. No. MTJ-93-881 , 03 August 1998,
293 SCRA 524.

[17]

A.M. No. RTJ-95-1325, 04 October 1995, 248 SCRA 684, citing Cruz v. Basa, A.M. No. MTJ91-598, 09 February 1993, 219 SCRA 551.

[18]

As amended by A.M. No. 01-8-10-SC, which took effect on 01 October 2001.

[19]

RE: Cases Left Behind by Retired Judge Antonio E. Arbis, Regional Trial Court, Branch 48,
Bacolod City, A.M. No. 99-1-01-RTC, 20 January 2003, 395 SCRA 398.

[20]

A.M. No. 97-9-278-RTC, 08 July 1998, 292 SCRA 8.

THIRD DIVISION

[G.R. No. 113296. January 16, 1998]

25.ABC DAVAO AUTO SUPPLY, INC., petitioner, vs. COURT OF


APPEALS, ABUNDIO T. MERCED, doing business under
the name and style of SOUTHERN ENGINEERING
WORKS, respondents.
DECISION
FRANCISCO, J.:

On October 6, 1980, a complaint for a sum of money, attorneys fees and


damages was filed by petitioner before the Court of First Instance (now
Regional Trial Court) of Davoa City which was raffled to Branch XVI. The pretrial was conducted by Judge Pacita Canizares-Nye and later by Judges
Alejandro Siazon and Cristeto Dinopol.5 During the trial on November 20, 1984,
Judge Renato Fuentes heard the evidence for petitioner and private respondent,
but the latters cross examination on August 28, 1985 and the presentation of the
parties rebuttal and sur-rebuttal evidences were heard by Judge Roque Agton,
having assumed office on August 1, 1985. When the judiciary was reorganized
under the Aquino administration, Judge Agton was transferred to another branch
of the Regional Trial Court, (RTC) but within the same Judicial
Region. Meanwhile, Judge Romeo Marasigan, who assumed office on February
3, 1987, was assigned to Branch XVI.
[1]

[2]

[3]

[4]

Sometime on May 1987, Judge Marasigan acted on private respondents


motion for extension of time to file memorandum. On June 9, 1987 a decision
penned by Judge Agton was rendered in favor of petitioner. Private respondent
moved to reconsider said decision, but the same was denied in an order dated

March 1, 1988, issued by Judge Marasigan. Private respondent appealed to the


Court of Appeals (CA) which nullified Judge Agtons decision on the ground that
at the time he rendered the judgment, he was neither the judge de jure nor the
judge de facto of the RTC Branch XVI, and correspondingly remanded the case
to the lower court. Hence, this petition on the sole issue of whether or not the
decision of Judge Agton is valid.
[5]

It is a rule that a case is deemed submitted for decision upon the filing of the
last pleading, brief or memorandum required by the rules, or by the
court. Records disclose that this case was submitted for decision sometime on
March 1987 after the parties submission of their memoranda as required by the
court, at which time Judge Marasigan was already presiding in Branch
XVI. Thus, the case was submitted for decision to Judge Marasigan and not to
Judge Agton who by then was already transferred to another branch. Judge
Agtons
decision,
therefore,
appears
to
be
tainted
with
impropriety. Nevertheless, the subsequent motion for reconsideration of Judge
Agtons decision was acted upon by Judge Marasigan himself and his denial of
the said motion indicates that he subscribed with the adopted in toto Judge
Agtons decision. Any incipient defect was cured. Besides, the presumption that
both magistrates (Agton and Marasigan) have regularly performed their official
functions, have not at all been rebutted by contrary evidence.
[6]

Moreover, for a judgment to be binding, it must be duly signed and


promulgated during the incumbency of the judge whose signature appears
thereon. This is in line with the Courts En Banc resolution of February 10, 1983
implementing B.P. 129 which merely requires that the judge who pens the
decision is still an incumbent judge, i.e., in this case, a judge of the same court,
albeit now assigned to a different branch, at the time the decision is
promulgated. Branches of the trial court are not distinct and separate tribunals
from each other. Hence, contrary to private respondents allegation, Judge
Agton could not have possibly lost jurisdiction over the case, because jurisdiction
does not attach to the judge but to the court. The continuity of a court and the
efficacy of its proceedings are not affected by the death, resignation, or cessation
from the service of the judge presiding over it. To remand a validly decided case
to the incumbent Presiding Judge Branch XVI, as what the CA suggest, would
only prolong of the Court to accord a just, speedy and inexpensive disposition for
every action
[7]

[8]

[9]

[10]

[11]

[12]

WHEREFORE, the decision of the Court of Appeals appealed from is hereby


SET ASIDE and the decision of Judge Agton is REINSTATED.
SO ORDERED
Narvasa, C.J., (Chairman), Romero, and Panganiban, JJ., concur.

DASUDECO (Davao Sugar Central Company) contracted respondent Merced to repair its
trailers. The latter then bought on credit some vehicular parts from the petitioner ABC, provided
that payments are made within 30 days after each purchase with 12% interest on the amount due
[1]

and a 25% attorneys fee in case of default. Out of the purchases, private respondent admittedly
had an outstanding balance of P99,217.15. Upon demand, private respondent refused payment
of the balance on the ground that the said accounts had not yet matured. (Rollo, p. 16).
The pre-trial ended on January 20, 1983 when Judge Nye was still presiding. The pre-trial
order dated August 16, 1984 was issued by Judge Dinopol.
[2]

Judge Agton was assigned to RTC Branch 6 in Mati, Davao Oriental, which is within the same
Judicial Region as Davao City.
[3]

[4]

Records furnished by the Office of the Court Administrator (OCA) reveal that:

A. Judge Roque A. Agton was appointed presiding Judge of the Regional Trial Court, Branch 16,
Davao City on July 19, 1985, took his oath of office on July 25, 1985 and assumed his duties on
August 1, 1985. During the juducial reorganization on November 3, 1986, he was one of those
reappointed. His took his oath on February 1, 1987 and assumed his duties on February 4,
1987. He was currently designated Executive Judge and Presiding Judge of the Regional trial
Court, Branch 7, Baganga, Davao Oriental, pursuant to Administrative Order #26 dated March 3,
1988, x x x. He retired (compulsory retirement) last December 25, 1995.
B. Judge Romeo D. Marasigan was appointed during the judicial reorganization on November 3,
1986 as judge of the Regional Trial Court, Branch 16, Davao City, and assumed office on
February 3, 1987. He holds the same position up to the present. Prior to this, he was Municipal
Judge of Matanao, Davao (July 3, 1967)."
CA decision penned by Justice F. Martin with Justices A. Gutierrrez and R. Mabutas, Jr.,
concurring; Rollo, pp. 15-23.
[5]

[6]

Rule 131, Section 3 (m) Rules of Court.

People v. Labao 220 SCRA 100 (1993); Lao v. To-Chip, 158 SCRA 243 (1988) citing among
others Jimenez v. republic, 22 SCRA 622 (1968); Siazon v. Judge of CFI Cotabato, 26 SCRA 664
(1969); Solis v. CA, 38 SCRA 53 (1971); People v. So, 101 Phil. 1257 (unrep. 1957) citing
Luna v. Ridriguez, 37 Phil. 186 Phil 186; Garchitorena v. Crescini, 37 Phil 675; People v. CA, 99
Phil. 786.
[7]

1. Cases already submitted for decision shall be decided by the Judge to whom they were
submitted, except cases submiited for decision to judges who were promoted to higher courts or
to those who are no longer in the service.
[8]

[9]

People v. CFI of Quezon, Branch X, 227 SCRA 457, 461 (1993).

People v. CFI of Quezon, supra.;


Lumpay v. Moscoso, 105 Phil. 968.
[10]

[11]

People v. CFI of Quezon, supra at 461.

[12]

Rule 1, Section 6, Rules of Court.

People v.

Gorospe,

129

SCRA

233

citing

lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
28. G.R. No. L-36837 August 17, 1983
ATAL MOSLEM and AMADO MOSLEM, petitioners,
vs.
ANTONIO M. SORIANO, and the HONORABLE COURT OF FIRST INSTANCE OF TAGUM DAVAO DEL NORTE, Branch
VIII, SALA I, respondents.

GUTIERREZ, JR., J.:


This is a petition for certiorari and mandamus with preliminary injunction to annul the orders and proceedings for contempt before
the Court of First Instance of Davao, Branch I at Tagum, in Civil Case No. 5788 for recovery of possession and damages. The
prayer that a writ of mandamus be issued directing the respondent court to order the release of the petitioners appears
premature because the petitioners were not under detention at the time. Our temporary restraining order also prevents the court's
order of arrest from being implemented.
Antonio M. Soriano filed Civil Case No. 5788 against Atal Moslem and Amado Moslem to recover possession of four (4) hectares
of land plus damages. In their answer, the defendants specifically denied the material averments of the complaint and contended
that they entered and peacefully possessed for more than twenty (20) years the area which was known as public land. The
defendants filed a counterclaim for P2,000.00 moral damages, P2,000.00 exemplary damages, and P1,000.00 attomey's fees.
The records show that the following transpired during the pre-trial hearings:
xxx xxx xxx
During the pre-trial that followed, Atty. Pangilan who represents the defendants, and Atty. Fernando Contreras,
who represents the plaintiff, agreed to have Surveyor Jose Vidua appointed Commissioner for the purpose of
relocating the boundaries of the land, subject matter of this complaint, the expenses to be borne by them share
and share alike. They also agreed that before relocation, they will deposit with the Deputy Clerk of Court their

share of the costs of the survey,


The defendants, through Atty. Pangilan also agreed that should the defendants be found within the land, subject
matter of this complaint, they will leave.
WHEREFORE, surveyor Jose Vidua is hereby appointed Commissioner for the purpose of aforesaid.
Before entering into the performance of his duties, he shall take an oath that he win faithfully perform his duties.
xxx xxx xxx
After the commissioner submitted his report, it was found that the defendants were within the land titled in the name of Soriano. It
appears that Atal Moslem and Amado Moslem interposed no objection to the report. The court, therefore, rendered a decision
ordering the petitioners to vacate the disputed land and pay the costs.
When the judgment was being executed, the petitioners refused to vacate the land. Soriano filed a motion to declare them in
contempt of court.
The petitioners, assisted by a new counsel filed an opposition to the motion. Resolving the motion after taking into account the
opposition, the respondent court issued an order, the dispositive portion of which reads:
WHEREFORE, the defendants are hereby found guilty of contempt and ordered arrested and imprisoned until they obey the
order aforementioned.
A motion for reconsideration of the order was denied.
The petitioners are now raising two issues for resolution, namely
l. Whether petitioners can be declared in contempt of court in a case for delivery of possession of real property.
2. Whether petitioners can be declared in contempt of court pending payments of the improvements in the land
under Articles 448 and 546 of the New Civil Code.
The arguments of the parties on whether or not the contempt order is valid revolve around the question as to what section of
Rule 39 of the Rules of Court applies in this case.
The petitioners contend that Section 8(d) of Rule 39 is appropriate because the judgment requires delivery of real property.
According to them, the refusal to vacate the disputed land is not contempt of court because the judgment is not a special
judgment enforceable under Section 9 of Rule 39. The respondents, however, argue that the order of the court is not to deliver
possession of land but to vacate it and to pay costs. They would apply Section 9, Rule 39. The respondents' arguments are
sophistic
A writ of execution under Section 8(d) requires the sheriff or other proper officer to whom it is directed:
xxx xxx xxx
(d) If it be for the delivery of the possession of real or personal property, to deliver the possession of the same,
describing it, to the party entitled thereto, and to satisfy any costs, damages, rents, or profits covered by the
judgment out of the personal property of the person against whom it was rendered, and if sufficient personal

property cannot be found, then out of the real property.


On the other hand, Section 9 which the lower court ruled as applicable, provides:
Writ of execution of special judgment. When a judgment requires the performance of any other act than the payment of money,
or the sale or delivery of real or personal property, a certified copy of the judgment shall be attached to the writ of execution and
shall be served by the officer upon the party against whom the same is rendered, or upon any other person required thereby, or
by law, to obey the same, and such party or person may be punished for contempt if he disobeys such judgment.
It is plain from the records that the judgment being enforced is an ordinary one. It is not a special judgment. The case filed by
Antonio M. Soriano is an ordinary civil action for the recovery of possession of a parcel of land and damages. The judgment
directing the petitioners to vacate the land is nothing but a judgment to deliver possession of real property. A special judgment
under Section 9, Rule 39 is one which "requires the performance of any other act than the payment of money, or the sale or
delivery of real or personal property. "
How is an ordinary judgment enforced? Section 13 of Rule 39 provides:
How execution for the delivery or restitution of property enforced The officer must enforce an execution for the delivery or
restitution of property by ousting therefrom the person against whom the judgment is rendered and placing the judgment creditorr
in possession of such property, and by levying as hereinafter provided upon so much of the property of the judgment debtor as
will satisfy the amount of the judgment and costs included in the writ of execution.
We applied the above rule in Rom vs. Cobadora (128 SCRA 758) and declared that the mere refusal or unwillingness on the part
of the defeated party to relinquish the property would not constitute contempt. The proper procedure must be followed in the
execution of the judgment.
Chinese Commercial Company v. Martinez, et al (6 SCRA 848) is clear that:
... Under Section 8(d) of Rule 39, if the judgment be for the delivery of the possession of real property, the writ of
execution must require the sheriff or other officer to whom it must be to deliver the possession of the property,
describing it, to the party entitled thereto. This means his means that the sheyiff must dispossess or eject the
losing party from the premises and deliver the possession thereof to the winning party. If subsequent to such
dispossession or ejectment the losing party enters or attempts to enter into or upon the real property, for the
purpose of executing acts of ownership or possession or in any manner disturbs the possession of the person
adjudged to be entitled thereto, then and only then may be loser be charged with and punished for contempt
under paragraph (h) of Section 3, Rule 64. "
A similar ruling was rendered in Fuentes, et al vs. Leviste, et al (117 SCRA 958), where this Court held
Under Sec. 13, Rule 39 of the Rules of Court, it is not enough for the sheriff, in the enforcement of a judgment for
delivery or restitution of property, to merely direct the defeated party to effect such delivery or restitution. The
refusal of the defeated party to surrender the property to the winning party upon the order of the sheriff does not
constitute contempt. The sheriff himself must oust the defeated party from the property and effect the delivery or
restitution by placing the winning party in possession of the property (U.S. vs. Ramayat 22 PhiL 183) ...
Under the second issue in this petition, the petitioners allege that they have entered, occupied, and were in peaceful possession
of the land in question which according to them was public land, for more than twenty (20) years, and that their legal possession
is evidenced by Tax Declaration No. 3068 issued by the Office of the Provincial Assessor on October 1 1, 1960. Having
introduced considerable improvements on the land in question before anybody laid claim to it, the petitioners state that they are
builders and planters in good faith and are thus entitled to the retention of the improvements pending payment under Articles 448

and 546 of the Civil Code. With this right of retention, the petitioners contend that their refusal to vacate the premises cannot be
punished as contempt.
The lower court did not find this explanation satisfactory. The respondents have not discussed the builder in good faith argument
but have limited themselves to insisting that the refusal to vacate and to pay costs is contemptuous defiance of the court orders.
The records of this case are rather sketchy. The petitioners did not submit any evidence to prove their assertions of being
builders and planters in good faith. The matter was not mentioned in their answer. Only after they were required to show cause
why they should not be hold in contempt did their new counsel explain that the petitioners had been in possession of the land
since before World War II, that under the Civil Code they are entitled to reimbursement of all their improvements and that
pending payment of said improvements, they cannot be held in contempt of court. Without explaining the basis of its ruling on
this point, the lower court found it unsatisfactory.
Under ordinary circumstances, the petitioners' contentions on the second issue they raised would not receive serious
consideration. During pre-trial, their first counsel agreed that a court commissioner would survey the land and if they are found
within the property of the private respondent, they would leave.
There are special reasons, however, why the builder in good faith issue should not be ignored or considered closed in spite of
the finality of the decision in the recovery of possession case.
In the first place, the petitioners have the presumption of good faith under Article 527 of the Civil Code in their favor. In the
drafting of the answer and during pre-trial the petitioners do not seem to have had the benefit of counsel in the real meaning of its
availability. The petitioners' first counsel limited the issues to ascertaining whether or not the two defendants were inside the titled
property of the paintiff. Atal and Amado are members of a cultural minority group. They appear not even to have any surname.
Their family name "Moslem" appears to be more of a descriptive applation than a surname. There is nothing in the records
before us to show whether or not Atal and Amado were mere squatters who entered land already titled in someone else's name.
It is not also shown whether the two were already working and cultivating land which they thought was public land when the
same was titled by a person more knowledgeable in acquisition of real estate. The builder in good faith argument is, therefore, a
valid one insofar as this contempt case is concerned. The petitioners are not precluded from pursuing further legal steps to be
reimbursed for their improvements if their claim is supported by satisfactory proof.
WHEREFORE, the orders of the respondent court finding the petitioners guilty of contempt and ordering their arrest and
detention are hereby REVERSED and SET ASIDE. The temporary restraining order earlier issued is made PERMANENT. Costs
against the private respondent.
SO ORDERED.
Teehankee, Actg. C.J., Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.

The Lawphil Project - Arellano Law Foundation

FIRST DIVISION

[G.R. No. 144882. February 04, 2005]

29.

LUISA BRIONES-VASQUEZ, petitioner, vs. COURT OF


APPEALS and HEIRS OF MARIA MENDOZA VDA. DE
OCAMPO, respondents.
DECISION

AZCUNA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Civil Procedure,
assailing the Resolution of the Court of Appeals in CA-G.R. CV No. 39025, dated
June 9, 2000, which denied petitioners motion for clarificatory judgment and the
Resolution of the Court of Appeals, dated August 3, 2000, which denied the
motion for reconsideration.
Under an agreement denominated as a pacto de retro sale, Maria Mendoza
Vda. De Ocampo acquired a parcel of land from Luisa Briones. The latter
thereunder reserved the right to repurchase the parcel of land up to December
31, 1970.
[1]

Maria Mendoza Vda. De Ocampo passed away on May 27, 1979. On June
14, 1990, Hipolita Ocampo Paulite and Eusebio Mendoza Ocampo, the heirs of
Maria Mendoza Vda. De Ocampo, filed a petition for consolidation of ownership,
alleging that the seller was not able to exercise her privilege to redeem the
property on or before December 31, 1970.
[2]

[3]

The Regional Trial Court (RTC) of Pili, Camarines Sur, Branch 32 rendered a
Decision on January 30, 1992 as follows:
[4]

WHEREFORE, premises considered, judgment is hereby rendered as follows:


1. declaring that exh. A is a true pacto de retro sale;
2. declaring that the defendant can still redeem the property within 30
days from the finality of this judgment, subject to the provisions of Art.
1616 of the New Civil Code;
3. No costs.

SO ORDERED.

[5]

Plaintiffs therein -- herein private respondents -- appealed the RTC Decision


to the Court of Appeals. On June 29, 1995, the Court of Appeals promulgated a
Decision and disposed of the case in the following manner:
[6]

[7]

THE FOREGOING CONSIDERED, the contested decision is hereby set aside;


and declaring the 1970 sale with right of repurchase, Exhibit A, as one of an
equitable mortgage.

SO ORDERED.

[8]

Respondents filed a motion for reconsideration which the Court of Appeals


denied through a Resolution, dated December 15, 1995. The Court of Appeals
Decision became final and executory and entry of judgment was made on July
17, 1996.
[9]

[10]

Subsequently, at the RTC, both petitioner and respondents filed their


respective motions for a writ of execution. The RTC issued a writ of execution.
However, the writ was returned unserved per sheriffs return which reads as
follows:

Respectfully returned to this Court thru the Clerk of Court VI, RTC, Pili,
Camarines Sur the herein attached original copy of the Writ of Execution
issued in the above-entitled case with the following information, to wit:
That the plaintiffs [herein private respondents] were informed that the writ of
execution was already issued for implementation and that they should pay the
necessary sheriffs and kilometrage fees;
That [one of] the plaintiff[s] came to the Office of the Clerk of Court VI but did
not deposit any amount for the kilometrage fee and for the expenses in the
implementation of the said writ, but instead plaintiff said that he is not
interested to implement such writ;
That the 60-day period within which the said writ should be implemented has
already expired.
WHEREFORE, the original copy of the Writ of Execution is hereby returned
unserved.
Cadlan, Pili, Camarines Sur July 8, 1997
For the Clerk of Court VI and
Ex-Officio Provincial Sheriff
by:
(signed)
EDDIE M. ROSERO
Sheriff IV
[11]

Petitioner thereafter filed a motion for an alias writ of execution. This was
granted by the RTC:
[12]

ALIAS WRIT OF EXECUTION

T O:

THE SHERIFF or any person authorized


to serve process, RTC, Br. 32, Pili, C.s.

THRU :

THE CLERK OF COURT VI and EX-OFFICIO


PROVINCIAL SHERIFF
Regional Trial Court
Pili, Camarines Sur

GREETINGS:
WHEREAS, on January 20, 1992, a decision was rendered by this
Court, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. declaring that Exh. A is a true pacto de retro sale;
2. declaring that the defendant can still redeem the property within
30 days from the finality of this judgment, subject to the
provisions of Art. 1616 of the New Civil Code.
3. No costs.

WHEREAS, in an order of this Court dated June 16, 1992, the notice of appeal
filed by counsel for the defendant has been granted and the Clerk of Court V of
this Court transmitted the entire records of the case to the Court of Appeals,
Manila;
WHEREAS, on June 29, 1995, a decision was rendered by the Court of
Appeals, Manila, the dispositive portion of which reads as follows:
THE FOREGOING CONSIDERED, the contested decision is hereby set
aside; and declaring the 1970 sale with right of repurchase, Exh. A as one of
an equitable mortgage.
WHEREAS, on March 5, 1997, the Hon. Nilo A. Malanyaon, Presiding Judge
of this Court issued an order granting the issuance of a writ of execution,
hereunder quoted as follows:
It appearing that the decision of the Court of Appeals had become final and
executory, and an entry of final judgment had already been issued by the
Honorable Court of Appeals, let a writ of execution issue.

WHEREAS, on July 10, 1997, Sheriff Eddie M. Rosero submitted his return:
WHEREFORE, the original copy of the Writ of execution is hereby returned
unserved.
WHEREAS, on July 18, 1997, the Hon. Nilo A. Malanyaon issued an Order:
The motion for issuance of alias writ of execution filed by counsel for the
defendant, Atty. Lucille Fe R. Maggay-Principe, is hereby granted.
Consequently, the Clerk of Court of this Court is directed to issue alias writ of
execution.
WHEREFORE, you the Provincial Sheriff of Camarines Sur or his lawful
deputy is hereby commanded to effect the satisfaction of the above-quoted
decision of the Honorable Court of Appeals, Manila. Return this writ to this
Court within sixty (60) days from your receipt hereof.
WITNESS THE HON. NILO A. MALANYAON, Judge of this Court, this
21st day of July, 1997, at Cadlan, Pili, Camarines Sur.
(Sgd.) LALAINE P. MONSERATE
Officer-In-Charge
Legal Researcher II
The Sheriff was unable to effect the satisfaction of the alias writ as stated in
the sheriffs report, which is worded thus:

This is to report on the status of the implementation of the Alias Writ of


Execution issued in the above-entitled case, to wit:
That on August 6, 1997 the plaintiff[s] represented by Sps. Policarpio Paulite
and Hipolita Ocampo and Eusebio M. Ocampo personally received copy of the
Alias Writ of Execution but they refused to sign on the original copy of the said
writ, together with the letter of advise informing them to withdraw at any time
the amount deposited to the Office of the Clerk of Court VI, RTC, Pili,
Camarines Sur by defendant Luisa Briones so that the mortgage may now be
deemed released or cancelled.
That until this time the said plaintiff[s] failed and or did not bother to withdraw
the said amount deposited by defendant Luisa Briones despite letter of advice
and the alias writ of execution having been personally received by them.

