Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION

SPOUSES DAISY and SOCRATES G. R. No. 193415

M. AREVALO,
Petitioners, Present:

CARPIO, J., Chairperson,

BRION,
- versus - PEREZ,
SERENO, and
REYES, JJ.

PLANTERS DEVELOPMENT
BANK and THE REGISTER OF Promulgated:
DEEDS OF PARAAQUE CITY,
Respondents. April 18, 2012

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

DECISION

SERENO, J.:

This is a Rule 45 Petition for Review, which seeks to reverse the Decision dated 24
March 2010[1] and Resolution dated 05 August 2010[2] of the Court of Appeals
(CA) in CA-G.R. SP No. 110806. The CA affirmed the trial courts Decision not to
grant petitioners application for a writ of preliminary injunction.

As stated, this case involves the trial courts refusal to issue a writ of
preliminary injunction in favor of petitioner Spouses Daisy and Socrates M.
Arevalo (Spouses Arevalo) based on their failure to comply with Section 2 of the
Procedure in Extra-Judicial or Judicial Foreclosure of Real Estate Mortgages
(Procedure on Foreclosure)[3] issued by this Court. This procedure required them to
pay twelve percent (12%) per annum interest on the amount of the principal
obligation, as stated in the application for foreclosure sale, before an injunctive
writ may issue against the extra-judicial foreclosure of real estate mortgage.[4]

We deny the instant Petition for the following reasons: (1) the Petition is
moot, because the trial court has already dismissed the Complaint dated 07 April
2009 (the First Complaint),[5] upon which petitioners application for the
provisional remedy of preliminary injunction was based; and (2) petitioners are
guilty of forum-shopping.

The conflict between the parties arose from a Loan Agreement[6] petitioners
executed with respondent Planters Development Bank (Bank). Petitioners obtained
from respondent Bank a ₱2,100,000 loan secured by a mortgage on their property
situated in Muntinlupa. Due to their failure to pay the loaned amount, the Bank
undertook to extra-judicially foreclose the mortgage. The Clerk of Court issued a
Notice of Sheriffs Sale and set the auction sale on 21 and 28 April 2009.[7]

Petitioners thereafter filed the First Complaint wherein they asked for the
nullification of interests, penalties and other charges, as well as for specific
performance with an application for a temporary restraining order (TRO) and writ
of preliminary injunction to enjoin the then impending auction sale of their
Muntinlupa property. They alleged that it was respondent Bank who breached its
obligations under the loan agreement; and that the auction sale was premature,
arbitrary and confiscatory, as their inability to pay the loan was caused and
aggravated by the Banks illegal schemes.[8]

During the hearing of petitioners application for preliminary injunction, the

trial court ruled that, as a precondition for the issuance of the writ and pursuant to
the Procedure on Foreclosure, petitioners were directed to pay 12% per annum
interest on the principal obligation as stated in the application for foreclosure sale.
Otherwise, the writ shall not issue. [9] The trial court further ruled that the evidence
in support of their application was evidentiary in nature and should thus be
presented during trial.[10]

Petitioner Spouses Arevalo sought to clarify the trial courts

Order,[11] inquiring whether they should be required to pay 12% per annum
interest. They argue that the rule requiring the payment of 12% interest as a
condition for the issuance of an injunctive writ against an impending foreclosure
sale was applicable only when applicant alleges that the interest rate is
unconscionable.[12] According to petitioners, nowhere in the Complaint did they
allege that the interest charges were unconscionable.[13] Instead, what they raised in
the First Complaint as their principal cause of action was the Banks deliberate
withholding of loan releases on various pretexts and the propriety of the acts of the
Bank charging them with interests and penalties due to the delay caused by the
Bank itself.[14] The trial court, however, affirmed its earlier ruling.[15]

Petitioners moved for reconsideration,[16] but their motion was

denied.[17] Consequently, they did not pay the required interest; thus, no writ of
preliminary injunction was issued in their favor.

Aggrieved, petitioner Spouses Arevalo filed a Rule 65 Petition[18] with the

CA to assail the Orders of the trial court involving the non-issuance of the
injunctive writ.[19]

Meanwhile, proceedings for the First Complaint ensued at the trial court.
Acting on the Motion to Dismiss filed by respondent Bank, the trial court granted
the motion and dismissed the First Complaint for lack of cause of
action.[20] Petitioner Spouses Arevalo then proceeded again to the CA to
appeal[21] the dismissal of the main case. The record does not reveal the status of
the case.

With regard to the Rule 65 Petition to the CA questioning the non-issuance

of the writ, respondent Bank filed its Comment [22] thereon. Subsequently, the CA
rendered the present assailed Decision dated 24 March 2010, affirming the
applicability of Section 2 of the Procedure on Foreclosure. It ruled that the trial
court was correct in refusing to issue the writ due to petitioners inexplicable failure
and even stubborn refusal to pay the accrued interest at 12% per annum.[23] The CA
held that the words used by petitioners in their First Complaint, such as manifestly
unjust, purely potestative condition, void ab initio, clearly contravenes morals,
good customs and public policy, whimsical, capricious violation of the legal and
inherent principles of mutuality of contracts, illegal, invalid, unilateral
impositionsall of which pertained to interest imposed by the Bankundeniably
meant that petitioners were challenging the interest for being unconscionable,
while opting to use other words of similar import.[24]
 Petitioners moved for reconsideration, but the CA denied their motion. [25]

Aggrieved, they filed the instant Rule 45 Petition to assail the Decision of
the CA affirming the non-issuance of the injunctive writ.

There are thus two (2) cases arising from similar facts and circumstances;
more particularly, the instant Rule 45 Petition and the appeal of the dismissal of the
main case with the CA.[26] It appears on record also that on 12 November 2010,
petitioners filed yet another Complaint dated 11 November 2010 [27] (Second
Complaint) with the trial court. This time, they prayed for the nullification of the
real estate mortgage, the extra-judicial foreclosure sale, and the subsequent
proceedings, with a prayer for preliminary injunction and TRO.

With regard to the instant Rule 45 Petition, petitioners assail the Decision
and Resolution of the CA based on the following grounds:[28] (1) they were
deprived of the opportunity to present evidence on their application for a writ of
preliminary injunction; and (2) the CA erred when it required them to pay 12%
interest per annum based on Section 2 of the Procedure on Foreclosure, when the
core of their First Complaint was not excessiveness of the interest but the Banks
supposed breach of their obligations in the loan agreement.[29]

Respondent Bank, on the other hand, countered as follows:[30] (1) petitioner

Spouses Arevalo were not denied due process, since they were accorded several
opportunities to be heard on their application for the issuance of an injunctive writ;
(2) the CA correctly required petitioners to pay the interest; and (3) petitioner
Spouses Arevalo were guilty of forum-shopping when they filed their Second
Complaint. For forum-shopping, respondent Bank likewise moved to hold them in
contempt,[31] arguing that they had sought similar reliefs in their Second Complaint
with the trial court as in the present Petition.

Petitioners filed their Reply[32] and Comment[33] to the charges on contempt.

Based on the parties submissions, the following issues are presented for the
resolution of this Court:
 1. Whether the requirement to pay 12% interest per annum before the
issuance of an injunctive writ to enjoin an impending foreclosure sale is
applicable to the instant case; and
2. Whether petitioner Spouses Arevalo are guilty of forum-shopping and
should consequently be punished for contempt.

RULING OF THE COURT

I. The issue of the applicability to this case

of the requirement to pay 12% interest
per annum before the issuance of an
injunctive writ to enjoin an impending
foreclosure sale is moot.

The Court rules that upon dismissal of the First Complaint by the trial court
on 27 October 2009,[34] the issue of whether the writ of injunction should issue has
become moot. Although both parties failed to raise this particular argument in their
submissions, we deny the instant Petition on this ground.

A case becomes moot and academic when there is no more actual

controversy between the parties or useful purpose that can be served in passing
upon the merits.[35]

There remains no actual controversy in the instant Petition because the First
Complaint has already been dismissed by the trial court. Upon its dismissal, the
question of the non-issuance of a writ of preliminary injunction necessarily died
with it.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an

adjunct of, and subject to the outcome of the main case.[36] Thus, a writ of
preliminary injunction is deemed lifted upon dismissal of the main case, any appeal
therefrom notwithstanding,[37] as this Court emphasized in Buyco v.
Baraquia[38] from which we quote:

The writ is provisional because it constitutes a temporary measure

availed of during the pendency of the action and it is ancillary because it is a
mere incident in and is dependent upon the result of the main action.
 It is well-settled that the sole object of a preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo until the merits of the case
can be heard. It is usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an act
or threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can be had
on the merits of the case.
xxxxxxxxx

The present case having been heard and found dismissible as it was in
fact dismissed, the writ of preliminary injunction is deemed lifted, its
purpose as a provisional remedy having been served, the appeal therefrom
notwithstanding.

Unionbank v. Court of Appeals enlightens:

xxx a dismissal, discontinuance or non-suit of an action in which a

restraining order or temporary injunction has been granted operates as a
dissolution of the restraining order or temporary injunction, regardless of
whether the period for filing a motion for reconsideration of the order dismissing
the case or appeal therefrom has expired. The rationale therefor is that even in
cases where an appeal is taken from a judgment dismissing an action on the
merits, the appeal does not suspend the judgment, hence the general rule
applies that a temporary injunction terminates automatically on the
dismissal of the action. (Emphases supplied.)[39]

There will be no practical value in resolving the question of the non-issuance

of an injunctive writ in this case. Setting aside the assailed Orders is manifestly
pointless, considering that the First Complaint itself has already been dismissed,
and there is nothing left to enjoin. The reversal of the assailed Orders would have a
practical effect only if the dismissal were set aside and the First Complaint
reinstated.[40] In this case, however, petitioner Spouses Arevalo admitted to the
impossibility of the reinstatement of the First Complaint when they filed their
Second Complaint.[41]

Even petitioners plea that this Court give due course to the Petition for a
ruling on the proper application of the Procedure on Foreclosure [42] cannot compel
us to resolve this issue.
 The Constitution provides that judicial power includes the duty of the courts
of justice to settle actual controversies involving rights which are legally
demandable and enforceable.[43] The exercise of judicial power requires an actual
case calling for it. The courts have no authority to pass upon issues through
advisory opinions, or to resolve hypothetical or feigned problems or friendly suits
collusively arranged between parties without real adverse interests.[44] Furthermore,
courts do not sit to adjudicate mere academic questions to satisfy scholarly interest,
however intellectually challenging.[45] As a condition precedent to the exercise of
judicial power, an actual controversy between litigants must first exist.[46] An
actual case or controversy involves a conflict of legal rights, an assertion of
opposite legal claims susceptible of judicial resolution, as distinguished from a
hypothetical or abstract difference or dispute.[47] There must be a contrariety of
legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence.[48]

This Court cannot issue a mere advisory opinion in relation to the

applicability of the provisions of the Procedure on Foreclosure.

II. Petitioners are guilty of forum-shopping.

Petitioners have committed two distinct acts of forum-shopping,[49] namely: (1)

petitioners willfully and deliberately went to different courts to avail themselves of
multiple judicial remedies founded on similar facts and raising substantially similar
reliefs, and (2) they did not comply with their undertaking to report the filing of the
Second Complaint within five days from its filing.

A. Petitioners filed multiple suits based on

similar facts while seeking similar
reliefsacts proscribed by the rules
on forum-shopping.

We rule that petitioners were guilty of willful and deliberate forum-shopping

when they filed their Second Complaint with the trial court insofar as they
undertook to obtain similar reliefs as those sought in the instant Petition.
 Respondent Bank argues that the rights asserted by petitioners, as well as the
reliefs petitioners seek in the instant Petition, are identical to those raised in their
Second Complaint.[50]

Petitioners, on the other hand, counter that the disparity between the two
cases lies in the issue to be resolved. More particularly, they allege that the issue in
this Petition is the summary application of the payment of 12% interest per annum
as a precondition for the issuance of a writ, as opposed to the issue in the Second
Complaint involving the validity of the real estate mortgage and compliance with
the rules on the holding of the extrajudicial foreclosure sale.[51]

Forum shopping is the act of litigants who repetitively avail themselves of multiple
judicial remedies in different fora, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and circumstances;
and raising substantially similar issues either pending in or already resolved
adversely by some other court; or for the purpose of increasing their chances of
obtaining a favorable decision, if not in one court, then in another.[52]

The rationale against forum-shopping is that a party should not be allowed to

pursue simultaneous remedies in two different courts, for to do so would constitute
abuse of court processes which tends to degrade the administration of justice,
wreaks havoc upon orderly judicial procedure, and adds to the congestion of the
heavily burdened dockets of the courts.[53]

In Yu v. Lim,[54] this Court enumerated the requisites of forum-shopping, as

follows:

Forum-shopping exists when the elements of litis pendentia are present or

where a final judgment in one case will amount to res judicata in another. Litis
pendentia requires the concurrence of the following requisites: (1) identity of
parties, or at least such parties as those representing the same interests in both
actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; and (3) identity with respect to the two preceding
particulars in the two cases, such that any judgment that may be rendered in the
pending case, regardless of which party is successful, would amount to res
judicata in the other case.[55]
What is essential in determining the existence of forum-shopping is the
vexation caused the courts and litigants by a party who asks different courts
and/or administrative agencies to rule on similar or related causes and/or
grant the same or substantially similar reliefs, in the process creating the
possibility of conflicting decisions being rendered upon the same issues.[56]

A comparison of the reliefs sought by petitioners in the instant Petition and in their
Second Complaint confirms that they are substantially similar on two points: (1)
revocation and cancellation of the Certificate of Sale and (2) permanent injunction
on any transfer and/or consolidation of title in favor of respondent Bank. These
similarities undoubtedly create the possibility of conflicting decisions from
different courts:
Instant Petition Second Complaint
WHEREFORE, it is most respectfully prayed that WHEREFORE, it is respectfully prayed of the
immediately upon filing of this petition, the same Honorable Court that pending consideration and
be given due course, and an order issue, ex parte: hearing on the principal reliefs herein prayed
for, a Temporary Restraining order (TRO)
(1) A Resolution be issued directing the and/or Writ of Preliminary Injunction be issued
Ex-Officio Sheriff and his Assisting Sheriff to immediately restraining and/or stopping the
undo, cancel, revoke the Certificate of Sale defendants Ex-Officio Sheriff Atty. Jerry R.
they issued; Toledo and Deputy Sheriff Paulo Jose N.
Cusi from executing and issuing a final deed
(2) Enjoining the Register of Deeds of of sale in favor of the defendant bank and
Paranaque (or any of her subordinates, agents, further ordering the defendant Registrar of
representatives and persons acting in their Deeds of Paranaque City to hold in abeyance
behalf to cease and desist from allowing any the registration of the final deed of sale and
transfer and/or consolidation of respondents other documents of consolidation pending
banks title to the property in question and an resolution of this Honorable Court. Plaintiffs
order be issued directing the Register of Deeds pray for the following additional reliefs:
to undo, cancel and revoke the registration of
the Certificate of Sale on November 13, 2009 1. After hearing on the merits, the Real
and other proceedings had thereafter, the Estate Mortgage be declared and rescinded
petition be given due course and judgment be and/or null and void;
rendered as follows:
2. The Certificate of Sale [dated
1. Making the injunction permanent. November 4, 2009] issued by the defendant
Sheriffs and its subsequent registration on
2. Issuing a writ of mandatory injunction November 13, 2009 with the Registry of
for the respondent Ex-Officio Sheriff to undo, Deeds be declared null and void;
revoke and cancel the Certificate of Sale issued
and/or directing the Register of Deeds to undo, 3. After due hearing, the preliminary
revoke and cancel the registration of the injunction be declared permanent. x x
Certificate of Sale and/or defer any x[58](Emphases supplied.)
consolidation of title in favor of respondent
bank pending final resolution of this petition.

3. Reversing and setting aside the

Decision of the Court of Appeals dated March 24,
2010 and Resolution dated August 5,
2010.[57] (Emphasis supplied.)

As illustrated above, there is a clear violation of the rules on forum-

shopping, as the Court is being asked to grant substantially similar reliefs as those
that may also be granted by the trial court, in the process creating a possibility of
conflicting decisions.

We emphasize 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.[59] To avoid any confusion, this Court adheres strictly to
the rules against forum shopping, and any violation of these rules results in the
dismissal of a case.[60] The acts committed and described herein can possibly
constitute direct contempt.[61]

B. Petitioners did not report the filing of

their Second Complaint within five
(5) days, in violation of their
undertaking to do so.

Aside from the fact that petitioners sought substantially similar reliefs from
different courts, they likewise failed to disclose to this Court the filing of their
Second Complaint within five (5) days from its filing, in violation of their previous
undertaking to do so.[62]

Every litigant is required to notify the court of the filing or pendency of any
other action or such other proceeding involving the same or similar action or claim
within five (5) days of learning of that fact.[63] Petitioners claim that it was merely
due to inadvertence that they failed to disclose the said filing within five (5) days,
contrary to their undertaking. [64]

This Court is not inclined to accept this self-serving explanation. We cannot

disregard the glaring fact that respondents had to call the attention of petitioners to
the said requirement before the latter admitted that they had indeed filed their
Second Complaint.
 As previously established, petitioners have violated two (2) components of
forum-shopping, more particularly: (1) petitioners willfully and deliberately went
to different courts to avail themselves of multiple judicial remedies founded on
similar facts and raising substantially similar reliefs, an act which may be
punishable as direct contempt;[65]and (2) they did not comply with their
undertaking to report the filing of the Second Complaint within five days from its
filing. The latter action may also possibly be construed as a separate count for
indirect contempt.

While in a limited sense, petitioners have already been given the chance to
rebut the prayer to hold them in contempt, We hereby provide sufficient avenue for
them to explain themselves by requiring them to show cause, within fifteen (15)
days, why they should not be held in direct and indirect contempt of court.

WHEREFORE, the instant Petition for Review filed by Spouses Daisy

Arevalo and Socrates M. Arevalo is hereby DENIED. The Decision dated 24
March 2010 and Resolution dated 05 August 2010 issued by the Court of Appeals
in CA-G.R. SP No. 110806 are AFFIRMED.

