CHAPTER

VII Section 402. Functions of the Lupon. - The lupon shall:

Katarungang Pambarangay
(a) Exercise administrative supervision over the conciliation panels provided herein;
Section 399. Lupong Tagapamayapa. -
(b) Meet regularly once a month to provide a forum for exchange of ideas among
(a) There is hereby created in each barangay a lupong tagapamayapa, hereinafter its members and the public on matters relevant to the amicable settlement of
referred to as the lupon, composed of the punong barangay, as chairman and ten disputes, and to enable various conciliation panel members to share with one
(10) to twenty (20) members. The lupon shall be constituted every three (3) years another their observations and experiences in effecting speedy resolution of
in the manner provided herein. disputes; and

(b) Any person actually residing or working, in the barangay, not otherwise (c) Exercise such other powers and perform such other duties and functions as may
expressly disqualified by law, and possessing integrity, impartiality, independence be prescribed by law or ordinance.
of mind, sense of fairness, and reputation for probity, may be appointed a member
of the lupon. Section 403. Secretary of the Lupon. - The barangay secretary shall concurrently serve as the
secretary of the lupon. He shall record the results of mediation proceedings before the
(c) A notice to constitute the lupon, which shall include the names of proposed punong barangay and shall submit a report thereon to the proper city or municipal courts. He
members who have expressed their willingness to serve, shall be prepared by the shall also receive and keep the records of proceedings submitted to him by the various
punong barangay within the first fifteen (15) days from the start of his term of conciliation panels.
office. Such notice shall be posted in three (3) conspicuous places in the barangay
continuously for a period of not less than three (3) weeks; Section 404. Pangkat ng Tagapagkasundo. -

(d) The punong barangay, taking into consideration any opposition to the proposed (a) There shall be constituted for each dispute brought before the lupon a
appointment or any recommendations for appointment as may have been made conciliation panel to be known as the pangkat ng tagapagkasundo, hereinafter
within the period of posting, shall within ten (10) days thereafter, appoint as referred to as the pangkat, consisting of three (3) members who shall be chosen by
members those whom he determines to be suitable therefor. Appointments shall the parties to the dispute from the list of members of the lupon.
be in writing, signed by the punong barangay, and attested to by the barangay
secretary.
Should the parties fail to agree on the pangkat membership, the same shall be
determined by lots drawn by the lupon chairman.
(e) The list of appointed members shall be posted in three (3) conspicuous places in
the barangay for the entire duration of their term of office; and
(b) The three (3) members constituting the pangkat shall elect from among
themselves the chairman and the secretary. The secretary shall prepare the
(f) In barangays where majority of the inhabitants are members of indigenous minutes of the pangkat proceedings and submit a copy duly attested to by the
cultural communities, local systems of settling disputes through their councils of chairman to the lupon secretary and to the proper city or municipal court. He shall
datus or elders shall be recognized without prejudice to the applicable provisions of issue and cause to be served notices to the parties concerned.
this Code.
The lupon secretary shall issue certified true copies of any public record in his
Section 400. Oath and Term of Office. - Upon appointment, each lupon member shall take an custody that is not by law otherwise declared confidential.
oath of office before the punong barangay. He shall hold office until a new lupon is
constituted on the third year following his appointment unless sooner terminated by
Section 405. Vacancies in the Pangkat. - Any vacancy in the pangkat shall be chosen by the
resignation, transfer of residence or place of work, or withdrawal of appointment by the
parties to the dispute from among the other lupon members. Should the parties fail to agree
punong barangay with the concurrence of the majority of all the members of the lupon.
on a common choice, the vacancy shall be filled by lot to be drawn by the lupon chairman.

Section 401. Vacancies. - Should a vacancy occur in the lupon for any cause, the punong
Section 406. Character of Office and Service of Lupon Members. -
barangay shall immediately appoint a qualified person who shall hold office only for the
unexpired portion of the term.
 (a) The lupon members, while in the performance of their official duties or on the (g) Such other classes of disputes which the President may determine in the
occasion thereof, shall be deemed as persons in authority, as defined in the interest of Justice or upon the recommendation of the Secretary of Justice.
Revised Penal Code.
The court in which non-criminal cases not falling within the authority of the lupon
(b) The lupon or pangkat members shall serve without compensation, except as under this Code are filed may, at any time before trial motu propio refer the case to
provided for in Section 393 and without prejudice to incentives as provided for in the lupon concerned for amicable settlement.
this Section and in Book IV of this Code. The Department of the Interior and Local
Government shall provide for a system of granting economic or other incentives to Section 409. Venue. -
the lupon or pangkat members who adequately demonstrate the ability to
judiciously and expeditiously resolve cases referred to them. While in the
(a) Disputes between persons actually residing in the same barangay shall be
performance of their duties, the lupon or pangkat members, whether in public or
brought for amicable settlement before the lupon of said barangay.
private employment, shall be deemed to be on official time, and shall not suffer
from any diminution in compensation or allowance from said employment by
reason thereof. (b) Those involving actual residents of different barangays within the same city or
municipality shall be brought in the barangay where the respondent or any of the
respondents actually resides, at the election of the complaint.
Section 407. Legal Advice on Matters Involving Questions of Law. - The provincial, city legal
officer or prosecutor or the municipal legal officer shall render legal advice on matters
involving questions of law to the punong barangay or any lupon or pangkat member (c) All disputes involving real property or any interest therein shall be brought in
whenever necessary in the exercise of his functions in the administration of the katarungang the barangay where the real property or the larger portion thereof is situated.
pambarangay.
(d) Those arising at the workplace where the contending parties are employed or at
Section 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each the institution where such parties are enrolled for study, shall be brought in the
barangay shall have authority to bring together the parties actually residing in the same city barangay where such workplace or institution is located.
or municipality for amicable settlement of all disputes except:
Objections to venue shall be raised in the mediation proceedings before the
(a) Where one party is the government, or any subdivision or instrumentality punong barangay; otherwise, the same shall be deemed waived. Any legal question
thereof; which may confront the punong barangay in resolving objections to venue herein
referred to may be submitted to the Secretary of Justice, or his duly designated
representative, whose ruling thereon shall be binding.
(b) Where one party is a public officer or employee, and the dispute relates to the
performance of his official functions;
Section 410. Procedure for Amicable Settlement. -
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine
exceeding Five thousand pesos (P5,000.00); (a) Who may initiate proceeding - Upon payment of the appropriate filing fee, any
individual who has a cause of action against another individual involving any matter
within the authority of the lupon may complain, orally or in writing, to the lupon
(d) Offenses where there is no private offended party;
chairman of the barangay.

(e) Where the dispute involves real properties located in different cities or
(b) Mediation by lupon chairman - Upon receipt of the complaint, the lupon
municipalities unless the parties thereto agree to submit their differences to
chairman shall within the next working day summon the respondent(s), with notice
amicable settlement by an appropriate lupon;
to the complainant(s) for them and their witnesses to appear before him for a
mediation of their conflicting interests. If he fails in his mediation effort within
(f) Disputes involving parties who actually reside in barangays of different cities or fifteen (15) days from the first meeting of the parties before him, he shall forthwith
municipalities, except where such barangay units adjoin each other and the parties set a date for the constitution of the pangkat in accordance with the provisions of
thereto agree to submit their differences to amicable settlement by an appropriate this Chapter.
lupon;
(c) Suspension of prescriptive period of offenses - While the dispute is under
mediation, conciliation, or arbitration, the prescriptive periods for offenses and
 cause of action under existing laws shall be interrupted upon filing the complaint (3) Where actions are coupled with provisional remedies such as
with the punong barangay. The prescriptive periods shall resume upon receipt by preliminary injunction, attachment, delivery of personal property and
the complainant of the complainant or the certificate of repudiation or of the support pendente lite; and
certification to file action issued by the lupon or pangkat secretary: Provided,
however, That such interruption shall not exceed sixty (60) days from the filing of (4) Where the action may otherwise be barred by the statute of
the complaint with the punong barangay. limitations.

(d) Issuance of summons; hearing; grounds for disqualification - The pangkat shall (c) Conciliation among members of indigenous cultural communities. - The customs
convene not later than three (3) days from its constitution, on the day and hour set and traditions of indigenous cultural communities shall be applied in settling
by the lupon chairman, to hear both parties and their witnesses, simplify issues, disputes between members of the cultural communities.
and explore all possibilities for amicable settlement. For this purpose, the pangkat
may issue summons for the personal appearance of parties and witnesses before it.
Section 413. Arbitration. -
In the event that a party moves to disqualify any member of the pangkat by reason
of relationship, bias, interest, or any other similar grounds discovered after the
constitution of the pangkat, the matter shall be resolved by the affirmative vote of (a) The parties may, at any stage of the proceedings, agree in writing that they shall
the majority of the pangkat whose decision shall be final. Should disqualification be abide by the arbitration award of the lupon chairman or the pangkat. Such
decided upon, the resulting vacancy shall be filled as herein provided for. agreement to arbitrate may be repudiated within five (5) days from the date
thereof for the same grounds and in accordance with the procedure hereinafter
prescribed. The arbitration award shall be made after the lapse of the period for
(e) Period to arrive at a settlement - The pangkat shall arrive at a settlement or
repudiation and within ten (10) days thereafter.
resolution of the dispute within fifteen (15) days from the day it convenes in
accordance with this section. This period shall, at the discretion of the pangkat, be
extendible for another period which shall not exceed fifteen (15) days, except in (b) The arbitration award shall be in writing in a language or dialect known to the
clearly meritorious cases. parties. When the parties to the dispute do not use the same language or dialect,
the award shall be written in the language or dialect known to them.
Section 411. Form of settlement. - All amicable settlements shall be in writing, in a language
or dialect known to the parties, signed by them, and attested to by the lupon chairman or the Section 414. Proceedings Open to the Public; Exception. - All proceedings for settlement shall
pangkat chairman, as the case may be. When the parties to the dispute do not use the same be public and informal: Provided, however, That the lupon chairman or the pangkat
language or dialect, the settlement shall be written in the language known to them. chairman, as the case may be, may motu proprio or upon request of a party, exclude the
public from the proceedings in the interest of privacy, decency, or public morals.
Section 412. Conciliation. -
Section 415. Appearance of Parties in Person. - In all katarungang pambarangay proceedings,
the parties must appear in person without the assistance of counsel or representative, except
(a) Pre-condition to Filing of Complaint in Court. - No complaint, petition, action, or
for minors and incompetents who may be assisted by their next-of-kin who are not lawyers.
proceeding involving any matter within the authority of the lupon shall be filed or
instituted directly in court or any other government office for adjudication, unless
there has been a confrontation between the parties before the lupon chairman or Section 416. Effect of Amicable Settlement and Arbitration Award. - The amicable settlement
the pangkat, and that no conciliation or settlement has been reached as certified and arbitration award shall have the force and effect of a final judgment of a court upon the
by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat expiration of ten (10) days from the date thereof, unless repudiation of the settlement has
chairman or unless the settlement has been repudiated by the parties thereto. been made or a petition to nullify the award has been filed before the proper city or
municipal court.
(b) Where Parties May Go Directly to Court. - The parties may go directly to court in
the following instances: However, this provision shall not apply to court cases settled by the lupon under the last
paragraph of Section 408 of this Code, in which case the compromise or the pangkat
chairman shall be submitted to the court and upon approval thereof, have the force and
(1) Where the accused is under detention;
effect of a judgment of said court.

(2) Where a person has otherwise been deprived of personal liberty

Section 417. Execution. - The amicable settlement or arbitration award may be enforced by
calling for habeas corpus proceedings;
execution by the lupon within six (6) months from the date of the settlement. After the lapse
of such time, the settlement may be enforced by action in the appropriate city or municipal The Solicitor General for respondents.
court.

Section 418. Repudiation. - Any party to the dispute may, within ten (10) days from the date
of the settlement, repudiate the same by filing with the lupon chairman a statement to that ESCOLIN, J.:
effect sworn to before him, where the consent is vitiated by fraud, violence, or intimidation.
Such repudiation shall be sufficient basis for the issuance of the certification for filing a
Sought to be annulled in this petition for review is a final and executory judgment rendered
complaint as hereinabove provided.
by the City Court [now Metropolitan Trial Court] of Manila in Civil Case No. 057662-CV on
ground of lack of jurisdiction. Petitioners contend that the Court did not acquire jurisdiction
Section 419. Transmittal of Settlement and Arbitration. - Award to the Court. - The secretary over the case for failure of respondent Jose Planas, plaintiff therein, to avail of the barangay
of the lupon shall transmit the settlement or the arbitration award to the appropriate city or conciliation process before the filing of the case in court, as required by P.D. 1508, otherwise
municipal court within five (5) days from the date of the award or from the lapse of the ten- known as the "Katarungang Pambarangay Law."
day period repudiating the settlement and shall furnish copies thereof to each of the parties
to the settlement and the lupon chairman.
The facts upon which this issue rests are the following: The spouses Apolinar R. Royales and
Presentacion Gregorio, petitioners herein, are the lessees of a residential house owned by
Section 420. Power to Administer Oaths. - The punong barangay, as chairman of the lupong respondent Jose Planas located at No. 1866 Int. I, Oroquieta St., Manila. On August 25, 1980,
tagapamayapa, and the members of the pangkat are hereby authorized to administer oaths Planas instituted before the then City Court of Manila an ejectment suit against petitioners,
in connection with any matter relating to all proceedings in the implementation of the docketed as Civil Case No. 057662-CV and assigned to the sala of Judge J. Cesar Sangco.
katarungang pambarangay.
Issues having been joined, trial on the merits ensued. Respondent Planas testified on his own
Section 421. Administration; Rules and Regulations. - The city or municipal mayor, as the case behalf and was cross-examined by petitioners' counsel.
may be, shall see to the efficient and effective implementation and administration of the
katarungang pambarangay. The Secretary of Justice shall promulgate the rules and
On November 10, 1981, when neither petitioners nor their counsel appeared at the hearing
regulations necessary to implement this Chapter.
despite due notice, the case, on motion of respondent Planas, was considered submitted for
decision. On November 26, 1981, the trial court rendered a decision, the dispositive portion
Section 422. Appropriations. - Such amount as may be necessary for the effective of which reads:
implementation of the katarungang pambarangay shall be provided for in the annual budget
of the city or municipality concerned.
WHEREFORE, judgment is hereby accordingly rendered ordering
defendants and all persons holding or claiming under them to
immediately vacate the house located at No. 1866 Int. I Oroquieta Street,
Sta. Cruz, Manila, subject of this action and restore possession thereof to
Republic of the Philippines the plaintiff and to pay to the latter;
SUPREME COURT
Manila 1. The sum of P1,000.00 as and for attorney's fees; and

EN BANC 2. The costs of suit.

G.R. No. L-65072 January 31, 1984 After the decision had become final and executory, Planas filed a motion for execution and
the same was granted by the court. Execution of the judgment was however restrained by
APOLINAR R. ROYALES and PRESENTACION GREGORIO, petitioners, the Regional Trial Court of Manila upon the filing by petitioners of a petition for certiorari and
vs. prohibition with preliminary injunction, wherein they assailed the said decision on ground of
HON. INTERMEDIATE APPELLATE COURT, JOSE PLANAS, HON. J. CESAR SANGCO etc., et lack of jurisdiction, allegedly arising from failure of respondent Planas to submit the dispute
al., respondents. to the Barangay Lupon for conciliation as required by P.D. 1508.

Citizens Legal Assistance Office for petitioners. After due hearing, the Regional Trial Court handed down a decision declaring the judgment
of the trial court null and void for having been rendered without jurisdiction. Having found
that "the parties in the case are residents not only of the same city, but of the same While petitioners could have prevented the trial court from exercising jurisdiction over the
barangay, i.e., Bgy. 336, Zone 34, District 2, City of Manila," the court ruled: case by seasonably taking exception thereto, they instead invoked the very same jurisdiction
by filing an answer and seeking affirmative relief from it. What is more, they participated in
Like the court of origin, this court is equally barren of jurisdiction to take the trial of the case by cross-examining respondent Planas. Upon this premise, petitioners
cognizance of the subject controversy which was prematurely filed with cannot now be allowed belatedly to adopt an inconsistent posture by attacking the
the city court, even before it could be referred to the barangay jurisdiction of the court to which they had submitted themselves voluntary. As this Court
2
authorities for conciliation as explicitly required under P.D. 1508, ruled in Tijam vs. Sibonghanoy:
something the private respondent admittedly failed to do. The failure to
allow the LUPON to act on the controversy at bar prior to the institution . . . . . . . a party cannot invoke the jurisdiction of a court to secure
of the instant ejectment case did render the city court, and even this affirmative relief against his opponent and, after obtaining or failing to
court, devoid of competence and jurisdiction to pass upon the present obtain such relief, repudiate or question that same jurisdiction (Dean vs.
complaint of private respondent. There is, therefore, no recourse left but Dean, 136 Or. 694, 86, A.L.R. 79).
to dismiss it, without prejudice to refiling it after due observance of the
formalities prescribed by law on the matter. In the case just cited, by way of explaining the rule, it was further said
that the question whether the court had jurisdiction either of the subject-
Reconsideration of the decision having been denied, respondent Planas appealed to the matter of the action or the parties was not important in such cases
Intermediate Appellate Court, which on July 12, 1982 promulgated a decision vacating the because the party is barred from such conduct not because the judgment
judgment of the Regional Trial Court, thus confirming the decision of the City Court of or order of the court is valid and conclusive as an adjudication, but for the
Manila. Unable to obtain a reconsideration thereof, petitioners filed the instant petition reason that such a practice can not be tolerated — obviously for reasons
before this Court. of public policy.

The petition is devoid of merit. Furthermore, it has also been held that after voluntarily submitting a cause and encountering
an adverse decision on the merits, it is too late for the loser to question the jurisdiction or
In disputes covered by P.D. 1508, as in the case at bar, the barangay conciliation process is a power of the court . . . . And in Littleton vs. Burges,16 Wyo. 58, the Court said that it is not
pre-condition for the filing of an action in court. This is so provided by Section 6 of the said right for a party who has affirmed and invoked the jurisdiction of a court in a particular
law: matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a
penalty.
Section 6. Conciliation, pre-condition to filing of complaint. — No
complaint, petition, action or proceeding involving any matter within the WHEREFORE, the petition is hereby dismissed and the decision of the respondent
authority of the Lupon as provided in Section 2 hereof shall be filed or Intermediate Appellate Court in AC-G.R.-SP-00342 is hereby affirmed. Costs against
instituted in Court or any other government office for adjudication unless petitioners.
there has been a confrontation of the parties before the Lupon Chairman
or Pangkat and no conciliation or settlement had been reached as SO ORDERED.
certified by the Lupon Secretary or the Pangkat Secretary attested by the
Lupon or Pangkat Chairman or unless the settlement has been Fernando, C.J., Teehankee, Makasiar, Aquino, Concepcion, Jr., Guerrero, De Castro, Melencio-
repudiated. ... Herrera, Plana, Relova and Gutierrez, Jr., JJ., concur.

There is no dispute that prior to the filing of the complaint, the case was never referred to
the Barangay Lupon for conciliation. In fact, respondent Planas failed to allege in his
complaint compliance with this condition precedent. But is this omission fatal?

Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect

the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to
dismissal on ground of lack of cause of action or prematurity; 1 but the same would not
prevent a court of competent jurisdiction from exercising its power of adjudication over the Separate Opinions
case before it, where the defendants, as in this case, failed to object to such exercise of
jurisdiction in their answer and even during the entire proceedings a quo.
ABAD SANTOS, J., concurring:

A simple ejectment case has gone all the way to this Court and assigned not to a Division D E C I S I O N
thereof but to the Banc on what appears to be a legal question of some novelty but which to
me does not deserve the treatment accorded to it. I think it is enough that the case has gone
before the City Court, the Court of First Instance and the Court of Appeals. But having CHICO-NAZARIO, J.:
reached this Court and for this Court only to affirm the decision of the Court of Appeals, a
simple denial of the petition instead of the full treatment given to it would have been
[1]
sufficient and more appropriate. Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court filed by petitioner Leo Wee, seeking the reversal and setting aside of the
[2] [3]
Decision dated 19 September 2006 and the Resolution dated 25 January 2007 of the Court

of Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Decision, reversed the
dismissal of Civil Case. No. 1990, an action for ejectment instituted by respondent George de
Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban and Jesus
[4]
de Castro against petitioner, by the Municipal Trial Court (MTC) of Alaminos City, which was
Separate Opinions affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in
favor of the respondents, ordered the petitioner to vacate the subject property. In its assailed
ABAD SANTOS, J., concurring: Resolution dated 25 January 2007, the Court of Appeals refused to reconsider its earlier
Decision of 19 September 2006.
[5]
In their Complaint filed on 1 July 2002 with the MTC of Alaminos City, docketed
A simple ejectment case has gone all the way to this Court and assigned not to a Division as Civil Case No. 1990, respondents alleged that they are the registered owners of the subject
thereof but to the Banc on what appears to be a legal question of some novelty but which to property, a two-storey building erected on a parcel of land registered under Transfer
me does not deserve the treatment accorded to it. I think it is enough that the case has gone Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, described and
before the City Court, the Court of First Instance and the Court of Appeals. But having bounded as follows:
reached this Court and for this Court only to affirm the decision of the Court of Appeals, a
simple denial of the petition instead of the full treatment given to it would have been A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a
sufficient and more appropriate. portion of Lot 13033-D, Psd-018529, LRC Rec. No. ____) situated in
Pob., Alaminos City; bounded on the NW. along line 1-2 by Lot 13035-D-1
of the subdivision plan; on the NE. along line 2-3 by Vericiano St.; on the
SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; on the SW.
THIRD DIVISION along line 4-1 by Lot 575, Numeriano Rabago. It is coverd by TCT No. 16193
of the Register of Deeds of Pangasinan (Alaminos City) and declared for
taxation purposes per T.D. No. 2075, and assessed in the sum
[6]
LEO WEE, G.R. No. 176405 of P93,400.00.
Petitioner,
Present:
Respondents rented out the subject property to petitioner on a month to month
[7]
YNARES-SANTIAGO, J., basis for P9,000.00 per month. Both parties agreed that effective 1 October 2001, the rental
- versus - Chairperson, payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however, failed or
AUSTRIA-MARTINEZ, refused to pay the corresponding increase on rent when his rental obligation for the month
CHICO-NAZARIO, of 1 October 2001 became due. The rental dispute was brought to the Lupon
NACHURA, and Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the
GEORGE DE CASTRO (on his behalf and as attorney-in- REYES, JJ. matter but the parties failed to reach an agreement, resulting in the issuance by
fact of ANNIE DE CASTRO and FELOMINA UBAN) the Barangay Lupon of a Certification to file action in court on 18 January 2002. On 10 June
and MARTINIANA DE CASTRO, 2002, respondent George de Castro sent a letter to petitioner terminating their lease
Respondents. Promulgated: agreement and demanding that the latter vacate and turn over the subject property to
respondents. Since petitioner stubbornly refused to comply with said demand letter,
August 20, 2008 respondent George de Castro, together with his siblings and co-respondents, Annie de Castro,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
Felomina de Castro Uban and Jesus de Castro, filed the Complaint for ejectment before the likewise agreed with petitioner in ruling that the allegation in the Complaint was flawed, since
MTC. respondents failed to allege that there was an unlawful withholding of possession of the
subject property, taking out Civil Case No. 1990 from the purview of an action for unlawful
It must be noted, at this point, that although the Complaint stated that it was being detainer. Finally, the RTC decreed that respondents Complaint failed to comply with the rule
filed by all of the respondents, the Verification and the Certificate of Non-Forum Shopping that a co-owner could not maintain an action without joining all the other co-owners. Thus,
were signed by respondent George de Castro alone. He would subsequently attach to his according to the dispositive portion of the RTC Decision:
position paper filed before the MTC on 28 October 2002 the Special Powers of Attorney (SPAs)
executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February 2002 WHEREFORE the appellate Court finds no cogent reason to
and 14 March 2002 respectively, authorizing him to institute the ejectment case against disturb the findings of the court a quo. The Decision dated November 21,
[12]
petitioner. 2002 appealed from is hereby AFFIRMED IN TOTO.
Petitioner, on the other hand, countered that there was no agreement between the
parties to increase the monthly rentals and respondents demand for an increase was
[13]
exorbitant. The agreed monthly rental was only for the amount of P9,000.00 and he was Undaunted, respondents filed a Petition for Review on Certiorari with the Court
religiously paying the same every month. Petitioner then argued that respondents failed to of Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in their
comply with the jurisdictional requirement of conciliation before the Barangay Lupon prior to Petition that the RTC gravely erred in ruling that their failure to comply with the conciliation
the filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The process was fatal to their Complaint, since it is only respondent George de Castro who resides
Certification to file action issued by the Barangay Lupon appended to the respondents in Alaminos City, Pangasinan, while respondent Annie de Castro resides in Pennsylvania,
Complaint merely referred to the issue of rental increase and not the matter of United States of America (USA); respondent Felomina de Castro Uban, in California, USA; and
ejectment. Petitioner asserted further that the MTC lacked jurisdiction over the ejectment suit, respondent Jesus de Castro, now substituted by his wife, Martiniana, resides in
since respondents Complaint was devoid of any allegation that there was an unlawful Manila. Respondents further claimed that the MTC was not divested of jurisdiction over their
[8]
withholding of the subject property by the petitioner. Complaint for ejectment because of the mere absence therein of the term unlawful
withholding of their subject property, considering that they had sufficiently alleged the same
[9]
During the Pre-Trial Conference held before the MTC, the parties stipulated that in in their Complaint, albeit worded differently. Finally, respondents posited that the fact that
May 2002, petitioner tendered to respondents the sum of P9,000.00 as rental payment for the only respondent George de Castro signed the Verification and the Certificate of Non-Forum
month of January 2002; petitioner paid rentals for the months of October 2001 to January 2002 Shopping attached to the Complaint was irrelevant since the other respondents already
but only in the amount of P9,000.00 per month; respondents, thru counsel, sent a letter to executed Special Powers of Attorney (SPAs) authorizing him to act as their attorney-in-fact in
petitioner on 10 June 2002 terminating their lease agreement which petitioner ignored; and the institution of the ejectment suit against the petitioner.
the Barangay Lupon did issue a Certification to file action after the parties failed to reach an
agreement before it. On 19 September 2006, the Court of Appeals rendered a Decision granting the
respondents Petition and ordering petitioner to vacate the subject property and turn over the
After the submission of the parties of their respective Position Papers, the MTC, same to respondents. The Court of Appeals decreed:
[10]
on 21 November 2002, rendered a Decision dismissing respondents Complaint in Civil Case
No. 1990 for failure to comply with the prior conciliation requirement before WHEREFORE, premises considered, the instant petition is
the Barangay Lupon. The decretal portion of the MTC Decision reads: GRANTED. The assailed Decision dated June 27, 2005 issued by the RTC of
Alaminos City, Pangasinan, Branch 54, is REVERSED and SET ASIDE. A new
WHEREFORE, premised considered, judgment is hereby one is hereby rendered ordering [herein petitioner] Leo Wee to
rendered ordering the dismissal of this case. Costs against the [herein SURRENDER and VACATE the leased premises in question as well as to pay
respondents]. the sum of P15,000.00 per month reckoned from March, 2002 until he shall
have actually turned over the possession thereof to petitioners plus the
On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, rental arrearages of P30,000.00 representing unpaid increase in rent for
[11]
Branch 54, promulgated its Decision dated 27 June 2005 affirming the dismissal of the period from October, 2001 to February, 2002, with legal interest at 6%
respondents Complaint for ejectment after finding that the appealed MTC Decision was based per annum to be computed from June 7, 2002 until finality of this decision
on facts and law on the matter. The RTC declared that since the original agreement entered and 12% thereafter until full payment thereof. Respondent is likewise
into by the parties was for petitioner to pay only the sum of P9.000.00 per month for the rent hereby ordered to pay petitioners the amount of P20,000.00 as and for
[14]
of the subject property, and no concession was reached by the parties to increase such amount attorneys fees and the costs of suit.
to P15.000.00, petitioner cannot be faulted for paying only the originally agreed upon monthly
rentals. Adopting petitioners position, the RTC declared that respondents failure to refer the
matter to the Barangay court for conciliation process barred the ejectment case, conciliation In a Resolution dated 25 January 2007, the appellate court denied the Motion for
before the Lupon being a condition sine qua non in the filing of ejectment suits. The RTC Reconsideration interposed by petitioner for lack of merit.
 system in mind, it would be wholly in keeping with the underlying philosophy of Presidential
Petitioner is now before this Court via the Petition at bar, making the following assignment of Decree No. 1508 (Katarungang Pambarangay Law), which would be better served if an out-of-
[16]
errors: court settlement of the case is reached voluntarily by the parties. To ensure this objective,
Section 6 of Presidential Decree No. 1508 requires the parties to undergo a conciliation process
before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a
I. complaint in court subject to certain exceptions. The said section has been declared
[17]
compulsory in nature.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT
CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local
NON-COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN Government Code), which took effect on 1 January 1992.
EJECTMENT CASE;
The pertinent provisions of the Local Government Code making conciliation a
II. precondition to the filing of complaints in court are reproduced below:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in
SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT court. No complaint, petition, action, or proceeding involving any matter
DESPITE THE WANT OF ALLEGATION OF UNLAWFUL WITHOLDING within the authority of the lupon shall be filed or instituted directly in court
PREMISES (sic) QUESTIONED BY PETITIONER; or any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the
III. pangkat, and that no conciliation or settlement has been reached
as certified by the lupon secretary or pangkat secretary as attested to by
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT the lupon or pangkat chairman or unless the settlement has been
THE FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO repudiated by the parties thereto.
WITHOUT JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT (b) Where parties may go directly to court. The parties may go directly to
PROPERTY IS PROPER; court in the following instances:

IV. (1) Where the accused is under detention;

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING (2) Where a person has otherwise been deprived of personal
SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO liberty calling for habeas corpus proceedings;
INDICATE IN HIS PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS
[15]
IBP DUES. (3) Where actions are coupled with provisional remedies such as
preliminary injunction, attachment, delivery of personal property, and
support pendente lite; and
Petitioner avers that respondents failed to go through the conciliation process
before the Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment. The (4) Where the action may otherwise be barred by the statute of
Certification to file action dated 18 January 2002 issued by the Barangay Lupon, appended by limitations.
the respondents to their Complaint in Civil Case No. 1990, is of no moment, for it attested only (c) Conciliation among members of indigenous cultural communities. The
that there was confrontation between the parties on the matter of rental increase but not on customs and traditions of indigenous cultural communities shall be applied
unlawful detainer of the subject property by the petitioner. If it was the intention of the in settling disputes between members of the cultural communities.
respondents from the very beginning to eject petitioner from the subject property, they should
have brought up the alleged unlawful stay of the petitioner on the subject property for
conciliation before the Barangay Lupon. SEC. 408. Subject Matter for Amicable Settlement; Exception
Thereto. The lupon of each barangay shall have authority to bring together
The barangay justice system was established primarily as a means of easing up the the parties actually residing in the same city or municipality for amicable
congestion of cases in the judicial courts. This could be accomplished through a proceeding settlement of all disputes except:
before the barangay courts which, according to the one who conceived of the system, the late
Chief Justice Fred Ruiz Castro, is essentially arbitration in character; and to make it truly (a) Where one party is the government or any subdivision or
effective, it should also be compulsory. With this primary objective of the barangay justice instrumentality thereof;

(b) Where one party is a public officer or employee, and the While it is true that the Certification to file action dated 18 January 2002 of
dispute relates to the performance of his official functions; the Barangay Lupon refers only to rental increase and not to the ejectment of petitioner from
the subject property, the submission of the same for conciliation before the Barangay
(c) Offenses punishable by imprisonment exceeding one (1) year Lupon constitutes sufficient compliance with the provisions of the Katarungang
or a fine exceeding Five thousand pesos (P5,000.00); Pambarangay Law. Given the particular circumstances of the case at bar, the conciliation
proceedings for the amount of monthly rental should logically and reasonably include also the
(d) Offenses where there is no private offended party; matter of the possession of the property subject of the rental, the lease agreement, and the
violation of the terms thereof.
(e) Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto agree to submit We now proceed to discuss the meat of the controversy.
their differences to amicable settlement by an appropriate lupon;
The contract of lease between the parties did not stipulate a fixed period. Hence, the
(f) Disputes involving parties who actually reside in barangays parties agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the
of different cities or municipalities, except where such barangay units Civil Code provides:
adjoin each other and the parties thereto agree to submit their differences
to amicable settlement by an appropriate lupon; Art. 1687. If the period for the lease has not been fixed, it is
understood to be from year to year, if the rent agreed upon
(g) Such other classes of disputes which the President may is annual; from month to month, if it is monthly; from week to week, if
determine in the interest of justice or upon the recommendation of the the rent is weekly; and from day to day, if the rent is to be paid daily.
Secretary of Justice. However, even though a monthly rent is paid, and no period for the lease
has been set, the courts may fix a longer term for the lease after the lessee
has occupied the premises for over one year. If the rent is weekly, the
There is no question that the parties to this case appeared before the Barangay courts may likewise determine a longer period after the lessee has been in
Lupon for conciliation proceedings. There is also no dispute that the only matter referred to possession for over six months. In case of daily rent, the courts may also
the Barangay Lupon for conciliation was the rental increase, and not the ejectment of fix a longer period after the lessee has stayed in the place for over one
petitioner from the subject property. This is apparent from a perusal of the Certification to file month. (Emphasis supplied.)
action in court issued by the Barangay Lupon on 18 January 2002, to wit:

CERTIFICATION TO FILE COMPLAINTS The rentals being paid monthly, the period of such lease is deemed terminated at
the end of each month. Thus, respondents have every right to demand the ejectment of
This is to certify that: petitioners at the end of each month, the contract having expired by operation of law. Without
a lease contract, petitioner has no right of possession to the subject property and must vacate
1. There was personal confrontation between parties before the the same. Respondents, thus, should be allowed to resort to an action for ejectment before
barangay Lupon regarding rental increase of a the MTC to recover possession of the subject property from petitioner.
commercial building but conciliation failed;
Corollarily, petitioners ejectment, in this case, is only the reasonable consequence of
2. Therefore, the corresponding dispute of the above-entitled his unrelenting refusal to comply with the respondents demand for the payment of rental
case may now be filed in Court/Government increase agreed upon by both parties. Verily, the lessors right to rescind the contract of lease
[18]
Office. (Emphasis ours.) for non-payment of the demanded increased rental was recognized by this Court in Chua v.
[19]
Victorio :

The question now to be resolved by this Court is whether the Certification dated 18 The right of rescission is statutorily recognized in reciprocal
January 2002 issued by the Barangay Lupon stating that no settlement was reached by the obligations, such as contracts of lease. In addition to the general remedy
parties on the matter of rental increase sufficient to comply with the prior conciliation of rescission granted under Article 1191 of the Civil Code, there is an
requirement under the Katarungang Pambarangay Law to authorize the respondents to independent provision granting the remedy of rescission for breach of any
institute the ejectment suit against petitioner. of the lessor or lessees statutory obligations. Under Article 1659 of the Civil
Code, the aggrieved party may, at his option, ask for (1) the rescission of
The Court rules affirmatively.
 the contract; (2) rescission and indemnification for damages; or (3) only
indemnification for damages, allowing the contract to remain in force. A power of attorney is an instrument in writing by which one person, as principal,
appoints another as his agent and confers upon him the authority to perform certain specified
Payment of the rent is one of a lessees statutory obligations, acts or kinds of acts on behalf of the principal. The written authorization itself is the power of
and, upon non-payment by petitioners of the increased rental in attorney, and this is clearly indicated by the fact that it has also been called a letter of
[22]
September 1994, the lessor acquired the right to avail of any of the three attorney.
remedies outlined above. (Emphasis supplied.)
Even then, the Court views the SPAs as mere surplusage, such that the lack thereof
does not in any way affect the validity of the action for ejectment instituted by respondent
Petitioner next argues that respondent George de Castro cannot maintain an action George de Castro. This also disposes of petitioners contention that respondent George de
for ejectment against petitioner, without joining all his co-owners. Castro lacked the authority to sign the Verification and the Certificate of Non-Forum
[23]
Shopping. As the Court ruled in Mendoza v. Coronel :
Article 487 of the New Civil Code is explicit on this point:
We likewise hold that the execution of the certification against
ART. 487. Any one of the co-owners may bring an action in forum shopping by the attorney-in-fact in the case at bar is not a violation
ejectment. of the requirement that the parties must personally sign the same. The
attorney-in-fact, who has authority to file, and who actually filed the
This article covers all kinds of action for the recovery of possession, i.e., forcible entry complaint as the representative of the plaintiff co-owner, pursuant to a
and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and Special Power of Attorney, is a party to the ejectment suit. In fact, Section
recovery of ownership (accion de reivindicacion). As explained by the renowned civilist, 1, Rule 70 of the Rules of Court includes the representative of the owner
[20]
Professor Arturo M. Tolentino : in an ejectment suit as one of the parties authorized to institute the
proceedings. (Emphasis supplied.)
A co-owner may bring such an action, without the necessity of
joining all the other co-owners as co-plaintiffs, because the suit is
deemed to be instituted for the benefit of all. If the action is for the Failure by respondent George de Castro to attach the said SPAs to the Complaint is
benefit of the plaintiff alone, such that he claims possession for himself innocuous, since it is undisputed that he was granted by his sisters the authority to file the
and not for the co-ownership, the action will not prosper. (Emphasis action for ejectment against petitioner prior to the institution of Civil Case No. 1990. The SPAs
added.) in his favor were respectively executed by respondents Annie de Castro and Felomina de Castro
Uban on 7 February 2002 and 14 March 2002; while Civil Case No. 1990 was filed by
respondent George de Castro on his own behalf and on behalf of his siblings only on 1 July
[21]
In the more recent case of Carandang v. Heirs of De Guzman, this Court declared 2002, or way after he was given by his siblings the authority to file said action. The Court quotes
that a co-owner is not even a necessary party to an action for ejectment, for complete relief with approval the following disquisition of the Court of Appeals:
can be afforded even in his absence, thus:
Moreover, records show that [herein respondent] George de Castro was
In sum, in suits to recover properties, all co-owners are real indeed authorized by his sisters Annie de Castro and Felomina de Castro
parties in interest. However, pursuant to Article 487 of the Civil Code and Uban, to prosecute the case in their behalf as shown by the Special Power
the relevant jurisprudence, any one of them may bring an action, any kind of Attorney dated February 7, 2002 and March 14, 2002. That these
of action for the recovery of co-owned properties. Therefore, only one of documents were appended only to [respondent George de Castros]
the co-owners, namely the co-owner who filed the suit for the recovery of position paper is of no moment considering that the authority conferred
the co-owned property, is an indispensable party thereto. The other co- therein was given prior to the institution of the complaint in July, 2002. x x
[24]
owners are not indispensable parties. They are not even necessary parties, x.
for a complete relief can be afforded in the suit even without their
participation, since the suit is presumed to have been filed for the benefit
of all co-owners. Respondent deceased Jesus de Castros failure to sign the Verification and Certificate of Non-
[25]
Forum Shopping may be excused since he already executed an Affidavit with respondent
George de Castro that he had personal knowledge of the filing of Civil Case No. 1990. In Torres
[26]
Moreover, respondents Annie de Castro and Felomina de Castro Uban each executed v. Specialized Packaging Development Corporation, the Court ruled that the personal signing
a Special Power of Attorney, giving respondent George de Castro the authority to initiate Civil of the verification requirement was deemed substantially complied with when, as in the
Case No. 1990. instant case, two out of 25 real parties-in-interest, who undoubtedly have sufficient knowledge
and belief to swear to the truth of the allegations in the petition, signed the verification SO ORDERED.
attached to it.
In the same vein, this Court is not persuaded by petitioners assertion that
respondents failure to allege the jurisdictional fact that there was unlawful withholding of the THIRD DIVISION
subject property was fatal to their cause of action.