Cadlan, Pili, Camarines Sur September 9, 1997.


For the Clerk of Court and
Ex-Officio Sheriff
by:
(signed)
EDDIE M. ROSERO
Sheriff IV
[13]

Unable to effect the execution of the Court of Appeals decision, petitioner


filed with the RTC an omnibus motion, dated May 25, 1999, praying:

WHEREFORE, it is respectfully prayed that an order issue:


a) Declaring the equitable mortgage, Exhibit A, discharged;
b) Directing the issuance of a Writ of Possession against the plaintiffs for the
delivery of possession of the land in question to the defendant.
[14]

The RTC denied the omnibus motion in an Order dated November 16, 1999,
which states:

Acting on the omnibus motion of plaintiff dated 25 May 1999 and the
opposition thereto of defendant, and considering that the decision of the Court
of Appeals referring the decision of this Court has become final and executory,
hence, this Court can no longer alter, modify or add anything thereto, the
prayers set forth in the omnibus motion is, as it is, hereby denied.
SO ORDERED.

[15]

Petitioner filed a motion for reconsideration of the above Order, which was
denied by the RTC in an Order dated February 23, 2000.
[16]

[17]

Petitioner then filed a motion for clarificatory judgment, dated April 5, 2000,
with the Court of Appeals. The motion was denied in a Resolution, dated June
9, 2000, which reads as follows:
[18]

The only issues that reached Us, through an appeal, was whether the 1970 Sale
with Right of Repurchase was actually an equitable mortgage. We ruled, it
was, necessarily there is nothing to clarify.
If it is a matter however whether the prevailing party should be entitled to a
right to repossess the property, then the remedy is not with Us, but with the
Court below.

For lack of merit, the Motion for Clarificatory Judgment is hereby DENIED.
SO ORDERED.

[19]

Petitioner filed a motion for reconsideration of the above Resolution. The


Court of Appeals denied the same in a Resolution dated August 3, 2000.
[20]

Petitioner now comes to this Court raising the following issues:

PETITIONER SUBMITS THAT THE PUBLIC RESPONDENT ACTED


ARBITRARILY, WITH GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN ISSUING THE FOLLOWING
RESOLUTIONS:
A) RESOLUTION DATED JUNE 9, 2000, DENYING PETITIONERS
MOTION FOR CLARIFICATORY JUDGMENT.
B) RESOLUTION DATED AUGUST 3, 2000, DENYING PETITIONERS
MOTION FOR RECONSIDERATION.
[21]

The sole issue is whether or not the Court of Appeals acted with grave abuse
of discretion amounting to lack of jurisdiction in refusing to grant petitioners
motion for clarificatory judgment.
It must be noted, as narrated above, that the Decision of the Court of
Appeals had already become final and executory at the time that the motion for
clarificatory judgment was filed. With regards to final judgments, this Court has
pronounced that:

nothing is more settled in the law than that when a final judgment becomes
executory, it thereby becomes immutable and unalterable. The judgment may
no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law, and
regardless of whether the modification is attempted to be made by the Court
rendering it or by the highest Court of the land. The only recognized
exceptions are the correction of clerical errors or the making of so-called nunc
pro tunc entries which cause no prejudice to any party, and, of course, where
the judgment is void.
[22]

As a general rule, therefore, final and executory judgments are immutable


and unalterable except under the three exceptions named above: a) clerical
errors; b) nunc pro tunc entries which cause no prejudice to any party; and c)
void judgments.

In the present case, petitioner claims the second exception, i.e., that her
motion for clarificatory judgment is for the purpose of obtaining anunc pro
tunc amendment of the final and executory Decision of the Court of Appeals.
Nunc pro tunc judgments have been defined and characterized by this Court
in the following manner:

The office of a judgment nunc pro tunc is to record some act of the court done
at a former time which was not then carried into the record, and the power of a
court to make such entries is restricted to placing upon the record evidence of
judicial action which has been actually taken. It may be used to make the
record speak the truth, but not to make it speak what it did not speak but
ought to have spoken. If the court has not rendered a judgment that it
might or should have rendered, or if it has rendered an imperfect or
improper judgment, it has no power to remedy these errors or omissions
by ordering the entrynunc pro tunc of a proper judgment. Hence a court in
entering a judgment nunc pro tunc has no power to construe what the
judgment means, but only to enter of record such judgment as had been
formerly rendered, but which had not been entered of record as rendered.
In all cases the exercise of the power to enter judgments nunc pro
tunc presupposes the actual rendition of a judgment, and a mere right to a
judgment will not furnish the basis for such an entry. (15 R. C. L., pp. 622623.)

The object of a judgment nunc pro tunc is not the rendering of a new
judgment and the ascertainment and determination of new rights, but is
one placing in proper form on the record, the judgment that had been
previously rendered, to make it speak the truth, so as to make it show what
the judicial action really was, not to correct judicial errors, such as to
render a judgment which the court ought to have rendered, in place of the
one it did erroneously render, nor to supply nonaction by the court,
however erroneous the judgment may have been. (Wilmerding vs. Corbin
Banking Co., 28 South., 640, 641; 126 Ala., 268.)
A nunc pro tunc entry in practice is an entry made now of something which
was actually previously done, to have effect as of the former date. Its office is
not to supply omitted action by the court, but to supply an omission in the
record of action really had, but omitted through inadvertence or mistake.
(Perkins vs. Haywood, 31 N. E., 670, 672.)

It is competent for the court to make an entry nunc pro tunc after the term at
which the transaction occurred, even though the rights of third persons may be
affected. But entries nunc pro tunc will not be ordered except where this can be
done without injustice to either party, and as a nunc pro tunc order is to
supply on the record something which has actually occurred, it cannot
supply omitted action by the court . . . (15 C. J., pp. 972-973.)
[23]

From the above characterization of a nunc pro tunc judgment it is clear that
the judgment petitioner sought through the motion for clarificatory judgment is
outside its scope. Petitioners did not allege that the Court of Appeals actually
took judicial action and that such action was not included in the Court of Appeals
Decision by inadvertence. A nunc pro tunc judgment cannot correct judicial error
nor supply nonaction by the court.
[24]

Since the judgment sought through the motion for clarificatory judgment is
not a nunc pro tunc one, the general rule regarding final and executory decisions
applies. In this case, no motion for reconsideration having been filed after the
Court of Appeals rendered its decision on June 29, 1995 and an entry of
judgment having been made on July 17, 1996, the same became final and
executory and, hence, is no longer susceptible to amendment. It, therefore,
follows that the Court of Appeals did not act arbitrarily nor with grave abuse of
discretion amounting to lack of jurisdiction when it issued the aforementioned
Resolution denying petitioners motion for clarificatory judgment and the
Resolution denying petitioners motion for reconsideration.
Nevertheless, for purposes of guiding the parties in the execution of the
aforesaid Decision of the CA, without altering the same, the following should be
noted:
The Court of Appeals pronounced in its Decision that the contract between
the parties is an equitable mortgage. Since the contract is characterized as a
mortgage, the provisions of the Civil Code governing mortgages apply. Article
2088 of the Civil Code states:

The creditor cannot appropriate the things given by way of pledge or mortgage,
or dispose of them. Any stipulation to the contrary is null and void.
This Court has interpreted this provision in the following manner:

The essence of pacto commissorio, which is prohibited by Article 2088 of the


Civil Code, is that ownership of the security will pass to the creditor by the
mere default of the debtor (Guerrero v. Yigo, et al., 96 Phil. 37, 41-42; Puig v.
Sellner, et al., 45 Phil. 286, 287 88)
[25]

The only right of a mortgagee in case of non-payment of a debt secured by


mortgage would be to foreclose the mortgage and have the encumbered

property sold to satisfy the outstanding indebtedness. The mortgagors default


does not operate to vest in the mortgagee the ownership of the encumbered
property, for any such effect is against public policy, as enunciated by the Civil
Code
[26]

Applying the principle of pactum commissorium specifically to equitable


mortgages, in Montevergin v. CA, the Court enunciated that the consolidation of
ownership in the person of the mortgagee in equity, merely upon failure of the
mortgagor in equity to pay the obligation, would amount to a pactum
commissorium. The Court further articulated that an action for consolidation of
ownership is an inappropriate remedy on the part of the mortgagee in equity.
The only proper remedy is to cause the foreclosure of the mortgage in equity.
And if the mortgagee in equity desires to obtain title to the mortgaged property,
the mortgagee in equity may buy it at the foreclosure sale.
[27]

The private respondents do not appear to have caused the foreclosure of the
mortgage much less have they purchased the property at a foreclosure sale.
Petitioner, therefore, retains ownership of the subject property. The right of
ownership necessarily includes the right to possess, particularly where, as in this
case, there appears to have been no availment of the remedy of foreclosure of
the mortgage on the ground of default or non-payment of the obligation in
question.
WHEREFORE, the petition for certiorari is DISMISSED. The parties are
directed to proceed upon the basis of the final Decision of the Court of Appeals,
dated June 29, 1995, in CA-G.R. CV No. 39025, that the contract in question was
an equitable mortgage and not a sale.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Carpio,
JJ., concur.

[1]

See, RTC Decision, CA Rollo, p. 47, and CA Decision, CA Rollo, pp. 77-78.

[2]

Ibid.

[3]

Ibid.

[4]

Penned by Judge Nilo A. Malanyaon.

[5]

RTC Decision, CA Rollo, p. 49.

[6]

CA G.R. CV No. 39025.

[7]

Penned by Justice Bernardo LL. Salas and concurred in by Justice Jaime M. Lantin (Chairman,
Eighth Division) and Justice Ma. Alicia Austria-Martinez (now Associate Justice of this
Court).

[8]

CA Rollo, p. 83.

[9]

Id., at 100.

[10]

Id., at 113.

[11]

Rollo, p. 24.

[12]

Id., at 25-26.

[13]

Rollo, p. 27.

[14]

Rollo, p. 28.

[15]

Id., at 30.

[16]

Id., at 31.

[17]

Id., at 36.

[18]

Id., at 37.

[19]

Rollo, p. 42.

[20]

Id., at 43.

[21]

Id., at 8.

[22]

Nual vs. CA, 221 SCRA 26, 32 (1993), citing Manning International Corporation v. NLRC, 195
SCRA 155, 166 (1991).

[23]

Lichauco v. Tan Pho, 51 Phil. 862, 879 881 (1923). (Emphasis Supplied)

[24]

Ibid.

[25]

Northern Motors, Inc. v. Herrera, 49 SCRA 392, 399 (1973).

[26]

Guanzon v. Argel, 33 SCRA 474, 478 479 (1970).

[27]

112 SCRA 641 (1982).

lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57343 July 23, 1990
30. LUISA ECHAUS, petitioner,
vs.
COURT OF APPEALS, EMILIO GONZALES and VIVIAN GONZALES, respondents.
Celso de las Alas for petitioner.
Mary Carolynn S. Que-Albay for private respondents.

NARVASA, J.:
Time honored and of constant observance is the principle that no judgment, or order whether final or interlocutory, has juridical
existence until and unless it is set down in writing, signed, and promulgated, i.e., delivered by the Judge to the Clerk of Court for
filing, release to the parties and implementation, 1 and that indeed, even after promulgation, it does not bind the parties until and
unless notice thereof is duly served on them by any of the modes prescribed by law. 2 This is so even if the order or judgment
has in fact been orally pronounced in the presence of the parties, or a draft thereof drawn up and signed and/or copy thereof
somehow read or acquired by any party. 3 In truth, even after promulgation (i.e., filing with the clerk of court), and even after
service on the parties of notice of an order or judgment, the Court rendering it indisputably has plenary power to recall and
amend or revise it in substance or form on motion of any party or even motu proprio, provided that in the case of a final order or
judgment, the same has not attained finality. 4
The appellate proceedings at bar originated from an action for collection of an indebtedness of P141,000.00 instituted in the then
Court of First Instance of Quezon City by the Spouses Emilio Gonzales and Vivian Gonzales against Luisa Echaus. 5 The action
resulted in a judgment containing the following dispositive portion, to wit: 6
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant for the principal
amount of P97,600.00 with interest thereon at ten percent (10%) per annum from the date of the filing of the
complaint on December 14, 1978 until fully paid plus the costs of the suit. The plaintiffs are directed to return the
watch which the plaintiffs claim to be valued at P8,000.00 but which value is not acceptable to the defendant,
upon full payment by the defendant of her obligation to the plaintiffs.
Luisa Echaus was duly served with notice of the judgment, and within the thirty-day period then prescribed for taking an appeal,
filed a notice of appeal and appeal bond, as well as a motion for extension of time to file a record on appeal. 7 The respondent
Judge denied the appeal it appearing, in his view, "that the decision rendered in this case ... was based strictly on the admission,
agreement and waiver made by both parties at the previous pre-trial.." 8
Echaus promptly filed a motion for reconsideration of the order dismissing her appeal. She also filed the requisite record on
appeal. About a week later, however, the respondent Judge ordered the issuance of a writ of executionin favor of the plaintiffs,
the Spouses Emilio Gonzales and Vivian Gonzales. 9

Echaus hied herself off to the Court of Appeals, praying for the issuance of writs of certiorari and mandamus to annul the
decision and orders of respondent Judge, and compel him to give due course to her appeal. 10 Her action was docketed as CAG.R. No.
SP-10149-R. Her plea for the writ of certiorari ("to set aside the decision .. in the stated Civil Case No. Q-26572") was denied, but
her plea for the writ of mandamus was GRANTED by the judgment dated February 18, 1980 of the Court of Appeals which
accordingly ordered the Judge "to give due course to the appeal of petitioner in the same said case." 11 The Gonzales Spouses'
attempt to have this Court reverse the judgment of the Court of Appeals was unsuccessful. Their petition for review on
certiorari 12 was denied by Resolution dated July 11, 1980 because filed late and having, in any case, no merit.
On December 9, 1980, Echaus filed with the Trial Court an "Urgent Motion to Transmit Record on Appeal and other Pertinent
Papers to the Appellate Court," which she set for hearing on December 15, 1980. 13 The Gonzales Spouses also filed on the
same date but apparently at an earlier hour, 14 a "Motion for Execution Pending Appeal," which they set for hearing on December
18, 1980. 15 Echaus then presented an "Urgent Supplemental Motion to Implement ... (Judgment) of Court of Appeals dated
February 18, 1980" 16 which judgment, as aforestated, required respondent Judge to give due course to her appeal.
According to Echaus, at the hearing on December 15, 1980 of her aforesaid motion to transmit record on appeal and other
papers to the Court of Appeals, respondent Judge verbally approved the record on appeal in open court, this allegedly being
"evidenced by the calendar of Branch V .. (showing) the word 'APPROVED' written opposite the incident 'Urgent Motion to
Transmit Record on Appeal, etc.,' with crossed markings. " 17 What was subsequently released by the Court, however, under date
of December 15, 1980, was an order signed by His Honor holding "approval of defendant's record on appeal .. in abeyance until
after the consideration and resolution of plaintiffs' .. Motion for Execution Pending Appeal' which is set for hearing on December
18, 1980 at 8:00 o'clock in the morning." 18
On December 19, 1980 Echaus moved for reconsideration of the Order of December 15, 1980. Without however waiting for its
resolution, she filed on December 29, 1980 a motion in the Court of Appeals in CA-G.R. No. SP-10149-R praying inter alia that
the Trial Judge be required to comply with the decision of February 18, 1980 and show cause why he should not be held in
contempt of court for having thus far refused to do so. 19
After appropriate proceedings, the Court of Appeals denied Echaus's motion for lack of merit, by Resolution dated March 18,
1981. 20 It observed that "there was no wilful or deliberate refusal to comply with the decision .. dated February 18, 1980;" that
what respondent Judge had been commanded to do by the decision was that he "should .. proceed to give due course to the
appeal by considering and acting" thereon, but immediate transmittal of said record could not be compelled in the premises
"because the correctness or accuracy .. (thereof) should be first passed upon and certified by the court a quo," even if there were
no opposition thereto. The Court also pointed out that deferment of approval of the record on appeal had been ordered by the
Trial Judge in keeping "with the proper and orderly procedure to the end that all pending incidents .. before him be first resolved ..
in order that said incidents be not rendered moot and academic by the approval of said ... record on appeal;" and that,
citingLaurilla v. Uichangco, et al., 104 Phil. 171
A verbal order or a mere notation in the minutes of the calendar of the court a quo .. indicating approval of the ..
record on appeal is, in our view, not yet the ultimate and requisite formal order of approval of said record on
appeal that would divest the court a quo of its jurisdiction to act on pending incidents. Even a written order
approving a record on appeal may still be subject to a motion for reconsideration of an opposing party. If a written
order which has not acquired finality may still be reconsidered by the court, with more reason can respondent
judge modify his verbal order that has not been implemented nor even made known to the other party in the case.
The Court of Appeals finally resolved that "as the motion for execution pending appeal is conceded to have been filed by the
plaintiffs before the court below had approved (but only verbally) petitioner's record on appeal, the court a quo therefore still
retained its jurisdiction to resolve the pending motion for execution pending appeal."
Echaus subsequently asked the Court of Appeals to reconsider the Resolution. The Court of Appeals refused. But in its

Resolution denying reconsideration, dated June 22, 1981,

21

the Court declared that it was prompted

.. to enjoin the respondent judge to act upon and set for hearing and resolve at the soonest time possible, the
stated motion for execution pending appeal if this incident is still pending before that Court, so that there will
remain no further reason or cause for withholding his resolution on the petitioner's record on appeal or such other
pleadings and orders as may be necessary for the perfection of petitioner's appeal. Then upon the formal
approval of the record on appeal the case can be transmitted to this Court, in compliance with the judgment
rendered in this case that the petitioner's appeal be given due course. All these, respondent judge is strongly
urged to act upon with promptness and dispatch.
These Resolutions-of March 18, 1981 and June 22, 1981 are challenged in the appellate proceeding at bar, initiated by
petition for review on certiorari presented by Echaus.
In this Court, Echaus argues that it was reversible error for the Court of Appeals to have "ignored the fact that .. (her) appeal had
in fact been perfected when the Trial Judge (verbally) ordered the record on appeal approved on December 15, 1980 and, in the
light of the ruling of the Supreme Court in the case of Cabilao et al. v. Judge of the Court of First Instance of Zamboanga, 17
SCRA 992, any further action on the part of the Trial Judge in the case, particularly on respondent spouses' motion for execution
pending appeal is null and void." 22
The argument is patently without merit and is here given short shrift. In line with the fundamental principles set forth in the
opening paragraph of this opinion, the oral order approving the record on appeal had no juridical existence; to give it that
existence it had to be reduced to writing and promulgated (i.e., Med with the clerk of court). 23 But even if it had been written and
promulgated, indeed even if it had already been properly served on the parties, it nonetheless was yet plainly within the power of
the Judge to recall it and set it aside. For every court has the inherent power, among others, to "amend and control its process
and orders so as to make them conformable to law and justice." 24 And this Court has had occasion to rule that a trial court may
set aside its order approving a record on appeal prior to the transmittal of the record. 25 So, even conceding arguendo, efficacy to
the oral order approving Echaus's record on appeal, the respondent Judge nevertheless had the power to recall said order, or, as
he actually did, hold approval thereof in abeyance until after he had resolved other pending incidents. This Court thus perceives
no error on the part of the Appellate Court in giving its imprimatur to that act of the respondent Judge in the light of the attendant
circumstances.
To all intents and purposes, Echaus's record on appeal had never been approved. Now, the doctrine prevailing at the time was
that prior to the approval of the record on appeal, the Trial Court retained jurisdiction to grant execution pending appeal, that
approval being in fact the operative act denoting the end of the court's power to grant execution pending appeal. 26 The
respondent Judge, therefore, cannot be deemed to have acted without or in excess of his jurisdiction, or to have gravely abused
his discretion, in deferring action on the record on appeal so that he might first resolve the motion for execution pending appeal.
Of course, as is by now known to all, the rules for taking an appeal to the Court of Appeals, and for execution pending appeal
have since been altered and simplified. Under Batas Pambansa Bilang 129, appeals from final judgments or orders of the
Regional Trial Court are taken to the Court of Appeals simply by filing a notice of appeal. 27 The requirement to file an appeal
bond 28 or record on appeal has been done away with, except in special proceedings or actions in which multiple appeals are
allowed in which cases a record on appeal is still needed. 29 Under the same BP129, an appeal by notice of appeal is deemed
perfected upon the expiration of the last day to appeal by either party; and in the exceptional cases where a record on appeal is
still required, the appeal is perfected upon approval thereof. 30 It should however be noted that a motion for execution pending
appeal filed before perfection of an appeal by mere notice, may still be acted upon and granted after such perfection but before
transmittal of the record to the appellate court. 31
WHEREFORE, the petition is DENIED for lack of merit, with costs against the petitioner. This Decision is immediately executory.

SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 Filing with the clerk constitutes promulgation of an interlocutory or final order or judgment. SEE Ago v. C.A., 6
SCRA 530 [1962] holding that it is the filing of the signed decision with the clerk of court that constitutes rendition
thereof; see, also, Araneta v. Dinglasan, 84 Phil. 433 and Neria v. Commissioner of Immigration, 23 SCRA 812,
cited in Moreno, Phil. Law Dictionary, 2d ed. The rule is the same incriminal cases, except that in the case of a
final judgment, promulgation consists in 'reading the same in the presence of the accused and any judge of the
court in which it was rendered.' Sec. 6, Rule 120;cf. , Qua v. Republic, 122 Phil. 1083.
2 Interlocutory orders are served either personally or by mail. Sec. 3, Rule 13. If service of an interlocutory order
is not made personally, it shall be served by registered mail 'if registry service exists in the locality;' otherwise
service may be effected by ordinary mail. Sec. 5, Rule 13. But finalorders or judgments shag be served either
personally or by registered mail. When a party summoned by publication has failed to appear in the action, final
orders or judgments against him shall be served upon him also by publication at the expense of the prevailing
party. See. 7, Rule 13, Rules of Court.
3 Sec. 2, Rule 15 requires that all motions should be made in writing "except motions for continuance made in the
presence of the adverse party, or those made in the course of a hearing or trial." It follows that orders resolving
written motions should also be in writing and that, on the other hand, orders resolving "motions for continuance
made in the presence of the adverse party, or those made in the course of a hearing or trial,' may properly be
made orally. Sec. 1, Rule 36 of the Rules of Court provides that all judgments determining the merits of cases
shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law
on which it is based, signed by him, and filed with the clerk of court. The filing with the clerk constitutes
'promulgation.'
4 SEE Marcopper Mining Corporation v. Liwanag Paras Brios, et al., 165 SCRA 464 (1981); Nieva v. Manila
Banking Corporation, 124 SCRA 453 (1983).
5 Docketed as Civil Case No. Q-26572, CFI, Rizal, Br. V. Quezon City, Hon. Eduardo C. Tutaan, presiding (Rollo,
p. 157)
6 Rollo, p. 170. The judgment was rendered on September 27, 1979.
7 The Rules have since been amended by B.P. Blg. 129 which provides for a period of 15 days from notice of the
judgment or order for taking an appeal therefrom and eliminates the requirement of filing an appeal bond, and a
record on appeal. However, in special proceedings and other cases where multiple appeals are allowed, the
period of appeal continues to be 30 days from notice, and a record on appeal is still required.
8 Order, Nov. 9, 1979, Rollo, p. 31.
9 Rollo, p. 14.
10 Id., pp. 14-15.

