CIVIL PROCEDURE

PLEADINGS ALLOWED UNDER THE RULES ON SUMMARY PROCEDURE

G.R. No. 170483 April 19, 2010

MANUEL C. BUNGCAYAO, SR., represented in this case by his Attorney-in-fact ROMEL R.
BUNGCAYAO,Petitioner,
vs.
FORT ILOCANDIA PROPERTY HOLDINGS, AND DEVELOPMENT CORPORATION, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 21 November 2005 Decision2 of the Court of Appeals
in CA-G.R. CV No. 82415.
The Antecedent Facts
Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs who introduced
improvements on the foreshore area of Calayab Beach in 1978 when Fort Ilocandia Hotel started its
construction in the area. Thereafter, other entrepreneurs began setting up their own stalls in the foreshore
area. They later formed themselves into the DSierto Beach Resort Owners Association, Inc. (DSierto).
In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred, ceded, and conveyed to
the Philippine Tourism Authority (PTA) pursuant to Presidential Decree No. 1704. Fort Ilocandia Resort
Hotel was erected on the area. In 1992, petitioner and other DSierto members applied for a foreshore
lease with the Community Environment and Natural Resources Office (CENRO) and was granted a
provisional permit. On 31 January 2002, Fort Ilocandia Property Holdings and Development Corporation
(respondent) filed a foreshore application over a 14-hectare area abutting the Fort Ilocandia Property,
including the 5-hectare portion applied for by DSierto members. The foreshore applications became the
subject matter of a conflict case, docketed Department of Environment and Natural Resources (DENR)
Case No. 5473, between respondent and DSierto members. In an undated Order,3 DENR Regional
Executive Director Victor J. Ancheta denied the foreshore lease applications of the DSierto members,
including petitioner, on the ground that the subject area applied for fell either within the titled property or
within the foreshore areas applied for by respondent. The DSierto members appealed the denial of their
applications. In a Resolution4 dated 21 August 2003, then DENR Secretary Elisea G. Gozun denied the
appeal on the ground that the area applied for encroached on the titled property of respondent based on
the final verification plan.
In a letter dated 18 September 2003,5 respondent, through its Public Relations Manager Arlene de
Guzman, invited the DSierto members to a luncheon meeting to discuss common details beneficial to all
parties concerned. Atty. Liza Marcos (Atty. Marcos), wife of Governor Bongbong Marcos, was present as
she was asked by Fort Ilocandia hotel officials to mediate over the conflict among the parties. Atty. Marcos
offered 300,000 as financial settlement per claimant in consideration of the improvements introduced,
on the condition that they would vacate the area identified as respondents property. A DSierto member
made a counter-offer of 400,000, to which the other DSierto members agreed.
Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting, manifested that he still
had to consult his parents about the offer but upon the undue pressure exerted by Atty. Marcos, he
accepted the payment and signed the Deed of Assignment, Release, Waiver and Quitclaim6 in favor of
respondent.
Petitioner then filed an action for declaration of nullity of contract before the Regional Trial Court of Laoag,
City, Branch 13 (trial court), docketed as Civil Case Nos. 12891-13, against respondent. Petitioner alleged
that his son had no authority to represent him and that the deed was void and not binding upon him.
Respondent countered that the area upon which petitioner and the other DSierto members constructed
their improvements was part of its titled property under Transfer Certificate of Title No. T-31182.
Respondent alleged that petitioners sons, Manuel, Jr. and Romel, attended the luncheon meeting on their
own volition and they were able to talk to their parents through a cellular phone before they accepted
respondents offer. As a counterclaim, respondent prayed that petitioner be required to return the amount
of 400,000 from respondent, to vacate the portion of the respondents property he was occupying, and
to pay damages because his continued refusal to vacate the property caused tremendous delay in the
planned implementation of Fort Ilocandias expansion projects.
In an Order7 dated 6 November 2003, the trial court confirmed the agreement of the parties to cancel the
Deed of Assignment, Release, Waiver and Quitclaim and the return of 400,000 to respondent.
Petitioners counsel, however, manifested that petitioner was still maintaining its claim for damages
against respondent.
Petitioner and respondent agreed to consider the case submitted for resolution on summary judgment.
Thus, in its Order8 dated 28 November 2003, the trial court considered the case submitted for resolution.
Petitioner filed a motion for reconsideration, alleging that he manifested in open court that he was
withdrawing his earlier manifestation submitting the case for resolution. Respondent filed a Motion for
Summary Judgment.
The trial court rendered a Summary Judgment9 dated 13 February 2004.
The Decision of the Trial Court
The trial court ruled that the only issue raised by petitioner was his claim for damages while respondents
issue was only his claim for possession of the property occupied by petitioner and damages. The trial court
noted that the parties already stipulated on the issues and admissions had been made by both parties.
The trial court ruled that summary judgment could be rendered on the case.
The trial court ruled that the alleged pressure on petitioners sons could not constitute force, violence or
intimidation that could vitiate consent. As regards respondents counterclaim, the trial court ruled that
based on the pleadings and admissions made, it was established that the property occupied by petitioner
was within the titled property of respondent. The dispositive portion of the trial courts decision reads:
WHEREFORE, the Court hereby renders judgment DISMISSING the claim of plaintiff for damages as it is
found to be without legal basis, and finding the counterclaim of the defendant for recovery of possession
of the lot occupied by the plaintiff to be meritorious as it is hereby GRANTED. Consequently, the plaintiff is
hereby directed to immediately vacate the premises administratively adjudicated by the executive
department of the government in favor of the defendant and yield its possession unto the defendant. No
pronouncement is here made as yet of the damages claimed by the defendant.
SO ORDERED.10
Petitioner appealed from the trial courts decision.
The Decision of the Court of Appeals
In its 21 November 2005 Decision, the Court of Appeals affirmed the trial courts decision in toto.
The Court of Appeals sustained the trial court in resorting to summary judgment as a valid procedural
device for the prompt disposition of actions in which the pleadings raise only a legal issue and not a
genuine issue as to any material fact. The Court of Appeals ruled that in this case, the facts are not in
dispute and the only issue to be resolved is whether the subject property was within the titled property of
respondent. Hence, summary judgment was properly rendered by the trial court.
The Court of Appeals ruled that the counterclaims raised by respondent were compulsory in nature, as
they arose out of or were connected with the transaction or occurrence constituting the subject matter of
the opposing partys claim and did not require for its adjudication the presence of third parties of whom
the court could not acquire jurisdiction. The Court of Appeals ruled that respondent was the rightful
owner of the subject property and as such, it had the right to recover its possession from any other person
to whom the owner has not transmitted the property, including petitioner.
The dispositive portion of the Court of Appeals decision reads:
WHEREFORE, the assailed decision dated February 13, 2004 of the Regional Trial Court of Laoag City,
Branch 13 is hereby AFFIRMED in toto.
SO ORDERED.11
Thus, the petition before this Court.
The Issues
Petitioner raises the following issues in his Memorandum:12
1. Whether respondents counterclaim is compulsory; and
2. Whether summary judgment is appropriate in this case.
The Ruling of this Court
The petition has merit.
Compulsory Counterclaim
A compulsory counterclaim is any claim for money or any relief, which a defending party may have against
an opposing party, which at the time of suit arises out of, or is necessarily connected with, the same
transaction or occurrence that is the subject matter of the plaintiffs complaint.13 It is compulsory in the
sense that it is within the jurisdiction of the court, does not require for its adjudication the presence of
third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not set up
in the answer to the complaint in the same case.14Any other counterclaim is permissive.15
The Court has ruled that the compelling test of compulsoriness characterizes a counterclaim as
compulsory if there should exist a logical relationship between the main claim and the counterclaim.16 The
Court further ruled that there exists such a relationship when conducting separate trials of the respective
claims of the parties would entail substantial duplication of time and effort by the parties and the court;
when the multiple claims involve the same factual and legal issues; or when the claims are offshoots of the
same basic controversy between the parties.17
The criteria to determine whether the counterclaim is compulsory or permissive are as follows:
(a) Are issues of fact and law raised by the claim and by the counterclaim largely the same?
(b) Would res judicata bar a subsequent suit on defendants claim, absent the compulsory rule?
(c) Will substantially the same evidence support or refute plaintiffs claim as well as defendants
counterclaim?
(d) Is there any logical relations between the claim and the counterclaim?
A positive answer to all four questions would indicate that the counterclaim is compulsory.18
In this case, the only issue in the complaint is whether Manuel, Jr. is authorized to sign the Deed of
Assignment, Release, Waiver and Quitclaim in favor of respondent without petitioners express approval
and authority. In an Order dated 6 November 2003, the trial court confirmed the agreement of the parties
to cancel the Deed of Assignment, Release, Waiver and Quitclaim and the return of 400,000 to
respondent. The only claim that remained was the claim for damages against respondent. The trial court
resolved this issue by holding that any damage suffered by Manuel, Jr. was personal to him. The trial court
ruled that petitioner could not have suffered any damage even if Manuel, Jr. entered into an agreement
with respondent since the agreement was null and void.
Respondent filed three counterclaims. The first was for recovery of the 400,000 given to Manuel, Jr.; the
second was for recovery of possession of the subject property; and the third was for damages. The first
counterclaim was rendered moot with the issuance of the 6 November 2003 Order confirming the
agreement of the parties to cancel the Deed of Assignment, Release, Waiver and Quitclaim and to return
the 400,000 to respondent. Respondent waived and renounced the third counterclaim for damages.19
The only counterclaim that remained was for the recovery of possession of the subject property. While this
counterclaim was an offshoot of the same basic controversy between the parties, it is very clear that it will
not be barred if not set up in the answer to the complaint in the same case. Respondents second
counterclaim, contrary to the findings of the trial court and the Court of Appeals, is only a permissive
counterclaim. It is not a compulsory counterclaim. It is capable of proceeding independently of the main
case.
The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the counterclaimant is
bound to pay the prescribed docket fees.20 Any decision rendered without jurisdiction is a total nullity and
may be struck down at any time, even on appeal before this Court.21 In this case, respondent did not
dispute the non-payment of docket fees. Respondent only insisted that its claims were all compulsory
counterclaims. As such, the judgment by the trial court in relation to the second counterclaim is
considered null and void22 without prejudice to a separate action which respondent may file against
petitioner.1avvphi1
Summary Judgment
Section 1, Rule 35 of the 1997 Rules of Civil Procedure provides:
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 judgment in his favor
upon all or any part thereof.
Summary judgment has been explained as follows:
Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and
useless delays. When the pleadings on file show that there are no genuine issues of fact to be tried, the
Rules allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are
not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts.
Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A "genuine
issue" is such issue of fact which requires the presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim. Section 3 of the said rule provides two (2) requisites for summary
judgment to be proper: (1) there must be no genuine issue as to any material fact, except for the amount
of damages; and (2) the party presenting the motion for summary judgment must be entitled to a
judgment as a matter of law. A summary judgment is permitted only if there is no genuine issue as to any
material fact and a moving party is entitled to a judgment as a matter of law. A summary judgment is
proper if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and
admissions presented by the moving party show that such issues are not genuine.23
Since we have limited the issues to the damages claimed by the parties, summary judgment has been
properly rendered in this case.
WHEREFORE, we MODIFY the 21 November 2005 Decision of the Court of Appeals in CA-G.R. CV No.
82415 which affirmed the 13 February 2004 Decision of the Regional Trial Court of Laoag City, Branch 13,
insofar as it ruled that respondents counterclaim for recovery of possession of the subject property is
compulsory in nature. We DISMISS respondents permissive counterclaim without prejudice to filing a
separate action against petitioner.
SO ORDERED.
G.R. No. 101747 September 24, 1997
PERFECTA QUINTANILLA, petitioner,
vs.
COURT OF APPEALS ** and RIZAL COMMERCIAL BANKING CORPORATION, respondents.

FRANCISCO, J.:
The antecedents, as found by the trial court and affirmed by the Court of Appeals (CA), are as follows:
Defendant, . . . (respondent RCBC) is a commercial banking institution, organized under existing laws,
doing business through its duly accredited offices in the City of Cebu.
On 12 July 1983, plaintiff (petitioner) executed a Real Estate Mortgage on a parcel of land, situated in
the City of Cebu, under TCT No. 39409, in favor of defendant, RCBC, to secure a credit line in the
amount of P45,000.00. Plaintiff availed, from this collateralized credit line, the amount of P25,000.00
only, secured and evidenced by promissory note no. 84/615 in the said sum of P25,000.00, with
interest at the rate of 38% per annum, on 23 October 1984.
Plaintiff, Perfecta Quintanilla, who is engaged in business, under the name and style, Cebu Cane
Products, exports rattan products abroad. In connection therewith, she established with defendant,
RCBC, advance credit line, for her export bills against Letters of Credit from her customers abroad.
Also, on an even date, 23 October 1984, plaintiff secured from defendant, RCBC, a loan or
P100,000.00, against her advance export credit line, secured by promissory note no. 84/614, on a
maturing period, one month from thence.
Again on November 8, 1984, plaintiff secured another advance credit of P100,000.00 against her
advance export credit line, which she again secured by another promissory note no. 84/032, of even
date.
On 20 November 1984, plaintiff shipped stocks of her Cane Products to her buyer in Belgium, upon a
Letter of Credit, under Export Bill No. 84/199, in the amount of US $10,638.15. Defendant, RCBC,
received the proceeds of this export shipment, in the amount of P208,630.00, from Bank Brussels
Lambert-New York.
The full amount of the proceeds, was therefore credited to plaintiff's Current Account No. 218 with
defendant bank. Defendant RCBC, then debited plaintiff's current account, in the amount of
P125,000.00 as payment for the latter's loan of P100,000.00 to promissory note no. 84/614 and
P25,000.00 to promissory note no. 84/615. The latter amount was what plaintiff secured by the Real
Estate Mortgage, Exhibit "A".
On November 27, 1984, plaintiff made another shipment from her Cebu Cane Products, under Export
Bill No. 84-205 for US $10,083.00. Consequently, RCBC sent the export documents to the issuing bank
for collection of this, latter export shipment.
However, on November 28, 1984, the issuing bank, Brussels Lambert-Belgium, refused payment on
Export Bill No. 84-199, and demanded reimbursement from defendant, RCBC, the amount of US
$20,721.70, invoking its right for immediate reimbursement, under Art. 16 of the International
Chamber of Commerce (ICC) Publication 400 through telex, to which plaintiff was so notified by
defendant, RCBC. The latter, subsequently advised plaintiff to communicate and arrange matters with
her buyers and customers in Belgium. After persistent demand for reimbursement, from Bank
Brussels Lambert-Belgium, defendant, RCBC, returned and reimbursed the total sum of US
$20,721.70 to Bank Brussels Lambert-Belgium.
RCBC, then proceeded to revert the credit and debit entries on plaintiff's current account, which it
supposedly paid to promissory note nos. 84/614 and 84/615 and demanded payments from the
plaintiff, the whole amount, including the amount of P25,000.00, it collaterized by the real estate
 mortgage, Exh. "A".1
For failing to comply with the demands, RCBC sought to foreclose the real estate mortgage, not only for
the amount of P25,000.00 but also for the amount of P500,994.39 which represents petitioner's
subsequent credit accommodations. RCBC alleged that the latter amount was likewise secured under the
mortgage contract.
Rejecting RCBC's claim, petitioner filed an action for specific performance, damages and attorney's fees
with prayer for a writ of preliminary injunction, alleging that the obligation for which the mortgage was
executed was only for the maximum amount of P45,000.00 and that petitioner had already paid her other
unsecured loans. RCBC filed an answer denying petitioner's claim and set up a counterclaim for the
payment of all her other outstanding loans totalling P500,694.39.
After trial, the RTC rendered judgment, the dispositive portion of which reads:
WHEREFORE, the writ or preliminary injunction, issued by this Court is hereby lifted. The defendant,
RCBC, and defendant's may proceed to foreclose the real estate mortgage for the satisfaction of
plaintiff's obligation of P25,000.00 plus stipulated interests thereon in accordance with the terms
thereof, but not to satisfy the other obligation of the plaintiff in excess thereof, which the said
mortgage did not secure, therefor. No pronouncement as to costs.
SO ORDERED.2
RCBC appealed to the CA imputing error to the trial court in not granting its counterclaim and in ruling that
the foreclosure of the mortgage was limited to the P25,000.00 availed of by petitioner. The CA affirmed
the RTC ruling in so far as the foreclosure was limited to the amount of P25,000.00 but modified the same
by granting the counterclaim. The dispositive portion of the CA decision provides:
Premises considered, We affirm the appealed decision with the modification consisting of ordering
the appellee to pay the appellant, on the latter's counter-claims, the sum of P500,694.39 due as of
May 22, 1987 plus interest on the principal sum of P298,097.47 at the rate of 18% per annum from
May 23, 1987 and penalty charges of 12%, per annum from the same date, until fully paid, and the
sum of P8,000.00 as reasonable attorney's fees plus the costs.
SO ORDERED.3
Aggrieved, petitioner moved for a partial reconsideration, arguing for the first time that respondent
RCBC's counterclaim is permissive in nature for which the trial court has not acquired jurisdiction due to
the non-payment of the docket fees. Petitioner's motion was denied by the CA, though it amended its
earlier decision by ordering respondent RCBC to pay docket fees on the
counterclaim.4 Hence this petition.
The pivotal issue is whether respondent RCBC's counterclaim is compulsory or permissive in nature, the
resolution of which hinges on the interpretation of the following provision in the real estate mortgage
which reads:
That for and in consideration of certain loans overdrafts and other credit accommodations obtained
from the mortgagee by the same and those that hereafter be obtained, the principal of all of which is
hereby fixed at forty-five Thousand Pesos (P45,000.00), Philippine Currency, as well as those that the
mortgagee may extend to the mortgagor including interest and expenses of any other obligation
owing to the mortgagee, whether direct or indirect, principal or secondary, as appears in the
accounts, books and records of the mortgagee, the mortgagor does hereby transfer and convey by
way of mortgage unto the mortgagee . . . (emphasis supplied).5
We disagree with the CA's ruling that RCBC's counterclaim is permissive. In Ajax Marketing & Development
Corporation vs. Court of Appeals,6 a substantially similar provision appears, to wit:
That for and in consideration of credit accommodations obtained from the MORTGAGEE
(Metropolitan Bank and Trust Company), by the MORTGAGOR and/or AJAX MKTG. & DEV. CORP./AJAX
 MARKETING COMPANY/YLANG-YLANG MERCHANDISING COMPANY detailed as follows:
Nature Date Granted Due Amount or Line
Date
Loans and/or P600,000.00
Advances in 150,000.00
current account 250,000.00
and to secure the payment of the same and those that may hereafter be obtained including the
renewals or extension thereof.
xxx xxx xxx
the principal of all of which is hereby fixed at (P600,000.00/P150,000.00/P250,000.00). . . as well as
those that the MORTGAGEE may have previously extended or may later extend to the MORTGAGOR,
including interest and expenses or any other obligation owing to the MORTGAGEE, whether direct or
indirect, principal or secondary, as appears in the accounts, books and records of the MORTGAGEE,
the MORTGAGOR hereby transfer and convey by way of mortgage unto the MORTGAGEE, . . . .
This Court in the "Ajax" case, in upholding the validity of the extra-judicial foreclosure of mortgage which
included the loans obtained in excess of the amount fixed in the mortgage contract as expressed in said
proviso, ruled that:
An action to foreclose a mortgage is usually limited to the amount mentioned in the mortgage, but
where on the four corners of the mortgage contracts, as in this case, the intent of the contracting
parties is manifest that the mortgage properly shall also answer for future loans or advancements,
then the same is not improper as it is valid and binding between the parties.7 (Emphasis supplied).
The amount stated in the mortgage contract between petitioner and RCBC does not limit the amount for
which it may stand as security considering that under the terms of that contract, the intent to secure
future indebtedness is apparent. It would have been different if the mortgage contract in the case at bar
simply provides that it was intended only "to secure the payment of the same and those that may
hereafter be obtained the principal of all of which is hereby fixed at P45,000.00. . ."8 Yet the parties to the
mortgage contract further stipulated: ". . . as well as those that the Mortgagee may extend to the
Mortgagor".9 The latter phrase clearly means that the mortgage is not limited to just the fixed amount but
also covers other credit accommodations in excess thereof. Thus, the general rule that mortgage must be
limited to the amount mentioned in the mortgage cannot be applied herein. Rather by specific provision
and agreement of the parties, the mortgage contract was designed to secure even future advancements.10
Having determined that the mortgage contract extends even to petitioner's other advances in excess of
the P25,000.00, RCBC's counterclaim for such other advances cannot but be considered as compulsory in
nature. Such counterclaim necessarily arises out of the transaction or occurrence that is the subject matter
of petitioner's claim which is to enjoin the foreclosure of the latter's other credit accommodations in
excess of P25,000.00. It thus satisfies the "compelling test of compulsoriness" which requires "a logical
relationship between the claim and counterclaim, that is, where conducting separate trials of the
respective claims of the parties would entail a substantial duplication of effort and time by the parties and
the court."11 Both claims are merely offshoots of the same basic controversy.12 Moreover, RCBC's
counterclaim does not require for its adjudication the presence of third parties upon whom the court
cannot acquire jurisdiction and the court has jurisdiction to entertain the
claim. 13
RCBC's counterclaim being compulsory in nature, there is no need to pay docket fees therefor.
Nevertheless, RCBC is still bound to pay the docket fees as ordered by the CA in its August 19, 1991
Resolution, having failed to appeal therefrom. The entrenched procedural rule in this jurisdiction is that a
party who has not himself appealed cannot obtain from the appellate court any affirmative relief other
than those granted in the decision of the lower court.14
Finally, even granting that RCBC's counterclaim is permissive where the trial court has no/cannot exercise
jurisdiction over said claim unless/until the corresponding docket fees therefor have been paid, petitioner
is however barred by estoppel from challenging the trial court's jurisdiction. We quote with approval the
CA's observation in this matter.
. . . The record clearly shows that never once, during the proceedings below, was the question of
docket fees and of jurisdiction raised by the appellee. Not only did appellee not bother to answer
counterclaim but she did [not] even hint at it in her memorandum, notwithstanding that the Bank
adduced the required evidence to prove the counterclaim which was included in the Bank's former
(sic) offer of evidence (EXG. C, Record, pp. 114-117). Neither was the issue raised in appellee's brief,
again notwithstanding the fact that the counterclaim is the subject of the first and second errors of
the brief of the Bank, against which appellee did not raise a single argument. The issue surfaced for
the first time in the motion for partial reconsideration filed by the appellee.
The objection should have been raised more seasonably, before the trial court or at the very least in
appellee's brief. In the circumstances appellee is barred by laches from raising the question of
jurisdiction at this very late stage (Vide Maersk vs. Court of Appeals, 187 SCRA 646).15
In addition, it has been consistently held by this Court that while jurisdiction may be assailed at any stage,
a party's active participation in the proceedings before a court without jurisdiction will estop such party
from assailing such lack of it. It is an undesirable practice of a party participating in the proceedings and
submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for
lack of jurisdiction, when adverse.16
WHEREFORE, save for the modification anent the nature of RCBC's counterclaim and its related incidents,
the decision of the Court of Appeals promulgated October 31, 1990 as amended by its Resolution
promulgated August 19, 1991 is hereby AFFIRMED in all other respects.
SO ORDERED.
PARTS OF A PLEADING: VERIFICATION
G.R. No. 192650 October 24, 2012
FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL, JONATHAN PAILAGO, ERNESTO
MONTANO, DOYONG JOSE, DEO MAMALATEO, ROSELO MAGNO, BONNIE SANTILLAN, ARSENIO
GONZALES, ALEX EDRADAN, MICHAEL ERASCA, MARLON MONTANO, VICENTE OLIVEROS, REYNALDO
LAMBOSON, DOMINGO ROTA, EDDIE ROTA, ZALDY OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER
BUISON, MARIANO LAZATE, JUAN VILLABER, LIMUEL LLANETA, LITO BANTILO, TERSO GARAY, ROWEL
BESTOLO, JERRY YORTAS, PASTOR PANTIG, GAVINO NICOLAS, RAFAEL VILLA, FELIX YORTAS, MELVIN
GARAY, NEIL DOMINGUEZ REYNALDO EVANGELISTA, JR., JOSE RAMOS, ELVIN ROSALES, JUN GRANEHO,
DANNY ASPARES, SALVEDOR TONLOC, ROLANDO EVANGELISTA, RICKY M. FRANCISCO, EDUARDO
ALEGRIA, SALVADOR SANTOS, GREG BISONIA, RUFO CARBILLO, MARVIN MONTERO, DANILO BESSIRE,
ALLAN CABALLERO, ORLANDO LIMOS, EDGARDO BICLAR, MANDY MAMALATEO, ALFRED GAJO, ERIC
CASTRENCE, ANTHONY MOLINA, JAIME SALIM, ROY SILVA, DANILO BEGORIE, PEPING CALISANA, ERIC
RONDA, RUFO CARBANILLO, ROWEL BATA, RICARDO TOLENTINO, ARNEL ARDINEZ, FERDINAND R.
ARANDIA, ROMEO R. GARBO, ANTONIO ROTA, REYNIELANDRE QUINTANILLA, JOSELITO HILARIO, JIMMY
CAMPANA, DANILO LIDO-AN, EMERSON PENAFLOR, CESAR PABALINAS, JONATHAN MELCHOR, ALEX
DAVID, EUTIQUIO ALCALA, MICHAEL CARANDANG, EDUARDO MANUEL, RAMON EVANGELISTA, RUBEN
MENDOZA, ERNESTO MENDOZA, RICKY RAMOS, ROBERTO NOVELLA, RUBEN CONDE, DANILO POLISTICO,
DOMINGO MENDOZA, FERNANDO SAN GABRIEL, AND DOMINGO ROTO,Petitioners,
vs.
NEW SAN JOSE BUILDERS, INC., Respondent.
DECISION
MENDOZA, J.:
Questioned in this Petition for Review is the July 31, 2009 Decision1 of the Court of Appeals (CA) and its
June 17, 2010 Resolution,2 which reversed and set aside the July 30, 2008 Decision3 and October 28, 2008,
Resolution4 of the National Labor Relations Commission (NLRC); and reinstated the May 23, 2003 Decision5
of the Labor Arbiter (LA). The dispositive portion of the CA Decision reads:
WHEREFORE, decision is hereby rendered, as follows:
1. Declaring the complainant Felix Martos was illegally dismissed and ordering respondent New San Jose
Builders, Inc. to pay him his separation pay, backwages, salary differentials, 13th month pay, service
incentive leave pay, and attorneys fees in the total amount of TWO HUNDRED SIXTY THOUSAND SIX
HUNDRED SIXTY ONE PESOS and 50/1000 (P260, 661.50).
The awards for separation pay, backwages and the corresponding attorneys fees are subject to further
computation until the decision in this case becomes final and executory; and
2. Dismissing the complaints/claim of the other complainants without prejudice.
SO ORDERED.6
The Facts
The factual and procedural antecedents were succinctly summarized by the CA as follows:
New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and existing
under the laws of the Philippines and is engaged in the construction of road, bridges, buildings, and low
cost houses primarily for the government. One of the projects of petitioner is the San Jose Plains Project
(hereafter SJPP), located in Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the
construction of low cost housing, which are being turned over to the National Housing Authority to be
awarded to deserving poor families.
Private respondents alleged that, on various dates, petitioner hired them on different positions, hereunder
specified:
1wphi1