It is apodictic that what determines the nature of an action as well as which court LIBRADA M. AQUINO, G.R. No. 153567
has jurisdiction over it are the allegations in the complaint and the character of the relief Petitioner, Present:
sought. In an unlawful detainer case, the defendants possession was originally lawful but
ceased to be so upon the expiration of his right to possess. Hence, the phrase unlawful YNARES-SANTIAGO, J.,
withholding has been held to imply possession on the part of defendant, which was legal in Chairperson,
the beginning, having no other source than a contract, express or implied, and which later AUSTRIA-MARTINEZ,
[27]
expired as a right and is being withheld by defendant. CHICO-NAZARIO,
- versus - NACHURA, and
[28]
In Barba v. Court of Appeals, the Court held that although the phrase unlawfully REYES, JJ.
withholding was not actually used by therein petitioner in her complaint, the Court held that
her allegations, nonetheless, amounted to an unlawful withholding of the subject property by
therein private respondents, because they continuously refused to vacate the premises even Promulgated:
after notice and demand.
[1]
ERNEST S. AURE , February 18, 2008
In the Petition at bar, respondents alleged in their Complaint that they are the Respondent.
registered owners of the subject property; the subject property was being occupied by the x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
petitioner pursuant to a monthly lease contract; petitioner refused to accede to respondents
demand for rental increase; the respondents sent petitioner a letter terminating the lease
agreement and demanding that petitioner vacate and turn over the possession of the subject
property to respondents; and despite such demand, petitioner failed to surrender the subject D E C I S I O N
[29]
property to respondents. The Complaint sufficiently alleges the unlawful withholding of the
subject property by petitioner, constitutive of unlawful detainer, although the exact words
unlawful withholding were not used. In an action for unlawful detainer, an allegation that the CHICO-NAZARIO, J.:
defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, without
[30]
necessarily employing the terminology of the law.
[2]
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Petitioners averment that the Court of Appeals should have dismissed respondents Court filed by petitioner Librada M. Aquino (Aquino), seeking the reversal and the setting aside
Petition in light of the failure of their counsel to attach the Official Receipt of his updated [3] [4]
of the Decision dated 17 October 2001 and the Resolution dated 8 May 2002 of the Court
payment of Integrated Bar of the Philippines (IBP) dues is now moot and academic, since of Appeals in CA-G.R. SP No. 63733. The appellate court, in its assailed Decision and Resolution,
respondents counsel has already duly complied therewith. It must be stressed that judicial [5]
reversed the Decision of the Regional Trial Court (RTC) of Quezon City, Branch 88, affirming
cases do not come and go through the portals of a court of law by the mere mandate of [6]
the Decision of the Metropolitan Trial Court (MeTC) of Quezon City, Branch 32, which
[31]
technicalities. Where a rigid application of the rules will result in a manifest failure or dismissed respondent Ernesto Aures (Aure) complaint for ejectment on the ground, inter alia,
[32]
miscarriage of justice, technicalities should be disregarded in order to resolve the case. of failure to comply with barangay conciliation proceedings.

Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the The subject of the present controversy is a parcel of land situated in Roxas District, Quezon
payment of back rentals, attorneys fees and cost of the suit. Respondents must be duly City, with an area of 449 square meters and covered by Transfer Certificate of Title (TCT) No.
indemnified for the loss of income from the subject property on account of petitioners refusal 205447 registered with the Registry of Deeds of Quezon City (subject property).
[7]
to vacate the leased premises.
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for ejectment
WHEREFORE, premises considered, the instant Petition is DENIED. The Decision against Aquino before the MeTC docketed as Civil Case No. 17450. In their Complaint, Aure
dated 19 September 2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA- and Aure Lending alleged that they acquired the subject property from Aquino and her
G.R. SP No. 90906 are hereby AFFIRMED in toto. Costs against petitioner. [8]
husband Manuel (spouses Aquino) by virtue of a Deed of Sale executed on 4 June 1996. Aure

claimed that after the spouses Aquino received substantial consideration for the sale of the determination thereof. Aure further asseverated that mere allegation of ownership should not
[9]
subject property, they refused to vacate the same. divest the MeTC of jurisdiction over the ejectment suit since jurisdiction over the subject
matter is conferred by law and should not depend on the defenses and objections raised by
[10]
In her Answer, Aquino countered that the Complaint in Civil Case No. 17450 lacks the parties. Finally, Aure contended that the MeTC erred in dismissing his Complaint with
cause of action for Aure and Aure Lending do not have any legal right over the subject prejudice on the ground of non-compliance with barangay conciliation process. He was not
property. Aquino admitted that there was a sale but such was governed by the Memorandum given the opportunity to rectify the procedural defect by going through
[11] [15]
of Agreement (MOA) signed by Aure. As stated in the MOA, Aure shall secure a loan from a the barangaymediation proceedings and, thereafter, refile the Complaint.
bank or financial institution in his own name using the subject property as collateral and turn On 17 October 2001, the Court of Appeals rendered a Decision, reversing the MeTC
over the proceeds thereof to the spouses Aquino. However, even after Aure successfully and RTC Decisions and remanding the case to the MeTC for further proceedings and final
secured a loan, the spouses Aquino did not receive the proceeds thereon or benefited determination of the substantive rights of the parties. The appellate court declared that the
therefrom. failure of Aure to subject the matter to barangayconciliation is not a jurisdictional flaw and it
will not affect the sufficiency of Aures Complaint since Aquino failed to seasonably raise such
On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in favor of issue in her Answer. The Court of Appeals further ruled that mere allegation of ownership does
Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending for non- not deprive the MeTC of jurisdiction over the ejectment case for jurisdiction over the subject
compliance with the barangay conciliation process, among other grounds. The MeTC observed matter is conferred by law and is determined by the allegations advanced by the plaintiff in his
that Aure and Aquino are residents of the same barangay but there is no showing that any complaint. Hence, mere assertion of ownership by the defendant in an ejectment case will not
attempt has been made to settle the case amicably at the barangay level. The MeTC further oust the MeTC of its summary jurisdiction over the same. The decretal part of the Court of
observed that Aure Lending was improperly included as plaintiff in Civil Case No. 17450 for it Appeals Decision reads:
did not stand to be injured or benefited by the suit. Finally, the MeTC ruled that since the
question of ownership was put in issue, the action was converted from a mere detainer suit to WHEREFORE, premises considered, the petition is hereby
one incapable of pecuniary estimation which properly rests within the original exclusive GRANTED - and the decisions of the trial courts below REVERSED and SET
jurisdiction of the RTC. The dispositive portion of the MeTC Decision reads: ASIDE. Let the records be remanded back to the court a quo for further
proceedings for an eventual decision of the substantive rights of the
[16]
WHEREFORE, premises considered, let this case be, as it is, disputants.
hereby ordered DISMISSED. [Aquinos] counterclaim is likewise
[12]
dismissed.
In a Resolution dated 8 May 2002, the Court of Appeals denied the Motion for
Reconsideration interposed by Aquino for it was merely a rehash of the arguments set forth in
On appeal, the RTC affirmed the dismissal of the Complaint on the same ground that her previous pleadings which were already considered and passed upon by the appellate court
the dispute was not brought before the Barangay Council for conciliation before it was filed in in its assailed Decision.
court. In a Decision dated 14 December 2000, the RTC stressed that the barangay conciliation
process is a conditio sine qua non for the filing of an ejectment complaint involving residents Aquino is now before this Court via the Petition at bar raising the following issues:
of the same barangay, and failure to comply therewith constitutes sufficient cause for the
dismissal of the action. The RTC likewise validated the ruling of the MeTC that the main issue I.
involved in Civil Case No. 17450 is incapable of pecuniary estimation and cognizable by the
RTC. Hence, the RTC ruled: WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY
CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT
WHEREFORE, finding no reversible error in the appealed WARRANTS THE DISMISSAL OF THE COMPLAINT.
[13]
judgment, it is hereby affirmed in its entirety.
II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF ITS
[14]
Aures Motion for Reconsideration was denied by the RTC in an Order dated 27 February JURISDICTION OVER AN EJECTMENT CASE.
2001.

Undaunted, Aure appealed the adverse RTC Decision with the Court of Appeals The barangay justice system was established primarily as a means of easing up the
arguing that the lower court erred in dismissing his Complaint for lack of cause of action. Aure congestion of cases in the judicial courts. This could be accomplished through a proceeding
asserted that misjoinder of parties was not a proper ground for dismissal of his Complaint and before the barangay courts which, according to the conceptor of the system, the late Chief
that the MeTC should have only ordered the exclusion of Aure Lending as plaintiff without Justice Fred Ruiz Castro, is essentially arbitration in character, and to make it truly effective, it
prejudice to the continuation of the proceedings in Civil Case No. 17450 until the final should also be compulsory. With this primary objective of the barangay justice system in mind,
it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508, (a) Where one party is the government or any subdivision or
otherwise known as the Katarungang Pambarangay Law, and the policy behind it would be instrumentality thereof;
[17]
better served if an out-of-court settlement of the case is reached voluntarily by the parties.
(b) Where one party is a public officer or employee, and the
The primordial objective of Presidential Decree No. 1508 is to reduce the number of court dispute relates to the performance of his official functions;
litigations and prevent the deterioration of the quality of justice which has been brought by
[18]
the indiscriminate filing of cases in the courts. To ensure this objective, Section 6 of (c) Offenses punishable by imprisonment exceeding one (1) year
[19]
Presidential Decree No. 1508 requires the parties to undergo a conciliation process before or a fine exceeding Five thousand pesos (P5,000.00);
the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint
[20]
in court subject to certain exceptions which are inapplicable to this case. The said section (d) Offenses where there is no private offended party;
[21]
has been declared compulsory in nature.
(e) Where the dispute involves real properties located in
Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160, different cities or municipalities unless the parties thereto agree to submit
otherwise known as The Local Government Code, which took effect on 1 January 1992. their differences to amicable settlement by an appropriate lupon;

The pertinent provisions of the Local Government Code making conciliation a (f) Disputes involving parties who actually reside in barangays
precondition to filing of complaints in court, read: of different cities or municipalities, except where such barangay units
adjoin each other and the parties thereto agree to submit their differences
SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in to amicable settlement by an appropriate lupon;
court. No complaint, petition, action, or proceeding involving any matter
within the authority of the lupon shall be filed or instituted directly in court (g) Such other classes of disputes which the President may
or any other government office for adjudication, unless there has been a determine in the interest of justice or upon the recommendation of the
confrontation between the parties before the lupon chairman or the Secretary of Justice.
pangkat, and that no conciliation or settlement has been reached
as certified by the lupon secretary or pangkat secretary as attested to by
the lupon chairman or pangkat chairman or unless the settlement has been There is no dispute herein that the present case was never referred to the Barangay
repudiated by the parties thereto. Lupon for conciliation before Aure and Aure Lending instituted Civil Case No. 17450. In fact, no
(b) Where parties may go directly to court. The parties may go directly to allegation of such barangay conciliation proceedings was made in Aure and Aure Lendings
court in the following instances: Complaint before the MeTC. The only issue to be resolved is whether non-recourse to
the barangay conciliation process is a jurisdictional flaw that warrants the dismissal of the
(1) Where the accused is under detention; ejectment suit filed with the MeTC.

(2) Where a person has otherwise been deprived of personal Aquino posits that failure to resort to barangay conciliation makes the action for
liberty calling for habeas corpus proceedings; ejectment premature and, hence, dismissible. She likewise avers that this objection was timely
raised during the pre-trial and even subsequently in her Position Paper submitted to the MeTC.
(3) Where actions are coupled with provisional remedies such as We do not agree.
preliminary injunction, attachment, delivery of personal property, and
support pendente lite; and It is true that the precise technical effect of failure to comply with the requirement
of Section 412 of the Local Government Code on barangay conciliation (previously contained
(4) Where the action may otherwise be barred by the statute of in Section 5 of Presidential Decree No. 1508) is much the same effect produced by non-
limitations. exhaustion of administrative remedies -- the complaint becomes afflicted with the vice of pre-
(c) Conciliation among members of indigenous cultural communities. The maturity; and the controversy there alleged is not ripe for judicial determination. The
[22]
customs and traditions of indigenous cultural communities shall be applied complaint becomes vulnerable to a motion to dismiss. Nevertheless, the conciliation
in settling disputes between members of the cultural communities. process is not a jurisdictional requirement, so that non-compliance therewith cannot affect
SEC. 408. Subject Matter for Amicable Settlement; Exception the jurisdiction which the court has otherwise acquired over the subject matter or over the
[23]
Therein. The lupon of each barangay shall have authority to bring together person of the defendant.
the parties actually residing in the same city or municipality for amicable
[24]
settlement of all disputes except: As enunciated in the landmark case of Royales v. Intermediate Appellate Court :

 Sec. 1. Defenses and objections not pleaded. Defenses and objections not
Ordinarily, non-compliance with the condition precedent pleaded either in a motion to dismiss or in the answer are deemed
prescribed by P.D. 1508 could affect the sufficiency of the plaintiff's cause waived. However, when it appears from the pleadings or the evidence on
of action and make his complaint vulnerable to dismissal on ground of lack record that the court has no jurisdiction over the subject matter, that there
of cause of action or prematurity; but the same would not prevent a court is another action pending between the same parties for the same cause,
of competent jurisdiction from exercising its power of adjudication over or that the action is barred by a prior judgment or by statute of limitations,
the case before it, where the defendants, as in this case, failed to object the court shall dismiss the claim. (Emphasis supplied.)
to such exercise of jurisdiction in their answer and even during the entire
proceedings a quo.
While the aforequoted provision applies to a pleading (specifically, an Answer) or a motion to
While petitioners could have prevented the trial court from dismiss, a similar or identical rule is provided for all other motions in Section 8 of Rule 15 of
exercising jurisdiction over the case by seasonably taking exception the same Rule which states:
thereto, they instead invoked the very same jurisdiction by filing an answer Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9,
and seeking affirmative relief from it. What is more, they participated in a motion attacking a pleading, order, judgment, or proceeding shall include
the trial of the case by cross-examining respondent Planas. Upon this all objections then available, and all objections not so included shall be
premise, petitioners cannot now be allowed belatedly to adopt an deemed waived.
inconsistent posture by attacking the jurisdiction of the court to which
they had submitted themselves voluntarily. x x x (Emphasis supplied.)
The spirit that surrounds the foregoing statutory norm is to require the party filing a pleading
or motion to raise all available exceptions for relief during the single opportunity so that single
[26]
In the case at bar, we similarly find that Aquino cannot be allowed to attack the jurisdiction of or multiple objections may be avoided. It is clear and categorical in Section 1, Rule 9 of the
the MeTC over Civil Case No. 17450 after having submitted herself voluntarily thereto. We Revised Rules of Court that failure to raise defenses and objections in a motion to dismiss or in
have scrupulously examined Aquinos Answer before the MeTC in Civil Case No. 17450 and an answer is deemed a waiver thereof; and basic is the rule in statutory construction that when
there is utter lack of any objection on her part to any deficiency in the complaint which could the law is clear and free from any doubt or ambiguity, there is no room for construction or
[27]
oust the MeTC of its jurisdcition. interpretation. As has been our consistent ruling, where the law speaks in clear and
categorical language, there is no occasion for interpretation; there is only room for
[28]
We thus quote with approval the disquisition of the Court of Appeals: application. Thus, although Aquinos defense of non-compliance with Presidential Decree
No. 1508 is meritorious, procedurally, such defense is no longer available for failure to plead
Moreover, the Court takes note that the defendant [Aquino] the same in the Answer as required by the omnibus motion rule.
herself did not raise in defense the aforesaid lack of conciliation
proceedings in her answer, which raises the exclusive affirmative defense Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The 1997 Rules of Civil
of simulation. By this acquiescence, defendant [Aquino] is deemed to have Procedure provide only three instances when the court may motu propriodismiss the claim,
waived such objection. As held in a case of similar circumstances, the and that is when the pleadings or evidence on the record show that (1) the court has no
failure of a defendant [Aquino] in an ejectment suit to specifically allege jurisdiction over the subject matter; (2) there is another cause of action pending between the
the fact that there was no compliance with the barangay conciliation same parties for the same cause; or (3) where the action is barred by a prior judgment or by a
[25]
procedure constitutes a waiver of that defense. x x x. statute of limitations. Thus, it is clear that a court may not motu proprio dismiss a case on the
ground of failure to comply with the requirement for barangay conciliation, this ground not
being among those mentioned for the dismissal by the trial court of a case on its own initiative.
By Aquinos failure to seasonably object to the deficiency in the Complaint, she is Aquino further argues that the issue of possession in the instant case cannot be resolved by
deemed to have already acquiesced or waived any defect attendant thereto. Consequently, the MeTC without first adjudicating the question of ownership, since the Deed of Sale vesting
Aquino cannot thereafter move for the dismissal of the ejectment suit for Aure and Aure Aure with the legal right over the subject property is simulated.
Lendings failure to resort to the barangay conciliation process, since she is already precluded
from doing so. The fact that Aquino raised such objection during the pre-trial and in her Again, we do not agree. Jurisdiction in ejectment cases is determined by the
Position Paper is of no moment, for the issue of non-recourse to barangay mediation allegations pleaded in the complaint. As long as these allegations demonstrate a cause of
proceedings should be impleaded in her Answer. action either for forcible entry or for unlawful detainer, the court acquires jurisdiction over the
subject matter. This principle holds, even if the facts proved during the trial do not support
As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: the cause of action thus alleged, in which instance the court -- after acquiring jurisdiction --
may resolve to dismiss the action for insufficiency of evidence.

 The necessary allegations in a Complaint for ejectment are set forth in Section 1, Rule As the law on forcible entry and unlawful detainer cases now stands, even
70 of the Rules of Court, which reads: where the defendant raises the question of ownership in his pleadings and
SECTION 1. Who may institute proceedings, and when. Subject to the the question of possession cannot be resolved without deciding the issue
provisions of the next succeeding section, a person deprived of the of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and
possession of any land or building by force, intimidation, threat, strategy, Municipal Circuit Trial Courts nevertheless have the undoubted
or stealth, or a lessor, vendor, vendee, or other person against whom the competence to resolve the issue of ownership albeit only to determine the
possession of any land or building is unlawfully withheld after the issue of possession.
expiration or termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or assigns of any x x x. The law, as revised, now provides instead that when the question
such lessor, vendor, vendee, or other person may at any time within one of possession cannot be resolved without deciding the issue of
(1) year after such unlawful deprivation or withholding of possession, bring ownership, the issue of ownership shall be resolved only to determine
an action in the proper Municipal Trial Court against the person or persons the issue of possession. On its face, the new Rule on Summary Procedure
unlawfully withholding or depriving of possession, or any person or was extended to include within the jurisdiction of the inferior courts
persons claiming under them, for the restitution of such possession, ejectment cases which likewise involve the issue of ownership. This does
together with damages and costs. not mean, however, that blanket authority to adjudicate the issue of
In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, alleged as ownership in ejectment suits has been thus conferred on the inferior
follows: courts.
2. [Aure and Aure Lending] became the owners of a house and
lot located at No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, At the outset, it must here be stressed that the resolution of this
Quezon City by virtue of a deed of absolute sale executed by [the spouses particular issue concerns and applies only to forcible entry and unlawful
Aquino] in favor of [Aure and Aure Lending] although registered in the detainer cases where the issue of possession is intimately intertwined with
name of x x x Ernesto S. Aure; title to the said property had already been the issue of ownership. It finds no proper application where it is otherwise,
issued in the name of [Aure] as shown by a transfer Certificate of Title , a that is, where ownership is not in issue, or where the principal and main
copy of which is hereto attached and made an integral part hereof as issue raised in the allegations of the complaint as well as the relief prayed
Annex A; for make out not a case for ejectment but one for recovery of ownership.

3. However, despite the sale thus transferring ownership of the subject
[32]
premises to [Aure and Aure Lending] as above-stated and consequently Apropos thereto, this Court ruled in Hilario v. Court of Appeals :
terminating [Aquinos] right of possession over the subject property,
[Aquino] together with her family, is continuously occupying the subject Thus, an adjudication made therein regarding the issue of
premises notwithstanding several demands made by [Aure and Aure ownership should be regarded as merely provisional and, therefore, would
Lending] against [Aquino] and all persons claiming right under her to not bar or prejudice an action between the same parties involving title to
vacate the subject premises and surrender possession thereof to [Aure and the land. The foregoing doctrine is a necessary consequence of the nature
Aure Lending] causing damage and prejudice to [Aure and Aure Lending] of forcible entry and unlawful detainer cases where the only issue to be
and making [Aquinos] occupancy together with those actually occupying settled is the physical or material possession over the real property, that
[29]
the subject premises claiming right under her, illegal. is, possession de facto and not possession de jure.