11 Id., p. 37. The decision was written by Alampay, J. (later Associate Justice of the Supreme Court) with whom
concurred Coquia and Borromeo, JJ.
12 Docketed as G.R. No. 53799.
13 Rollo, pp. 38-39.
14 Id., p. 50.
15 Id., pp. 43-46.
16 Id., 47-49.
17 Id., p. 52; see petitioner's brief, pp. 4-5.
18 Id., p. 50.
19 Id., pp. 51-55.
20 Id., pp. 57-61.
21 Id, pp. 73-74.
22 Id., p. 12.
23 SEE footnotes 1, 2 and 3, at pp. 1 and 2, supra.
24 Sec. 5 (g), Rule 135, Rules of Court.
25 Cabungcal v. Fernandez, L-16520, April 30, 1964, 10 SCRA 731; Cabilao v. CFI, L-19454, Aug. 29, 1966, 17
SCRA 992, cited in Feria, Civil Procedure, 1969 ed., p. 668.
26 Moran, Comments on the Rules of Court, 1979 ed., Vol. 2, pp. 258-259, citing inter alia Vda. de Sy Quia v.
Concepcion, et al., 60 Phil., 186; Luis B. Uvero, et al. v. Court of Appeals, et al., G.R. No. L-6522, May 24, 1954,
95 Phil. 11; Aguirre v. Macadaeg, 55 O.G. 2088; Feria, Civil Procedure, 1969 ed., p. 668, supra, citing De la
Fuente v. Jugo, 76 Phil. 262; Anonuevo v. Zurbano, L-22277, May 19, 1966, 17 SCRA 157.
27 Sec. 39; Par. 18, Interim Rules promulgated by the Supreme Court, Jan. 11, 1983.
28 Par. 18, Interim Rules.
29 Sec. 39, BP129; Par. 18, Interim Rules.
30 Par. 23, Interim Rules.
31 Universal Far East Corporation v. C.A., 131 SCRA 642.
The Lawphil Project - Arellano Law Foundation

lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
32. G.R. No. 74730 August 25, 1989
CALTEX PHILIPPINES, INC., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT and HERBERT MANZANA respondents.

MEDIALDEA, J.:
This is a petition for review on certiorari of the resolution of respondent Intermediate Appellate Court (now Court of Appeals)
dated January 31, 1986 vacating its prior decision dated June 29, 1984 and ordering that the records of the case be remanded to
the Court of First Instance (now Regional Trial Court) of Manila, and its resolution dated May 19,1986 denying the motion for
reconsideration.
The antecedent facts are as follows:
Private respondent Herbert Manzana purchased on credit petroleum products from petitioner Caltex Philippines, Inc. (CALTEX,
for short). As of August 31, 1969, his indebtedness to CALTEX has amounted to P361,218.66. On October 4, 1969, Manzana
executed a Deed a First Mortgage in favor of CALTEX over a parcel of land covered by OCT No. 0-274 of the Register of Deeds

of the Province of Camarines Norte to secure his debts to the latter. On various occasions, CALTEX sent to Manzana statements
of account and later demanded payment of his entire debts. Because of Manzana's failure and refusal to pay, CALTEX filed a
complaint on August 17, 1970 before the trial court for the recovery of the whole amount of P361,218.66.
Meanwhile, on September 15, 1970, CALTEX foreclosed extrajudicially the mortgaged property. On October 30, 1970, the
mortgaged property was sold at auction to CALTEX, being the only bidder, for P20,000.00 as shown by the Sheriff s Certificate of
Sale. The foreclosure was allegedly known by Manzana only on October 4, 1980 when such fact was manifested by CALTEX in
its reply to the opposition of Manzana to the motion for execution pending appeal.
On July 23, 1980, the trial court rendered judgment ordering Manzana to pay CALTEX the amount of P353,218.66 after
deducting P8,000.00 paid by Traders Insurance and Surety Company on its surety bond, with interest thereon at 12% per annum
from August 17, 1970, plus 20% thereof as attorney's fees (p. 115, Rollo).
Manzana appealed the trial court's decision to the respondent Intermediate Appellate Court raising the following issues (p.
37, Rollo):
1. THAT PLAINTIFF APPELLEE CANNOT AVAIL BOTH OF A PERSONAL ACTION (THIS CASE) AND AN
EXTRAJUDICIAL FORECLOSURE AT THE SAME TIME AGAINST THE DEFENDANT DEFENDANTAPPELLANT; AND,
2. THAT PLAINTIFF-APPELLEE CANNOT AVAIL OF A DEFICIENCY JUDGMENT AFTER HE HAD
EXTRAJUDICIALLY FORECLOSED ON THE PROPERTY OF DEFENDANT-APPELLANT.
It was the opinion of the respondent court that "a reading of the issues raised by the defendant-appellant shows that the question
that needs resolution is whether or not plaintiff-appellee can still avail of the complaint for the recovery of the balance of
indebtedness after having already foreclosed the property securing the same" (p. 37,Rollo).
lwph1.t

On June 29, 1984, the respondent court rendered a decision (pp. 36-39, Rollo) affirming in toto the appealed decision after
"finding no reversible error" therein. On July 19, 1984, Manzana filed a motion for reconsideration of said decision. In its
comment to the motion for reconsideration, CALTEX prayed that "the judgment sought to be reconsidered be modified by
deducting the amount of P20,000.00 (foreclosure amount) from P353,218.66 thereby leaving a balance of P333,218.66
representing the deficiency that plaintiff-appellee is entitled to recover from defendant-appellant plus interest, attorney's fees and
costs of suit" (p. 41, Rollo).
Acting on the motion for reconsideration, the respondent court issued a resolution dated January 31, 1986, the dispositive portion
of which reads (p. 59, Rollo):
WHEREFORE, in the interest of justice the decision of this Court promulgated June 29, 1984 is vacated and the
records are ordered remanded for purposes of determining the deficiency due the plaintiff-appellee and for the
trial court to render another and proper judgment based on the evidence adduced by all the parties. Without
pronouncement as to costs.
SO ORDERED.
The respondent court was convinced that the following consideration justified a reconsideration of its prior decision (pp. 5556, Rollo): "..., the action (before the trial court) cannot be said to be one for recovery of deficiency judgment because ... (it)
seeks recovery of the whole amount of indebtedness totalling P361,210.66" (should be P361,218.66).
The motion for reconsideration filed by CALTEX was denied.

Hence, the present petition.


The issues may be limited to the following:
1) Whether or not the respondent court committed an error in giving due course to the question whether CALTEX
can avail at the same time of a personal action in court for collection of a sum of money and the extrajudicial
foreclosure of the deed of first mortgage, which was only raised for the first time on appeal;
2) Whether or not the mere filing of a collection suit for the recovery of the debt secured by real estate mortgage
constitutes waiver of the other remedy of foreclosure;
3) Whether or not the filing of the complaint for recovery of the amount of indebtedness and the subsequent
extrajudicial foreclosure of the deed of first mortgage constitutes splitting of a single cause of action.
FIRST ISSUE
CALTEX alleges that the only issue submitted for resolution before the trial court is whether or not Manzana was indebted and
liable to it in the sum of P361,218.66. The issue whether or not CALTEX can avail at the same time of a personal action in court
for collection of a sum of money and the extrajudicial foreclosure of the Deed of First Mortgage, and the issue whether or not
CALTEX can avail of a deficiency judgment were never raised in the pleadings of the parties nor at any stage of the proceedings
before the trial court. These were only raised by Manzana for the first time on appeal before the respondent court.
We rule that the respondent court did not commit any error in taking cognizance of the aforestated issues, although not raised
before the trial court. The presence of strong consideration of substantial justice has led this Court to relax the well-entrenched
rule that, except questions on jurisdiction, no question will be entertained on appeal unless it has been raised in the court below
and it is within the issues made by the parties in their pleadings (Cordero v. Cabral, G.R. No. L- 36789, July 25, 1983, 123 SCRA
532). The compassionate spirit behind this rule will equally apply to the other allegation of CALTEX that Manzana's indebtedness
of P 361,218.66 was secured up to the extent of P120,000.00 only although it appears that this issue is raised for the first time in
this present petition. Thus, the liberal application of the rule will favor both parties.
On the basis of the first condition enumerated in the Deed of First Mortgage, CALTEX submits that Manzana's indebtedness of P
361,218.66 was secured up to the extent of P120,000.00 only, to wit (p. 50, Rollo):
This Mortgage is subject to the following terms and conditions:
l) The aforementioned indebtedness of THREE HUNDRED SIXTY-ONE THOUSAND TWO HUNDRED
EIGHTEEN & 66/100 (P361,218.66) of the MORTGAGOR shall be paid upon demand by the MORTGAGEE; it
being expressly understood that the limit or maximum amount secured by this mortgage is ONE HUNDRED
TWENTY THOUSAND PESOS (P120,000.00) only.
On the other hand, on the basis of the fourth paragraph of the deed and the fourth condition therein, Manzana contends that the
whole outstanding obligation of P361,218.66 was secured by the mortgage, to wit (pp. 49-50,Rollo):
NOW, THEREFORE, for and in consideration of the said overdue, payable and demandable indebtedness of the
MORTGAGOR to the MORTGAGEE in the sum of THREE HUNDRED SIXTY-ONE THOUSAND TWO
HUNDRED EIGHTEEN PESOS & 66/100 (P361,218.66), Philippine Currency, the foregoing premises and other x
x x and valuable considerations, and to secure the faithful performance by the MORTGAGOR of all the terms and
conditions hereinafter set forth, particularly the payment of the obligations hereby secured, the MORTGAGOR
does hereby convey BY WAY OF FIRST MORTGAGE. ...

x x x.
4) This mortgage shall remain in force to cover the afore-mentioned mentioned outstanding indebtedness of the
MORTGAGOR to the MORTGAGEE in the amount of THREE HUNDRED SIDE ONE THOUSAND TWO
HUNDRED EIGHTEEN PESOS & 66/100 (P361,218.66).
Article 1374 of the Civil Code, regarding interpretation of contracts, provides:
ART. 1374. The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones
that sense which may result from all of them taken jointly.
The Deed of First Mortgage seems to contain provisions that contradict one another. However, considering all the provisions
together, the first condition cited by CALTEX is actually a specific provision while the fourth paragraph and the fourth condition
cited by Manzana are general provisions. This interpretation is bolstered by the third WHEREAS clause and the penultimate
paragraph of the deed, to wit (pp. 49-50, Rollo):
WHEREAS, the MORTGAGOR has offered to execute, sign and deliver a First Mortgage over his
property ..., only as partial security for the aforementioned overdue, payable and demandable indebtedness of the
MORTGAGOR to the MORTGAGEE, which offer of the MORTGAGOR is accepted by the MORTGAGEE.
(emphasis supplied)
x x x.
The MORTGAGOR binds himself to complete the securities required by the MORTGAGEE and shall permit any
authorized representative of the MORTGAGEE to inspect the mortgaged property and all the properties offered to
be mortgaged to complete the required security.' (emphasis supplied)
We therefore hold that Manzana's indebtedness of P 361,218.66 was secured up to the extent of P120,000.00 only.
The records show that CALTEX extended to Manzana a continuing credit line, with the result that each transaction constituted a
separate obligation. We affirm the trial court's ruling with respect to the liability of Manzana to CALTEX in the amount of
P233,218.66 (P353,218.66 less P120,000.00) with interest thereon at 12% per annum from August 17, 1970, plus 20% thereof
as attorney's fees. The evidence on record, both testimonial and documentary, clearly support such amount of indebtedness. The
trial court said (pp. 114- 115, Rollo):
Plaintiffs claim that as at (sic) termination of agreement on July 27, 1970, Manzana had an outstanding account
totalling P361,218.66, appears to be confirmed by the following:
(1) On September 8, 1970, defendant Manzana, by a letter, acknowledged his indebtedness, but asked for time
to pay the unpaid balance (Exh. 'l" and "M").
(2) To secure as obligation of P 361,218.66, said defendant executed, on October 4, 1969, a Deed of First
Mortgage on a piece of land covered by O.C.T. No. 0274 of the Registry of Deeds for Camarines Norte (Exh. "N")
Rarely can a confirmation of an account be more definitive than the foregoing.
Defendant Manzana's defenses, set up in his answer, do not appear to have merit. In the first place, the
supposed lack of liquidation is belied by the periodical statements of account showing the corresponding running
balance thru the years 1968 to 1969 (Exhs. "N" to "O-7" inclusive), effectively constituting a form of liquidation.
Secondly, the very terms used repeatedly in the Dealer Agreement neither pleaded nor in any manner assailed

as ambiguous-are peculiar to purchase and sale transactions and to the relationship of the parties thereto as
debtor and creditor. There is no reasonable way under the provisions thereof that Manzana can be deemed to be
either an agent or a mere collector with plaintiff bearing the risk of non-payment."
Furthermore, this case has been pending since August 17,1970 and to order its remand to the trial court will necessarily entail
additional expenses and unduly delay its disposition and the administration of justice to the parties.
Remand of the case to the lower court for reception of evidence is not necessary if the Supreme Court can resolve the dispute on
the records before it. The common denominator in cases holding that remand of a case is not necessary is the fact that the trial
court had received all the evidence intended to be presented by both parties (Hechanova v. Court of Appeals, G.R. No. L-48787
November 14, 1986, 145 SCRA 550).
THE SUCCEEDING DISCUSSION WILL CONCERN THE SECURED INDEBTEDNESS OF P120,000.00.
CALTEX, in effect, has made a mockery of our judicial system when it initially filed a collection suit then, during the pendency
thereof foreclosed extrajudicially the mortgaged property which secured the indebtedness and still pursued the collection suit to
the end. In this light, the actuations of CALTEX are deserving of severe criticism, to say the least. Of importance is the doctrine
laid down by this court in the leading case of Bachrach Motor, Inc. v. Icarangal et al., 68 Phil. 287, which was applied by the
respondent Court in resolving the case, where We ruled that;
... in the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor
either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either
of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of
the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the
properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he
waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment
thereon would still give him the right to sue for a deficiency judgment, in which case, all the properties of the
defendant, other than the mortgaged property, are again open to him for the satisfaction of the deficiency. In
either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the
pursuit of one or the other remedy are purely accidental and are all under his right of election. ...
Thus, where a debt is secured by a mortgage and there is a default in payment on the part of the mortgagor, the mortgagee has
a choice of one (1) of two (2) remedies, but he cannot have both. The mortgagee may:
1) foreclosure the mortgage; or
2) file an ordinary action to collect the debt.
When the mortgagee chooses the foreclosure of the mortgage as a remedy, he enforces his lien by the sale on foreclosure of the
mortgaged property. The proceeds of the sale will be applied to the satisfaction of the debt. With this remedy, he has a prior lien
on the property. In case of a deficiency, the mortgagee has the right to claim for the deficiency resulting from the price obtained
in the sale of the real property at public auction and the outstanding obligation at the time of the foreclosure proceedings (Soriano
v. Enriquez, 24 Phil. 584; Banco de Islas Filipinas v. Concepcion Hijos, 53 Phil. 86; Banco Nacional v. Barreto, 53 Phil. 101).
lwph1.t

On the other hand, if the mortgagee resorts to an action to collect the debt, he thereby waives his mortgage lien. He will have no
more priority over the mortgaged property. If the judgment in the action to collect is favorable to him, and it becomes final and
executory, he can enforce said judgment by execution. He can even levy execution on the same mortgaged property, but he will
not have priority over the latter and there may be other creditors who have better lien on the properties of the mortgagor.
CALTEX submits that the principles enunciated in the Bachrach case are not applicable nor determinative of the case at bar for

the reason that the factual circumstances obtained in the said case are totally different from the instant case. In
the Bachrach case, the plaintiff instituted an action to foreclose the mortgage after the money judgment in its favor remained
unsatisfied whereas in the present case, CALTEX initially filed a complaint for collection of the debt and during the pendency
thereof foreclosed extrajudicially the mortgage.
We disagree. Although the facts in the Bachrach case and in the present case are not identical, there is similarity in the fact that
the plaintiffs in these two cases availed of both remedies although they are entitled to a choice of only one.
SECOND ISSUE
CALTEX alleges next that the mere act of filing a collection suit for the recovery of a debt secured by real estate mortgage is not
tantamount to an implied waiver of the mortgage lien. Under Philippine jurisdiction, there is no statute which prohibits or
precludes a mortgagee from subsequently foreclosing the real estate mortgage shortly after the collection suit has been filed.
The real estate mortgage itself does not contain any explicit provision that the filing of a collection suit would mean waiver of the
remedy of foreclosure.
We hold otherwise. The mere act of filing a collection suit for the recovery of a debt secured by a mortgage constitutes waiver of
the other remedy of foreclosure. The rationale behind this was adequately explained in theBachrach case, supra:
... a rule that would authorize the plaintiff to bring a personal action against the debtor and simultaneously or
successively another action against the mortgaged property, would result not only in multiplicity of suits so
offensive to justice (Soriano vs. Enriques, 24 Phil. 584) and obnoxious to law and equity (Osorio vs. San Agustin,
25 Phil. 404), but also in subjecting the defendant to the vexation of being sued in the place of his residence or of
the residence of the plaintiff, and then again in the place where the property lies.
In the present case, however, We shall not follow this rule to the letter but declare that it is the collection suit which was waived
and/or abandoned. This ruling is more in harmony with the principles underlying our judicial system. It is of no moment that the
collection suit was filed ahead, what is determinative is the fact that the foreclosure proceedings ended even before the decision
in the collection suit was rendered. As a matter of fact, CALTEX informed the trial court that it had already consolidated its
ownership over the property, in its reply to the opposition of Manzana to the motion for execution pending appeal filed by it.
A corollary issue that We might as well resolve now (although not raised as an issue in the present petition, but applying the rule
in Gayos et al. v. Gayos et al., G.R. No. L-27812, September 26, 1975, 67 SCRA 146, that it is a cherished rule of procedure that
a court should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of
future litigation) is whether or not CALTEX can still sue for a deficiency judgment P100,000.00 (secured debt of P120,000.00 less
the foreclosure amount of P20,000.00).
The collection suit filed before the trial court cannot be considered as a deficiency judgment because a deficiency judgment has
been defined as one for the balance of the indebtedness after applying the proceeds of the sale of the mortgaged property to
such indebtedness and is necessarily filed after the foreclosure proceedings. It is significant to note that the judgment rendered
by the trial court was for the full amount of the indebtedness and the case was filed prior to the foreclosure proceedings.
In general, a deficiency judgment is in the nature of an ordinary money judgment, may constitute a cause of action and is barred
by the statute of limitations applicable to ordinary judgment (59 C.J.S. 1497). The ten (10) year period provided in Articles 1142
and 1144 of the Civil Code applies to a suit for deficiency judgment, to wit:
Art. 1142. A mortgage action prescribes after ten years. (1964a)
Art. 1144. The following actions must be brought with ten years from the time the right of action accrues:

(1) Upon a written contract;


(2) Upon an obligation created by law;
(3) Upon a judgment. (n)
A suit for the recovery of the deficiency after the foreclosure of a mortgage is in the nature of a mortgage action because its
purpose is precisely to enforce the mortgage contract; it is upon a written contract and upon an obligation of Manzana to pay the
deficiency which is created by law (see Development Bank of the Philippines v. Tomeldan et al., G.R. No. 51269, November 17,
1980, 101 SCRA 171). Therefore, since more than ten (10) years have elapsed from the time the right of action accrued,
CALTEX can no longer recover the deficiency from Manzana.
THIRD ISSUE
CALTEX has only one cause of action against Manzana, that is, non-payment of the debt although two choices of remedies are
available to it. As held in the Bachrach case, supra:
For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor.
This single cause of action consists in the recovery of the credit with execution of the security. In other words, the
creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But
both demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a
single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary
to the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action
for a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single
cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of
the mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the
creditor to file two separate complaint simultaneously or successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so
much cost to the courts and with so much vexation and oppression to the debtor.
ACCORDINGLY, the resolution of the respondent Intermediate Appellate Court dated January 31,1986 is SET ASIDE. The
decision of the trial court is AFFIRMED with the MODIFICATION that private respondent Herbert Manzana's liability to petitioner
Caltex Philippines, Inc. is only up to the extent of P233,218.66 with interest thereon at 12% per annum from August 17, 1970,
plus 20% thereof as attorney's fees.
SO ORDERED.
Narvasa, Cruz, Gancayco and Gri;o-Aquino, JJ., concur.

The Lawphil Project - Arellano Law Foundation

lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
33.
G.R. No. 115942 May 31, 1995
RUBLE RUBENECIA, petitioner,
vs.
CIVIL SERVICE COMMISSION, respondent.

FELICIANO, J.:
Petitioner Ruble Rubenecia assails Civil Service Commission ("CSC" or "Commission") Resolution No. 94-0533, dated 25
January 1994, aquitting him of a charge of insubordination but finding him guilty of several other administrative charges and
imposing upon him the penalty of dismissal from the service. He also questions the validity of CSC Resolution No. 93-2387 dated
29 June 1993, which allegedly abolished the Merit System Protection Board ("MSPB") and authorized the elevation of cases
pending before that body to the Commission.
Teachers of Catarman National High School in Catarman, Northern Samar, filed before the MSPB an administrative complaint
against petitioner Rubenecia, the School Principal, for dishonesty, nepotism, oppression and violation of Civil Service Rules.
After a preliminary inquiry, the MSPB on 15 January 1992 formally charged Rubenecia and required him to file an answer with
the CSC Regional Office in Tacloban City. On 24 February 1992, petitioner Rubenecia, instead of filing an answer, requested
that he be furnished with copies of the documents submitted by complainants in support of the charges against him. 1
On 15 May 1992, the CSC Regional Director assigned to investigate the case invited Rubenecia to the Regional Office and there
identify and pick up the documents he desired. The Regional Office had then just received the records of the case transmitted by
the MSPB.