Names Date Employed Date Dismissed

1. Felix Martos October 5, 1998 February 25, 2002

2. Jimmy Eclana 1999 July 2001

3. Rodel Pilones February 1999 July 2001

4. Ronaldo Noval

5. Jonathan Pailago

6. Ernesto Montao 1998 2000

7. Doyong Jose 1996 July 2001

8. Deo Mamalateo 1999 July 2001

9. Roselo Magno 1994 November 2000

10. Bonnie Santillan 1998 July 2001

11. Arsenio Gonzales 1998 July 2001

12. Alex Edradan 1998 November 2001

13. Michael Erasca 1999 July 2001

14. Marlon Montao 1998 July 2001

15. Vicente Oliveros April 5, 1998 July 2001

16. Reynaldo Lamboson 1999 July 2001

17. Domingo Rota 1998

18. Eddie Rota 1998

19. Zaldy Oliveros 1999 July 2001

20. Antonio Natel 1998 July 2001

21. Hermie Buison 1998 July 2001

22. Roger Buison 1998 2000

23. Mariano Lazate February 19, 1995

24. Juan Villaber January 10, 1997

25. Limuel Llaneta March 5, 1994

26. Lito Bantilo May 1987

27. Terso Garay October 3, 1986

28. Rowel Bestolo February 6, 1999

29. Jerry Yortas May 1994

30. Pastor Pantig April 11,1998

31. Gavino Nicolas June 20, 1997

32. Rafael Villa March 9, 1998

33. Felix Yortas 1992

34. Melvin Garay February 2, 1994

35. Neil Dominguez February 16, 1998

36. Reynaldo Evangelista, Jr. October 10, 1998

37. Jose Ramos October 10, 1998

38. Elvis Rosales June 14, 1998

39. Jun Graneho January 15, 1998

40. Danny Espares April 1999

41. Salvador Tonloc January 8, 1998

42. Rolando Evangelista March 15, 1998

43. Ricky M. Francisco September 28, 1991

44. Eduardo Alegria May 2001

45. Salvador Santos September 22, 2000

46. Greg Bisonia March 28, 1993

47. Rufo Carbillo March 28, 1993

48. Marvin Montero 1997 January 2001

49. Danilo Bessiri 1997 2002

50. Allan Caballero 1997 2002

51. Orlando Limos 1997 July 2001

52. Edgardo Biclar 1997 July 2001

53. Mandy Mamalatco 1989 2002

54. Alfred Gajo 1998 July 2001

55. Eric Castrence 1988 2002

56. Anthony Molina 1997 2002

57. Jaime Salin

58. Roy Silva 1997 2002

59. Danilo V. Begorie 1994 January 2001

60. Peping Celisana 1999 July 2001

61. Eric Ronda 1998 July 2001

62. Rufo Carbanillo 1998 July 2001

63. Rowel Batta 1999 July 2001

64. Ricardo Tolentino 1997 July 2001

65. Arnel Ardinez 1998 July 2001

66. Ferdinand P. Arandia 1998 1999

67. Romeo R. Garbo 1998 2000

68. Antonio Rota 1998 July 2001

69. Reynielande Quintanilla February 28, 1998 2002

70. Joselito Hilario 1998 2002

71. Jimmy Campana August 15, 1998 August 2001

72. Danilo Lido-An September 8, 1998

73. Emerson Peaflor August 8,1998

74. Cesar Pabalinas

75. Jonathan Melchor November 1998

76. Alex David 1998

77. Eutiquio Alcala December 1999

78. Michael Carandang June 2000

79. Eduardo Nanuel October 1999

80. Ramon Evangelista February 15, 1998

81. Ruben Mendoza 1999 July 2001

82. Ernesto A. Mendoza 1998 July 2001

83. Ricky Ramos 1999 July 2001

 84. Roberto Novella 1998 July 2001

85. Ruben Conde 1998 July 2001

86. Ramon Evangelista 1997 July 2001

87. Danilo Polistico 1999 July 2001

88. Domingo Mendoza 1999 July 2001

89. Fernando San Gabriel 1999 July 2001

90. Domingo Roto 1994 July 2001

Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP
project due to lack of funds of the National Housing Authority. Thus, the workers were informed that many
of them [would] be laid off and the rest would be reassigned to other projects. Juan Villaber, Terso Garay,
Rowell Batta, Pastor Pantig, Rafael Villa, and Melvin Garay were laid off. While on the other hand, Felix
Martos, Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence,
Anthony Molina, and Roy Silva were among those who were retained and were issued new appointment
papers to their respective assignments, indicating therein that they are project employees. However, they
refused to sign the appointment papers as project employees and subsequently refused to continue to
work.
On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the
NLRC against petitioner and Jose Acuzar, by private respondents who claimed to be the former employees
of petitioner, to wit:
1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. vs. NSJBI", docketed as NLRC-NCR
Case No. 03-01639-2002;
2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. vs. NSJBI," docketed as NLRC-NCR
Case No. 07-04969-2002;
3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. NSJBI", docketed as NLRC-NCR Case
No. 07-02888-2002.
Petitioner denies that private respondents were illegally dismissed, and alleged that they were project
employees, whose employments were automatically terminated upon completion of the project for which
they were hired. On the other hand, private respondents claim that petitioner hired them as regular
employees, continuously and without interruption, until their dismissal on February 28, 2002.
Subsequently, the three Complaints were consolidated and assigned to Labor Arbiter Facundo Leda.7
Ruling of the Labor Arbiter
As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that
petitioner Felix Martos (Martos) was illegally dismissed and entitled to separation pay, backwages and
other monetary benefits; and dismissing, without prejudice, the complaints/claims of the other
complainants (petitioners).
Ruling of The NLRC
Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the
complaints, without prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc.
(respondent) appealed that part which held that Martos was its regular employee and that he was illegally
dismissed.
On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and partially
granting that of the other petitioners. The dispositive portion of the NLRC decision reads as follows:
WHEREFORE, premises considered, respondents appeal is DISMISSED for lack of merit. The appeal of the
complainants is, however, PARTIALLY GRANTED by modifying the 23 May 2003 Decision of the Labor
Arbiter Facundo L. Leda, in that, respondents are ordered to reinstate all the complainants to their former
positions, without loss of seniority rights and with full backwages, counted from the time their
compensation was withheld from them until actual reinstatement.
Respondents are likewise ordered to pay complainants their salary differentials, service incentive leave pay,
and 13th month pay, using, as basis, the computation made on the claims of complainant Felix Martos.
In all other aspects, the Decision is AFFIRMED.
SO ORDERED.8
Ruling Of The CA
After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari
under Rule 65 of the 1997 Rules of Civil Procedure, as amended, raising the following issues:
I) The public respondent has committed grave abuse of discretion in holding that the private
respondents were regular employees and, thus, have been illegally dismissed.
II) The public respondent has committed grave abuse of discretion in reviving the complaints of the
other private respondents despite their failure to verify the same.
III) The public respondent has committed grave abuse of discretion when it upheld the findings of the
Labor Arbiter granting relief in favor of those supposed complainants who did not even render
service to the petitioner and, hence, are not on its payroll.
On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision and the
October 28, 2008 Resolution of the NLRC and reinstating the May 23, 2003 Decision of the LA. The
dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly, the assailed
Resolution dated October 28, 2008 of public respondent National Labor Relations Commission is
REVERSED and SET ASIDE, and the Decision dated May 23, 2003 of Labor Arbiter Facundo L. Leda, is
hereby ordered reinstated.
SO ORDERED.9
The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of
petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified the
position paper and his counsel never offered any explanation for his failure to secure the verification of
the others. The CA also held that the NLRC gravely abused its discretion when it took cognizance of
petitioners appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil Procedure, as amended, which
is suppletory, provides that no appeal may be taken from an order dismissing an action without prejudice.
Nevertheless, the CA stated that the factual circumstances of Martos employment and his dismissal from
work could not equally apply to petitioners because they were not similarly situated. The NLRC did not
even bother to look at the evidence on record and inappropriately granted monetary awards to petitioners
who had either denied having filed a case or withdrawn the case against respondent. According to the CA,
the position papers should have covered only those claims and causes of action raised in the complaint
excluding those that might have been amicably settled.
With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination
was illegal. It explained that Martos should have been considered a regular employee because there was
no indication that he was merely a project employee when he was hired. To show otherwise, respondent
should have presented his employment contract for the alleged specific project and the successive
employment contracts for the different projects or phases for which he was hired. In the absence of such
document, he could not be considered such an employee because his work was necessary and desirable to
the respondents usual business and that he was not required to sign any employment contract fixing a
definite period or duration of his engagement. Thus, Martos already attained the status of a regular
employee. Moreover, the CA noted that respondent did not report the termination of Martos supposed
project employment to the Department of Labor and Employment (DOLE), as required under Department
Order No. 19.
Being a regular employee, the CA concluded that he was constructively dismissed when he was asked to
sign a new appointment paper indicating therein that he was a project employee and that his appointment
would be co-terminus with the project.
Not in conformity with the CA decision, petitioners filed this petition anchored on the following
ASSIGNMENT OF ERRORS
A
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER BELOW GRAVELY
ERRED IN DISMISSING THE COMPLAINTS OF THE NINETY NINE (99) PETITIONERS DUE TO FAILURE OF
THE LATTER TO VERIFY THEIR POSITION PAPER WHEN, OBVIOUSLY, SUCH TECHNICALITY SHOULD NOT
HAVE BEEN RESORTED TO BY THEM AS IT WILL DEPRIVE THESE PETITIONERS OF THEIR PROPERTY
RIGHT TO WORK.
B
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER BELOW GRAVELY
ERRED IN NOT ORDERING THE REINSTATEMENT OF PETITIONER MARTOS AND THE OTHER 99
PETITIONERS WHEN, OBVIOUSLY, AND AS FOUND BY THEM, THE DISMISSAL OF MARTOS IS ILLEGAL
WHICH WOULD WARRANT HIS REINSTATEMENT AND THE GRANT TO HIM OF FULL BACKWAGES AND
OTHER EMPLOYEES BENEFITS.
C
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT ORDERING THE
RESPONDENTS TO PAY THE PETITIONERS ACTUAL, MORAL AND EXEMPLARY DAMAGES.
Position of Petitioners
Petitioners basically argue that the CA was wrong in affirming the dismissal of their complaints due to their
failure to verify their position paper. They insist that the lack of verification of a position paper is only a
formal and not a jurisdictional defect. Hence, it was not fatal to their cause of action considering that the
CA could have required them to submit the needed verification.
The CA overlooked the fact that all of them verified their complaints by declaring under oath relevant and
material facts such as their names, addresses, employment status, salary rates, facts, causes of action, and
reliefs common to all of them. The information supplied in their complaints is sufficient to prove their
status of employment and entitlement of their monetary claims. In the adjudication of labor cases, the
adherence to stringent technical rules may be relaxed in the interest of the working man. Moreover,
respondent failed to adduce evidence of payment of their money claims.
Finally, petitioners argue that they and Martos were similarly situated. The award of separation pay
instead of reinstatement to an illegally dismissed employee was improper because the strained relations
between the parties was not clearly established. Moreover, they are entitled to actual, moral and
exemplary damages for respondents illegal act of violating labor standard laws, the minimum wage law
and the 13th month pay law.
Position of Respondents
On the other hand, respondent principally counters that the CA and the LA 1) did not err in dismissing the
complaints of the 88 petitioners who failed to verify their position paper, without prejudice; 2) correctly
ruled that Martos and the 88 petitioners concerned were not entitled to reinstatement; and 3) correctly
ruled that petitioners were not entitled to an award of actual, moral and exemplary damages.
Petitioners have the propensity to disregard the mandatory provisions of the 2005 Revised Rules of
Procedure of the NLRC (NLRC Rules) which require the parties to submit simultaneously their verified
position papers with supporting documents and affidavits. In the proceedings before the LA, the
complaints of the 99 workers were dismissed because they failed to verify or affix their signatures to the
position paper filed with the LA.
While it is true that the NLRC Rules must be liberally construed and that the NLRC is not bound by the
technicalities of law and procedure, it should not be the first to arbitrarily disregard specific provisions of
the rules which are precisely intended to assist the parties in obtaining just, expeditious and inexpensive
settlement of labor disputes. It was only Felix Martos who verified their position paper and their
memorandum of appeal. It was only he alone who was vigilant in looking after his interest and enforcing
his rights. Petitioners should be considered to have waived their rights and interests in the case for their
consistent neglect and passive attitude.
Moreover, Martos was never authorized by any of his fellow complainants through a special power of
attorney or other document in the proceedings to represent them before the LA and the NLRC. His acts
and verifications were made only in his own personal capacity and did not bind or benefit petitioners.
There is only one logical reason why a majority of them failed to verify their position paper, their appeal
and now their petition: they were not in any way employees of the respondent. They were total strangers
to the respondent. They even refused to identify themselves during the proceedings by their failure to
appear thereat. Hence, it is too late for the others to participate in the fruits, if any, of this litigation.
Finally, the reinstatement being sought by Martos and the others was no longer practicable because of the
strained relation between the parties. Petitioners can no longer question this fact. This issue was never
raised or taken up on appeal before the NLRC. It was only when the petitioners lost in the appeal in the CA
that they first raised the issue of strained relation. Moreover, no proof of actual damages was presented
by the petitioners. There is no clear and convincing evidence on record showing that the termination of an
employees services had been carried out in an arbitrary, capricious or malicious manner.
The Courts Ruling
The Court is basically asked to resolve two (2) issues: 1 whether or not the CA was correct in dismissing the
complaints filed by those petitioners who failed to verify their position papers; and 2 whether or not
Martos should be reinstated.
Regarding the first issue, the Court agrees with the respondent.
Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:
SEC. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be
under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein
are true and correct of his personal knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on "information and belief" or upon
"knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned
pleading.
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed
or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or
non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions. x x x.
[Emphases supplied]
The verification requirement is significant, as it is intended to secure an assurance that the allegations in
the pleading are true and correct and not the product of the imagination or a matter of speculation, and
that the pleading is filed in good faith.10 Verification is deemed substantially complied with when, as in this
case, one who has ample knowledge to swear to the truth of the allegations in the complaint or petition
signs the verification, and when matters alleged in the petition have been made in good faith or are true
and correct.11
The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.12
The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign
for them. Unfortunately, petitioners failed to adduce proof that he was so authorized. The complaints of
the other parties in the case of Nellie Vda. De Formoso v. v. PNB13 suffered a similar fate. Thus:
Admittedly, among the seven (7) petitioners mentioned, only Malcaba signed the verification and
certification of non-forum shopping in the subject petition. There was no proof that Malcaba was
authorized by his co-petitioners to sign for them. There was no special power of attorney shown by the
Formosos authorizing Malcaba as their attorney-in-fact in filing a petition for review on certiorari. Neither
could the petitioners give at least a reasonable explanation as to why only he signed the verification and
certification of non-forum shopping.
The liberal construction of the rules may be invoked in situations where there may be some excusable
formal deficiency or error in a pleading, provided that the same does not subvert the essence of the
proceeding and it at least connotes a reasonable attempt at compliance with the rules. Besides,
fundamental is the precept that rules of procedure are meant not to thwart but to facilitate the
attainment of justice; hence, their rigid application may, for deserving reasons, be subordinated by the
need for an apt dispensation of substantial justice in the normal course. They ought to be relaxed when
there is subsequent or even substantial compliance, consistent with the policy of liberality espoused by
Rule 1, Section 6.14 Not being inflexible, the rule on verification allows for such liberality.15
Considering that the dismissal of the other complaints by the LA was without prejudice, the other
complainants should have taken the necessary steps to rectify their procedural mistake after the decision
of the LA was rendered. They should have corrected this procedural flaw by immediately filing another
complaint with the correct verification this time. Surprisingly, they did not even attempt to correct this
technical blunder. Worse, they committed the same procedural error when they filed their appeal16 with
the NLRC.
Under the circumstances, the Court agrees with the CA that the dismissal of the other complaints were
brought about by the own negligence and passive attitude of the complainants themselves. In Formoso,
the Court further wrote:
The petitioners were given a chance by the CA to comply with the Rules when they filed their motion for
reconsideration, but they refused to do so. Despite the opportunity given to them to make all of them sign
the verification and certification of non-forum shopping, they still failed to comply. Thus, the CA was
constrained to deny their motion and affirm the earlier resolution.
The Court can only do so much for them.
Most probably, as the list17 submitted is not complete with the information as to when each started and
when each was dismissed there must be some truth in the claim of respondent that those complainants
who failed to affix their signatures in the verification were either not employees of respondent at all or
they simply refused to prosecute their complaints. In its position paper,18 respondent alleged that, aside
from the four (4) complainants who withdrew their complaints, only 17 out of the more or less 104
complainants appeared on its records as its former project employees or at least known by it to have
worked in one of its construction projects. From the sworn statements executed by Felix Yortas,19 Marvin
Batta,20
Lito Bantillo,21 Gavino Felix Nicolas,22 and Romeo Pangacian Martos,23 they already withdrew their
complaints against respondent. Their status and cause of action not being clear and proven, it is just not
right that these complaints be considered as similarly situated as Martos and entitled to the same
benefits.
As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable
because of strained relation between the parties. Indeed, he can no longer question this fact. This issue
was never raised or taken up on appeal before the MLRC. It was only after he lost the appeal in the CA that
he raised it.
Thus, the Court deems it fair to award separation pay in lieu of reinstatement.1wphi1 In addition to his
separation pay. Martos is also entitled to payment of full backwages, 13th month pay, service incentive
leave pay, and attorneys fees.
The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no
longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise
be awarded if the employee decides not to be reinstated.
Under the doctrine of stained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter opinion is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be highly oppressive work environment. On the other
hand, it release the employer from the grossly unpalatable obligation of maintaining in its employ a
worker it could no longer trust.24
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 195191 March 20, 2012
CONGRESSWOMAN LUCY MARIE TORRES-GOMEZ, petitioner,
vs.
EUFROCINO C. CODILLA, JR. AND HON. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL,respondents.
DECISION
SERENO, J.:
This is a Petition for Certiorari under Rule 65 of the Rules of Court, with application for Temporary
Restraining Order and/or Writ of Preliminary Prohibitory Injunction. The Petition seeks to annul and set
aside Resolution No. 10-482 of the Mouse of Representatives Electoral Tribunal (HRET) in HRET Case No.
10-009 (EP) entitled "Eufrocino C. Codilla, Jr. v. Lucy Marie Torres-Gomez (Fourth District, Leyte)," which
denied the Motion for Reconsideration filed by petitioner.
Statement of the Facts and the Case
On 30 November 2009, Richard I. Gomez (Gomez) filed his Certificate of Candidacy for representative of
the Fourth Legislative District of Leyte under the Liberal Party of the Philippines. On even date, private
respondent Codilla Jr. filed his Certificate of Candidacy for the same position under Lakas Kampi CMD.
On 6 December 2009, Buenaventura O. Juntilla (Juntilla), a registered voter of Leyte, filed a Verified
Petition for Gomez's disqualification with the Commission on Elections (COMELEC) First Division on the
ground that Gomez lacked the residency requirement for a Member of the Fiouse of Representatives.
In a Resolution dated 17 February 2010, the COMELEC First Division granted Juntilla's Petition and
disqualified Gomez. On 20 February 2010, the latter filed a Motion for Reconsideration with the COMELEC
En Banc, which dismissed it on 4 May 2010, six days before the May 2010 national, and local elections. The
dispositive portion of the COMELEC's Resolution1 is worded as follows:
WHEREFORE, premises considered, the motion for reconsideration filed by the Respondent is DISMISSED
for lack of merit. The Resolution of the Commission (First Division) is hereby AFFIRMED.
SO ORDERED.2
On the same date, Gomez filed a Manifestation with the COMELEC En Bane, alleging that, without
necessarily admitting the allegations raised by Juntilla, he was accepting the aforementioned Resolution
with finality, in order to enable his substitute to facilitate the filing of the necessary documents for
substitution.
On 5 May 2010, petitioner Lucy Marie Torres-Gomez filed her Certificate of Candidacy as substitute for the
position of representative of the Fourth Congressional District for the Province of Leyte vice Gomez, her
husband.
On 6 May 2010, Juntilla filed a Counter-Manifestation with the COMELEC En Banc. At the same time, he
wrote a letter to Atty. Ferdinand T. Rafanan, Director of the Law Department of the COMELEC, alleging the
invalidity of the proposed substitution of Gomez by petitioner.
On 8 May 2010, the COMELEC En Banc issued Resolution No. 8890, which approved and adopted the
recommendation of its Law Department to allow petitioner as a substitute candidate for Gomez for
representative of the Fourth Legislative District of Leyte.
On 9 May 2010, Juntilla filed an Extremely Urgent Motion for Reconsideration of the above COMELEC
Resolution No. 8890. Pending resolution of his motion, the national and local elections were conducted as
scheduled.
After the casting, counting and canvassing of votes in the said elections, petitioner emerged as the winner
with 101,250 votes or a margin of 24,701 votes over private respondent Codilla, who obtained 76,549
votes.
On 11 May 2010, Codilla filed an Urgent Ex-Parte Motion to Suspend the Proclamation of Substitute
Candidate Lucy Marie T. Gomez (vice Richard I. Gomez) as the Winning Candidate of the May 10, 2010
Elections for the Fourth Congressional District of Leyte.
On the same date, Juntilla filed an Extremely Urgent Motion to resolve the pending Motion for
Reconsideration filed on 9 May 2010 relative to Resolution No. 8890 and to immediately order the
Provincial Board of Canvassers of the Province of Leyte to suspend the proclamation of petitioner as a
Member of the House of Representatives, Fourth District, Province of Leyte.
On 12 May 2010, petitioner was proclaimed the winning candidate for the congressional seat of the
Fourth District of Leyte.
Accordingly, on 21 May 2010, private respondent Codilla filed a Petition with public respondent HRET
against petitioner docketed as HRET Case No. 10-009 (Election Protest).
On 2 July 2010, petitioner filed her Verified Answer to Codilla's Election Protest questioning the alleged
lack of the required Verification and praying for its dismissal.
On 8 July 2010, Codilla filed a Reply to petitioner's Verified Answer.
In an Order issued by public respondent HRET, the instant case was set for preliminary conference on 2
September 2010.
On 1 September 2010, unsatisfied with the Order of the HRET, petitioner filed an Urgent Manifestation
and Motion, persistent in her position that Codilla's Election Protest should be dismissed based on the
grounds raised in her Verified Answer. She also prayed for the deferment of the preliminary conference
until after the resolution of the said motion.1wphi1
On 9 September 2010, the HRET issued the assailed Resolution No. 10-2823 resolving the Urgent
Manifestation and Motion filed by petitioner, the dispositive portion of which provides:
The Tribunal NOTES the Urgent Manifestation and Motion filed on September 1, 2010 by the protestee;
REITERATES its ruling in Resolution No. 10-160 dated July 29, 2010 that the protest cannot be considered
insufficient in form, considering that the examination of the original copy of the protest filed before the
Tribunal had revealed the existence of the required verification; and DENIES the respondent's motion for
deferment of the preliminary conference scheduled on September 2, 2010.4
Accordingly, on 30 September 2010, petitioner filed with public respondent HRET a Motion for
Reconsideration of the above Resolution No. 10-282.
On 22 November 2010, public respondent HRET issued Resolution No. 10-4825 denying petitioner's Motion
for Reconsideration, ruling as follows:
WHEREFORE, the Tribunal DENIES the instant motion for reconsideration as regards the issues pertaining
to absence/defect of the verification and propriety of the election protest; and DIRECTS the protestant to
have his verification properly notarized.6
Thereafter, petitioner filed the instant Petition for Certiorari7 dated 7 February 2011. The Petition raises
the following grounds:
A.
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT REFUSED TO DISMISS THE ELECTION PROTEST DESPITE AN
ADMITTEDLY DEFECTIVE VERIFICATION.
B.
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
AND/OR EXCESS OF JURISDICTION WHEN Y ALLOWED THE PROTESTANT TO RAISE ISSUES ON
QUALIFICATION OF CANDIDATES IN AN ELECTION PROTEST.8
Petitioner claims that there was a material defect in the Verification of the Election Protest, a requirement
explicitly provided for in Rule 16 of the 2004 Rules of the House of Representatives Electoral Tribunal
(HREF Rules).9 The verification being a mandatory requirement, the failure to comply therewith is a fatal
defect that affects the very jurisdiction of the HRET.
On the second issue, petitioner claims that what is in question in the Election Protest is her qualification as
a Member of the House of Representatives, and not the number of votes cast. Her qualification is allegedly
not a proper ground for an election protest, in which the issues should be the appreciation of ballots and
the correctness and number of votes of each candidate.
On 15 February 2011 this Court required respondents to file their comment on the Petition. Thereafter,
Codilla filed his Comment/Opposition dated 28 April 2011. In his Comment, he argues that there was no
grave abuse of discretion on the part of the HREF in issuing the assailed Resolutions. He clarifies that the
Ejection Protest that he filed contained a validly executed Verification and Certification of Non-Forum
Shopping (Verification).10 However, the defect that petitioner points to is the portion of the jurat of the
Verification, which states:
Subscribed and sworn to before me this__ day of May 2010 at _____. Affiant personally and exhibited to
me his (1) License ID Card with Card No. 1103-80-002135 issued by LTO on January 16, 2009 (2) Philippine
Passport No. XX4793730 issued on "October 20, 2009 valid until October 19, 2014, he, being the same
person herein who executed the foregoing document thereof.11
The date "May 21 2009" was stamped on the first blank in "__ day of May 2010." "May 21 2010" was
written with a pen over the stamped date "May 21 2009" and countersigned by the notary public. Codilla
claims that the date of the Verification was a mere innocuous mistake or oversight, which did not warrant