Accordingly, petitioners are required to SHOW CAUSE, within fifteen (15)

days from receipt of this Decision, why they should not be held in contempt; more
specifically: (a) for direct contempt of courtfor availing of multiple judicial
remedies founded on similar facts and raising substantially similar reliefs from
different courts; and (b) for indirect contempt of courtfor not complying with their
undertaking to report the filing of the Second Complaint within five days from its
filing.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:
 ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Rollo, pp. 51-62.
[2]
Rollo, p. 64.
[3]
SC Administrative Matter No. 99-10-05-0 dated 20 February 2007. (Hereinafter, Procedure on Foreclosure).
[4]
No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate
mortgage shall be issued on the allegation that the interest on the loan is unconscionable, unless the debtor pays the
mortgagee at least twelve percent per annum interest on the principal obligation as stated in the application for
foreclosure sale, which shall be updated monthly while the case is pending. (Sec. 2 of the Procedure on
Foreclosure.)
[5]
The Complaint for Nullification of Interests, Penalties and Other Charges, Specific Performance with Prayer for
Preliminary Injunction, TRO and Damages dated 07 April 2009, docketed as Civil Case No. 09-0126, entitled Daisy
M. Arevalo and Socrates M. Arevalo v. Planters Development Bank, Inc., then pending before Regional Trial Court
of Paraaque City, Branch 258, was dismissed by virtue of an Order dated 27 October 2009; rollo, pp. 105-137, 231-
236.
[6]
Rollo, pp. 118-121.
[7]
Rollo, p. 52.
[8]
Rollo, p. 54.
[9]
Order dated 24 April 2009; rollo, p. 139.
[10]
Id.
[11]
Id.
[12]
Rollo, pp. 140-159.
[13]
Rollo, p. 145.
[14]
Id.
[15]
Order dated 10 July 2009; rollo, pp. 98-100.
[16]
Rollo, pp. 160-166.
[17]
Order dated 24 August 2009; rollo, pp. 102-103.
[18]
Docketed as CA-GR No. 110806, entitled Sps. Daisy Arevalo and Socrates Arevalo v. The Presiding Judge
Branch 258, Regional Trial Court of Paranaque City; rollo, pp. 65-97.
[19]
Rollo, p. 79.
[20]
Order dated 27 October 2009; rollo, pp. 231-236.
[21]
Docketed as CA-G.R. CV No. 94925, entitled Sps. Daisy & Socrates Arevalo v. Planters Development
Bank, Notice of Appeal dated 08 March 2010; rollo, pp. 237-238 and Notice dated 28 September 2010; rollo, p. 239.
[22]
Rollo, pp. 178-186.
[23]
Rollo, pp. 60-61.
[24]
Rollo, p. 60.
[25]
Rollo, p. 64.
[26]
Supra note 21.
[27]
Rollo, pp. 290-299.
[28]
Rollo, p. 8.
[29]
Rollo, p. 27.
[30]
Rollo, pp. 279-301.
[31]
Id.
[32]
Rollo, pp. 307-320.
[33]
Rollo, pp. 334-347.
[34]
Supra note 20.
[35]
Tantoy, Sr. v. Hon. Judge Abrogar, 497 Phil. 615 (2005).
[36]
Bustamante v. Court of Appeals, G.R. No. 126371, 17 April 2002, 381 SCRA 171.
[37]
Golez v. Hon. Judge Leonidas, 194 Phil. 179 (1981).
[38]
G.R. No. 177486, 21 December 2009, 608 SCRA 699.
[39]
Id. at 703-705.
[40]
Ley Construction & Development Corporation v. Hyatt Industrial Manufacturing Corporation, 393 Phil. 633
(2000).
[41]
Civil Case no. 10-0519 is anchored on an entirely distinct causes of action, one of which, is that despite the total
approved loan was already annotated on petitioners TCT No. 13168 pursuant to the real estate mortgage, the
respondent bank failed to release the full amount of loan to the petitioners on various pretexts, thus, a substantial
portion of the consideration of the real estate mortgage was not released to petitioners resulting to their substantial
prejudice. Thus, in Civil Case No. CV-09-0126 before Branch 258, petitioners prayed for Specific Performance for
the release to the latter of the ₱602,013.93 which the respondent bank unjustifiably withheld from them, but instead
proceeded with the extrajudicial foreclosure of the subject property.
Since fulfillment is rendered legally impossible by the extrajudicial foreclosure already conducted by
the respondent bank, as in fact it may have already consolidated its title over petitioners property, petitioners
availed themselves of the remedy provided, for under paragraph 2 of Article 1191 of the Civil Code, which
states:
x x x He may also seek rescission, even after he has chosen fulfillment if the latter should become
impossible. (Emphases supplied.) (Rollo, pp. 335-336.)
[42]
Rollo, p. 319.
[43]
CONSTITUTION, Art. VIII, Sec. 3.
[44]
Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 426 (1998).
[45]
Id.
[46]
Id.
[47]
Province of North Cotabato v. Government of the Republic of the Philippines Peace Panel on Ancestral
Domain (GRP), G.R. Nos. 183591, 183752, 183893 & 183591, 14 October 2008, 568 SCRA 402.
[48]
Id.
[49]
Sadang v. Court of Appeals, G.R. No. 140138, 11 October 2006, 504 SCRA 137.
[50]
Rollo, pp. 285-288.
[51]
Rollo, pp. 318, 340.
[52]
Pilipino Telephone Corp. v. Radiomarine Network, Inc., G.R. No. 152092, 04 August 2010, 626 SCRA 702.
[53]
Id.
[54]
G.R. No. 182291, 22 September 2010, 631 SCRA 172.
[55]
Id.
[56]
Lim v. Vianzon, 529 Phil. 472 (2006).
[57]
Rollo, pp. 41-42.
[58]
Rollo, pp. 298-299.
[59]
Guevara v. BPI Securities Corporation, G.R. No. 159786, 15 August 2006, 498 SCRA 613.
[60]
Dy v. Mandy Commodities Co., Inc., G.R. No. 171842, 22 July 2009, 593 SCRA 440.
[61]
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.
(Emphases supplied.) (Rules of Court, Rule 7, Sec. 5.)
[62]
Rollo, pp. 43, 317-319 and 341-343.
[63]
Rules of Court, Rule 45, Sec. 4, in relation to Rule 42, Sec. 2; Rule 7, Sec. 5.
[64]
Rollo, pp. 319 and 343.
[65]
Rules of Court, Rule 7, Sec. 5; Garcia v. Sandiganbayan, G.R. No. 165835, 22 June 2005, 460 SCRA 600.
 THIRD DIVISION

HONORABLE OMBUDSMAN G.R. No. 175201

SIMEON V. MARCELO,
Present:
Petitioner,

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,

CHICO-NAZARIO,
- versus -
NACHURA, and

REYES, JJ.

LEOPOLDO F. BUNGUBUNG and

HON. COURT OF APPEALS, Promulgated:
Respondents.

April 23, 2008

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

DECISION
CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court, whereby petitioner Office of the Ombudsman (Ombudsman) prays for the
reversal of the Decision[1] dated 30 June 2006 and Resolution[2] dated 26 October
2006 of the Court of Appeals in CA-G.R. SP No. 89689 which, in turn, reversed and
set aside the Ombudsmans Orders dated 11 January 2005 and 28 April 2005 in
OMB-ADM-0-01-0502. The Ombudsman found respondent Leopoldo F.
Bungubung (Bungubung) administratively liable for grave misconduct, dismissing
him from the service and imposing the accessory penalties of cancellation of
eligibility, forfeiture of retirement benefits, and his perpetual disqualification
from reemployment in government service.

The Hon. Simeon V. Marcelo represented the Ombudsman, with powers and
functions provided under Article XI, Section 13 of the 1987 Constitution and the
provisions of Republic Act No. 6770, otherwise known as the Ombudsman Act of
1989.

Bungubung is the Manager of the Port District Office (PDO) of Manila, Philippine
Ports Authority (PPA), South Harbor, Port Area, Manila. He is also the Chairman of
the Ports District Security Bids and Awards Committee (PDSBAC) of the PPA.

On 24 September 2001, Roberto C. Doromal (Doromal), the President of Combat

Security & Executive Protection Agency (CSEPA), a security agency that
participated in the bidding for security services for the PPA, filed a Complaint-
Affidavit[3] dated 7 September 2001 against Bungubung before PPA Resident
Ombudsman Manolo M. Mabini, alleging as follows:
3. That sometime in June 1995, my aforesaid wife was instrumental in negotiating and
concluding a contract for Security Services with the Philippine Ports Authority (PPA),
more particularly at the Port District of Manila (PDO-Manila) for two (2) years
starting August 1, 1995;

xxxx

6. That after a service contract was signed by PPA and this agency on January 28, 1999,
the Port District Manager of PDO-Manila, Mr. Leopoldo Bungubung and other PPA
officials asked for certain amounts from my said wife as balato for winning the award
where (sic) the latter obliged herself to give;

7. That initially, Mr. Leopoldo Bungubung and other PPA officials demanded amounts
ranging from P10,000 a month down to P2,000 for him (Bungubung) and his
subordinates, respectively; and my wife directed our staff, particularly the Billing and
Collection Clerk and Cashier to include in our records and books of account these
disbursements as Representation expense;

8. That when my late wife died on May 3, 2000, the same arrangement was pursued and
carried over through the period that I was already the one dealing with PPA, and that,
sometime in late April 2000, when the security force was increased to 184 Security
guards at North Harbor-Special Take-Over Unit (STU), the amount demanded by Mr.
Bungubung was also increased to P40,000 a month and sometimes P50,000;

xxxx

10. That sometime in late February, 2001, one of office staff received a telephone call
from a certain Capt. Valenzuela of the Port Police Dept. of PPA and because I was not
around, said Capt. Valenzuela left a message advising me to see Mr. Leopoldo
Bungubung for some important matters;

11. That upon receipt of the advise (sic) from my office staff, I went to PPA, with my
secretary, Ms. Evalyn Cruz, to see Mr. Leopoldo Bungubung at his office located at old
 PNR Bldg., South Harbor, Port Area, Manila and at the same time personally delivered a
sum of money amounting to P50,000 as earlier requested by him (Bungubung).

12. That during the course of my conversation with Mr. Leopoldo Bungubung after
giving the P50,000, he asked from me a vehicle, Mitsubishi Pajero (late model) van, to
be due and delivered supposedly to him in the middle part of March 2001 while there is
no award of the winning bidder yet; and that I asked the said Bid Committee Chairman,
Mr. Bungubung to give me a grace period of two (2) months to produce what he was
asking from me. Unfortunately, however, due to the expensive value of the said Pajero
van, I was not able to deliver. Hence, on March 30, 2001, I was served a Notice of Award
of the winning bidder which is STAR SPECIAL WATCHMAN & DETECTIVE AGENCY, INC. an
agency comparatively smaller than mine;

13. That taking a cue from the Pajero van being asked, I instructed my men to conduct
an investigation and there, they found a late model Pajero van with Plate No. WLA-674
parked in from of the residence of Mr. Leopoldo Bungubung and later verified to have
been registered and transferred on 12 March 2001 under the name of Mr. Norman
Vincent Bungubung, son of Chairman Bungubung at #45 Buencamino St., BF
Homes, Paranaque City.[4]

In support of the allegations in his Complaint-Affidavit, Doromal submitted an

affidavit of his secretary Evalyn Cruz (Cruz) and an alleged blue book of
CSEPA. Cruz recounted in her affidavit another incident wherein she personally
handed over the amount of P50,000.00 cash to Bungubung at his office on 16
January 2001. The CSEPA blue book purportedly detailed
monthly balato or payola paid to PPA officials from July 2000 to February 2001,
recorded therein as representation expenses. It was allegedly prepared by a
certain Evalyn M. Ebora (Ebora), and approved by Doromal.

Thereafter, PPA Resident Ombudsman Mabini released a

[5]
Memorandum/Investigation Report dated 25 September 2001, recommending
the following:
 a. That criminal complaint be filed against Mr. Leopoldo F. Bungubung for violation of
Section 3(b) of R.A. 3019; Section 7(d) of R.A. 6713 and Art. 211 of the RPC for
demanding and receiving balato from COMBAT in the total amount of P320,000
more or less;

b. That likewise, an administrative complaint be filed against Mr. Leopoldo F.

Bungubung for Grave Misconduct and Conduct Prejudicial to the Best Interest of the
Service arising from the above criminal act;

c. That Mr. Leopoldo F. Bungubung be placed under Preventive Suspension for a

period of six (6) months without pay pursuant to Section 24 of R.A. 6770.

From the foregoing, the following complaints were filed against Bungubung
before the Ombudsman: (1) an administrative complaint for Grave Misconduct
and Conduct Prejudicial to the Best Interest of the Service, docketed as OMB-
ADM-0-01-0502 (OMB-0-01-0793); and (2) a criminal complaint for violation of
Section 3(b) of the Anti-Graft and Corrupt Practices Act, docketed as OMB-0-01-
0793.

After the parties submitted the required pleadings, a preliminary

conference was held on 21 February 2002 in OMB-ADM-0-01-0502, the
administrative case. Bungubung manifested therein that he was submitting the
case for resolution. Doromal, however, was still undecided on whether to opt for
the conduct of a formal investigation or to submit the case for resolution at
once. In a Manifestation filed on 25 February 2002, Doromal informed the
Ombudsman that he was opting instead for the conduct of a formal investigation
for purposes of submission of evidence and affidavits of witnesses.[6]
Doromals aforecited manifestation notwithstanding, the Ombudsman, in an
Order dated 6 March 2002, through Graft Investigation Officer II Joselito P.
Fangon, ordered the submission of the case for resolution.

The parties were then required to submit their respective Memoranda.

On 28 November 2002, Graft Investigation Officer II Fangon drafted a
Decision[7] which recommended the dismissal of the administrative case against
Bungubung, without prejudice to its re-filing.
However, Ombudsman Marcelo disapproved Graft Investigation Officer II Fangons
28 November 2002 Decision, and issued another Order[8] dated 11 January 2005
finding Bungubung liable for grave misconduct (which absorbed the lesser offense
of conduct prejudicial to the best interest of the service) and ordering
Bungubungs dismissal from service, together with the accessory penalties of
cancellation of eligibility, forfeiture of retirement benefits, and respondents
perpetual disqualification from reemployment in government service. The
dispositive part of Ombudsman Marcelos 11 January 2005 Order reads:

WHEREFORE, the 28 November 2002 Decision prepared by the former

Administrative Adjudication Bureau (AAB), this Office, recommending the dismissal
(without prejudice to its re-filing) of the administrative complaint against [Bungubung] is
hereby DISAPPROVED.

Respondent LEOPOLDO F. BUNGUBUNG, Port District Manager, Manila Port

District, Philippine Ports Authority, is hereby found liable for Grave Misconduct and, as
such, is DISMISSED from the service. The penalty of dismissal shall carry with it the
accessory penalties of cancellation of eligibility, forfeiture of retirement benefits, and
[Bungubungs] perpetual disqualification from reemployment in the government service.

In the interim, the Ombudsman issued an Order[9] dated 10 September

2003 in OMB-0-01-0793, for the filing of the criminal complaint against
Bungubung, after finding that there was probable cause to indict him for violation
of Section 3(b) of the Anti-Graft and Corrupt Practices Act.[10]
The Ombudsman took into consideration its aforementioned 10 September
2003 Order in OMB-0-01-0793, when it found in OMB-ADM-0-01-0502 that
Bungubung took advantage of his position as Chairman of the PDSBAC of the PPA,
using it as leverage in soliciting cash and a Mitsubishi Pajero van from the bidders
as consideration for the award of the security contract. According to the
Ombudsman, such actuations constitute conduct grossly prejudicial to the best
interest of the service. It rejected Bungubungs denial and instead gave credence
to the attestation of Cruz that she personally delivered the P50,000.00 to
Bungubung.

Bungubung filed a Motion for Reconsideration[11] of the 11 January 2005 Order of

the Ombudsman in OMB-ADM-0-01-0502, but it was denied by the Ombudsman
in another Order[12] dated 28 April 2005, to wit:

WHEREFORE, the Motion for Reconsideration dated 21 January 2005 filed by

respondent Leopoldo F. Bungubung is DENIED. The Order dated 11 January 2005 finding
him liable for Grave Misconduct thereby ordering him dismissed from the service,
together with its accessory penalties, is hereby AFFIRMED.

Bungubung then sought recourse to the Court of Appeals via a Petition for Review
under Rule 43 of the 1997 Rules of Civil Procedure, docketed as CA-G.R. SP No.
89689. He asserted therein that the Ombudsman erred in (a) holding that there
was substantial evidence to make him liable for grave misconduct, resulting in his
dismissal from service and imposition upon him of the accessory penalties; and
(b) ordering him dismissed from the service, when the Constitution merely
empowered said office to make a recommendation of dismissal. Pending
resolution of CA-G.R. SP No. 89689 by the Court of Appeals, Bungubung filed
therein a Motion for Issuance of a Temporary Restraining Order (TRO) and/or
Writ of Preliminary Injunction to enjoin the Ombudsman and the PPA General
Manager from implementing the Order dated 11 January 2005 which dismissed
him from service.[13] The Court of Appeals granted the TRO on 3 June 2005.[14]

In the meantime, Doromal executed an Ex-Parte Manifestation and Motion

to Withdraw Complaint[15] dated 18 August 2005 and an Affidavit of
Desistance[16] dated 23 August 2005, which he filed before the Ombudsman. In
his Ex-Parte Manifestation and Motion to Withdraw Complaint and Affidavit of
Desistance, Doromal expressed his desire to withdraw his Complaint-Affidavit
against Bungubung and desist from the continuance of both OMB-ADM-0-01-
0502 and OMB-0-01-0793. Doromal explicitly admitted in said documents that his
allegations in the administrative and criminal complaints against Bungubung were
all fabricated. He further confessed that Bungubung never demanded or received
any balato from him or his wife in exchange for the award of the PPA security
service contract; nor did Bungubung ask for a Mitsubishi Pajero van from him.

On 30 June 2006, the Court of Appeals issued a Decision in CA-G.R. SP No.

89689 ruling in Bungubungs favor, and reversing and setting aside the Orders
dated 11 January 2005 and 28 April 2005 of the Ombudsman. It further absolved
Bungubung from liability for the charge of grave misconduct, finding no
substantial evidence that Bungubung committed the same.

According to the appellate court:

There is merit in the petition.

Indeed, there is absence of substantial evidence to hold [Bungubung] liable for grave misconduct.