In response, Rubenecia requested that his visit to the CSC Regional Office be deferred because of alleged problems in his
school relating to the enrollment period. The CSC reiterated on 10 June 1992 its order to Rubenecia to file his answer. In turn,
petitioner through counsel in a letter dated 9 July 1992, reiterated his request that the CSC Regional Office furnish him copies of
the documents submitted in connection with the charges against him.
Although petitioner did not file his answer, the Regional Director set the case for hearing on 20 August 1992. This hearing,
however, did not take place as the complainants did not there show up. Petitioner Rubenecia appeared at that hearing, but filed
no answer. In an order issued on the same day, i.e., 20 August 1992, the Regional Office declared that the case was deemed
submitted for resolution on the basis of the documents theretofore filed.
On 25 August 1992, Rubenecia wrote to the Chairman of the Civil Service Commission, praying that the case against him be
dismissed and attaching to that letter many documents in support of his claim of innocence.
On 28 September 1992, the Regional Director submitted an investigation report to the Chairman, MSPB. Before the MSPB could
render a decision, the Commission issued on 29 June 1993 Resolution No. 93-2387 which provided, among other things, that
cases then pending before the MSPB were to be elevated to the Commission for decision.
The Commission, accordingly, took over the case against petitioner and on 25 January 1994, rendered its Resolution No. 940533 finding petitioner guilty and ordering his dismissal from the service. Petitioner moved for reconsideration, asserting lack of
jurisdiction on the part of the Commission and attaching most if not all of the same documents he had annexed to his letteranswer to support his assertion of innocence. The motion for reconsideration was denied in a resolution of the Commission on 31
May 1994.
Two (2) principal issues are raised in this Petition for Certiorari:
(1) Whether or not the CSC had authority to issue its Resolution No. 93-2387 and assume jurisdiction over the
administrative case against petitioner; and
(2) Whether or not petitioner had been accorded due process in connection with rendition of CSC Resolution No.
94-0533 finding him guilty and ordering his dismissal from the service.
I
In respect of the first issue, petitioner Rubenecia contends that the Commission had no jurisdiction to take over the administrative
case against him from the MSPB for the reason that CSC Resolution No. 93-2387 was invalid. The argument of the petitioner is
that since the MSPB was a creation of law, it could be abolished only by law, and that Resolution No. 93-2387 was accordingly
an ultra vires act on the part of the Commission.
Resolution No. 93-2387 reads in full:
WHEREAS, the Civil Service Commission recognizes the government-wide call and the need for streamlining of
operations which requires implification of systems, cutting of red tape and elimination of unnecessary
bureaucratic layer;
WHEREAS, one of the powers and functions of the Commission provided for in Section 12 (11) of Book V of the
Administrative Code of 1987 is to hear and decide administrative cases instituted by or brought before it
directly or on appeal, including contested appointments and review decisions and actions of its offices and of the
agencies attach to it;
WHEREAS, Section 47 (1) of Book V of the Administrative Code of 1987 specifically provides that

theCommission shall decide upon appeal all administrative disciplinary cases involving the imposition of penalty
of suspension for more that thirty days, or fine in an amount exceeding thirty days salary, demotion in rank or
salary or transfer removal or dismissal from office;
WHEREAS, under Section 16 (2) of Book V of the Code, the Merit System Protection Board (MSPB),an office of
the Commission, has the function to hear and decide administrative cases involving officials and employees of
the civil service concurrently with the Commission;
WHEREAS, most decisions on administrative cases rendered by the MSPB are later appealed to the
Commission for review and final resolution;
WHEREAS, the existing procedure wherein most administrative cases are first reviewed by the MSPB before
they are elevated to the Commission makes it difficult for these cases to be finally resolved within a short period
of time;
WHEREAS, the present situation requires immediate streamlining of the operation of the Civil Service
Commission to achieve as speedier delivery of administrative justice and economical operation without impairing
due process and the substantive rights of the parties in administrative cases;
NOW, THEREFORE, pursuant to the provisions of Section 17 of Book V of the Administrative Code of 1987
which authorizes the Commission, as an independent constitutional body, to effect changes in its organization as
the need arises, the Commission Resolves as it is hereby Resolved to effect the following changes;
1. Decisions in administrative cases involving officials and employees of the civil
serviceappealable to the Commission pursuant to Section 47 of Book V of the Code including
personnel actions such as contested appointments shall now be appealed directly to the
Commission and not to the MSPB; and
2. Decisions and administrative cases involving the officials and employees of the Civil Service
including contested appointments which have already been appealed to the MSPB and other
pending administrative cases brought directly before the MSPB, shall now be elevated to the
Commission for final resolution.
Parties in administrative cases pending before the MSPB shall be notified in writing that their respective cases
have already been elevated to the Commission for final resolution. They shall have 15 days from receipt of notice
to submit their comments on or objections to the new procedures.
This Resolution shall take effect on 1 July 1993 and the new procedure shall remain effective until rescinded by
the Commission in another resolution.
Adopted this 29th day of June 1993.
Patricia A. Sto. Tomas
Chairman
Ramon P. Ereneta, Jr. Thelma P. Gaminde
Commissioner Commissioner
Juanito Demetrio

Board Secretary VI
(Emphasis supplied)
The Merit System Protection Board was originally created by P.D. No. 1409, dated 8 June 1978, Section 1 of which said: "There
is hereby created in the Civil Service Commission a Merit Systems Board." The Board was composed of "a commissioner and
two (2) associate commissioners" appointed by the CSC. 2 The powers and functions of this Board were set out in Section 5 of
P.D. No. 1409 in the following terms:
Sec. 5. Powers and Functions of the Board. The Board shall have the following powers and functions, among
others:
(1) Hear and decide administrative cases involving officers and employees of the civil service.
(2) Hear and decide cases brought before it by officers and employees who feel aggrieved by the determination
of appointing authorities involving appointment promotion, transfer, detail, reassignment and other personnel
actions, as well as complaints against any officers in the government arising from abuses arising from personnel
actions of these officers or from violation of the merit system.
(3) Hear and decide complaints of civil service employees regarding malpractices of other officials and
employees.
(4) Promulgate, subject to the approval of the Civil Service Commission, rules and regulations to carry out the
functions of the Board.
(5) Administer oaths, issue subpoena and subpoena duces tecum, and take testimony in any investigation or
inquiry. The Board shall have the power to punish for contempt in accordance with the rules of court under the
same procedure with the same penalties provided therein.
(6) Perform such other functions as may be assigned by the Civil Service Commission.
xxx xxx xxx
Decisions of the Board involving removal of officers and employees from the service were "subject to automatic review by the
Commission;" all other decisions of the Board were also subject to appeal to the Commission. 3
As noted, P.D. No. 1409 had "created in the Civil Service Commission [the] Merit Systems Board." Section 16 of the present Civil
Service Law found in the 1987 Administrative Code followed the same line and re-created the Merit Systems Board as an office
of the Commission and gave it a new name: "Merit System Protection Board."
Section 16 of the present Civil Service Law reads as follows, in pertinent part:
Sec. 16. Offices in the Commission. The Commission shall have the following offices:
(1) The Office of the Executive Director . . .
(2) The Merit System Protection Board composed of a Chairman and two (2) members which have the following
functions:

(a) Hear and decide on appeal administrative cases involving officials and employees of the Civil
Service. Its decision shall be final except those involving dismissal or separation from the service
which may be appealed to the Commission;
(b) Hear and decide cases brought before it on appeal by officials and employees who feel
aggrieved by the determination of appointing authorities involving personnel actions and violations
of the merit system. The decision of the Board shall be final except those involving division chiefs
or officials of higher ranks which may be appealed to the Commission;
(c) Directly take cognizance of complaints affecting functions of the Commission, those which are
unacted upon by the agencies, and such other complains which required direct action of the
Board in the interest of justice;
(d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any
investigation or inquiry, punish for contempt in accordance with the same procedures and
penalties prescribed in the Rules of Court; and
(e) Promulgate rules and regulations to carry out the functions of the Board subject to the
approval of the Commission.
(3) The Office of Legal Affairs . . . . .
xxx xxx xxx
The 1987 Administrative Code thus made clear that the MSPB was intended to be an office of the Commission like any of the
other thirteen (13) offices in the Commission: e.g., the Office of Legal Affairs; the Office of Planning and Management; the
Central Administrative Office, and so forth. The MSPB was, in other words, a part of the internal structure and organization of the
Commission and thus a proper subject of organizational change which the Commission is authorized to undertake under Section
17 of the present Civil Service Law:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least
one (1) Assistant Director, and may have such divisions as are necessary to carry out their respective
functions. As an independent constitutional body, the Commission may effect changes in the organization as the
need arises. (Emphasis supplied).
Since it was part and parcel of the internal organization of the Commission, the MSPB was not an autonomous entity created by
law and merely attached for administrative purposes to the Civil Service Commission. In Aida Eugenio v. Civil Service
Commission, 4 the Court invalidated a CSC Resolution which had transferred the Career Executive Service Board to the Office for
Career Executive Service of the CSC precisely because the Career Executive Service Board was an autonomous entity created
by a special law and attached, for administrative purposes only, to the Civil Service Commission; that Board did not fall within the
control of the Civil Service Commission.
It will be noted that under the provisions of Section 16 (2) (a) and (b) quoted earlier, cases originating outside the Civil Service
Commission itself and appealed to the MSPB were, in cases involving division chiefs and higher officials and cases where the
penalty imposed was dismissal or separation from the service, subject to further appeal to the Commission itself. At the same
time, cases filed originally with the MSPB could also be filed directly with the Commission itself under Section 12 (11) of the Civil
Service Law. It was this apparent duplication or layering of functions within the Commission that the Commission sought to
rationalize and eliminate by enacting Resolution No. 93-2387 quoted in full earlier.
The change instituted by CSC Resolution No. 93-2387 consisted basically of the following: decision in administrative cases

appealable to the Commission pursuant to Section 47 of the present Civil Service Law may now be appealed directly to the
Commission itself and not to the MSPB. Administrative cases already pending on appeal before the MSPB or previously brought
directly to the MSPB, at the time of the issuance of Resolution No. 93-2387, were required to be elevated to the Commission for
final resolution. The functions of the MSPB relating to the determination of administrative disciplinary cases were, in other words,
re-allocated to the Commission itself. These changes were prescribed by the Commission in its effort to "streamline the operation
of the CSC" which in turn required the "simplification of systems, cutting of red tape and elimination of [an] unnecessary
bureaucratic layer." The previous procedure made it difficult for cases to be finally resolved within a reasonable period of time.
The change, therefore, was moved by the quite legitimate objective of simplifying the course that administrative disciplinary
cases, like those involving petitioner Rubenecia, must take. We consider that petitioner Rubenecia had no vested right to a twostep administrative appeal procedure within the Commission, that is, appeal to an office of the Commission, the MSPB, and
thereafter a second appeal to the Civil Service Commission itself (i.e., the Chairman and the two [2] Commissioners of the Civil
Service Commission), a procedure which most frequently consumed a prolonged period of time.
We note also that Resolution No. 93-2387 did not purport to abolish the MSPB nor to effect the termination of the relationship of
public employment between the Commission and any of its officers or employees. At all events, even if Resolution No. 93-2387
had purported to do so, petitioner Rubenecia, who does not claim to be an officer or employee of the MSPB, has no personality
or standing to contest such termination of public employment. InFernandez and De Lima v. Hon. Patricia A. Sto. Tomas, etc., et
al., 5 the Court upheld Resolution No. 94-3710 of the Civil Service which effected certain changes in the internal organization and
structure of the Commission. The Court said:
We consider that Resolution No. 94-3710 has not abolished any public office as that term is used in the law of
public officers. It is essential to note that none of the "changes in organization" introduced by Resolution No. 943710 carried with it or necessarily involved the termination of the relationship of public employment between the
Commission and any of its officers and employees. We find it very difficult to suppose that the 1987 Revised
Administrative Code having mentioned fourteen (14) different offices of the CSC, meant to freeze these offices
and to cast in concrete, as it were, the internal organization of the Commission until it might please Congress to
change such internal organization regardless of the ever changing needs of the civil service as a whole. To the
contrary, the legislative authority had expressly authorized the Commission to carry out "changes in the
organization," as the need [for such changes] arises.
Petitioner Rubenecia also claims that the Civil Service Commission itself (as distinguished from the MSPB) did not acquire
jurisdiction over his case because he had not been notified by individual written notice sent by mail that his case had been
elevated to the Civil Service Commission as required by Resolution No. 93-2387. We consider this objection unmeritorious. CSC
Resolution No. 93-2387, quoted earlier, did not require individual written notice sent by mail to parties in administrative cases
pending before the MSPB. Assuming that Rubenecia had not in fact been sent an individual notice, the fact remains that
Resolution No. 93-2387 was published in a newspaper of general circulation (The Manila Standard, issue of 16 July 1993 6 ); the
Commission may accordingly be deemed to have complied substantially with the requirement of written notice in its own
Resolution. Moreover, petitioner himself had insisted on pleading before the Commission, rather than before the MSPB; he filed
before the Commission itself his letter-cum-annexes which effectively was his answer to the Formal Charge instituted before the
MSPB. He cannot now be heard to question the jurisdiction of the Commission.
II
We turn to petitioner's contention that he had been denied due process when the Commission rendered its Resolution No. 940533 finding him guilty and ordering his dismissal from the government service.
The fundamental rule of due to process requires that a person be accorded notice and an opportunity to be heard. These
requisites were respected in the case of petitioner Rubenecia.
The Formal Charge prepared by the MSPB and given to petitioner Rubenecia constituted sufficient notice which, in fact, had
enabled him to prepare his defense. The Formal Charge contained the essence of the complaint and the documents in support

thereof and the conclusion of the MSPB finding a prima facie case against Rubenecia. Rubenecia himself admitted that he had
been furnished with copies of an affidavit and testimonies of the principal witnesses against him that were given during the
preliminary hearing of the case against Rubenecia. 7
We are also not persuaded by petitioner's complaint that he had not been furnished copies of all the documents that had
accompanied the Formal Charge. Rubenecia was given an opportunity by the Investigating Officer, the Regional Director of CSC,
to obtain those documents from the CSC Regional Office. Rubenecia did not avail himself of that opportunity and he cannot now
be heard to complain that he was not given such documents. At all events, as already noted, he sent a formal letter-answer to
Chairman Sto. Tomas controverting the charges against him and submitted voluminous documents in support of his claim of
innocence and prayed for dismissal of the Formal Charge. This letter-answer constitutes proof that he did have notice of the
accusations against him and was in fact able to present his own defense.
Petitioner's answer to the Formal Charge was considered by the Investigating Officer. This Officer, however, concluded in his
report that "the evidence presented by respondent [Rubenecia] could not outweigh that of the prosecution as contained in the
records. 8
Finally, the motion for reconsideration filed by Rubenecia before the Commission cured whatever defect might have existed in
respect of alleged denial of procedural due process. 9 Denial of due process cannot be successfully invoked by a party who has
had the opportunity to be heard on his motion for reconsideration. 10 In the instant case, petitioner was heard not only in respect of
his motion for reconsideration; he was also in fact afforded reasonable opportunity to present his case before decision was
rendered by the Commission finding him guilty.
Rubenecia also claims that the Commission had erred in disregarding the "overwhelming evidence" in his favor. The settled rule
in our jurisdiction is that the findings of fact of an administrative agency must be respected, so long as such findings of fact are
supported by substantial evidence, even if such evidence might not be overwhelming or even preponderant. It is not the task of
an appellate court, like this Court, to weigh once more the evidence submitted before the administrative body and to substitute its
own judgment for that of the administrative agency in respect of sufficiency of evidence. 11 In the present case, in any event, after
examination of the record of this case, we conclude that the decision of the Civil Service Commission finding Rubenecia guilty of
the administrative charges prepared against him, is supported by substantial evidence.
In Resolution No. 94-0533, the Commission drew the following conclusions in respect of the charges against petitioner
Rubenecia:
I. VIOLATION OF CIVIL SERVICE RULES AND REGULATIONS
The records show that Rubenecia committed the said offense. He himself admitted that he did not accomplish his
DTR but this was upon the suggestion of the Administrative Officer. Rubenecia cannot use as an excuse the
alleged suggestion of an Administrative Officer. As the principal of a national high School, he is expected to know
the basic civil service law, rules, and regulations.
II DISHONESTY
The Commission finds Rubenecia liable. He was charged for misrepresenting that he was on "Official Travel" to
Baguio City to attend a three-week seminar and making it appear in his CSC Form No. 7 for the month of October
1988 that the has a perfect attendance for that month. Rubenecia in order to rebut the same simply reiterated
previous allegation that he attended the SEDP Training in Baguio City during the questioned months without even
an attempt on his part to adduce evidence documentary or testimonial that would attest to the truth of his
allegation that he was indeed in Baguio during those weeks for training purposes. A mere allegation cannot
obviously prevail over a more direct and positive statement of Celedonio Layon, School Division Superintendent,
Division of Northern Samar, when the latter certified that he had no official knowledge of the alleged "official

travel" of Rubenecia. Moreover, verification with the Bureau of Secondary Schools reveals that no training
seminar for school principal was conducted by DECS during that time. It was also proven by records that he
caused one Mrs. Cecilia vestra to render service as Secondary School Teacher from January 19, 1990 to August
30, 1991 without any duly issued appointment by the appointing authority.
III. NEPOTISM
With respect to the charge of Nepotism, Rubenecia alleged that he is not the appointing authority with regard to
the appointment of his brother-in-law as Utilityman but merely a recommending authority. With this statement, the
Commission finds Rubenecia guilty. It should be noted that under the provision of Sec. 59, of the 1987
Administrative Code, the recommending authority is also prohibited from recommending the appointment to a
non-teaching position of his relatives within the prohibited degree.
IV. OPPRESSION
Rubenecia is also guilty of Oppression. He did not give on time the money benefits due to Ms. Leah Rebadulla
and Mr. Rolando Tafalla, both Secondary Teachers of CNHS, specifically their salary differentials for July to
December 1987, their salaries for the month of May and half of June 1988; their proportional vacation salaries for
the semester of 1987-1988, and the salary of Mr. Tafalla for the month of June, 1987. Rubenecia did not even
attempt to present countervailing evidence. Without being specifically denied, they are deemed admitted by
Rubenecia.
V INSUBORDINATION
He is not liable for Insubordination arising from his alleged refusal to obey the "Detail Order" by filing a sick leave
and vacation leave successively. The records show that the two applications for leave filed by Rubenecia were
duly approved by proper official, hence it cannot be considered an act of Insubordination on the part of Rubenecia
when he incurred absences based on an approved application for leave of absence.
Rubenecia is therefore found guilty of Dishonesty, Nepotism, Oppression and Violations of Civil Service Rules
and Regulations.
WHEREFORE, foregoing premises considered, the Commission hereby resolves to find Ruble Rubenecia guilty of
Dishonesty, Nepotism, Oppression and Violation of Civil Service Rules and Ragulations. Accordingly, he is meted, out
the penalty of dismissal from the service. 12

We find no basis for overturning the above conclusions as the product merely of arbitrary whims and caprice or of bad
faith and malice.
We conclude that petitioner Rubenecia has failed to show grave abuse of discretion or any act without or in excess of jurisdiction
on the part of public respondent Commission in issuing its Resolution No. 93-2387 dated 29 June 1993 and Resolution No. 940533 dated 25 January 1994.
WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza and Francisco, JJ.,
concur.

Quiason, J., is on leave.

Footnotes
1 Petitioner cited in this connection Section 48(2) of Book V, Title I, Subtitle A, Chapter 1, of the 1987
Administrative Code, the present Civil Service Law which provides:
". . . If a prima facie case exists, he shall notify the respondent in writing of the charges against the latter, to which
shall be attached copies of the complaint, sworn statements and other documents submitted, . . . ."
2 Section 2, P.D. No. 1409.
3 Section 8, P.D. No. 1409.
4 G.R. No. 115863, 31 March 1995.
5 G.R. No. 116418, 27 March 1995.
6 See CSC Resolution No. 94-2857, 31 May 1994, Rollo, p. 36.
7 Petitioner's letter dated 27 August 1992 to Patricia Sto. Tomas, p. 2; Rollo, p. 85.
8 Investigation Report, p. 3; Rollo, p. 268.
9 Medenilla vs. CSC, 194 SCRA 278 [1991]; Remarco Garments Manufacturing vs. Minister of Labor, 135 SCRA
167 [1985]; De Leon vs. Comelec, 129 SCRA 117 [1984].
10 Mendiola vs. CSC, 221 SCRA 295 [1993].
11 Assistant Executive Secretary for Legal Affairs of the Office of the President vs. Court of Appeals, 169 SCRA
27 [1989].
12 Rollo, pp. 33-35.
The Lawphil Project - Arellano Law Foundation

THIRD DIVISION

[G.R. No. 106153. July 14, 1997]

34.

FLORENCIO G. BERNARDO, petitioner, vs. THE HON.


SPECIAL SIXTH DIVISION OF THE COURT OF APPEALS
and JIMMY TOMAS, respondents.
DECISION

PANGANIBAN, J.:

Did the trial court deny due process to the petitioner by its refusal to grant
new trial and/or to reopen the case in spite of the fact that the defendant was
unable to participate and to present his evidence due to the death of the handling
lawyer of the law firm representing him and the failure of the new attorney to
follow the rules on substitution of counsel?
In its original decision, the Court of Appeals answered the foregoing
question in the affirmative and ordered the trial court to reopen the proceedings
to enable the petitioner to present his evidence. Upon reconsideration, however,
said Court reversed itself and affirmed the regional trial courts ruling that
petitioners failure to present his side was due to his own fault or
negligence. Undaunted, petitioner filed before this Court the present petition for
certiorari, mandamus and prohibition under Rule 65 of the Rules of Court praying
for the nullification of the Amended Decision of the Respondent Court of
Appeals promulgated on March 5, 1992 and its Resolution denying petitioners
motion for reconsideration, promulgated on July 3, 1992.
[1]

[2]

[3]

[4]

[5]

The dispositive portion of the challenged Amended Decision reads:

Construed in the light of the above rule, We find the Motion for
Reconsideration well taken and grant the same. The decision dated December
27, 1991 is hereby withdrawn and set aside and the decision of the trial court is
AFFIRMED.
Originally handled by this Courts First Division, the case was transferred to
the Third Division by a Resolution (of the First Division) dated November 23,
1995. After due deliberation on the various submissions of the parties, the Court
assigned the undersigned ponente to write the Courts Decision.
The Facts
On November 17, 1988, Private Respondent Jimmy Tomas filed before the
Regional Trial Court of Kalookan City, Branch 127, a complaint for recovery of
possession, quieting of title and damages with preliminary mandatory injunction
against Petitioner Florencio Bernardo, the National Housing Authority (NHA),
Raymundo Dizon, Jr. and Jose Vasquez in their official capacities as general
manager and project manager, respectively, of NHA. The first pleading filed by
[6]

[7]

therein Defendant Bernardo was an ex parte motion for extension of time to file
an answer signed by Atty. Jose B. Puerto as counsel. When the answer was
submitted later, his counsel became Puerto Nuez & Associates, but with the
same Jose B. Puerto signing. Thereafter, all pleadings on behalf of Bernardo
during the pre-trial were filed by said law firm, and the other parties furnished him
with their own pleadings through the same firm.
[8]

[9]

It appears that the lot subject of the complaint was the object of a double sale
by the NHA to Plaintiff Tomas and to Defendant Bernardo. The parties failed to
reach an amicable settlement during the pre-trial. Thus, on November 6, 1990,
the trial judge issued an order terminating pre-trial and scheduling initial trial on
the merits on December 5, 1990. Counsel for plaintiff, however, requested for a
resetting since the plaintiff was going out of the country and would be back only
at the end of the year. This was granted and the hearing was reset to January 9,
1991. Later, the court realized that said date fell on a Wednesday, a day
reserved for criminal cases. The hearing was thus reset anew to February 5,
1991. On
this
date,
plaintiffs
and
NHAs
respective
counsels
appeared. However, neither Defendant Bernardo nor his counsel came despite
due notice. During the proceedings, the court interpreter informed the judge that
an associate of Atty. Puerto allegedly called to say that Atty. Puerto had died.
Pending official and verified notification of such death, the court decided to
proceed with reception of evidence from the plaintiff. It was only on June 7,
1991, after Plaintiff Tomas and the NHA concluded the presentation of their
respective evidence, that Atty. Marcelo J. Abibas, Jr. filed a notice of
appearance as new counsel for Bernardo, mentioning therein the death of Atty.
Puerto.
[10]

[11]

[12]

Without acting on the notice filed by Bernardos new counsel and without
receiving evidence from Defendant Bernardo, the trial court promulgated its
decision on June 11, 1991. The dispositive portion of said decision reads:
[13]

WHEREFORE, in view of all the foregoing considerations, judgment is


hereby rendered in favor of plaintiff:
a)
Declaring that Lot 3, Block 6, Phase III-C of the Development
Project at Dagat-Dagatan, Kalookan City, was validly awarded and sold by
defendant NHA to plaintiff Jimmy Tomas and, therefore, the latter is entitled to
the ownership and possession thereof, and to this end defendant NHA is
ordered to execute such other documents, as may be necessary in order to
transfer full ownership and possession thereof to said plaintiff;
b)
Ordering defendant Florencio Bernardo to remove and to demolish
the house he erected on said lot and thereafter deliver unto said plaintiff the
peaceful possession of the same lot;

c)
Ordering defendant Florencio Bernardo to pay plaintiff the amounts
of P100,000.00 actual damages, P200,000.00 as moral damages, P200,000.00
as exemplary damages, P30,000.00 as attorneys fees plus P500.00 per
appearance, as well as the costs of suit;
d)
Dismissing defendant Bernardos counterclaim and cross-claim for
lack of merit/substantiation; and
e)
Ordering defendant NHA to refund under proper receipt to defendant
Florencio Bernardo the sum of P615,000.00 which the latter paid to and was
accepted by the former.
[14]