It can be inferred from the foregoing that Aure, together with Aure Lending, sought In other words, inferior courts are now conditionally vested with adjudicatory power over the
the possession of the subject property which was never surrendered by Aquino after the issue of title or ownership raised by the parties in an ejectment suit. These courts shall resolve
perfection of the Deed of Sale, which gives rise to a cause of action for an ejectment suit the question of ownership raised as an incident in an ejectment case where a determination
[33]
cognizable by the MeTC. Aures assertion of possession over the subject property is based on thereof is necessary for a proper and complete adjudication of the issue of possession.
his ownership thereof as evidenced by TCT No. 156802 bearing his name. That Aquino
impugned the validity of Aures title over the subject property and claimed that the Deed of WHEREFORE, premises considered, the instant Petition is DENIED. The Court of
[30]
Sale was simulated should not divest the MeTC of jurisdiction over the ejectment case. Appeals Decision dated 17 October 2001 and its Resolution dated 8 May 2002 in CA-G.R. SP
No. 63733 are hereby AFFIRMED. Costs against the petitioner.
As extensively discussed by the eminent jurist Florenz D. Regalado in Refugia v. Court of
[31]
Appeals : SO ORDERED.

 of the loan in full. However, the respondent still failed to pay, and on December 13, 2004,
the Lupong Tagapamayapa issued a certification to file action in court in favor of the
petitioner.
Republic of the Philippines
Supreme Court On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of
Manila Makati City, Branch 66, a complaint for Collection of Sum of Money. In his Answer with
[3]
Counterclaim, the respondent raised the defense of improper venue considering that the
petitioner was a resident of Bagumbong, Caloocan City while he lived in San Mateo, Rizal.

[4]
SECOND DIVISION After trial, on August 16, 2006, the MeTC rendered a Decision, which disposes as
follows:
CRISANTA ALCARAZ MIGUEL, G.R. No. 191336
Petitioner, WHEREFORE, premises considered[,] judgment is hereby rendered
Present: ordering defendant Jerry D. Montanez to pay plaintiff the following:

CARPIO, J., 1. The amount of [Php147,893.00] representing the
- versus - Chairperson, obligation with legal rate of interest from
PEREZ, February 1, 2002 which was the date of the
SERENO, loan maturity until the account is fully paid;
REYES, and
*
PERLAS-BERNABE, JJ. 2. The amount of Php10,000.00 as and by way of
attorneys fees; and the costs.
JERRY D. MONTANEZ, Promulgated:
[5]
Respondent. SO ORDERED.
January 25, 2012

x------------------------------------------------------------------------------------x On appeal to the Regional Trial Court (RTC) of Makati City, Branch 146, the
[6]
respondent raised the same issues cited in his Answer. In its March 14, 2007 Decision, the
DECISION RTC affirmed the MeTC Decision, disposing as follows:

REYES, J.: WHEREFORE, finding no cogent reason to disturb the findings of
the court a quo, the appeal is hereby DISMISSED, and the DECISION
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. appealed from is hereby AFFIRMED in its entirety for being in accordance
Petitioner Crisanta Alcaraz Miguel (Miguel) seeks the reversal and setting aside of the with law and evidence.
[1] [2]
September 17, 2009 Decision and February 11, 2010 Resolution of the Court of Appeals
[7]
(CA) in CA-G.R. SP No. 100544, entitled Jerry D. Montanez v. Crisanta Alcaraz Miguel. SO ORDERED.

Antecedent Facts
Dissatisfied, the respondent appealed to the CA raising two issues, namely, (1)
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One Hundred whether or not venue was improperly laid, and (2) whether or not the Kasunduang Pag-
Forty-Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00), payable in one (1) year, aayos effectively novated the loan agreement. On September 17, 2009, the CA rendered the
or until February 1, 2002, from the petitioner. The respondent gave as collateral therefor his assailed Decision, disposing as follows:
house and lot located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City.
WHEREFORE, premises considered, the petition is
Due to the respondents failure to pay the loan, the petitioner filed a complaint hereby GRANTED. The appealed Decision dated March 14, 2007 of the
against the respondent before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Regional Trial Court (RTC) of Makati City, Branch 146, is REVERSED and SET
Rizal. The parties entered into a Kasunduang Pag-aayos wherein the respondent agreed to pay ASIDE. A new judgment is entered dismissing respondents complaint for
his loan in installments in the amount of Two Thousand Pesos (P2,000.00) per month, and in collection of sum of money, without prejudice to her right to file the
the event the house and lot given as collateral is sold, the respondent would settle the balance necessary action to enforce the Kasunduang Pag-aayos.
 Perforce, the complaint for
[8]
SO ORDERED. collection of sum of money is the
proper remedy.

Anent the issue of whether or not there is novation of the loan
contract, the CA ruled in the negative. It ratiocinated as follows: The petitioner contends that the CA erred in ruling that she should have followed
the procedure for enforcement of the amicable settlement as provided in the Revised
Judging from the terms of the Kasunduang Pag-aayos, it is clear Katarungang Pambarangay Law, instead of filing a collection case. The petitioner points out
that no novation of the old obligation has taken place. Contrary to that the cause of action did not arise from the Kasunduang Pag-aayos but on the respondents
[15]
petitioners assertion, there was no reduction of the term or period breach of the original loan agreement.
originally stipulated. The original period in the first agreement is one (1)
year to be counted from February 1, 2001, or until January 31, 2002. When This Court agrees with the petitioner.
the complaint was filed before the barangay on February 2003, the period
of the original agreement had long expired without compliance on the part It is true that an amicable settlement reached at the barangay conciliation proceedings, like
of petitioner. Hence, there was nothing to reduce or extend. There was the Kasunduang Pag-aayos in this case, is binding between the contracting parties and, upon
only a change in the terms of payment which is not incompatible with the its perfection, is immediately executory insofar as it is not contrary to law, good morals, good
[16]
old agreement. In other words, the Kasunduang Pag-aayos merely customs, public order and public policy. This is in accord with the broad precept of Article
[9]
supplemented the old agreement. 2037 of the Civil Code, viz:

A compromise has upon the parties the effect and authority
The CA went on saying that since the parties entered into a Kasunduang Pag- of res judicata; but there shall be no execution except in compliance with
aayos before the Lupon ng Barangay, such settlement has the force and effect of a court a judicial compromise.
judgment, which may be enforced by execution within six (6) months from the date of
settlement by the Lupon ng Barangay, or by court action after the lapse of such
[10]
time. Considering that more than six (6) months had elapsed from the date of settlement, Being a by-product of mutual concessions and good faith of the parties, an amicable
[17]
the CA ruled that the remedy of the petitioner was to file an action for the execution of settlement has the force and effect of res judicata even if not judicially approved. It
[11]
the Kasunduang Pag-aayos in court and not for collection of sum of money. Consequently, transcends being a mere contract binding only upon the parties thereto, and is akin to a
[12] [18]
the CA deemed it unnecessary to resolve the issue on venue. judgment that is subject to execution in accordance with the Rules. Thus, under Section 417
[19]
of the Local Government Code, such amicable settlement or arbitration award may be
The petitioner now comes to this Court. enforced by execution by the Barangay Lupon within six (6) months from the date of
settlement, or by filing an action to enforce such settlement in the appropriate city or municipal
Issues court, if beyond the six-month period.

(1) Whether or not a complaint for sum of money is the proper remedy for the Under the first remedy, the proceedings are covered by the Local Government Code
[13]
petitioner, notwithstanding the Kasunduang Pag-aayos; and and the Katarungang Pambarangay Implementing Rules and Regulations. The Punong
Barangay is called upon during the hearing to determine solely the fact of non-compliance of
the terms of the settlement and to give the defaulting party another chance at voluntarily
(2) Whether or not the CA should have decided the case on the merits complying with his obligation under the settlement. Under the second remedy, the proceedings
[14]
rather than remand the case for the enforcement of the Kasunduang Pag-aayos. are governed by the Rules of Court, as amended. The cause of action is the amicable settlement
[20]
itself, which, by operation of law, has the force and effect of a final judgment.
Our Ruling
It must be emphasized, however, that enforcement by execution of the amicable
Because the respondent failed to settlement, either under the first or the second remedy, is only applicable if the contracting
comply with the terms of parties have not repudiated such settlement within ten (10) days from the date thereof in
the Kasunduang Pag-aayos, said accordance with Section 416 of the Local Government Code. If the amicable settlement is
agreement is deemed rescinded repudiated by one party, either expressly or impliedly, the other party has two options, namely,
pursuant to Article 2041 of the to enforce the compromise in accordance with the Local Government Code or Rules of Court
New Civil Code and the petitioner as the case may be, or to consider it rescinded and insist upon his original demand. This is in
can insist on his original demand.
accord with Article 2041 of the Civil Code, which qualifies the broad application of Article clearly makes the procedure provided in the Revised Katarungang
2037, viz: Pambarangay Law directory or merely optional in nature.

If one of the parties fails or refuses to abide by the Thus, although the "Kasunduan" executed by petitioner and
compromise, the other party may either enforce the compromise or respondent before the Office of the Barangay Captain had the force and
regard it as rescinded and insist upon his original demand. effect of a final judgment of a court, petitioner's non-compliance paved
the way for the application of Art. 2041 under which respondent may
either enforce the compromise, following the procedure laid out in
[21]
In the case of Leonor v. Sycip, the Supreme Court (SC) had the occasion to explain the Revised Katarungang Pambarangay Law, or regard it as rescinded
this provision of law. It ruled that Article 2041 does not require an action for rescission, and and insist upon his original demand. Respondent chose the latter option
the aggrieved party, by the breach of compromise agreement, may just consider it already when he instituted Civil Case No. 5139-V-97 for recovery of unrealized
rescinded, to wit: profits and reimbursement of advance rentals, moral and exemplary
damages, and attorney's fees. Respondent was not limited to
It is worthy of notice, in this connection, that, unlike Article 2039 claiming P150,000.00 because although he agreed to the amount in the
of the same Code, which speaks of "a cause of annulment or rescission of "Kasunduan," it is axiomatic that a compromise settlement is not an
the compromise" and provides that "the compromise may be annulled or admission of liability but merely a recognition that there is a dispute and
rescinded" for the cause therein specified, thus suggesting an action for an impending litigation which the parties hope to prevent by making
annulment or rescission, said Article 2041 confers upon the party reciprocal concessions, adjusting their respective positions in the hope of
concerned, not a "cause" for rescission, or the right to "demand" the gaining balanced by the danger of losing. Under the "Kasunduan,"
rescission of a compromise, but the authority, not only to "regard it as respondent was only required to execute a waiver of all possible claims
rescinded", but, also, to "insist upon his original demand". The language arising from the lease contract if petitioner fully complies with his
of this Article 2041, particularly when contrasted with that of Article obligations thereunder. It is undisputed that herein petitioner did
[24]
2039, denotes that no action for rescission is required in said Article 2041, not. (emphasis supplied and citations omitted)
and that the party aggrieved by the breach of a compromise agreement
may, if he chooses, bring the suit contemplated or involved in his original
demand, as if there had never been any compromise agreement, without In the instant case, the respondent did not comply with the terms and conditions of
bringing an action for rescission thereof. He need not seek a judicial the Kasunduang Pag-aayos. Such non-compliance may be construed as repudiation because it
declaration of rescission, for he may "regard" the compromise denotes that the respondent did not intend to be bound by the terms thereof, thereby negating
[22]
agreement already "rescinded". (emphasis supplied) the very purpose for which it was executed. Perforce, the petitioner has the option either to
enforce the Kasunduang Pag-aayos, or to regard it as rescinded and insist upon his original
demand, in accordance with the provision of Article 2041 of the Civil Code. Having instituted
[23]
As so well stated in the case of Chavez v. Court of Appeals, a party's non- an action for collection of sum of money, the petitioner obviously chose to rescind
compliance with the amicable settlement paved the way for the application of Article 2041 the Kasunduang Pag-aayos. As such, it is error on the part of the CA to rule that enforcement
under which the other party may either enforce the compromise, following the procedure laid by execution of said agreement is the appropriate remedy under the circumstances.
out in the Revised Katarungang Pambarangay Law, or consider it as rescinded and insist upon
his original demand. To quote: Considering that the Kasunduang
Pag-aayos is deemed rescinded
In the case at bar, the Revised Katarungang Pambarangay by the non-compliance of the
Law provides for a two-tiered mode of enforcement of an amicable respondent of the terms thereof,
settlement, to wit: (a) by execution by the Punong Barangay which is quasi- remanding the case to the trial
judicial and summary in nature on mere motion of the party entitled court for the enforcement of said
thereto; and (b) an action in regular form, which remedy is judicial. agreement is clearly
However, the mode of enforcement does not rule out the right of unwarranted.
rescission under Art. 2041 of the Civil Code. The availability of the right of
rescission is apparent from the wording of Sec. 417 itself which provides
that the amicable settlement "may" be enforced by execution by The petitioner avers that the CA erred in remanding the case to the
the lupon within six (6) months from its date or by action in the appropriate trial court for the enforcement of the Kasunduang Pag-aayos as it prolonged the process,
[25]
city or municipal court, if beyond that period. The use of the word "may" thereby putting off the case in an indefinite pendency. Thus, the petitioner insists that she
should be allowed to ventilate her rights before this Court and not to repeat the same
proceedings just to comply with the enforcement of the Kasunduang Pag-aayos, in order to denying petitioner Edwin N. Tribianas (Edwin) motion to dismiss the petition for habeas
[26]
finally enforce her right to payment. corpus filed against him by respondent Lourdes Tribiana (Lourdes).

The CA took off on the wrong premise that enforcement of the Kasunduang Pag-
aayos is the proper remedy, and therefore erred in its conclusion that the case should be
remanded to the trial court. The fact that the petitioner opted to rescind the Kasunduang Pag- Antecedent Facts
aayos means that she is insisting upon the undertaking of the respondent under the original
loan contract. Thus, the CA should have decided the case on the merits, as an appeal before it,
Edwin and Lourdes are husband and wife who have lived together since 1996 but
and not prolong the determination of the issues by remanding it to the trial court. Pertinently,
formalized their union only on 28 October 1997. On 30 April 1998, Lourdes filed a petition
evidence abounds that the respondent has failed to comply with his loan obligation. In fact,
for habeas corpus before the RTC claiming that Edwin left their conjugal home with their
the Kasunduang Pag-aayos is the well nigh incontrovertible proof of the respondents
daughter, Khriza Mae Tribiana (Khriza). Edwin has since deprived Lourdes of lawful custody of
indebtedness with the petitioner as it was executed precisely to give the respondent a second
Khriza who was then only one (1) year and four (4) months of age. Later, it turned out that
chance to make good on his undertaking. And since the respondent still reneged in paying his
Khriza was being held by Edwins mother, Rosalina Tribiana (Rosalina). Edwin moved to dismiss
indebtedness, justice demands that he must be held answerable therefor.
Lourdes petition on the ground that the petition failed to allege that earnest efforts at a

compromise were made before its filing as required by Article 151 of the Family Code.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals
is SET ASIDE and the Decision of the Regional Trial Court, Branch 146, Makati City, dated March On 20 May 1998, Lourdes filed her opposition to Edwins motion to dismiss claiming that
14, 2007 is REINSTATED. there were prior efforts at a compromise, which failed. Lourdes attached to her opposition a
copy of the Certification to File Action from their Barangay dated 1 May 1998.
SO ORDERED.
On 18 May 1998, the RTC denied Edwins motion to dismiss and reiterated a previous
order requiring Edwin and his mother, Rosalina to bring Khriza before the RTC. Upon denial of
Article 151 of the Family Code provides as follows: No suit between members of the his motion for reconsideration, Edwin filed with the Court of Appeals a petition for prohibition
same family shall prosper unless it should appear from the verified complaint or petition that and certiorari under Rule 65 of the Rules of Civil Procedure. The appellate court denied Edwins
earnest efforts toward a compromise have been made, but that the same have failed. petition on 2 July 1998. The appellate court also denied Edwins motion for reconsideration.

Hence, this petition.
FIRST DIVISION

The Rulings of the RTC and the Court of Appeals

[G.R. No. 137359. September 13, 2004]

The RTC denied Edwins motion to dismiss on the ground that the Certification to File
Action attached by Lourdes to her opposition clearly indicates that the parties attempted to
reach a compromise but failed.
EDWIN N. TRIBIANA, petitioner, vs. LOURDES M. TRIBIANA, respondent.
The Court of Appeals upheld the ruling of the RTC and added that under Section 412 (b)
(2) of the Local Government Code, conciliation proceedings before the barangay are not
D E C I S I O N required in petitions for habeas corpus.
CARPIO, J.:

The Issue
The Case
Edwin seeks a reversal and raises the following issue for resolution:
[1]
This petition for review on certiorari seeks to reverse the Court of Appeals
[2]
Resolutions dated 2 July 1998 and 18 January 1999 in CA-G.R. SP No. 48049. The Court of
[3]
Appeals affirmed the Order of the Regional Trial Court, Branch 19, Bacoor, Cavite (RTC),
 WHETHER THE TRIAL AND APPELLATE COURTS SHOULD HAVE DISMISSED THE corpus. We have held that in cases where the defect consists of the failure to state compliance
PETITION FOR HABEAS CORPUS ON THE GROUND OF FAILURE TO COMPLY WITH with a condition precedent, the trial court should order the amendment of the
[10]
THE CONDITION PRECEDENT UNDER ARTICLE 151 OF THE FAMILY CODE. complaint. Courts should be liberal in allowing amendments to pleadings to avoid
[11]
multiplicity of suits and to present the real controversies between the parties.

Moreover, in a habeas corpus proceeding involving the welfare and custody of a child of
The Ruling of the Court tender age, the paramount concern is to resolve immediately the issue of who has legal
custody of the child. Technicalities should not stand in the way of giving such child of tender
[12]
age full protection. This rule has sound statutory basis in Article 213 of the Family Code,
The petition lacks merit. which states, No child under seven years of age shall be separated from the mother unless the
court finds compelling reasons to order otherwise. In this case, the child (Khriza) was only one
Edwin argues that Lourdes failure to indicate in her petition for habeas corpus that the
year and four months when taken away from the mother.
parties exerted prior efforts to reach a compromise and that such efforts failed is a ground for
[4]
the petitions dismissal under Section 1(j), Rule 16 of the 1997 Rules of Civil Procedure. Edwin The Court of Appeals dismissed Edwins contentions by citing as an additional ground the
maintains that under Article 151 of the Family Code, an earnest effort to reach a compromise exception in Section 412 (b) (2) of the Local Government Code (LGC) on barangay conciliation,
is an indispensable condition precedent. Article 151 provides: which states:

No suit between members of the same family shall prosper unless it should appear from the (b) Where the parties may go directly to court. the parties may go directly to court in the
verified complaint or petition that earnest efforts toward a compromise have been made, following instances:
but that the same have failed. If it is shown that no such efforts were in fact made, the case
must be dismissed. xxx

This rule shall not apply to cases which may not be the subject of compromise under the Civil 2) Where a person has otherwise been deprived of personal liberty calling
Code. for habeas corpus proceedings;

Edwins arguments do not persuade us. xxx.

It is true that the petition for habeas corpus filed by Lourdes failed to allege that she
resorted to compromise proceedings before filing the petition. However, in her opposition to Under Rule 102 of the 1997 Rules of Civil Procedure, a party may resort to a habeas
Edwins motion to dismiss, Lourdes attached a Barangay Certification to File Action dated 1 May corpus proceeding in two instances. The first is when any person is deprived of liberty either
1998. Edwin does not dispute the authenticity of the Barangay Certification and its contents. through illegal confinement or through detention. The second instance is when custody of any
This effectively established that the parties tried to compromise but were unsuccessful in their person is withheld from the person entitled to such custody. The most common case falling
efforts. However, Edwin would have the petition dismissed despite the existence of the under the second instance involves children who are taken away from a parent by another
Barangay Certification, which he does not even dispute. parent or by a relative. The case filed by Lourdes falls under this category.