To begin with, [Doromal] and his witness failed to appear at the preliminary
conference on February 21, 2005 to attest to the truth of the contents of their affidavits.
For such failure, their affidavits are inadmissible as they are hearsay evidence.

xxxx

By not appearing at the preliminary conference and affirming their affidavits,

We can not readily conclude that the contents thereof are true. It is highly probable that
[Doromal] is only sour graping for losing the PPA 2001 service contract. As early
as January 18, 2001, the bids for the 2001 service contract were already opened and
authenticated. Thus, it can not be said that the bids were manipulated or rigged to
favour somebody.
 While rules of procedure do not strictly apply to administrative cases as long as
defendants right to due process is not violated, its liberal application in administrative
cases does not allow admission of hearsay evidence, i.e. affidavits not identified by
affiants, as this would violate the constitutional right of petitioner to due process and
his substantive right not to be adjudged guilty on the basis of hearsay evidence.

xxxx

In the instant case, [Bungubung], in denying the assertion of Evalyn Cruz in her
affidavit that she gave him P50,000.00, and in describing her claim as a self-serving
fabrication, is positive evidence that what she claimed did not occur. This holds true
with respect to [Bungubungs] positive denial of [Doromals] assertion that he gave
[Bungubung] another P50,000.00 in late February 2001 and that he also demanded a
late model Pajero from [Doromal].

[The Ombudsman] accepted as credible [Doromals] claim that [Bungubung]

asked for a late model Pajero in exchange for the 2001 security service contract. x x x

The following must, however, be considered:

1. The rule on positive and negative testimonies do not apply where a person who
is in a position to know if a fact occurred denies that it did. This is positive denial
which has the same weight as a contrary assertion.

2. The finding that the van was acquired after the failed solicitation and before the
award readily assumes as true private respondents bare assertion that
petitioner asked him for a van.

Allegedly taking cue from his failure to deliver a Pajero van, [Doromal] had
[Bungubungs] home cased and saw a Pajero in front of his house. If this is the case, why
was this not mentioned by [Doromal] when he filed a civil case to stop the award of the
security service contract on ground of irregularities in the bidding? Neither was this
matter brought up during the hearing on the application for a TRO. [Doromal] only
 brought up this matter about a Pajero in his affidavit-complaint of September 7,
2001 after hearing that [Bungubungs] son has a newly-bought Pajero.

1. [Bungubung] presented proof that on May 4, 2001, [Doromal] filed a false hit-and-
run report involving the Pajero with plate WLA 674 of [Bungubungs] son. This shows
the extent that [Doromal] would go just to spite [Bungubung].

2. The President of Star Security Agency declared under oath that he did not give
[Bungubung] any Pajero;

3. The Pajero was acquired by [Bungubungs] son from a certain Teresito Uy as

evidenced by a notarized deed of sale;

4. It is unfair to assume that [Bungubungs] son could not afford the price of a used
Pajero. He put up a glass and aluminum business after getting married.

From the foregoing, [the Ombudsman] should have dismissed the complaint for
lack of substantial evidence to support it.

The fallo of the Court of Appeals 30 June 2006 Decision reads:

WHEREFORE, the petition for review is GRANTED and GIVEN DUE COURSE. The
Orders[17] of the Ombudsman dated January 11, 200[5] and April 28, 200[5] are reversed
and set aside and a new one issued absolving petitioner from liability for the charge of
grave misconduct.[18]

The Ombudsman filed a Motion for Reconsideration of the afore-quoted

Decision, which the appellate court denied in its Resolution dated 26 October
2006 for lack of merit, thus:

Notably, the issues raised in the motion have already been thoroughly threshed
out and passed upon in the assailed decision. No novel or new matters were introduced
therein.
 The disquisition made by the Supreme Court in Dela Cruz vs. Department of
Education, Culture and Sports-Cordillera Administrative Region is most helpful, We have
long held that affidavits are deemed hearsay evidence because the adverse party is
deprived of the opportunity to cross-examine the affiants. Hence, affidavits are
generally deemed inadmissible or rejected outright unless the affiants themselves are
placed on the witness stand to testify thereon.

WHEREFORE, in view of the foregoing, the instant Motion for Reconsideration is

DENIED for lack of merit.[19]

Consequently, the Ombudsman filed this Petition for Review on Certiorari under
Rule 45 of the Revised Rules of Court based on the following grounds:

I.

THE RELIANCE BY THE OMBUDSMAN ON THE AFFIDAVITS

OF ROBERTO DOROMAL AND HIS WITNESS IN
DETERMINING [BUNGUBUNG]S ADMINISTRATIVE
LIABILITY WAS PROPER. IT DID NOT DEPRIVE
[BUNGUBUNG] OF DUE PROCESS;

II.

THE FINDING OF ADMINISTRATIVE OFFENSE FOR GRAVE

MISCONDUCT AGAINST [BUNGUBUNG] IS SUPPORTED BY
SUBSTANTIAL EVIDENCE;

III.
 AS CONSEQUENTLY HELD BY THE SUPREME COURT, THE FINDINGS OF
THE OMBUDSMAN DESERVE GREAT WEIGHT, AND MUST BE
ACCORDED FULL RESPECT AND CREDIT.

The Ombudsman prays that this Court render a Decision nullifying and setting
aside the Decision dated 30 June 2006 and Resolution dated 26 October 2006 of
the Court of Appeals in CA-G.R. SP No. 89689, and affirming the Ombudsmans
Orders dated 11 January 2005 and 28 April 2005 in OMB-ADM-0-01-0502 which
found Bungubung guilty of Grave Misconduct and dismissing him from service
with all the accessory penalties incident thereto.

Bungubung counters that the Court of Appeals correctly held that there was no
substantial evidence to hold him liable for grave misconduct; and that the reliance
by the Ombudsman on the affidavits of Doromal and Cruz in determining his
administrative liability, despite the fact that the contents thereof were not
personally attested to by the affiants before the Ombudsman, was a clear
violation of his right to due process. He also avers that the Court of Appeals was
correct in giving credence to the Ex-ParteManifestation and Motion to Withdraw
the Complaint and Affidavit of Desistance, filed by Doromal with the Ombudsman
in August 2005, as proof of Bungubungs lack of culpability.

The present Petition must fail.

Before proceeding to the merits of the instant Petition, this Court deems it
necessary to first address the allegation of Bungubung that he was denied due
process by the Ombudsman. The fact that no formal hearing took place is not
sufficient ground to say that due process was not afforded Bungubung. It is well-
settled that in administrative proceedings, including those before the
Ombudsman, cases may be submitted for resolution on the basis of affidavits and
pleadings. The standard of due process that must be met in administrative
tribunals allows a certain degree of latitude as long as fairness is not ignored. It is,
therefore, not legally objectionable for being violative of due process for an
administrative agency to resolve a case based solely on position papers,
affidavits or documentary evidence submitted by the parties as affidavits of
witnesses may take the place of their direct testimonies.[20] Undoubtedly, due
process in administrative proceedings is an opportunity to explain one's side or an
opportunity to seek reconsideration of the action or ruling complained
of,[21] which requirement was afforded Bungubung.[22]
In Manggagawa ng Komunikasyon sa Pilipinas v. National Labor Relations
Commission,[23] this Court held that:

[A]ctual adversarial proceeding becomes necessary only for clarification or when there
is a need to propound searching questions to unclear witnesses. This is a procedural
right which the employee must, however, ask for it is not an inherent right, and
summary proceedings may be conducted. This is to correct the common but mistaken
perception that procedural due process entails lengthy oral arguments. Hearings in
administrative proceedings and before quasi-judicial agencies are neither oratorical
contests nor debating skirmishes where cross examination skills are displayed. Non-
verbal devices such as written explanations, affidavits, positions papers or other
pleadings can establish just as clearly and concisely aggrieved parties predicament or
defense. What is essential is ample opportunity to be heard, meaning, every kind of
assistance that management must accord the employee to prepare adequately for his
defense.

After the filing of the Complaint, Bungubung was allowed by the

Ombudsman to submit the following: (a) a counter-affidavit refuting the charges
against him; (b) a rejoinder-affidavit; and (c) a Motion for Reconsideration of
the 11 January 2005 Order of the Ombudsman. Moreover, Bungubung had the
option to subject the case to a formal investigation, but his Manifestation
dated 21 February 2002 before the Ombudsman was evidence that he did not
choose to do so and, instead, agreed to submit the case for resolution on the
basis of the affidavits on record. These facts establish that Bungubung was not
deprived of his right to due process, having ample opportunity to present his side
before the Ombudsman. In fact, it was only later on in a Manifestation filed on 25
February 2002 that Doromal changed his mind and informed the Ombudsman
that he was opting instead for the conduct of a formal investigation.
 That point having been settled, this Court moves on to determine the
merits of the Petition at bar.

The Petition primarily involves questions of fact, pitting against each other
the findings of fact of the Court of Appeals and those of the Ombudsman, both of
which depended on the probative weight to be given to the affidavits of Doromal,
Cruz, and the alleged CSEPA blue book.
We stress the procedural tenet that a petition for review on certiorari filed
with this Court under Rule 45 of the Revised Rules of Court shall raise only
questions of law.[24] A question of law has been defined as one that does not call
for any examination of the probative value of the evidence presented by the
parties;[25] a question of fact arises when the doubt or difference pertains to the
truth or falsehood of alleged facts or when the query necessarily solicits
calibration of the whole evidence considering mostly the credibility of witnesses,
existence and relevancy of specific surrounding circumstances, their relation to
one another and to the whole and probabilities of the situation.[26] We have
consistently held that in a petition for review on certiorari, this Court does not sit
as an arbiter of facts for it is not the function of the Supreme Court to analyze or
weigh all over again the evidence already considered in the proceedings
below.[27] Such factual findings can be questioned only if, among other
exceptions,[28] the findings of fact are conflicting and the findings of the Court of
Appeals are contrary to those of the lower court and/or administrative agency,
which exceptional circumstances are present herein, thus, justifying the review by
this Court of the factual findings of the Ombudsman and the Court of Appeals.

In Montemayor v. Bundalian,[29] this Court laid down the following guidelines for
the judicial review of decisions rendered by administrative agencies in the
exercise of their quasi-judicial power:

First, the burden is on the complainant to prove by substantial evidence the allegations in his complaint. Substantial
evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. Second, in
reviewing administrative decisions of the executive branch of the government, the findings of facts made therein are to
be respected so long as they are supported by substantial evidence. Hence, it is not for the reviewing court to weigh the
 conflicting evidence, determine the credibility of witnesses, or otherwise substitute its judgment for that of the
administrative agency with respect to the sufficiency of evidence. Third, administrative decisions in matters within the
executive jurisdiction can only be set aside on proof of gross abuse of discretion, fraud, or error of law. These principles
negate the power of the reviewing court to re-examine the sufficiency of the evidence in an administrative case as if
originally instituted therein, and do not authorize the court to receive additional evidence that was not submitted to the
administrative agency concerned.

As stated above, the fundamental rule in administrative proceedings is that the

complainant has the burden of proving, by substantial evidence, the allegations in
his complaint.Section 27 of the Ombudsman Act is unequivocal: Findings of fact
by the Office of the Ombudsman when supported by substantial evidence are
conclusive. Conversely, therefore, when the findings of fact by the Ombudsman
are not adequately supported by substantial evidence, they shall not be binding
upon the courts. Such is the case in the present Petition.

Substantial evidence, which is more than a mere scintilla but is such

relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, would suffice to hold one administratively liable.[30] The standard of
substantial evidence is satisfied when there is reasonable ground to believe that
respondent is responsible for the misconduct complained of,[31] even if such
evidence might not be overwhelming or even preponderant.[32] While substantial
evidence does not necessarily import preponderance of evidence as is required in
an ordinary civil case,[33] or evidence beyond reasonable doubt as is required in
criminal cases,[34] it should be enough for a reasonable mind to support a
conclusion. There is none here.

Bungubung is being charged with the administrative offense of Grave

Misconduct, which has been authoritatively defined in Amosco v. Judge
Magro[35] as:

Misconduct in office has a definite and well-understood legal meaning. By uniform legal
definition, it is a misconduct such as affects his performance of his duties as an officer
and not such only as affects his character as a private individual. In such cases, it has
been said at all times, it is necessary to separate the character of the man from the
character of the officer x x x. It is settled that misconduct, misfeasance, or malfeasance
warranting removal from office of an officer, must have direct relation to and be
 connected with the performance of official duties amounting either to
maladministration or willful, intentional neglect and failure to discharge the duties of
the office. x x x.

In In re: Impeachment of Horilleno,[36] this Court authoritatively defined

serious misconduct --

[S]ufficient cause must exist in the judgment of the Supreme Court involving serious
misconduct. The adjective is serious; that is, important, weighty, momentous, and not
trifling. The noun is misconduct; that is, a transgression of some established and definite
rule of action, more particularly, unlawful behavior or gross negligence by the public
officer. x x x.

Being guided accordingly by the aforementioned evidentiary rules and

jurisprudence, this Court finds that the evidence on record in the present case
does not constitute substantial evidence of Bungubungs administrative culpability
for grave misconduct.

Within the field of administrative law, while strict rules of evidence are not
applicable to quasi-judicial proceedings, nevertheless, in adducing evidence
constitutive of substantial evidence, the basic rule that mere allegation is not
evidence cannot be disregarded.[37]

In his Affidavit-Complaint, Doromal accused Bungubung of soliciting and

receiving P100,000.00 from him and a Mitsubishi Pajero van from another bidder
in exchange for the award of the security services contract of the PPA. Doromal
also accused Bungubung and other PPA employees of demanding and
receiving balato in consideration of the award of the PPA Security Service
Contract.
 In addition to his Complaint-Affidavit, Doromal submitted a Reply-Affidavit,
as well as the following supporting documents:

(a) Affidavit of Evalyn Cruz, his secretary;

(b) CSEPA blue book detailing the monthly balato or payola paid to PPA officials
and employees, referred to therein as representation expenses.

On the other hand, Bungubung filed his Counter-Affidavit and Rejoinder-

Affidavit. In his defense, Bungubung further submitted the following evidence:

(a) Affidavit of Celso A. Fernandez, President and Chairman of Star Special

Watchman and Detective Agency, Inc., the winning bidder, who denied giving
any money or a Pajero to Bungubung;

(b) Affidavit of a certain Rufino Valenzuela, who denied giving instructions for
Doromal to go to Bungubungs office;

(c) A copy of the petition in Civil Case No. 01-100678, entitled Roberto C. Doromal,
etc. v. Philippine Ports Authority, et al., questioning the legality of the case filed
by Doromal against Bungubung before the RTC to show that Doromal never
mentioned therein that Bungubung requested for a Pajero from him;

(d) A copy of the Deed of Sale of the Pajero executed by Teresito Uy in favor
of Norman Vincent Bungubung, as proof that the said vehicle was bought and is
now owned by Bungubungs son;

(e) A copy of the Traffic Incident Report of the Central Police Traffic Enforcement
Office to evidence the fabricated hit and run charge made by an employee of
CSEPA against the Pajero owned by Bungubungs son; and

(f) PSBAC Resolutions establishing that the award of the PPA Security Contracts
was made by public bidding.

The Ombudsman chose to give more credence to Doromals allegations and

evidence when it found that Bungubung took advantage of his position as
Chairman of the PSBAC and used it as leverage in soliciting cash and a Mitsubishi
Pajero van from the bidders as a consideration for the award of the PPA security
service contract. However, Doromals evidence is hardly substantive.

First, Doromals allegation that Bungubung acquired the Mitsubishi Pajero

van from another bidder after failing to successfully solicit the same from him is
highly suspect, since Doromal only narrated the alleged solicitation in his
Affidavit-Complaint against Bungubung filed with the Ombudsman on 7
September 2001. He failed to mention such a significant circumstance in Civil Case
No. 01100678, Roberto C. Doromal v. Philippine Ports Authority, before the RTC or
in his petition for TRO in the same case, both of which were filed ahead of his
Affidavit-Complaint before the Ombudsman.

Second, little weight should be given to the CSEPA blue book allegedly
detailing the monthly payola or balato paid to PPA officials and employees from
July 2000 to February 2001, recorded therein as representation expenses.
According to the CSEPA blue book, the following PPA key officials received
monthly representation allowances:

NAME POSITION PERIOD TOTAL AMOUNT

Mr. Cecilio AGM Operations July 2000-Feb 2001 P200,000.00

Leopoldo Bungubung Port District Manager July 2000-Feb 2001 P300,000.00

Ted Alcalde District Manager July 2000-Feb 2001 P144,000.00

Capt. Gamis Chief of Port Police July 2000-Feb 2001 P144,000.00

North Harbor

Felix Barcala Chief of Port Police July 2000-Feb 2001 P35,000.00

South Harbor

Alex Cruz July 2000- Feb 2001 P144,000.00

 The CSEPA blue book, however, is evidently self-serving. The entries therein
were purportedly made by a certain Ebora, who was never presented to
personally identify the entries she made or confirm the same. The only other
person involved in the preparation of the blue book was Doromal who supposedly
approved the entries therein. The blue book is not audited, nor is it subject to
review by an independent party. The blue book then can easily be
manufactured. Considering the seriousness of the charges which may arise
against the public officers named therein, the entries in the blue book must not
be accepted at face value when the entries therein are uncorroborated by any
other evidence.
Third, while the Ombudsman gave much weight and credit to Doromals
evidence, it lightly brushed aside that submitted by Bungubung. Among
Bungubungs evidence which the Ombudsman failed to consider was a copy of the
Traffic Accident Incident Report prepared by the Central Police Traffic
Enforcement Office, stating that on 4 May 2001, Doromal filed a false report of a
hit-and-run incident which supposedly occurred on 1 May 2001 involving the
Mitsubishi Pajero van of Bungubungs son. The report was made by the police
investigator in his official capacity; thus, it enjoys the presumption of regularity
and is a prima facie evidence of the facts therein stated. The filing of the false
report establishes ill motive on the part of Doromal specifically directed against
Bungubung.

Fourth, the main defense put up by Bungubung is complete denial, a

defense which is said to be the weakest, seldom believed or given weight, as it is
easy to fabricate. Nonetheless, Bungubungs denial of -- (a) Cruzs allegation in her
affidavit that she personally gave Bungubung P50,000.00 on 16 January 2001; (b)
Doromals assertion in his affidavit that he gave Bungubung another P50,000.00 in
late February 2001; and (c) Doromals assertion that Bungubung demanded from
him a late model Mitsubishi Pajero van -- is given weight in this instance.