Bernardo, through his new counsel, filed a nine-page Omnibus


Motion seeking (1) reconsideration of the above decision, (2) reopening of the
case and (3) a new trial on the grounds that he had been denied his substantive
right to due process, particularly the right to be heard, and that said decision was
contrary to law. In an Order dated August 7, 1991, the trial judge denied the
motion, reasoning thus:
[15]

[16]

The foregoing indeed illustrated a clear instance of a grossly negligent party


shifting the blame from his own self to the court. We say grossly negligent
because there was absolutely no justification for a client not to get in touch with
his lawyer, much less to be ignorant or unaware of the latters death. And in
the same manner that it is the duty of the lawyer to inform the court of the
death of his client who is a party in a pending litigation, so is a client-party
obligated to inform the court of the death of his lawyer.
xxx

xxx

xxx

Furthermore, new counsel knew or must have known that the raw information
as to the death of Atty. Puerto was not even a verified information because
when he entered his appearance on June 2, 1991 all he could say was that Atty.
Puerto died recently. It was only on June 25, 1991 or after the lapse of almost
five (5) months when he was able to produce a death certificate evidencing
death of Atty. Puerto on January 28, 1991.
Furthermore, since it was the law firm of PUERTO, NUEZ &
ASSOCIATES who represented defendant Florencio Bernardo in this case, it
behooved any partner or employee therein to inform this Court that Atty.
Puerto of said law firm who was handling this case was already dead and that
nobody in the same law firm was taking over from said Atty. Puerto. x x x
xxx

xxx

xxx

In any event, there was no meritorious defense by defendant Florencio


Bernardo to speak of in this case. x x x
The truth of the matter is that defendant Florencio Bernardo had been
forewarned that the acceptance of his money totaling P615,600.00 on April 14,
1988 by the Project Office through the Project Manager, did not constitute a
valid award to him of subject lot. He know (sic) or must have known that all
the actuations of the Project Manager were subject to the approval of the
General Manager of defendant NHA. Furthermore, defendant Bernardo knew
or must have known that under Memorandum Circular No. 528 dated 29
October 1987 (or very much prior to Bernardos payment of P615,600.00 on
April 14, 1988), Project Officers were ordered to cease-desist from accepting
payments/deposits from applicants of commercial/industrial lots until after
approval of final award has been issued by NHA (Exh. E).
When defendant Bernardo, therefore, did not await the approval by the NHA
of his payment of P615,600.00 through the issuance of a final award to him,
said defendant took a risk the consequences of which he alone must
suffer. Since the award to plaintiff was the one approved by defendant NHA,
as in fact the agreement to sell subject lot was executed in his favor, there was
no valid defense whatsoever which defendant Bernardo could raise against
plaintiff. x x x
[17]

On September 4, 1991, Bernardo filed his notice of appeal. However, the


appeal was denied due course by the trial court upon opposition by Tomas
counsel on the ground that it was filed beyond the reglementary period to
appeal. Hence, on September 24, 1991, Bernardo filed before the Court of
Appeals a petition for certiorari, mandamus, prohibition with injunction and a
special prayer for the issuance of a temporary restraining order. A
supplement thereto dated October 8, 1991 was filed through his collaborating
counsel -- Gonzales, Batiller, Bilog & Associates. On December 27, 1991, the
Court of Appeals (Sixth Division) promulgated a Decision in favor of Petitioner
Bernardo, ordering the trial judge to set the case for hearing for the reception of
petitioners evidence after which a decision be rendered based on the evidence
and applicable law. The appellate court reasoned thus:
[18]

[19]

[20]

[21]

The steps for the substitution of counsel are clear in the Rules. But these rules
are not inflexible when a strict adherence thereto would result in injustice, and
a decision which gives premium on technicalities. It is therefore our opinion
that as of June 7, 1991, Atty. Marcelo J. Abibas, Jr. became the petitioners
new counsel. This being so, copy of the decision should have been sent to
him. Since this was not complied with, and without being technical about it,
his receipt on June 24, 1991 of the decision is considered as the date from

which the reglementary 15-day period to appeal should commence to


run. Thus, when petitioner filed his Omnibus Motion on June 25, 1991, this
was well within the 15-day period. And when the motion was denied on
August 7, 1991 and received by petitioner on August 23, 1991, there were
fourteen more days left for petitioner within which to perfect his appeal. When
he filed his Notice of Appeal on September 4, 1991, it was only the 13th day of
the appeal period.
[22]

Respondent Tomas moved for the reconsideration of the above


Decision. After Petitioner Bernardo filed his opposition thereto, the Respondent
Court, this time through a Special Sixth Division, reversed its original decision
and affirmed the trial courts judgment. It justified its change of mind this wise:
[23]

In resolving this Motion for Reconsideration, we feel constrained to consider


as crucial the failure of a party to comply with the rules on substitution of
counsel. When a party is represented by counsel of record, service of orders
and notices must be made upon the said attorney and notice to the client and to
any other lawyer, not the counsel of record, is not notice in law. (See Chainani
vs. Tancinco, 90 Phil. 862). In order that there may be substitution of attorneys
in a given case, there must be (1) written application for substitution; (2) a
written consent of the client; (3) a written consent of the attorney to be
substituted; and (4) in case such written consent cannot be procured, there must
be filed with the application for substitution proof of the service of notice of
such motion in a manner required by the rules on the attorney to be
substituted. (Cortez vs. Court of Appeals, L-32547, May 9, 1978; 83 SCRA
316; Sumadchat vs. Court of Appeals, 111 SCRA 488). Where the procedure
for substitution of attorney is not followed, the attorney who appears on record
before the filing of the application for substitution should be regarded as the
attorney entitled to be served with all the notices and pleadings, and the client
is answerable for the shortcomings of his counsel on record. (See Ramos vs.
Potenciano, 118 Phil. 1435). The filing of notice of appearance by a new
counsel does not amount to official substitution of counsel of record. The
courts may not presume that the counsel of record had already been substituted
by new counsel merely from the filing of formal appearance by the
latter. (Sumadchat vs. Court of Appeals, L-58197; January 30, 1982; 111
SCRA 488).
[24]

Bernardos motion for reconsideration of the above Amended Decision was


denied via a Resolution promulgated on July 3, 1992. Not satisfied with the
said Amended Decision and Resolution, petitioner filed the present petition to this
Court.
[25]

Issue
The petitioner raises a single issue:

Respondent Court committed grave abuse of discretion amounting to lack of


or in excess of jurisdiction when it initially granted the petition based on legal
and equitable grounds in favor of petitioner as contained in its decision dated
27 December 1991 but thereafter reversed itself by withdrawing and setting
aside said decision and in lieu thereof enter another one reversing it entirely
and consequently affirming the questioned decision, orders and writ issued by
respondent judge and the notice to vacate issued by respondent sheriff and such
error was further compounded when respondent court denied the motion for
reconsideration filed by petitioner despite sufficient factual, legal and equitable
grounds of record that justify the grant of the petition as explained in its
decision dated 27 December 1991 and as argued by petitioner in his pleadings /
comments. (Underscoring in the original)
[26]

Preliminarily, this Court clarifies that although petitioner refers to a


respondent judge and a respondent sheriff in his petition, said respondents
were not, however, impleaded as parties in the instant petition. It is, therefore,
an error on the part of the petitioner to attack either of these judicial officers
because he filed this petition against only The Hon. Special Sixth Division of the
Court of Appeals and Jimmy Tomas as respondents.
In support of his petition, Bernardo argues that although a court of justice is
entitled to correct itself, it is grave abuse of discretion to do so in a case where
it would do away unceremoniously with the most cherished Constitutional right of
petitioner to due process of law, or when technicality would desert its objective
of giving the parties the chance to present their side of the issue. Petitioner
also claims that Respondent Tomas merely prayed that Respondent Courts
original decision be modified such that a new trial would be denied the petitioner
and only his appeal would be given due course. However, Respondent Court
went beyond such reliefs prayed for, and instead reversed entirely its original
decision. Petitioner contends that, in effect, Respondent Court of Appeals
sanctioned the illegal proceedings in the trial court which had failed to accord him
his substantive right to due process.
[27]

In brief, petitioner maintains that the Court of Appeals (and the trial court)
committed grave abuse of discretion in depriving him of due process by failing to
reopen the trial proceedings to enable him to present evidence to support his
defenses, counterclaim and cross-claim.
The Courts Ruling

The petition is not meritorious, except as to the award of damages.


Preliminary Issue: Rule 65 or Rule 45?
At the outset, this Court notes that the proper remedy of Petitioner Bernardo
should have been an appeal under Rule 45 of the Rules of Court. We have time
and again reminded members of the bench and bar that a special civil action
for certiorari under Rule 65 lies only when there is no appeal nor plain, speedy
and adequate remedy in the ordinary course of law. Certiorari cannot be
allowed when a party to a case fails to appeal a judgment despite the availability
of that remedy, certiorari not being a substitute for lost appeal. The remedies
of appeal and certiorari are mutually exclusive and not alternative or successive.
For this procedural lapse, the petition should thus be denied outright.
Moreover, there are even more cogent reasons for denying the petition on the
merits.
[28]

[29]

[30]

[31]

Main Issue: No Denial of Due Process


Under Section 26, Rule 138 of the Rules of Court and established
jurisprudence, a valid substitution of counsel has the following requirements: (1)
the filing of a written application for substitution; (2) the clients written consent;
(3) the consent of the substituted lawyer if such consent can be obtained; and, in
case such written consent cannot be procured, (4) a proof of service of notice of
such motion on the attorney to be substituted in the manner required by the
Rules. Where death of the previous attorney is the cause of substitution of the
counsel, a verified proof of the death of such attorney (usually a death certificate)
must accompany the notice of appearance of the new counsel.
[32]

Clearly, petitioner failed to comply with the above requirements. His new
counsels notice of appearance merely mentioned that Atty. Jose B. Puerto
recently died. A verified certificate of death was not attached thereto. It has
been held that courts may not presume that the counsel of record has been
substituted by a second counsel merely from the filing of a formal appearance by
the latter.
[33]

[34]

In any event, mere mention of the death of Atty. Puerto was of no moment for
it was the law firm of Puerto Nuez & Associates, -- not merely Atty. Jose Puerto
-- which was the legal representative of petitioner. The death of said attorney did
not extinguish the lawyer-client relationship between the firm and Bernardo.
[35]

This Court is not unmindful of the belated attestation of the former


secretary of said law office that the other partner, Dr. Constantino Nuez,
allegedly died even before 1986; that two associates ceased to be connected
with the firm since 1989; while a third associate, Atty. Jose Acejas predeceased
Atty. Puerto in March 1990, thereby leaving Atty. Puerto as the only lawyer in the
[36]

[37]

[38]

office. But, obviously, it was petitioners former counsel who misled the trial court
into believing that Puerto Nuez and Associates, a law firm consisting of more
than one lawyer, continued to legally represent Bernardo. Courts may presume
that a law firm that represented itself as such, with at least two name partners
and more than one associate is composed of at least three lawyers. It is not the
duty of the courts to inquire during the progress of a case whether the
partnership continues to exist lawfully, or the partners are still alive or its
associates are still connected with the firm.
[39]

Jurisprudence teems with pronouncements that a client is bound by the


conduct, negligence and mistakes of his counsel. Only when the counsels
actuations are gross or palpable, resulting in serious injustice to the client, that
the courts should accord relief to the party. A thorough review of the instant
case reveals that the negligence of the law firm engaged by the petitioner to
defend his cause, and the error of his new counsel in giving a defective
substitution and notice of the death of his former counsel, did not result in
deprivation of due process to said party. Hence, a nullification of the Respondent
Courts Amended Decision grounded on grave abuse of discretion is not
warranted.
[40]

It should be stressed that petitioner was able to file his motion for
reconsideration in which he presented his legal defenses with respect to the main
subject of the original complaint. His arguments were substantially discussed
and debunked by the trial court in its order disposing of said motion. Such
motion for reconsideration cured whatever defect there may have been, if any, as
regards the alleged denial of due process. It is a time-honored ruling that lack of
opportunity to be heard, and not necessarily absence of prior notice, constitutes
violation of due process.
[41]

[42]

[43]

[44]

Worth mentioning is the fact that petitioner was likewise not entirely
blameless in his alleged deprivation of his day in court. In a recent case, this
Court enunciated:
[45]

Litigants, represented by counsel, should not expect that all they need to do is
sit back, relax and await the outcome of their case. They should give the
necessary assistance to their counsel for what is at stake is their interest in the
case.
[46]

In his concurring opinion in Republic vs. Sandiganbayan, Mr. Justice


Teodoro R. Padilla emphasized the value and significance of the partys
presence and diligence in the advancement of his cause, thus:
[47]

x x x An almost lifetime of experience in litigation is the best witness to the


indispensability of partys presence (aside from his lawyer, in case he has the
assistance of counsel) in order to litigate with any reasonable opportunity of
success. x x x especially during the cross-examination of adverse partys
witnesses -- where the truth must be determined -- every counsel worth his salt

must have the assistance and presence of his client on the spot, for the client
invariably knows the facts far better than his counsel. In short, even in civil
cases, the presence of party (as distinguished from his lawyer alone) is essential
to due process.
[48]

True enough, the party-litigant should not rely totally on his counsel to litigate
his case even if the latter expressly assures that the formers presence in court
will no longer be needed. No prudent party will leave the fate of his case entirely
to his lawyer. Absence in one or two hearings may be negligible but want of
inquiry or update on the status of his case for several months (four, in this case)
is inexcusable. It is the duty of a party-litigant to be in contact with his counsel
from time to time in order to be informed of the progress of his case. Petitioner
simply claims that he was busy with his gravel and sand and trading businesses
which involved frequent traveling from Manila to outlying provinces. But this was
not a justifiable excuse for him to fail to ask about the developments in his case,
or to ask somebody to make the query for him. Petitioner failed to act with
prudence and diligence; hence, his plea that he was not accorded the right to
due process cannot elicit this Courts approval or even sympathy.
[49]

[50]

Notwithstanding the above discussed negligence or failure of private


respondent, we note that he was not left without any relief. The trial courts
decision affirmed by the Respondent Court required the NHA to refund the
amounts he had remitted for the erroneous award of the lot to him. This relief we
find fair and equitable.
Damages
The award by the trial court, affirmed by Respondent Court, of actual, moral
and exemplary damages to Private Respondent Tomas in the sums
of P100,000.00, P200,000.00 and P200,000.00, respectively, is however
erroneous.
Basic is the rule that to recover actual damages, the amount of loss must not
only be capable of proof but must actually be proven with a reasonable degree of
certainty, premised upon competent proof or best evidence obtainable.
[51]

Private Respondent Tomas claim for actual damages was only premised
upon his testimony as follows:
Q

What is the basis of your actual damages that you suffered in this
proceeding?

The basis of the actual damages that I suffered was that I was deprived of
my business and also my relation with my friends and counterparts in the
business has been cancelled in making the assembly plant of water
pumps, sir.[52]

No other evidence was proffered to substantiate his bare statements. How the
amount of P100,000.00 was arrived at was never shown; thus, said
amount remains a pure speculation. Private respondents self-serving
testimonial evidence, if it may be called such, is definitely insufficient to support
an award of compensatory damages.
[53]

Neither did private respondent establish the legal basis for his claimed moral
damages. Although such damages are incapable of exact estimation and do not
necessitate proof of pecuniary loss for them to be awarded -- the amount of
indemnity being left to the discretion of the court -- it is still essential to prove
that: (1) injury must have been suffered by the claimant and (2) such injury must
have sprung from any of the cases listed in Articles 2219 and 2220 of the Civil
Code. It is not enough that one merely says he suffered mental anguish,
serious anxiety, social humiliation, wounded feelings and the like as a result of
the actuations of the other party. Invariably, such actions must be shown to
have been willfully done in bad faith or with ill motive. Bad faith or ill motive
under the law cannot be presumed but must be established with clear and
convincing evidence.
[54]

[55]

[56]

[57]

This Court finds the grant of actual and moral damages to be untenable and
substantially devoid of legal basis. Private respondent not being entitled to these
damages, an award of exemplary damages is likewise baseless. Finally, where
the award of moral and exemplary damages is eliminated, so must the award for
attorneys fees be deleted. Private respondent has not shown entitlement
thereto pursuant to the Civil Code. As petitioner was not able to present
contradictory evidence, private respondents ex parte claims for damages must
be carefully reviewed and any doubt should be resolved against the latter.
[58]

[59]

[60]

WHEREFORE, premises considered, the assailed Amended Decision of


Respondent Court of Appeals promulgated on March 5, 1992 and its Resolution
of July 3, 1992 affirming the decision of the Regional Trial Court of Kalookan
City, Branch 127, in Civil Case No. C-13614, are hereby AFFIRMED with
the MODIFICATION that the trial courts award of actual, moral and exemplary
damages and attorneys fees isDELETED.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

[1]

Promulgated on December 27, 1991; Rollo, pp. 196-206.

[2]

Sixth Division composed of J. Jose C. Campos, Jr., Chairman and ponente, with JJ. Venancio
D. Aldecoa, Jr. and Filemon H. Mendoza, concurring.

[3]

Special Sixth Division composed of J. Jose C. Campos, Jr., Chairman and ponente, with JJ.
Alicia V. Sempio-Dy (acting third member) and Filemon H. Mendoza, concurring.

[4]

Rollo, pp. 227-230.

[5]

Ibid., pp. 248-249.

[6]

Presided by Judge Manuel J.N. Serapio.

[7]

Docketed as Civil Case No. C-13614.

[8]

Rollo, pp. 52-53.

[9]

Ibid., pp. 136-145.

[10]

Atty. Jose B. Puerto consistently represented Bernardo during pre-trial proceedings.

[11]

TSN, February 5, 1991, p. 4.

[12]

Rollo, p. 101.

[13]

Ibid., pp. 102-113.

[14]

RTC Decision, pp. 11-12; Rollo, pp. 112-113.

[15]

Rollo, pp. 114-122.

[16]

Ibid., pp. 137-141.

[17]

RTC Order, pp. 4-5; Rollo, pp. 140-141.

[18]

Rollo, p. 142.

[19]

Docketed as CA-G.R. SP No. 26097; Rollo, pp. 27-55.

[20]

Rollo, pp. 157-159.

[21]

Ibid., pp. 196-206.

[22]

CA Decision, pp. 6-7.

[23]

Sempio-Dy, J. replaced Aldecoa, J.


Division; see notes 2 and 3.

[24]

Assailed Amended Decision, pp. 1-2; Rollo, pp. 227-228.

[25]

Rollo, pp. 248-249.

[26]

Petition, pp. 11-12; Rollo, pp. 12-13.

[27]

Ibid., p. 12; Rollo, p. 13.

[28]

Dela Paz vs. Panis, 245 SCRA 248, 250, June 22, 1995.

[29]

Felizardo vs. Court of Appeals, 233 SCRA 220, June 15, 1994.

[30]

Delos Santos-Reyes vs. Montesa, Jr., 247 SCRA 77, 84, August 7, 1995.

[31]

Oriental Media, Inc. vs. Court of Appeals, 250 SCRA 647, 653, December 6, 1995.

[32]

Yu vs. Court of Appeals, 135 SCRA 181, 189-190, February 28, 1985, citing Aban vs. Enage,
120 SCRA 778, February 25, 1983, and Phil. Apparel Workers Union vs.NLRC, 125
SCRA 391, October 27, 1983.

[33]

Rollo, p. 101.

[34]

Sumadchat vs. Court of Appeals, 111 SCRA 488, 499, January 30, 1982.

[35]

B.R. Sebastian Enterprises, Inc. vs. Court of Appeals, 206 SCRA 28, 37, February 7, 1992.

[36]

Rollo, pp. 177-179.

[37]

Felicisima P. Liongson.

[38]

Atty. Quintin Muning and Teodorico Pangilinan.

as

the

third

member

of

the

original

Sixth

[39]

Cf. Antonio vs. Court of Appeals, 153 SCRA 592, 599, August 31, 1987.

[40]

People vs. Salido, et al., G.R. No. 116208, July 5, 1996, citing several cases; San Miguel
Corporation vs. Laguesma, 236 SCRA 595, 601, September 21, 1994, citing Villa Rhecar
Bus vs. De la Cruz, 157 SCRA 13, January 7, 1988.

[41]

Omnibus Motion, pp. 6-8; Rollo, pp. 119-121.

[42]

RTC Order dated August 7, 1991; Rollo, p. 140(a).

[43]

Rubenecia vs. Civil Service Commission, 244 SCRA 640, 652, May 31, 1995; Jao vs. Court of
Appeals, 251 SCRA 391, 397, December 19, 1995; See also Salonga vs.Court of
Appeals, G.R. No. 111478, March 13, 1997.

[44]

Cornejo vs. Secretary of Justice, 57 SCRA 663, June 28, 1974; Sumadchat vs. Court of
Appeals, supra, p. 501.

[45]

Greenhills Airconditioning and Services, Inc. vs. NLRC, 245 SCRA 384, June 27, 1995.

[46]

Ibid., p. 390.

[47]

239 SCRA 529, December 28, 1994.

[48]

Ibid., p. 538.

[49]

Fernandez vs. Tam Tiong Tick, 1 SCRA 1138, April 28, 1961; Florendo vs. Florendo, 27 SCRA
432, March 28, 1969.

[50]

B.R. Sebastian Enterprises, Inc. vs. Court of Appeals, supra, p. 39.

[51]

Del Mundo vs. Court of Appeals, 240 SCRA 348, 356, January 20, 1995; People vs. Rosario,
246 SCRA 658, 671, July 18, 1995.

[52]

TSN, March 5, 1991, p. 5.

[53]

Scott Consultants & Resource Development Corp., Inc. vs. Court of Appeals, 242 SCRA 393,
404-405, March 16, 1995.

[54]

Del Mundo, supra.

[55]

TSN, March 5, 1991, p. 6.

[56]

Chua vs. Court of Appeals, 242 SCRA 341, 345, March 14, 1995.

[57]

Philippine Air Lines vs. Miano, 242 SCRA 235, 240, March 8, 1995, citing LBC vs. Court of
Appeals, 236 SCRA 602, September 21, 1994.

[58]

Article 2234, Civil Code; Scott Consultants, supra, p. 405.

[59]

Philippine Air Lines vs. Miano, supra.

[60]

Article 2208, Civil Code.


[Syllabus]

THIRD DIVISION

[G.R. No. 117499. February 9, 1996]

35.SPOUSES VICTOR WARLITO V. YBAEZ and VIRGINIA A.


YBAEZ,
represented
by
their
attorney-in-fact,
FORTUNATO V. YBAEZ, petitioners, vs. COURT OF
APPEALS; REGIONAL TRIAL COURT OF RIZAL, BR. NO.
154; METROPOLITAN TRIAL COURT OF PASIG, BR. NO.
72; and SPOUSES AVELINO P. IFURUNG and VIRGINIA F.
IFURUNG, respondents.
DECISION
FRANCISCO, J.:

This is the factual background.