a finding that the Verification was defective; much less, fatally defective. He claims he should not be
faulted for any alleged oversight that may have been committed by the notary public. Further, the same
argument holds true with respect to the absence of the Mandatory Continuing Legal Education (MCLE)
Compliance Number of the notary public, as well as the overdue Professional Tax Receipt (PTR) indicated
in the notarial stamp. In any case, the insufficiency of the Verification was not fatal to the jurisdiction of
the HRET.
With respect to the second issue, Codilla argues that the issues in the Election Protest do not pertain to
petitioner's qualification, but to the casting and counting of votes. He claims that his Election Protest
contests the declaration by the Board of Canvassers that the 101,250 votes should be counted in favor of
petitioner and be credited to him as these should have instead been declared as stray votes.
Thereafter, public respondent HRET filed its Comment12 on the Petition dated 5 May 2011. In its Comment,
the HRET claims that it did not commit grave abuse of discretion when it took cognizance of Codilla's
Election Protest despite an alleged absence/defect in the verification. After all, an unverified petition
differs from one which contains a defective verification, such as in this case. A defective verification is
merely a formal defect which does not affect the jurisdiction of the tribunal. In any case, the summary
dismissal of an Election Protest, as well as the allowance of its amendments in matters of form, is
sanctioned by the HRET Rules.
The HRET further argues that it did not commit grave abuse of discretion when it took cognizance of the
Election Protest. The issue raised in the Election Protest was the validity of petitioner's proclamation, in
view of her alleged invalid substitution. This is a matter that is addressed to the sound judgment of the
HRET.
On 7 June 2011, this Court, among others, required petitioner to file a reply to Codilla's Comment.
Petitioner later filed her Reply dated 15 August 2011, citing an additional ground for considering the
Verification as defective. She claimed that Codilla, a resident of Ormoc City, could not have possibly
appeared before a notary public in Quezon City; and that he failed to prove that he was indeed in Quezon
City when he supposedly verified the Election Protest.
The Court's Ruling
The Petition is dismissed for failure to show any grave abuse of discretion on the part of the HRET.
On the Allegedly Defective Verification
While the existence of the Verification is not disputed, petitioner notes three alleged defects. First, the
Election Protest was filed on 21 May 2010, but the Verification was allegedly subscribed and sworn to on
21 May 2009.13Second, Codilla, a resident of Ormoc City, could not have possibly appeared personally
before the notary public in Quezon City.14 Third, in the notarial stamp, the date of expiration of the notarial
commission was handwritten while all other details were stamped; the PTR indicated was issued in 2005;
there was no MCLE Compliance Number as required by Bar Matter No. 1922.15 Petitioner claims that due
to the lack of a proper verification, the Election Protest should have been treated as an unsigned pleading
and must be dismissed.
The alleged defects of the Verification are more apparent than real.
With respect to the date of the notarization, it is clear that the stamped date "2009" was a mere
mechanical error. In fact, the notary public had superimposed in writing the numbers "10" and
countersigned the alteration. Thus, this error need not be overly magnified as to constitute a defect in the
Verification.
With respect to the second alleged defect, there is a presumption that official duty has been regularly
performed with respect to the jurat of the Verification, wherein the notary public attests that it was
subscribed and sworn to before him or her, on the date mentioned thereon.16 Official duties are disputably
presumed to have been regularly performed. Thus, contrary to petitioner's allegation, there was no need
for Codilla to "attach his plane ticket to prove he flew from Ormoc City to Manila."17
Further, to overcome the presumption of regularity, clear and convincing evidence must be presented.18
Absent such evidence, the presumption must be upheld. The burden of proof to overcome the
presumption of due execution of a notarized document lies on the party contesting the execution.19 Thus,
petitioner's contention that she "had reliable information that [Codilla] was in Ormoc City on the date
indicated in the Verification" cannot be considered as clear and convincing evidence to rebut the
presumption that the document was duly executed and notarized.
With respect to the third alleged defect, the fact that some portions of the stamp of the notary public
were handwritten and some were stamped does not, in itself, indicate any defect. Further, Bar Matter No.
1922 merely requires lawyers to indicate in all pleadings filed before the courts or quasi-judicial bodies,
the number and date of issue of their MCLE Certificate of Compliance or Certificate of Exemption,
whichever is applicable - for the immediately preceding compliance period. Clearly, the regulation does
not apply to notarial acts. With respect to the PTR number which was dated 5 years prior to the date of
notarization, the deficiency merely entails the potential administrative liability of the notary public.20
In any case, there was no grave abuse of discretion on the part of the HRET in denying petitioner's Motion
to Dismiss the Election Protest and directing Codilla to have his Verification properly notarized.
It has been consistently held that the verification of a pleading is only a formal, not a jurisdictional,
requirement. The purpose of requiring a verification is to secure an assurance that the allegations in the
petition are true and correct, not merely speculative. This requirement is simply a condition affecting the
form of pleadings, and noncompliance therewith does not necessarily render the pleading fatally
defective.21
This Court has emphasized that in this species of controversy involving the determination of the true will
of the electorate, time is indeed of paramount importance. An election controversy, by its very nature,
touches upon the ascertainment of the people's choice as gleaned from the medium of the ballot. For this
reason, an election protest should be resolved with utmost dispatch, precedence and regard for due
process. Obstacles and technicalities that fetter the people's will should not stand in the way of a prompt
termination of election contests.22 Thus, rules on the verification of protests should be liberally construed.
At this point, it is pertinent to note that such liberalization of the rules was also extended to
petitioner.1wphi1 A perusal of the Verification and Certification attached to this Petition shows she
attests that the contents of the Petition "are true and correct of [her] own personal knowledge, belief and
based on the records in [her] possession.23 Section 4, Rule 7 of the Rules of Court provides that a pleading
required to be verified which contains a verification based on "information and belief or "knowledge,
information and belief," shall be treated as an unsigned pleading. A pleading, therefore, wherein the
verification is based merely on the party's knowledge and belief such as in the instant Petition
produces no legal effect, subject to the discretion of the court to allow the deficiency to be remedied.24
On the Propriety of the Election Protest
Codilla's Election Protest contests the counting of 101,250 votes in favor of petitioner. He claims that the
denial of the Certificate of Candidacy of Gomez rendered the latter a non-candidate, who therefore could
not have been validly substituted, as there was no candidacy to speak of.
It bears stressing that the HRET is the sole judge of all contests relating to the election, returns, and
qualifications of the members of the House of Representatives. This exclusive jurisdiction includes the
power to determine whether it has the authority to hear and determine the controversy presented; and
the right to decide whether there exists that state of facts that confers jurisdiction, as well as all other
matters arising from the case legitimately before it.25Accordingly, the HRET has the power to hear and
determine, or inquire into, the question of its own jurisdiction - both as to parties and as to subject matter;
and to decide all questions, whether of law or of fact, the decision of which is necessary to determine the
question of jurisdiction.26 Thus, the HRET had the exclusive jurisdiction to determine its authority and to
take cognizance of the Election Protest filed before it.
Further, no grave abuse of discretion could be attributed to the HRET on this score. An election protest
proposes to oust the winning candidate from office. It is strictly a contest between the defeated and the
winning candidates, based on the grounds of electoral frauds and irregularities. Its purpose is to determine
who between them has actually obtained the majority of the legal votes cast and is entitled to hold the
office.27 The foregoing considered, the issues raised hi Codilla's Election Protest are proper for such a
petition, and is within the jurisdiction of the HRET.
WHEREFORE, the instant Petition for Certiorari is DISMISSED.
The Application for a Temporary Restraining Order and/or Writ of Preliminary Prohibitory Injunction is
likewise DENIED. Resolution Nos. 10-282 and 10-482 of the House of Representatives Electoral Tribunal
are hereby AFFIRMED.
SO ORDERED.
CERTIFICATION AGAINST FORUM SHOPPING
G.R. No. 191906 June 2, 2014
JOSELITO MA. P. JACINTO (Formerly President of F. Jacinto Group, Inc.), Petitioner,
vs.
EDGARDO* GUMARU, JR., Respondent.
DECISION
DEL CASTILLO, J.:
"When a judgment has been satisfied, it passes beyond review",1 and "there are no more proceedings to
speak of inasmuch as these were terminated by the satisfaction of the judgment."2
This Petition for Review on Certiorari3 seeks to set aside the November 5, 2009 Resolution4 of the Court of
Appeals (CA) in CA-G.R. SP No. 111098, entitled "Joselito Ma. P. Jacinto (Former President of F Jacinto
Group, Inc.), Petitioner, versus Edgardo Gumaru, Jr. and the National Labor Relations Commission,
Respondents," as well as its March 24, 2010 Resolution5 denying the petitioner's Motion for
Reconsideration.
Factual Antecedents
On December 6, 2004, a Decision6 was rendered in favor of respondent Eduardo Gumaru, Jr. and against
petitioner Joselito Ma. P. Jacinto and F. Jacinto Group, Inc. in NLRC-NCR Case No. 00-06-07542-037 (the
labor case), the dispositive portion of which reads:
WHEREFORE, premises considered, respondents are hereby jointly and severally liable to pay complainant
the following:
1. Separation pay based on two months per year of service.
50,000.00 x 2 x 10 years = 1,000,000.00
2. Other monetary claims.
A. 3 mos. unpaid wages & allowance = 133,101.00
 B. SL/VL for 2000 = 34,969.00
C. 13th month pay for 2000 = 24,944.00
3. Moral Damages in the sum of 100,000.00
4. Exemplary Damages in the sum of 500,000.00
5. 10% of all sums accruing shall be adjudged as attorneys fees.
It is understood that the withholding of the separation benefits plus other monetary claims shall earn legal
interest of 12% per annum from the time [they were] unlawfully withheld on September 01, 2000.
SO ORDERED.8
Petitioner and F. Jacinto Group, Inc. filed an appeal with the National Labor Relations Commission (NLRC).
However, the appeal was not perfected for failure to post the proper cash or surety bond; this was the
finding of the NLRC in its Resolution dated September 30, 2005.9
Thus, the December 6, 2004 Decision became final and executory. Entry of judgment was issued by the
NLRC on November 23, 2005.10
On February 6, 2006, a Writ of Execution11 was issued in the labor case. A Second Alias Writ of Execution
was issued and returned when the first one expired. By virtue of such alias writ, real property belonging to
petitioner located in Baguio City and covered by Original Certificate of Title No. P-2010 was levied
upon, and was scheduled to be sold at auction on June 27, 2008 or July 4, 2008.
On June 20, 2008, petitioner filed an Extremely Urgent Motion to Lift and Annul Levy on Execution12
praying, among others, that the scheduled June 27, 2008 auction sale be restrained, and that the
execution process covered by the Second Alias Writ of Execution be invalidated.
On June 26, 2008, the Labor Arbiter issued an Order13 denying petitioners Extremely Urgent Motion to Lift
and Annul Levy on Execution, thus:
On June 20, 2008, respondents filed a Motion to Lift and Annul levy on execution on the ground that the
writ of execution served had already elapsed. Finding that the writ of execution was issued on September
07, 2007 and pursuant to the Supreme Courts declaration in the case of Merlinda Dagooc vs. Roberto
Endina, 453 SCRA 423 quoting section 14 of the Revised Rules of Court, that the writ has a life of five years,
the instant Motion is hereby DENIED.
WHEREFORE, premises considered, the NLRC Sheriff is hereby ORDERED to proceed with the auction sale
set on June 27, 2008 at 10:00 AM before the Register of Deeds of Baguio City.
SO ORDERED.14
The Subject Resolutions of the National Labor Relations Commission
Petitioner appealed the Labor Arbiters June 26,2008 Order to the NLRC, which, in a November 28, 2008
Resolution,15set aside the same. The decretal portion of the Resolution states:
WHEREFORE, premises considered, the Order appealed from is hereby SET ASIDE and
respondents-appellants Motion to Lift and Annul Levy is GRANTED. The Labor Arbiter is also hereby
ordered to oversee the proper implementation and execution of the judgment award in this case.
Let the records be remanded to the Labor Arbiter of origin for further execution proceedings.
SO ORDERED.16
Petitioner moved for partial reconsideration, but in a July 27, 2009 Resolution,17 the NLRC stood its
ground.
The Assailed Resolutions of the Court of Appeals
Petitioner went up to the CA on certiorari, assailing the November 28, 2008 and July 27, 2009 Resolutions
of the NLRC. The Petition18 in CA-G.R. SP No. 111098 contained a verification and certification of
non-forum shopping that was executed and signed not by petitioner, but by his counsel Atty. Ronald Mark
S. Daos.
On November 5, 2009, the CA issued the first assailed Resolution, which held thus:
The Verification and Certification of Non-Forum Shopping, which accompanied the petition at bar, was
executed and signed by petitioners counsel Atty. Ronald Mark S. Daos, in violation of Section 5,Rule 7 of
the Revised Rules of Court.
Pursuant to Supreme Court Revised Circular No. 28-91, the duty to certify under oath is strictly addressed
to petitioner which in this case is herein petitioner Joselito P. Jacinto and not his counsel to [sic] Atty.
Ronald Mark S. Daos. Thus, to allow the delegation of said duty to anyone would render Supreme Court
Revised Circular No. 28-91 inutile.
Accordingly, the petition is DENIED DUE COURSE and DISMISSED.
SO ORDERED.19
Petitioner filed his Motion for Reconsideration,20 arguing that a verification signed by counsel constitutes
adequate and substantial compliance under Sections 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure;21
verification is merely a formal, and not jurisdictional, requisite such that an improper verification or
certification against forum-shopping is not a fatal defect.22 Petitioner attached a copy of an Affidavit23
acknowledged before the Hon. Paul Raymond Cortes, Consul, Philippine Consulate General, Honolulu,
Hawaii, U.S.A. attesting that he caused the preparation of the CA Petition, and that he read the contents
of the CA Petition and affirm that they are true and correct and undisputed based on his own personal
knowledge and on authentic records. In said Affidavit, petitioner further certified that he has not
commenced any other action or proceeding, or filed any claims involving the same issues in the Supreme
Court, Court of Appeals, or any Division thereof, or in any other court, tribunal or agency; to the best of his
knowledge, no such other action, proceeding, or claim is pending before the Supreme Court, Court of
Appeals, or any division thereof, or in any court, tribunal or agency; if there is any other action or
proceeding which is either pending or may have been terminated, he will state the status thereof; if he
should thereafter learn that a similar action, proceeding or claim has been filed or is pending before the
Supreme Court, Court of Appeals, or any division thereof, or in any court, tribunal or agency, he
undertakes to promptly report the fact within five days from notice thereof. Petitioner explained further
that he was out of the country, and could not return on account of his physical condition, which thus
constrained him to resort to the execution of a sworn statement in lieu of his actual verification and
certification as required under the Rules. Petitioner likewise ratified Atty. Daoss acts done on his behalf
relative to the labor case and the filing of the CA Petition, and implored the appellate court to reconsider
its November 5, 2009 Resolution and excuse his procedural oversight in respect of the improper
verification and certification in his CA Petition.
On March 24, 2010, the CA issued the second assailed Resolution denying petitioners Motion for
Reconsideration, stating that a writ of certiorari is merely a "prerogative writ, never demandable as a
matter of right, never issued except in the exercise of judicial discretion. Hence, he who seeks a writ of
certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and
the Rules."24
Thus, the present Petition was instituted.
Issues
Petitioner raises the following issues:
4.1. THE COURT OF APPEALS SHOULD NOT HAVE DISMISSED THE SUBJECT PETITION.
A PARTY UNABLE TO SIGN THE CERTIFICATION AGAINST FORUM SHOPPING CAN AUTHORIZE HIS COUNSEL
TO SIGN THE CERTIFICATION. IN HIS AFFIDAVIT AND SPECIAL POWER OF ATTORNEY, PETITIONER
EFFECTIVELY EMPOWERED HIS COUNSEL TO EXECUTE THE REQUIRED VERIFICATION AND CERTIFICATION.
MOREOVER, PETITIONER, BEING ABROAD AND PHYSICALLY UNABLE TO TRAVEL TO THE NEAREST
CONSULAR OFFICE, MERITED THE RELAXATION OF THE TECHNICAL RULES ONVERIFICATION AND
CERTIFICATION. IN ANY EVENT, PETITIONER SUBSEQUENTLY SUBMITTED THE NECESSARY DOCUMENT, IN
SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF VERIFICATION AND CERTIFICATION.
VERIFICATION BY COUNSEL IS LIKEWISE ADEQUATE AND SUBSTANTIALLY COMPLIANT.THE REQUIREMENT
OF VERIFICATION IS ALSO DEEMED SUBSTANTIALLY COMPLIED WITH WHEN THE AFFIANT ACTED IN GOOD
FAITH AND X X X [POSSESSES] X X X SUFFICIENT KNOWLEDGE TO TRUTHFULLY ATTEST THAT THE
ALLEGATIONS ARE TRUE AND CORRECT, AS IN THE CASE AT BAR. IN ANY CASE, VERIFICATION IS A FORMAL,
NOT A JURISDICTIONAL,REQUISITE. IT AFFECTS ONLY THE FORM OF PLEADINGBUT DOES NOT RENDER THE
PLEADING FATALLY DEFECTIVE.
4.2. THE COURT OF APPEALS SHOULD HAVE GIVEN DUE COURSE TO THE SUBJECT PETITION.
THE MERITS, SPECIAL CIRCUMSTANCES AND COMPELLING REASONS FOR THE ALLOWANCE OF THE
SUBJECT PETITION, SPECIFICALLY, THAT IN THE ABSENCE OF A PRIOR VALID SERVICE ON PETITIONER OF
THE RESOLUTION SUPPOSEDLY DISPOSING OF HIS APPEAL OF THE DECEMBER 6, 2004 DECISION, THE SAID
DECISION CANNOT BE IMPLEMENTED AND EXECUTED BECAUSE IT HAS NOT ATTAINED FINALITY AND
JURIDICAL EXISTENCE, IS APPARENT. IF NOT CORRECTED, IT WOULD CAUSE GREAT AND IRREPARABLE
DAMAGE AND INJURY, NOT TO MENTION GRAVE INJUSTICE, TO PETITIONER, WHO WILL BECOMPELLED
TOSATISFY A JUDGMENT THAT OBVIOUSLY HAS NOT ATTAINED FINALITY AND JURIDICAL EXISTENCE.25
Petitioners Arguments
Essentially, petitioner in his Petition and Reply26 argues that if, for reasonable or justifiable reasons, a party
is unable to sign the verification and certification against forum-shopping, he could execute a special
power of attorney authorizing his lawyer to execute the verification and sign the certification on his behalf.
Which is exactly what petitioner did: he executed a special power of attorney in favor of his counsel, Atty.
Daos, authorizing the latter to file the Petition in CA-G.R. SP No. 111098 and thus sign the verification and
certification against forum-shopping contained therein. Petitioner asserts that, going by the dispositions of
the Court in past controversies,27 the said procedure is allowed.
Petitioner next argues that there are compelling reasons to grant his Petition for Certiorari. He asserts that
the NLRC committed grave abuse of discretion in issuing its assailed November 28, 2008 and July 27, 2009
Resolutions remanding the case to the Labor Arbiter for further proceedings on execution, claiming that
the December 6, 2004 Decision of the Labor Arbiter had not attained finality since the NLRC failed to
furnish him with a copy of its September 30, 2005 Resolution which dismissed his appeal for failure to post
the required bond and thus perfect the appeal. Since the Labor Arbiters Decision has not attained finality,
execution proceedings could not commence; the NLRC may not direct the Labor Arbiter to conduct
execution proceedings below.
Petitioner therefore prays that the Court annul and set aside the assailed Resolutions of the CA and order
the reinstatement of his Petition for Certiorari in the appellate court.
Respondents Arguments
In his Comment,28 respondent contends that with the dismissal of petitioners certiorari petition by the CA,
it is for all intents and purposes deemed to have never been filed, and thus may not be corrected by
resorting to a Petition for Review under Rule 45. Respondent reiterates the view taken by the CA that
certiorari under Rule 65 is a prerogative writ that is not demandable as a matter of right.
Respondent notes further that the Verification and Certification against forum-shopping accompanying the
instant Petition was not signed by petitioner, but by his counsel, in consistent violation of the Courts
Circular No. 28-91 and Rule 7 of the 1997 Rules of Civil Procedure.1wphi1
Respondent cites that he is already 71 years old, yet petitioner continues to undermine execution of the
judgment rendered in the labor case through the instant Petition, which he prays the Court to deny.
Our Ruling
The Court finds that the Petition has become moot and academic.
It is true, as petitioner asserts, that if for reasonable or justifiable reasons he is unable to sign the
verification and certification against forum shopping in his CA Petition, he may execute a special power of
attorney designating his counsel of record to sign the Petition on his behalf. In Altres v. Empleo,29 this view
was taken:
For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential
pronouncements already reflected above respecting noncompliance with the requirements on, or
submission of defective, verification and certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or submission of
defective verification, and non-compliance with the requirement on or submission of defective
certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the
pleading fatally defective. The court may order its submission or correction or act on the pleading if
the attending circumstances are such that strict compliance with the Rule may be dispensed with in
order that the ends of justice may be served thereby.
3) Verification is deemed substantially complied with when one who has ample knowledge to swear
to the truth of the allegations in the complaint or petition signs the verification, and when matters
alleged in the petition have been made in good faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent submission or correction thereof, unless there
is a need to relax the Rule on the ground of "substantial compliance" or presence of "special
circumstances or compelling reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or
justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest
and invoke a common cause of action or defense, the signature of only one of them in the
certification against forum shopping substantially complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his
counsel. H, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he
must execute a Special Power of Attorney designating his counsel of record to sign on his behalf.30
(Emphasis supplied)
However, while the Court takes the petitioner's side with regard to the procedural issue dealing with
verification and the certification against forum shopping, it nonetheless appears that the Petition has been
overtaken by events. In a May 24, 2011 Manifestation,31 respondent informed this Court that the
judgment award has been satisfied in full. The petitioner does not dispute this claim, in which case, the
labor case is now deemed ended. "It is axiomatic that after a judgment has been fully satisfied, the case is
deemed terminated once and for all."32 And "when a judgment has been satisfied, it passes beyond review,
satisfaction being the last act and the end of the proceedings, and payment or satisfaction of the
obligation thereby established produces permanent and irrevocable discharge; hence, a judgment debtor
who acquiesces to and voluntarily complies with the judgment is estopped from taking an appeal
therefrom."33
With the above development in the case, the instant Petition is rendered moot and academic. The
satisfaction of the judgment in full has placed the case beyond the Court's review. "Indeed, there are no
more proceedings to speak of inasmuch as these were terminated by the satisfaction of the judgment."34
WHEREFORE, the Petition is DENIED for being moot and academic.
SO ORDERED.
FORUM SHOPPING
G.R. No. 158239 January 25, 2012
PRISCILLA ALMA JOSE, Petitioner,
vs.
RAMON C. JAVELLANA, ET AL., Respondents.
DECISION
BERSAMIN, J.:
The denial of a motion for reconsideration of an order granting the defending partys motion to dismiss is
not an interlocutory but a final order because it puts an end to the particular matter involved, or settles
definitely the matter therein disposed of, as to leave nothing for the trial court to do other than to execute
the order.1 Accordingly, the claiming party has a fresh period of 15 days from notice of the denial within
which to appeal the denial.2
Antecedents
On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for consideration of 160,000.00 to
respondent Ramon Javellana by deed of conditional sale two parcels of land with areas of 3,675 and
20,936 square meters located in Barangay Mallis, Guiguinto, Bulacan. They agreed that Javellana would
pay 80,000.00 upon the execution of the deed and the balance of 80,000.00 upon the registration of
the parcels of land under the Torrens System (the registration being undertaken by Margarita within a
reasonable period of time); and that should Margarita become incapacitated, her son and attorney-in-fact,
Juvenal M. Alma Jose (Juvenal), and her daughter, petitioner Priscilla M. Alma Jose, would receive the
payment of the balance and proceed with the application for registration.3
After Margarita died and with Juvenal having predeceased Margarita without issue, the vendors
undertaking fell on the shoulders of Priscilla, being Margaritas sole surviving heir. However, Priscilla did
not comply with the undertaking to cause the registration of the properties under the Torrens System, and,
instead, began to improve the properties by dumping filling materials therein with the intention of
converting the parcels of land into a residential or industrial subdivision.4 Faced with Priscillas refusal to
comply, Javellana commenced on February 10, 1997 an action for specific performance, injunction, and
damages against her in the Regional Trial Court in Malolos, Bulacan (RTC), docketed as Civil Case No.
79-M-97 entitled Ramon C. Javellana, represented by Atty. Guillermo G. Blanco v. Priscilla Alma Jose.
In Civil Case No. 79-M-97, Javellana averred that upon the execution of the deed of conditional sale, he
had paid the initial amount of 80,000.00 and had taken possession of the parcels of land; that he had
paid the balance of the purchase price to Juvenal on different dates upon Juvenals representation that
Margarita had needed funds for the expenses of registration and payment of real estate tax; and that in
1996, Priscilla had called to inquire about the mortgage constituted on the parcels of land; and that he had
told her then that the parcels of land had not been mortgaged but had been sold to him.5
Javellana prayed for the issuance of a temporary restraining order or writ of preliminary injunction to
restrain Priscilla from dumping filling materials in the parcels of land; and that Priscilla be ordered to
institute registration proceedings and then to execute a final deed of sale in his favor.6
Priscilla filed a motion to dismiss, stating that the complaint was already barred by prescription; and that
the complaint did not state a cause of action.7
The RTC initially denied Priscillas motion to dismiss on February 4, 1998.8 However, upon her motion for
reconsideration, the RTC reversed itself on June 24, 1999 and granted the motion to dismiss, opining that
Javellana had no cause of action against her due to her not being bound to comply with the terms of the
deed of conditional sale for not being a party thereto; that there was no evidence showing the payment of
the balance; that he had never demanded the registration of the land from Margarita or Juvenal, or
brought a suit for specific performance against Margarita or Juvenal; and that his claim of paying the
balance was not credible.9
Javellana moved for reconsideration, contending that the presentation of evidence of full payment was
not necessary at that stage of the proceedings; and that in resolving a motion to dismiss on the ground of
failure to state a cause of action, the facts alleged in the complaint were hypothetically admitted and only
the allegations in the complaint should be considered in resolving the motion.10 Nonetheless, he attached
to the motion for reconsideration the receipts showing the payments made to Juvenal.11 Moreover, he