Evidently, Lourdes has complied with the condition precedent under Article 151 of the The barangay conciliation requirement in Section 412 of the LGC does not apply
Family Code. A dismissal under Section 1(j) of Rule 16 is warranted only if there is a failure to to habeas corpus proceedings where a person is deprived of personal liberty. In such a case,
comply with a condition precedent. Given that the alleged defect is a mere failure to Section 412 expressly authorizes the parties to go directly to court without need of any
allege compliance with a condition precedent, the proper solution is not an outright dismissal conciliation proceedings. There is deprivation of personal liberty warranting a petition
of the action, but an amendment under Section 1 of Rule 10 of the 1997 Rules of Civil for habeas corpus where the rightful custody of any person is withheld from the person
[5] [13]
Procedure. It would have been a different matter if Edwin had asserted that no efforts to entitled thereto. Thus, the Court of Appeals did not err when it dismissed Edwins
arrive at a compromise have been made at all. contentions on the additional ground that Section 412 exempts petitions for habeas
corpus from the barangay conciliation requirement.
In addition, the failure of a party to comply with a condition precedent is not a
[6]
jurisdictional defect. Such defect does not place the controversy beyond the courts power to The petition for certiorari filed by Edwin questioning the RTCs denial of his motion to
resolve. If a party fails to raise such defect in a motion to dismiss, such defect is deemed dismiss merely states a blanket allegation of grave abuse of discretion. An order denying a
[7] [14]
waived. Such defect is curable by amendment as a matter of right without leave of court, if motion to dismiss is interlocutory and is not a proper subject of a petition for certiorari. Even
[8]
made before the filing of a responsive pleading. A motion to dismiss is not a responsive in the face of an error of judgment on the part of a judge denying the motion to dismiss,
[9] [15]
pleading. More importantly, an amendment alleging compliance with a condition precedent certiorari will not lie. Certiorari is not a remedy to correct errors of procedure. The proper
is not a jurisdictional matter. Neither does it alter the cause of action of a petition for habeas remedy against an order denying a motion to dismiss is to file an answer and interpose as
affirmative defenses the objections raised in the motion to dismiss. It is only in the presence
of extraordinary circumstances evincing a patent disregard of justice and fair play where resort
[16]
to a petition for certiorari is proper. D E C I S I O N

The litigation of substantive issues must not rest on a prolonged contest on AUSTRIA-MARTINEZ, J.:
technicalities. This is precisely what has happened in this case. The circumstances are devoid
of any hint of the slightest abuse of discretion by the RTC or the Court of Appeals. A party must
not be allowed to delay litigation by the sheer expediency of filing a petition for certiorari Before the Court is a petition for certiorari under Rule 65 of the Rules of Court seeking to nullify
under Rule 65 based on scant allegations of grave abuse. More importantly, any matter [1]
the Orders of the Regional Trial Court (RTC) of Caloocan City, Branch 122, dated November
involving the custody of a child of tender age deserves immediate resolution to protect the [2] [3]
8, 2001 and May 7, 2002 denying herein petitioners Motion to Dismiss and Motion for
childs welfare. Partial Reconsideration, respectively.
WHEREFORE, we DISMISS the instant petition for lack of merit. We AFFIRM the The antecedent facts are as follows:
Resolutions of the Court of Appeals dated 2 July 1998 and 18 January 1999 in CA-G.R. SP No.
48049. The Regional Trial Court, Branch 19, Bacoor, Cavite is ordered to act with dispatch in On November 24, 2000, Alberto Moreno (private respondent) filed with the RTC of Caloocan
resolving the petition for habeas corpus pending before it. This decision is IMMEDIATELY City a complaint against Hiyas Savings and Loan Bank, Inc. (petitioner), his wife Remedios, the
EXECUTORY. spouses Felipe and Maria Owe and the Register of Deeds of Caloocan City for cancellation of
mortgage contending that he did not secure any loan from petitioner, nor did he sign or
SO ORDERED. execute any contract of mortgage in its favor; that his wife, acting in conspiracy with Hiyas and
the spouses Owe, who were the ones that benefited from the loan, made it appear that he
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur. signed the contract of mortgage; that he could not have executed the said contract because
he was then working abroad.
[4]

Republic of the Philippines On May 17, 2001, petitioner filed a Motion to Dismiss on the ground that private
Supreme Court respondent failed to comply with Article 151 of the Family Code wherein it is provided that no
Manila suit between members of the same family shall prosper unless it should appear from the
verified complaint or petition that earnest efforts toward a compromise have been made, but
that the same have failed. Petitioner contends that since the complaint does not contain any
FIRST DIVISION fact or averment that earnest efforts toward a compromise had been made prior to its
institution, then the complaint should be dismissed for lack of cause of action.
[5]

HIYAS SAVINGS and LOAN G.R. NO. 154132 Private respondent filed his Comment on the Motion to Dismiss with Motion to Strike
BANK, INC. Out and to Declare Defendants in Default. He argues that in cases where one of the parties is
Petitioner, not a member of the same family as contemplated under Article 150 of the Family Code, failure
Present: to allege in the complaint that earnest efforts toward a compromise had been made by the
plaintiff before filing the complaint is not a ground for a motion to dismiss. Alberto asserts that
PANGANIBAN, C.J. since three of the party-defendants are not members of his family the ground relied upon
(Chairperson) by Hiyas in its Motion to Dismiss is inapplicable and unavailable. Alberto also prayed that
YNARES-SANTIAGO, defendants be declared in default for their failure to file their answer on time.
[6]
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., and Petitioner filed its Reply to the Comment with Opposition to the Motion to Strike
CHICO-NAZARIO, JJ. [7]
and to Declare Defendants in Default. Private respondent, in turn, filed his Rejoinder.
[8]

HON. EDMUNDO T. ACUA, On November 8, 2001, the RTC issued the first of its assailed Orders denying the
in his capacity as Pairing Judge Motion to Dismiss, thus:
of Regional Trial Court, Branch
122, Caloocan City, and ALBERTO The court agrees with plaintiff that earnest efforts towards a
MORENO, Promulgated: compromise is not required before the filing of the instant case considering
Respondent. August 31, 2006 that the above-entitled case involves parties who are strangers to the
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x family. As aptly pointed out in the cases cited by plaintiff, Magbaleta v.
 G[o]nong, L-44903, April 25, 1977 and Mendez v. [B]iangon, L-32159, At the outset, the Court notes that the instant Petition for Certiorari should have
October 28, 1977, if one of the parties is a stranger, failure to allege in the been filed with the Court of Appeals (CA) and not with this Court pursuant to the doctrine of
complaint that earnest efforts towards a compromise had been made by hierarchy of courts. Reiterating the established policy for the strict observance of this doctrine,
[16]
plaintiff before filing the complaint, is not a ground for motion to dismiss. this Court held in Heirs of Bertuldo Hinog v. Melicor that:

Insofar as plaintiffs prayer for declaration of default against
defendants, the same is meritorious only with respect to defendants Although the Supreme Court, Court of Appeals and the Regional
Remedios Moreno and the Register of Deeds of Kaloocan City. A Trial Courts have concurrent jurisdiction to issue writs of certiorari,
declaration of default against defendant bank is not proper considering prohibition, mandamus, quo warranto, habeas corpus and injunction, such
that the filing of the Motion to Dismiss by said defendant operates to stop concurrence does not give the petitioner unrestricted freedom of choice
the running of the period within which to file the required Answer.
[9] of court forum. As we stated in People v. Cuaresma:

[10]
Petitioner filed a Motion for Partial Reconsideration. Private respondent filed his
[11] [12]
Comment, after which petitioner filed its Reply. Thereafter, private respondent filed his This Court's original jurisdiction to issue
[13]
Rejoinder. writs of certiorari is not exclusive. It is shared by this
Court with Regional Trial Courts and with the Court of
On May 7, 2002, the RTC issued the second assailed Order denying petitioners Appeals. This concurrence of jurisdiction is not,
Motion for Partial Reconsideration. The trial court ruled: however, to be taken as according to parties seeking
Reiterating the resolution of the court, dated November 8, 2001, any of the writs an absolute, unrestrained freedom of
considering that the above-entitled case involves parties who are strangers choice of the court to which application therefor will
to the family, failure to allege in the complaint that earnest efforts towards be directed. There is after all a hierarchy of
a compromise were made by plaintiff, is not a ground for a Motion to courts. That hierarchy is determinative of the venue
Dismiss. of appeals, and also serves as a general determinant
of the appropriate forum for petitions for the
Additionally, the court agrees with plaintiff that inasmuch as it is extraordinary writs. A becoming regard for that
defendant Remedios Moreno who stands to be benefited by Art. 151 of judicial hierarchy most certainly indicates that
the Family Code, being a member of the same family as that of plaintiff, petitions for the issuance of extraordinary writs
[14]
only she may invoke said Art. 151. against first level (inferior) courts should be filed with
the Regional Trial Court, and those against the latter,
x x x with the Court of Appeals. A direct invocation of the
Supreme Courts original jurisdiction to issue these
Hence, the instant Petition for Certiorari on the following grounds: writs should be allowed only when there are special
and important reasons therefor, clearly and
I. Public respondent committed grave abuse of discretion specifically set out in the petition. This is [an]
amounting to lack or in excess of jurisdiction when he ruled that lack of established policy. It is a policy necessary to prevent
earnest efforts toward a compromise is not a ground for a motion to inordinate demands upon the Courts time and
dismiss in suits between husband and wife when other parties who are attention which are better devoted to those matters
strangers to the family are involved in the suit. Corollarily, public within its exclusive jurisdiction, and to prevent further
respondent committed grave abuse of discretion amounting to lack or in over-crowding of the Courts docket.
excess of jurisdiction when he applied the decision in the case
of Magbaleta v. Gonong instead of the ruling in the case of De Guzman v.
Genato. The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and
II. Public respondent committed grave abuse of discretion resultant delay, intended or otherwise, in the adjudication of cases, which
amounting to lack or in excess of jurisdiction when he ruled that a party in some instances had to be remanded or referred to the lower court as
who is a stranger to the family of the litigants could not invoke lack of the proper forum under the rules of procedure, or as better equipped to
earnest efforts toward a compromise as a ground for the dismissal of the resolve the issues because this Court is not a trier of facts.
[15]
complaint.

 Thus, this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and The Code Commission that drafted Article 222 of the Civil Code from which Article 151 of the
exceptional and compelling circumstances, such as cases of national Family Code was taken explains:
interest and of serious implications, justify the availment of the
extraordinary remedy of writ of certiorari, calling for the exercise of its [I]t is difficult to imagine a sadder and more tragic spectacle than a
primary jurisdiction. Exceptional and compelling circumstances were held litigation between members of the same family. It is necessary that every
present in the following cases: (a) Chavez vs. Romulo on citizens right to effort should be made toward a compromise before a litigation is allowed
bear arms; (b) Government of the United States of America vs. Purganan on to breed hate and passion in the family. It is known that a lawsuit between
[21]
bail in extradition proceedings; (c) Commission on Elections vs. Quijano- close relatives generates deeper bitterness than between strangers.
Padilla on government contract involving modernization and In Magbaleta, the case involved brothers and a stranger to the family, the alleged owner of
computerization of voters registration list; (d) Buklod ng Kawaning EIIB vs. the subject property. The Court, taking into consideration the explanation made by the Code
Zamora on status and existence of a public office; and (e) Fortich vs. Commision in its report, ruled that:
Corona on the so-called Win-Win Resolution of the Office of the President
[17]
which modified the approval of the conversion to agro-industrial area. [T]hese considerations do not, however, weigh enough to make it
imperative that such efforts to compromise should be a jurisdictional pre-
requisite for the maintenance of an action whenever a stranger to the
In the present case, petitioner failed to advance a satisfactory explanation as to its failure to family is a party thereto, whether as a necessary or indispensable one. It is
comply with the principle of judicial hierarchy. There is no reason why the instant petition not always that one who is alien to the family would be willing to suffer the
could not have been brought before the CA. On this basis, the instant petition should be inconvenience of, much less relish, the delay and the complications that
dismissed. wranglings between or among relatives more often than not entail.
Besides, it is neither practical nor fair that the determination of the rights
And even if this Court passes upon the substantial issues raised by petitioner, the of a stranger to the family who just happened to have innocently acquired
instant petition likewise fails for lack of merit. some kind of interest in any right or property disputed among its members
should be made to depend on the way the latter would settle their
Restating its arguments in its Motion for Partial Reconsideration, petitioner argues differences among themselves. x x x.
[22]
[18]
that what is applicable to the present case is the Courts decision in De Guzman v. Genato and
[19]
not in Magbaleta v. Gonong, the former being a case involving a husband and wife while Hence, once a stranger becomes a party to a suit involving members of the same family, the
the latter is between brothers. law no longer makes it a condition precedent that earnest efforts be made towards a
compromise before the action can prosper.
The Court is not persuaded.
In the subsequent case of De Guzman, the case involved spouses and the alleged paramour of
Article 151 of the Family Code provides as follows: the wife. The Court ruled that due to the efforts exerted by the husband, through the Philippine
Constabulary, to confront the wife, there was substantial compliance with the law, thereby
No suit between members of the same family shall prosper implying that even in the presence of a party who is not a family member, the requirements
unless it should appear from the verified complaint or petition that earnest that earnest efforts towards a compromise have been exerted must be complied with,
efforts toward a compromise have been made, but that the same have pursuant to Article 222 of the Civil Code, now Article 151 of the Family Code.
failed. If it is shown that no such efforts were in fact made, the case must
be dismissed. While De Guzman was decided after Magbaleta, the principle enunciated in the Magbaleta is
the one that now prevails because it is reiterated in the subsequent cases of Gonzales v.
This rule shall not apply to cases which may not be the subject of [23] [24]
Lopez, Esquivias v. Court of Appeals, Spouses Hontiveros v. Regional Trial Court, Branch
compromise under the Civil Code. [25] [26]
25, Iloilo City, and the most recent case of Martinez v. Martinez. Thus, Article 151 of the
Family Code applies to cover when the suit is exclusively between or among family members.
Article 222 of the Civil Code from which Article 151 of the Family Code was taken, essentially
contains the same provisions, to wit: The Court finds no cogent reason why the ruling in Magbaleta as well as in all of the
aforementioned cases should not equally apply to suits involving husband and wife.
No suit shall be filed or maintained between members of the
same family unless it should appear that earnest efforts toward a Petitioner makes much of the fact that the present case involves a husband and his
compromise have been made, but that the same have failed, subject to the wife while Magbaleta is a case between brothers. However, the Court finds no specific, unique,
[20]
limitations in Article 2035. or special circumstance that would make the ruling in Magbaleta as well as in the
abovementioned cases inapplicable to suits involving a husband and his wife, as in the present HEIRS OF DR. MARIANO FAVIS SR. represented by their co-heirs and Attorneys-in-Fact
case. In the first place, Article 151 of the Family Code and Article 222 of the Civil Code are clear MERCEDES A. FAVIS and NELLY FAVIS- VILLAFUERTE, Petitioners,
that the provisions therein apply to suits involving members of the same family as vs.
contemplated under Article 150 of the Family Code, to wit: JUANA GONZALES, her son MARIANO G. FAVIS, MA. THERESA JOANA D. FAVIS, JAMES
MARK D. FAVIS, all minors represented herein by their parents SPS. MARIANO FAVIS and
ART. 150. Family relations include those: LARCELITA D. FAVIS,Respondents.

(1) Between husband and wife; D E C I S I O N
(2) Between parents and children;
(3) Among other ascendants and descendants; and
PEREZ, J.:
(4) Among brothers and sisters, whether of the full or
half blood. 1
Before this Court is a petition for review assailing the 10 April 2008 Decision and 7 January
2
and Article 217 of the Civil Code, to wit: 2009 Resolution of the Court of Appeals in CA-G.R. CV No. 86497 dismissing petitioners’
complaint for annulment of the Deed of Donation for failure to exert earnest efforts towards
ART. 217. Family relations shall include those: a compromise.

(1) Between husband and wife; Dr. Mariano Favis, Sr. (Dr. Favis) was married to Capitolina Aguilar (Capitolina) with whom he
(2) Between parent and child; had seven children named Purita A. Favis, Reynaldo Favis, Consolacion Favis-Queliza, Mariano
(3) Among other ascendants and their descendants; A. Favis, Jr., Esther F. Filart, Mercedes A. Favis, and Nelly Favis-Villafuerte. When Capitolina
(4) Among brothers and sisters. died in March 1944, Dr. Favis took Juana Gonzales (Juana) as his common-law wife with
whom he sired one child, Mariano G. Favis (Mariano). When Dr. Favis and Juana got married
in 1974, Dr. Favis executed an affidavit acknowledging Mariano as one of his legitimate
Petitioner also contends that the trial court committed grave abuse of discretion when it ruled children. Mariano is married to Larcelita D. Favis (Larcelita), with whom he has four children,
that petitioner, not being a member of the same family as respondent, may not invoke the named Ma. Theresa Joana D. Favis, Ma. Cristina D. Favis, James Mark D. Favis and Ma. Thea
provisions of Article 151 of the Family Code. D. Favis.

Suffice it to say that since the Court has ruled that the requirement under Article 151 of the Dr. Favis died intestate on 29 July 1995 leaving the following properties:
Family Code is applicable only in cases which are exclusively between or among members of
the same family, it necessarily follows that the same may be invoked only by a party who is a
member of that same family. 1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan, Ilocos Sur,
consisting an area of 898 square meters, more or less, bounded on the north by
WHEREFORE, the instant Petition for Certiorari is DISMISSED for lack of merit. Salvador Rivero; on the East by Eleutera Pena; on the South by Bonifacio St., and on
the West by Carmen Giron; x x x;
Costs against petitioner.
2. A commercial building erected on the aforesaid parcel of land with an assessed
SO ORDERED. value of ₱126,000.00; x x x;

3. A parcel of residential land located in Brgy. VII, Vigan, Ilocos Sur, containing an
Republic of the Philippines area of 154 sq. ms., more or less, bounded on the North by the High School Site; on
SUPREME COURT the East by Gomez St., on the South by Domingo [G]o; and on the West by Domingo
Manila Go; x x x;

SECOND DIVISION 4. A house with an assessed value of ₱17,600.00 x x x;

G.R. No. 185922 January 15, 2014 5. A parcel of orchard land located in Brgy. VI, Vigan, Ilocos Sur, containing an area
of 2,257 sq. ma. (sic) more or less, bounded on the North by Lot 1208; on the East
 by Mestizo River; on the South by Lot 1217 and on the West by Lot 1211-B, 1212 3. One-half (1/2) of the house located in Brgy. VI, Vigan City, Ilocos Sur[,] containing
3
and 1215 x x x. an area of 2,257 sq. meters more or less, bounded on the north by Lot 1208; on the
east by Mestizo River; on the South by Lot 1217 and on the West by Lot 1211-B,
Beginning 1992 until his death in 1995, Dr. Favis was beset by various illnesses, such as 1212 and 1215.
kidney trouble, hiatal hernia, congestive heart failure, Parkinson’s disease and pneumonia.
He died of "cardiopulmonary arrest secondary to multi-organ/system failure secondary to 4. The accumulated rentals of the new Vigan Coliseum in the amount of One
4
sepsis secondary to pneumonia." Hundred Thirty [Thousand] (₱130,000.00) pesos per annum from the death of Dr.
8
Mariano Favis, Sr.
5
On 16 October 1994, he allegedly executed a Deed of Donation transferring and conveying
properties described in (1) and (2) in favor of his grandchildren with Juana. Respondents interposed an appeal before the Court of Appeals challenging the trial court’s
nullification, on the ground of vitiated consent, of the Deed of Donation in favor of herein
Claiming that said donation prejudiced their legitime, Dr. Favis’ children with Capitolina, respondents. The Court of Appeals ordered the dismissal of the petitioners’ nullification case.
petitioners herein, filed an action for annulment of the Deed of Donation, inventory, However, it did so not on the grounds invoked by herein respondents as appellant.
liquidation and partition of property before the Regional Trial Court (RTC) of Vigan, Ilocos
Sur, Branch 20 against Juana, Spouses Mariano and Larcelita and their grandchildren as The Court of Appeals motu proprio ordered the dismissal of the complaint for failure of
respondents. petitioners to make an averment that earnest efforts toward a compromise have been made,
as mandated by Article 151 of the Family Code. The appellate court justified its order of
In their Answer with Counterclaim, respondents assert that the properties donated do not dismissal by invoking its authority to review rulings of the trial court even if they are not
form part of the estate of the late Dr. Favis because said donation was made inter vivos, assigned as errors in the appeal.
6
hence petitioners have no stake over said properties.
Petitioners filed a motion for reconsideration contending that the case is not subject to
The RTC, in its Pre-Trial Order, limited the issues to the validity of the deed of donation and compromise as it involves future legitime.
7
whether or not respondent Juana and Mariano are compulsory heirs of Dr. Favis.
The Court of Appeals rejected petitioners’ contention when it ruled that the prohibited
In a Decision dated 14 November 2005, the RTC nullified the Deed of Donation and cancelled compromise is that which is entered between the decedent while alive and compulsory heirs.
the corresponding tax declarations. The trial court found that Dr. Favis, at the age of 92 and In the instant case, the appellate court observed that while the present action is between
plagued with illnesses, could not have had full control of his mental capacities to execute a members of the same family it does not involve a testator and a compulsory heir. Moreover,
valid Deed of Donation. Holding that the subsequent marriage of Dr. Favis and Juana the appellate court pointed out that the subject properties cannot be considered as "future
legitimated the status of Mariano, the trial court also declared Juana and Mariano as legitime" but are in fact, legitime, as the instant complaint was filed after the death of the
compulsory heirs of Dr. Favis. The dispositive portion reads:WHEREFORE, in view of all the decedent.
foregoing considerations, the Deed of Donation dated October 16, 1994 is hereby annulled
and the corresponding tax declarations issued on the basis thereof cancelled. Dr. Mariano Undaunted by this legal setback, petitioners filed the instant petition raising the following
Favis, Sr. having died without a will, his estate would result to intestacy. Consequently, arguments:
plaintiffs Heirs of Dr. Mariano Favis, Sr., namely Purita A. Favis, Reynaldo A. Favis,
Consolacion F. Queliza, Mariano A. Favis, Jr., Esther F. Filart, Mercedes A. Favis, Nelly F. 1. The Honorable Court of Appeals GRAVELY and SERIOUSLY ERRED in DISMISSING
Villafuerte and the defendants Juana Gonzales now deceased and Mariano G. Favis, Jr. shall the COMPLAINT.
inherit in equal shares in the estate of the late Dr. Mariano Favis, Sr. which consists of the
following:
2. Contrary to the finding of the Honorable Court of Appeals, the verification of the
complaint or petition is not a mandatory requirement.
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan City, Ilocos Sur,
consisting an area of 89 sq. meters more or less, bounded on the north by Salvador
3. The Honorable Court of Appeals seriously failed to appreciate that the filing of an
Rivero; on the East by Eleutera Pena; on the South by Bonifacio St., and on the
intervention by Edward Favis had placed the case beyond the scope of Article 151
West by Carmen Giron;
of the Family Code.