In December 1984, petitioners spouses Victor Warlito V. Ybaez and Virginia
A. Ybaez, as vendors, entered into a Deed of Sale With Assumption of
Mortgage and With Right of Purchase over a mortgaged 400 sq. m. parcel of
land in favor of private respondents spouses Avelino P. Ifurung and Virginia F.
Ifurung, as vendees. shall pay the sum of P118,000.00 to the petitioners and
assume the obligations under the Deed of Mortgage of the subject property with
the Development Bank of the Philippines (DBP); (2) petitioners shall have the
right to repurchase the property within three months from the date of the sale; (3)
failure on the part of petitioners to repurchase within the agreed period will cause
the transfer of the property to private respondents without reservation, and
petitioners will vacate the subject property and surrender possession thereof in
favor of private respondents.[1] To enable the private respondents to pay the
monthly amortizations to the DBP, petitioners executed a power of attorney for
the purpose, which was subsequently revoked by them. [2]
The agreed three-month period expired without petitioners exercising their
right to repurchase the subject property. Private respondents, through counsel,
demanded that petitioners surrender the possession of the subject property and
vacate the premises in accordance with the deed of sale, only to be
unheeded. Thus, in 1992, private respondents filed an ejectment suit against
petitioners before the Metropolitan Trial Court (MTC) docketed as Civil Case
No. 2751. Summons were issued and served by substituted service thru Engr.
and Mrs. Nomer Ybaez (brother of Mr. Victor Warlito V. Ibalez [sic]) [3]. As a
result of petitioners failure to file an answer, the MTC, in accordance with
Section 6 of the Revised Rules on Summary Procedure, motu propio rendered
judgment in favor of private respondents ordering petitioners to deliver
possession and vacate the premises in question [and] to pay x x x the amount[s]
of P5,000.00 for and as attorneys fees, x x x P309,000.00 as reasonable rent at
P3,000.00 per month starting March, 1984 until September 1992, x x x [and] to
pay the costs.[4]
Petitioners appealed before the Regional Trial Court (RTC) of Pasig, Branch
154, docketed as SCA No. 253, and premised the same on the alleged lack of

valid service of summons over their persons. They asserted that service of
summons to Engr. and Mrs. Nomer Ybaez is improper and invalid since
petitioners, as early as 1988, have left for abroad, although it is uncontroverted
that the latter spouses (Engr. and Mrs Nomer Ybaez) were found residing at
petitioners last known address. The appeal did not prosper. Finding the
substituted service of summons proper and valid, the RTC affirmed the MTC
decision, but modified the amount of reasonable rentals to P3,000.00 a month
beginningSeptember 13, 1991 with legal interest of 6% per annum until
defendants [petitioners herein] actually vacate the premises. [5] Petitioners
thereafter filed a notice of appeal signifying their intention to appeal the judgment
to the Court of Appeals which was denied due course by the RTC on the ground
that it is not the proper remedy [6] - the correct recourse being the filing of a
petition for review.[7] On March 31, 1993, petitioners filed a motion for new trial
before the RTC. In an Order dated March 11, 1994, the RTC denied the motion
for having been filed beyond the reglementary period, among others. [8] With the
denial of private respondents motion and the decision having attained finality,
the RTC in SCA No. 253 issued a writ of execution dated March 22, 1994, and
subsequently caused the entry of the judgment through an Order
dated September 1, 1994.
In a bid to nullify the deed of sale, petitioners commenced an action for
Cancellation of Deed of Sale With Assumption of Mortgage and With Right of
Repurchase With Damages, before RTC Branch 156, docketed as Civil Case No.
64437.[9] On September 16, 1994, RTC Branch 156dismissed for lack of merit
petitioners complaint for cancellation of the deed of sale. This dismissal is now
pending appeal before the Court of Appeals.
Apparently, in a desperate move, on May 2, 1994, petitioners filed another
action - a petition for annulment of judgment of the RTC in SCA No. 253 before
respondent Court of Appeals, [10] now the subject of this petition. Petitioners
assailed the validity of the substituted service of summons over their persons in
the MTC ejectment case, an issue well settled in their appeal before the
RTC. Likewise, petitioners attacked the RTC jurisdiction to modify and affirm on
appeal the MTC decision and further contended that private respondents
obtained the judgment by default against the petitioners by means of extrinsic
fraud[11] Respondent court reversed the RTC in so far as the validity of the
substituted service of summons is concerned and ruled that there was an
improper substituted service of summons upon petitioners. However, respondent
court stressed that the RTCs decision is not void since, by asking for affirmative
relief through their appeal and motion for new trial before the RTC, petitioners
were effectively barred from questioning the validity of the substituted service of
summons, as well as the RTCs jurisdiction over their persons. On the issue of
extrinsic fraud, respondent court ruled that there was no extrinsic fraud to warrant
the annulment of the MTC and RTC judgments. Dissatisfied, but without filing a
motion for reconsideration for no apparent reason, petitioners filed the instant
petition stressing that t]his is a petition for certiorari, both under Rule 65 and
Rule 45, Rules of Court[12] raising substantially the following issues: (1) whether

or not the substituted service of summons over the persons of the petitioners in
the ejectment case was valid to vest the MTC jurisdiction over their persons, and
(2)whether or not the judgments of the MTC in the ejectment suit and of the RTC
on appeal were obtained by means of extrinsic fraud to warrant their nullification.
[13]

At the outset, we note that petitioners immediately filed this petition without
even filing a motion for reconsideration of the assailed decision thereby depriving
respondent court of the opportunity to correct at the first instance an error which
it may have committed. We see no cogent reason and none was persuasively
presented to excuse petitioners from their failure to file a motion for
reconsideration. Also glaring is the ambivalent, if not irresolute, posture taken by
the petitioners by categorizing this petition to be both under Rule 65 and
Rule 45, Rules of Court[14] in an attempt, apparently, to evade the dismissal of the
petition based on a wrong mode of appeal in accordance with Circular No. 2-90
issued on March 9, 1990. The court cannot tolerate this practice much less the
seeming ignorance of the law on appeals. This petition cannot be subsumed
simultaneously under Rule 45 and Rule 65 of the Rules of Court, and neither
may petitioners delegate upon the court the task of determining under which rule
the petition should fall. Under Circular No. 2-90, wrong or inappropriate mode of
appeal, as in this case, merits an outright dismissal. In fact, paragraph 4 (e) of
the circular specifically warns litigants counsels by providing the following:
Duty of counsel. - It is therefore incumbent upon every attorney who would seek review
of a judgment or order promulgated against his client to make sure of the nature of the
errors he proposes to assign, whether these be of fact or law; then upon such basis to
ascertain carefully which Court has appellate jurisdiction; and finally, to follow
scrupulously the requisites for appeal prescribed by law, ever aware that any error or
imprecision in compliance may well be fatal to his clients cause.
The disposition of this case could have stopped here without further ado, but
nevertheless we will briefly deal with the assigned issues for while the
respondent court correctly dismissed the action for annulment of judgment, its
reversal of the RTC ruling on the issue of substituted service of summons is
misplaced.
On the first issue, we feel that respondent court acted inadvertently when it
set aside the RTC ruling relative to the validity of the substituted service of
summons over the persons of the petitioners in the MTC level. We must not lose
sight of the fact that what was filed before respondent court is an action to annul
the RTC judgment and not a petition for review. Annulment of judgment may
either be based on the ground that a judgment is void for want of jurisdiction [15] or
that the judgment was obtained by extrinsic fraud. [16] There is nothing in the
records that could cogently show that the RTC lacked jurisdiction. Chiefly,
Section 22 of B.P. Blg. 129, otherwise known as the Judiciary Reorganization Act
of 1980, vests upon the RTC the exercise of an appellate jurisdiction over all
cases decided by the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts in their respective territorial jurisdictions. [17] Clearly

then, when the RTC took cognizance of petitioners appeal from the adverse
decision of the MTC in the ejectment suit, it (RTC) was unquestionably exercising
its appellate jurisdiction as mandated by law. Perforce, its decision may not be
annulled on the basis of lack of jurisdiction as it has, beyond cavil, jurisdiction to
decide the appeal.
Corollarily, it is inappropriate for respondent court to reverse the RTC ruling
that there was proper and valid substituted service of summons over the persons
of the petitioners. Petitioners properly assigned this issue and, in fact, it was
exhaustively argued in their appeal, albeit without success. They subsequently
failed to seasonably question the soundness of the RTC ruling before respondent
court via a petition for review. As it stands, therefore, the ruling of the RTC that
substituted service of summons was validly effected has long acquired finality.
Raising this long settled issue in the annulment case could very well be
petitioners device and technique to acquire a fresh opportunity to assail this
ruling, a chance they already lost because of their failure to seasonably file a
petition for review. This scheme is highly irregular and may as well constitute
misuse of court processes. [18] In addition, it stultifies and renders asunder the
principle, well embedded in our jurisprudence, that a judgment properly rendered
by a court vested with jurisdiction. like the RTC. and which has acquired finality
becomes immutable and unalterable, hence, may no longer be modified in any
respect except only to correct clerical errors or mistakes. [19] Judgments of courts
become final at some definite time fixed by law and that parties, like the
petitioners, should not be permitted to litigate the same issue/s over again.
Moreover, a party cannot, by varying the form of action, or adopting a
different method of presenting his case, escape the effect of a valid judgment.
Section 49 (b) and (c), Rule 39 of the Rules of Court states:
SEC. 49. Effect of judgments. - The effect of a judgment or final order rendered by a
court or judge of the Philippines, having jurisdiction to pronounce the judgment or order,
may be as follows:
xxx

xxx

xxx

(b) In other cases the judgment or order is, with respect to the matter directly adjudged or
as to any other matter that could have been raised in relation thereto, conclusive between
the parties and their successors-in-interest by title subsequent to the commencement of
the action or special proceeding, litigating for the same thing and under the same title and
in the same capacity;
(c) In any other litigation between the same parties or their successors-in-interest, that
only is deemed to have been adjudged in a former judgment which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto.

These provisions embody the same rule that once a judgment has become
final and executory, the issues therein should be laid to rest. Paragraph (b) is
referred to as bar by former judgment. It is a concept in which the term res
judicata is more commonly and generally used and has the following concurring
requisites, namely: (1) the former judgment or order must be final; (2) it must be
a judgment or order on the merits, that is, it was rendered after a consideration of
the evidence or stipulations submitted by the parties at the trial of the case; (3) it
must have been rendered by a court having jurisdiction over the subject matter
and the parties; (4) there must be, between the first and second actions, identity
of parties, of subject matter and of cause of action.
Paragraph (c) is the less familiar concept or less terminological usage of res
judicata known as conclusiveness of judgment. This concept, which applies in
this case, refers to a situation where the judgment in the prior action operates as
an estoppel only as to the matters actually determined or necessarily included
therein. Otherwise stated, conclusiveness of judgment precludes relitigation of
a particular fact or issue in another action between the same parties on a
different claim or cause of action. [20] With the validity of the substituted service of
summons having been settled in the RTC and having long acquired finality,
petitioners are now precluded to relitigate the same issue. Litigation must have
and always has an end. If not, judicial function will lose its relevance.
With respect to the second issue, we agree with respondent courts succinct
disposition that the MTC judgment was not obtained by extrinsic fraud to warrant
annulment. Respondent court amply explained extrinsic fraud and applied the
same in this wise:
The kind of fraud that justifies the annulment of a judgment is extrinsic fraud. This
refers to some act or conduct of the prevailing party which has prevented the aggrieved
party from having a trial or presenting his case to the court, or was used to procure
judgment without a fair submission of the controversy. Extrinsic fraud refers to acts
outside the trial. It must be distinguished from intrinsic fraud which refers to acts of a
party at a trial which prevented a fair and just determination of the case and which could
have been litigated and determined at the trial or adjudication of the case. Examples of
intrinsic fraud are falsification and false testimony.
The petitioners argued that the private respondents committed extrinsic fraud when they
did not inform the trial court that they (private respondents) have not assumed the
mortgage of the property in question. Applying the definition stated earlier, the fraud
supposed to have been committed does not amount to extrinsic fraud. The omission was
done within the trial or the litigation process, particularly in the complaint for ejectment
filed before the Metropolitan Trial Court. If such omission were fraudulent, it would have
constituted intrinsic fraud which could have been determined in the adjudication of the
case. As such, even if it were proven, the supposed fraud does not justify the annulment
of the judgment.[21]

Similarly, the RTC decision in SCA No. 253 was not attended by extrinsic
fraud. We find nothing, either act or conduct on the part of private respondents,
that may have prevented petitioners from presenting their case to the court.
Indeed, the record is bereft of any iota of evidence that could show the contrary.
WHEREFORE, save for some modifications in respondent courts findings
which, nonetheless, did not alter the final outcome of the case, the petition is
hereby DISMISSED.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

Rollo, pp. 81-83..

[1]
[2]

Revocation of Power of Attorney, October 28, 1992; Rollo, p. 138.

[3]

Sheriff s Return, September 21, 1992, p.1; Rollo, p. 34.

[4]

MTC Decision, Civil Case No. 2751, October 21, 1992; Rollo p. 43.

[5]

RTC Br. 154 Decision, SCA No. 253, p. 7; Rollo, p. 50.

[6]

RTC Br. 154 Order, March 12, 1993.

[7]

CA Decision p. 27, citing RTC Order; See also Circular No. 2-90, par. 3 (b).
RTC Br. 154 Order, Rollo, pp. 51-54.

[8]
[9]

The record is silent as to the exact date of the filing of this action.

Special Seventh Division, Martinez, A.M., J., Chairman; Martin Jr., F.A., and Vasquez,
Jr., C.M., JJ., members.
[10]

[11]

CA Decision, at p. 5; Rollo, p. 29.

[12]

Petition, p. 2; Rollo, p. 5.

[13]

Petition, pp. 7-11, Rollo, pp. 10-14.

[14]

Id.

Laxamana vs. Court of Appeals, 87 SCRA 48, 56(1978); Panlilio vs. Garcia, 119 SCRA 387,
391 (1982).
[15]

[16]

Id.

See also Resolution E(21), Resolution of the Supreme Court En Banc, dated January 11,
1983, Providing for the Interim or Transitional Rules and Guidelines Relative to the
Implementation of the Judiaicary Reorganization Act.
[17]

[18]

Proscribed under Canon 12, Rule 12.04, Code of Professional Responsibility.

Lim v. Jabalde, 172 SCRA 211, 223 (1989); Adez Realty, Inc V. Court of Appeals, 212 SCRA
623,627(1992).
[19]

Filinvest Credit Corp. v. Intermediate


Lopez v. Reyes, 76 SCRA 179, 186(1977).
[20]

[21]

CA Decision, p. 8; Rollo, p. 32.

Appellate

Court,

207

SCRA

59,63

(1992);

36.G.R. No. 80904 : December 3, 1990.]


191 SCRA 830
BALTAZAR, PEDRO, URSULA, and DOMINGO, all surnamed PANTIG,
Petitioners, vs. VENANCIO BALTAZAR, Respondent.
DECISION
PARAS, J.:
This is a petition for review on certiorari which seeks to annul and set aside: a) the
September 1, 1987 resolution * of the Court of Appeals, in CA-G.R. CV No. 03198
entitled "Baltazar, Pedro, Ursula and Domingo, all surnamed Pantig vs. Venancio
Baltazar" granting the private respondents' motion for new trial; and b) the
December 1, 1987 resolution of the Court of Appeals denying the motion for
reconsideration.
The antecedent facts of the case as found by the Court of Appeals, are as follows:
During his lifetime, Macario Baltazar, divided his properties by way of inheritance,
among his children and his grandchildren, the surviving heirs of his deceased
daughter Anastacia Baltazar who died in 1952, namely: Baltazar, Pedro, Ursula and
Domingo, all surnamed Pantig. He gave the properties known as Banga, Pagpito and
Sukol, named after the sitios where the properties were situated; that because the
grandchildren were still minors, the properties adjudicated to them known as Lot No.
1471 of the Sexmoan Cadastre, with an area of 139,126 square meters were placed
under the joint management/administration of Venancio Baltazar and Maxima
Baltazar and her husband, Justo Garcia (Rollo, p. 66).
chanrobles virtual law library

In 1924, upon agreement of Maxima and Venancio, Lot No. 1471 was converted into
a fishpond and said land was covered by Tax Declaration No. 6081 in the name of
Macario Baltazar (Rollo, Ibid.).
When Pedro Pantig, son of the deceased Anastacia Baltazar, became of age, he and
his brothers and sisters demanded from their uncle, Venancio Baltazar, the return of
their properties to them, but their uncle merely told them not to worry and instead
gave them P200.00 semi-annually as their shares in the produce of the fishpond;
their last share of P400.00 was received in 1969 (Rollo, Ibid.).
:-cralaw

On July 23, 1968, applicant Venancio Baltazar filed in Court an application for
registration of three parcels of land, designated as Lots Nos. 1471,1747 and 1801 of
the Sexmoan Cadastre, with an area of 139,296 square meters, 20,592 square
meters and 3,178 square meters, respectively, all situated at Barangay San Antonio
and Sta. Monica, Pampanga (Rollo, Decision, p. 18).
In the said application for registration, the applicant alleged that he acquired Lot No.
1747 and Lot No. 1801 from Jose L. Lacsamana on December 7, 1953 and Lot No.
1471, partly by inheritance from his late father Macario Baltazar who died in 1925
and that his possession thereof, together with that of his predecessor-in-interest, has
been open, peaceful, public, continuous and adverse and in the concept of owner for
more than thirty years (Rollo, Ibid.).
The late Hon. Malcolm G. Sarmiento, then Presiding Judge of this Branch (CFI),
appointed the Branch Clerk of Court Irene T. Galura (now retired) as Commissioner
to receive the evidence for the applicant and the applicant presented three (3)

witnesses before the Commissioner and thereafter submitted the application for
decision (Rollo, Ibid.).
In a decision rendered on August 29, 1969, the court affirmed the applicant's title to
the three parcels of land described in the application, including the lot in question
(Lot 1471) and ordered that the same be decreed in favor of Venancio Baltazar. On
March 6, 1970, an order for the issuance of the corresponding decree was issued
(Rollo, Ibid.).
On May 20, 1970, petitioners Pantig filed a petition for review of judgment in the
Regional Trial Court, Branch XLI, San Fernando, Pampanga, insofar as Lot 1471 is
concerned, alleging that the same is their property and that Venancio Baltazar has
defrauded them by intentionally omitting them in his application for registration of
the land and by stating in the application that the said land belongs to him,
notwithstanding his full knowledge that the same lawfully belongs to the herein
petitioners, despite the fact that Venancio Baltazar was merely holding the property
in trust as an uncle administrator of the property (Rollo, Ibid., p. 18).
Because of the petition for review, the same court, in its order of June 24, 1970,
ordered the Land Registration Commissioner to hold in abeyance the issuance of a
decree over Lot No. 1471 (Rollo, Ibid., p. 19) but on December 15, 1972, dismissed
the petition for review without prejudice on the part of petitioner to file an ordinary
action for reconveyance (Rollo, Ibid.).
On January 25, 1973, petitioners elevated the dismissal of their petition to the
Intermediate Appellate Court (now Court of Appeals) which remanded the case to the
court of origin, which was ordered to act on the petition for review in accordance
with the law and the evidence, as presented in support of the petition as well as that
presented in opposition thereto (Rollo, Annex "D", p. 30).
: nad

On April 5, 1984, a decision was rendered in favor of the petitioners Pantig, the
dispositive portion of which reads:
"WHEREFORE, and in view of the foregoing, a new judgment is hereby
rendered as follows:
'1) That portion of the Decision rendered on August 21, 1969 confirming
applicant-respondent's title to Lot 1471 is hereby set aside;
'2) Petitioners' title to Lot 1471, described in plan AP-19164 (Exhibit D) and in
its technical description (Exhibit H), is hereby confirmed and orders that the
same be decreed in an undivided equal shares in favor of petitioners Baltazar
Pantig, Domingo Pantig, Pedro Pantig and Ursula Pantig, Filipinos, of legal
ages, all married, the first two being residents of Sexmoan, Pampanga, and
the last two being residents of Guagua, Pampanga; and,
'3) Upon the finality of this decision, respondent Venancio Baltazar is hereby
ordered to surrender possession of Lot 1471 to the petitioners and to render
within sixty (60) days thereof an accounting of the produce thereof from
1969.
"Once this Decision becomes final, let the corresponding decree issue.
"With costs against applicant-respondent Venancio Baltazar.
"SO ORDERED." (Rollo, p. 27)
On appeal, the Intermediate Appellate Court (now Court of Appeals), on March 21,
1986, affirmed the decision of the lower court, the dispositive part of which reads:
: nad

"WHEREFORE, finding no reversible error in the judgment appealed from, the


same is hereby AFFIRMED.
"SO ORDERED." (Rollo, Annex "D", p. 36)
On April 8, 1986, the respondent filed a motion for reconsideration. And on April 16,
1986, respondent filed a Supplemental Motion for New Trial under Section 9 of Batas
Pambansa Blg. 129 based on the following grounds:
I
THAT THE HEIRS OF RESPONDENT-APPELLANT
DEPRIVED OF THEIR DAY IN COURT;

VENANCIO

BALTAZAR

WERE

II
THAT NEWLY DISCOVERED EVIDENCES HAVE BEEN FOUND WHICH IF PRESENTED
WOULD PROBABLY ALTER THE DECISION IN THE INSTANT CASE. (ROLLO, P. 134)
After the parties had filed their respective pleadings and their oral arguments heard,
the Intermediate Appellate Court (now Court of Appeals) promulgated a Resolution
dated September 1, 1987, the dispositive portion of which reads:
:- nad

"WHEREFORE, in the interest of justice, the motion for new trial is hereby
GRANTED to give an opportunity for the movants to adduce their newly
discovered evidences.
"Let the records of this case be remanded to the trial court for appropriate
proceedings." (Rollo, Annex "A", p. 3)
To said resolutions, the petitioners filed a motion for reconsideration, which was
denied by the Court of Appeals in its resolution dated December 1, 1987 (Rollo,
Annex "B", pp. 58-59).
Hence, the petition.
The Second Division of this Court, in its resolution dated February 15, 1989 gave due
course to the petition and required both parties to file their simultaneous memoranda
(Rollo, Petition, pp. 8-16; Resolution, p. 145).
Memorandum for petitioners (pp. 121-128) was filed on March 21, 1989 while
private respondent's memorandum was filed on April 1, 1989 (Rollo, pp. 129-146).
The pivotal issue in this case is whether or not the private respondent is entitled to a
new trial on the ground of newly discovered evidence.
The petition is impressed with merit.
Section 1 of Rule 37 of the New Rules of Court enumerates the grounds for new trial,
among others:
"a) . . .
"b) Newly discovered evidence, which he could not, with reasonable diligence,
have discovered, and produced at the trial, and which if presented would
probably alter the result.
"c) . . .
A motion for new trial upon the ground of newly discovered evidence, is properly
granted where there is concurrence of the following requisites, namely: a) the
evidence had been discovered after trial; b) the evidence could not have been
discovered and produced during trial even with the exercise of reasonable diligence;

and c) the evidence is material, and not merely corroborative, cumulative, or


impeaching and is of such weight that if admitted, would probably alter the result
(Tumang v. Court of Appeals, 172 SCRA 332 [1989]).
:- nad

In order that a particular piece of evidence may be properly regarded as "newly


discovered" for purposes of a grant of a new trial, what is essential is not so much
the time when the evidence offered first sprang into existence nor the time when it
first came to the knowledge of the party now submitting it; what is essential is,
rather, that the offering party had exercised reasonable diligence in seeking to locate
such evidence before or during trial but had nonetheless failed to secure it (Ibid.).
In the case at bar, the fact that the deed of sale, the contracts of lease mortgage
and the like, are allegedly newly discovered, are not supported by the records. On
the contrary, they could have been produced during the trial in the lower court, any
time from July 1970 up to April 4, 1984, inasmuch as they are known by Venancio
Baltazar and his heirs or his counsel and are easily obtainable from the parties to the
contract, from the notary public who notarized them or from the clerk of court where
copies are filed. Said documents cannot, therefore, be considered as newly
discovered evidence but more correctly ascribed as suppressed evidence.
Nonetheless, after a careful study of the findings of the trial court (Decision, pp. 1827) which were supported by substantial evidence and unanimously affirmed by the
Court of Appeals (Rollo, Decision, pp. 28-36), there appears no basis for the claim
that the alleged newly discovered evidence would alter the result of the said
decision.
PREMISES CONSIDERED, the petition is hereby GRANTED, the assailed resolutions
dated September 1, 1987 and December 1, 1987 are hereby SET ASIDE, and the
decision of the Court of Appeals dated March 21, 1986 is hereby REINSTATED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
Endnotes
* Penned by Justice R. Coquia concurred in by Justices Ricardo P. Tensuan and Oscar
M. Herrera with separate dissenting opinions of Justices Floreliana C. Bartolome and
Bienvenido C. Ejercito.