maintained that Priscilla could no longer succeed to any rights respecting the parcels of land because he
had meanwhile acquired absolute ownership of them; and that the only thing that she, as sole heir, had
inherited from Margarita was the obligation to register them under the Torrens System.12
On June 21, 2000, the RTC denied the motion for reconsideration for lack of any reason to disturb the
order of June 24, 1999.13
Accordingly, Javellana filed a notice of appeal from the June 21, 2000 order,14 which the RTC gave due
course to, and the records were elevated to the Court of Appeals (CA).
In his appeal (C.A.-G.R. CV No. 68259), Javellana submitted the following as errors of the RTC,15 to wit:
I
THE TRIAL COURT GRIEVOUSLY ERRED IN NOT CONSIDERING THE FACT THAT PLAINTIFF-APELLANT
HAD LONG COMPLIED WITH THE FULL PAYMENT OF THE CONSIDERATION OF THE SALE OF THE
SUBJECT PROPERTY AND HAD IMMEDIATELY TAKEN ACTUAL AND PHYSICAL POSSESSION OF SAID
PROPERTY UPON THE SIGNING OF THE CONDITIONAL DEED OF SALE;
II
THE TRIAL COURT OBVIOUSLY ERRED IN MAKING TWO CONFLICTING INTERPRETATIONS OF THE
PROVISION OF THE CIVIL [CODE], PARTICULARLY ARTICLE 1911, IN THE LIGHT OF THE TERMS OF THE
CONDITIONAL DEED OF SALE;
III
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT-APPELLEE BEING NOT A PARTY TO THE
CONDITIONAL DEED OF SALE EXECUTED BY HER MOTHER IN FAVOR OF PLAINTFF-
APPELLANT IS NOT BOUND THEREBY AND CAN NOT BE COMPELLED TO DO THE ACT REQUIRED IN
THE SAID DEED OF CONDITIONAL SALE;
IV
THE TRIAL COURT ERRED IN DISMISSING THE AMENDED COMPLAINT WITHOUT HEARING THE CASE
ON THE MERITS.
Priscilla countered that the June 21, 2000 order was not appealable; that the appeal was not perfected on
time; and that Javellana was guilty of forum shopping.16
It appears that pending the appeal, Javellana also filed a petition for certiorari in the CA to assail the June
24, 1999 and June 21, 2000 orders dismissing his complaint (C.A.-G.R. SP No. 60455). On August 6, 2001,
however, the CA dismissed the petition for certiorari,17 finding that the RTC did not commit grave abuse of
discretion in issuing the orders, and holding that it only committed, at most, an error of judgment
correctible by appeal in issuing the challenged orders.
On November 20, 2002, the CA promulgated its decision in C.A.-G.R. CV No. 68259,18 reversing and setting
aside the dismissal of Civil Case No. 79-M-97, and remanding the records to the RTC "for further
proceedings in accordance with law."19 The CA explained that the complaint sufficiently stated a cause of
action; that Priscilla, as sole heir, succeeded to the rights and obligations of Margarita with respect to the
parcels of land; that Margaritas undertaking under the contract was not a purely personal obligation but
was transmissible to Priscilla, who was consequently bound to comply with the obligation; that the action
had not yet prescribed due to its being actually one for quieting of title that was imprescriptible brought
by Javellana who had actual possession of the properties; and that based on the
complaint, Javellana had been in actual possession since 1979, and the cloud on his title had come about
only when Priscilla had started dumping filling materials on the premises.20
On May 9, 2003, the CA denied the motion for reconsideration, 21 stating that it decided to give due course
to the appeal even if filed out of time because Javellana had no intention to delay the proceedings, as in
fact he did not even seek an extension of time to file his appellants brief; that current jurisprudence
afforded litigants the amplest opportunity to present their cases free from the constraints of technicalities,
such that even if an appeal was filed out of time, the appellate court was given the discretion to
nonetheless allow the appeal for justifiable reasons.
Issues
Priscilla then brought this appeal, averring that the CA thereby erred in not outrightly dismissing
Javellanas appeal because: (a) the June 21, 2000 RTC order was not appealable; (b) the notice of appeal
had been filed belatedly by three days; and (c) Javellana was guilty of forum shopping for filing in the CA a
petition for certiorari to assail the orders of the RTC that were the subject matter of his appeal pending in
the CA. She posited that, even if the CAs decision to entertain the appeal was affirmed, the RTCs dismissal
of the complaint should nonetheless be upheld because the complaint stated no cause of action, and the
action had already prescribed.
On his part, Javellana countered that the errors being assigned by Priscilla involved questions of fact not
proper for the Court to review through petition for review on certiorari; that the June 21, 2000 RTC order,
being a final order, was appealable; that his appeal was perfected on time; and that he was not guilty of
forum shopping because at the time he filed the petition for certiorari the CA had not yet rendered a
decision in C.A.-G.R.
CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV No. 68259 was different from the
issue of grave abuse of discretion raised in C.A.-G.R. SP No. 60455.
Ruling: The petition for review has no merit.
I. Denial of the motion for reconsideration of the order of dismissal was a final order and appealable
Priscilla submits that the order of June 21, 2000 was not the proper subject of an appeal considering that
Section 1 of Rule 41 of the Rules of Court provides that no appeal may be taken from an order denying a
motion for reconsideration.
Priscillas submission is erroneous and cannot be sustained.
First of all, the denial of Javellanas motion for reconsideration left nothing more to be done by the RTC
because it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an
interlocutory one. The Court has distinguished between final and interlocutory orders in Pahila-Garrido v.
Tortogo,22 thuswise:
The distinction between a final order and an interlocutory order is well known. The first disposes of the
subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be
done except to enforce by execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to
ascertain whether or not an order or a judgment is
interlocutory or final is: does the order or judgment leave something to be done in the trial court with
respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.
And, secondly, whether an order is final or interlocutory determines whether appeal is the correct remedy
or not. A final order is appealable, to accord with the final judgment rule enunciated in Section 1, Rule 41
of the Rules of Court to the effect that "appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by these Rules to be
appealable;"23 but the remedy from an interlocutory one is not an appeal but a special civil action for
certiorari. The explanation for the differentiation of remedies given in Pahila-Garrido v. Tortogo is apt:
xxx The reason for disallowing an appeal from an interlocutory order is to avoid multiplicity of appeals in a
single action, which necessarily suspends the hearing and decision on the merits of the action during the
pendency of the appeals. Permitting multiple appeals will necessarily delay the trial on the merits of the
case for a considerable length of time, and will compel the adverse party to incur unnecessary expenses,
for one of the parties may interpose as many appeals as there are incidental questions raised by him and
as there are interlocutory orders rendered or issued by the lower court. An interlocutory order may be the
subject of an appeal, but only after a judgment has been rendered, with the ground for appealing the
order being included in the appeal of the judgment itself.
The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action
under Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or
with grave abuse of discretion. Then is certiorari under Rule 65 allowed to be resorted to.
Indeed, the Court has held that an appeal from an order denying a motion for reconsideration of a final
order or judgment is effectively an appeal from the final order or judgment itself; and has expressly
clarified that the prohibition against appealing an order denying a motion for
reconsideration referred only to a denial of a motion for reconsideration of an interlocutory order.24
II. Appeal was made on time pursuant to Neypes v. CA
Priscilla insists that Javellana filed his notice of appeal out of time. She points out that he received a copy
of the June 24, 1999 order on July 9, 1999, and filed his motion for reconsideration on July 21, 1999 (or
after the lapse of 12 days); that the RTC denied his motion for reconsideration through the order of June
21, 2000, a copy of which he received on July 13, 2000; that he had only three days from July 13, 2000, or
until July 16, 2000, within which to perfect an appeal; and that having filed his notice of appeal on July 19,
2000, his appeal should have been dismissed for being tardy by three days beyond the expiration of the
reglementary period.
Section 3 of Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from notice of
the judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a
notice of appeal and a record on appeal within thirty (30) days from notice of the judgment or final order.
The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion
for extension of time to file a motion for new trial or reconsideration shall be allowed. (n)
Under the rule, Javellana had only the balance of three days from July 13, 2000, or until July 16, 2000,
within which to perfect an appeal due to the timely filing of his motion for reconsideration interrupting
the running of the period of appeal. As such, his filing of the notice of appeal only on July 19, 2000 did not
perfect his appeal on time, as Priscilla insists.
The seemingly correct insistence of Priscilla cannot be upheld, however, considering that the Court
meanwhile adopted the fresh period rule in Neypes v. Court of Appeals,25 by which an aggrieved party
desirous of appealing an adverse judgment or final order is allowed a fresh period of 15 days within which
to file the notice of appeal in the RTC reckoned from receipt of the order denying a motion for a new trial
or motion for reconsideration, to wit:
The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to amend,
repeal or even establish new rules for a more simplified and inexpensive process, and the speedy
disposition of cases. In the rules governing appeals to it and to the Court of Appeals, particularly Rules 42,
43 and 45, the Court allows extensions of time, based on justifiable and compelling reasons, for parties to
file their appeals. These extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal
their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of
appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or
motion for reconsideration.
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial
Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the
Court of Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or resolution.26
The fresh period rule may be applied to this case, for the Court has already retroactively extended the
fresh period rule to "actions pending and undetermined at the time of their passage and this will not
violate any right of a person who may feel that he is adversely affected, inasmuch as there are no vested
rights in rules of procedure."27According to De los Santos v. Vda. de Mangubat:28
Procedural law refers to the adjective law which prescribes rules and forms of procedure in order that
courts may be able to administer justice. Procedural laws do not come within the legal conception of a
retroactive law, or the general rule against the retroactive operation of statues they may be given
retroactive effect on actions pending and undetermined at the time of their passage and this will not
violate any right of a person who may feel that he is adversely affected, insomuch as there are no vested
rights in rules of procedure.
The "fresh period rule" is a procedural law as it prescribes a fresh period of 15 days within which an appeal
may be made in the event that the motion for reconsideration is denied by the lower court. Following the
rule on retroactivity of procedural laws, the "fresh period rule" should be applied to pending actions, such
as the present case.
Also, to deny herein petitioners the benefit of the "fresh period rule" will amount to injustice, if not
absurdity, since the subject notice of judgment and final order were issued two years later or in the year
2000, as compared to the notice of judgment and final order in Neypes which were issued in 1998. It will
be incongruous and illogical that parties receiving notices of judgment and final orders issued in the year
1998 will enjoy the benefit of the "fresh period rule" while those later rulings of the lower courts such as
in the instant case, will not.29
Consequently, we rule that Javellanas notice of appeal was timely filed pursuant to the fresh period rule.
III. No forum shopping was committed
Priscilla claims that Javellana engaged in forum shopping by filing a notice of appeal and a petition for
certiorari against the same orders. As earlier noted, he denies that his doing so violated the policy against
forum shopping.
The Court expounded on the nature and purpose of forum shopping in In Re: Reconstitution of Transfer
Certificates of Title Nos. 303168 and 303169 and Issuance of Owners Duplicate Certificates of Title In Lieu
of Those Lost, Rolando Edward G. Lim, Petitioner:30
Forum shopping is the act of a party litigant against whom an adverse judgment has been rendered in one
forum seeking and possibly getting a favorable opinion in another forum, other than by appeal or the
special civil action of certiorari, or the institution of two or more actions or proceedings grounded on the
same cause or supposition that one or the other court would make a favorable disposition. Forum
shopping happens when, in the two or more pending cases, there is identity of parties, identity of rights or
causes of action, and identity of reliefs sought. Where the elements of litis pendentia are present, and
where a final judgment in one case will amount to res judicata in the other, there is forum shopping. For
litis pendentia to be a ground for the dismissal of an action, there must be: (a) identity of the parties or at
least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed
for, the relief being founded on the same acts; and (c) the identity in the two cases should be such that the
judgment which may be rendered in one would, regardless of which party is successful, amount to res
judicata in the other.
For forum shopping to exist, both actions must involve the same transaction, same essential facts and
circumstances and must raise identical causes of action, subject matter and issues. Clearly, it does not exist
where different orders were questioned, two distinct causes of action and issues were raised, and two
objectives were sought.
Should Javellanas present appeal now be held barred by his filing of the petition for certiorari in the CA
when his appeal in that court was yet pending?
We are aware that in Young v. Sy,31 in which the petitioner filed a notice of appeal to elevate the orders
concerning the dismissal of her case due to non-suit to the CA and a petition for certiorari in the CA
assailing the same orders four months later, the Court ruled that the successive filings of the notice of
appeal and the petition for certiorari to attain the same objective of nullifying the trial courts dismissal
orders constituted forum shopping that warranted the dismissal of both cases. The Court said:
Ineluctably, the petitioner, by filing an ordinary appeal and a petition for certiorari with the CA, engaged in
forum shopping. When the petitioner commenced the appeal, only four months had elapsed prior to her
filing with the CA the Petition for Certiorari under Rule 65 and which eventually came up to this Court by
way of the instant Petition (re: Non-Suit). The elements of litis pendentia are present between the two
suits. As the CA, through its Thirteenth Division, correctly noted, both suits are founded on exactly the
same facts and refer to the same subject matterthe RTC Orders which dismissed Civil Case No. SP-5703
(2000) for
failure to prosecute. In both cases, the petitioner is seeking the reversal of the RTC orders.1wphi1 The
parties, the rights asserted, the issues professed, and the reliefs prayed for, are all the same. It is evident
that the judgment of one forum may amount to res judicata in the other.
The remedies of appeal and certiorari under Rule 65 are mutually exclusive and not alternative or
cumulative. This is a firm judicial policy. The petitioner cannot hedge her case by wagering two or more
appeals, and, in the event that the ordinary appeal lags significantly behind the others, she cannot post
facto validate this circumstance as a demonstration that the ordinary appeal had not been speedy or
adequate enough, in order to justify the recourse to Rule 65. This practice, if adopted, would sanction the
filing of multiple suits in multiple fora, where each one, as the petitioner couches it, becomes a
"precautionary measure" for the rest, thereby increasing the chances of a favorable decision. This is the
very evil that the proscription on forum shopping seeks to put right. In Guaranteed Hotels, Inc. v. Baltao,
the Court stated that the grave evil sought to be avoided by the rule against forum shopping is the
rendition by two competent tribunals of two separate and contradictory decisions. Unscrupulous party
litigants, taking advantage of a variety of competent tribunals, may repeatedly try their luck in several
different fora until a favorable result is reached. To avoid the resultant confusion, the Court adheres strictly
to the rules against forum shopping, and any violation of these rules results in the dismissal of the case.32
The same result was reached in Zosa v. Estrella,33 which likewise involved the successive filing of a notice of
appeal and a petition for certiorari to challenge the same orders, with the Court upholding the CAs
dismissals of the appeal and the petition for certiorari through separate decisions.
Yet, the outcome in Young v. Sy and Zosa v. Estrella is unjust here even if the orders of the RTC being
challenged through appeal and the petition for certiorari were the same. The unjustness exists because
the appeal and the petition for certiorari actually sought different objectives. In his appeal in C.A.-G.R. CV
No. 68259, Javellana aimed to undo the RTCs erroneous dismissal of Civil Case No. 79-M-97 to clear the
way for his judicial demand for specific performance to be tried and determined in due course by the RTC;
but his petition for certiorari had the ostensible objective "to prevent (Priscilla) from developing the
subject property and from proceeding with the ejectment case until his appeal is finally resolved," as the
CA explicitly determined in its decision in C.A.-G.R. SP No. 60455.34
Nor were the dangers that the adoption of the judicial policy against forum shopping designed to prevent
or to eliminate attendant. The first danger, i.e., the multiplicity of suits upon one and the same cause of
action, would not materialize considering that the appeal was a continuity of Civil Case No. 79-M-97,
whereas C.A.-G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC. The second danger, i.e., the unethical
malpractice of shopping for a friendly court or judge to ensure a favorable ruling or judgment after not
getting it in the appeal, would not arise because the CA had not yet decided C.A.-G.R. CV No. 68259 as of
the filing of the petition for certiorari.
Instead, we see the situation of resorting to two inconsistent remedial approaches to be the result of the
tactical misjudgment by Javellanas counsel on the efficacy of the appeal to stave off his caretakers
eviction from the parcels of land and to prevent the development of them into a residential or commercial
subdivision pending the appeal. In the petition for certiorari, Javellana explicitly averred that his appeal
was "inadequate and not speedy to prevent private respondent Alma Jose and her transferee/assignee xxx
from developing and disposing of the subject property to other parties to the total deprivation of
petitioners rights of possession and ownership over the subject property," and that the dismissal by the
RTC had "emboldened private respondents to fully develop the property and for respondent Alma Jose to
file an ejectment case against petitioners overseer xxx."35 Thereby, it became far-fetched that Javellana
brought the petition for certiorari in violation of the policy against forum shopping.
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on
November 20, 2002; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.
Pleadings; certification of non-forum shopping; substantial compliance through subsequent submission.
Unquestionably, there is sufficient jurisprudential basis to hold that Land heights has substantially
complied with the verification and certification requirements. We have held in a catena of cases with
similar factual circumstances that there is substantial compliance with the Rules of Court when there is a
belated submission or filing of the secretarys certificate through a motion for reconsideration of the Court
of Appeals decision dismissing the petition for certiorari. In Ateneo de Naga University v. Manalo, this
Court acknowledged that it has relaxed, under justifiable circumstances, the rule requiring the submission
of these certifications and has applied the rule of substantial compliance under justifiable circumstances
with respect to the contents of the certification. It also conceded that if this Court has allowed the belated
filing of the certification against forum shopping for compelling reasons in previous rulings, with more
reason should it sanction the timely submission of such certification though the proof of the signatorys
authority was submitted thereafter. The Court is aware of the necessity for a certification of non-forum
shopping in filing petitions for certiorari as this is required under Section 1, Rule 65, in relation to Section 3,
Rule 46 of the Rules of Civil Procedure, as amended. When the petitioner is a corporation, the certification
should obviously be executed by a natural person to whom the power to execute such certification has
been validly conferred by the corporate board of directors and/or duly authorized officers and agents.
Generally, the petition is subject to dismissal if a certification was submitted unaccompanied by proof of
the signatorys authority. However, we must make a distinction between non-compliance with the
requirements for certificate of non-forum shopping and verification and substantial compliance with the
requirements as provided in the Rules of Court. The Court has allowed the belated filing of the
certification on the justification that such act constitutes substantial compliance. In Roadway Express, Inc.
v. CA, the Court allowed the filing of the certification fourteen (14) days before the dismissal of the
petition. In Uy v. Land Bank of the Philippines, the Court reinstated a petition on the ground of substantial
compliance even though the verification and certification were submitted only after the petition had
already been originally dismissed. In Havtor Management Phils. Inc. v. NLRC, we acknowledged substantial
compliance when the lacking secretarys certificate was submitted by the petitioners as an attachment to
the motion for reconsideration seeking reversal of the original decision dismissing the petition for its
earlier failure to submit such requirement. In the present case, Land heights rectified its failure to submit
proof of Mr. Dickson Tans authority to sign the verification/certification on non-forum shopping on its
behalf when the required document was subsequently submitted to the Court of Appeals. The admission
of these documents, and consequently, the reinstatement of the petition itself, is in line with the cases we
have cited. In such circumstances, we deem it more in accord with substantive justice that the case be
decided on the merits.
G.R. No. 161368 April 5, 2010
MEDISERV, INC., Petitioner, vs. COURT OF APPEALS (Special Former 13th Division) and LANDHEIGHTS
DEVELOPMENT CORPORATION,Respondents.
DECISION
VILLARAMA, JR., J.:
estionably, tcentof directors. CT No. s consolidated in favor of Landheights and the register of
Deedseficiency whichon. No. toBefore the Court is a petition for certiorari to nullify the September 16,
2003 Resolution1 of the Court of Appeals reinstating the Petition for Review of private respondent
Landheights Development Corporation and the November 7, 2003 Resolution2 denying the motion for
reconsideration thereof.
The facts are as follows:
On September 20, 1994, petitioner Mediserv, Inc. executed a real estate mortgage in favor of China
Banking Corporation as security for a loan. The mortgage was constituted on a 500-square meter lot with
improvements located at 926 A.H. Lacson Street, Sampaloc, Manila and covered by Transfer Certificate of
Title (TCT) No. 205824 of the Registry of Deeds for the City of Manila. Mediserv defaulted on its obligation
with Chinabank and the real estate mortgage was foreclosed. At the public auction sale, private
respondent Landheights Development Corporation emerged as the highest bidder with a bid price of
17,617,960.00 for the subject property.
Sometime in April 1998, Landheights filed with the Regional Trial Court (RTC) of Manila an "Application for
Possession of Real Estate Property Purchased at an Auction Sale under Act No. 3135."3 On September 21,
1999, the title of the property was consolidated in favor of Landheights and the Register of Deeds for the
City of Manila issued TCT No. 242202 in its favor. On March 13, 2000, Landheights, seeking to recover
possession of the subject property, filed a verified complaint for ejectment against Mediserv before the
Metropolitan Trial Court of Manila (MeTC). The case was docketed as Civil Case No. 166637.
On October 12, 2000, the MeTC of Manila, Branch 15, rendered a decision4 in favor of Landheights, the
decretal portion of which states:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby entered in favor of plaintiff and against the
defendant ordering the latter and all persons claiming rights under said entity to VACATE the premises
situated at 926 A.H. Lacson Street, Sampaloc, Manila; and to PAY plaintiff the sum of P25,000.00 as
attorneys fees.
Costs against defendant.
SO ORDERED.
Aggrieved, Mediserv appealed5 the decision to the RTC of Manila docketed as Civil Case No. 00-99395. On
June 14, 2002 the RTC rendered a Decision,6 the fallo of which reads:
WHEREFORE, the Judgment of the Honorable Metropolitan Trial Court, Branch 15, Manila, dated October
26, 2000, is hereby reversed and set aside; and the Complaint for Ejectment is hereby ordered to be
dismissed.
Further, on the Counterclaims, the plaintiff-appellee is hereby directed to pay the defendant-appellant, the
sum of Php 50,000.00 for actual damages and another sum of Php 50,000.00 for and as attorneys fees.
With costs against plaintiff-appellee.
SO ORDERED.
On September 16, 2002, Landheights motion for reconsideration7 was likewise denied. 8
Accordingly, Landheights filed a Petition for Review9 with the Court of Appeals, which however dismissed
the petition in a Resolution10 dated December 12, 2002, to wit:
It appearing that the written authority of Dickson Tan to sign the verification and certification on
non-forum shopping, as well as the copies of the complaint and answer, are not attached to the petition,
the petition is DISMISSED.
SO ORDERED.
Landheights seasonably filed a motion for reconsideration11 on December 26, 2002 and subsequently
submitted a Secretarys Certificate12 dated January 13, 2003 executed by its Corporate Secretary, Ms. Polly
S. Tiu, stating that the Board of Directors affirms the authority of Mr. Dickson Tan to file the Petition for
Review.
On March 19, 2003, the Court of Appeals issued a Resolution13 granting Landheights a new period of ten
(10) days within which to correct and rectify the deficiencies in the petition. On April 1, 2003, Mediserv
filed a motion for reconsideration14 praying that the March 19, 2003 Resolution be set aside and the
December 12, 2002 Resolution, which dismissed the petition, be reinstated. On even date, Landheights
filed its Manifestation of Compliance.15
On September 16, 2003, the appellate court issued the first assailed resolution reinstating the petition for
review, the pertinent portion of which reads as follows:
With the subsequent compliance of the petitioner with the requirement of the rules and in the interest of
substantial justice, We now consider the petition reinstated.
Respondent is hereby directed to file its comment on the petition within ten (10) days from notice and
petitioner may file its reply within five (5) days from receipt of the comment.
SO ORDERED.
Mediserv filed a motion for reconsideration16 on October 3, 2003, while Landheights filed its comment17
thereto on October 14, 2003.
On November 7, 2003, the Court of Appeals issued the second assailed resolution, the significant portion
of which states:
However, again, in the interest of justice, we shall consider the belatedly filed Secretarys Certificate as a
subsequent compliance of our March 19, 2003 Resolution.
WHEREFORE, this Courts Resolution dated September 16, 2003 is hereby REITERATED. The petition is
hereby REINSTATED and the respondent is directed to file its Comment on the petition within ten (10) days
from notice.
SO ORDERED.
Its motion for reconsideration having been denied by the appellate court, petitioner is now before us via
the present recourse. Petitioner faults the appellate court as follows:
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AND ACTED WITHOUT AND/ OR IN EXCESS OF
JURISDICTION IN REINSTATING THE PETITION DESPITE THE CLEAR MANDATE OF THE RULES AS WELL AS
THE JURISPRUDENCE AS LAID DOWN BY THIS HONORABLE COURT CALLING FOR THE DISMISSAL OF THE
SAID PETITION.18
Petitioner argues that from the beginning, the Court of Appeals found the petition filed before it to be