In the absence of corroborative evidence, the Court would not be prepared

to accept the usual lame defense of denial over the straightforward and positive
declaration of a witness since denials constitute self-serving negative evidence
which cannot be accorded greater evidentiary weight than the declaration of
credible witnesses who testify on affirmative matters. Thus, in the case of
contradictory declarations and statements, greater weight is generally given to
positive testimonies than to mere denials.[38]

In this instance, however, Bungubungs denial of the allegations against him

are supported by his own controverting evidence. In contrast, Doromals
Complaint-Affidavit and Cruzs Affidavit support only each other.

Finally, this Court cannot ignore Doromals Ex-Parte Manifestation and

Motion to Withdraw Complaint dated 18 August 2005 and Affidavit of Desistance
dated 23 August 2005, which he filed with the Ombudsman. In both
documents, Doromal expressed his desire to withdraw his Complaint-Affidavit
filed with the Ombudsman and desist from the continuance of the criminal and
administrative complaints against Bungubung. Doromal explicitly admitted
therein that he merely fabricated all his allegations against Bungubung.

While this Court looks with disfavor on affidavits of desistance, still, its
effect on the instant case cannot be ignored. Doromals Affidavit of Desistance
includes an explicit admission that he fabricated the charges against Bungubung.
Therefore, Doromals Affidavit of Desistance is an express repudiation of the
material points alleged in his Complaint-Affidavit, and not a mere expression of
his lack of interest to pursue his complaints against Bungubung. Since Doromal
willfully and knowingly executed his Affidavit of Desistance, there being no
showing that he was made to do so fraudulently or under duress, then it may be
admitted and considered as evidence which considerably puts into question the
probative value of the Affidavit-Complaint he executed earlier and he now
repudiates.

In Gaviola v. Salcedo,[39] which involved an administrative case for

suspension or disbarment against a lawyer, this Court gave probative value to the
Affidavit of Desistance of the complainant, pronouncing that while the filing of an
Affidavit of Desistance by the complainant for lack of interest does not ipso
facto result in the termination of the administrative case, it was constrained to
dismiss the charges since such charges cannot be proven without the evidence of
the complainant and her witnesses. Such is the case at bar. Essentially, the
administrative case against Bungubung was based on the allegations made by
Doromal in his Affidavit-Complaint, without which, the case against Bungubung
collapses.

The Court of Appeals therefore took proper notice of Doromals Ex-

Parte Motion to Withdraw the Affidavit-Complaint and Affidavit of
Desistance since they cast a different light on the evidence previously considered
by the Ombudsman.

After evaluating the totality of evidence on record, this Court reaches the
inescapable conclusion that complainant Doromal failed to present substantial
evidence that Bungubung is administratively liable for grave misconduct.

As this Court declared in Ang Tibay v. Court of Industrial Relations,[40] the

assurance of a desirable flexibility in administrative procedure does not go so far
as to justify orders without a basis in evidence having rational probative force.

WHEREFORE, premises considered, the Petition for Review

on Certiorari is DENIED. The Decision dated 30 June 2006 and Order dated 26
October 2006 of the Court of Appeals in CA-G.R. SP No. 89689 are AFFIRMED.

No Costs.

SO ORDERED.
 MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

MA. ALICIA AUSTRIA-MARTINEZ ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES
 Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

REYNATO S. PUNO

Chief Justice

[1]
Penned by Associate Justice Lucenito N. Tagle with Associate Justices Marina L. Buzon and Regalado E.
Maambong concurring; rollo, pp. 46-61.
[2]
Rollo, pp. 64-65.
[3]
Incidentally, Doromal also filed on 25 April 2001 a Petition for Prohibition (rollo, pp. 107-133) with prayer for the
Issuance of Preliminary Injunction and/or Temporary Restraining Order (TRO) before the Regional Trial
Court (RTC) of the National Capital Region (NCR), captioned as Roberto C. Doromal, doing business under
the firm name/style of Combat Security and Executive Protection Agency vs. Philippine Ports Authority,
 Leopoldo F. Bungubung in his capacity as Port District Manager, PDC - Manila and as Chairman of PDS BAC
and Alfonso G. Cusi and Star Special Watchman and Detective Agency, docketed as Case No. 01100678.

[4]
Rollo, pp. 318-319.
[5]
CA rollo, pp. 67-71.
[6]
Rollo, p. 93.
[7]
Annex J to the Petition for Review before the Court of Appeals, pp. 94-106.
[8]
Rollo, pp. 84-87.
[9]
Page 2 of the 11 January 2005 Order of the Ombudsman.
[10]
Section 3(b) of the Anti-Graft and Corrupt Practices Act (RA 3019, as amended) provides:
SEC. 3. Corrupt practices of public officers. -- In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
xxxx
(b) Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself
or for any other person, in connection with any contract or transaction between the Government and any
other party, wherein the public officer in his official capacity has to intervene under the law.
[11]
Rollo, pp. 39-59.
[12]
Id. at 88-92.
[13]
Id. at 135-140.
[14]
Id. at 144-145.
[15]
Id. at 217-218.
[16]
Id. at 214-216.
[17]
Erroneously cited as 2001 instead of 2005 in the CA decision dated 30 June 2006.
[18]
Rollo, p. 45.
[19]
Id. at 64-65.
[20]
Samalio v. Court of Appeals, G.R. No. 140079, 31 March 2005, 454 SCRA 462, 473, citing CMP Federal
Security Agency, Inc. v. National Labor Relations Commission, 362 Phil. 439, 450 (1999).
[21]
Vertudes v. Buenaflor, G.R. No. 153166, 16 December 2005, 478 SCRA 210, 227-228, citing Velasquez v.
Hernandez, G.R. No. 150732, 31 August 2004, 437 SCRA 357, 368; Adiong v. Court of Appeals, 422 Phil.
713, 720 (2001); Vda. de Dela Cruz v. Abille, 405 Phil. 357, 366 (2001).
[22]
Huertas v. Gonzales, G.R. No. 152443, 14 February 2005, 451 SCRA 256, 270; Samalio v. Court of Appeals,
supra note 20.
[23]
G.R. No. 90964, 10 February 1992, 206 SCRA 109, 115.
[24]
Section 1, Rule 45, Revised Rules of Court.
[25]
Philippine National Bank v.Pike, G.R. No.157845, 20 September 2005, 470 SCRA 328, 339-340.

[26]
Secretary of Education v. Heirs of Rufino Dulay, Sr., G.R. No. 164748, 27 January 2006, 480 SCRA 452, 460,
citing Philippine National Bank v. Court of Appeals, 392 Phil. 156, 171 (2000); Bernardo v. Court of
Appeals, G.R. No. 101680, 7 December 1992, 216 SCRA 224, 332.
[27]
Metropolitan Bank & Trust Co. v. Barrientos, G.R. No. 157028, 31 January 2006, 481 SCRA 311, 320-
321; German Machineries Corporation v. Endaya, G.R. No. 156810, 25 November 2004, 444 SCRA 329,
340; Fortuna v. People, 401 Phil. 545, 550 (2000).
[28]
The exceptions to this rule include the following instances: (1) when the conclusion is grounded entirely on
speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is contrary to the admissions of both
appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial
courts; (8) when the findings of fact are conclusions without citation of specific evidence on which they
are based; (9) when the Court of Appeals overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of
the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on
 record. (Sering v. Court of Appeals, 422 Phil 467, 471-472 (2001); Fuentes v. Court of Appeals, 335 Phil.
1163, 1168-1169 (1997).
[29]
453 Phil. 158, 167 (2003).
[30]
Tapiador v. Office of the Ombudsman, 429 Phil. 47, 54 (2002); Audion Electric Co., Inc. v. National Labor
Relations Commission, G.R. No. 106648, 17 June 1999, 308 SCRA 340, 351; Association of Independent
Unions in the Phils. v. National Labor Relations Commission, G.R. No. 120505, 25 March 1999, 305
SCRA 219, 231; Gonzales v. National Labor Relations Commission, G.R. No. 125735, 26 August 1999,
313 SCRA 169, 174.
[31]
Consolidated Food Corporation v. National Labor Relations Commission, G.R. No. 118647, 23 September 1999,
315 SCRA 129, 141.
[32]
Coca Cola Bottlers Philippines, Inc. v. National Labor Relations Commission, G.R. No. 78787, 18 December
1989, 180 SCRA 195, 200-201.
[33]
Buduhan v. Pakurao, G.R. No. 168237, 22 February 2006, 283 SCRA 116, 122.
[34]
People v. Caigat, 426 Phil. 782, 792 (2002).
[35]
165 Phil. 110, 112 (1976); Manuel v. Judge Calimag, Jr., 367 Phil. 162, 166 (1999).
[36]
43 Phil. 212, 214 (1922).
[37]
Narazo v. Employees Compensation Commission, G.R. No. 80157, 6 February 1990, 181 SCRA 874,
877; Government Service Insurance System v. Court of Appeals, 357 Phil. 511, 529 (1998).
[38]
People v. Antonio, G.R. No. 107950, 17 June 1994, 233 SCRA 283, 299; Vda de Ramos v. Court of Appeals, 171
Phil. 354, 364 (1978).
[39]
A.C. No. 3037, 20 May 2004, 428 SCRA 563, 565-566.
[40]
69 Phil. 635 (1940).
 Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

DEUTSCHE BANK AG, G.R. No. 193065

Petitioner,

Present:

VELASCO, JR., J., Chairperson,

- versus -
PERALTA,
 ABAD,

MENDOZA, and

PERLAS-BERNABE, JJ.
COURT OF APPEALS and STEEL
CORPORATION OF
THE PHILIPPINES,

Respondents.

Promulgated:

February 27, 2012

X -------------------------------------------------------------------------------------- X

DECISION

MENDOZA, J.:

This is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure
assailing the March 12, 2010[1] and July 19, 2010[2] Resolutions of the Court of
Appeals (CA) in CA-G.R. SP No. 111556 entitled Deutsche Bank AG v. Hon. Judge
Albert A. Kalalo and Steel Corporation of the Philippines (Deutsche Bank AG
Petition) for having been issued without jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction, insofar as they ordered the
consolidation of the Deutsche Bank AG Petition with another case earlier filed and
docketed as CA-G.R. SP No. 107535 entitled Vitarich Corporation v. Judge Danilo
Manalastas (Vitarich Petition) on the ground that the two cases involve a
common question of law.

THE FACTS

Private respondent Steel Corporation of the Philippines (SteelCorp) is a

domestic corporation organized and existing under the laws of
the Philippines with principal place of business in Munting Tubig, Balayan,
Batangas. It is engaged in the business of manufacturing and distribution of cold-
rolled, galvanized and pre-painted steel sheets and coils.

On December 7, 1995, SteelCorp, as borrower, entered into a loan

agreement[3] with a consortium of lending banks and other financial institutions
for the purpose of partially financing the construction of its integrated steel mill
project. One of the participating lenders was Rizal Commercial Banking
Corporation (RCBC).

SteelCorp failed to pay its loan obligations as they fell due. Thus, on September
11, 2006, Equitable PCI Bank, Inc. (now Banco de Oro) filed a creditor-initiated
petition to place SteelCorp under corporate rehabilitation before the Regional
Trial Court of Batangas, Branch 2, which was subsequently raffled to Branch 4
(RTC-Batangas). This case was docketed as Spec. Proc. No. 06-7993.[4]
 In its Decision[5] dated December 3, 2007, the RTC-Batangas approved the
proposed Rehabilitation Plan and ordered the parties to comply strictly with the
provisions of the approved Rehabilitation Plan.

In February 2008 and during the pendency of the proceedings before the RTC-
Batangas, RCBC and petitioner Deutsche Bank AG entered into a deed of
assignment,[6] wherein the former assigned to the latter all of its rights,
obligations, title to, and interest in, the loans which it had extended to SteelCorp
in the aggregate outstanding principal amount of ₱94,412,862.58.

SteelCorp was duly informed of the said assignment through the Notice of
Transfer[7] sent to it by RCBC.

Through its Entry of Appearance with Motion for Substitution of

Parties[8] dated May 2, 2008, Deutsche Bank AG informed the RTC-Batangas of the
said transfer and assignment of the loan obligations.

The RTC-Batangas, upon the motion of SteelCorp, issued its Order dated October
28, 2009, directing the assignees, including Deutsche Bank AG, to disclose the
actual price or consideration paid by them for the SteelCorp debts assigned and
transferred to them.[9] From this order, Deutsche Bank AG filed its Petition for
Certiorari (With Urgent Application for a Temporary Restraining Order and/or
Writ of Preliminary Injunction) with the CA docketed as CA-G.R. No. 111556.[10]

Records show that two other petitions for certiorari filed by other creditors
of SteelCorp were pending before different divisions of the CA, both of which
arising from the same October 28, 2009 Order of the RTC-Batangas. The cases
were docketed as follows:
 1. CA-G.R. SP No. 111560 entitled Investments 2234 Philippines
Fund, Inc. v. Hon. Albert A. Kalalo, in His Capacity as the Presiding
Judge of the Regional Trial Court of Batangas City, Branch 4 and
Steel Corporation of the Philippines (Investments 2234
Petition); and

2. CA-G.R. SP No. 112175 entitled Equitable PCI Bank, Inc. (now BDO
Unibank, Inc.) v. Hon. Albert A. Kalalo in His Capacity as Presiding
Judge of the Regional Trial Court of Batangas City, Branch 4 and
Steel Corporation of the Philippines (EPCIB Petition).

In the meantime, SteelCorp filed its Motion for Consolidation[11] dated

February 18, 2010, praying for the consolidation of the Deutsche Bank AG
Petition, together with the Investments 2234 Petition and EPCIB Petition, with the
Vitarich Petition on the ground that the cases involved the same question of law
whether creditors could be compelled to disclose the actual assignment price for
credits in litigation which were assigned in the context of a corporate
rehabilitation proceeding pursuant to Articles 1634 and 1236 of the Civil Code.

On March 12, 2010, the CA in CA-G.R. SP No. 111556 issued the assailed
Resolution ordering the consolidation of Deutsche Bank AG Petition with the
Vitarich Petition, to wit:

Finding merit in the motion, and pursuant to Section 3(a), Rule III of the
Internal Rules of the Court of Appeals, the instant petition is
ordered CONSOLIDATED with CA-G.R. SP No. 107535 (the case with the lower
docket number), subject to the conformity of the ponente thereof and with right
of replacement with a case of similar nature and status.

SO ORDERED.[12]
 It appears from the records that the Vitarich Petition emanated from Civil
Case No. 592-M-2006 entitled In the Matter of the Petition for Corporate
Rehabilitation of Vitarich Corporation which is currently pending before Branch 7,
Regional Trial Court of Bulacan (RTC-Bulacan).

The RTC-Bulacan in its Decision dated May 31, 2007, approved the Vitarich
rehabilitation plan and upheld the rights of the assignees as subrogees to all the
rights and obligations of the original creditors.

Vitarich sought a partial reversal of the said decision via a petition for
review under Rule 43 of the 1997 Rules of Court (docketed as CA-G.R. SP No.
99374), contending that it should only be made to pay the discounted transfer
prices of the assigned credits should it decide to exercise its right of
redemption. Vitarich, however, withdrew the said petition and instead filed a
motion to direct the assignees to disclose the amounts paid by them to their
assignors.
In its Order dated January 15, 2009, the RTC-Bulacan denied Vitarichs
motion, ruling that the rehabilitation case before it could not be considered as a
litigation as contemplated in Article 1634 of the Civil Code.

Hence, Vitarich filed its petition[13] praying that the CA order the assignees
to disclose the actual amount paid to their respective assignors so that it could
pay the transfer prices of the assigned credits should it exercise its right of
redemption. Several banks moved for the dismissal of this petition on the ground
that the ruling on the issue raised therein had already become final.

Deutsche Bank AG filed a motion for reconsideration[14] of the March 12,

2010 CA resolution arguing that the Deutsche Bank AG petition and the Vitarich
petition were not related cases that would merit consolidation. It stressed that a
common question of law alone does not warrant consolidation inasmuch as the
Internal Rules of the CA (IRCA)provides that for consolidation to be proper, the
cases must be related. It also claimed that the consolidation of these two
unrelated cases would not serve the purpose of consolidation, which was to
obtain justice with the least expense and vexation to the litigants.

The said motion was, however, denied by the CA in its Resolution dated July
19, 2010. Citing Zulueta v. Asia Brewery, Inc.,[15] it held that consolidation of cases
under Section 3(a), Rule III of the IRCA was proper as the cases involved common
questions of law.

Thus, the CA agreed with the SteelCorps conclusion that when two cases
involved the same parties, or related questions of fact, or related questions of
law, then they were considered as related cases for purposes of
consolidation. The pertinent portion of the CA resolution reads:

To deny the transfer of a case to a court or division where another case

involving the same question of law is pending could lead to further protracted
litigations. The rationale for consolidation is to have all cases intimately related
acted upon by one Court/Division to avoid the possibility of conflicting decisions
being rendered that will not serve the orderly administration of justice.

The added expense and unjustified vexation intimated by petitioner are

all in the mind. One division of this Court would be able to resolve the issue in
both petitions with more dispatch and accord than two divisions.

WHEREFORE, the motion for reconsideration is DENIED.

 SO ORDERED.[16]

Hence, Deutsche Bank AG interposes the present special civil action before
this Court anchored on the following

GROUNDS

THE RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING

TO LACK OR EXCESS OF JURISDICTION, IN ISSUING THE ASSAILED RESOLUTIONS AND
ORDERING THE CONSOLIDATION OF THE TWO (2) SUBJECT PETITIONS CONSIDERING
THAT:

(I)

UNDER SECTION 3(A) RULE III OF THE INTERNAL RULES OF THE COURT OF APPEALS
AND LONGSTANDING JURISPRUDENCE, FOR CONSOLIDATION TO BE PROPER, THE
CASES MUST BE RELATED, I.E., THEY ARISE FROM THE SAME ACT, EVENT OR
TRANSACTION, INVOLVE THE SAME OR LIKE ISSUES, AND DEPEND LARGELY OR
SUBSTANTIALLY ON THE SAME EVIDENCE. HERE, THE CASES SOUGHT TO BE
CONSOLIDATED ARE TOTALLY UNRELATED;

(II)

THE CONSOLIDATION OF THE TWO CASES WILL BE COMPLETELY AGAINST THE

PURPOSE OF CONSOLIDATION, WHICH IS TO OBTAIN JUSTICE WITH THE LEAST
EXPENSE AND VEXATION TO THE LITIGANTS.[17]

It appears from the records that on November 18, 2011, SteelCorp filed a
manifestation dated November 17, 2011, stating that the assailed resolution
ordering consolidation dated March 12, 2010 had been issued in response to the
Motion for Consolidation dated February 18, 2010 filed therein by
SteelCorp. SteelCorp manifested that on November 14, 2011, in CA-G.R. SP No.
111556, it filed its Motion to Withdraw the said Motion for Consolidation in order
to forestall further delay and for the CA to proceed in the resolution of the merits
of the case, rendering this petition moot.