THIRD DIVISION

[A.M. No. RTJ-00-1591. April 11, 2002]

LAURENTINO D. BASCUG, complainant, vs. JUDGE GRACIANO H.


ARINDAY, JR., Presiding Judge, Branch 69, Regional Trial
Court of Negros Occidental, Silay City, respondent.
DECISION

VITUG, J.:

A complaint, dated 01 December 1997, initiated by Laurentino D. Bascug, has


charged Judge Graciano H. Arinday, Jr., of the Regional Trial Court of Silay City,
Branch 69, with grave misconduct, knowingly rendering an unjust judgment, malicious
delay in the administration of justice, and violation of the code of judicial conduct.
Relative to Civil Cases No. 1797-69, entitled "Spouses Laurentino and Estrella
Bascug, et al., vs. Spouses Loreto Duganggay," and No. 1798-69, entitled "Spouses
Laurentino and Estrella Bascug, et al., vs. Spouses Romeo Abuagan, et al.," complainant
Laurentino Bascug charged respondent judge with delaying the proceedings thereat. The
civil cases, formerly docketed Civil Cases No. 624-V and No. 633-V, were originally
filed with the Municipal Circuit Trial Court ("MCTC") of Victorias-Manapla, Negros
Occidental. On 15 May 1995, the MCTC rendered a decision dismissing the cases on the
ground that no certificate of barangay conciliation was attached to the complaints. The
plaintiffs subsequently appealed the decision to the Regional Trial Court ("RTC") of
Silay City. The appeal was assigned to respondent judge. In an order, dated 20 October
1995, respondent judge reversed the 15th May 1995 decision of the MCTC and ordered
the latter to conduct further proceedings on the cases. The defendants filed a motion for
reconsideration but, because it did not bear the signature of defendants' counsel, the
motion was denied by respondent judge. A second motion for reconsideration was filed
on 16 January 1996. In his order, dated 23 January 1996, respondent judge lifted the
denial of the first motion for reconsideration and gave due course to the second motion
for reconsideration. On 12 November 1996, respondent judge ultimately denied the
second motion for reconsideration for lack of merit. It was only, however, in his order of
13 June 1997 that respondent judge required the Clerk of Court to remand the entire
records of the cases to MCTC Victorias-Manapla for further proceedings. Complainant
Bascug attributed the delay in the disposition of the cases to the alleged influence on
respondent judge by the mayor of the municipality of Victorias.
In respect to Civil Case No. 1718-69, entitled "Vicente Ditching, Jr., for himself and
as ASSIGNEE of his co-heirs; viz: Ester, Editha, Juan, Corazon, Josefa, Otelia, Rosita,
Jose Ramon, Marciano, Samson, Ciello, Herminio and Marino, all surnamed Ditching vs.
Odisco Farms System Cooperative Foundation, represented by Leyte Salvacion B.
Monteroso, accompanied by her husband Glenn Monteroso and Lino Cornelio Cecilio
Bascug," complainant Bascug charged respondent judge with gross misconduct when he
directed a judgment on the pleadings. Complainant Bascug claimed that respondent judge
had declared the parties as having agreed to the rendition of a judgment on the pleadings
even while the defendant corporation, Odisco Farms System Cooperative Foundation of
which complainant Bascug was the President, had never agreed to it. In fact,
complainant Bascug stated, the corporation precisely did not submit any memorandum
for judgment on the pleadings required by respondent judge in his order of 20 December
1994. On 04 April 1995, respondent judge, nevertheless, rendered a judgment based on
the pleadings in favor of the plaintiffs. A motion for the reconsideration of the decision
was denied in an order of 11 December 1995. The case was later brought to the Court of
Appeals. In its decision, dated 14 August 1998, the appellate court set aside the appealed
judgment and remanded the case to the court a quo for further proceedings.

In Criminal Case No. 4000-69, entitled "The People of the Philippines vs. Vicente
Ditching, Jr., et al.," complainant Bascug, the father-in-law of the complaining witness,
asserted that there was irregularity in the service of the warrant of arrest against the
accused. He averred that respondent judge had failed to commence any prosecution
against the persons liable.
Required to submit his comment on the complaint, respondent judge refuted the
several allegations in the complaint. He attributed the delay in the resolution of Civil
Cases No. 1797-69 and No. 1798-69 to the former counsel of complainant who had failed
to file any opposition to the second motion for reconsideration. He denied the averment
that he delayed the resolution of the cases due to the influence over him by the municipal
mayor of Victorias. As regards Civil Case No. 1718-69, respondent judge maintained
that the parties, including the former counsel of complainant, had manifested that they
had no objection to the submission of the case for judgment on the
pleadings. Respondent judge disowned any irregularity in Criminal Case No. 400069. He argued that if, indeed, there was any problem about the service of the warrant of
arrest, that matter should have been addressed to Senior Inspector Larry Decena, Chief of
Police of Victorias, Negros Occidental.
In reply to the comment of respondent Judge relating to Civil Case No. 1718-69,
complainant Bascug submitted a certification from the Clerk of Court of the Court of
Appeals stating that, on the basis of the records of CA-G.R. CV No. 54234 (formerly
Civil Case No. 1718-69), no memorandum for a judgment on the pleadings was filed by
the defendants.
The matter was referred by the Court to the Office of the Court Administrator
("OCA") for evaluation, report and recommendation. In its memorandum, dated 15
August 2000, the OCA found respondent judge liable for his failure to resolve the second
motion for reconsideration in Civil Cases No. 1797-69 and No. 1798-69 within the
reglementary period and for grave misconduct in issuing an order, dated 11 December
1995, in Civil Case No. 1718-69, stating that the parties had agreed to submit the case for
judgment on the pleadings even though the defendant corporation in the civil case did not
apparently agree thereto. The OCA recommended that a fine in the amount of P5,000.00
be imposed for unreasonably delaying the proceedings in Civil Cases No. 1797-69 and
No. 1798-69 and for grave misconduct in Civil Case No. 1718-69.
The Court adopts the recommendation of the Office of the Court Administrator.
A motion for reconsideration should be resolved within thirty days from the time it is
submitted for resolution.[1] In this case, the second motion for reconsideration was filed on
16 January 1996 and respondent judge issued an order, dated 23 January 1996, giving it
due course. The motion was eventually resolved by respondent judge only on 12
November 1996, and directed, only on 13 June 1997, the Clerk of Court to remand the
records of the case to MCTC Victorias-Manapla for further proceedings. The failure of
respondent judge to act with reasonable dispatch on the matter constituted gross
inefficiency on his part. Moreover, respondent judge ought to have known that, under the
rules, a second motion for reconsideration should not be allowed.[2]

The Court has often given reminder that any delay in the disposition of cases erodes
the faith and confidence of our people in the judiciary and brings it into unnecessary
disrepute.[3] It is indeed a situation that cannot just be ignored.
With regard to the order of respondent judge holding Civil Case No. 1718-69
submitted for judgment on the pleadings, Section 1, Rule 34, of the Rules on Civil
Procedure provides -

"(W)here an answer fails to tender an issue or otherwise admits the material


allegations of the adverse party's pleading, the court may on motion of that
party, direct judgment on such pleading."
In his order, dated 20 December 1994, respondent judge required the parties to submit
their respective memoranda for a judgment on the pleadings. Complainant was the
President of the defendant corporation who maintained that the corporation never agreed
to have the case submitted for judgment on the pleadings. As so aptly put by the Court of
Appeals in its decision of 14 August 1998 -

"It is believed that under the circumstances of the case, judgment on the
pleadings was not called for and prevented a fair and full resolution of
controversy. The trial court stated that both parties agreed to have judgment on
the pleadings, the minutes of the session held on December 20, 1994 merely
stated that `both parties will submit their respective memoranda for judgment
on the pleadings' (p. 57, Record). Only the plaintiffs submitted Memorandum
praying for judgment on the pleadings; the defendants did not submit their
memorandum for judgment on the pleadings. In fact, in their Motion for
Reconsideration of the Judgment on the pleadings, the defendants pointed out
that the parties presented `widely opposing contentions' in their respective pretrial brief, and the court cannot rely on `conjectures' on the `wild' monetary
claims of plaintiffs. In view of the objections expressed by the defendants to
the issues raised, there was no clear agreement to submit the case to a judgment
or the pleadings, much less an implied admission of each other's factual
allegations, which the defendants-appellants correctly describe as `widely
opposing,' that would support a submission by the parties to a judgment on the
pleadings."
The Court shares the view of OCA that respondent judge has fallen below
circumspection and the standard of conduct expected of him.
WHEREFORE, the Court finds Judge Graciano H. Arinday, Jr., of the Regional
Trial Court of Silay City, Negros Occidental, Branch 69, guilty of gross inefficiency and
grave misconduct and hereby imposes on him a fine of FIVE THOUSAND PESOS with
a warning that any further infraction will be dealt with severely.
SO ORDERED.

Melo, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio, JJ., concur.

[1]

Rule 37, Section 4, 1997 Rules of Civil Procedure.

[2]

Section 5, Rule 37 of the Revised Rules on Civil Procedure

[3]

247 SCRA 519.

THIRD DIVISION

[A.M. No. MTJ-03-1471. January 22, 2003]

PROSECUTOR ROBERT M. VISBAL, petitioner, vs. JUDGE


MARINO S. BUBAN, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:

Once again, we find occasion to reiterate this Courts mandate that every
judge should dispose of his courts business promptly. Delay in resolving
motions is inexcusable and should not be condoned.
[1]

In a sworn letter-complaint dated April 15, 2000 addressed to then Court


Administrator Alfredo L. Benipayo, Provincial Prosecutor Robert M. Visbal of
Tacloban City charged Judge Marino S. Buban, Municipal Trial Court in Cities
(MTCC), Branch 1, Tacloban City, with gross inefficiency and misconduct in
Office.
[2]

In his complaint, complainant alleged that on July 29, 1999, he filed with the
MTCC a "Motion to Correct and Re-mark Exhibits of the Prosecution" in Criminal
Cases Nos. 98-07-CR-19 and 98-07-CR-20. Presiding Judge Marino S. Buban,
respondent, resolved the motion only on March 20, 2000, or almost eight (8)
months from the date it was filed. He deliberately failed to resolve the motion
within the prescribed period of ninety (90) days because he begrudged
complainant's filing of an administrative charge and several motions for his
inhibition. Respondents delay in resolving the motion violated the relevant
provisions of the Constitution and the Code of Judicial Conduct. Furthermore,
respondent committed falsification by stating in his Certificates of Service from
October 1999 to February 2000 that he has no pending motions submitted for
resolution.
In his comment, respondent judge admitted he incurred delay in resolving
the "Motion to Correct and Re-mark Exhibits of the Prosecution." He attributed
[3]

such delay to the frequent resetting of the hearing of the cases. He also alleged
that his clerk of court failed or forgot to submit the records of the pertinent case
to him and to call his attention to the unresolved motion attached to the
voluminous records. He blamed the complainant for failing to remind him earlier
of the motion. It was only during the hearing of March 20, 2000 that complainant
called his attention to the pending incident. Immediately, he granted the motion
and ordered the remarking of exhibits. He stressed that the delay in resolving
the motion did not impede the flow of the proceedings. He surmised that
complainant filed the instant administrative case in order to force him
(respondent) to inhibit himself from hearing Criminal Case No. 98-11-18 for direct
assault upon a person in authority. The accused therein is complainants wife.
In her Report, Deputy Court Administrator Zenaida N. Elepao
recommended that respondent be held administratively liable for gross
inefficiency for his delay in resolving a motion.
This Court has consistently held that failure to decide cases and other
matters within the reglementary period constitutes gross inefficiency and
warrants the imposition of administrative sanction against the erring magistrate.
Delay in resolving motions and incidents pending before a judge within the
reglementary period of ninety (90) days fixed by the Constitution and the law is
not excusable and constitutes gross inefficiency. Further, such delay
constitutes a violation of Rule 3.05, Canon 3 of the Code of Judicial Conduct
which mandates that a judge should dispose of the courts business promptly and
decide cases within the required periods.
[4]

[5]

[6]

It is undisputed that respondent failed to resolve complainants motion within


the reglementary period of ninety (90) days. He cannot escape liability by
claiming that his clerk failed or forgot to inform him of the unresolved
motion. Though blame may conveniently be placed on court personnels
mismanagement of the records of cases, it must be kept in mind that they are not
the guardians of a judges responsibilities. Proper and efficient court
management is as much the judges responsibility for he is the one directly
responsible for the proper discharge of his official functions.
[7]

[8]

As a trial judge, respondent is a frontline official of the judiciary and should at


all times act with efficiency and with probity. Rule 3.08 of Canon 3 of the Code
of Judicial Conduct provides that a judge should diligently discharge
administrative responsibilities, maintain professional competence in court
management, and facilitate the performance of the administrative functions of
other judges and court personnel.
[9]

[10]

Furthermore, Rule 3.09, Canon 3 of the same Code requires every judge to
organize and supervise the court personnel to ensure the prompt and efficient
dispatch of business. Respondent fell short of this mandate. He also failed to
comply with this Courts Circular No. 13 dated July 31, 1987 which directs all
judges to closely supervise court personnel.
[11]

Noteworthy is the fact that respondent did not refute complainant's


imputation of falsification of his Certificates of Service. In fact, the Office of the
Court Administrator secured copies of respondent's Certificates of Service for the
months of August, September, October, and November 1999 and found that he
continued to certify that all proceedings, applications, petitions, motions and all
civil and criminal cases for submission or determination within ninety (90) days or
more have been determined and decided.
[12]

However, Deputy Court Administrator Elepao stated that respondents false


entries in his Certificates of Service were based on his belief, though erroneous,
that he had then no pending matter to resolve. She concluded that there can be
no crime when the criminal mind is wanting.
[13]

We find respondent judge administratively liable for undue delay in rendering


an order, a less serious charge under Section 9, Rule 140, as amended, of the
Revised Rules of Court. Pursuant to Section 11(b) of the same Rule, such
offense is punishable by suspension from office without salary and other benefits
for not less than one (1) nor more than three (3) months; or a fine of more
than P10,000.00 but not exceedingP20,000.00.
WHEREFORE, for incurring undue delay in rendering an order, respondent
Judge Marino S. Buban of the Municipal Trial Court in Cities (MTCC), Branch 1,
Tacloban City, is ordered to pay a FINE of Eleven Thousand (P11,000.00)
Pesos, with a stern warning that a repetition of the same offense will be dealt
with more severely.
SO ORDERED.
Puno, (Chairman), Panganiban, Corona and Carpio-Morales, JJ., concur.

[1]

Sy Bang vs. Mendez, 287 SCRA 84, 89 (1998).

[2]

Rollo, at 2-3.

[3]

Id., at 9-15.

[4]

Echaves vs. Fernandez, A.M. No. RTJ-001596, February 19, 2002; Gallego vs. Doronila, 334
SCRA 339, 346 (2000); Sea vs. Villarin, 328 SCRA 644, 648 (2000);Hilario vs.
Concepcion, 327 SCRA 96, 104 (2000); Report on the Judicial Audit Conducted in RTC,
Branches 29, 53 & 57, Libmanan, Camarines Sur, 316 SCRA 272, 280 (1999).

[5]

Rivera vs. Lamorena, 280 SCRA 633, 635 (1997); Guintu vs. Lucero, 261 SCRA 1, 7 (1996).

[6]

Martin vs. Guerrero, 317 SCRA 166, 175 (1999).

[7]

[8]

[9]

Longboan vs. Polig, 186 SCRA 557, 562 (1990).


Re: Report on the Judicial Audit Conducted in the RTC, Branches 61, 134, and 147, Makati,
Metro Manila, 248 SCRA 5, 24 (1995).
Ng vs. Ulibari, 293 SCRA 342, 348 (1998).

[10]

Longboan vs. Polig, supra, at 562.

[11]

Dysico vs. Dacumos, 262 SCRA 275, 282 (1996); Fernandez vs. Imbing, 260 SCRA 586, 592
(1996).

[12]

Report of the Deputy Court Administrator, Rollo, at 21.

[13]

Peralta vs. Sandiganbayan, 268 SCRA 332, 356 (1997), citing People vs. Pacana, 47 Phil.
48, 55 (1924).

lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION

G.R. Nos. 103442-45 May 21, 1993


NATIONAL POWER CORPORATION, ET AL., petitioners,
vs.
THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.
The Solicitor General for plaintiff-appellee.

Ponciano G. Hernandez for private respondents.

DAVIDE, JR., J.:


This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court urging this Court to set aside the 19 August
1991 consolidated Decision of the Court of Appeals in CA.-G.R. CV Nos. 27290-93 1 which reversed the Decision of Branch 5 of
the then Court of First Instance (now Regional Trial Court) of Bulacan, and held petitioners National Power Corporation (NPC)
and Benjamin Chavez jointly and severally liable to the private respondents for actual and moral damages, litigation expenses
and attorney's fees.
This present controversy traces its beginnings to four (4) separate complaints 2 for damages filed against the NPC and Benjamin
Chavez before the trial court. The plaintiffs therein, now private respondents, sought to recover actual and other damages for the
loss of lives and the destruction to property caused by the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978.
The flooding was purportedly caused by the negligent release by the defendants of water through the spillways of the Angat Dam
(Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia, that: 1) defendant NPC operated and maintained a multipurpose hydroelectric plant in the Angat River at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was the plant
supervisor at the time of the incident in question; 3) despite the defendants' knowledge, as early as 24 October 1978, of the
impending entry of typhoon "Kading," they failed to exercise due diligence in monitoring the water level at the dam; 4) when the
said water level went beyond the maximum allowable limit at the height of the typhoon, the defendants suddenly, negligently and
recklessly opened three (3) of the dam's spillways, thereby releasing a large amount of water which inundated the banks of the
Angat River; and 5) as a consequence, members of the household of the plaintiffs, together with their animals, drowned, and their
properties were washed away in the evening of 26 October and the early hours of 27 October 1978. 3
In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised due care, diligence and prudence in the
operation and maintenance of the hydroelectric plant; 2) the NPC exercised the diligence of a good father in the selection of its
employees; 3) written notices were sent to the different municipalities of Bulacan warning the residents therein about the
impending release of a large volume of water with the onset of typhoon "Kading" and advise them to take the necessary
precautions; 4) the water released during the typhoon was needed to prevent the collapse of the dam and avoid greater damage
to people and property; 5) in spite of the precautions undertaken and the diligence exercised, they could still not contain or control
the flood that resulted and; 6) the damages incurred by the private respondents were caused by a fortuitous event or force
majeure and are in the nature and character of damnum absque injuria. By way of special affirmative defense, the defendants
averred that the NPC cannot be sued because it performs a purely governmental function. 4
Upon motion of the defendants, a preliminary hearing on the special defense was conducted. As a result thereof, the trial court
dismissed the complaints as against the NPC on the ground that the provision of its charter allowing it to sue and be sued does
not contemplate actions based on tort. The parties do not, however, dispute the fact that this Court overruled the trial court and
ordered the reinstatement of the complaints as against the NPC. 5
Being closely interrelated, the cases were consolidated and trial thereafter ensued.
The lower court rendered its decision on 30 April 1990 dismissing the complaints "for lack of sufficient and credible
evidence." 6 Consequently, the private respondents seasonably appealed therefrom to the respondent Court which then docketed
the cases as CA-G.R. CV Nos. 27290-93.
In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the appealed decision and awarded damages
in favor of the private respondents. The dispositive portion of the decision reads:
CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and SET

ASIDE, and a new one is hereby rendered:


1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants, with
legal interest from the date when this decision shall become final and executory, the following:
A. Actual damages, to wit:
1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two Hundred Sixty Pesos
(P231,260.00);
2) Bienvenido P. Pascual, Two Hundred Four Thousand Five Hundred Pesos (P204.500.00);
3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos (P155,000.00);
4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos (P147,000.00);.
5) Bernardino Cruz, One Hundred Forty Three Thousand Five Hundred Fifty Two Pesos and Fifty
Centavos (P143,552.50);
6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos (P57,500.00);
7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00);
8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00); and
B. Litigation expenses of Ten Thousand Pesos (P10,000.00);
2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-appellant, with
legal interest from the date when this decision shall have become final and executory, the following :
A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00);.
B. Moral damages of five hundred Thousand Pesos (P500,000.00); and.
C. Litigation expenses of Ten Thousand Pesos (P10,000.00);.
3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and severally, with legal interest from
the date when this decision shall have become final and executory;
A. Plaintiff-appellant Angel C. Torres:
1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty Pesos (P199,120.00);
2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00);
B. Plaintiff-appellant Norberto Torres:

1) Actual damages of Fifty Thousand Pesos (P50,000.00);


2) Moral damages of Fifty Thousand Pesos (P50,000.00);
C. Plaintiff-appellant Rodelio Joaquin:
1) Actual damages of One Hundred Thousand Pesos (P100,000.00);
2) Moral damages of One Hundred Thousand Pesos (P100,000.00); and
D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);
4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and severally, with legal interest from
the date when this decision shall have become final and executory :
A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo:
1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred Pesos (P256,600.00);
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
B. Plaintiff-appellant Consolacion Guzman :
1) Actual damages of One Hundred forty Thousand Pesos (P140,000.00);
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
C. Plaintiff-appellant Virginia Guzman :
1) Actual damages of Two Hundred Five Hundred Twenty Pesos (205,520.00); and
D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).
In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly and severally, plaintiffsappellants attorney fees in an amount equivalent to 15% of the total amount awarded.
No pronouncement as to costs. 7

The foregoing judgment is based on the public respondent's conclusion that the petitioners were guilty of:
. . . a patent gross and evident lack of foresight, imprudence and negligence . . . in the management and operation of
Angat Dam. The unholiness of the hour, the extent of the opening of the spillways, And the magnitude of the water
released, are all but products of defendants-appellees' headlessness, slovenliness, and carelessness. The resulting
flash flood and inundation of even areas (sic) one (1) kilometer away from the Angat River bank would have been
avoided had defendants-appellees prepared the Angat Dam by maintaining in the first place, a water elevation which
would allow room for the expected torrential rains. 8

This conclusion, in turn, is anchored on its findings of fact, to wit:

As early as October 21, 1978, defendants-appellees knew of the impending onslaught of and imminent danger
posed by typhoon "Kading". For as alleged by defendants-appellees themselves, the coming of said super
typhoon was bannered by Bulletin Today, a newspaper of national circulation, on October 25, 1978, as "Super
Howler to hit R.P." The next day, October 26, 1978, said typhoon once again merited a headline in said
newspaper as "Kading's Big Blow expected this afternoon" (Appellee's Brief, p. 6). Apart from the newspapers,
defendants-appellees learned of typhoon "Kading' through radio announcements (Civil Case No. SM-950, TSN,
Benjamin Chavez, December 4, 1984, pp. 7-9).
Defendants-appellees doubly knew that the Angat Dam can safely hold a normal maximum headwater elevation
of 217 meters (Appellee's brief, p. 12; Civil Case No. SM-951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6";
Civil Case No. SM-1247, Exhibit "G-6").
Yet, despite such knowledge, defendants-appellees maintained a reservoir water elevation even beyond its
maximum and safe level, thereby giving no sufficient allowance for the reservoir to contain the rain water that will
inevitably be brought by the coming typhoon.
On October 24, 1978, before typhoon "Kading" entered the Philippine area of responsibility, water elevation
ranged from 217.61 to 217.53, with very little opening of the spillways, ranging from 1/2 to 1 meter. On October
25, 1978, when typhoon "Kading" entered the Philippine area of responsibility, and public storm signal number
one was hoisted over Bulacan at 10:45 a.m., later raised to number two at 4:45 p.m., and then to number three at
10:45 p.m., water elevation ranged from 217.47 to 217.57, with very little opening of the spillways, ranging from
1/2 to 1 meter. On October 26, 1978, when public storm signal number three remained hoisted over Bulacan, the
water elevation still remained at its maximum level of 217.00 to 218.00 with very little opening of the spillways
ranging from 1/2 to 2 meters, until at or about midnight, the spillways were suddenly opened at 5 meters, then
increasing swiftly to 8, 10, 12, 12.5, 13, 13.5, 14, 14.5 in the early morning hours of October 27, 1978, releasing
water at the rate of 4,500 cubic meters per second, more or less. On October 27, 1978, water elevation remained
at a range of 218.30 to 217.05 (Civil Case No. SM-950, Exhibits "D" and series, "L", "M", "N", and "O" and Exhibits
"3" and "4"; Civil Case No. SM-951, Exhibits "H" and "H-1"; Civil Case No. SM-953, Exhibits "I" and "I-1"; Civil
Case No. SM 1247, Exhibits "F" and "F-1").
xxx xxx xxx
From the mass of evidence extant in the record, We are convinced, and so hold that the flash flood on October 27,
1978, was caused not by rain waters (sic), but by stored waters (sic) suddenly and simultaneously released from the
Angat Dam by defendants-appellees, particularly from midnight of October 26, 1978 up to the morning hours of October
27,
1978. 9

The appellate court rejected the petitioners' defense that they had sent "early warning written notices" to the towns of Norzagaray,
Angat, Bustos, Plaridel, Baliwag and Calumpit dated 24 October 1978 which read:
TO ALL CONCERN (sic):
Please be informed that at present our reservoir (dam) is full and that we have been releasing water intermittently
for the past several days.
With the coming of typhoon "Rita" (Kading) we expect to release greater (sic) volume of water, if it pass (sic) over
our place.