defective for failure to comply with the rules. It points out that there is no showing that the respondent
corporation, through its board of directors, had authorized Mr. Dickson Tan to file the petition for review in
its behalf and to sign the verification and certification against forum-shopping. However, instead of
upholding the dismissal of the petition, the Court of Appeals allowed private respondent to rectify its
deficiency, which is contrary to jurisprudence.
Petitioner also cites Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended, which provides
that failure to comply with the requirements on certification against forum shopping shall not be curable
by mere amendment of the complaint or other initiatory pleading but shall be cause for dismissal of the
case. Petitioner thus asserts that the appellate court acted with grave abuse of discretion amounting to
lack or in excess of jurisdiction in reinstating the petition for review filed by respondent corporation.
We are not persuaded.
Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil Procedure, as amended, petitions for
certiorarimust be verified and accompanied by a sworn certification of non-forum shopping.19 A pleading
is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true
and correct of his personal knowledge or based on authentic records.20 The party need not sign the
verification. A partys representative, lawyer or any person who personally knows the truth of the facts
alleged in the pleading may sign the verification.21
On the other hand, a certification of non-forum shopping is a certification under oath by the plaintiff or
principal party in the complaint or other initiatory pleading asserting a claim for relief or in a sworn
certification annexed thereto and simultaneously filed therewith, (a) that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial
agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is
such other pending action or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory
pleading has been filed.22
The requirement that a petitioner or principal party should sign the certificate of non-forum shopping
applies even to corporations, considering that the mandatory directives of the Rules of Court make no
distinction between natural and juridical persons.23 A corporation, however, exercises its powers through
its board of directors and/or its duly authorized officers and agents. Physical acts, like the signing of
documents, can be performed only by natural persons duly authorized for the purpose by corporate
by-laws or by a specific act of the board of directors.24
In the case of Digital Microwave Corp. v. Court of Appeals,25 the certification of non-forum shopping was
signed by the petitioner corporations counsel; hence, the appellate court dismissed the petition for failure
to comply with Revised Supreme Court Circular No. 28-91, as amended.26 Petitioner corporations motion
for reconsideration was denied by the appellate court "absent any compelling reason for petitioners
failure to comply, at the first instance, with [the circular] ...." On appeal, this Court denied the petition in
this wise:
In this case, petitioner has not adequately explained its failure to have the certification against forum
shopping signed by one of its officers. Neither has it shown any compelling reason for us to disregard
strict compliance with the rules.27 (Emphasis supplied.)
In Shipside Incorporated v. Court of Appeals,28 petitioner Shipside Incorporated filed a petition for
certiorari and prohibition with the Court of Appeals, which was, however, dismissed for failure to attach
proof that the one (1) who signed the verification and certification of non-forum shopping, its Manager
Lorenzo Balbin, Jr., was authorized to institute the petition in petitioners behalf. Shipside Incorporated
filed a motion for reconsideration to which it attached a certificate issued by its board secretary stating
that ten (10) days before the filing of the petition, its board of directors authorized Balbin, Jr. to file it. The
Court of Appeals denied the motion for reconsideration, so the petitioner sought relief from this Court. In
granting the petition, this Court explained:
It is undisputed that on October 21, 1999, the time petitioners Resident Manager Balbin filed the petition,
there was no proof attached thereto that Balbin was authorized to sign the verification and non-forum
shopping certification therein, as a consequence of which the petition was dismissed by the Court of
Appeals. However, subsequent to such dismissal, petitioner filed a motion for reconsideration, attaching to
said motion a certificate issued by its board secretary stating that on October 11, 1999, or ten days prior to
the filing of the petition, Balbin had been authorized by petitioners board of directors to file said petition.
The Court has consistently held that the requirement regarding verification of a pleading is formal, not
jurisdictional (Uy v. LandBank, G.R. No. 136100, July 24, 2000, 336 SCRA 419). Such requirement is simply
a condition affecting the form of the pleading, non-compliance with which does not necessarily render the
pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the
pleading are true and correct and not the product of the imagination or a matter of speculation, and that
the pleading is filed in good faith. The court may order the correction of the pleading if verification is
lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict
compliance with the rules may be dispensed with in order that the ends of justice may thereby be served.
On the other hand, the lack of certification against forum shopping is generally not curable by the
submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil Procedure
provides that the failure of the petitioner to submit the required documents that should accompany the
petition, including the certification against forum shopping, shall be sufficient ground for the dismissal
thereof. The same rule applies to certifications against forum shopping signed by a person on behalf of a
corporation which are unaccompanied by proof that said signatory is authorized to file a petition on behalf
of the corporation.
In certain exceptional circumstances, however, the Court has allowed the belated filing of the
certification. In Loyola v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court considered the filing of
the certification one day after the filing of an election protest as substantial compliance with the
requirement. In Roadway Express, Inc. v. Court of Appeals, et al. (264 SCRA 696 [1996]), the Court allowed
the filing of the certification 14 days before the dismissal of the petition. In Uy v. LandBank, supra, the
Court had dismissed Uys petition for lack of verification and certification against non-forum shopping.
However, it subsequently reinstated the petition after Uy submitted a motion to admit certification and
non-forum shopping certification. In all these cases, there were special circumstances or compelling
reasons that justified the relaxation of the rule requiring verification and certification on non-forum
shopping.
In the instant case, the merits of petitioners case should be considered special circumstances or
compelling reasons that justify tempering the requirement in regard to the certificate of non-forum
shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement
as to the certificate of non-forum shopping. With more reason should we allow the instant petition since
petitioner herein did submit a certification on non-forum shopping, failing only to show proof that the
signatory was authorized to do so. That petitioner subsequently submitted a secretarys certificate
attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this
oversight.
It must also be kept in mind that while the requirement of the certificate of non-forum shopping is
mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping (Bernardo v. NLRC, 255 SCRA 108
[1996]). Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the
swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more
urgent ideal.29 Unquestionably, there is sufficient jurisprudential basis to hold that Landheights has
substantially complied with the verification and certification requirements. We have held in a catena of
cases30 with similar factual circumstances that there is substantial compliance with the Rules of Court
when there is a belated submission or filing of the secretarys certificate through a motion for
reconsideration of the Court of Appeals decision dismissing the petition for certiorari.1avvphi1
In Ateneo de Naga University v. Manalo,31 this Court acknowledged that it has relaxed, under justifiable
circumstances, the rule requiring the submission of these certifications and has applied the rule of
substantial compliance under justifiable circumstances with respect to the contents of the certification. It
also conceded that if this Court has allowed the belated filing of the certification against forum shopping
for compelling reasons in previous rulings, with more reason should it sanction the timely submission of
such certification though the proof of the signatorys authority was submitted thereafter.
The Court is aware of the necessity for a certification of non-forum shopping in filing petitions for
certiorari as this is required under Section 1, Rule 65, in relation to Section 3, Rule 46 of the Rules of Civil
Procedure, as amended. When the petitioner is a corporation, the certification should obviously be
executed by a natural person to whom the power to execute such certification has been validly conferred
by the corporate board of directors and/or duly authorized officers and agents. Generally, the petition is
subject to dismissal if a certification was submitted unaccompanied by proof of the signatorys authority.32
However, we must make a distinction between non-compliance with the requirements for certificate of
non-forum shopping and verification and substantial compliance with the requirements as provided in the
Rules of Court. The Court has allowed the belated filing of the certification on the justification that such
act constitutes substantial compliance. In Roadway Express, Inc. v. CA,33 the Court allowed the filing of the
certification fourteen (14) days before the dismissal of the petition. In Uy v. Land Bank of the Philippines,34
the Court reinstated a petition on the ground of substantial compliance even though the verification and
certification were submitted only after the petition had already been originally dismissed. In Havtor
Management Phils. Inc. v. NLRC,35 we acknowledged substantial compliance when the lacking secretarys
certificate was submitted by the petitioners as an attachment to the motion for reconsideration seeking
reversal of the original decision dismissing the petition for its earlier failure to submit such requirement.
In the present case, Landheights rectified its failure to submit proof of Mr. Dickson Tans authority to sign
the verification/certification on non-forum shopping on its behalf when the required document was
subsequently submitted to the Court of Appeals. The admission of these documents, and consequently,
the reinstatement of the petition itself, is in line with the cases we have cited. In such circumstances, we
deem it more in accord with substantive justice that the case be decided on the merits.
It is settled that liberal construction of the rules may be invoked in situations where there may be some
excusable formal deficiency or error in a pleading, provided that the same does not subvert the essence of
the proceeding and connotes at least a reasonable attempt at compliance with the rules. After all, rules of
procedure are not to be applied in a very rigid, technical sense; they are used only to help secure
substantial justice.36
Finally, we note that the instant petition was filed under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, which requires the existence of grave abuse of discretion. Grave abuse of discretion exists
where an act of a court or tribunal is performed with a capricious or whimsical exercise of judgment
equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of
passion or personal hostility.37 No such grave abuse of discretion exists in this case to warrant issuance of
the extraordinary writ of certiorari.
WHEREFORE, the petition is DISMISSED. The September 16, 2003 and November 7, 2003 Resolutions of
the Court of Appeals are AFFIRMED.
Let the records of this case be REMANDED to the Court of Appeals which is hereby DIRECTED to take
appropriate action thereon in light of the foregoing discussion with DISPATCH.
With costs against the petitioner.
SO ORDERED.
PLEADING AN ACTIONABLE DOCUMENT
G.R. No. 200868 November 12, 2012
ANITA A. LEDDA, Petitioner,
vs.
BANK OF THE PHILIPPINE ISLANDS, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for rebiew1 assails the 15 July 2011 Decision2 and 9 February 2012 Resolution3 of the Court of
Appeals in CA-G.R. CV No. 93747. The Court of Appeals partially granted the appeal filed by petitioner
Anita A. Ledda (Ledda) and modified the 4 June 2009 Decision4 of the Regional Trial Court, Makati City,
Branch 61. The Court of Appeals denied the motion for reconsideration.
The Facts
This case arose from a collection suit filed by respondent Bank of the Philippine Islands (BPI) against Ledda
for the latters unpaid credit card obligation.
BPI, through its credit card system, extends credit accommodations to its clientele for the purchase of
goods and availment of various services from accredited merchants, as well as to secure cash advances
from authorized bank branches or through automated teller machines.
As one of BPIs valued clients, Ledda was issued a pre-approved BPI credit card under Customer Account
Number 020100-9-00-3041167. The BPI Credit Card Package, which included the Terms and Conditions
governing the use of the credit card, was delivered at Leddas residence on 1 July 2005. Thereafter, Ledda
used the credit card for various purchases of goods and services and cash advances.
Ledda defaulted in the payment of her credit card obligation, which BPI claimed in their complaint
amounted to P548,143.73 per Statement of Account dated 9 September 2007.5 Consequently, BPI sent
letters6 to Ledda demanding the payment of such amount, representing the principal obligation with
3.25% finance charge and 6% late payment charge per month.
Despite BPIs repeated demands, Ledda failed to pay her credit card obligation constraining BPI to file an
action for collection of sum of money with the Regional Trial Court, Makati City, Branch 61. The trial court
declared Ledda in default for failing to file Answer within the prescribed period, despite receipt of the
complaint and summons. Upon Leddas motion for reconsideration, the trial court lifted the default order
and admitted Leddas Answer Ad Cautelam.
While she filed a Pre-Trial Brief, Ledda and her counsel failed to appear during the continuation of the
Pre-Trial. Hence, the trial court allowed BPI to present its evidence ex-parte.
In its Decision of 4 June 2009, the trial court ruled in favor of BPI, thus:
WHEREFORE, premises duly considered, the instant "Complaint" of herein plaintiff Bank of the Philippine
Islands (BPI) is hereby given DUE COURSE/GRANTED.
Accordingly, judgment is hereby rendered against herein defendant ANITA A. LEDDA and in favor of the
plaintiff.
Ensuably, the herein defendant ANITA A. LEDDA is hereby ordered to pay the herein plaintiff Bank of the
Philippine Islands (BPI) the following sums, to wit:
1. Five Hundred Forty-Eight Thousand One Hundred Forty-Three Pesos and Seventy-Three Centavos
(P548,143.73) as and for actual damages, with finance and late-payment charges at the rate of three and
one-fourth percent (3.25%) and six percent (6%) per month, respectively, to be counted from 19 October
2007 until the amount is fully paid;
2. Attorneys fees equivalent to twenty-five percent (25%) of the total obligation due and demandable,
exclusive of appearance fee for every court hearing, and
3. Costs of suit.
SO ORDERED.7 (Emphasis in the original)
The Ruling of the Court of Appeals
The Court of Appeals rejected Leddas argument that the document containing the Terms and Conditions
governing the use of the BPI credit card is an actionable document contemplated in Section 7, Rule 8 of
the 1997 Rules of Civil Procedure. The Court of Appeals held that BPIs cause of action is based on "Leddas
availment of the banks credit facilities through the use of her credit/plastic cards, coupled with her refusal
to pay BPIs outstanding credit for the cost of the goods, services and cash advances despite lawful
demands."
Citing Macalinao v. Bank of the Philippine Islands,8 the Court of Appeals held that the interest rates and
penalty charges imposed by BPI for Leddas non-payment of her credit card obligation, totalling 9.25% per
month or 111% per annum, are exorbitant and unconscionable. Accordingly, the Court of Appeals reduced
the monthly finance charge to 1% and the late payment charge to 1%, or a total of 2% per month or 24%
per annum.
The Court of Appeals recomputed Leddas total credit card obligation by deducting P226,000.15,
representing interests and charges, from P548,143.73, leaving a difference of P322,138.58 as the principal
amount, on which the reduced interest rates should be imposed.
The Court of Appeals awarded BPI P10,000 attorneys fees, pursuant to the ruling in Macalinao.
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, premises considered, the appeal is PARTLY GRANTED, and accordingly the herein assailed
June 4, 2009 Decision of the trial court is hereby MODIFIED, ordering defendant-appellant Anita Ledda to
pay plaintiff-appellee BPI the amount of Php322,138.58, with 1% monthly finance charges from date of
availment of the plaintiffs credit facilities, and penalty charge at 1% per month of the amount due from
the date the amount becomes due and payable, until full payment. The award of attorneys fees is fixed at
Php10,000.00.
SO ORDERED.9 (Emphasis in the original)
The Issues
Ledda raises the following issues:
1. Whether the Court of Appeals erred in holding that the document containing the Terms and
Conditions governing the issuance and use of the credit card is not an actionable document
contemplated in Section 7, Rule 8 of the 1997 Rules of Civil Procedure.
2. Whether the Court of Appeals erred in applying Macalinao v. Bank of the Philippine Islands instead
of Alcaraz v. Court of Appeals10 as regards the imposition of interest and penalty charges on the credit
card obligation.
3. Whether the Court of Appeals erred in awarding attorneys fees in favor of BPI.
The Ruling of the Court
The petition is partially meritorious.
I.
Whether the document containing the
Terms and Conditions is an actionable document.
Section 7, Rule 8 of the 1997 Rules of Civil Procedure provides:
SEC. 7. Action or defense based on document. Whenever an action or defense is based upon a written
instrument or document, the substance of such instrument or document shall be set forth in the pleading,
and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to
be a part of the pleading, or said copy may with like effect be set forth in the pleading.
Clearly, the above provision applies when the action is based on a written instrument or document.
In this case, the complaint is an action for collection of sum of money arising from Leddas default in her
credit card obligation with BPI. BPIs cause of action is primarily based on Leddas (1) acceptance of the BPI
credit card, (2) usage of the BPI credit card to purchase goods, avail services and secure cash advances,
and (3) non-payment of the amount due for such credit card transactions, despite demands.11 In other
words, BPIs cause of action is not based only on the document containing the Terms and Conditions
accompanying the issuance of the BPI credit card in favor of Ledda. Therefore, the document containing
the Terms and Conditions governing the use of the BPI credit card is not an actionable document
contemplated in Section 7, Rule 8 of the 1997 Rules of Civil Procedure. As such, it is not required by the
Rules to be set forth in and attached to the complaint.
At any rate, BPI has sufficiently established a cause of action against Ledda, who admits having received
the BPI credit card, subsequently used the credit card, and failed to pay her obligation arising from the use
of such credit card.12
II.
Whether Alcaraz v. Court of Appeals,
instead of Macalinao v. BPI, is applicable.
Ledda contends that the case of Alcaraz v. Court of Appeals,13 instead of Macalinao v. Bank of the
Philippine Islands14 which the Court of Appeals invoked, is applicable in the computation of the interest
rate on the unpaid credit card obligation. Ledda claims that similar to Alcaraz, she was a "pre-screened"
client who did not sign any credit card application form or terms and conditions prior to the issuance of
the credit card. Like Alcaraz, Ledda asserts that the provisions of the Terms and Conditions, particularly on
the interests, penalties and other charges for non-payment of any outstanding obligation, are not binding
on her as such Terms and Conditions were never shown to her nor did she sign it.
We agree with Ledda. The ruling in Alcaraz v. Court of Appeals15 applies squarely to the present case. In
Alcaraz, petitioner there, as a pre-screened client of Equitable Credit Card Network, Inc., did not submit or
sign any application form or document before the issuance of the credit card. There is no evidence that
petitioner Alcaraz was shown a copy of the terms and conditions before or after the issuance of the credit
card in his name, much less that he has given his consent thereto.
In this case, BPI issued a pre-approved credit card to Ledda who, like Alcaraz, did not sign any credit card
application form prior to the issuance of the credit card. Like the credit card issuer in Alcaraz, BPI, which
has the burden to prove its affirmative allegations, failed to establish Leddas agreement with the Terms
and Conditions governing the use of the credit card. It must be noted that BPI did not present as evidence
the Terms and Conditions which Ledda allegedly received and accepted.16 Clearly, BPI failed to prove
Leddas conformity and acceptance of the stipulations contained in the Terms and Conditions. Therefore,
as the Court held in Alcaraz, the Terms and Conditions do not bind petitioner (Ledda in this case) "without
a clear showing that x x x petitioner was aware of and consented to the provisions of such document."17
On the other hand, Macalinao v. Bank of the Philippine Islands,18 which the Court of Appeals cited, involves
a different set of facts. There, petitioner Macalinao did not challenge the existence of the Terms and
Conditions Governing the Issuance and Use of the BPI Credit Card and her consent to its provisions,
including the imposition of interests and other charges on her unpaid BPI credit card obligation. Macalinao
simply questioned the legality of the stipulated interest rate and penalty charge, claiming that such
charges are iniquitous. In fact, one of Macalinaos assigned errors before this Court reads: "The reduction
of interest rate, from 9.25% to 2%, should be upheld since the stipulated rate of interest was
unconscionable and iniquitous, and thus illegal."19 Therefore, there is evidence that Macalinao was fully
aware of the stipulations contained in the Terms and Conditions Governing the Issuance and Use of the
Credit Card, unlike in this case where there is no evidence that Ledda was aware of or consented to the
Terms and Conditions for the use of the credit card.
Since there is no dispute that Ledda received, accepted and used the BPI credit card issued to her and that
she defaulted in the payment of the total amount arising from the use of such credit card, Ledda is liable
to pay BPI P322,138.58 representing the principal amount of her unpaid credit card obligation.20
Consistent with Alcaraz, Ledda must also pay interest on the total unpaid credit card amount at the rate of
12% per annum since her credit card obligation consists of a loan or forbearance of money.21 In Eastern
Shipping Lines, Inc. v. Court of Appeals,22 the Court explained:
1. When an obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
We reject Leddas contention that, since there was no written agreement to pay a higher interest rate, the
interest rate should only be 6%. Ledda erroneously invokes Article 2209 of the Civil Code.23 Article 2209
refers to indemnity for damages and not interest on loan or forbearance of money, which is the case here.
In Sunga-Chan v. Court of Appeals,24 the Court held:
Eastern Shipping Lines, Inc. synthesized the rules on the imposition of interest, if proper, and the
applicable rate, as follows: The 12% per annum rate under CB Circular No. 416 shall apply only to loans or
forbearance of money, goods, or credits, as well as to judgments involving such loan or forbearance of
money, goods, or credit, while the 6% per annum under Art. 2209 of the Civil Code applies "when the
transaction involves the payment of indemnities in the concept of damage arising from the breach or a
delay in the performance of obligations in general," with the application of both rates reckoned "from the
time the complaint was filed until the adjudged amount is fully paid." In either instance, the reckoning
period for the commencement of the running of the legal interest shall be subject to the condition "that
the courts are vested with discretion, depending on the equities of each case, on the award of interest.
(Emphasis supplied)
In accordance with Eastern Shipping Lines, Inc., the 12% legal interest shall be reckoned from the date BPI
extrajudicially demanded from Ledda the payment of her overdue credit card obligation. Thus, the 12%
legal interest shall be computed from 2 October 2007, when Ledda, through her niece Sally D. Gancea,25
received BPIs letter26dated 26 September 2007 demanding the payment of the alleged overdue amount of
P548,143.73.
III.
Whether the award of attorneys fees is proper.
Ledda assails the award of attorneys fees in favor of BPI on the grounds of (1) erroneous reliance by the
Court of Appeals on the case of Macalinao and (2) failure by the trial court to state the reasons for the
award of attorneys fees.
Settled is the rule that the trial court must state the factual, legal or equitable justification for the award of
attorneys fees.27 The matter of attorneys fees cannot be stated only in the dispositive portion of the
decision.28 The body of the courts decision must state the reasons for the award of attorneys fees.29 In
Frias v. San Diego-Sison,30 the Court held:
Article 2208 of the New Civil Code enumerates the instances where such may be awarded and, in all cases,
it must be reasonable, just and equitable if the same were to be granted. Attorneys fees as part of
damages are not meant to enrich the winning party at the expense of the losing litigant. They are not
awarded every time a party prevails in a suit because of the policy that no premium should be placed on
the right to litigate. The award of attorneys fees is the exception rather than the general rule.1wphi1 As
such, it is necessary for the trial court to make findings of facts and law that would bring the case within
the exception and justify the grant of such award. The matter of attorneys fees cannot be mentioned only
in the dispositive portion of the decision. They must be clearly explained and justified by the court in the
body of its decision. On appeal, the CA is precluded from supplementing the bases for awarding attorneys
fees when the trial court failed to discuss in its Decision the reasons for awarding the same. Consequently,
the award of attorneys fees should be deleted.1wphi1
In this case, the trial court failed to state in the body of its decision the factual or legal reasons for the
award of attorneys fees in favor of BPI. Therefore, the same must be deleted.
WHEREFORE, we GRANT the petition IN PART. Petitioner Anita A. Ledda is ORDERED to pay respondent
Bank of the Philippine Islands the amount of .P322, 138.58, representing her unpaid credit card obligation,
with interest thereon at the rate of 12% per annum to be computed from 2 October 2007, until full
payment thereof. The award of attorney's fees is DELETED for lack of basis.
SO ORDERED.
G.R. No. 183034 March 12, 2014
SPOUSES FERNANDO and MA. ELENA SANTOS, Petitioners,
vs.
LOLITA ALCAZAR, represented by her Attorney-in-Fact DELFIN CHUA, Respondent.
DECISION
DEL CASTILLO, J.:
The rule that the genuineness and due execution of the instrument shall be deemed admitted, unless the
adverse party specifically denies them under oath, applies only to parties to such instrument.
Assailed in this Petition for Review on Certiorari1 are the September 27, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 87935, entitled "Lolita Alcazar, represented by her Attorney-in-Fact, Delfin
Chua, Plaintiff-Appellee, versus Spouses Fernando T. Santos, Defendants-Appellants," and its May 23, 2008
Resolution3 denying petitioners' Motion for Reconsideration.
Factual Antecedents
In February 2001, respondent Lolita Alcazar, proprietor of Legazpi Color Center (LCC), instituted through
her attorney-in-fact Delfin Chua a Complaint4 for sum of money against the petitioners, spouses Fernando
and Ma. Elena Santos, to collect the value of paint and construction materials obtained by the latter from
LCC amounting to 1,456,000.00, which remained unpaid despite written demand. The case was docketed
as Civil Case No. 9954 and assigned to Branch 5 of the Regional Trial Court of Legazpi City. Respondents
cause of action is based on a document entitled "Acknowledgment"5 apparently executed by hand by
petitioner Fernando, thus:
ACKNOWLEDGMENT
This is to certify that I acknowledge my obligation in the amount of One Million Four Hundred Fifty Six
Thousand (1,456,000), Philippine Currency with LEGAZPI COLOR CENTER, LEGAZPI CITY.
Signed at No. 32 Agno St. Banaue, Quezon City on December 12, 2000.
(signed)
FERNANDO T. SANTOS
Debtor
Signed in the presence of:
(signed)
TESS ALCAZAR
Proprietress
Legazpi Color Center
Witnesses in the signing:

(signed) (signed)
DELFIN A. CHUA AILEEN C. EDADES6

Respondent alleged in her Complaint:

 xxxx
4. That as part of the agreement, defendants also obligated themselves to pay plaintiff at the rate of
3% interest per month based on the unpaid principal, to cover the cost of money;
5. That as of December, 2000, the total obligation of defendants with plaintiff which consists of
principal and interest was 1,456,000.00, a copy of the document where defendants acknowledged
their unpaid obligation is hereto attached as Annex "B"; (referring to the above Acknowledgment)
6. That on January 5, 2001, plaintiff sent a final demand to defendants to pay the indebtedness, but
said demand fell on deaf ears and defendants did not even bother to communicate with plaintiff,
copy of the demand letter is hereto attached as Annex "C";7
She thus prayed that judgment be rendered ordering petitioners to pay her the sum of 1,456,000.00,
with interest at the rate of 3% per month; attorneys fees in the amount of 72,800.00, and 1,500.00 per
court appearance; and costs of the suit.
In their Answer,8 petitioners sought the dismissal of the Complaint, alleging among others that
4. Paragraph 5 is specifically denied as the document which Defendant Fernando T. Santos signed
does not reflect the true contract or intention of the parties, the actionable document is incorrect
and has to be reformed to reflect the real indebtedness of the defendants;
5. Paragraph 6 of the complaint is specifically denied as the same does not reflect the correct amount.
The defendants[] computation is that the amount of 600,000.00 is the only amount due and the
instrument used as the actionable document does not reflect the correct substance of the
transaction and indicates a reformation of the actionable document;
6. Paragraph 7 is specifically denied as defendants are willing to pay the correct amount, not the
amount in the complaint as the same does not indicate the correct amount owing to the plaintiff;
xxxx
VERIFICATION
I, Fernando T. Santos[,] of legal age, Filipino[,] married and resident of Banawe, Quezon City[,] under oath
declare:
1. That I am the defendant in the above entitled case;
2. That I have read and understood the contents thereof and affirm that the allegations contained
therein are true and correct of my personal knowledge[;]
3. That I have not commenced any other action or proceeding involving x x x the same issues in the
Supreme Court, Court of Appeals or any other tribunal/agency[;]
4. That to the best of my knowledge, no such action or proceeding involving the same issues in the
Supreme Court, Court of Appeals or any other tribunal/agency [is pending];
5. That if I should thereafter learn that a similar action or proceeding has been filed or is pending
before the Supreme Court, Court of Appeals or any other tribunal/agency, I undertake to report the
fact within 5 days therefrom to this court.
IN WITNESS WHEREOF, I have hereunto set [my] hand this April 18, 2001 x x x.
(signed)
Fernando T. Santos
Defendant9
Pre-trial was conducted. On September 26, 2005, the trial court issued its Pre-trial Order10 setting forth
the matters taken up during the pre-trial conference and the schedule of hearings. The presentation of
respondents evidence was set on October 10; November 8 and 21; and December 6 and 13, 2005.
Petitioners were scheduled to present their case on January 9 and 23; and February 6, 2006.11
On November 8, 2005, respondent presented her evidence and testified in court as the lone witness. On
November 21, 2005, she made a formal offer of her evidence and rested her case.
On January 17, 2006, petitioners filed a Demurrer to Evidence,12 which respondent opposed. Petitioners
argued that the Acknowledgment respondents Exhibit "A" which was presented in court was not an
original copy and thus inadmissible; petitioners receipt of the written demand was not proved; the
alleged deliveries of paint and construction materials were not covered by delivery receipts; and
respondents testimony was merely hearsay and uncorroborated.
On January 26, 2006, the trial court issued an Order13 denying petitioners demurrer for lack of merit. In
the same Order, the trial court scheduled the presentation of petitioners evidence in the morning and
afternoon sessions of February 20, 2006.
Petitioners moved to reconsider the trial courts January 26, 2006 Order. On February 20, 2006, the trial
court issued an Order14 denying petitioners Motion for Reconsideration and scheduled the presentation
of evidence for the petitioners on March 20, 2006.
On March 15, 2006, petitioners moved to reset the March 20, 2006 scheduled hearing, on the ground that
on said date and time, their counsel was to appear in another scheduled case.
On March 20, 2006, or the day of the scheduled hearing, petitioners counsel failed to appear, prompting
the trial court to issue an Order15 1) denying petitioners March 15, 2006 motion to reset for lack of merit
and for violating Section 4, Rule 15 of the 1997 Rules of Civil Procedure;16 2) declaring that petitioners
have waived their right to present evidence; and 3) declaring that Civil Case No. 9954 is deemed submitted
for decision.
Petitioners went up to the CA on certiorari. Docketed as CA-G.R. SP. No. 93889, the Petition questioned
the denial of petitioners demurrer. Meanwhile, they filed a Motion for Reconsideration17 of the March 20,
2006 Order denying their motion to reset, but the trial court denied the same in an Order dated April 24,
2006.18
The Decision of the Regional Trial Court
On June 27, 2006, the trial court rendered its Decision19 in Civil Case No. 9954, which contained the
following decretal portion:
WHEREFORE, Premises Considered, judgment is rendered ordering the defendants to pay the plaintiff the
following amounts, to wit:
1. The sum of 1,456,000 pesos plus interest thereon at the legal rate commencing from the time the
complaint was filed in court until such time such amount has been paid in full;
2. The sum of 10,000 pesos as litigation expenses; and
3. The sum of 25,000 pesos as attorneys fees.
The defendants shall pay the costs of suit.
Needless to say, the counterclaim in the Answer is Dismissed.
SO ORDERED.20
The trial court essentially held that petitioners, in their Answer, admitted that they entered into
transactions with the respondent for the delivery of paint and construction materials, which remained
unpaid; that from the Acknowledgment, Exhibit "A," signed by Fernando and duly presented,
authenticated, and identified by respondent during trial, petitioners admitted that their unpaid obligation
including interest amounted to 1,456,000.00; and that petitioners plea for reformation has no basis.
Petitioners filed their Motion for Reconsideration,21 arguing that the trial court should not have
pre-empted CA-G.R. SP No. 93889, and instead should have awaited the resolution thereof; that the
Acknowledgment was signed by Fernando alone, and thus the judgment should not bind his co-defendant
and herein petitioner Ma. Elena Santos; that petitioners liability has not been established since no
delivery receipts, invoices and statements of account were presented during trial to show delivery of paint
and construction materials; that respondent was unable to present the original of the Acknowledgment,
which puts the Decision of the trial court declaring that the original thereof was presented and
authenticated by respondent in serious doubt; and that there is no evidentiary basis to hold petitioners
liable for 1,456,000.00.
In an Order22 dated August 8, 2006, the trial court denied petitioners Motion for Reconsideration.
The Assailed Court of Appeals Decision
Petitioners interposed an appeal with the CA. Docketed as CA-G.R. CV No. 87935, the ruling in the appeal
is the subject of the present Petition. Petitioners claimed that the trial court erred in allowing respondent
to present her evidence ex parte; the Acknowledgment has not been authenticated; the adjudged liability
in the amount of 1,456,000.00 was not sufficiently proved by respondent, as she failed to present
receipts and statements of account which would show the true amount of their obligation, including
interest; the trial court based its findings on erroneous conclusions, assumptions and inferences; and the
trial court erred in declaring them to have waived their right to present evidence.
Meanwhile, in CA-G.R. SP. No. 93889, the CA issued its Decision23 dated March 30, 2007, dismissing
petitioners certiorari petition and sustaining the trial courts denial of their demurrer. The CA held that
petitioners failed to deny specifically under oath the genuineness and due execution of the
Acknowledgment; consequently, 1) its genuineness and due execution are deemed admitted, 2) there was
thus no need to present the original thereof, and 3) petitioners liability was sufficiently established.24 The
CA added that under the circumstances, certiorari was not the proper remedy; petitioners should have
gone to trial and awaited the trial courts Decision, which they could appeal if adverse.
The Decision became final and executory on April 27, 2007.25
On September 27, 2007, the CA issued the herein assailed Decision in CA-G.R. CV No. 87935, which held as
follows:
WHEREFORE, the instant appeal is DENIED and consequently DISMISSED for lack of merit.
SO ORDERED.26
The CA held that in their Answer, petitioners admitted that they owed respondent, albeit to the extent of
600,000.00; this judicial admission of liability required no further proof. And with this admission of
liability, the Acknowledgment which was duly authenticated and formally offered in evidence was
sufficient to establish their liability, and no further proof in the form of receipts and statements of account
was required. The appellate court stated that Fernandos categorical admission of liability as contained in
the Acknowledgment as well as petitioners admissions in their Answer sufficed. It held further that
respondent was competent to testify on the Acknowledgment as she was a signatory therein.
The CA likewise held that since they failed to oppose the Acknowledgment in the court below as a result of
their having waived their right to present evidence, petitioners cannot now belatedly question the
document. Moreover, their claim of a lesser liability in the amount of 600,000.00 remained to be plain
unsubstantiated allegations as a result of their failure to refute respondents evidence and present their
own.
Finally, the CA held that petitioners were not deprived of due process during trial; on the contrary, they
were afforded sufficient opportunity to participate in the proceedings by way of constant strict reminders
by the court and several continuances, but they failed to take part in the proceedings.
Petitioners moved to reconsider, but in the second assailed May 23, 2008 disposition, the appellate court
stood its ground. Thus, the instant Petition seeking a reversal of the assailed CA dispositions and the
dismissal of the Complaint in Civil Case No. 9954.
 Issues
Petitioners now raise the following issues for the Courts resolution:
IN THE RESOLUTION OF THE COURT OF APPEALS, THE ARGUMENT IN PETITIONERS MOTION FOR
RECONSIDERATION THAT RESPONDENT FAILED TO PRODUCE AND PRESENT THE ORIGINAL COPY OF
THE ACKNOWLEDGMENT RECEIPT EXHIBIT "A" WHICH IS A VIOLATION OF THE BEST EVIDENCE RULE,
WAS NOT ACTED UPON AND CONSIDERED "REHASH".
THE COURT OF APPEALS27 FOUND THE NEED FOR RECEIPTS OF STATEMENTS OF ACCOUNT TO BE
PRESENTED REFLECTING THE ACTUAL OBLIGATION OF PETITIONERS IN ITS DECISION DATED JULY 20,
2004 AND THUS SET ASIDE AND REMANDED TO THE COURT A QUO THE CASE FOR FURTHER
PROCEEDINGS BUT THE SAME WAS COUNTERMANDED IN THE ASSAILED DECISION.
CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, PETITIONERS DID NOT ADMIT IN THEIR
ANSWER THAT THEY ARE INDEBTED TO RESPONDENT IN THE AMOUNT OF 1,456,000.00.
THE COURT OF APPEALS FAILED TO RULE ON THE ABSENCE OF ANY RECORD OF THE PROCEEDINGS
OF THE PRE-TRIAL CONFERENCE HELD ON SEPTEMBER 26, 2005. THE COURT OF APPEALS SHOULD
HAVE SERIOUSLY CONSIDERED TACKLING THE ISSUE OF PRESUMPTIONS, INFERENCES, AND
MISCONCEPTION OF FACTS USED BY THE COURT A QUO [IN ARRIVING AT] ITS FINDINGS AND
CONCLUSIONS.
PETITIONERS WERE NOT DULY NOTIFIED OF THE NOVEMBER 8, 2005 HEARING IN VIOLATION OF
SECTIONS 4 AND 5 [OF RULE 15] OF THE RULES OF COURT WHICH THE COURT OF APPEALS FAILED TO
RULE.
PETITIONERS HAVE BEEN DEPRIVED OF THEIR DAY IN COURT WHEN THEY WERE CONSIDERED TO
HAVE WAIVED THEIR RIGHT TO PRESENT EVIDENCE AND THE CASE SUBMITTED FOR DECISION, THE
CONTRARY RULING OF THE COURT OF APPEALS NOTWITHSTANDING.28
Petitioners Arguments
Petitioners, in their Petition and Reply,29 assert that during the proceedings below, only a photocopy of the
Acknowledgment was presented and identified by respondent even as the original was not lost, the same
having been made part of the record of the case when respondents evidence was first presented ex
parte.30 For this reason, they argue that the photocopy presented and offered in evidence is inadmissible
and could not be the basis for arriving at a finding of liability on their part, pursuant to the best evidence
rule.
Petitioners further point out that in the first CA disposition, specifically in CA-G.R. CV No. 71187, the
appellate courts Thirteenth Division ruled that in establishing petitioners pecuniary liability, receipts and
statements of account reflecting the actual amount of their obligation and interest thereon were
necessary. Later on, in CA-G.R. CV No. 87935, the same division of the CA made a complete turnaround,
declaring that receipts and statements of account were no longer necessary. For petitioners, this retraction
by the CA was irregular.
Petitioners add that the pre-trial conference in Civil Case No. 9954 is a sham, as there are no records to
show that it was ever conducted. Consequently, this irregularity renders the proceedings below including
the assailed judgment null and void. They add that the trial court irregularly proceeded to receive
respondents evidence ex parte on November 8, 2005 despite lack of notice of hearing.
Next, petitioners point out inconsistencies and erroneous assumptions made by the appellate court which
formed the basis of its decision, such as Ma. Elenas undue inclusion in the judgment of liability, when it is
evident from the Acknowledgment that it was executed and signed by Fernando alone.
Finally, petitioners submit that in denying a continuance of the March 20, 2006 hearing and declaring
them to have waived their right to present evidence, the trial court deprived them of their day in court.
Respondents Arguments
In her Comment,31 respondent counters that the Petition presents no valid cause for the Courts exercise
of its power of review; that the issues raised therein have been duly taken up and conclusively resolved by
the CA; that with the finality of the Decision in CA-G.R. SP No. 93889, petitioners may no longer raise any
issue pertaining to the Acknowledgment, the genuineness and due execution of which they are considered
to have admitted; and that with the resolution by the CA of the issues revived in the Petition, petitioners
are guilty of forum shopping.
Respondent adds that petitioners are bound by the proceedings taken during the pre-trial conference, and
may not pretend to be ignorant of the hearing dates agreed upon and set by the trial court. Respondent
argues that petitioners may not claim to be oblivious of the pre-trial conference itself, since their
representative was present all throughout the proceedings, and a pre-trial order was issued thereafter
which contained the matters taken up during pre-trial and the hearing dates scheduled by the court.
Our Ruling
The Court denies the Petition.
Respondents failure to present the original copy of the Acknowledgment during the taking of her
testimony for the second time, and the presentation of a mere photocopy thereof at said hearing, does
not materially affect the outcome of the case. It was a mere procedural inadvertence that could have been
cured and did not affect petitioners cause in any manner. As conceded by them and as held by the CA, the
original exists and was made part of the records of the case when respondents evidence was first taken.
Though respondent now claims that she had lost the original, the CA proclaimed that the document
resides in the record. This would explain then why respondent cannot find it in her possession; it is with
the court as an exhibit. Besides, it evidently appears that there is no question raised on the authenticity
and contents of the photocopy that was presented and identified in court; petitioners merely insist that
the photocopy is inadmissible as a result of respondents failure to present the original, which they
nevertheless admit to exist and is found and included in the record of the case.
While it is a basic rule of evidence that the original copy prevails over a mere photocopy,32 there is no
harm if in a case, both the original and a photocopy thereof are authenticated, identified and formally
offered in evidence by the party proponent.
More to the point is the fact that petitioners failed to deny specifically under oath the genuineness and
due execution of the Acknowledgment in their Answer. The effect of this is that the genuineness and due
execution of the Acknowledgment is deemed admitted. "By the admission of the genuineness and due
execution [of such document] is meant that the party whose signature it bears admits that he signed it or
that it was signed by another for him with his authority; that at the time it was signed it was in words and
figures exactly as set out in the pleading of the party relying upon it; that the document was delivered;
and that any formal requisites required by law, such as a seal, an acknowledgment, or revenue stamp,
which it lacks, are waived by him. Hence, such defenses as that the signature is a forgery x x x; or that it
was unauthorized x x x; or that the party charged signed the instrument in some other capacity than that
alleged in the pleading setting it out x x x; or that it was never delivered x x x, are cut off by the admission
of its genuineness and due execution."33
"There is no need for proof of execution and authenticity with respect to documents the genuineness and
due execution of which are admitted by the adverse party."34 With the consequent admission engendered
by petitioners failure to properly deny the Acknowledgment in their Answer, coupled with its proper
authentication, identification and offer by the respondent, not to mention petitioners admissions in
paragraphs 4 to 6 of their Answer that they are indeed indebted to respondent, the Court believes that
judgment may be had solely on the document, and there is no need to present receipts and other
documents to prove the claimed indebtedness. The Acknowledgment, just as an ordinary
acknowledgment receipt, is "valid and binding between the parties who executed it, as a document
evidencing the loan agreement they had entered into."35 The absence of rebutting evidence occasioned by
petitioners waiver of their right to present evidence renders the Acknowledgment as the best evidence of
the transactions between the parties and the consequential indebtedness incurred.36 Indeed, the effect of
the admission is such that "a prima facie case is made for the plaintiff which dispenses with the necessity
of evidence on his part and entitles him to a judgment on the pleadings unless a special defense of new
matter, such as payment, is interposed by the defendant."37
However, as correctly argued by petitioners, only Fernando may be held liable for the judgment amount of
1,456,000.00, since Ma. Elena was not a signatory to the Acknowledgment. She may be held liable only
to the extent of 600,000.00, as admitted by her and Fernando in paragraph 5 of their Answer; no case
against her may be proved over and beyond such amount, in the absence of her signature and an
acknowledgment of liability in the Acknowledgment. The rule that the genuineness and due execution of
the instrument shall be deemed admitted, unless the adverse party specifically denies them under oath,
applies only to parties to the document.38
As for petitioners claim that in CA-G.R. CV No. 87935, the same division of the CA made a complete
turnaround from its original pronouncement in CA-G.R. CV No. 71187 thus doing away with the
requirement of presenting receipts and statements of account which it originally required in the latter case,
the Court finds no irregularity in this. The admission of liability resulting from petitioners admission of
indebtedness in their Answer and other pleadings,39 their failure to specifically deny under oath the
genuineness and due execution of the Acknowledgment, as well as their waiver of their right to present
evidence all these did away with the necessity of producing receipts and statements of account which
would otherwise be required under normal circumstances.
On the claim that they were denied their day in court, the Court notes that despite reminders and
admonitions by the trial court, petitioners caused several continuances of trial, which understandably
prompted the trial court to finally deny their March 15, 2006 motion to reset the scheduled March 20
hearing and declare a waiver of their right to present evidence. Thus, as found by the CA,
In its September 26, 2005 Pre-Trial Order, the trial court fixed the hearing dates with a firm
declaration that the same "shall be strictly followed and all postponements made by the parties shall
be deducted from such partys allotted time to present evidence.
When plaintiff-appellee finished her presentation of evidence ahead of schedule, the appellants
were again advised of their schedule for presentation of evidence i.e., December 6 and 13, 2005 and
January 9 and 23 and February 6, 2006. Despite said schedule, the appellants failed to appear in
court.
On January 9, 2006, the lower court reiterated the scheduled hearing set on January 26, 2006 and
included February 20, 2006 as an additional hearing date.
Instead of presenting their evidence, the appellants filed a Demurrer to Evidence on January 17,
2006 which, however, was denied by the trial court in its Order dated January 26, 2006.
On February 20, 2006, the trial court again allowed another hearing date March 20, 2006 to
afford the appellants added opportunity to present their evidence.
The foregoing clearly show that not only were appellants given an opportunity to be heard, an added
mileage in due process was extended to them by the trial court.40
Petitioners submit further that the trial courts subsequent denial of their motion for continuance of the
March 20, 2006 hearing was improper. Yet again, the Court does not subscribe to this view. Petitioners
filed their motion to reset the March 20, 2006 previously scheduled hearing, but the trial court did not act
on the motion. Instead of attending the March 20, 2006 hearing, petitioners counsel proceeded to absent
himself and attended the supposed hearing of another case. This was improper. As we have held before,
[A] party moving for postponement should be in court on the day set for trial if the motion is not acted
upon favorably before that day. He has no right to rely either on the liberality of the court or on the
generosity of the adverse party. x x x
[A]n attorney retained in a case the trial of which is set for a date on which he knows he cannot appear
because of his engagement in another trial set previously on the same date, has no right to presume that
the court will necessarily grant him continuance. The most ethical thing for him to do in such a situation is
to inform the prospective client of all the facts so that the latter may retain another attorney, If the client,
having full knowledge of all the facts, still retain[s] the attorney, he assumes the risk himself and cannot
complain of the consequences if the postponement is denied and finds himself without attorney to
represent him at the trial.41
The grant or denial of a motion for postponement rests on the courts sound discretion; it is a matter of
privilege, not a right. "A movant for postponement should not assume beforehand that his motion will be
granted. The grant or denial of a motion for postponement is a matter that is addressed to the sound
discretion of the trial court. Indeed, an order declaring a party to have waived the right to present
evidence for performing dilatory actions upholds the trial court's duty to ensure that trial proceeds despite
the deliberate delay and refusal to proceed on the part of one party."42
On the other questions raised by petitioners, specifically that the pre-trial conference is a sham for lack of
records of the proceedings, and that the November 8, 2005 hearing where respondent's evidence was
taken exparte was irregular for lack of a notice of hearing - the Court finds them to be without merit. It is
evident that a pre-trial conference was held, and that petitioners' representative was present therein;
moreover, the proceedings were covered by the required pre-trial order, which may itself be considered a
record of the pre-trial.43 In said order, the November 8, 2005 pre-scheduled hearing was particularly
specified.44 Thus, from the very start, petitioners knew of the November 8 hearing; if they failed to attend,
no fault may be attributed to the trial court.
WHEREFORE, the Petition is DENIED. The September 27, 2007 Decision and May 23, 2008 Resolution of
the Court of Appeals in CA-G.R. CV No. 87935 are AFFIRMED, with MODIFICATION in that petitioner Ma.
Elena Santos is held liable for the principal and interest only to the extent of 600,000.00.
SO ORDERED.
G.R. No. 150731 September 14, 2007
CASENT REALTY DEVELOPMENT CORP., petitioner,
vs.
PHILBANKING CORPORATION, respondent.
DECISION
VELASCO, JR., J.:
On appeal to this Court through Rule 45 of the Rules of Court is the March 29, 2001 Decision1 and
November 7, 2001 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 63979 entitled Philbanking
Corporation v. Casent Realty Development Corporation. The CA reversed the May 12, 1999 Order3 of the
Makati City Regional Trial Court (RTC), Branch 145 in Civil Case No. 93-2612, which granted petitioners
demurrer to evidence and dismissed the complaint filed by respondent.
The Facts
The facts according to the appellate court are as follows:
In 1984, petitioner Casent Realty Development Corporation executed two promissory notes in favor of
Rare Realty Corporation (Rare Realty) involving the amounts of PhP 300,000 (PN No. 84-04) and PhP
681,500 (PN No. 84-05). It was agreed in PN No. 84-04 that the loan it covered would earn an interest of
36% per annum and a penalty of 12% in case of non-payment by June 27, 1985, while the loan covered by
PN No. 84-05 would earn an interest of 18% per annum and 12% penalty if not paid by June 25, 1985.4 On
August 8, 1986, these promissory notes were assigned to respondent Philbanking Corporation through a
Deed of Assignment.5
Respondent alleged that despite demands, petitioner failed to pay the promissory notes upon maturity
such that its obligation already amounted to PhP 5,673,303.90 as of July 15, 1993. Respondent filed on
July 20, 1993 a complaint before the Makati City RTC for the collection of said amount. In its Answer,6
petitioner raised the following as special/affirmative defenses:
1. The complaint stated no cause of action or if there was any, the same was barred by estoppel,
statute of frauds, statute of limitations, laches, prescription, payment, and/or release;
2. On August 27, 1986, the parties executed a Dacion en Pago7 (Dacion) which ceded and conveyed
petitioners property in Iloilo City to respondent, with the intention of totally extinguishing
petitioners outstanding accounts with respondent. Petitioner presented a Confirmation Statement8
dated April 3, 1989 issued by respondent stating that petitioner had no loans with the bank as of
December 31, 1988.
3. Petitioner complied with the condition in the Dacion regarding the repurchase of the property
since the obligation was fully paid. Respondent sent confirmation statements in the latter months of
1989, which showed that petitioner had no more outstanding loan; and
4. Assuming that petitioner still owed respondent, the latter was already estopped since in October
1988, it reduced its authorized capital stock by 50% to wipe out a deficit of PhP 41,265,325.12.9
Thus, petitioner, by way of compulsory counterclaim, alleged that it made an overpayment of
approximately PhP 4 million inclusive of interest based on Central Bank Reference Lending Rates on dates
of overpayment. Petitioner further claimed moral and exemplary damages and attorneys fee, amounting
to PhP 4.5 million plus the costs of suit as a consequence of respondents insistence on collecting.10
The parties failed to reach an amicable settlement during the pre-trial conference. Thereafter, respondent
presented its evidence and formally offered its exhibits. Petitioner then filed a Motion for Judgment on
Demurrer to the Evidence,11 pointing out that the plaintiffs failure to file a Reply to the Answer which
raised the Dacion and Confirmation Statement constituted an admission of the genuineness and execution
of said documents; and that since the Dacion obliterated petitioners obligation covered by the promissory
notes, the bank had no right to collect anymore.
Respondent subsequently filed an Opposition12 which alleged that: (1) the grounds relied upon by
petitioner in its demurrer involved its defense and not insufficiency of evidence; (2) the Dacion and
Confirmation Statement had yet to be offered in evidence and evaluated; and (3) since respondent failed
to file a Reply, then all the new matters alleged in the Answer were deemed controverted.13
The trial court ruled in favor of petitioner and dismissed the complaint through the May 12, 1999 Order,
the dispositive portion of which reads:
WHEREFORE, premises considered[,] finding defendants Motion For Judgment On Demurrer To The
Evidence to be meritorious[,] the same is hereby GRANTED. Consequently, considering that the
obligation of the defendant to the plaintiff having been extinguish[ed] by a Dacion en Pago duly
executed by said parties, the instant complaint is hereby DISMISSED, with prejudice. Without Cost.14
The Ruling of the Court of Appeals
On appeal, respondent alleged that the trial court gravely erred because the promissory notes were not
covered by the Dacion, and that respondent was able to prove its causes of action and right to relief by
overwhelming preponderance of evidence. It explained that at the time of execution of the Dacion, the
subject of the promissory notes was the indebtedness of petitioner to Rare Realty and not to the
"Bank"--the party to the Dacion. It was only in 1989 after Rare Realty defaulted in its obligation to
respondent when the latter enforced the security provided under the Deed of Assignment by trying to
collect from petitioner, because it was only then that petitioner became directly liable to respondent. It
was also for this reason that the April 3, 1989 Confirmation Statement stated that petitioner had no
obligations to repondent as of December 31, 1988. On the other hand, petitioner claimed that the Deed of
Assignment provided that Rare Realty lost its rights, title, and interest to directly proceed against
petitioner on the promissory notes since these were transferred to respondent. Petitioner reiterated that
the Dacion covered all conceivable amounts including the promissory notes.15
The appellate court ruled that under the Rules of Civil Procedure, the only issue to be resolved in a
demurrer is whether the plaintiff has shown any right to relief under the facts presented and the law. Thus,
it held that the trial court erred when it considered the Answer which alleged the Dacion, and that its
genuineness and due execution were not at issue. It added that the court a quo should have resolved
whether the two promissory notes were covered by the Dacion, and that since petitioners demurrer was
granted, it had already lost its right to present its evidence.16
The CA found that under the Deed of Assignment, respondent clearly had the right to proceed against the
promissory notes assigned by Rare Realty. Thus, the CA ruled, as follows:
WHEREFORE, premises considered, the Order dated May 12, 1999 of the Regional Trial Court,
National Capital Judicial Region, Branch 145, Makati City is hereby REVERSED and SET ASIDE.
Judgment is hereby entered ORDERING [petitioner] Casent Realty [Development] Corporation to:
1. pay [respondent] Philbanking Corporation the amount of P300,000.00 with an interest of 36%
per annum and a penalty of 12% for failure to pay the same on its maturity date, June 27, 1985
as stipulated in Promissory Note No. 84-04;
2. pay [respondent] Philbanking Corporation the amount of P681,500.00 with an interest of 18%
per annum and a penalty of 12% for failure to pay the same on its maturity date, June 25, 1985
as stipulated in Promissory Note No. 84-05; and
3. pay [respondent] Philbanking Corporation, the amount representing 25% of total amount due
as attorneys fee as stipulated in the promissory notes.
SO ORDERED.17
Petitioner filed a Motion for Reconsideration18 which was denied by the CA in its November 7, 2001
Resolution.19
The Issues
WHETHER OR NOT THE COURT OF APPEALS ERRED IN EXCLUDING THE PETITIONERS AFFIRMATIVE
DEFENSES IN ITS ANSWER IN RESOLVING A DEMURRER TO EVIDENCE; AND
WHETHER OR NOT PETITIONER IS LIABLE TO PAY THE RESPONDENT
In other words, the questions posed by this case are:
1. Does respondents failure to file a Reply and deny the Dacion and Confirmation Statement under
oath constitute a judicial admission of the genuineness and due execution of these documents?
2. Should judicial admissions be considered in resolving a demurrer to evidence? If yes, are the
judicial admissions in this case sufficient to warrant the dismissal of the complaint?
Petitioner asserts that its obligation to pay under the promissory notes was already extinguished as
evidenced by the Dacion and Confirmation Statement. Petitioner submits that when it presented these
documents in its Answer, respondent should have denied the same under oath. Since respondent failed to
file a Reply, the genuineness and due execution of said documents were deemed admitted, thus also
admitting that the loan was already paid. On the other hand, respondent states that while it failed to file a
Reply, all the new matters were deemed controverted pursuant to Section 10, Rule 6 of the Rules of Court.
Also, the loan which was covered by the Dacion refers to another loan of petitioner amounting to PhP
3,921,750 which was obtained directly from the respondent as of August 1986.20 Furthermore, petitioner
argued that assuming respondent admitted the genuineness and due execution of the Dacion and
Confirmation Statement, said admission was not all-encompassing as to include the allegations and
defenses pleaded in petitioners Answer.
The Courts Ruling
The petition is partly meritorious.
Rule 33, Section 1 of the 1997 Rules of Civil Procedure provides:
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.
In Gutib v. Court of Appeals, we defined a demurrer to evidence as "an objection by one of the parties in
an action, to the effect that the evidence which his adversary produced is insufficient in point of law,
whether true or not, to make out a case or sustain the issue."21
What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff is
entitled to the relief based on the facts and the law. The evidence contemplated by the rule on demurrer
is that which pertains to the merits of the case, excluding technical aspects such as capacity to sue.22
However, the plaintiffs evidence should not be the only basis in resolving a demurrer to evidence. The
"facts" referred to in Section 8 should include all the means sanctioned by the Rules of Court in
ascertaining matters in judicial proceedings. These include judicial admissions, matters of judicial notice,
stipulations made during the pre-trial and trial, admissions, and presumptions, the only exclusion being
the defendants evidence.
Petitioner points out that the defense of Dacion and Confirmation Statement, which were submitted in the
Answer, should have been specifically denied under oath by respondent in accordance with Rule 8, Section
8 of the Rules of Court:
Section 8. How to contest such documents.When an action or defense is founded upon a written
instrument, copied in or attached to the corresponding pleading as provided in the preceding section,
the genuineness and due execution of the instrument shall be deemed admitted unless the adverse
party, under oath, specifically denies them, and sets forth, what he claims to be the facts; but the
requirement of an oath does not apply when the adverse party does not appear to be a party to the
instrument or when compliance with an order for an inspection of the original instrument is refused.
Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due execution
of said documents. This judicial admission should have been considered by the appellate court in resolving
the demurrer to evidence. Rule 129, Section 4 of the Rules of Court provides:
Section 4. Judicial admissions.---An admission, verbal or written, made by a party in the course of
the proceeding in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.
On appeal to the CA, respondent claimed that even though it failed to file a Reply, all the new matters
alleged in the Answer are deemed controverted anyway, pursuant to Rule 6, Section 10:
Section 10. Reply.A reply is a pleading, the office or function of which is to deny, or allege facts in
denial or avoidance of new matters alleged by way of defense in the answer and thereby join or make
issue as to such new matters. If a party does not file such reply, all the new matters alleged in the
answer are deemed controverted.
We agree with petitioner. Rule 8, Section 8 specifically applies to actions or defenses founded upon a
written instrument and provides the manner of denying it. It is more controlling than Rule 6, Section 10
which merely provides the effect of failure to file a Reply. Thus, where the defense in the Answer is based
on an actionable document, a Reply specifically denying it under oath must be made; otherwise, the
genuineness and due execution of the document will be deemed admitted.23 Since respondent failed to
deny the genuineness and due execution of the Dacion and Confirmation Statement under oath, then
these are deemed admitted and must be considered by the court in resolving the demurrer to evidence.
We held in Philippine American General Insurance Co., Inc. v. Sweet Lines, Inc. that "[w]hen the due
execution and genuineness of an instrument are deemed admitted because of the adverse partys failure
to make a specific verified denial thereof, the instrument need not be presented formally in evidence for it
may be considered an admitted fact."24
In any case, the CA found that:
From the facts of the case, the genuineness and due execution of the Dacion en Pago were never put
to issue. Genuineness merely refers to the fact that the signatures were not falsified and/or whether
there was no substantial alteration to the document. While due execution refers to whether the
document was signed by one with authority.25
The more important issue now is whether the Dacion and Confirmation Statement sufficiently prove that
petitioners liability was extinguished. Respondent asserts that the admission of the genuineness and due
execution of the documents in question is not all encompassing as to include admission of the allegations
and defenses pleaded in petitioners Answer. In executing the Dacion, the intention of the parties was to
settle only the loans of petitioner with respondent, not the obligation of petitioner arising from the
promissory notes that were assigned by Rare Realty to respondent.
We AGREE.
Admission of the genuineness and due execution of the Dacion and Confirmation Statement does not
prevent the introduction of evidence showing that the Dacion excludes the promissory notes. Petitioner,
by way of defense, should have presented evidence to show that the Dacion includes the promissory
notes.
The promissory notes matured in June 1985, and Rare Realty assigned these promissory notes to
respondent through a Deed of Assignment dated August 8, 1986. The Deed of Assignment provides, thus:
Rare Realty Corporation, a corporation duly organized and existing in accordance with law, with office
at 8th Floor Philbanking Building, Ayala Ave., Makati, Metro Manila (herein called Assignor) in
consideration of the sum of THREE MILLION SEVEN HUNDRED NINETY THOUSAND & 00/100 pesos
[PhP 3,790,000.00] and as security fee or in the payment of the sum, obtained or to be obtained as
loan or credit accommodation of whatever form or nature from the [PHILBANKING] CORPORATION,
with office at Ayala Ave., Makati, Metro Manila (herein called Assignee), including renewals or
extensions of such loan or credit accommodation, now existing or hereinafter incurred, due or to
become due, whether absolute or contingent, direct or indirect, and whether incurred by the
Assignor as principal, guarantor, surety, co-maker, or in any other capacity, including interest, charges,
penalties, fees, liquidated damage, collection expenses and attorneys fee, the Assignor hereby
assigns, transfers and conveys to Assignee all its rights, title and interest in and to: (a) contracts under
which monies are or will be due to Assignor, (b) moneys due or to be due thereunder, or (c) letters of
credit and/or proceeds or moneys arising from negotiations under such credits, all which are herein
called moneys or receivables assigned or assigned moneys or receivables, and are attached, or listed
and described in the Attached Annex A (for contracts) or Annex B (for letters of credit).26
It is clear from the foregoing deed that the promissory notes were given as security for the loan granted by
respondent to Rare Realty. Through the Deed of Assignment, respondent stepped into the shoes of Rare
Realty as petitioners creditor.
Respondent alleged that petitioner obtained a separate loan of PhP 3,921,750. Thus, when petitioner and
respondent executed the Dacion on August 27, 1986, what was then covered was petitioners loan from
the bank. The Dacion provides, thus:
NOW, THEREFORE, in consideration of the foregoing premises, the DEBTOR hereby transfers and
conveys in favor of the BANK by way of Dacion en Pago, the above-described property in full
satisfaction of its outstanding indebtedness in the amount of P3,921,750.00 to the BANK, subject to x
x x terms and conditions.27 (Emphasis supplied.)
The language of the Dacion is unequivocalthe property serves in full satisfaction of petitioners own
indebtedness to respondent, referring to the loan of PhP 3,921,750. For this reason, the bank issued a
Confirmation Statement saying that petitioner has no unpaid obligations with the bank as of December 31,
1988.
In 1989, however, Rare Realty defaulted in its payment to respondent. Thus, respondent proceeded
against the security assigned to it, that is, the promissory notes issued by the petitioner. Under these
promissory notes, petitioner is liable for the amount of PhP 300,000 with an interest of 36% per annum
and a penalty of 12% for failure to pay on the maturity date, June 27, 1985; and for the amount of PhP
681,500 with an interest of 18% per annum and a penalty of 12% for failure to pay on the maturity date,
June 25, 1985.
WHEREFORE, the March 29, 2001 Decision and November 7, 2001 Resolution of the CA are AFFIRMED.
Costs against petitioner. SO ORDERED.
SPECIFIC DENIALS: WHEN A SPECIFIC DENIAL REQUIRES AN OATH
G.R. No. 139930 June 26, 2012
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
EDUARDO M. COJUANGCO, JR., JUAN PONCE ENRILE, MARIA CLARA LOBREGAT, JOSE ELEAZAR, JR., JOSE
CONCEPCION, ROLANDO P. DELA CUESTA, EMMANUEL M. ALMEDA, HERMENEGILDO C. ZAYCO, NARCISO
M. PINEDA, IAKI R. MENDEZONA, DANILO S. URSUA, TEODORO D. REGALA, VICTOR P. LAZATIN,
ELEAZAR B. REYES, EDUARDO U. ESCUETA, LEO J. PALMA, DOUGLAS LU YM, SIGFREDO VELOSO and
JAIME GANDIAGA, Respondents.
DECISION
ABAD, J.:
This case, which involves another attempt of the government to recover ill-gotten wealth acquired during
the Marcos era, resolves the issue of prescription.
The Facts and the Case
On April 25, 1977 respondents Teodoro D. Regala, Victor P. Lazatin, Eleazar B. Reyes, Eduardo U. Escueta
and Leo J. Palma incorporated the United Coconut Oil Mills, Inc. (UNICOM)1 with an authorized capital
stock of 100 million divided into one million shares with a par value of 100 per share. The incorporators
subscribed to 200,000 shares worth 20 million and paid 5 million.
On September 26, 1978 UNICOM amended its capitalization by (1) increasing its authorized capital stock to
three million shares without par value; (2) converting the original subscription of 200,000 to one million
shares without par value and deemed fully paid for and non-assessable by applying the 5 million already
paid; and (3) waiving and abandoning the subscription receivables of 15 million.2
On August 29, 1979 the Board of Directors of the United Coconut Planters Bank (UCPB) composed of
respondents Eduardo M. Cojuangco, Jr., Juan Ponce Enrile, Maria Clara L. Lobregat, Jose R. Eleazar, Jr., Jose
C. Concepcion, Rolando P. Dela Cuesta, Emmanuel M. Almeda, Hermenegildo C. Zayco, Narciso M. Pineda,
Iaki R. Mendezona, and Danilo S. Ursua approved Resolution 247-79 authorizing UCPB, the Administrator
of the Coconut Industry Investment Fund (CII Fund), to invest not more than 500 million from the fund in
the equity of UNICOM for the benefit of the coconut farmers.3
On September 4, 1979 UNICOM increased its authorized capital stock to 10 million shares without par
value. The Certificate of Increase of Capital Stock stated that the incorporators held one million shares
without par value and that UCPB subscribed to 4 million shares worth 495 million.4
On September 18, 1979 a new set of UNICOM directors, composed of respondents Eduardo M. Cojuangco,
Jr., Juan Ponce Enrile, Maria Clara L. Lobregat, Jose R. Eleazar, Jr., Jose Concepcion, Emmanuel M. Almeda,
Iaki R. Mendezona, Teodoro D. Regala, Douglas Lu Ym, Sigfredo Veloso, and Jaime Gandiaga, approved
another amendment to UNICOMs capitalization. This increased its authorized capital stock to one billion
shares divided into 500 million Class "A" voting common shares, 400 million Class "B" voting common
shares, and 100 million Class "C" non-voting common shares, all with a par value of 1 per share. The
paid-up subscriptions of 5 million shares without par value (consisting of one million shares for the
incorporators and 4 million shares for UCPB) were then converted to 500 million Class "A" voting common
shares at the ratio of 100 Class "A" voting common shares for every one without par value share.5
About 10 years later or on March 1, 1990 the Office of the Solicitor General (OSG) filed a complaint for
violation of Section 3(e) of Republic Act (R.A.) 30196 against respondents, the 1979 members of the UCPB
board of directors, before the Presidential Commission on Good Government (PCGG). The OSG alleged
that UCPBs investment in UNICOM was manifestly and grossly disadvantageous to the government since
UNICOM had a capitalization of only 5 million and it had no track record of operation. In the process of
conversion to voting common shares, the governments 495 million investment was reduced by 95
million which was credited to UNICOMs incorporators. The PCGG subsequently referred the complaint to
the Office of the Ombudsman in OMB-0-90-2810 in line with the ruling in Cojuangco, Jr. v. Presidential
Commission on Good Government,7 which disqualified the PCGG from conducting the preliminary
investigation in the case.
About nine years later or on March 15, 1999 the Office of the Special Prosecutor (OSP) issued a
Memorandum,8stating that although it found sufficient basis to indict respondents for violation of Section
3(e) of R.A. 3019, the action has already prescribed. Respondents amended UNICOMs capitalization a
third time on September 18, 1979, giving the incorporators unwarranted benefits by increasing their 1
million shares to 100 million shares without cost to them. But, since UNICOM filed its Certificate of Filing
of Amended Articles of Incorporation with the Securities and Exchange Commission (SEC) on February 8,
1980, making public respondents acts as board of directors, the period of prescription began to run at
that time and ended on February 8, 1990. Thus, the crime already prescribed when the OSG filed the
complaint with the PCGG for preliminary investigation on March 1, 1990.
In a Memorandum9 dated May 14, 1999, the Office of the Ombudsman approved the OSPs
recommendation for dismissal of the complaint. It additionally ruled that UCPBs subscription to the shares
of stock of UNICOM on September 18, 1979 was the proper point at which the prescription of the action
began to run since respondents act of investing into UNICOM was consummated on that date. It could not
be said that the investment was a continuing act. The giving of undue benefit to the incorporators
prescribed 10 years later on September 18, 1989. Notably, when the crime was committed in 1979 the
prescriptive period for it had not yet been amended. The original provision of Section 11 of R.A. 3019
provided for prescription of 10 years. Thus, the OSG filed its complaint out of time.
The OSG filed a motion for reconsideration on the Office of the Ombudsmans action but the latter denied
the same;10 hence, this petition.
Meanwhile, the Court ordered the dismissal of the case against respondent Maria Clara L. Lobregat in view
of her death on January 2, 2004.11
The Issue Presented
The pivotal issue in this case is whether or not respondents alleged violation of Section 3(e) of R.A. 3019
already prescribed.
The Courts Ruling
Preliminarily, the Court notes that what Republic of the Philippines (petitioner) filed in this case is a
petition for review on certiorari under Rule 45. But the remedy from an adverse resolution of the Office of
the Ombudsman in a preliminary investigation is a special civil action of certiorari under Rule 65.12 Still, the
Court will treat this petition as one filed under Rule 65 since a reading of its contents reveals that
petitioner imputes grave abuse of discretion and reversible jurisdictional error to the Ombudsman for
dismissing the complaint. The Court has previously treated differently labeled actions as special civil
actions for certiorari under Rule 65 for acceptable reasons such as justice, equity, and fair play.13
As to the main issue, petitioner maintains that, although the charge against respondents was for violation
of the Anti-Graft and Corrupt Practices Act, its prosecution relates to its efforts to recover the ill-gotten
wealth of former President Ferdinand Marcos and of his family and cronies. Section 15, Article XI of the
1987 Constitution provides that the right of the State to recover properties unlawfully acquired by public
officials or employees is not barred by prescription, laches, or estoppel.
But the Court has already settled in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v.
Desierto14 that Section 15, Article XI of the 1987 Constitution applies only to civil actions for recovery of
ill-gotten wealth, not to criminal cases such as the complaint against respondents in OMB-0-90-2810. Thus,
the prosecution of offenses arising from, relating or incident to, or involving ill-gotten wealth
contemplated in Section 15, Article XI of the 1987 Constitution may be barred by prescription.15
Notably, Section 11 of R.A. 3019 now provides that the offenses committed under that law prescribes in 15
years. Prior to its amendment by Batas Pambansa (B.P.) Blg. 195 on March 16, 1982, however, the
prescriptive period for offenses punishable under R.A. 3019 was only 10 years.16 Since the acts complained
of were committed before the enactment of B.P. 195, the prescriptive period for such acts is 10 years as
provided in Section 11 of R.A. 3019, as originally enacted.17
Now R.A. 3019 being a special law, the 10-year prescriptive period should be computed in accordance with
Section 2 of Act 3326,18 which provides:
Section 2. Prescription shall begin to run from the day of the commission of the violation of the law, and
if the same be not known at the time, from the discovery thereof and the institution of judicial
proceedings for its investigation and punishment.
The above-mentioned section provides two rules for determining when the prescriptive period shall begin
to run: first, from the day of the commission of the violation of the law, if such commission is known; and
second, from its discovery, if not then known, and the institution of judicial proceedings for its
investigation and punishment.19
Petitioner points out that, assuming the offense charged is subject to prescription, the same began to run
only from the date it was discovered, namely, after the 1986 EDSA Revolution. Thus, the charge could be
filed as late as 1996.
In the prosecution of cases of behest loans, the Court reckoned the prescriptive period from the discovery
of such loans.1wphi1 The reason for this is that the government, as aggrieved party, could not have
known that those loans existed when they were made. Both parties to such loans supposedly conspired to
perpetrate fraud against the government. They could only have been discovered after the 1986 EDSA
Revolution when the people ousted President Marcos from office. And, prior to that date, no person
would have dared question the legality or propriety of the loans.20
Those circumstances do not obtain in this case. For one thing, what is questioned here is not the grant of
behest loans that, by their nature, could be concealed from the public eye by the simple expedient of
suppressing their documentations. What is rather involved here is UCPBs investment in UNICOM, which
corporation is allegedly owned by respondent Cojuangco, supposedly a Marcos crony. That investment
does not, however, appear to have been withheld from the curious or from those who were minded to
know like banks or competing businesses. Indeed, the OSG made no allegation that respondent members
of the board of directors of UCPB connived with UNICOM to suppress public knowledge of the investment.
Besides, the transaction left the confines of the UCPB and UNICOM board rooms when UNICOM applied
with the SEC, the publicly-accessible government clearing house for increases in corporate capitalization,
to accommodate UCPBs investment. Changes in shareholdings are reflected in the General Information
Sheets that corporations have been mandated to submit annually to the SEC. These are available to
anyone upon request.
The OSG makes no allegation that the SEC denied public access to UCPBs investment in UNICOM during
martial law at the Presidents or anyone elses instance. Indeed, no accusation of this kind has ever been
hurled at the SEC with reference to corporate transactions of whatever kind during martial law since even
that regime had a stake in keeping intact the integrity of the SEC as an instrumentality of investments in
the Philippines.
And, granted that the feint-hearted might not have the courage to question the UCPB investment into
UNICOM during martial law, the second elementthat the action could not have been instituted during
the 10-year period because of martial lawdoes not apply to this case. The last day for filing the action
was, at the latest, on February 8, 1990, about four years after martial law ended. Petitioner had known of
the investment it now questions for a sufficiently long time yet it let those four years of the remaining
period of prescription run its course before bringing the proper action.
Prescription of actions is a valued rule in all civilized states from the beginning of organized society. It is a
rule of fairness since, without it, the plaintiff can postpone the filing of his action to the point of depriving
the defendant, through the passage of time, of access to defense witnesses who would have died or left to
live elsewhere, or to documents that would have been discarded or could no longer be located. Moreover,
the memories of witnesses are eroded by time. There is an absolute need in the interest of fairness to bar
actions that have taken the plaintiffs too long to file in court.
Respondents claim that, in any event, the complaint against them failed to show probable cause. They
point out that, prior to the third amendment of UNICOMs capitalization, the stated value of the one
million shares without par value, which belonged to its incorporators, was 5 million. When these shares
were converted to 5 million shares with par value, the total par value of such shares remained at 5
million. But, the action having prescribed, there is no point in discussing the existence of probable cause
against the respondents for violation of Section 3(e) of R.A. 3019.
WHEREFORE, the Court DENIES the petition and AFFIRMS the Memorandum dated May 14, 1999 of the
Office of the Ombudsman that dismissed on the ground of prescription the subject charge of violation of
Section 3(e) of R.A. 3019 against respondents Eduardo M. Cojuangco, Jr., Juan Ponce Enrile, Jose R. Eleazar,
Jr., Jose C. Concepcion, Rolando P. Dela Cuesta, Emmanuel M. Almeda, Hermenegildo C. Zayco, Narciso M.
Pineda, Iaki R. Mendezona, Danilo S. Ursua, Teodoro D. Regala, Victor P. Lazatin, Eleazar B. Reyes,
Eduardo U. Escueta, Leo J. Palma, Douglas Lu Ym, Sigfredo Veloso, and Jaime Gandiaga. SO ORDERED.
FILING AND SERVICE OF PLEADINGS: PAYMENT OF DOCKET FEES
n Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners'
counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was
then presiding over said case. Upon the order of this Court, the records of said case together with
twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which
were under investigation for under-assessment of docket fees were transmitted to this Court. The Court
thereafter returned the said records to the trial court with the directive that they be re-raffled to the other
judges in Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch
104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC
directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its
payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket
fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in
their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the
docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984,
an amended complaint was filed by private respondent including the two additional defendants
aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case
to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution
of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact
amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a
"Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory
damages" in the prayer. In the body of the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the total amount of about
P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and
stating therein that the same constituted proper compliance with the Resolution of this Court and that a
copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid
by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie
Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or
some seven months after filing the supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00.1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of
the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion thereof
questioning the reassessment of the docketing fee, and requiring the Honorable respondent
Court to reassess the docketing fee to be paid by private respondent on the basis of the amount
of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of respondent court,
private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did
not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and
proper docket fee. Petitioners allege that while it may be true that private respondent had paid the
amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount
sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that
should be paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners
contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. In
support of their theory, petitioners cite the latest ruling of the Court in Manchester Development
Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket
fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is
overturned and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to
Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling
as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over the case even if the
docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of their passage. Procedural laws are retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee
is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the
justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the
plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of
P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of
judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen
(14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire
jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by
sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee
was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled
that the declaration was not filed in accordance with the legal requirement that such declaration should
be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded
that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until
the required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original
petition for quo warranto contesting the right to office of proclaimed candidates which was mailed,
addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as
provided therefor by law.10However, the required docket fees were paid only after the expiration of said
period. Consequently, this Court held that the date of such payment must be deemed to be the real date
of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a
court will act on a petition or complaint. However, we also held that said rule is not applicable when
petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate
action for each will but instead he may have other wills probated in the same special proceeding then
pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only
upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a
complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of
First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the
complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer
Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed
that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant
be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to
plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the
action and exemplary damages in the amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to
which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of
land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct
docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant.
In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The
amended prayer merely sought moral damages as the court may determine, attorney's fees of
P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint.
The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed and then
challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00
and that if he has to pay the additional fee it must be based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case
even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was
deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual
date of the filing of the complaint; that there was an honest difference of opinion as to the correct amount
to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee
of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the
additional docket fee based on the damages alleged in the amended complaint as against the assessment
of the trial court which was based on the damages alleged in the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for
torts and damages and specific performance with a prayer for the issuance of a temporary restraining
order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during
the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by
the plaintiffs for the property in question, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order
requiring defendants to execute a contract of purchase and sale of the subject property and annul
defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to
pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of said
amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to
declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of
payment, and to make the injunction permanent. The amount of damages sought is not specified in the
prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered
by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on
the nature of the action for specific performance where the amount involved is not capable of pecuniary
estimation. However, it was obvious from the allegations of the complaint as well as its designation that
the action was one for damages and specific performance. Thus, this court held the plaintiff must be
assessed the correct docket fee computed against the amount of damages of about P78 Million, although
the same was not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of
damages in the body of the complaint. The prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other
cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the
amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In
the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no
amount of damages was specified in the prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of
the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original
complaint duly filed which could be amended. Consequently, the order admitting the amended complaint
and all subsequent proceedings and actions taken by the trial court were declared null and void.13
The present case, as above discussed, is among the several cases of under-assessment of docket fee which
were investigated by this Court together with Manchester. The facts and circumstances of this case are
similar to Manchester. In the body of the original complaint, the total amount of damages sought
amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action
was for the refund of the premium and the issuance of the writ of preliminary attachment with damages.
The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an
amended complaint wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as
actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is
approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was
reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986,
private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of
the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for
additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester,
on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private
respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total
amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70,
petitioner insists that private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present case. The pattern and the intent to
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint
but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this
Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint
could not have been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket fee as ordered by the
respondent court. It triggered his change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total
amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized
docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby
instructed to reassess and determine the additional filing fee that should be paid by private respondent
considering the total amount of the claim sought in the original complaint and the supplemental
complaint as may be gleaned from the allegations and the prayer thereof and to require private
respondent to pay the deficiency, if any, without pronouncement as to costs. SO ORDERED.
G.R. No. 176339 January 10, 2011
DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM and LELY KUNG LIM, Petitioners,
vs.
SECURITY BANK CORP., TITOLAIDO E. PAYONGAYONG, EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY
AGENCY CORP. and GIL SILOS, Respondents.
DECISION
ABAD, J.:
This case is about the propriety of awarding damages based on claims embodied in the plaintiffs
supplemental complaint filed without prior payment of the corresponding filing fees.
The Facts and the Case
From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung
Lim (the Lims) took out loans from respondent Security Bank Corporation (the Bank) that totaled
92,454,776.45. Unable to pay the loans on time, the Lims assigned some of their real properties to the
Bank to secure the same, including a building and the lot on which it stands (the property), located at M.
de Leon St., Santolan, Pasig City.1
In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc.
(DMI) primarily for business although the Lims were to use part of the property as their residence. DMI
and the Bank executed a two-year lease contract from October 1, 1998 to September 30, 2000 but the
Bank retained the right to pre-terminate the lease. The contract also provided that, should the Bank
decide to sell the property, DMI shall have the right of first refusal.
On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it was pre-terminating
the lease on December 31, 1999. Wanting to exercise its right of first refusal, DMI tried to negotiate with
the Bank the terms of its purchase. DMI offered to pay the Bank 8 million for the property but the latter
rejected the offer, suggesting 15 million instead. DMI made a second offer of 10 million but the Bank
declined the same.
While the negotiations were on going, the Lims claimed that they continued to use the property in their
business. But the Bank posted at the place private security guards from Philippine Industrial Security
Agency (PISA). The Lims also claimed that on several occasions in 2000, the guards, on instructions of the
Bank representatives Titolaido Payongayong and Evylene Sison, padlocked the entrances to the place and
barred the Lims as well as DMIs employees from entering the property. One of the guards even pointed
his gun at one employee and shots were fired. Because of this, DMI was unable to close several projects
and contracts with prospective clients. Further, the Lims alleged that they were unable to retrieve assorted
furniture, equipment, and personal items left at the property.
The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig City for damages with
prayer for the issuance of a temporary restraining order (TRO) or preliminary injunction against the Bank
and its co-defendants Payongayong, Sison, PISA, and Gil Silos.2 Answering the complaint, the Bank pointed
out that the lease contract allowed it to sell the property at any time provided only that it gave DMI the
right of first refusal. DMI had seven days from notice to exercise its option. On September 10, 1999 the
Bank gave notice to DMI that it intended to sell the property to a third party. DMI asked for an extension
of its option to buy and the Bank granted it. But the parties could not agree on a purchase price. The Bank
required DMI to vacate and turnover the property but it failed to do so. As a result, the Banks buyer
backed-out of the sale. Despite what happened, the Bank and DMI continued negotiations for the
purchase of the leased premises but they came to no agreement.
The Bank denied, on the other hand, that its guards harassed DMI and the Lims. To protect its property,
the Bank began posting guards at the building even before it leased the same to DMI. Indeed, this
arrangement benefited both parties. The Bank alleged that in October of 2000, when the parties could not
come to an agreement regarding the purchase of the property, DMI vacated the same and peacefully
turned over possession to the Bank.
The Bank offered no objection to the issuance of a TRO since it claimed that it never prevented DMI or its
employees from entering or leaving the building. For this reason, the RTC directed the Bank to allow DMI
and the Lims to enter the building and get the things they left there. The latter claimed, however, that on
entering the building, they were unable to find the movable properties they left there. In a supplemental
complaint, DMI and the Lims alleged that the Bank surreptitiously took such properties, resulting in
additional actual damages to them of over 27 million.
The RTC set the pre-trial in the case for December 4, 2001. On that date, however, counsel for the Bank
moved to reset the proceeding. The court denied the motion and allowed DMI and the Lims to present
their evidence ex parte. The court eventually reconsidered its order but only after the plaintiffs had
already presented their evidence and were about to rest their case. The RTC declined to recall the
plaintiffs witnesses for cross- examination but allowed the Bank to present its evidence.3 This prompted
the Bank to seek relief from the Court of Appeals (CA) and eventually from this Court but to no avail.4
During its turn at the trial, the Bank got to present only defendant Payongayong, a bank officer. For
repeatedly canceling the hearings and incurring delays, the RTC declared the Bank to have forfeited its
right to present additional evidence and deemed the case submitted for decision.
On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims. It ordered the Bank to
pay the plaintiffs 27,974,564.00 as actual damages, 500,000.00 as moral damages, 500,000 as
exemplary damages, and 100,000.00 as attorneys fees. But the court absolved defendants Payongayong,
Sison, Silos and PISA of any liability.
The Bank moved for reconsideration of the decision, questioning among other things the RTCs authority
to grant damages considering plaintiffs failure to pay the filing fees on their supplemental complaint. The
RTC denied the motion. On appeal to the CA, the latter found for the Bank, reversed the RTC decision, and
dismissed the complaint as well as the counterclaims.5 DMI and the Lims filed a motion for reconsideration
but the CA denied the same, hence this petition.
The Issues Presented
The issues presented in this case are:
1. Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiffs supplemental
complaint against the Bank considering their failure to pay the filing fees on the amounts of damages
they claim in it;
2. Whether or not the Bank is liable for the intimidation and harassment committed against DMI and
its representatives; and
3. Whether or not the Bank is liable to DMI and the Lims for the machineries, equipment, and other
properties they allegedly lost after they were barred from the property.
The Courts Rulings
One. On the issue of jurisdiction, respondent Bank argues that plaintiffs failure to pay the filing fees on
their supplemental complaint is fatal to their action.
But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint. The RTC
acquired jurisdiction over plaintiffs action from the moment they filed their original complaint
accompanied by the payment of the filing fees due on the same. The plaintiffs non-payment of the
additional filing fees due on their additional claims did not divest the RTC of the jurisdiction it already had
over the case.6
Two. As to the claim that Banks representatives and retained guards harassed and intimidated DMIs
employees and the Lims, the RTC found ample proof of such wrongdoings and accordingly awarded
damages to the plaintiffs. But the CA disagreed, discounting the testimony of the police officers regarding
their investigations of the incidents since such officers were not present when they happened. The CA may
be correct in a way but the plaintiffs presented eyewitnesses who testified out of personal knowledge. The
police officers testified merely to point out that there had been trouble at the place and their
investigations yielded their findings.
The Bank belittles the testimonies of the petitioners witnesses for having been presented ex parte before
the clerk of court. But the ex parte hearing, having been properly authorized, cannot be assailed as less
credible. It was the Banks fault that it was unable to attend the hearing. It cannot profit from its lack of
diligence.
Domingo Lim and some employees of DMI testified regarding the Bank guards unmitigated use of their
superior strength and firepower. Their testimonies were never refuted. Police Inspector Priscillo dela Paz
testified that he responded to several complaints regarding shooting incidents at the leased premises and
on one occasion, he found Domingo Lim was locked in the building. When he asked why Lim had been
locked in, a Bank representative told him that they had instructions to prevent anyone from taking any
property out of the premises. It was only after Dela Paz talked to the Bank representative that they let Lim
out.7
Payongayong, the Banks sole witness, denied charges of harassment against the Banks representatives
and the guards. But his denial came merely from reports relayed to him. They were not based on personal
knowledge.1avvphil
While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims
and their employees. The RTC was therefore correct in adjudging moral damages, exemplary damages, and
attorneys fees against the Bank for the acts of their representatives and building guards.
Three. As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the
RTC committed no error in admitting the complaint even if they had not paid the filing fees due on it since
such fees constituted a lien anyway on the judgment award. But this after-judgment lien, which implies
that payment depends on a successful execution of the judgment, applies to cases where the filing fees
were incorrectly assessed or paid or where the court has discretion to fix the amount of the award.8 None
of these circumstances obtain in this case.
Here, the supplemental complaint specified from the beginning the actual damages that the plaintiffs
sought against the Bank. Still plaintiffs paid no filing fees on the same. And, while petitioners claim that
they were willing to pay the additional fees, they gave no reason for their omission nor offered to pay the
same. They merely said that they did not yet pay the fees because the RTC had not assessed them for it.
But a supplemental complaint is like any complaint and the rule is that the filing fees due on a complaint
need to be paid upon its filing.9 The rules do not require the court to make special assessments in cases of
supplemental complaints.
To aggravate plaintiffs omission, although the Bank brought up the question of their failure to pay
additional filing fees in its motion for reconsideration, plaintiffs made no effort to make at least a late
payment before the case could be submitted for decision, assuming of course that the prescription of their
action had not then set it in. Clearly, plaintiffs have no excuse for their continuous failure to pay the fees
they owed the court. Consequently, the trial court should have treated their Supplemental Complaint as
not filed.
Plaintiffs of course point out that the Bank itself raised the issue of non-payment of additional filing fees
only after the RTC had rendered its decision in the case. The implication is that the Bank should be
deemed to have waived its objection to such omission. But it is not for a party to the case or even for the
trial court to waive the payment of the additional filing fees due on the supplemental complaint. Only the
Supreme Court can grant exemptions to the payment of the fees due the courts and these exemptions are
embodied in its rules.
Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that the movable
properties in question had remained in the premises and that the bank was responsible for their loss. The
only evidence offered to prove the loss was Domingo Lims testimony and some undated and unsigned
inventories. These were self-serving and uncorroborated.
WHEREFORE, the Court PARTIALLY GRANTS the petition and REINSTATES with modification the decision of
the Regional Trial Court of Pasig City in Civil Case 68184. The Court DIRECTS respondent Security Bank
Corporation to pay petitioners DMI and spouses Domingo and Lely Kung Lim damages in the following
amounts: 500,000.00 as moral damages, 500,000.00 as exemplary damages, and 100,000.00 for
attorneys fees. The Court DELETES the award of actual damages of 27,974,564.00. SO ORDERED.