2. A commercial building erected on the aforesaid parcel of land with an assessed

4. Even assuming arguendo without admitting that the filing of intervention by
value of ₱126,000.00;
Edward Favis had no positive effect to the complaint filed by petitioners, it is still a
 serious error for the Honorable Court of Appeals to utterly disregard the fact that The appellate court’s reliance on this provision is misplaced. Rule 16 treats of the grounds for
petitioners had substantially complied with the requirements of Article 151 of the a motion to dismiss the complaint. It must be distinguished from the grounds provided under
Family Code. Section 1, Rule 9 which specifically deals with dismissal of the claim by the court motu
proprio. Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides:
5. Assuming arguendo that petitioners cannot be construed as complying
substantially with Article 151 of the Family Code, still, the same should be Section 1. Defenses and objections not pleaded. − Defenses and objections not pleaded
considered as a non-issue considering that private respondents are in estoppel. either in a motion to dismiss or in the answer are deemed waived. However, when it appears
from the pleadings or the evidence on record that the court has no jurisdiction over the
6. The dismissal of the complaint by the Honorable Court of Appeals amounts to subject matter, that there is another action pending between the same parties for the same
grave abuse of discretion amounting to lack and excess of jurisdiction and a cause, or that the action is barred by a prior judgment or by statute of limitations, the court
complete defiance of the doctrine of primacy of substantive justice over strict shall dismiss the claim.
application of technical rules.
Section 1, Rule 9 provides for only four instances when the court may motu proprio dismiss
7. The Honorable Court of Appeals gravely and seriuosly erred in not affirming the the claim, namely: (a) lack of jurisdiction over the subject matter; (b) litis pendentia ; (c) res
10 11
9
decision of the Court a quo that the Deed of Donation is void. judicata ; and (d) prescription of action. Specifically in Gumabon v. Larin, cited in Katon v.
12
Palanca, Jr., the Court held:
In their Comment, respondents chose not to touch upon the merits of the case, which is the
validity of the deed of donation. Instead, respondents defended the ruling the Court of x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the
Appeals that the complaint is dismissible for failure of petitioners to allege in their complaint court clearly had no jurisdiction over the subject matter and when the plaintiff did not
that earnest efforts towards a compromise have been exerted. appear during trial, failed to prosecute his action for an unreasonable length of time or
neglected to comply with the rules or with any order of the court. Outside of these instances,
any motu proprio dismissal would amount to a violation of the right of the plaintiff to be
The base issue is whether or not the appellate court may dismiss the order of dismissal of the
heard. Except for qualifying and expanding Section 2, Rule 9, and Section 3, Rule 17, of the
complaint for failure to allege therein that earnest efforts towards a compromise have been
Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure brought about no
made. The appellate court committed egregious error in dismissing the complaint. The
radical change. Under the new rules, a court may motu proprio dismiss a claim when it
appellate courts’ decision hinged on Article 151 of the Family Code, viz:
appears from the pleadings or evidence on record that it has no jurisdiction over the subject
matter; when there is another cause of action pending between the same parties for the
Art. 151. No suit between members of the same family shall prosper unless it should appear same cause, or where the action is barred by a prior judgment or by statute of limitations. x x
from the verified complaint or petition that earnest efforts toward a compromise have been 13
x.
made, but that the same have failed. If it is shown that no such efforts were in fact made, the
case must be dismissed.
The error of the Court of Appeals is evident even if the consideration of the issue is kept
within the confines of the language of Section 1(j) of Rule 16 and Section 1 of Rule 9. That a
This rule shall not apply to cases which may not be the subject of compromise under the Civil condition precedent for filing the claim has not been complied with, a ground for a motion to
Code. dismiss emanating from the law that no suit between members from the same family shall
prosper unless it should appear from the verified complaint that earnest efforts toward a
The appellate court correlated this provision with Section 1, par. (j), Rule 16 of the 1997 Rules compromise have been made but had failed, is, as the Rule so words, a ground for a motion
of Civil Procedure, which provides: to dismiss. Significantly, the Rule requires that such a motion should be filed "within the time
for but before filing the answer to the complaint or pleading asserting a claim." The time
Section 1. Grounds. — Within the time for but before filing the answer to the complaint or frame indicates that thereafter, the motion to dismiss based on the absence of the condition
pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: precedent is barred. It is so inferable from the opening sentence of Section 1 of Rule 9 stating
that defense and objections not pleaded either in a motion to dismiss or in the answer are
deemed waived. There are, as just noted, only four exceptions to this Rule, namely, lack of
x x x x jurisdiction over the subject matter; litis pendentia ; res judicata ; and prescription of action.
Failure to allege in the complaint that earnest efforts at a compromise has been made but
(j) That a condition precedent for filing the claim has not been complied with. had failed is not one of the exceptions. Upon such failure, the defense is deemed waived.
 14
It was in Heirs of Domingo Valientes v. Ramas cited in P.L. Uy Realty Corporation v. ALS based on the failure to comply with a condition precedent was filed in the trial court; neither
15
Management and Development Corporation where we noted that the second sentence of was such failure assigned as error in the appeal that respondent brought before the Court of
Section 1 of Rule 9 does not only supply exceptions to the rule that defenses not pleaded Appeals.
either in a motion to dismiss or in the answer are deemed waived, it also allows courts to
dismiss cases motu propio on any of the enumerated grounds. The tenor of the second Therefore, the rule on deemed waiver of the non-jurisdictional defense or objection is wholly
sentence of the Rule is that the allowance of a motu propio dismissal can proceed only from applicable to respondent.1âwphi1 If the respondents as parties-defendants could not, and
the exemption from the rule on waiver; which is but logical because there can be no ruling on did not, after filing their answer to petitioner’s complaint, invoke the objection of absence of
a waived ground. the required allegation on earnest efforts at a compromise, the appellate court
unquestionably did not have any authority or basis to motu propio order the dismissal of
Why the objection of failure to allege a failed attempt at a compromise in a suit among petitioner’s complaint.
members of the same family is waivable was earlier explained in the case of Versoza v.
16
Versoza, a case for future support which was dismissed by the trial court upon the ground Indeed, even if we go by the reason behind Article 151 of the Family Code, which provision as
that there was no such allegation of infringement of Article 222 of the Civil Code, the origin then Article 222 of the New Civil Code was described as "having been given more teeth" by
21

of Article 151 of the Family Code. While the Court ruled that a complaint for future support Section 1(j), Rule 16 of the Rule of Court, it is safe to say that the purpose of making sure that
cannot be the subject of a compromise and as such the absence of the required allegation in there is no longer any possibility of a compromise, has been served. As cited in commentaries
the complaint cannot be a ground for objection against the suit, the decision went on to state on Article 151 of the Family Code –
thus:
This rule is introduced because it is difficult to imagine a sudden and more tragic spectacle
The alleged defect is that the present complaint does not state a cause of action. The than a litigation between members of the same family. It is necessary that every effort
proposed amendment seeks to complete it. An amendment to the effect that the should be made towards a compromise before a litigation is allowed to breed hate and
requirements of Article 222 have been complied with does not confer jurisdiction upon the passion in the family. It is known that a lawsuit between close relatives generates deeper
lower court. With or without this amendment, the subject-matter of the action remains as bitterness than between strangers.
22

one for support, custody of children, and damages, cognizable by the court below.

17
The facts of the case show that compromise was never an option insofar as the respondents
To illustrate, Tamayo v. San Miguel Brewery, Inc., allowed an amendment which " merely were concerned. The impossibility of compromise instead of litigation was shown not alone
corrected a defect in the allegation of plaintiff-appellant’s cause of action, because as it then by the absence of a motion to dismiss but on the respondents’ insistence on the validity of
stood, the original complaint stated no cause of action." We there ruled out as inapplicable the donation in their favor of the subject properties. Nor could it have been otherwise
18
the holding in Campos Rueda Corporation v. Bautista, that an amendment cannot be made because the Pre-trial Order specifically limited the issues to the validity of the deed and
so as to confer jurisdiction on the court x x x. (Italics supplied). whether or not respondent Juana and Mariano are compulsory heirs of Dr. Favis.
Respondents not only confined their arguments within the pre-trial order; after losing their
Thus was it made clear that a failure to allege earnest but failed efforts at a compromise in a case, their appeal was based on the proposition that it was error for the trial court to have
complaint among members of the same family, is not a jurisdictional defect but merely a relied on the ground of vitiated consent on the part of Dr. Favis.
defect in the statement of a cause of action. Versoza was cited in a later case as an instance
analogous to one where the conciliation process at the barangay level was not priorly The Court of Appeals ignored the facts of the case that clearly demonstrated the refusal by
resorted to. Both were described as a "condition precedent for the filing of a complaint in the respondents to compromise. Instead it ordered the dismissal of petitioner’s complaint on
19
Court." In such instances, the consequence is precisely what is stated in the present Rule. the ground that it did not allege what in fact was shown during the trial. The error of the
Thus: Court of Appeals is patent.

x x x The defect may however be waived by failing to make seasonable objection, in a motion Unfortunately for respondents, they relied completely on the erroneous ruling of the Court
to dismiss or answer, the defect being a mere procedural imperfection which does not affect of Appeals even when petitioners came to us for review not just on the basis of such
20
the jurisdiction of the court. (Underscoring supplied). defective motu propio action but also on the proposition that the trial court correctly found
that the donation in question is flawed because of vitiated consent. Respondents did not
In the case at hand, the proceedings before the trial court ran the full course. The complaint answer this argument. The trial court stated that the facts are:
of petitioners was answered by respondents without a prior motion to dismiss having been
filed. The decision in favor of the petitioners was appealed by respondents on the basis of x x x To determine the intrinsic validity of the deed of donation subject of the action for
the alleged error in the ruling on the merits, no mention having been made about any defect annulment, the mental state/condition of the donor Dr. Mariano Favis, Sr. at the time of its
in the statement of a cause of action. In other words, no motion to dismiss the complaint execution must be taken into account. Factors such as his age, health and environment
among others should be considered. As testified to by Dr. Mercedes Favis, corroborated by That although age of senility varies from one person to another, to reach the age of 92 with
Dr. Edgardo Alday and Dra. Ofelia Adapon, who were all presented as expert witnesses, Dr. all those medications and treatment one have received for those illnesses, yet claim that his
Mariano Favis, Sr. had long been suffering from Hiatal Hernia and Parkinson’s disease and mind remains unimpaired, would be unusual. The fact that the Deed of Donation was only
had been taking medications for years. That a person with Parkinson’s disease for a long time executed after Dra. Mercedes Favis left his father's house necessarily indicates that they
may not have a good functioning brain because in the later stage of the disease, 1/3 of death don't want the same to be known by the first family, which is an indicia of bad faith on the
23
develop from this kind of disease, and or dementia. With respect to Hiatal Hernia, this is a part of the defendant, who at that time had influence over the donor.
state wherein organs in the abdominal cavity would go up to the chest cavity, thereby
occupying the space for the lungs causing the lungs to be compromised. Once the lungs are The correctness of the finding was not touched by the Court of Appeals. The respondents
affected, there is less oxygenation to the brain. The Hernia would cause the heart not to opted to rely only on what the appellate court considered, erroneously though, was a
pump enough oxygen to the brain and the effect would be chronic, meaning, longer lack of procedural infirmity. The trial court's factual finding, therefore, stands unreversed; and
oxygenation to the brain will make a person not in full control of his faculties. Dr. Alday respondents did not provide us with any argument to have it reversed.
further testified that during his stay with the house of Dr. Mariano Favis, Sr. (1992-1994), he
noticed that the latter when he goes up and down the stairs will stop after few seconds, and
The issue of the validity of donation was fully litigated and discussed by the trial court.
he called this pulmonary cripple – a very advanced stage wherein the lungs not only one lung,
Indeed, the trial court's findings were placed at issue before the Court of Appeals but the
but both lungs are compromised. That at the time he operated on the deceased, the left and
appellate court chose to confine its review to the procedural aspect. The judgment of the
right lung were functioning but the left lung is practically not even five (5%) percent
Court of Appeals, even if it dealt only with procedure, is deemed to have covered all issues
functioning since it was occupied by abdominal organ. x x x.
including the correctness of the factual findings of the trial court. Moreover, remanding the
case to the Court of Appeals would only constitute unwarranted delay in the final disposition
Dr. Mariano Favis, Sr. during the execution of the Deed of Donation was already 92 years old; of the case.
living with the defendants and those years from 1993 to 1995 were the critical years when he
was sick most of the time. In short, he’s dependent on the care of his housemates
WHEREFORE, the Decision of the Court of Appeals is REVERSED and SET ASIDE and the
particularly the members of his family. It is the contention of the defendants though that Dr.
Judgment of the Regional Trial Court of Vigan, Ilocos Sur, Branch 20 is AFFIRMED.
Mariano Favis, Sr. had full control of his mind during the execution of the Deed of Donation
because at that time, he could go on with the regular way of life or could perform his daily
routine without the aid of anybody like taking a bath, eating his meals, reading the SO ORDERED.
newspaper, watching television, go to the church on Sundays, walking down the plaza to
exercise and most importantly go to the cockpit arena and bet. Dr. Ofelia Adapon, a VENUE (RULE 4)
neurology expert however, testified that a person suffering from Parkinson’s disease when
he goes to the cockpit does not necessarily mean that such person has in full control of his
mental faculties because anyone, even a retarded person, a person who has not studied and
have no intellect can go to the cockpit and bet. One can do everything but do not have SECOND DIVISION
control of his mind. x x x That Hiatal Hernia creeps in very insidiously, one is not sure
especially if the person has not complained and no examination was done. It could be there
for the last time and no one will know. x x x.
UNIWIDE HOLDINGS, INC.,
The Deed of Donation in favor of the defendants Ma. Theresa, Joana D. Favis, Maria Cristina Petitioner,
D. Favis, James Mark D. Favis and Maria Thea D. Favis, all of whom are the children of
Mariano G. Favis, Jr. was executed on [16 October] 1994, seven (7) months after Dra.
Mercedes Favis left the house of Dr. Favis, Sr. at Bonifacio St., Vigan City, Ilocos Sur, where
she resided with the latter and the defendants. -versus-


Putting together the circumstances mentioned, that at the time of the execution of the Deed

of Donation, Dr. Mariano Favis, Sr. was already at an advanced age of 92, afflicted with
ALEXANDER M. CRUZ,
different illnesses like Hiatal hernia, Parkinsons’ disease and pneumonia, to name few, which
Respondent.
illnesses had the effects of impairing his brain or mental faculties and the deed being

executed only when Dra. Mercedes Favis had already left his father’s residence when Dr.

Mariano Favis, Sr. could have done so earlier or even in the presence of Dra. Mercedes Favis,

at the time he executed the Deed of Donation was not in full control of his mental faculties.
G.R. No. 171456 FIRST CAUSE OF ACTION

Present: 10. Being entitled to the payment of monthly service fee pursuant to the
FA, which defendant failed to pay despite demand, plaintiff suffered
QUISUMBING, J., Chairperson, actual damages in the amount of Phil. Peso: One Million Three Hundred
CARPIO, Twenty Seven Thousand Six Hundred Sixty Nine & 83/100 (P1,327,669.83),
CARPIO MORALES, computed as of 05 April 2004, for which defendant should be held liable
TINGA, and together with legal interest thereon from the date of filing of this
VELASCO, JR., JJ. Complaint, until fully paid.

SECOND CAUSE OF ACTION

11. Being the assignee of the receivable of FPC, which receivable
Promulgated: defendant failed to pay despite demand, plaintiff suffered actual
August 9, 2007 damages in the amount of Phil. Peso: Sixty Four Thousand One Hundred
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x Sixty Five & 96/100 (P64,165.96) for which defendant should be held liable
together with the legal interest thereon computed from date of receipt of
D E C I S I O N plaintiffs demand letter, or on August 16, 2002 to be exact, until fully paid.

CARPIO MORALES, J.: THIRD CAUSE OF ACTION

12. Being the assignee of the receivable of USWCI, which receivable
Petitioner, Uniwide Holdings, Inc. (UHI), whose principal office is located in Paraaque City, defendant failed to pay despite demand, plaintiff suffered actual
[1]
entered into a Franchise Agreement (the agreement) granting respondent, Alexander M. damages in the total amount of Phil. Peso: One Million Five Hundred
Cruz (Cruz), a five-year franchise to adopt and use the Uniwide Family Store System for the Seventy Nine Thousand Sixty One & 36/100 (P1,579,061.36), computed as
establishment and operation of a Uniwide Family Store along Marcos Highway, Sta. Cruz, of 05 April 2004, inclusive of the two and a half percent (2.5%) monthly
Cogeo, Marikina City. interest, as and by way of penalty, and the three (3%) annual interest on
the unpaid amount, for which defendant should be held liable, with legal
[2]
Article 10.2 of the agreement called for Cruz as franchisee to pay UHI a monthly service fee interest thereon from the date of filing of this Complaint, until fully paid.
of P50,000 or three percent of gross monthly purchases, whichever is higher, payable within
five days after the end of each month without need of formal billing or demand from UHI. In FOURTH CAUSE OF ACTION
[3]
case of any delay in the payment of the monthly service fee, Cruz would, under Article 10.3 of
the agreement, be liable to pay an interest charge of three percent per month. 13. By reason of defendants obstinate refusal or failure to pay his
indebtedness, plaintiff was constrained to file this Complaint and in the
It appears that Cruz had purchased goods from UHIs affiliated companies First Paragon process incur expenses by way of attorneys fees, which could be
Corporation (FPC) and Uniwide Sales Warehouse Club, Inc. (USWCI). reasonably estimated to reach at least Phil. Peso: Two Hundred Fifty
Thousand (P250,000.00) and for which defendant should be held
[4] [6]
In August 2002, FPC and USWCI executed Deeds of Assignment in favor of UHI answerable for. (Emphasis and underscoring supplied)
assigning all their rights and interests over Cruzs accounts payable to them.

[7]
As of August 13, 2002, Cruz had outstanding obligations with UHI, FPC, and USWCI in the total To the complaint Cruz filed a motion to dismiss on the ground of improper venue, he invoking
amount of P1,358,531.89, drawing UHI to send him a letter of even date for the settlement Article 27.5 of the agreement which reads:
thereof in five days. His receipt of the letter notwithstanding, Cruzs accounts remained
unsettled. 27.5 Venue Stipulation The Franchisee consents to the exclusive
jurisdiction of the courts of Quezon City, the Franchisee waiving any other
[5] [8]
Thus UHI filed a complaint for collection of sum of money before the Regional Trial Court venue. (Emphasis supplied)
(RTC) of Paraaque docketed as Civil Case No. 04-0278 against Cruz on the following causes of
action:

 [9]
Branch 258 of the Paraaque RTC, by Order of December 12, 2005, granted Cruzs motion to be subjected to the exclusive venue stipulation embodied in the agreement. So San Miguel
[14]
dismiss. Corporation v. Monasterio enlightens:

Hence, the present petition before this Court, raising the sole legal issue of: Exclusive venue stipulation embodied in a contract restricts or confines
parties thereto when the suit relates to breach of said contract. But where
WHETHER A CASE BASED ON SEVERAL CAUSES OF ACTION IS DISMISSIBLE the exclusivity clause does not make it necessarily encompassing, such
ON THE GROUND OF IMPROPER VENUE WHERE ONLY ONE OF THE CAUSES that even those not related to the enforcement of the contract should
OF ACTION ARISES FROM A CONTRACT WITH EXCLUSIVE VENUE be subject to the exclusive venue, the stipulation designating exclusive
[10]
STIPULATION. (Underscoring supplied) venues should be strictly confined to the specific undertaking or
agreement. Otherwise, the basic principles of freedom to contract might
work to the great disadvantage of a weak party-suitor who ought to be
[15]
Petitioner contends that nowhere in the agreement is there a mention of FPC and USWCI, and allowed free access to courts of justice. (Emphasis and underscoring
neither are the two parties thereto, hence, they cannot be bound to the stipulation on exclusive supplied)
venue.