In view of the said withdrawal of the motion for consolidation, the present
petition assailing the CAs order of consolidation has certainly been rendered
moot and academic.

A moot and academic case is one that ceases to present a justiciable

controversy by virtue of supervening events, so that a declaration thereon would
be of no practical use or value. Generally, courts decline jurisdiction over such
case or dismiss it on ground of mootness. However, even in cases where
supervening events had made the cases moot, this Court did not hesitate to
resolve the legal or constitutional issues raised to formulate controlling principles
to guide the bench, the bar and the public. Moreover, as an exception to the rule
on mootness, the courts will decide a question otherwise moot if it is capable of
repetition, yet evading review.[18]

This case comes within the rule that courts will decide a question, otherwise moot
and academic, if it is capable of repetition, yet evading review. The issue of
whether the CA pursuant to its internal rules can validly order consolidation of
cases on the sole ground that the same involve a common question of law most
likely will recur. Thus, there is a necessity to decide the case on the merits.

The Court will now resolve the merits of the sole issue raised in this
petition, whether the CA gravely abused its discretion amounting to lack or excess
of jurisdiction when it ordered the consolidation of the Deutsche Bank AG petition
and the Vitarich petition.
Deutsche Bank AG argues that a common question of law alone would not
warrant consolidation, and for cases to be consolidated, the same must be related
cases. It cited as basis the ruling enunciated in the landmark case of Teston v.
Development Bank of the Philippines,[19] that actions involving common question
of law or fact may be tried together where they arise from the same act, event or
transaction, involve the same or like issues, and depend largely or substantially on
the same evidence. It contends that there was grave abuse of discretion on the
part of the CA when it ordered the consolidation because Deutsche Bank AG
Petition and the Vitarich Petition were not related, much less, intimately related
cases. The two cases were entirely different with separate factual antecedents,
having arisen from two separate petitions for rehabilitation of two distinct
corporations. In addition, there were no interconnected transactions in, nor
identical properties subject of, the two cases. It further argues that consolidation
would only defeat, rather than serve, the purpose of consolidation.

SteelCorp counters that the CA may consolidate cases on the sole ground that the
cases involve related questions of law. Thus, the fact that Deutsche Bank AG
Petition and Vitarich Petition involve an identical question of law is sufficient to
make them related cases which were proper for consolidation pursuant to Section
3(a), Rule III of the IRCA.

The Court agrees with Deutsche Bank AG.

Consolidation of actions involving a common question of law or fact is
expressly authorized under Section 1, Rule 31 of the 1997 Rules of Civil
Procedure, to wit:

SECTION 1. Consolidati0n. When actions involving a common question of law or

fact are pending before the court, it may order a joint hearing or trial of any or all
the matters in issue in the actions; it may order all the actions consolidated; and
it may make such orders concerning proceedings therein as may tend to avoid
unnecessary costs or delay.
 Consolidation of cases is also allowed under Section 3, Rule III of the 2009
IRCA, to wit:

Consolidation of Cases. When related cases are assigned to different Justices, they
may be consolidated and assigned to one Justice.

(a) Upon motion of a party with notice to the other party/ies, or at the instance of
the Justice to whom any of the related cases is assigned, upon notice to the
parties, consolidation shall ensue when the cases involve the same parties and/or
related questions of fact and/or law.

(b) Consolidated cases shall pertain to the Justice

(1) To whom the case with the lowest docket number is

assigned, if they are of the same kind;
(2) To whom the criminal case with the lowest number is
assigned, if two or more of the cases are criminal and the
others are civil or special;
(3) To whom the criminal case is assigned and the other are
civil or special; and
(4) To whom the civil case is assigned, or to whom the civil
case with the lowest docket number is assigned, if the cases
involved are civil and special.
(c) Notice of the consolidation and replacement shall be given to the Raffle
Staff and the Judicial Records Division. (Emphasis and underscoring
supplied)

As can be gleaned from the aforequoted provision, for consolidation to be

proper, the cases sought to be consolidated must be related.

Similarly, jurisprudence has laid down the requisites for consolidation. In the
recent case of Steel Corporation of the Philippines v. Equitable PCI Bank,
Inc.,[20] the Court heldthat it is a time-honored principle that when two or more
cases involve the same parties and affect closely related subject matters, they
must be consolidated and jointly tried, in order to serve the best interests of the
parties and to settle expeditiously the issues involved. In other words,
consolidation is proper wherever the subject matter involved and relief
demanded in the different suits make it expedient for the court to determine all
of the issues involved and adjudicate the rights of the parties by hearing the suits
together.

In the present case, there is no sufficient justification to order the consolidation

inasmuch as the Deutsche Bank AG Petition has no relation whatsoever to the
Vitarich Petition.To recall, the Deutsche Bank AG Petition is an appeal on
certiorari from the Order dated October 28, 2009 of the RTC Batangas in Sp. Proc.
No. 06-7993. Vitarich case, on the other hand, is an appeal on certiorari and
mandamus from the Order dated January 19, 2009 of the RTC Bulacan in Civil
Case No. 592-M-2006.

The fact that Deutsche Bank AG is a party to both cases does not make the
proceedings intimately related. There is no factual relation between the two
proceedings. SteelCorp proceedings originated from SteelCorps rehabilitation
proceedings which have nothing to do with the Vitarich proceeding that
originated from Vitarichs rehabilitation proceeding.

Neither are there interconnected transactions, nor identical subject matter

in the Deutsche Bank AG and Vitarich petitions. The former involved issue
resulting from the assignment of credits of RCBC to Deutsche Bank AG whereas in
the latter, the issue arose from the assignment of the receivables of various
creditors of Vitarich to several corporations and special purpose vehicles (SPVs).

Verily, the two petitions having no factual relationship with and no

interconnected transactions on the same subject matter, they cannot be deemed
related cases. As such, the necessity to consolidate does not become
imperative. The order of consolidation by the CA on the sole ground that the
cases involved a common question of law was, therefore, not in order.
 It bears noting that the CA cited the cases of Zulueta v. Asia Brewery,
Inc., Benguet Corporation, Inc. v. Court of Appeals,[22] and Active Wood Products
[21]

Co., Inc. v. Court of Appeals[23] as jurisprudential basis of its order to

consolidate. Its reliance on the said cases was misplaced as the factual milieus
therein were not in all fours with the case at bench. The ruling in these cases, in
fact, bolstered Deutsche Bank AGs position that for consolidation to be warranted
the cases sought to be consolidated must not only involve related issues but also
the same parties and closely related subject matters.

The CA cannot rely on the case of Zulueta v. Asia Brewery, Inc., to support its
ruling that consolidation is proper when the cases involve the resolution of a
common question of law or fact. In the said case, a joint trial of the two cases was
justified because both arose out of, or an incident of, the same Dealership
Agreement. Thus, the Court upheld the consolidation in this wise:
Inasmuch as the binding force of the Dealership Agreement was put in
question, it would be more practical and convenient to submit to
the Iloilo court all the incidents and their consequences. The issues in both
civil cases pertain to the respective obligations of the same parties under
the Dealership Agreement. Thus, every transaction as well as liability
arising from it must be resolved in the judicial forum where it is put in
issue. The consolidation of the two cases then becomes imperative to a
complete, comprehensive and consistent determination of all these related
issues.
Two cases involving the same parties and affecting closely related
subject matters must be ordered consolidated and jointly tried in court,
where the earlier case was filed.[24] (underscoring supplied)

In the case of Benguet Corporation, Inc. v. Court of Appeals, where it was written
that the rationale for consolidation is to have all cases intimately related acted upon
by one Court/Division to avoid the possibility of conflicting decisions being
rendered.[25] A scrutiny of the ruling in Benguet reveals that the case pending in the
9th Division was merely an offshoot of the decision rendered in the
10th Division. Faulting the CA 9th Division with grave abuse of discretion in
denying Benguet's Motion to Transfer Case No. CA-G.R. SP No. 12964 to the 10th
Division, the Court held, thus:
 2. The matter elevated to the 9th Division, namely, the implementation of
the Writ of Preliminary Mandatory Injunction with Break-open Order
issued by the Trial Court on 29 September 1987 in favor of BENGUET in
the Reconveyance Case (Civil Case No. 5815) was a consequence of the
very Decision rendered by the 10th Division. It was, therefore, properly
within its competence being intimately related to the very issues raised
and resolved by said Division.
3. The rationale for consolidation is to have all cases intimately
related acted upon by one Court Division to avoid the possibility of
conflicting decisions in cases involving the same facts and common
questions of law. The cases before the 10th Division and the 9th Division
of the Court of Appeals are two (2) such intimately and substantially
related cases. Consolidation being called for it cannot be justifiably argued,
as private respondents do, that BENGUET is estopped from pleading for
such consolidation. To deny the transfer could lead to further protracted
litigations to the detriment of the efficient and effective determination of
actions and proceedings.[26] (underscoring supplied)

Hence, consolidation of cases is proper when there is a real need to

forestall the possibility of conflicting decisions being rendered in the cases.[27] In
the case under consideration, considering that Deutsche Bank AG and Vitarich
cases are not related, the risk of conflicting decisions is a remote probability.

Lastly, in Active Wood Products Co., Inc. v. Court of Appeals, the Court sustained
the consolidation of the civil case filed by Active Wood against State Investment
House and the latters petition for a writ of possession in the land registration case
as they involved the same parties and the same subject matter Active Woods two
parcels of land, thus:

The consolidation of cases becomes mandatory because it involves the

same parties and the same subject matter which is the same parcel of land. Such
consolidation is desirable to avoid confusion and unnecessary costs and expenses
with the multiplicity of suits.[28] xxx (underscoring supplied)

Further, the Court finds merit in Deutsche Bank AGs contention that the
consolidation of the subject cases will defeat the purpose of consolidation.
 It is well recognized that the purpose of the rule on consolidation is to avoid
multiplicity of suits; to guard against oppression and abuse; to prevent delays; to
clear congested dockets; and to simplify the work of the trial court. In short,
consolidation aims to attain justice with the least expense and vexation to the
parties-litigants.[29] It contributes to the swift dispensation of justice, and is in
accord with the aim of affording the parties a just, speedy, and inexpensive
determination of their cases before the courts. Further, it results in the avoidance of
the possibility of conflicting decisions being rendered by the courts in two or more
cases, which would otherwise require a single judgment.[30]

Under the circumstances, the consolidation of the Deutsche Bank AG Petition

with the Vitarich Petition does not appear to be a prudent move as it serves none
of the purposes cited above. On the contrary and as correctly pointed out by
Deutsche Bank AG, it will only complicate the resolution of the cases as the CA
would have to consider the different factual antecedents of both the Deutsche
Bank AG and Vitarich petitions.

Moreover, the question of law that the Vitarich proceedings allegedly

shares with the SteelCorp Proceedings whether Vitarichs creditors could be
compelled to disclose the sums paid for the assigned Vitarich loans - has long
been finally resolved and has already become the law of the case among the
parties in the Vitarich rehabilitation proceedings.Thus, the consolidation would
unduly prejudice the banks and would lead to complications, delay or restriction
on the right of the banks to the immediate dismissal of the Vitarich proceedings.

Furthermore, the consolidation will only subject the parties to added expense
and unjust vexation. The number of parties will substantially increase so as the
cost of furnishing the parties with pleadings, thereby defeating the very rationale
behind consolidation.

Relevant is the case of Republic of the Phils. v. Hon. Mangrobang,[31] where

the Court disallowed the consolidation of an ejectment case and a case for
eminent domain because the consolidation thereof would complicate procedural
requirements and delay the resolution of the cases which raised dissimilar
issues. The Court held that fairness and due process might be hampered rather
than helped if the cases were consolidated.
Likewise, in Philippine National Bank v. Tyan Ming Development, Inc.[32] the
non-consolidation of PNBs petition for a writ of possession and GOTESCOs
complaint for annulment of foreclosure proceeding was upheld for defeating the
very purpose of consolidation, thus:

The record shows that PNBs petition was filed on May 26, 2006, and
remains pending after three (3) years, despite the summary nature of the
petition. Obviously, the consolidation only delayed the issuance of the
desired writ of possession. Further, it prejudiced PNBs right to take
immediate possession of the property and gave GOTESCO undue
advantage, for GOTESCO continues to possess the property during the
pendency of the consolidated cases, despite the fact that title to the
property is no longer in its name.
It should be stressed that GOTESCO was well aware of the expiration of
the period to redeem the property. Yet, it did not exercise its right of
redemption. There was not even an attempt to redeem the property.
Instead, it filed a case for annulment of foreclosure, specific performance,
and damages and prayed for a writ of injunction to prevent PNB from
consolidating its title. GOTESCOs maneuvering, however, failed, as the CA
and this Court refused to issue the desired writ of injunction.
Cognizant that the next logical step would be for PNB to seek the delivery
of possession of the property, GOTESCO now tries to delay the issuance of
writ of possession. It is clear that the motion for consolidation was filed
merely to frustrate PNBs right to immediate possession of the property. It
is a transparent ploy to delay, if not to prevent, PNB from taking
possession of the property it acquired at a public auction ten (10) years
ago. This we cannot tolerate.
xxx

In De Vera v. Agloro, this Court upheld the denial by the RTC of a motion
for consolidation of a petition for issuance of a writ of possession with a
civil action, as it would prejudice the right of one of the parties, viz.:
It bears stressing that consolidation is aimed to obtain justice with the
least expense and vexation to the litigants. The object of consolidation is to
avoid multiplicity of suits, guard against oppression or abuse, prevent
delays and save the litigants unnecessary acts and expense. Consolidation
 should be denied when prejudice would result to any of the parties or
would cause complications, delay, prejudice, cut off, or restrict the rights
of a party.[33] (underscoring supplied)
In the recent case of Espinoza v. United Overseas Bank Phils.,[34] the Court, in the
same manner ruled against the consolidation of the proceedings for the issuance
of a writ of possession with that for the declaration of nullity of a foreclosure sale
on the ground that it would run counter to the purpose of consolidation:

In this case, title to the litigated property had already been consolidated in the

name of respondent, making the issuance of a writ of possession a matter of right.

Consequently, the consolidation of the petition for the issuance of a writ of

possession with the proceedings for nullification of foreclosure would be highly

improper. Otherwise, not only will the very purpose of consolidation (which is to

avoid unnecessary delay) be defeated but the procedural matter of consolidation

will also adversely affect the substantive right of possession as an incident of

ownership.[35]

Indeed, the consolidation of actions is addressed to the sound discretion of the

court and its action in consolidating will not be disturbed in the absence of
manifest abuse of discretion.[36] Grave abuse of discretion defies exact definition,
but it generally refers to capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to perform
a duty enjoined by law, 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 and
hostility.[37]

In this particular case, however, the exercise of such discretion by the CA in

ordering the consolidation of the Deutsche Bank AG Petition and the Vitarich
Petition was less than judicious considering that the two cases were not intimately
and substantially related.

Lest it be misunderstood, the CA may prescribe reasonable rules governing

assignment of cases with similar questions of law or facts to one justice. In case of
consolidation, however, it may be effected only if the said cases are related.
Needless to state, assignment is different from consolidation.

WHEREFORE, the petition is GRANTED. The March 12, 2010 and the July 19,
2010 Resolutions of the Court of Appeals in CA-G.R. SP No. 111556
are REVERSED and SET ASIDE.

SO ORDERED.

JOSE CATRAL MENDOZA Associate Justice

WE CONCUR:
 PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

ATTESTATION
 I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA

Chief Justice
[1]
Annex A of Petition, rollo, pp. 69-70. Penned by Associate Justice Magdangal M. De Leon with Associate Justice
Romeo F. Barza and Associate Justice Franchito N. Diamante, concurring.
[2]
Annex B of Petition, id. at 72-74.
[3]
Annex C of Petition, id. at 76-112.
[4]
Annex H of Petition, id. at 234-267.
[5]
Annex I of Petition, id. at 269-297.
[6]
Annex J of Petition, id. at 300.
[7]
Annex K of Petition, id. at 304-305.
[8]
Annex L of Petition, id.at 307-309.
[9]
Annex Q of Petition, id. at 368-371.
[10]
Annex R of Petition, id. at 373.
[11]
Annex X of Petition, id. at 496-592.
[12]
Rollo, pp. 69-70.
[13]
Annex AA of Petition, id. at 525-558.
[14]
Rollo, p. 656.
[15]
406 Phil. 543 (2001).
[16]
Rollo, pp. 73-74.
[17]
Id. at 48-49.
[18]
Integrated Bar of the Philippines v. Atienza, G.R. No. 175241, February 24, 2010, 613 SCRA 518, 523,
citing Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308.
[19]
511 Phil. 221 (2005).
[20]
G.R. No. 190462 & G.R. No. 190538, November 17, 2010, 635 SCRA 403.
[21]
406 Phil. 543 (2001).
[22]
247-A Phil. 356 (1988).
[23]
260 Phil. 825 (1990).
[24]
Zulueta v. Asia Brewery, Inc., supra note 21 at 555-556.
[25]
Supra note 22.
[26]
Benguet Corporation, Inc. v. Court of Appeals, supra note 22 at 363.
[27]
Bank of Commerce v. Perlas-Bernabe, G.R. No. 172393, October 20, 2010, 634 SCRA 107, 121.
[28]
Active Wood Products Co., Inc. v. Court of Appeals, supra note 23 at 829-830.
[29]
Steel Corporation of the Philippines v. Equitable PCI Bank, Inc., supra note 20 at 416, citing Canos v.
Peralta, 201 Phil. 422 (1982).
[30]
Id., citing Yu, Sr. v. Basilio G. Magno Construction and Development Enterprises, Inc., G.R. Nos. 138701-02,
October 17, 2006, 504 SCRA 618, 633.
[31]
422 Phil. 178 (2001).
[32]
G.R. No. 183211, June 5, 2009, 588 SCRA 798.
[33]
Id. at 804-806.
[34]
G.R. No. 175380, March 22, 2010, 616 SCRA 353.
[35]
Id. at 361.
[36]
Teston v. Development Bank of the Philippines, supra note 19 at 229-230, citing De Vera v. Agloro, 489 Phil. 185
(2005).
[37]
People of the Philippines v. Tan, G.R. No. 167526, July 26, 2010, 625 SCRA 388, 397; De Vera v. De Vera,
G.R. No. 172832, April 7, 2009, 584 SCRA 506, 514-515, citing People v. Court of Appeals, 368 Phil. 169, 180
(1999).
 Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

DEUTSCHE BANK AG, G.R. No. 193065

Petitioner,

Present:

VELASCO, JR., J., Chairperson,

- versus -
PERALTA,

ABAD,

MENDOZA, and
 PERLAS-BERNABE, JJ.