G.R. No. 151898 March 14, 2012

RICARDO RIZAL, POTENCIANA RIZAL, SATURNINA RIZAL, ELENA RIZAL, and BENJAMIN RIZAL,Petitioners,
vs.
LEONCIA NAREDO, ANASTACIO LIRIO, EDILBERTO CANTAVIEJA, GLORIA CANTAVIEJA, CELSO CANTAVIEJA,
and the HEIRS of MELANIE CANTAVIEJA, Respondents.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Decision1 of the Court of
Appeals (CA) dated July 13, 2001 in CA-G.R. CV No. 26109, affirming the decision of the Regional Trial
Court (RTC), Branch 36, Calamba, Laguna which dismissed the Complaint,2 docketed as Civil Case No.
1153-87-C3 for "partition, recovery of shares with damages" of Lot No. 252 on res judicata.
Factual Antecedents
Herein petitioners Ricardo, Potenciana, Elena, Saturnina and Benjamin, all surnamed Rizal, commenced
Civil Case No. 7836 against Matias Naredo (Matias), Valentin Naredo (Valentin) and Juana de Leon (Juana)
before the then Court of First Instance (CFI) of Laguna involving the accretion of two (2) hectares of land to
Lot No. 454 of the Calamba Estate. In a decision rendered on May 22, 1947, the CFI ruled in favor of the
petitioners. The CFI awarded the ownership of the two-hectare accretion to the petitioners and ordered
the defendants therein to vacate the said land and to pay 500.00 a year from 1943 as reasonable rent for
their occupancy thereof. Both the CA and the Supreme Court upheld the decision.
To satisfy the money judgment in Civil Case No. 7836, the provincial sheriff of Laguna levied upon Lots Nos.
252 and 269 of the Calamba Estate, together with the house erected on Lot No. 252. This Lot No. 252,
which is the subject of the controversy, was registered under Transfer Certificate of Title (TCT) No. RT-488
(RT-3377 No. 12206) in the name of the "Legal Heirs of Gervacia Cantillano," of Parian, Calamba, Laguna.
Several third-party claims were filed, to wit: (a) by Leoncia Naredo (Leoncia) and Marcela Naredo
(Marcela), who are also heirs of Gervacia Cantillano over Lot No. 252; (b) by Pedro Cantavieja, husband of
Marcela over Lot No. 269; and (c) by Teodoro Armesto over the house of mixed materials standing on Lot
No. 252. After the petitioners posted the required bond, the provincial sheriff proceeded with the auction
sale on April 7, 1951. The petitioners were declared the highest bidders. A final deed of sale was issued to
them on April 15, 1952.
On May 9, 1955, Marcela, Leoncia, Matias, Valentin, and Juana instituted Civil Case No. 9908 before the
CFI Branch 1, Laguna, questioning the validity of the execution sale of Lots Nos. 252 and 269 and the
house of mixed materials on Lot No. 252. They claimed that these properties were exempt from execution.
On December 8, 1955, the CFI declared valid the execution sale of Lots Nos. 252 and 269 of the Calamba
Estate in favor of the petitioners, with a qualification that the petitioners only acquired whatever rights,
title or interests Matias, Valentin and Juana had in Lot No. 252. The sale of the house of mixed materials in
Lot No. 252 was set aside considering that a waiver was executed by the petitioners in favor of Juana.
Although the CFI ordered that the petitioners be placed in possession of Lots Nos. 252 and 269 and Matias
and Valentin be ejected therefrom, it did not evict Marcela and Leoncia from Lot No. 252 since they were
not parties to Civil Case No. 7836.4
After the aforesaid judgment in Civil Case No. 9908, the petitioners filed Civil Case No. 36-C against
Marcela and Leoncia for partition, accounting and recovery of possession of Lot No. 252. The parties then
entered into a Compromise Agreement whereby the parties acknowledged that they owned Lot No. 252 in
common, with 3/5 thereof as the interest of the petitioners and the other 2/5 belonging to therein
defendants Marcela and Leoncia. Said Compromise Agreement was approved by the CFI Branch VI, Laguna,
in an Order dated December 1, 1971.5The pertinent portions of the agreement read as follows:
5. That the plaintiffs (herein petitioners) and the defendants (herein respondents) agree that said
parcel of land (Lot 252) embraced in Transfer Certificate of Title 12206, and registered in the names
of the Legal Heirs of Gervacia Cantillano, is now owned in common and in undivided shares of
TWO-FIFTHS (2/5) for the defendants and THREE-FIFTHS (3/5) for the plaintiffs;
6. That the plaintiffs and the defendants agree that the subject parcel of land be actually partitioned
as they have so caused the survey and partition of the same per the hereto attached copy of the
pertinent subdivision survey plan, marked as Annex "A" hereof and made integral part of this
compromise agreement;
7. That the plaintiffs and the defendants do hereby express their unqualified conformity to the said
partition and they hereby accept to their full and entire satisfaction their respective determined
shares in the subject parcel of land, and they agree to have their respective determined portions,
Two-Fifths (2/5) for defendants and Three-Fifths (3/5) for plaintiffs, to be covered by independent
and separate certificates of title in their respective names.
8. That the plaintiffs agree to shoulder all the expenses incurred in the partition and to pay all
expenses and fees which may be entailed in the issuance of the independent certificates of title in
favor of the respective parties by the proper Registry of Deeds;6
Ten years after or on August 11, 1981, Marcela and Leoncia, assisted by their husbands, instituted Civil
Case No. 299-83-C assailing the Compromise Agreement. They claimed that said agreement was a forgery
and that their lawyer was not duly authorized for the purpose. In an Order dated July 6, 1984, the trial
court dismissed the case without prejudice to the plaintiffs failure to prosecute.
Thereafter, on September 26, 1984, Marcela and Leoncia instituted Civil Case No. 792-84-C, for
enforcement of judgment, partition and segregation of shares with damages over Lot No. 252. On July 6,
1985, the trial court dismissed the complaint on the ground of prescription. No appeal was taken
therefrom.
On September 21, 1987, the petitioners filed a Complaint before the RTC for the immediate segregation,
partition and recovery of shares and ownership of Lot No. 252, with damages. This was docketed as Civil
Case No. 1153-87-C. However, on April 3, 1990, on the basis of the pleadings and exhibits, the court a quo
dismissed the complaint because of res judicata. The trial court stated thus:
"A perusal of this instant case and Civil Case No. 792-84-C, (Exh. 1) will readily show that between these
causes of actions, there are (a) identity of parties; (b) identity of subject matter; and (c) identity of cause
of action. As admitted by the parties, the judgment in Civil Case No. 792-84-C is now final and executory.
While there may appear a difference in the forms of action, the same is irrelevant for purposes of
determining res judicata. It is a firmly established rule that a different remedy sought or a diverse form of
action does not prevent the estoppel of the former adjudication.
x x x."7
Aggrieved, the petitioners appealed to the CA, docketed as CA-G.R. CV No. 26109. Unfortunately, the
original records of the case were misplaced. After earnest efforts were made for the reconstitution of the
records of the case, the parties agreed to have the case submitted for decision based on the documents
submitted.8
In the now assailed decision,9 the CA dismissed the appeal. The CA found that the appellants brief neither
contained the required page references to the records, as provided in Section 13 of Rule 44 of the Rules of
Court; nor was it specified, both in the prayer and in the body of the complaint, the specific amounts of
the petitioners claim for actual, moral, exemplary and compensatory damages, as enunciated in
Manchester Development Corporation v. Court of Appeals.10
As to the substantive issues raised in the complaint, the CA ruled that the action for partition has been
barred by res judicata. It also held that the petitioners no longer had any cause of action for partition
because the co-ownership of the parties over Lot No. 252 had ceased to exist by the Order of the CFI
Branch VI, Laguna on December 1, 1971.
Issues
In the case at bar, the petitioners submit the following issues for this Courts consideration, to wit:
A.
THE CA ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE PETITIONERS' APPEAL BRIEF
FAILED TO MAKE PAGE REFERENCES TO THE RECORD.
B.
THE CA ERRED IN APPLYING THE RULING IN THE MANCHESTER CASE REGARDING DOCKET FEES.
C.
THE CA ERRED IN DISMISSING THE APPEAL ON THE GROUND OF PRESCRIPTION AND RES JUDICATA.
D.
11
THE RTC ERRED IN DISMISSING THE ENTIRE CASE.
Ruling and Discussions
We find no merit in the petition.
Failure to observe the requirements under Section 13(a), Rule 44 of the 1997 Rules of Court and to pay the
correct docket fees is fatal to the appeal.
The petitioners argue that the CA erred in dismissing their appeal for their failure to indicate the page
references to the records of the case pursuant to Section 13(a), Rule 4412 of the Rules of Court. They
invoke Section 6, Rule 1 of the 1997 Rules of Civil Procedure which states that "technical rules shall be
liberally construed in order to promote a just, speedy and inexpensive disposition of every action and
proceeding." They cite the case of Pacific Life Assurance Corporation v. Sison,13 where it was held that an
appeal should not be dismissed on mere technicality.
It is settled that technical rules of procedure are mere tools designed to facilitate the attainment of justice.
Their strict and rigid application should be relaxed when they hinder rather than promote substantial
justice. Cases should as much as possible be resolved on the merits, and not on mere technicalities. The
failure of the petitioners' appeal brief to contain page references to the records is a formal defect which
may be considered as minor, if not negligible.14
However, while this Court may be lenient in some instances on formal defects of pleadings filed with the
court, it could not close its eyes when a litigant continuously ignores technical rules, to the point of
wanton disregard of the rationale behind those rules. In fact, this Court has consistently affirmed the
importance of complying with the requirements in Section 13(a), Rule 4415 of the Rules of Court in many of
its decisions, particularly in Mendoza v. United Coconut Planters Bank, Inc.,16 where the Court explicitly
stated that:
Rule 44 and 50 of the 1997 Rules of Civil Procedure are designed for the proper and prompt disposition of
cases before the Court of Appeals Rules of Procedure exist for a noble purpose, and to disregard such rules
in the guise of liberal construction would be to defeat such purpose. The Court of Appeals noted in its
Resolution denying petitioners motion for reconsideration that despite ample opportunity, petitioners
never attempted to file an amended appellants brief correcting the deficiencies of their brief, but
obstinately clung to their argument that their Appellants Brief substantially complied with the rules. Such
obstinacy is incongruous with their plea for liberality in construing the rules on appeal.
De Liano v. Court of Appeals held:
"Some may argue that adherence to these formal requirements serves but a meaningless purpose, that
these may be ignored with little risk in the smug certainty that liberality in the application of procedural
rules can always be relied upon to remedy the infirmities. This misses the point. We are not martinets; in
appropriate instances, we are prepared to listen to reason, and to give relief as the circumstances may
warrant. However, when the error relates to something so elementary as to be inexcusable, our discretion
becomes nothing more than an exercise in frustration. It comes as an unpleasant shock to us that the
contents of an appellants brief should still be raised as an issue now. There is nothing arcane or novel
about the provisions of Section 13, Rule 44. The rule governing the contents of appellants briefs has
existed since the old Rules of Court, which took effect on July 1, 1940, as well as the Revised Rules of Court,
which took effect on January 1, 1964, until they were superseded by the present 1997 Rules of Civil
Procedure. The provisions were substantially preserved, with few revisions."17
Moreover, the petitioners also failed to pay the correct docket fees; in which case, jurisdiction did not vest
in the trial court. In Siapno v. Manalo,18 this Court has made it abundantly clear that any complaint,
petition, answer and other similar pleading, which does not specify both in its body and prayer the
amount of damages being claimed, should not be accepted or admitted, or should be expunged from the
records, as may be the case.19
The petitioners alleged in their complaint in Civil Case No. 1153-87-C20 that they suffered actual loss from
the time they had been deprived of their share of 3/5 on Lot No. 252 by the respondents, as well as moral
and exemplary damages, attorney's fees and litigation expenses. However, the only claims they specified in
their prayer were for the attorney's fees in the amount of 30,000.00 and 500.00 for every court
appearance of the counsel.
In Siapno,21 the complaint alleged in its body the aggregate sum of 4,500,000 in moral and exemplary
damages and attorney's fees, but the prayer portion did not mention these claims, nor did it even pray for
the payment of damages. This Court held that such a complaint should be dismissed outright; or if already
admitted, should be expunged from the records. The Court explained that the rule requiring the amount
of damages claimed to be specified not only in the body of the pleading but also in its prayer portion was
intended to put an end to the then prevailing practice of lawyers where the damages prayed for were
recited only in the body of the complaint, but not in the prayer, in order to evade payment of the correct
filing fees. As held by the Court in Manchester:22
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise
be expunged from the record.23
In Sun Insurance Office Ltd. v. Judge Asuncion,24 the Court laid down the following rules as regards the
payment of filing fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of
the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket
 fee, the court may allow payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may
also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading
and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.25
It cannot be gainsaid from the above guidelines that, with the exception of pauper litigants,26 without the
payment of the correct docket or filing fees within the reglementary period, jurisdiction over the
subject-matter or nature of the action will not vest in the trial court. In fact, a pauper litigant may still have
to pay the docket fees later, by way of a lien on the monetary or property judgment that may accrue to
him. Clearly, the flexibility or liberality of the rules sought by the petitioners cannot apply in the instant
case.
Action is dismissible for res judicata and lack of cause of action.
The petitioners vehemently deny that the partition of Lot No. 252 has already been settled in Civil Case No.
36-C. They insist that the mere determination of the proportionate shares of the parties, as well as their
respective portions of the aforesaid lot in the Compromise Agreement is not enough. They allege that Lot
No. 252 is still covered by the old title, TCT No. 12206, in the name of the heirs of Gervacia Cantillano. The
finality of the decision in Civil Case No. 36-C did not cause Lot No. 252 to divide itself in accordance with
the subdivision plan. They assert that there must be an actual and exclusive possession of their respective
portions in the plan and titles issued to each of them accordingly.27
The petitioners contentions are untenable.
Article 484 of the New Civil Code provides that there is co-ownership whenever the ownership of an
undivided thing or right belongs to different persons. Thus, on the one hand, a co-owner of an undivided
parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is at
the same time the owner of a portion which is truly abstract. On the other hand, there is no co-ownership
when the different portions owned by different people are already concretely determined and separately
identifiable, even if not yet technically described.28
Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the co-ownership, and his
proper remedy is an action for partition under Rule 69 of the Rules of Court, which he may bring at
anytime in so far as his share is concerned. Article 1079 of the Civil Code defines partition as the
separation, division and assignment of a thing held in common among those to whom it may belong. It has
been held that the fact that the agreement of partition lacks the technical description of the parties'
respective portions or that the subject property was then still embraced by the same certificate of title
could not legally prevent a partition, where the different portions allotted to each were determined and
became separately identifiable.29
The partition of Lot No. 252 was the result of the approved Compromise Agreement in Civil Case No. 36-C,
which was immediately final and executory. Absent any showing that said Compromise Agreement was
vitiated by fraud, mistake or duress, the court cannot set aside a judgment based on compromise.30 It is
axiomatic that a compromise agreement once approved by the court settles the rights of the parties and
has the force of res judicata. It cannot be disturbed except on the ground of vice of consent or forgery.31
Of equal significance is the fact that the compromise judgment in Civil Case No. 36-C settled as well the
question of which specific portions of Lot No. 252 accrued to the parties separately as their proportionate
shares therein. Through their subdivision survey plan, marked as Annex "A"32 of the Compromise
Agreement and made an integral part thereof, the parties segregated and separately assigned to
themselves distinct portions of Lot No. 252. The partition was immediately executory,33 having been
accomplished and completed on December 1, 1971 when judgment was rendered approving the same.
The CA was correct when it stated that no co-ownership exist when the different portions owned by
different people are already concretely determined and separately identifiable, even if not yet technically
described.34
It bears to note that the parties even acknowledged in Paragraph 7 of the Compromise Agreement that
they had accepted their "respective determined shares in the subject parcel of land, and they agree to
have their respective determined portions, Two-Fifths (2/5) for defendants and Three-Fifths (3/5) for
plaintiffs, to be covered by independent and separate certificates of title in their respective names."35
The petitioners slept on their rights under the partition agreement.
To recall, the petitioners obtained part ownership of Lot No. 252 as the highest bidders at the execution
sale of Lots Nos. 252 and 269 in Civil Case No. 7836, whereas respondents Marcela and Leoncia as heirs of
Gervacia Cantillano retained their 2/5 interest in Lot No. 252 since they were not impleaded in the said
case. As buyers of land, the petitioners had the right to pursue their share therein all the way to the
issuance of their separate title and recovery of possession of their portion, beginning with the filing of Civil
Case No. 36-C.
Concerning the registration with the Registry of Deeds of a judgment of partition of land, Section 81 of
Presidential Decree (P.D.) No. 1529 provides that after the entry of the final judgment of partition, a copy
of such final judgment shall be filed and registered. If the land is set off to the owner in severalty, each
owner shall be entitled to have his certificate entered showing the share set off to him in severalty, and to
receive an owner's duplicate thereof.36
Accordingly, Paragraph 8 of the Compromise Agreement provided that the petitioners shall "shoulder all
the expenses incurred in the partition and to pay all expenses and fees which may be incurred in the
issuance of the independent certificates of title in favor of the respective parties by the proper Registry of
Deeds."37 Unfortunately, the records do not disclose that the petitioners neither filed and registered with
the Register of Deeds a certified copy of the final judgment of partition in Civil Case No. 36-C, nor did they
perform or cause to be performed all further acts requisite for the cancellation of TCT No. 12206 and the
issuance of the parties' separate titles over their assigned portions in Lot No. 252. The only entry in TCT No.
12206,38 prior to the recording on June 13, 1979 of the issuance to the petitioners of a second duplicate
copy of TCT No. 12206, is the annotation in April 1952 of the execution sale of Lot No. 252 to the
petitioners.
Section 6, Rule 39 of the Rules of Court provides:
Sec. 6. Execution by motion or by independent action. A final and executory judgment or order may be
executed on motion within five (5) years from the date of its entry. After the lapse of such time, and
before it is barred by the statute of limitations, a judgment may be enforced by action. The revived
judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations.
A final and executory judgment may be executed by the prevailing party as a matter of right by mere
motion within five (5) years from the entry of judgment, failing which the judgment is reduced to a mere
right of action which must be enforced by the institution of a complaint in a regular court within ten (10)
years from finality of the judgment.39 In the instant case, there is no showing that after the judgment in
Civil Case No. 36-C, the petitioners filed a motion to execute the same during the first five (5) years after
its finality, or within the succeeding five (5) years, by a civil action to revive the judgment, before it would
have been barred by the statute of limitations.40 An action for revival of judgment is governed by Articles
1144(3) and 1152 of the Civil Code, and Section 6, Rule 39 of the Rules of Court. Articles 1144(3) and 1152
of the Code state:
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(3) Upon a judgment
Art. 1152. The period for prescription of actions to demand the fulfillment of obligations declared by a
judgment commences from the time the judgment became final.
When the petitioners filed Civil Case No. 1153-87-C on September 21, 1987, it was not purportedly to
revive the judgment in Civil Case No. 36-C. It was apparently an action for "Partition, Recovery of Shares
with Damages," but nonetheless citing as basis of the Compromise Agreement in Civil Case No. 36-C. The
petitioners wanted to accomplish through an entirely new action what was already adjudicated in Civil
Case No. 36-C, rendered 17 years earlier, but which they inexplicably failed to enforce. The petitioners do
not allege that they tried to execute the compromise judgment in Civil Case No. 36-C either by motion or
by action to revive judgment within the prescriptive period. Absent any proof that the respondents
resorted to dilatory schemes and maneuvers to prevent the execution of the Compromise Agreement,41
and contrary to the petitioners gratuitous assertion in paragraph VIII of their complaint in Civil Case No.
1153-87-C, we fail to see how the mere filing by the respondents of Civil Case No. 299-83-C on August 11,
1981 could have in any way prevented or impeded the petitioners from executing the judgment in Civil
Case No. 36-C.
We thus sustain the respondents' affirmative defenses of res judicata and lack of cause of action, and
uphold the appellate and trial courts' rejection of the petitioners' ostensible attempt to revive the already
stale judgment in Civil Case No. 36-C through an entirely new action for partition. The Court agrees with
the CA when it explained:
a. The judgment that effected res judicata is not so much the dismissal of the case due to prescription
in Civil Case No. 792-84-C. What more appropriately leads to res judicata to this case is the final
Compromise Judgment in Civil Case No. 36-C. All the elements of res judicata are present, a final
decision on the merits, between the same parties, on the same subject matter and cause of action. x
x x.
b. The present complaint states no cause of action. There is no doubt that appellants prayer for
partition is anchored on their supposed co-ownership of Lot No. 252 plus the added fact that it is still
covered by Transfer Certificate of Title No. 12206. However, appellants must have lost track of the
fact that at the time the present action was commenced, partition was no longer an available remedy
in their favor simply because their pretended co-ownership had already ceased to exist. Their 3/5
shares had already been segregated and determined in the subdivision plan mentioned in the
Compromise Judgment and have, in fact, accepted their share to their satisfaction. In De la Cruz vs.
Cruz, 32 SCRA 307 [1970], the Supreme Court, through Justice J.B.L. Reyes, said that co-ownership no
longer exists over the whole parcel of land where the portions owned by the parties are already
determined and identifiable. That said respective portions are not technically described, or that said
portions are still embraced in one and the same certificate of title, does not make said portions less
determinable, or identifiable, or distinguishable, one from the other, nor that dominion over its
portions rest exclusively in their respective owners.42
Nonetheless, it must be made clear that nothing in this decision shall be understood to mean that the
petitioners have lost their title or interest in the subject property. The final ("definite") deed of sale
executed by the sheriff in favor of the petitioners pursuant to the execution sale in Civil Case No. 7836,
which was duly registered in TCT No. 12206 on April 15, 1952, constituted an effective conveyance to the
petitioners of the property sold therein and entitled them to possession thereof,43 although in the
subsequent decision in 1955 in Civil Case No. 9908, the respondents 2/5 interest in the property was
recognized, thereby amending the extent of the petitioners title. The said judgment has not been
registered, and neither was the compromise judgment of partition in Civil Case No. 36-C dated December
1, 1971, which established the parties respective specific portions in Lot No. 252. Thus, as a prerequisite
to the issuance of a new title in the name of the petitioners over their 3/5 allocated portion, we believe
that Section 8144 of P.D. No. 1529 does not bar the belated registration of the compromise judgment in
Civil Case No. 36-C.
WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals dated July
13, 2001 in CA-G.R. CV No. 26109 is AFFIRMED. SO ORDERED.