The petition is impressed with merit. In fine, since the other causes of action in petitioners complaint do not relate to a breach of the
agreement it forged with Cruz embodying the exclusive venue stipulation, they should not be
The general rule on venue of personal actions, as in petitioners complaint for subjected thereto. As San Miguel further enlightens:
collection of sum of money, is embodied in Section 2, Rule 4 of the Rules of Court which
provides: Restrictive stipulations are in derogation of the general policy of making it
more convenient for the parties to institute actions arising from or in
Sec. 2. Venue of personal actions. All other actions may be relation to their agreements. Thus, the restriction should be strictly
commenced and tried where the plaintiff or any of the principal plaintiffs construed as relating solely to the agreement for which the exclusive
resides, or where the defendant or any of the principal defendants resides, venue stipulation is embodied. Expanding the scope of such limitation on
or in the case of a nonresident defendant, where he may be found, at the a contracting party will create unwarranted restrictions which the parties
election of the plaintiff. (Emphasis and underscoring supplied) might find unintended or worse, arbitrary and
[16]
oppressive. (Underscoring supplied)

The afore-quoted provision is, however, qualified by Section 4 of the same rule which allows
[11]
parties, before the filing of the action, to validly agree in writing on an exclusive venue. WHEREFORE, the petition is GRANTED. The December 12, 2005 Order of Regional
Trial Court of Paraaque City, Branch 258 in Civil Case No. 04-0278 is SET ASIDE. The case
The forging of a written agreement on an exclusive venue of an action does not, is REMANDED to said court which is directed to reinstate the case to its docket and conduct
however, preclude parties from bringing a case to other venues. further proceedings thereon with dispatch.

Where there is a joinder of causes of action between the same parties one of which SO ORDERED.
does not arise out of the contract where the exclusive venue was stipulated upon, the
complaint, as in the one at bar, may be brought before other venues provided that such other
[12]
cause of action falls within the jurisdiction of the court and the venue lies therein.

Based on the allegations in petitioners complaint, the second and third causes of
action are based on the deeds of assignment executed in its favor by FPC and USWCI. The FIRST DIVISION
deeds bear no exclusive venue stipulation with respect to the causes of action
thereunder. Hence, the general rule on venue applies that the complaint may be filed in the
[13]
place where the plaintiff or defendant resides. UNIVERSAL ROBINA CORPORATION, G.R. No. 154338
Petitioner,
It bears emphasis that the causes of action on the assigned accounts are not based Present:
on a breach of the agreement between UHI and Cruz. They are based on separate, distinct and
independent contracts-deeds of assignment in which UHI is the assignee of Cruzs obligations PUNO, C.J., Chairperson,
to the assignors FPC and USWCI. Thus, any action arising from the deeds of assignment cannot -versus- SANDOVAL-GUTIERREZ,
 CORONA, principal office at Pasig City and the defendant is, as provided in the
AZCUNA, and complaint, from Laoag City.
GARCIA, JJ.
Wherefore, premises considered, this case is hereby DISMISSED
[2]
ALBERT LIM, doing business under the without prejudice for improper venue and for lack of jurisdiction.
name and style New H-R Grocery,
Respondent.
Accordingly, petitioner filed a motion for reconsideration together with an amended
complaint alleging that the parties agreed that the proper venue for any dispute relative to the
Promulgated: transaction is Quezon City.

In an Order dated October 11, 1999, the trial court granted the motion and admitted
October 5, 2007 petitioners amended complaint.
x-----------------------------------------------------------------------------------------x
On December 6, 1999, summons was served upon respondent. For his failure to file
an answer seasonably and upon motion of petitioner, the trial court issued an Order
DECISION dated September 12, 2000 declaring him in default and allowing petitioner to present its
[3]
evidence ex parte.

However, on April 17, 2001, the trial court, still unsure whether venue was properly laid, issued
an Order directing petitioner to file a memorandum of authorities on whether it can file a
[4]
complaint in Quezon City. Subsequently, on May 11, 2001, the trial court again issued an
Order dismissing the complaint on the ground of improper venue, thus:

It appears that there is no connection whatsoever
between Quezon City and the parties. Plaintiffs official place of business is
SANDOVAL-GUTIERREZ, J.: in Pasig whereas the defendants residence is stated to be
in Laoag City both stipulated in the Complaint. The filing is based on the
stipulation at the back of the delivery receipt that venue shall be in Quezon
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of City --- which is not even stated in the Complaint nor admitted to have
Civil Procedure, as amended, assailing the Resolutions dated January 16, 2002 and July 1, been signed by the defendant.
2002 of the Court of Appeals in CA-G.R. SP No. 67368.
WHEREFORE, premises considered, venue is hereby declared to
The present controversy stemmed from a contract of sale between Universal Robina have been improperly laid. This case is hereby dismissed without prejudice
[5]
Corporation, petitioner, and Albert Lim, respondent. Pursuant to the contract, petitioner sold to filing in the proper venue.
to respondent grocery products in
the total amount of P808,059.88. After tendering partial payments, respondent refused to
settle his obligation despite petitioners repeated demands.
Petitioner filed a motion for reconsideration but it was denied by the trial court in its
[6]
Thus, on May 31, 1999, petitioner filed with the Regional Trial Court, Branch 227, Quezon City, Resolution dated August 15, 2001.
[1]
a complaint against respondent for a sum of money, docketed as Civil Case No. Q-99-37791.
Petitioner then filed with the Court of Appeals a petition for review. But it
On June 22, 1999, the trial court issued an Order dismissing the complaint motu proprio on was dismissed due to petitioners failure to attach thereto an explanation why copies of the
grounds of lack of jurisdiction and improper venue, thus: petition were not served by personal service but by registered mail, in violation of Section 11,
[7]
Rule 14 of the 1997 Rules of Civil Procedure, as amended. Petitioner filed a motion for
The case is misplaced with respect to jurisdiction and reconsideration but it was likewise denied by the appellate court in a Resolution dated July 1,
venue. There is not even a remote connection by the parties to Quezon 2002, thus:
City, where this Regional Trial Court sits, the plaintiff corporation has
 After a careful assessment of the petitioners motion for reconsideration of
the Resolution dated March 21, 2002 dismissing the instant case for failure Corollarily, Section 1, Rule 9 of the same Rules provides for the instances when the
to comply with Section 11, Rule 14, this Court finds the reasons therein trial court may motu proprio dismiss a claim, thus:
alleged to be not well-taken.
Section 1. Defenses and objections not pleaded.
Moreover, Supreme Court Circular No. 1-88 and Administrative Circular Defenses and objections not pleaded either in a motion to dismiss or in the
No. 3-96, provide that subsequent compliance with the requirements of a answer are deemed waived. However, when it appears from the pleadings
petition for review/certiorari shall not warrant reconsideration of the or the evidence on record that the court has no jurisdiction over the
order of dismissal unless the court is fully satisfied that the non-compliance subject matter, that there is another action pending between the same
with the said requirements was not in any way attributable to the party, parties for the same cause, or that the action is barred by a prior judgment
despite due negligence on his part, and that there are highly justifiable and or by statute of limitations, the court shall dismiss the claim.
compelling reasons for the court to make such other disposition as it may
deem just and equitable.


Implicit from the above provision is that improper venue not impleaded in the
We find such reasons wanting in the present case.
motion to dismiss or in the answer is deemed waived. Thus, a court may not dismiss an

action motu proprio on the ground of improper venue as it is not one of the grounds wherein
Besides, after a restudy of the facts, law and jurisprudence, as well as the
the court may dismiss an action motu proprio on the basis of the pleadings.
dispositions already contained in the assailed Resolutions of public

respondent, we find the present petition for certiorari to be patently [9]
In Dacoycoy v. Intermediate Appellate Court, this Court held that a trial court may not motu
without merit, and the questions raised therein are too unsubstantial to
proprio dismiss a complaint on the ground of improper venue, thus:
require consideration.


Dismissing the complaint on the ground of improper venue is certainly not
WHEREFORE, the motion for reconsideration is hereby DENIED for utter
[8] the appropriate course of action at this stage of the proceedings,
lack of merit.
particularly as venue, in inferior courts as well as in the courts of first

instance (now RTC), may be waived expressly or impliedly. Where the
Hence, this petition.
defendant fails to challenge timely the venue in a motion to dismiss as

provided by Section 4 of Rule 4 of the Rules of Court, and allows the trial
The fundamental issue being raised is whether the trial court may dismiss motu
to be held and a decision to be rendered, he cannot on appeal or in a
proprio petitioners complaint on the ground of improper venue.
special action be permitted to belatedly challenge the wrong venue, which

is deemed waived.
Sections 2 and 4, Rule 4 of the same Rules provide:

Sec. 2. Venue of personal actions. All other actions may be
Indeed, it was grossly erroneous for the trial court to have taken a
commenced and tried where the plaintiff or any of the principal plaintiffs
procedural short-cut by dismissing motu proprio the complaint on the
resides, or where the defendant or any of the principal defendants resides,
ground of improper venue without first allowing the procedure outlined in
or in the case of a non-resident defendant where he may be found, at the
the rules of court to take its proper course. Although we are for the speedy
election of the plaintiff.
and expeditious resolution of cases, justice and fairness take primary
importance. The ends of justice require that respondent trial court
Sec. 4. When Rule not applicable. This Rule shall not apply
faithfully adhere to the rules of procedure to afford not only the
defendant, but the plaintiff as well, the right to be heard on his cause.
(a) In those cases where a specific rule or law provides otherwise;
or
[10]
In Rudolf Lietz Holdings Inc. v. Registry of Deeds of Paraaque, the Court likewise held that a
(b) Where the parties have validly agreed in writing before the trial court may not motu proprio dismiss a complaint on the ground of improper venue, thus:
filing of the action on the exclusive venue thereof.
Rule 9, Section 1 of the 1997 Rules of Civil Procedure states that
Clearly, in personal actions, the plaintiff may commence an action either in the place of his or defenses and objections not pleaded either in a motion to dismiss or in the
her residence or the place where the defendant resides. However, the parties may agree to a answer are deemed waived. The court may only dismiss an action motu
specific venue which could be in a place where neither of them resides. proprio in case of lack of jurisdiction over the subject matter, litis
 [2]
pendentia, res judicata and prescription. Therefore, the trial court in this reversed the trial courts September 3, 2002 Resolution dismissing the complaint of
case erred when it dismissed the petition motu proprio. It should have respondent Warren Embes Lubayen in Civil Case No. 511, on the ground of improper venue.
waited for a motion to dismiss or a responsive pleading from respondent,
raising the objection or affirmative defense of improper venue, before The facts show that on October 24, 2001, respondent, a resident of Magsaysay, Tabuk, Kalinga,
[3]
dismissing the petition. filed with the Kalinga RTC a complaint for damages against petitioner Auction in Malinta, Inc.,
a corporation with business address at Malinta, Valenzuela City, and engaged in public auction
of heavy equipments, trucks, and assorted machineries. Respondent alleged that in an auction
In the instant case, respondent, despite proper service of summons, failed to file an answer conducted by petitioner on May29, 2001, he was declared the highest bidder for a wheel
and was thus declared in default by the trial court. Verily, having been declared in default, he loader T.C.M. 75B, series no. 3309. On June 7, 2001, respondent tendered the payment for the
[11]
lost his standing in court and his right to adduce evidence and present his defense, including said item but petitioner could no longer produce the loader.
his right to question the propriety of the venue of the action.
Petitioner filed a motion to dismiss on the ground of improper venue. It argued that the correct
venue is the RTC of Valenzuela City pursuant to the stipulation in the Bidders Application and
WHEREFORE, the Petition for Review is GRANTED. The assailed Resolutions of the Court of Registration Bidding Agreement which states that:
Appeals in CA-G.R. SP No. 67368 are REVERSED. The Regional Trial Court, Branch 227, Quezon
City is ordered to REINSTATE Civil Case No. Q-99-37791 and conduct an ex parte hearing for ALL COURT LITIGATION PROCEDURES SHALL BE CONDUCTED IN THE
[4]
the reception of petitioners evidence and dispose of the case with dispatch. APPROPRIATE COURTS OF VALENZUELA CITY, METRO MANILA.

In a Resolution dated September 3, 2002, the Kalinga RTC held that the clear
SO ORDERED. intention of the parties was to limit the venue to the proper court of Valenzuela Cityand thus
[5]
dismissed respondents complaint on the ground of improper venue.

Aggrieved, respondent appealed to the Court of Appeals which reversed the
Resolution of the Kalinga RTC and reinstated the complaint. The dispositive portion thereof,
reads:
THIRD DIVISION
WHEREFORE, the Resolution appealed from is hereby REVERSED
and SET ASIDE. The case is remanded to the RTC which is ordered to
AUCTION IN MALINTA, INC., G.R. No. 173979 reinstate plaintiffs complaint for damages.
Petitioner,
[6]
Present: SO ORDERED.
- versus - Ynares-Santiago, J. (Chairperson),
Austria-Martinez, Petitioners motion for reconsideration was denied; hence, the instant petition.
Callejo, Sr.,
Chico-Nazario, and The sole issue is whether the stipulation in the parties Bidders Application and
Nachura, JJ. Registration Bidding Agreement effectively limited the venue of the instant case exclusively to
WARREN EMBES LUYABEN, the proper court of Valenzuela City.
Respondent. Promulgated:
February 12, 2007 The Court rules in the negative.
x ---------------------------------------------------------------------------------------- x
The general rule on the venue of personal actions, as in the instant case for
[7]
DECISION damages filed by respondent, is embodied in Section 2, Rule 4 of the Rules of Court. It
provides:
YNARES-SANTIAGO, J.:
Sec. 2. Venue of personal actions. All other actions may be
commenced and tried where the plaintiff or any of the principal plaintiffs
Assailed in this petition for review under Rule 45 of the Rules of Court is the May 31, resides, or where the defendant or any of the principal defendants resides,
[1]
2005 Decision of the Court of Appeals in CA-G.R. CV No. 78456, which held that venue was or in the case of a nonresident defendant, where he may be found, at the
properly laid before the Regional Trial Court of Bulanao, Tabuk, Kalinga (Kalinga RTC), and election of the plaintiff.
 1. If court litigation becomes necessary to enforce collection, an additional
The aforequoted rule, however, finds no application where the parties, before the equivalent (sic) to 25% of the principal amount will be charged. The agreed
[8] [18]
filing of the action, have validly agreed in writing on an exclusive venue. But the mere venue for such action is Makati, Metro Manila, Philippines.
stipulation on the venue of an action is not enough to preclude parties from bringing a case in
other venues. It must be shown that such stipulation is exclusive. In the absence of qualifying 2. In case of litigation hereunder, venue shall be in the City Court or Court
[9]
or restrictive words, such as exclusively and waiving for this purpose any other venue, shall of First Instance of Manila as the case may be for determination of any and
[10] [11] [19]
only preceding the designation of venue, to the exclusion of the other courts, or words of all questions arising thereunder.
similar import, the stipulation should be deemed as merely an agreement on an additional
[12]
forum, not as limiting venue to the specified place. Then too, the doctrine that absent qualifying or restrictive words, the venue shall
either be that stated in the law or rule governing the action or the one agreed in the contract,
[13] [20]
This has been the rule since the 1969 case of Polytrade Corporation v. Blanco. It was applied to an extra-judicial foreclosure sale under Act No. 3135. In Langkaan Realty
[21]
was held therein that the clause [t]he parties agree to sue and be sued in the Courts of Manila, Development, Inc. v. United Coconut Planters Bank, where the provision on the venue
does not preclude the filing of suits in the court which has jurisdiction over the place of employed the word shall to refer to the place where the foreclosure will be held, the Court
residence of the plaintiff or the defendant. The plain meaning of the said provision is that the ruled that said provision lack(s) qualifying or restrictive words to indicate the exclusivity of the
parties merely consented to be sued in Manila considering that there are no qualifying or agreed forum, and therefore the stipulated place is considered only as an additional, not a
[22]
restrictive words which would indicate that Manila, and Manila alone, is the agreed venue. It limiting venue. The said stipulation reads:
simply is permissive and the parties did not waive their right to pursue remedy in the courts
[14]
specifically mentioned in Section 2 of Rule 4 of the Rules of Court. It is hereby agreed that in case of foreclosure of this mortgage
under Act 3135, as amended, and Presidential Decree No. 385, the auction
The Polytrade doctrine was further applied in the case of Unimasters sale shall be held at the capital of the province, if the property is within the
[15]
Conglomeration, Inc. v. Court of Appeals, which analyzed the various jurisprudence territorial jurisdiction of the province concerned, or shall be held in the
rendered after the Polytrade case. In Unimasters, we held that a stipulation stating that [a]ll city, if the property is within the territorial jurisdiction of the city
[16] [23]
suits arising out of this Agreement shall be filed with/in the proper Courts of Quezon City, is concerned.
only permissive and does not limit the venue to the Quezon City courts. As explained in the
said case: In the instant case, the stipulation in the parties agreement, i.e., all Court litigation
procedures shall be conducted in the appropriate Courts of Valenzuela City, Metro Manila,
In other words, unless the parties make very clear, by employing evidently lacks the restrictive and qualifying words that will limit venue exclusively to the RTC
categorical and suitably limiting language, that they wish the venue of of Valenzuela City. Hence, the Valenzuela courts should only be considered as an additional
actions between them to be laid only and exclusively at a definite place, choice of venue to those mentioned under Section 2, Rule 4 of the Rules of Court. Accordingly,
and to disregard the prescriptions of Rule 4, agreements on venue are not the present case for damages may be filed with the (a) RTC of Valenzuela City as stipulated in
to be regarded as mandatory or restrictive, but merely permissive, or the bidding agreement; (b) RTC of Bulanao, Tabuk, Kalinga which has jurisdiction over the
complementary of said rule. The fact that in their agreement the parties residence of respondent (plaintiff); or with the (c) RTC of Valenzuela City which has jurisdiction
specify only one of the venues mentioned in Rule 4, or fix a place for their over the business address of petitioner (defendant). The filing of the complaint in the RTC
actions different from those specified by said rule, does not, without more, of Bulanao, Tabuk, Kalinga, is therefore proper, respondent being a resident of Tabuk, Kalinga.
suffice to characterize the agreement as a restrictive one. There must, to
[24]
repeat, be accompanying language clearly and categorically expressing The case of Hoechst Philippines, Inc. v. Torres, promulgated in 1978, and invoked
their purpose and design that actions between them be litigated only at by petitioner in its motion to dismiss, had already been superseded by current decisions on
the place named by them, regardless of the general precepts of Rule 4; and venue. In the said case, the Court construed the proviso: [i]n case of any litigation arising out
any doubt or uncertainty as to the parties intentions must be resolved of this agreement, the venue of action shall be in the competent courts of
[25]
against giving their agreement a restrictive or mandatory aspect. Any other the Province of Rizal, as sufficient to limit the venue to the proper court of Rizal. However,
[26]
rule would permit of individual, subjective judicial interpretations without in Supena v. De la Rosa, we ruled that Hoechsthad been rendered obsolete by recent
stable standards, which could well result in precedents in hopeless jurisprudence applying the doctrine enunciated in Polytrade.
[17]
inconsistency.
In sum, we find that the Court of Appeals correctly declared that venue in the instant
The rule enunciated in Unimasters and Polytrade was reiterated in subsequent cases case was properly laid with the RTC of Bulanao, Tabuk, Kalinga.
where the following agreements on venue were likewise declared to be merely permissive and
do not limit the venue to the place specified therein, to wit: WHEREFORE, the petition is DENIED. The May 31, 2005 Decision of the Court of
Appeals in CA-G.R. CV No. 78456 which reversed the September 3, 2002 Resolution of the
Regional Trial Court of Bulanao, Tabuk, Kalinga; reinstated the complaint in Civil Case No. 511; On the first shipment, petitioner requested for seven days within which to pay private
and remanded the case to the said court, is AFFIRMED. respondent. However, for the next three shipments, March 17, 24 and 31, 1988, petitioner
[4]
failed to pay private respondent shipping charges amounting to P109, 376.95.
Costs against petitioner.
Despite several demands, petitioner never paid private respondent. Thus, on June 10,
SO ORDERED. 1988, private respondent filed Civil Case No. 5875 before the Regional Trial Court of Pasay City
for collection of sum of money.
On August 1, 1988, the sheriff filed his Sheriffs Return showing that summons was not
THIRD DIVISION served on petitioner. A woman found at petitioners house informed the sheriff that petitioner
transferred her residence to Sto. Nio, Guagua, Pampanga. The sheriff found out further that
[5]
petitioner had left the Philippines for Guam.