COURT OF APPEALS and STEEL

CORPORATION OF
THE PHILIPPINES,

Respondents.

Promulgated:

February 27, 2012

X -------------------------------------------------------------------------------------- X

DECISION

MENDOZA, J.:

This is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure
assailing the March 12, 2010[1] and July 19, 2010[2] Resolutions of the Court of
Appeals (CA) in CA-G.R. SP No. 111556 entitled Deutsche Bank AG v. Hon. Judge
Albert A. Kalalo and Steel Corporation of the Philippines (Deutsche Bank AG
Petition) for having been issued without jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction, insofar as they ordered the
consolidation of the Deutsche Bank AG Petition with another case earlier filed and
docketed as CA-G.R. SP No. 107535 entitled Vitarich Corporation v. Judge Danilo
Manalastas (Vitarich Petition) on the ground that the two cases involve a
common question of law.

THE FACTS

Private respondent Steel Corporation of the Philippines (SteelCorp) is a

domestic corporation organized and existing under the laws of
the Philippines with principal place of business in Munting Tubig, Balayan,
Batangas. It is engaged in the business of manufacturing and distribution of cold-
rolled, galvanized and pre-painted steel sheets and coils.

On December 7, 1995, SteelCorp, as borrower, entered into a loan

agreement[3] with a consortium of lending banks and other financial institutions
for the purpose of partially financing the construction of its integrated steel mill
project. One of the participating lenders was Rizal Commercial Banking
Corporation (RCBC).

SteelCorp failed to pay its loan obligations as they fell due. Thus, on September
11, 2006, Equitable PCI Bank, Inc. (now Banco de Oro) filed a creditor-initiated
petition to place SteelCorp under corporate rehabilitation before the Regional
Trial Court of Batangas, Branch 2, which was subsequently raffled to Branch 4
(RTC-Batangas). This case was docketed as Spec. Proc. No. 06-7993.[4]

In its Decision[5] dated December 3, 2007, the RTC-Batangas approved the

proposed Rehabilitation Plan and ordered the parties to comply strictly with the
provisions of the approved Rehabilitation Plan.
In February 2008 and during the pendency of the proceedings before the RTC-
Batangas, RCBC and petitioner Deutsche Bank AG entered into a deed of
assignment,[6] wherein the former assigned to the latter all of its rights,
obligations, title to, and interest in, the loans which it had extended to SteelCorp
in the aggregate outstanding principal amount of ₱94,412,862.58.

SteelCorp was duly informed of the said assignment through the Notice of
Transfer[7] sent to it by RCBC.

Through its Entry of Appearance with Motion for Substitution of

Parties[8] dated May 2, 2008, Deutsche Bank AG informed the RTC-Batangas of the
said transfer and assignment of the loan obligations.

The RTC-Batangas, upon the motion of SteelCorp, issued its Order dated October
28, 2009, directing the assignees, including Deutsche Bank AG, to disclose the
actual price or consideration paid by them for the SteelCorp debts assigned and
transferred to them.[9] From this order, Deutsche Bank AG filed its Petition for
Certiorari (With Urgent Application for a Temporary Restraining Order and/or
Writ of Preliminary Injunction) with the CA docketed as CA-G.R. No. 111556.[10]

Records show that two other petitions for certiorari filed by other creditors
of SteelCorp were pending before different divisions of the CA, both of which
arising from the same October 28, 2009 Order of the RTC-Batangas. The cases
were docketed as follows:

1. CA-G.R. SP No. 111560 entitled Investments 2234 Philippines

Fund, Inc. v. Hon. Albert A. Kalalo, in His Capacity as the Presiding
 Judge of the Regional Trial Court of Batangas City, Branch 4 and
Steel Corporation of the Philippines (Investments 2234
Petition); and

2. CA-G.R. SP No. 112175 entitled Equitable PCI Bank, Inc. (now BDO
Unibank, Inc.) v. Hon. Albert A. Kalalo in His Capacity as Presiding
Judge of the Regional Trial Court of Batangas City, Branch 4 and
Steel Corporation of the Philippines (EPCIB Petition).

In the meantime, SteelCorp filed its Motion for Consolidation[11] dated

February 18, 2010, praying for the consolidation of the Deutsche Bank AG
Petition, together with the Investments 2234 Petition and EPCIB Petition, with the
Vitarich Petition on the ground that the cases involved the same question of law
whether creditors could be compelled to disclose the actual assignment price for
credits in litigation which were assigned in the context of a corporate
rehabilitation proceeding pursuant to Articles 1634 and 1236 of the Civil Code.

On March 12, 2010, the CA in CA-G.R. SP No. 111556 issued the assailed
Resolution ordering the consolidation of Deutsche Bank AG Petition with the
Vitarich Petition, to wit:

Finding merit in the motion, and pursuant to Section 3(a), Rule III of the
Internal Rules of the Court of Appeals, the instant petition is
ordered CONSOLIDATED with CA-G.R. SP No. 107535 (the case with the lower
docket number), subject to the conformity of the ponente thereof and with right
of replacement with a case of similar nature and status.

SO ORDERED.[12]
 It appears from the records that the Vitarich Petition emanated from Civil
Case No. 592-M-2006 entitled In the Matter of the Petition for Corporate
Rehabilitation of Vitarich Corporation which is currently pending before Branch 7,
Regional Trial Court of Bulacan (RTC-Bulacan).

The RTC-Bulacan in its Decision dated May 31, 2007, approved the Vitarich
rehabilitation plan and upheld the rights of the assignees as subrogees to all the
rights and obligations of the original creditors.

Vitarich sought a partial reversal of the said decision via a petition for
review under Rule 43 of the 1997 Rules of Court (docketed as CA-G.R. SP No.
99374), contending that it should only be made to pay the discounted transfer
prices of the assigned credits should it decide to exercise its right of
redemption. Vitarich, however, withdrew the said petition and instead filed a
motion to direct the assignees to disclose the amounts paid by them to their
assignors.
In its Order dated January 15, 2009, the RTC-Bulacan denied Vitarichs
motion, ruling that the rehabilitation case before it could not be considered as a
litigation as contemplated in Article 1634 of the Civil Code.

Hence, Vitarich filed its petition[13] praying that the CA order the assignees
to disclose the actual amount paid to their respective assignors so that it could
pay the transfer prices of the assigned credits should it exercise its right of
redemption. Several banks moved for the dismissal of this petition on the ground
that the ruling on the issue raised therein had already become final.

Deutsche Bank AG filed a motion for reconsideration[14] of the March 12,

2010 CA resolution arguing that the Deutsche Bank AG petition and the Vitarich
petition were not related cases that would merit consolidation. It stressed that a
common question of law alone does not warrant consolidation inasmuch as the
Internal Rules of the CA (IRCA)provides that for consolidation to be proper, the
cases must be related. It also claimed that the consolidation of these two
unrelated cases would not serve the purpose of consolidation, which was to
obtain justice with the least expense and vexation to the litigants.

The said motion was, however, denied by the CA in its Resolution dated July
19, 2010. Citing Zulueta v. Asia Brewery, Inc.,[15] it held that consolidation of cases
under Section 3(a), Rule III of the IRCA was proper as the cases involved common
questions of law.

Thus, the CA agreed with the SteelCorps conclusion that when two cases
involved the same parties, or related questions of fact, or related questions of
law, then they were considered as related cases for purposes of
consolidation. The pertinent portion of the CA resolution reads:

To deny the transfer of a case to a court or division where another case

involving the same question of law is pending could lead to further protracted
litigations. The rationale for consolidation is to have all cases intimately related
acted upon by one Court/Division to avoid the possibility of conflicting decisions
being rendered that will not serve the orderly administration of justice.

The added expense and unjustified vexation intimated by petitioner are

all in the mind. One division of this Court would be able to resolve the issue in
both petitions with more dispatch and accord than two divisions.

WHEREFORE, the motion for reconsideration is DENIED.

SO ORDERED.[16]
 Hence, Deutsche Bank AG interposes the present special civil action before
this Court anchored on the following

GROUNDS

THE RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING

TO LACK OR EXCESS OF JURISDICTION, IN ISSUING THE ASSAILED RESOLUTIONS AND
ORDERING THE CONSOLIDATION OF THE TWO (2) SUBJECT PETITIONS CONSIDERING
THAT:

(I)

UNDER SECTION 3(A) RULE III OF THE INTERNAL RULES OF THE COURT OF APPEALS
AND LONGSTANDING JURISPRUDENCE, FOR CONSOLIDATION TO BE PROPER, THE
CASES MUST BE RELATED, I.E., THEY ARISE FROM THE SAME ACT, EVENT OR
TRANSACTION, INVOLVE THE SAME OR LIKE ISSUES, AND DEPEND LARGELY OR
SUBSTANTIALLY ON THE SAME EVIDENCE. HERE, THE CASES SOUGHT TO BE
CONSOLIDATED ARE TOTALLY UNRELATED;

(II)

THE CONSOLIDATION OF THE TWO CASES WILL BE COMPLETELY AGAINST THE

PURPOSE OF CONSOLIDATION, WHICH IS TO OBTAIN JUSTICE WITH THE LEAST
EXPENSE AND VEXATION TO THE LITIGANTS.[17]

It appears from the records that on November 18, 2011, SteelCorp filed a
manifestation dated November 17, 2011, stating that the assailed resolution
ordering consolidation dated March 12, 2010 had been issued in response to the
Motion for Consolidation dated February 18, 2010 filed therein by
SteelCorp. SteelCorp manifested that on November 14, 2011, in CA-G.R. SP No.
111556, it filed its Motion to Withdraw the said Motion for Consolidation in order
to forestall further delay and for the CA to proceed in the resolution of the merits
of the case, rendering this petition moot.
In view of the said withdrawal of the motion for consolidation, the present
petition assailing the CAs order of consolidation has certainly been rendered
moot and academic.

A moot and academic case is one that ceases to present a justiciable

controversy by virtue of supervening events, so that a declaration thereon would
be of no practical use or value. Generally, courts decline jurisdiction over such
case or dismiss it on ground of mootness. However, even in cases where
supervening events had made the cases moot, this Court did not hesitate to
resolve the legal or constitutional issues raised to formulate controlling principles
to guide the bench, the bar and the public. Moreover, as an exception to the rule
on mootness, the courts will decide a question otherwise moot if it is capable of
repetition, yet evading review.[18]

This case comes within the rule that courts will decide a question, otherwise moot
and academic, if it is capable of repetition, yet evading review. The issue of
whether the CA pursuant to its internal rules can validly order consolidation of
cases on the sole ground that the same involve a common question of law most
likely will recur. Thus, there is a necessity to decide the case on the merits.

The Court will now resolve the merits of the sole issue raised in this
petition, whether the CA gravely abused its discretion amounting to lack or excess
of jurisdiction when it ordered the consolidation of the Deutsche Bank AG petition
and the Vitarich petition.

Deutsche Bank AG argues that a common question of law alone would not
warrant consolidation, and for cases to be consolidated, the same must be related
cases. It cited as basis the ruling enunciated in the landmark case of Teston v.
Development Bank of the Philippines,[19] that actions involving common question
of law or fact may be tried together where they arise from the same act, event or
transaction, involve the same or like issues, and depend largely or substantially on
the same evidence. It contends that there was grave abuse of discretion on the
part of the CA when it ordered the consolidation because Deutsche Bank AG
Petition and the Vitarich Petition were not related, much less, intimately related
cases. The two cases were entirely different with separate factual antecedents,
having arisen from two separate petitions for rehabilitation of two distinct
corporations. In addition, there were no interconnected transactions in, nor
identical properties subject of, the two cases. It further argues that consolidation
would only defeat, rather than serve, the purpose of consolidation.

SteelCorp counters that the CA may consolidate cases on the sole ground that the
cases involve related questions of law. Thus, the fact that Deutsche Bank AG
Petition and Vitarich Petition involve an identical question of law is sufficient to
make them related cases which were proper for consolidation pursuant to Section
3(a), Rule III of the IRCA.

The Court agrees with Deutsche Bank AG.

Consolidation of actions involving a common question of law or fact is
expressly authorized under Section 1, Rule 31 of the 1997 Rules of Civil
Procedure, to wit:

SECTION 1. Consolidati0n. When actions involving a common question of law or

fact are pending before the court, it may order a joint hearing or trial of any or all
the matters in issue in the actions; it may order all the actions consolidated; and
it may make such orders concerning proceedings therein as may tend to avoid
unnecessary costs or delay.
 Consolidation of cases is also allowed under Section 3, Rule III of the 2009
IRCA, to wit:

Consolidation of Cases. When related cases are assigned to different Justices, they
may be consolidated and assigned to one Justice.

(a) Upon motion of a party with notice to the other party/ies, or at the instance of
the Justice to whom any of the related cases is assigned, upon notice to the
parties, consolidation shall ensue when the cases involve the same parties and/or
related questions of fact and/or law.

(b) Consolidated cases shall pertain to the Justice

(1) To whom the case with the lowest docket number is

assigned, if they are of the same kind;
(2) To whom the criminal case with the lowest number is
assigned, if two or more of the cases are criminal and the
others are civil or special;
(3) To whom the criminal case is assigned and the other are
civil or special; and
(4) To whom the civil case is assigned, or to whom the civil
case with the lowest docket number is assigned, if the cases
involved are civil and special.
(c) Notice of the consolidation and replacement shall be given to the Raffle
Staff and the Judicial Records Division. (Emphasis and underscoring
supplied)

As can be gleaned from the aforequoted provision, for consolidation to be

proper, the cases sought to be consolidated must be related.

Similarly, jurisprudence has laid down the requisites for consolidation. In the
recent case of Steel Corporation of the Philippines v. Equitable PCI Bank,
Inc.,[20] the Court heldthat it is a time-honored principle that when two or more
cases involve the same parties and affect closely related subject matters, they
must be consolidated and jointly tried, in order to serve the best interests of the
parties and to settle expeditiously the issues involved. In other words,
consolidation is proper wherever the subject matter involved and relief
demanded in the different suits make it expedient for the court to determine all
of the issues involved and adjudicate the rights of the parties by hearing the suits
together.

In the present case, there is no sufficient justification to order the consolidation

inasmuch as the Deutsche Bank AG Petition has no relation whatsoever to the
Vitarich Petition.To recall, the Deutsche Bank AG Petition is an appeal on
certiorari from the Order dated October 28, 2009 of the RTC Batangas in Sp. Proc.
No. 06-7993. Vitarich case, on the other hand, is an appeal on certiorari and
mandamus from the Order dated January 19, 2009 of the RTC Bulacan in Civil
Case No. 592-M-2006.

The fact that Deutsche Bank AG is a party to both cases does not make the
proceedings intimately related. There is no factual relation between the two
proceedings. SteelCorp proceedings originated from SteelCorps rehabilitation
proceedings which have nothing to do with the Vitarich proceeding that
originated from Vitarichs rehabilitation proceeding.

Neither are there interconnected transactions, nor identical subject matter

in the Deutsche Bank AG and Vitarich petitions. The former involved issue
resulting from the assignment of credits of RCBC to Deutsche Bank AG whereas in
the latter, the issue arose from the assignment of the receivables of various
creditors of Vitarich to several corporations and special purpose vehicles (SPVs).

Verily, the two petitions having no factual relationship with and no

interconnected transactions on the same subject matter, they cannot be deemed
related cases. As such, the necessity to consolidate does not become
imperative. The order of consolidation by the CA on the sole ground that the
cases involved a common question of law was, therefore, not in order.
 It bears noting that the CA cited the cases of Zulueta v. Asia Brewery,
Inc., Benguet Corporation, Inc. v. Court of Appeals,[22] and Active Wood Products
[21]

Co., Inc. v. Court of Appeals[23] as jurisprudential basis of its order to

consolidate. Its reliance on the said cases was misplaced as the factual milieus
therein were not in all fours with the case at bench. The ruling in these cases, in
fact, bolstered Deutsche Bank AGs position that for consolidation to be warranted
the cases sought to be consolidated must not only involve related issues but also
the same parties and closely related subject matters.

The CA cannot rely on the case of Zulueta v. Asia Brewery, Inc., to support its
ruling that consolidation is proper when the cases involve the resolution of a
common question of law or fact. In the said case, a joint trial of the two cases was
justified because both arose out of, or an incident of, the same Dealership
Agreement. Thus, the Court upheld the consolidation in this wise:
Inasmuch as the binding force of the Dealership Agreement was put in
question, it would be more practical and convenient to submit to
the Iloilo court all the incidents and their consequences. The issues in both
civil cases pertain to the respective obligations of the same parties under
the Dealership Agreement. Thus, every transaction as well as liability
arising from it must be resolved in the judicial forum where it is put in
issue. The consolidation of the two cases then becomes imperative to a
complete, comprehensive and consistent determination of all these related
issues.
Two cases involving the same parties and affecting closely related
subject matters must be ordered consolidated and jointly tried in court,
where the earlier case was filed.[24] (underscoring supplied)

In the case of Benguet Corporation, Inc. v. Court of Appeals, where it was written
that the rationale for consolidation is to have all cases intimately related acted upon
by one Court/Division to avoid the possibility of conflicting decisions being
rendered.[25] A scrutiny of the ruling in Benguet reveals that the case pending in the
9th Division was merely an offshoot of the decision rendered in the
10th Division. Faulting the CA 9th Division with grave abuse of discretion in
denying Benguet's Motion to Transfer Case No. CA-G.R. SP No. 12964 to the 10th
Division, the Court held, thus:
 2. The matter elevated to the 9th Division, namely, the implementation of
the Writ of Preliminary Mandatory Injunction with Break-open Order
issued by the Trial Court on 29 September 1987 in favor of BENGUET in
the Reconveyance Case (Civil Case No. 5815) was a consequence of the
very Decision rendered by the 10th Division. It was, therefore, properly
within its competence being intimately related to the very issues raised
and resolved by said Division.
3. The rationale for consolidation is to have all cases intimately
related acted upon by one Court Division to avoid the possibility of
conflicting decisions in cases involving the same facts and common
questions of law. The cases before the 10th Division and the 9th Division
of the Court of Appeals are two (2) such intimately and substantially
related cases. Consolidation being called for it cannot be justifiably argued,
as private respondents do, that BENGUET is estopped from pleading for
such consolidation. To deny the transfer could lead to further protracted
litigations to the detriment of the efficient and effective determination of
actions and proceedings.[26] (underscoring supplied)

Hence, consolidation of cases is proper when there is a real need to

forestall the possibility of conflicting decisions being rendered in the cases.[27] In
the case under consideration, considering that Deutsche Bank AG and Vitarich
cases are not related, the risk of conflicting decisions is a remote probability.