In view of this kindly advise people residing along Angat River to keep alert and stay in safe places.
BENJAMIN L.
CHAVEZ
Power Plant
Superintendent 10
because:
Said notice was delivered to the "towns of Bulacan" on October 26, 1978 by defendants-appellees driver,
Leonardo Nepomuceno (Civil Case No. SM-950, TSN, Benjamin Chavez, December 4, 1984, pp. 7-11 and TSN,
Leonardo Nepomuceno, March 7, 1985, pp. 10-12).
Said notice is ineffectual, insufficient and inadequate for purposes of the opening of the spillway gates at midnight of
October 26, 1978 and on October 27, 1978. It did not prepare or warn the persons so served, for the volume of water to
be released, which turned out to be of such magnitude, that residents near or along the Angat River, even those one (1)
kilometer away, should have been advised to evacuate. Said notice, addressed "TO ALL CONCERN (sic)," was
delivered to a policeman (Civil Case No. SM-950, pp. 10-12 and Exhibit "2-A") for the municipality of Norzagaray. Said
notice was not thus addressed and delivered to the proper and responsible officials who could have disseminated the
warning to the residents directly affected. As for the municipality of Sta. Maria, where plaintiffs-appellants in Civil Case
No. SM-1246 reside, said notice does not appear to have been served. 11

Relying on Juan F. Nakpil & Sons vs. Court of Appeals, 12 public respondent rejected the petitioners' plea that the incident in
question was caused by force majeure and that they are, therefore, not liable to the private respondents for any kind of damage
such damage being in the nature of damnum absque injuria.
The motion for reconsideration filed by the petitioners, as well as the motion to modify judgment filed by the public
respondents, 13 were denied by the public respondent in its Resolution of 27 December 1991. 14
Petitioners thus filed the instant petition on 21 February 1992.
After the Comment to the petition was filed by the private respondents and the Reply thereto was filed by the petitioners, We gave
due course to the petition on 17 June 1992 and directed the parties to submit their respective Memoranda, 15 which they
subsequently complied with.
The petitioners raised the following errors allegedly committed by the respondent Court :
I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING OF NAKPIL & SONS V. COURT OF
APPEALS AND HOLDING THAT PETITIONERS WERE GUILTY OF NEGLIGENCE.
II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE WRITTEN NOTICES OF WARNING ISSUED BY
PETITIONERS WERE INSUFFICIENT.
III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE DAMAGE SUFFERED BY PRIVATE
RESPONDENTS WAS NOT DAMNUM ABSQUE INJURIA.
IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE COUNTERCLAIM OF PETITIONERS FOR
ATTORNEY'S FEES AND EXPENSES OF LITIGATION. 16

These same errors were raised by herein petitioners in G.R. No. 96410, entitled National Power Corporation, et al., vs. Court of

Appeals, et al., 17 which this Court decided on 3 July 1992. The said case involved the very same incident subject of the instant
petition. In no uncertain terms, We declared therein that the proximate cause of the loss and damage sustained by the plaintiffs
therein who were similarly situated as the private respondents herein was the negligence of the petitioners, and that the 24
October 1978 "early warning notice" supposedly sent to the affected municipalities, the same notice involved in the case at bar,
was insufficient. We thus cannot now rule otherwise not only because such a decision binds this Court with respect to the cause
of the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978 which resulted in the loss of lives and the
destruction to property in both cases, but also because of the fact that on the basis of its meticulous analysis and evaluation of
the evidence adduced by the parties in the cases subject of CA-G.R. CV Nos. 27290-93, public respondent found as conclusively
established that indeed, the petitioners were guilty of "patent gross and evident lack of foresight, imprudence and negligence in
the management and operation of Angat Dam," and that "the extent of the opening of the spillways, and the magnitude of the
water released, are all but products of defendants-appellees' headlessness, slovenliness, and carelessness." 18 Its findings and
conclusions are biding upon Us, there being no showing of the existence of any of the exceptions to the general rule that findings
of fact of the Court of Appeals are conclusive upon this Court. 19 Elsewise stated, the challenged decision can stand on its own
merits independently of Our decision in G.R. No. 96410. In any event, We reiterate here in Our pronouncement in the latter case
that Juan F. Nakpil & Sons vs. Court of Appeals 20 is still good law as far as the concurrent liability of an obligor in the case
of force majeure is concerned. In the Nakpil case, We held:
To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of an obligation due to an
"act of God," the following must concur: (a) the cause of the breach of the obligation must be independent of the
will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to
render it impossible for the debtor to fulfill his obligation in a moral manner; and (d) the debtor must be free from
any participation in, or aggravation of the injury to the creditor. (Vasquez v. Court of Appeals, 138 SCRA 553;
Estrada v. Consolacion, 71 SCRA 423; Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon
Stevedoring Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).
Thus, if upon the happening of a fortuitous event or an act of God, there concurs a corresponding fraud,
negligence, delay or violation or contravention in any manner of the tenor of the obligation as provided for in
Article 1170 of the Civil Code, which results in loss or damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned exclusively
by the violence of nature and all human agencies are to be excluded from creating or entering into the cause of
the mischief. When the effect, the cause of which is to be considered, is found to be in part the result of the
participation of man, whether it be from active intervention or neglect, or failure to act, the whole occurrence is
thereby humanized, as it were, and removed from the rules applicable to the acts of God. (1 Corpus Juris, pp.
1174-1175).
Thus it has been held that when the negligence of a person concurs with an act of God in producing a loss, such person
is not exempt from liability by showing that the immediate cause of the damage was the act of God. To be exempt from
liability for loss because of an act of God, he must be free from any previous negligence or misconduct by which that
loss or damage may have been occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G.
4379; Limpangco & Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). 21

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for the loss or damage
sustained by private respondents since they, the petitioners, were guilty of negligence. The event then was not occasioned
exclusively by an act of God or force majeure; a human factor negligence or imprudence had intervened. The effect then of
the force majeure in question may be deemed to have, even if only partly, resulted from the participation of man. Thus, the whole
occurrence was thereby humanized, as it were, and removed from the laws applicable to acts of God.
WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the Consolidated Decision of the Court of
Appeals in CA-G.R. CV Nos. 27290-93 is AFFIRMED, with costs against the petitioners.

SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.
#

Footnotes
1 Annex "A" of Petition; Rollo, 34-53. Per Associate Justice Venancio D. Aldecoa, Jr., concurred in by Associate
Justices Luis L. Victor and Filemon N. Mendoza.
2 Civil Case No. SM-950 entitled "GAUDENCIO C. RAYO, BIENVENIDO P. PASCUAL, TOMAS MANUEL,
PEDRO C. BARTOLOME, BERNARDO CRUZ, JOSE PALAD, MARIANO CRUZ AND LUCIO FAJARDO versus
NATIONAL POWER CORPORATION AND BENJAMIN CHAVEZ," and filed on 20 December 1978;
Civil Case No. SM-951 entitled "FRANCISCO RAYOS versus NATIONAL POWER CORPORATION AND
BENJAMIN CHAVEZ," and filed on 29 December 1978
Civil Case No. SM-953 entitled "ANGEL C. TORRES, NORBERTO TORRES AND RODELIO JOAQUIN versus
NATIONAL POWER CORPORATION AND BENJAMIN CHAVEZ," and filed on 4 January 1978; and
Civil Case No. SM-1247 entitled "PRESENTACION LORENZO, CLODUALDO LORENZO, CONSOLACION
GUZMAN AND VIRGINIA GUZMAN, in her behalf and as natural guardian of her minor children, RODELIO,
MINERVA AND EMERSON, all surnamed GUZMAN, versus NATIONAL POWER CORPORATION AND
BENJAMIN CHAVEZ," and filed on 29 January 1982.
3 CA Decision, 3; Rollo, 37.
4 Id., 3-4; Id., 37-38.
5 CA Decision, 4; Rollo, 38.
6 Id., 2; Id., 36.
7 Rollo, 51-53.
8 Rollo, 40.
9 Rollo, 39-41.
10 Rollo, 41.
11 Id., 42.
12 144 SCRA 596 [1986], quoted in National Power Corp. vs. Court of Appeals, 161 SCRA 334 [1988].
13 In the matter of when interest on the damages awarded will accrue, the Court of Appeals ruled that interest
shall be paid only from the time its decision shall have become final and executory.
14 Rollo, 56-57.

15 Id., 166.
16 Rollo, 16.
17 211 SCRA 162 [1992].
18 Supra.
19 Remalante vs. Tibe, 158 SCRA 138 [1988]; Median vs. Asistio, Jr., 191 SCRA 218 [1990].
20 Supra.
21 Supra, at 606-607.
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lawphil

Today is Thursday, August 22, 2013

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 95026 October 4, 1991

SPOUSES PEDRO and ANGELINA TELAN, petitioner,


vs.
COURT OF APPEALS, ROBERTO TELAN, and SPOUSES VICENTE and VIRGINIA TELAN, respondent.
Peter Donnely A. Barot for petitioners.
Monsanto Law Office for private respondent.

SARMIENTO, J.:p
This is a petition for review of the Resolution dated December 28, 1989 of the Court of Appeals 1 which considered the appeal of
the herein petitioner, spouses Pedro and Angelina Telan (hereinafter PEDRO and ANGELINA), ABANDONED and DISMISSED,
for their failure to file an appeal brief within the reglementary period, pursuant to Section I(f), Rule 50 of the Rules of the Court.
The only issue involved in this petition for review on certiorari is:
Whether or not the representation of the petitioner by a fake lawyer amounts to a deprivation of his right to
counsel and hence a lack of due process.
The circumstances under which the case arose are as follows:
The petitioner PEDRO is a retired government employee and high school graduate who settled in 1973 on a property abutting
the national highway in Guibang, Gamu, Isabela. 2
In 1977, when the government needed the land, PEDRO was compelled to transfer his residence to the other side of the national
highway on a lot owned by Luciano Sia where he rented 750 square meters for P50.00 a month. 3
Because the lot was en route to the shrine of Our Lady of Guibang which was frequented by pilgrims, PEDRO set up business
enterprises such as a vulcanizing shop and an eatery. Shortly thereafter, his cousins, the herein private respondents Roberto
Telan and Spouses Vicente and virginia Telan (hereinafter ROBERTO, VICENTE, and VIRGINIA), followed suit by setting up
their own eatery within the same lot. 4
On March 27, 1984, PEDRO and his spouses ANGELINA received a Notice to Vacate from the Development Bank of the
Philippine (DBP). This was followed by a letter from VIRGINIA herself, reiterating the said demand. Apparently VICENTE and
VIRGINIA had executed a Deed of Sale with Assumption of Mortgage with Sia over the said lot shared by PEDRO and
ANGELINA. 5
Soon, DBP as the mortgagee of Sia's lot, foreclosed the mortgage.
On June 7, 1984, the DBP and the Spouses VICENTE and VIRGINIA TELAN filed a suit at the Regional Trial Court of Ilagan,
Isabela to evict PEDRO TELAN's family from the lot. The case was dismissed.
Meanwhile, on September 22, 1986, ROBERTO TELAN was able to secure a Certificate of Title in his name over the contested
lot. 6
With the new Transfer Certificate of Title, ROBERTO and the spouses VICENTE and VIRGINIA filed a complaint denominated as

Accion Publiciana against the petitioners, Spouses PEDRO and ANGELINA.

At this point, PEDRO and ANGELINA hired the services of Atty. Antonio Paguiran to defend them in the suit.

On October 27, 1988, the lower court awarded the possession of the property in question to ROBERTO and Souses VICENTE
and VIRGINIA TELAN.
PEDRO and ANGELINA informed Atty. Paguiran that they wanted to appeal the case, but since Atty. Paguiran was disposed not
to do so, PEDRO and ANGELINA asked another person to sign for them. 9
In the course of their eatery business, petitioner ANGELINA TELAN became acquainted with Ernesto Palma who represented
himself to be a "lawyer." Having no counsel to assist them in their appeal, Angelina asked "Atty. Palma" to handle their case. he
cosented and the petitioners paid his "lawyer's fees." 10
In the meantime, on August 5, 1988, PEDRO TELAN broke his hip while he was getting off from a passenger jeepney. On
September 5, 1988, unable to withstand the pain, he went to the Philippine General Hospital for treatment where he was
diagnosed to have a "fractured, closed, complete, femoral neck garden type IV (R) femur." 11 On the spot, the doctors
recommended an operation.
Another operation followed on September 22, 1988. All the while, from September 5, 1988 up to October 2, 1988, PEDRO was
confined a the PGH. He had to go back to PGH several times for check-up even after was released from the hospital. 12
It was only by January 1990 that PEDRO managed to walk again although still with much difficulty.
Meanwhile, on December 28, 1989, the Court of Appeals issued a Resolution which considered the appeal interposed by
petitioners as abandoned and dismissed "for failure ... to file an appeal brief within the reglementary period, pursuant to Section 1
(f), Rule 50 of the Rules of Court. 13
The petitioners were not aware of the dismissal of their appeal. They only came to know about it on May 1990, when somebody
in the Isabela Provincial Capitol at Ilagan informed PEDRO TELAN immediately verified the facts. "Atty. Palma" could no longer
be found. PEDRO in verifying the existence of "Atty. Palma" in the Roll of Attorneys with the Bar Confidant's Office. This was
followed by the filing of Criminal Case No. 389-90 for Estafa against "Atty. Palma." 15 By now PEDRO had realized that "Atty.
Palma" was a fake.
The Court of Appeals in its Resolution dated August 27, 1990 ruled as follows:
xxx xxx xxx
It should be recalled that the instant appeal was dismissed only on December 28, 1989 (p. 13 rollo). Prior thereto, appellant's
counsel received on July 25, 1989 this Court's letter-notice dated July 14, 1989 requiring him to file the appellants' brief within
forty-five (45) days from receipt thereof. Per report dated October 185, 1989 of the brief, non has yet been filed as of said date
and hence, this Court issued a Resolution dated October 20, 1989 for appellants to show cause, within ten (10) days, why the
appeal should not be dismissed for failure to file the appellants' brief within the reglementary period. Hence from July 25, 1989
when appellants' counsel received this Court's letter-notice to file brief until the JRD's report on December 15, 1989 that no
appellant's brief has been filed, a period of about four (4) months and twenty-three (23) days have elapsed, thus giving
appellants enough to time to file their brief. Unfortunately, no appellants' brief was ever filed during said period. Let it be stressed
that the rules prescribing the time within which certain acts must be done or certain proceedings taken are absolutely
indispensable to the prevention of needless delay and the orderly and speedy discharge of judicial business. (FJR Garment
Industries v. CA, 130 SCRA 216, 218). 16

On January 24, 1990, the Resolution dated December 28, 1989 became final and was entered on May 24, 1990 in the Book of
Entries of Judgment.
On September 12, 1990, the presiding judge of the lower court issue the Writ of Demolition for the enforcement of the decision.

17

The Petition for Review on certiorari before this Court was filed on October 18, 1990 by the spouses PEDRO and ANGELINA
TELAN with an Urgent Prayer for Temporary Restraining Order/Preliminary Injunction. 18
On October 24, 1990, after deliberating on the petition for review on certiorari, the Court without giving due course required the
respondents to COMMENT within ten (10) days form notice thereof. At the same time, as prayed for, effective "immediately" and
"continuing until further orders from this Court", a TEMPORARY RESTRAINING ORDER was issued enjoining the respondents
from enforcing the Order dated September 12, 1990 issued in Civil Case No. 279.
In due time, after the filing of the necessary pleadings, the petition was given due course and the parties were ordered to submit
simultaneously their respective memoranda. The petitioners filed their memorandum while the private respondents manifested to
adopt their Comments dated November 5, 1990. However, after the filing of the petitioners' memorandum, the private
respondents filed on June 10, 1991, a pleading they denominated asAddendum. Apparently, changing their minds, on July 23,
1991, the private respondents filed their memorandum.
We rule for the petitioners. We hold that they had not been accorded due process of law because they lost their to appeal when
deprived of the right to counsel.
Article III, Section 2 of the Constitutional provides:
xxx xxx xxx
No person shall be deprived of life, or property, without due process of law, nor shall any person be denied the
equal protection of the law.
The right to counsel in civil cases exists just as forcefully as in criminal cases,
or property is subjected to restraint or in danger of loss.

19 specially

so when as a consequence, life, liberty,

In criminal cases, the right of an accused person to be assisted by a member of the bar is immutable. Otherwise, there would be
a grave denial of due process. Thus, even if the judgment had become final and executory, it may still be recalled, and the
accused afforded the opportunity to be heard by himself and counsel. 20
There is no reason why the rule in criminal cases has to be different from that in civil cases. The preeminent right to due process
of law applies not only to life and liberty but also to property. There can be no fair hearing unless a party, who is in danger of
losing his house in which he and his family live and in which he has established a modest means of livelihood, is given the right
to be heard by himself and counsel.
Even the most experienced lawyers ge tangled in the web of procedure. To demand as much form ordinary citizens whose
only compelle intrare is their sense of right would turn the legal system into a intimidating monstrosity where an individual may be
stripped of his property rights not because he has no right to the property but because he does not know how to establish such
right.
The right to counsel is absolute and may be invoked at all times. More so, in the case of an on-going litigation, it is a right that
must be exercised at every step of the way, with the lawyer faithfully keeping his client company.
No arrangement or interpretation of law could be as absurd as the position that the right to counsel exists only in the trial courts

and that thereafter, the right ceases in the pursuit of the appeal.
This is the reason why under ordinary circumstances, a lawyer can not simply refuse anyone the counsel that only the exercise
of his office can impart. 21
Curiously, the counsel of the private respondents, ROBERTO TELAN and spouses VICENTE and VIRGINIA, would still insist
that the petitioners, spouses PEDRO and ANGELINA TELAN, had lost their right to appeal because of the negligence of their
counsel, referring to "Atty. Palma."
A client is generally bound by the action of his counsel in the management of a litigation even by the attorney's mistake or
negligence in procedural technique. 22 But how can there be negligence by the counsel in the case at bar when the "lawyer",
"Atty. Palma," turned out to be fake? The Affidavit of the petitioner PEDRO TELAN, the sworn Petition, the Certifications of the
Bar Confidant's Office and the Integrated Bar of the Philippines, and the submitted records of Criminal Case No. 389-90 more
than sufficiently establish the existence of an Ernesto Palma who misrepresented himself as a lawyer. 23
WHEREFORE, the Petitioner is GRANTED; the proceedings in CA-G.R CV No. 20786 are hereby REINSTATED and the
respondent Court of Appeals is ordered to give DUE COURSE to the appeal and to decide the same on the merits.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and Regalado, JJ., concur.

Footnotes
1 Telan v. Telan, CA-G.R. CV No. 20786, December 28, 1989, Hector C. Fule, ponente; Lorna S. Lombos-De la
Fuente, Chairman and Regina G. Ordoez-Benitez, concurring.
2 Rollo, 9.
3 Ibid.
4 Ibid.
5 Ibid.
6 Rollo, 10.
7 Ibid.
8 Ibid.
9 Ibid.
10 Rollo, 10.
11 Rollo, 30.

12 Ibid.
13 CA G.R. CV No. 20786, Ordoez-Benitez, concurred by Lombos-Dela Fuente and Mendoza, JJ.
14 Rollo, 12.
15 Id., 82-84.
16 Rollo, 20.
17 Roberto Telan, et al., v. Pedro Telan, et al., Civil Case No. 279, Regional Trail Court (Branch 16, Iligan),
September 12, 1990, Hon.
18 Rollo, 6.
19 CONST., art. III, states:
Sec. 12(1) Any person under investigation for the commission of an offense shall have the right to be informed of
his right to remain silent and to have competent and independent counsel preferably of his own choice. If the
person cannot afford the services of counsel, he must be provided with on. These rights cannot be waived except
in writing and in the presence of counsel.
Sec. 14(2) In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and
shall enjoy the right to be heard by himself and counsel, to be informed of nature and cause of the accusation
against him, to have a speedy trial, to meet the witnesses face to face, and to have compulsory process to secure
the attendance of witnesses and the production of evidence in his behalf. However, after arraignment, trial may
proceed notwithstanding the absence of the accused provided that he has been duly notified and his failure to
appear is unjustifiable.
20 People v. Holgado, 85 Phil. 752, 756-757 (1950) Flores v. Ruiz, No. L-35707, May 31, 1979, 90 SCRA 432433; and Delgado v. Court of Appeals, No. L-46392, Nov. 10, 1986, 145 SCRA 360.
21 THE CODE OF PROFESSIONAL RESPONSIBILITY, Canon 14 states:
xxx xxx xxx
Rule 14.01 A lawyer shall not decline to represent a person solely on account of the latter's sex, race, creed or
status of life, or because of his own opinion regarding the guilt of said person.
xxx xxx xxx
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