Lastly, in Active Wood Products Co., Inc. v. Court of Appeals, the Court sustained
the consolidation of the civil case filed by Active Wood against State Investment
House and the latters petition for a writ of possession in the land registration case
as they involved the same parties and the same subject matter Active Woods two
parcels of land, thus:

The consolidation of cases becomes mandatory because it involves the

same parties and the same subject matter which is the same parcel of land. Such
consolidation is desirable to avoid confusion and unnecessary costs and expenses
with the multiplicity of suits.[28] xxx (underscoring supplied)

Further, the Court finds merit in Deutsche Bank AGs contention that the
consolidation of the subject cases will defeat the purpose of consolidation.
 It is well recognized that the purpose of the rule on consolidation is to avoid
multiplicity of suits; to guard against oppression and abuse; to prevent delays; to
clear congested dockets; and to simplify the work of the trial court. In short,
consolidation aims to attain justice with the least expense and vexation to the
parties-litigants.[29] It contributes to the swift dispensation of justice, and is in
accord with the aim of affording the parties a just, speedy, and inexpensive
determination of their cases before the courts. Further, it results in the avoidance of
the possibility of conflicting decisions being rendered by the courts in two or more
cases, which would otherwise require a single judgment.[30]

Under the circumstances, the consolidation of the Deutsche Bank AG Petition

with the Vitarich Petition does not appear to be a prudent move as it serves none
of the purposes cited above. On the contrary and as correctly pointed out by
Deutsche Bank AG, it will only complicate the resolution of the cases as the CA
would have to consider the different factual antecedents of both the Deutsche
Bank AG and Vitarich petitions.

Moreover, the question of law that the Vitarich proceedings allegedly

shares with the SteelCorp Proceedings whether Vitarichs creditors could be
compelled to disclose the sums paid for the assigned Vitarich loans - has long
been finally resolved and has already become the law of the case among the
parties in the Vitarich rehabilitation proceedings.Thus, the consolidation would
unduly prejudice the banks and would lead to complications, delay or restriction
on the right of the banks to the immediate dismissal of the Vitarich proceedings.

Furthermore, the consolidation will only subject the parties to added expense
and unjust vexation. The number of parties will substantially increase so as the
cost of furnishing the parties with pleadings, thereby defeating the very rationale
behind consolidation.

Relevant is the case of Republic of the Phils. v. Hon. Mangrobang,[31] where

the Court disallowed the consolidation of an ejectment case and a case for
eminent domain because the consolidation thereof would complicate procedural
requirements and delay the resolution of the cases which raised dissimilar
issues. The Court held that fairness and due process might be hampered rather
than helped if the cases were consolidated.
Likewise, in Philippine National Bank v. Tyan Ming Development, Inc.[32] the
non-consolidation of PNBs petition for a writ of possession and GOTESCOs
complaint for annulment of foreclosure proceeding was upheld for defeating the
very purpose of consolidation, thus:

The record shows that PNBs petition was filed on May 26, 2006, and
remains pending after three (3) years, despite the summary nature of the
petition. Obviously, the consolidation only delayed the issuance of the
desired writ of possession. Further, it prejudiced PNBs right to take
immediate possession of the property and gave GOTESCO undue
advantage, for GOTESCO continues to possess the property during the
pendency of the consolidated cases, despite the fact that title to the
property is no longer in its name.
It should be stressed that GOTESCO was well aware of the expiration of
the period to redeem the property. Yet, it did not exercise its right of
redemption. There was not even an attempt to redeem the property.
Instead, it filed a case for annulment of foreclosure, specific performance,
and damages and prayed for a writ of injunction to prevent PNB from
consolidating its title. GOTESCOs maneuvering, however, failed, as the CA
and this Court refused to issue the desired writ of injunction.
Cognizant that the next logical step would be for PNB to seek the delivery
of possession of the property, GOTESCO now tries to delay the issuance of
writ of possession. It is clear that the motion for consolidation was filed
merely to frustrate PNBs right to immediate possession of the property. It
is a transparent ploy to delay, if not to prevent, PNB from taking
possession of the property it acquired at a public auction ten (10) years
ago. This we cannot tolerate.
xxx

In De Vera v. Agloro, this Court upheld the denial by the RTC of a motion
for consolidation of a petition for issuance of a writ of possession with a
civil action, as it would prejudice the right of one of the parties, viz.:
It bears stressing that consolidation is aimed to obtain justice with the
least expense and vexation to the litigants. The object of consolidation is to
avoid multiplicity of suits, guard against oppression or abuse, prevent
delays and save the litigants unnecessary acts and expense. Consolidation
 should be denied when prejudice would result to any of the parties or
would cause complications, delay, prejudice, cut off, or restrict the rights
of a party.[33] (underscoring supplied)
In the recent case of Espinoza v. United Overseas Bank Phils.,[34] the Court, in the
same manner ruled against the consolidation of the proceedings for the issuance
of a writ of possession with that for the declaration of nullity of a foreclosure sale
on the ground that it would run counter to the purpose of consolidation:

In this case, title to the litigated property had already been consolidated in the

name of respondent, making the issuance of a writ of possession a matter of right.

Consequently, the consolidation of the petition for the issuance of a writ of

possession with the proceedings for nullification of foreclosure would be highly

improper. Otherwise, not only will the very purpose of consolidation (which is to

avoid unnecessary delay) be defeated but the procedural matter of consolidation

will also adversely affect the substantive right of possession as an incident of

ownership.[35]

Indeed, the consolidation of actions is addressed to the sound discretion of the

court and its action in consolidating will not be disturbed in the absence of
manifest abuse of discretion.[36] Grave abuse of discretion defies exact definition,
but it generally refers to capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to perform
a duty enjoined by law, 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 and
hostility.[37]

In this particular case, however, the exercise of such discretion by the CA in

ordering the consolidation of the Deutsche Bank AG Petition and the Vitarich
Petition was less than judicious considering that the two cases were not intimately
and substantially related.

Lest it be misunderstood, the CA may prescribe reasonable rules governing

assignment of cases with similar questions of law or facts to one justice. In case of
consolidation, however, it may be effected only if the said cases are related.
Needless to state, assignment is different from consolidation.

WHEREFORE, the petition is GRANTED. The March 12, 2010 and the July 19,
2010 Resolutions of the Court of Appeals in CA-G.R. SP No. 111556
are REVERSED and SET ASIDE.

SO ORDERED.

JOSE CATRAL MENDOZA Associate Justice

WE CONCUR:
 PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

ATTESTATION
 I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA

Chief Justice
[1]
Annex A of Petition, rollo, pp. 69-70. Penned by Associate Justice Magdangal M. De Leon with Associate Justice
Romeo F. Barza and Associate Justice Franchito N. Diamante, concurring.
[2]
Annex B of Petition, id. at 72-74.
[3]
Annex C of Petition, id. at 76-112.
[4]
Annex H of Petition, id. at 234-267.
[5]
Annex I of Petition, id. at 269-297.
[6]
Annex J of Petition, id. at 300.
[7]
Annex K of Petition, id. at 304-305.
[8]
Annex L of Petition, id.at 307-309.
[9]
Annex Q of Petition, id. at 368-371.
[10]
Annex R of Petition, id. at 373.
[11]
Annex X of Petition, id. at 496-592.
[12]
Rollo, pp. 69-70.
[13]
Annex AA of Petition, id. at 525-558.
[14]
Rollo, p. 656.
[15]
406 Phil. 543 (2001).
[16]
Rollo, pp. 73-74.
[17]
Id. at 48-49.
[18]
Integrated Bar of the Philippines v. Atienza, G.R. No. 175241, February 24, 2010, 613 SCRA 518, 523,
citing Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308.
[19]
511 Phil. 221 (2005).
[20]
G.R. No. 190462 & G.R. No. 190538, November 17, 2010, 635 SCRA 403.
[21]
406 Phil. 543 (2001).
[22]
247-A Phil. 356 (1988).
[23]
260 Phil. 825 (1990).
[24]
Zulueta v. Asia Brewery, Inc., supra note 21 at 555-556.
[25]
Supra note 22.
[26]
Benguet Corporation, Inc. v. Court of Appeals, supra note 22 at 363.
[27]
Bank of Commerce v. Perlas-Bernabe, G.R. No. 172393, October 20, 2010, 634 SCRA 107, 121.
[28]
Active Wood Products Co., Inc. v. Court of Appeals, supra note 23 at 829-830.
[29]
Steel Corporation of the Philippines v. Equitable PCI Bank, Inc., supra note 20 at 416, citing Canos v.
Peralta, 201 Phil. 422 (1982).
[30]
Id., citing Yu, Sr. v. Basilio G. Magno Construction and Development Enterprises, Inc., G.R. Nos. 138701-02,
October 17, 2006, 504 SCRA 618, 633.
[31]
422 Phil. 178 (2001).
[32]
G.R. No. 183211, June 5, 2009, 588 SCRA 798.
[33]
Id. at 804-806.
[34]
G.R. No. 175380, March 22, 2010, 616 SCRA 353.
[35]
Id. at 361.
[36]
Teston v. Development Bank of the Philippines, supra note 19 at 229-230, citing De Vera v. Agloro, 489 Phil. 185
(2005).
[37]
People of the Philippines v. Tan, G.R. No. 167526, July 26, 2010, 625 SCRA 388, 397; De Vera v. De Vera,
G.R. No. 172832, April 7, 2009, 584 SCRA 506, 514-515, citing People v. Court of Appeals, 368 Phil. 169, 180
(1999).
 Today is Monday, September 25, 2017

FIRST DIVISION

DECISION

dated 31 August 1994 in CA-G.R. SP No. 23971 and CA-G.R. SP No. 26178 and the Resolution dated October 18, 1996 denying petitioner’s motion for rec
1 2

ve together after the marriage although they would meet each other regularly. Not long after private respondent gave birth to a girl on April 21, 1989, petitio

a certain Julieta Santella (Santella). 4

r’s marriage to Santella, an information charging petitioner with bigamy was filed with the Regional Trial Court (RTC) of Quezon City on August 9, 1990. Th5

ate respondent on the ground that he was forced to marry her. He alleged that private respondent concealed her pregnancy by another man at the time of t
e case against petitioner and Santella for the revocation of their respective engineering licenses on the ground that they committed acts of immorality by li
of falsification by stating in his marriage contract with Santella that he was still single.
8

ourt and motion to inhibit the trial court judge for showing antagonism and animosity towards petitioner’s counsel during the hearings of said case.

could not be granted because the prosecution had sufficiently established a prima facie case against the accused. The RTC also denied petitioner’s motion
9

rial court judge, Judge Cezar C. Peralejo, for (1) exhibiting antagonism and animosity towards petitioner’s counsel; (2) violating the requirements of due pro
uling that in a criminal case only "prima facie evidence" is sufficient for conviction of an accused. This case was docketed as CA-G.R. SP No. 23971. 11

ocation of his engineering license was pending, a motion to suspend the proceedings therein in view of the pendency of the civil case for annulment of his m
nother petition for certiorari, contending that the Board gravely abused its discretion in: (1) failing to hold that the resolution of the annulment case is prejudi
st him; and (3) making an overly-sweeping interpretation that Section 32 of the Rules and Regulations Governing the Regulation and Practice of Profession
ribunals. This petition was docketed as CA-G.R. SP No. 26178. 14

e appellate court upheld the RTC’s denial of the motion to inhibit due to petitioner’s failure to show any concrete evidence that the trial court judge exhibited
demurrer to evidence filed by petitioner for his failure to set forth persuasive grounds to support the same, considering that the prosecution was able to add

o suspend proceedings in the administrative case on the ground of prejudicial question. Respondent court held that no prejudicial question existed since th

L [CRIMINAL AND ADMINISTRATIVE] PROCEEDINGS DESPITE THE PENDENCY OF THE CIVIL CASE FOR DECLARATION OF NULLITY OF MARRIA

II

W IN NOT HOLDING THAT THE DEMURRER TO EVIDENCE SHOULD HAVE BEEN GIVEN DUE COURSE.

III

AL JUDGE A QUO SHOULD HAVE INHIBITED HIMSELF. 19

ed the issue of the propriety of suspending both the criminal case for bigamy before the RTC of Quezon City, Branch 98 and the administrative case for rev

ected with it that it determines the guilt or innocence of the accused, and for it to suspend the criminal action, it must appear not only that said case involve
tionale behind the principle of suspending a criminal case in view of a prejudicial question is to avoid two conflicting decisions. 22

ner against private respondent did not pose a prejudicial question which would necessitate that the criminal case for bigamy be suspended until said civil ca

ination of petitioner’s innocence or guilt in the criminal case for bigamy, because all that is required for the charge of bigamy to prosper is that the first marr
aration that their marriage was void ab initio would necessarily absolve him from criminal liability, is untenable. The ruling in People vs. Mendoza and Peo
24

t at the time of petitioner’s marriage to private respondent in September 1988. Said article states that the absolute nullity of a previous marriage may not be
ding. In Landicho vs. Relova, we held that:
26 27

of competent courts and only when the nullity of a marriage is so declared can it be held as void, and so long as there is no such declaration the presumpt
nt did not give rise to a prejudicial question which warranted the suspension of the proceedings in the criminal case for bigamy since at the time of the alle

he PRC Board. As discussed above, the concept of prejudicial question involves a civil and a criminal case. We have previously ruled that there is no preju

Board expressly provides that the administrative proceedings before it shall not be suspended notwithstanding the existence of a criminal and/or civil case

st an examinee or registered professional involving the same facts as in the administrative case filed or to be filed before the Board shall neither suspend n

ue of the alleged bigamous marriage contracted by petitioner and Santella. Petitioner is also charged with immoral conduct for continued failure to perform h
ard.

he criminal case for bigamy, arguing that the prosecution failed to establish the existence of both the first and second marriages beyond reasonable doubt.
lied with. He alleges further that the original copy of the marriage contract between him and Santella was not presented, that no proof that he signed said c

s ruling on the matter shall not be disturbed in the absence of a grave abuse of such discretion. In this case, the Court of Appeals did not find any grave ab
32

insufficient to justify the grant of the same. It has been held that the appellate court will not review in a special civil action for certiorari the prosecution’s evi
to adduce evidence in his defense. 34

the existence of a prima facie case against him, the trial court was already making a pronouncement that he is liable for the offense charged. As correctly h
sary to resolve the case. The RTC’s observation that there was a prima facie case against petitioner only meant that the prosecution had presented suffici
35

nouncement of petitioner’s guilt. It was precisely because of such finding that the trial court denied the demurrer, in order that petitioner may present eviden

anted since said judge exhibited partiality and bias against him in several instances. First, when petitioner manifested that he would file a motion for recons
nifested that he had just recovered from an accident and was not physically fit for trial, the judge commented that counsel was merely trying to delay the ca
deny the same. According to petitioner, the judge’s hostile attitude towards petitioner’s counsel as shown in the foregoing instances justified the grant of his

hat the latter was biased and had prejudged the case. In People of the Philippines vs. Court of Appeals, this Court held that while bias and prejudice have
37 38

harge of bias and partiality. 39

ection 1, Rule 137 of the Revised Rules of Court, the decision to inhibit himself lay within the sound discretion of Judge Peralejo. Said provision of law state

ecuniarily interested as heir, legatee, creditor or otherwise, or in which he is related to either party within the sixth degree of consanguinity or affinity, or to c
he subject of review, without the written consent of all parties in interest, signed by them and entered upon the record.

ther than those mentioned above.

determining the propriety of the denial of said motion is whether petitioner was deprived a fair and impartial trial. The instances when Judge Peralejo allege
40

rer to evidence are in accord with law and jurisprudence. Neither was there anything unreasonable in the requirement that petitioner’s counsel submit a me
by unnecessary and unjustified delays, in keeping with the judge’s duty to disposing of the court’s business promptly. 41

of the Philippines, Respondents.

Choa Te, Respondents.

ge, Regional Trial Court of Quezon City, Branch 106; and (2) People of the Philippines vs. Arthur Te, Criminal Case No. Q-90-14409 for Bigamy, Regional T

2 (1995).

marriage has not been legally dissolved; (3) the offender contracts a second or subsequent marriage; and (4) the second or subsequent marriage has all the

Wiegel vs. Sempio-Diy, 143 SCRA 499, 501 (1986).

36.

FIRST DIVISION

[G.R. No. 126746. November 29, 2000]

ARTHUR TE, petitioner, vs. COURT OF APPEALS, and LILIANA

CHOA, respondents.

DECISION
KAPUNAN, J.:
 Before us is a petition for review on certiorari which seeks to reverse the Decision of
the Court of Appeals Tenth Division, dated 31 August 1994 in CA-G.R. SP No.
23971[1] and CA-G.R. SP No. 26178[2] and the Resolution dated October 18, 1996
denying petitioners motion for reconsideration.
The facts of the case are as follows:
Petitioner Arthur Te and private respondent Liliana Choa were married in civil rites
on September 14, 1988. They did not live together after the marriage although they
would meet each other regularly. Not long after private respondent gave birth to a girl on
April 21, 1989, petitioner stopped visiting her.[3]
On May 20, 1990, while his marriage with private respondent was subsisting,
petitioner contracted a second marriage with a certain Julieta Santella (Santella). [4]
On the basis of a complaint-affidavit filed by private respondent sometime in June
1990, when she learned about petitioners marriage to Santella, an information charging
petitioner with bigamy was filed with the Regional Trial Court (RTC) of Quezon City on
August 9, 1990.[5] This case was docketed as Criminal Case No. Q-90-14409.[6]
Meanwhile, on July 20, 1990, petitioner filed in the RTC of Quezon City an action for
the annulment of his marriage to private respondent on the ground that he was forced to
marry her.He alleged that private respondent concealed her pregnancy by another man
at the time of their marriage and that she was psychologically incapacitated to perform
her essential marital obligations.[7]
On November 8, 1990, private respondent also filed with the Professional
Regulation Commission (PRC) an administrative case against petitioner and Santella
for the revocation of their respective engineering licenses on the ground that they
committed acts of immorality by living together and subsequently marrying each other
despite their knowledge that at the time of their marriage, petitioner was already married
to private respondent. With respect to petitioner, private respondent added that he
committed an act of falsification by stating in his marriage contract with Santella that he
was still single.[8]
After the prosecution rested its case in the criminal case for bigamy, petitioner
filed a demurrer to evidence with leave of court and motion to inhibit the trial court judge
for showing antagonism and animosity towards petitioners counsel during the hearings
of said case.
The trial court denied petitioners demurrer to evidence in an Order dated November
28, 1990 which stated that the same could not be granted because the prosecution had
sufficiently established a prima facie case against the accused.[9] The RTC also denied
petitioners motion to inhibit for lack of legal basis.[10]
Petitioner then filed with the Court of Appeals a petition for certiorari, alleging grave
abuse of discretion on the part of the trial court judge, Judge Cezar C. Peralejo, for (1)
exhibiting antagonism and animosity towards petitioners counsel; (2) violating the
requirements of due process by denying petitioners [motion for reconsideration and]
demurrer to evidence even before the filing of the same; (3) disregarding and failing to
comply with the appropriate guidelines for judges promulgated by the Supreme Court;
and (4) ruling that in a criminal case only prima facie evidence is sufficient for conviction
of an accused. This case was docketed as CA-G.R. SP No. 23971.[11]
Petitioner also filed with the Board of Civil Engineering of the PRC (PRC Board),
where the administrative case for the revocation of his engineering license was pending,
a motion to suspend the proceedings therein in view of the pendency of the civil case
for annulment of his marriage to private respondent and criminal case for bigamy in
Branches 106 and 98, respectively of the RTC of Quezon City. [12] When the Board
denied the said motion in its Order dated July 16, 1991, [13] petitioner filed with the Court
of Appeals another petition for certiorari, contending that the Board gravely abused its
discretion in: (1) failing to hold that the resolution of the annulment case is prejudicial to
the outcome of the administrative case pending before it; (2) not holding that the
continuation of proceedings in the administrative case could render nugatory petitioners
right against self-incrimination in this criminal case for bigamy against him; and (3)
making an overly-sweeping interpretation that Section 32 of the Rules and Regulations
Governing the Regulation and Practice of Professionals does not allow the suspension
of the administrative proceeding before the PRC Board despite the pendency of criminal
and/or administrative proceedings against the same respondent involving the same set
of facts in other courts or tribunals. This petition was docketed as CA-G.R. SP No.
26178.[14]
The two petitions for certiorari were consolidated since they arose from the same
set of facts.
On 31 August 1994, the Court of Appeals, Tenth Division, rendered the assailed
decision in the consolidated petitions. The appellate court upheld the RTCs denial of the
motion to inhibit due to petitioners failure to show any concrete evidence that the trial
court judge exhibited partiality and had prejudged the case. It also ruled that the denial
of petitioners motion to suspend the proceedings on the ground of prejudicial question
was in accord with law.[15] The Court of Appeals likewise affirmed the RTCs denial of the
demurrer to evidence filed by petitioner for his failure to set forth persuasive grounds to
support the same, considering that the prosecution was able to adduce evidence
showing the existence of the elements of bigamy.[16]
Neither did the appellate court find grave abuse of discretion on the part of the
Boards Order denying petitioners motion to suspend proceedings in the administrative
case on the ground of prejudicial question. Respondent court held that no prejudicial
question existed since the action sought to be suspended is administrative in nature,
and the other action involved is a civil case.[17]
Petitioner thereafter filed a motion for reconsideration of the decision of the Court of
Appeals but the same was denied.[18]
Hence, petitioner filed the instant petition raising the following issues:
I

PUBLIC RESPONDENT COMMITTED A SERIOUS ERROR IN REFUSING

TO SUSPEND THE LEGAL [CRIMINAL AND ADMINISTRATIVE]
PROCEEDINGS DESPITE THE PENDENCY OF THE CIVIL CASE FOR
DECLARATION OF NULLITY OF MARRIAGE.
II

PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION AND

COMMITTED AN ERROR OF LAW IN NOT HOLDING THAT THE
DEMURRER TO EVIDENCE SHOULD HAVE BEEN GIVEN DUE COURSE.
III

PUBLIC RESPONDENT COMMITTED A SERIOUS LEGAL ERROR IN NOT

HOLDING THAT THE TRIAL JUDGE A QUO SHOULD HAVE INHIBITED
HIMSELF. [19]

The petition has no merit.

While the termination of Civil Case No. Q-90-6205 for annulment of petitioners
marriage to private respondent has rendered the issue of the propriety of suspending
both the criminal case for bigamy before the RTC of Quezon City, Branch 98 and the
administrative case for revocation of petitioners engineering license before the PRC
Board moot and academic, the Court shall discuss the issue of prejudicial question to
emphasize the guarding and controlling precepts and rules.[20]
A prejudicial question has been defined as one based on a fact distinct and
separate from the crime but so intimately connected with it that it determines the guilt or
innocence of the accused, and for it to suspend the criminal action, it must appear not
only that said case involves facts intimately related to those upon which the criminal
prosecution would be based but also that in the resolution of the issue or issues raised
in the civil case, the guilt or innocence of the accused would necessarily be
determined.[21] The rationale behind the principle of suspending a criminal case in view of
a prejudicial question is to avoid two conflicting decisions.[22]
The Court of Appeals did not err when it ruled that the pendency of the civil case for
annulment of marriage filed by petitioner against private respondent did not pose a
prejudicial question which would necessitate that the criminal case for bigamy be
suspended until said civil case is terminated.
The outcome of the civil case for annulment of petitioners marriage to private
respondent had no bearing upon the determination of petitioners innocence or guilt in
the criminal case for bigamy, because all that is required for the charge of bigamy to
prosper is that the first marriage be subsisting at the time the second marriage is
contracted.[23] Petitioners argument that the nullity of his marriage to private respondent
had to be resolved first in the civil case before the criminal proceedings could continue,
because a declaration that their marriage was void ab initio would necessarily absolve
him from criminal liability, is untenable. The ruling in People vs. Mendoza[24] and People
vs. Aragon[25] cited by petitioner that no judicial decree is necessary to establish the
invalidity of a marriage which is void ab initio has been overturned. The prevailing rule is
found in Article 40 of the Family Code, which was already in effect at the time of
petitioners marriage to private respondent in September 1988. Said article states that
the absolute nullity of a previous marriage may not be invoked for purposes of
remarriage unless there is a final judgment declaring such previous marriage
void. Thus, under the law, a marriage, even one which is void or voidable, shall be
deemed valid until declared otherwise in a judicial proceeding. [26] In Landicho vs.
Relova,[27] we held that:

Parties to a marriage should not be permitted to judge for themselves its

nullity, for this must be submitted to the judgment of competent courts and
only when the nullity of a marriage is so declared can it be held as void, and
so long as there is no such declaration the presumption of marriage exists. [28]

It is clear from the foregoing that the pendency of the civil case for annulment of
petitioners marriage to private respondent did not give rise to a prejudicial question
which warranted the suspension of the proceedings in the criminal case for bigamy
since at the time of the alleged commission of the crime, their marriage was, under the
law, still valid and subsisting.
Neither did the filing of said civil case for annulment necessitate the suspension of
the administrative proceedings before the PRC Board. As discussed above, the concept
of prejudicial question involves a civil and a criminal case. We have previously ruled that
there is no prejudicial question where one case is administrative and the other is civil.[29]
Furthermore, Section 32 of the Rules and Regulations Governing the Regulation
and Practice of Professionals of the PRC Board expressly provides that the
administrative proceedings before it shall not be suspended notwithstanding the
existence of a criminal and/or civil case against the respondent involving the same facts
as the administrative case:

The filing or pendency of a criminal and/or civil cases in the courts or an

administrative case in another judicial body against an examinee or registered
professional involving the same facts as in the administrative case filed or to
be filed before the Board shall neither suspend nor bar the proceeding of the
latter case. The Board shall proceed independently with the investigation of
the case and shall render therein its decision without awaiting for the final
decision of the courts or quasi-judicial body.

It must also be noted that the allegations in the administrative complaint before the
PRC Board are not confined to the issue of the alleged bigamous marriage contracted
by petitioner and Santella. Petitioner is also charged with immoral conduct for continued
failure to perform his obligations as husband to private respondent and as father to their
child, and for cohabiting with Santella without the benefit of marriage. [30] The existence of
these other charges justified the continuation of the proceedings before the PRC Board.
 Petitioner also contends that the Court of Appeals erred in upholding the trial courts
denial of his demurrer to evidence in the criminal case for bigamy, arguing that the
prosecution failed to establish the existence of both the first and second marriages
beyond reasonable doubt. Petitioner claims that the original copy of marriage contract
between him and private respondent was not presented, the signatures therein were not
properly identified and there was no showing that the requisites of a valid marriage were
complied with. He alleges further that the original copy of the marriage contract between
him and Santella was not presented, that no proof that he signed said contract was
adduced, and that there was no witness presented to show that a second marriage
ceremony participated in by him ever took place.[31]
We are not persuaded. The grant or denial of a demurrer to evidence is left to the
sound discretion of the trial court, and its ruling on the matter shall not be disturbed in
the absence of a grave abuse of such discretion. [32] In this case, the Court of Appeals did
not find any grave abuse of discretion on the part of the trial court, which based its
denial of the demurrer on two grounds: first, the prosecution established a prima
facie case for bigamy against the petitioner; and second, petitioners allegations in the
demurrer were insufficient to justify the grant of the same. It has been held that the
appellate court will not review in a special civil action for certiorari the prosecutions
evidence and decide in advance that such evidence has or has not yet established the
guilt of the accused beyond reasonable doubt. [33] In view of the trial courts finding that
a prima facie case against petitioner exists, his proper recourse is to adduce evidence
in his defense.[34]
The Court also finds it necessary to correct petitioners misimpression that by
denying his demurrer to evidence in view of the existence of a prima facie case against
him, the trial court was already making a pronouncement that he is liable for the offense
charged. As correctly held by the Court of Appeals, the order of the RTC denying the
demurrer was not an adjudication on the merits but merely an evaluation of the
sufficiency of the prosecutions evidence to determine whether or not a full-blown trial
would be necessary to resolve the case.[35] The RTCs observation that there was a prima
facie case against petitioner only meant that the prosecution had presented sufficient
evidence to sustain its proposition that petitioner had committed the offense of bigamy,
and unless petitioner presents evidence to rebut the same, such would be the
conclusion.[36] Said declaration by the RTC should not be construed as a pronouncement
of petitioners guilt. It was precisely because of such finding that the trial court denied the
demurrer, in order that petitioner may present evidence in his defense and allow said
court to resolve the case based on the evidence adduced by both parties.
Lastly, petitioner contends that his motion to inhibit Judge Peralejo in Criminal Case
No. Q-90-14409 should have been granted since said judge exhibited partiality and bias
against him in several instances. First, when petitioner manifested that he would file a
motion for reconsideration of the denial of his motion to suspend the proceedings in said
case, the judge said such motion was dilatory and would be denied even though the
motion for reconsideration had not yet been filed. Second, when petitioners counsel
manifested that he had just recovered from an accident and was not physically fit for
trial, the judge commented that counsel was merely trying to delay the case and
required said counsel to produce a medical certificate to support his statement. Third,
when petitioner manifested that he was going to file a demurrer to evidence, the judge
characterized the same as dilatory and declared that he would deny the
same.According to petitioner, the judges hostile attitude towards petitioners counsel as
shown in the foregoing instances justified the grant of his motion to inhibit.
We agree with the appellate court that the grounds raised by petitioner against
Judge Peralejo did not conclusively show that the latter was biased and had prejudged
the case.[37] In People of the Philippines vs. Court of Appeals,[38] this Court held that while
bias and prejudice have been recognized as valid reasons for the voluntary inhibition of
a judge under Section 1, Rule 137, the rudimentary rule is that the mere suspicion that a
judge is partial is not enough. There should be clear and convincing evidence to prove
the charge of bias and partiality.[39]
Furthermore, since the grounds raised by petitioner in his motion to inhibit are not
among those expressly mentioned in Section 1, Rule 137 of the Revised Rules of Court,
the decision to inhibit himself lay within the sound discretion of Judge Peralejo. Said
provision of law states:

Section 1. Disqualification of judges. No judge or judicial officer shall sit in any

case in which he, or his wife or child, is pecuniarily interested as heir, legatee,
creditor or otherwise, or in which he is related to either party within the sixth
degree of consanguinity or affinity, or to counsel within the fourth degree,
computed according to the rules of the civil law, or in which he has been
executor, administrator, guardian, trustee or counsel, or in which he has
presided in any inferior court when his ruling or decision is the subject of
review, without the written consent of all parties in interest, signed by them
and entered upon the record.

A judge may, in the exercise of his sound discretion, disqualify himself from
sitting in the case, for just and valid reasons other than those mentioned
above.

Thus, it was not mandatory that the judge inhibit himself from hearing and deciding
the case.
This Court does not find any abuse of discretion by respondent judge in denying
petitioners motion to inhibit. The test for determining the propriety of the denial of said
motion is whether petitioner was deprived a fair and impartial trial. [40] The instances when
Judge Peralejo allegedly exhibited antagonism and partiality against petitioner and/or
his counsel did not deprive him of a fair and impartial trial. As discussed earlier, the
denial by the judge of petitioners motion to suspend the criminal proceeding and the
demurrer to evidence are in accord with law and jurisprudence. Neither was there
anything unreasonable in the requirement that petitioners counsel submit a medical
certificate to support his claim that he suffered an accident which rendered him
unprepared for trial. Such requirement was evidently imposed upon petitioners counsel
to ensure that the resolution of the case was not hampered by unnecessary and
unjustified delays, in keeping with the judges duty to disposing of the courts business
promptly.[41]
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

Arthur Te, Petitioner, vs. Hon. Cesar C. Peralejo as Judge, RTC of Quezon City, Branch 98 and People
[1]

of the Philippines, Respondents.

Arthur Te, Petitioner, vs. Board of Civil Engineering, Professional Regulation Commission and Liliana
[2]

Choa Te, Respondents.

[3]
Decision of the Court of Appeals dated August 31, 1994, Rollo, p. 29.
[4]
Ibid.
[5]
Id., at 29-30.
[6]
Records, Criminal Case No. Q-90-14409, p.1.
[7]
Rollo, pp. 29-30.
[8]
Id., at 30.
[9]
Records, Criminal Case No. Q-90-14409, p. 37.
[10]
Id., at 33.
[11]
Id., at 6-10.
These cases were: (1) Arthur Te, vs. Liliana Choa-Te, Civil Case No. 90-6265 for Annulment of
[12]

Marriage, Regional Trial Court of Quezon City, Branch 106; and (2) People of the Philippines vs. Arthur
Te, Criminal Case No. Q-90-14409 for Bigamy, Regional Trial Court of Quezon City, Branch 98.
[13]
Records, CA-G.R. SP No. 26178, p. 15.
[14]
Records, CA-G.R. SP No. 26178, pp. 6-10.
[15]
Decision of the Court of Appeals, Rollo, pp. 33-34, 36.
[16]
Id., at 35.
[17]
Id., at 36.
[18]
Resolution of the Court of Appeals dated October 18, 1996, Id., at 103.
[19]
Petition, Id., at 18-24.
[20]
Salonga vs. Cruz Pano, 134 SCRA 438, 463 (1985).
[21]
Librado vs. Coscolluela, Jr., 116 SCRA 303, 309-310 (1982).
Carlos vs. Court of Appeals, 268 SCRA 25, 33 (1997) citing Tuanda vs. Sandiganbayan, 249 SCRA
[22]

342 (1995).
The elements of the crime of bigamy are as follows: (1) the offender has been legally married; (2) the
[23]

marriage has not been legally dissolved; (3) the offender contracts a second or subsequent marriage; and
(4) the second or subsequent marriage has all the essential requisites for validity. (REYES, LUIS B. THE
REVISED PENAL CODE ANNOTATED, Vol. 2 , Thirteenth Edition, p. 828.)
[24]
95 Phil. 843 (1954).
[25]
100 Phil. 1033 (1957).
Mercado vs. Tan, G.R. No. 137110, August 1, 2000; Bobis vs. Bobis, G.R. No. 138509, July 31, 2000;
[26]

Wiegel vs. Sempio-Diy, 143 SCRA 499, 501 (1986).

[27]
22 SCRA 731(1968).
[28]
Id., at 734, citing 3 VIADA, PENAL CODE 275.
[29]
Ocampo vs. Buenaventura, 55 SCRA 267, 271 (1974).
[30]
Records, CA-G.R. SP No. 26178, pp. 18-19.
[31]
Petition, Rollo, pp. 21-23.
[32]
People vs. Mercado, 159 SCRA 453, 459 (1988).
[33]
People vs. Cruz, 144 SCRA 677, 681 (1986).
[34]
Section 15, Rule 119, Revised Rules of Court.
Decision of the Court of Appeals in CA-G.R. SP No. 23971 and CA-G.R. SP No. 26178, Rollo, pp. 35-
[35]

36.
[36]
People vs. Nuque, 58 O.G. 8445; Salonga vs Cruz Pano, supra note 20 at 450.
[37]
Decision of the Court of Appeals in CA-G.R. SP No. 23971 and CA-G.R. SP No. 26178, Rollo, p. 33.
[38]
309 SCRA 705 (1999).
[39]
Id., at 709-710.
[40]
Associacion de Agricultures de Talisay-Silay, Inc. vs. Talisay-Silay Milling Co., Inc., 88 SCRA 294.
[41]
Rule 3.05, Canon 3, Code of Judicial Conduct.