Thus, on September 13, 1988, construing petitioners departure from the Philippines as
[G.R. No. 125027. August 12, 2002] done with intent to defraud her creditors, private respondent filed a Motion for Preliminary
Attachment. On September 26, 1988, the trial court issued an Order of Preliminary
[6]
Attachment against petitioner. The following day, the trial court issued a Writ of Preliminary
Attachment.
ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA, respondents.
The trial court granted the request of its sheriff for assistance from their counterparts in
RTC, Pampanga. Thus, on October 28, 1988, Sheriff Alfredo San Miguel of RTC Pampanga
D E C I S I O N served on petitioners household help in San Fernando, Pampanga, the Notice of Levy with the
[7]
Order, Affidavit and Bond.
CARPIO, J.:
On November 7, 1988, petitioner filed an Urgent Motion to Discharge
[8]
Attachment without submitting herself to the jurisdiction of the trial court. She pointed out
that up to then, she had not been served a copy of the Complaint and the summons. Hence,
The Case [9]
petitioner claimed the court had not acquired jurisdiction over her person.

In the hearing of the Urgent Motion to Discharge Attachment on November 11, 1988,
This is a petition fore review on certiorari under Rule 45 of the Rules of Court, seeking to private respondent sought and was granted a re-setting to December 9, 1988. On that date,
[1] [2]
set aside the Decision of the Court of Appeals affirming the Decision of the Regional Trial private respondents counsel did not appear, so the Urgent Motion to Discharge Attachment
Court, Branch 108, Pasay City. The trial court upheld the writ of attachment and the declaration [10]
was deemed submitted for resolution.
of default on petitioner while ordering her to pay private respondent P109,376.95 plus 18
percent interest per annum, 25 percent attorneys fees and costs of suit. The trial court granted the Motion to Discharge Attachment on January 13, 1989 upon
filing of petitioners counter-bond. The trial court, however, did not rule on the question of
jurisdiction and on the validity of the writ of preliminary attachment.

The Facts On December 26, 1988, private respondent applied for an alias summons, which the trial
[11]
court issued on January 19, 1989. It was only on January 26, 1989 that summons was finally
[12]
served on petitioner.
Petitioner Anita Mangila (petitioner for brevity) is an exporter of sea foods and doing
On February 9, 1989, petitioner filed a Motion to Dismiss the Complaint on the ground
business under the name and style of Seafoods Products. Private respondent Loreta Guina
of improper venue. Private respondents invoice for the freight forwarding service stipulates
(private respondent for brevity) is the President and General Manager of Air Swift
that if court litigation becomes necessary to enforce collection xxx the agreed venue for such
International, a single registered proprietorship engaged in the freight forwarding business. [13]
action is Makati, Metro Manila. Private respondent filed an Opposition asserting that
Sometime in January 1988, petitioner contracted the freight forwarding services of although Makati appears as the stipulated venue, the same was merely an inadvertence by the
[14]
private respondent for shipment of petitioners products, such as crabs, prawns and assorted printing press whose general manager executed an affidavit admitting such inadvertence.
fishes, to Guam (USA) where petitioner maintains an outlet. Petitioner agreed to pay private Moreover, private respondent claimed that petitioner knew that private respondent was
[15]
respondent cash on delivery. Private respondents invoice stipulates a charge of 18 percent holding office in Pasay City and not in Makati. The lower court, finding credence in private
interest per annum on all overdue accounts. In case of suit, the same invoice stipulates respondents assertion, denied the Motion to Dismiss and gave petitioner five days to file her
[3]
attorneys fees equivalent to 25 percent of the amount due plus costs of suit. Answer. Petitioner filed a Motion for Reconsideration but this too was denied.
 [16]
Petitioner filed her Answer on June 16, 1989, maintaining her contention that the Hence, this petition.
venue was improperly laid.

On June 26, 1989, the trial court issued an Order setting the pre-trial for July 18, 1989 at
8:30 a.m. and requiring the parties to submit their pre-trial briefs. Meanwhile, private The Issues
respondent filed a Motion to Sell Attached Properties but the trial court denied the motion.

On motion of petitioner, the trial court issued an Order resetting the pre-trial from July The issues raised by petitioner may be re-stated as follows:
18, 1989 to August 24, 1989 at 8:30 a.m..
[17]
I.
On August 24, 1989, the day of the pre-trial, the trial court issued an Order terminating
the pre-trial and allowing the private respondent to present evidence ex-parte on September
WHETHER RESPONDENT COURT ERRED IN NOT HOLDING THAT THE WRIT OF ATTACHMENT
12, 1989 at 8:30 a.m.. The Order stated that when the case was called for pre-trial at 8:31 a.m.,
WAS IMPROPERLY ISSUED AND SERVED;
only the counsel for private respondent appeared. Upon the trial courts second call 20 minutes
later, petitioners counsel was still nowhere to be found. Thus, upon motion of private
respondent, the pre-trial was considered terminated. II.

On September 12, 1989, petitioner filed her Motion for Reconsideration of the Order
WHETHER THERE WAS A VALID DECLARATION OF DEFAULT;
terminating the pre-trial. Petitioner explained that her counsel arrived 5 minutes after the
second call, as shown by the transcript of stenographic notes, and was late because of heavy
traffic. Petitioner claims that the lower court erred in allowing private respondent to present III.
evidence ex-parte since there was no Order considering the petitioner as in default. Petitioner
contends that the Order of August 24, 1989 did not state that petitioner was declared as in WHETHER THERE WAS IMPROPER VENUE.
[18]
default but still the court allowed private respondent to present evidence ex-parte.

On October 6, 1989, the trial court denied the Motion for Reconsideration and scheduled IV.
the presentation of private respondents evidence ex-parte on October 10, 1989.
WHETHER RESPONDENT COURT ERRED IN DECLARING THAT PETITIONER IS OBLIGED TO PAY
On October 10, 1989, petitioner filed an Omnibus Motion stating that the presentation [20]
P109, 376.95, PLUS ATTORNEYS FEES.
of evidence ex-parte should be suspended because there was no declaration of petitioner as
in default and petitioners counsel was not absent, but merely late.
[19]
On October 18, 1989, the trial court denied the Omnibus Motion. The Ruling of the Court
On November 20, 1989, the petitioner received a copy of the Decision of November 10,
1989, ordering petitioner to pay respondent P109,376.95 plus 18 percent interest per annum,
Improper Issuance and Service of Writ of Attachment
25 percent attorneys fees and costs of suit. Private respondent filed a Motion for Execution
Pending Appeal but the trial court denied the same.
Petitioner ascribes several errors to the issuance and implementation of the writ of
attachment. Among petitioners arguments are: first, there was no ground for the issuance of
The Ruling of the Court of Appeals the writ since the intent to defraud her creditors had not been established; second, the value
of the properties levied exceeded the value of private respondents claim. However, the crux
of petitioners arguments rests on the question of the validity of the writ of attachment.
On December 15, 1995, the Court of Appeals rendered a decision affirming the decision Because of failure to serve summons on her before or simultaneously with the writs
of the trial court. The Court of Appeals upheld the validity of the issuance of the writ of implementation, petitioner claims that the trial court had not acquired jurisdiction over her
attachment and sustained the filing of the action in the RTC of Pasay. The Court of Appeals also person and thus the service of the writ is void.
affirmed the declaration of default on petitioner and concluded that the trial court did not
As a preliminary note, a distinction should be made between issuance and
commit any reversible error.
implementation of the writ of attachment. It is necessary to distinguish between the two to
Petitioner filed a Motion for Reconsideration on January 5, 1996 but the Court of Appeals determine when jurisdiction over the person of the defendant should be acquired to validly
denied the same in a Resolution dated May 20, 1996.
implement the writ. This distinction is crucial in resolving whether there is merit in petitioners despite diligent efforts or where the defendant is a resident temporarily absent therefrom x x
argument. x. Private respondent asserts that when she commenced this action, she tried to serve
summons on petitioner but the latter could not be located at her customary address in
This Court has long settled the issue of when jurisdiction over the person of the [24]
Kamuning, Quezon City or at her new address in Guagua, Pampanga. Furthermore,
defendant should be acquired in cases where a party resorts to provisional remedies. A party respondent claims that petitioner was not even in Pampanga; rather, she was in Guam
to a suit may, at any time after filing the complaint, avail of the provisional remedies under the purportedly on a business trip.
Rules of Court. Specifically, Rule 57 on preliminary attachment speaks of the grant of the
[21]
remedy at the commencement of the action or at any time thereafter. This phrase refers Private respondent never showed that she effected substituted service on petitioner
to the date of filing of the complaint which is the moment that marks the commencement of after her personal service failed. Likewise, if it were true that private respondent could not
the action. The reference plainly is to a time before summons is served on the defendant, or ascertain the whereabouts of petitioner after a diligent inquiry, still she had some other
even before summons issues. recourse under the Rules of Civil Procedure.
[22]
In Davao Light & Power Co., Inc. v. Court of Appeals, this Court clarified the actual The rules provide for certain remedies in cases where personal service could not be
time when jurisdiction should be had: effected on a party. Section 14, Rule 14 of the Rules of Court provides that whenever the
defendants whereabouts are unknown and cannot be ascertained by diligent inquiry, service
It goes without saying that whatever be the acts done by the Court prior to the acquisition of may, by leave of court, be effected upon him by publication in a newspaper of general
jurisdiction over the person of defendant - issuance of summons, order of attachment and circulation x x x. Thus, if petitioners whereabouts could not be ascertained after the sheriff had
writ of attachment - these do not and cannot bind and affect the defendant until and unless served the summons at her given address, then respondent could have immediately asked the
[25]
jurisdiction over his person is eventually obtained by the court, either by service on him of court for service of summons by publication on petitioner.
summons or other coercive process or his voluntary submission to the courts authority. Moreover, as private respondent also claims that petitioner was abroad at the time of
Hence, when the sheriff or other proper officer commences implementation of the writ of the service of summons, this made petitioner a resident who is temporarily out of the country.
attachment, it is essential that he serve on the defendant not only a copy of the applicants [26]
This is the exact situation contemplated in Section 16, Rule 14 of the Rules of Civil Procedure,
affidavit and attachment bond, and of the order of attachment, as explicitly required by providing for service of summons by publication.
Section 5 of Rule 57, but also the summons addressed to said defendant as well as a copy of
the complaint xxx. (Emphasis supplied.) In conclusion, we hold that the alias summons belatedly served on petitioner cannot be
deemed to have cured the fatal defect in the enforcement of the writ. The trial court cannot
Furthermore, we have held that the grant of the provisional remedy of attachment involves enforce such a coercive process on petitioner without first obtaining jurisdiction over her
three stages: first, the court issues the order granting the application; second, the writ of person. The preliminary writ of attachment must be served after or simultaneous with the
attachment issues pursuant to the order granting the writ; and third, the writ is service of summons on the defendant whether by personal service, substituted service or by
[27]
implemented. For the initial two stages, it is not necessary that jurisdiction over the person publication as warranted by the circumstances of the case. The subsequent service of
of the defendant be first obtained. However, once the implementation of the writ summons does not confer a retroactive acquisition of jurisdiction over her person because the
commences, the court must have acquired jurisdiction over the defendant for without such law does not allow for retroactivity of a belated service.
jurisdiction, the court has no power and authority to act in any manner against the defendant.
[23]
Any order issuing from the Court will not bind the defendant.

In the instant case, the Writ of Preliminary Attachment was issued on September 27, Improper Venue
1988 and implemented on October 28, 1988. However, the alias summons was served only
on January 26, 1989 or almost three months after the implementation of the writ of
attachment. Petitioner assails the filing of this case in the RTC of Pasay and points to a provision in
private respondents invoice which contains the following:
The trial court had the authority to issue the Writ of Attachment on September 27 since
a motion for its issuance can be filed at the commencement of the action. However, on the 3. If court litigation becomes necessary to enforce collection, an additional equivalent (sic) to
day the writ was implemented, the trial court should have, previously or simultaneously with 25% of the principal amount will be charged. The agreed venue for such action is Makati,
the implementation of the writ, acquired jurisdiction over the petitioner. Yet, as was shown in Metro Manila, Philippines.
[28]
the records of the case, the summons was actually served on petitioner several months after
the writ had been implemented.
Based on this provision, petitioner contends that the action should have been instituted
Private respondent, nevertheless, claims that the prior or contemporaneous service of in the RTC of Makati and to do otherwise would be a ground for the dismissal of the case.
summons contemplated in Section 5 of Rule 57 provides for exceptions. Among such
exceptions are where the summons could not be served personally or by substituted service
 We resolve to dismiss the case on the ground of improper venue but not for the reason case was brought in Pasay City, where the business of private respondent is found. This would
stated by petitioner. have been permissible had private respondents business been a corporation, just like the case
in Sy v. Tyson Enterprises, Inc. However, as admitted by private respondent in her
The Rules of Court provide that parties to an action may agree in writing on the venue [37]
Complaint in the lower court, her business is a sole proprietorship, and as such, does not
[29]
on which an action should be brought. However, a mere stipulation on the venue of an [38]
have a separate juridical personality that could enable it to file a suit in court. In fact, there
[30]
action is not enough to preclude parties from bringing a case in other venues. The parties [39]
is no law authorizing sole proprietorships to file a suit in court.
must be able to show that such stipulation is exclusive. Thus, absent words that show the
parties intention to restrict the filing of a suit in a particular place, courts will allow the filing of A sole proprietorship does not possess a juridical personality separate and distinct from
[40]
a case in any venue, as long as jurisdictional requirements are followed. Venue stipulations in the personality of the owner of the enterprise. The law merely recognizes the existence of
a contract, while considered valid and enforceable, do not as a rule supersede the general rule a sole proprietorship as a form of business organization conducted for profit by a single
[31]
set forth in Rule 4 of the Revised Rules of Court. In the absence of qualifying or restrictive individual and requires its proprietor or owner to secure licenses and permits, register its
[41]
words, they should be considered merely as an agreement on additional forum, not as limiting business name, and pay taxes to the national government. The law does not vest a separate
[32]
venue to the specified place. legal personality on the sole proprietorship or empower it to file or defend an action in
[42]
court.
In the instant case, the stipulation does not limit the venue exclusively to Makati. There
are no qualifying or restrictive words in the invoice that would evince the intention of the Thus, not being vested with legal personality to file this case, the sole proprietorship is
parties that Makati is the only or exclusive venue where the action could be instituted. We not the plaintiff in this case but rather Loreta Guina in her personal capacity. In fact, the
therefore agree with private respondent that Makati is not the only venue where this case complaint in the lower court acknowledges in its caption that the plaintiff and defendant are
could be filed. Loreta Guina and Anita Mangila, respectively. The title of the petition before us does not state,
and rightly so, Anita Mangila v. Air Swift International, but rather Anita Mangila v. Loreta
Nevertheless, we hold that Pasay is not the proper venue for this case. Guina. Logically then, it is the residence of private respondent Guina, the proprietor with the
Under the 1997 Rules of Civil Procedure, the general rule is venue in personal actions is juridical personality, which should be considered as one of the proper venues for this case.
where the defendant or any of the defendants resides or may be found, or where the plaintiff All these considered, private respondent should have filed this case either in San
[33]
or any of the plaintiffs resides, at the election of the plaintiff. The exception to this rule is Fernando, Pampanga (petitioners residence) or Paraaque (private respondents residence).
when the parties agree on an exclusive venue other than the places mentioned in the rules. Since private respondent (complainant below) filed this case in Pasay, we hold that the case
But, as we have discussed, this exception is not applicable in this case. Hence, following the should be dismissed on the ground of improper venue.
general rule, the instant case may be brought in the place of residence of the plaintiff or
defendant, at the election of the plaintiff (private respondent herein). Although petitioner filed an Urgent Motion to Discharge Attachment in the lower court,
petitioner expressly stated that she was filing the motion without submitting to the jurisdiction
In the instant case, the residence of private respondent (plaintiff in the lower court) was of the court. At that time, petitioner had not been served the summons and a copy of the
not alleged in the complaint. Rather, what was alleged was the postal address of her sole [43] [44]
complaint. Thereafter, petitioner timely filed a Motion to Dismiss on the ground of
proprietorship, Air Swift International. It was only when private respondent testified in court, improper venue. Rule 16, Section 1 of the Rules of Court provides that a motion to dismiss may
after petitioner was declared in default, that she mentioned her residence to be in Better Living be filed [W]ithin the time for but before filing the answer to the complaint or pleading asserting
Subdivision, Paraaque City. [45]
a claim. Petitioner even raised the issue of improper venue in his Answer as a special and
[34]
In the earlier case of Sy v. Tyson Enterprises, Inc., the reverse happened. The plaintiff affirmative defense. Petitioner also continued to raise the issue of improper venue in her
[46]
in that case was Tyson Enterprises, Inc., a corporation owned and managed by Dominador Ti. Petition for Review before this Court. We thus hold that the dismissal of this case on the
The complaint, however, did not allege the office or place of business of the corporation, which ground of improper venue is warranted.
was in Binondo, Manila. What was alleged was the residence of Dominador Ti, who lived in San The rules on venue, like other procedural rules, are designed to insure a just and orderly
Juan, Rizal. The case was filed in the Court of First Instance of Rizal, Pasig. The Court there held administration of justice or the impartial and evenhanded determination of every action and
that the evident purpose of alleging the address of the corporations president and manager proceeding. Obviously, this objective will not be attained if the plaintiff is given unrestricted
was to justify the filing of the suit in Rizal, Pasig instead of in Manila. Thus, the Court ruled that [47]
freedom to choose where to file the complaint or petition.
there was no question that venue was improperly laid in that case and held that the place of
business of Tyson Enterpises, Inc. is considered as its residence for purposes of venue. We find no reason to rule on the other issues raised by petitioner.
Furthermore, the Court held that the residence of its president is not the residence of the
corporation because a corporation has a personality separate and distinct from that of its WHEREFORE, the petition is GRANTED on the grounds of improper venue and invalidity
officers and stockholders. of the service of the writ of attachment. The decision of the Court of Appeals and the order of
respondent judge denying the motion to dismiss are REVERSED and SET ASIDE. Civil Case No.
In the instant case, it was established in the lower court that petitioner resides in San 5875 is hereby dismissed without prejudice to refiling it in the proper venue. The attached
[35] [36]
Fernando, Pampanga while private respondent resides in Paraaque City. However, this properties of petitioner are ordered returned to her immediately.
 SO ORDERED. There is merit in the instant petition.
[2]
Puno, (Chairman), and Panganiban, JJ., concur. Section 4, Rule 4, of the Revised Rules of Civil Procedure allows the parties to agree
Sandoval-Gutierrez, J., on leave. and stipulate in writing, before the filing of an action, on the exclusive venue of any litigation
between them. Such an agreement would be valid and binding provided that the stipulation
on the chosen venue is exclusive in nature or in intent, that it is expressed in writing by the
THIRD DIVISION parties thereto, and that it is entered into before the filing of the suit. The provision contained
in paragraph 22 of the Mobile Service Agreement, a standard contract made out by petitioner
PILTEL to its subscribers, apparently accepted and signed by respondent, states that the venue
of all suits arising from the agreement, or any other suit directly or indirectly arising from the
[G.R. No. 156966. May 7, 2004] relationship between PILTEL and subscriber, shall be in the proper courts of Makati, Metro
[3]
Manila. The added stipulation that the subscriber expressly waives any other venue should
indicate, clearly enough, the intent of the parties to consider the venue stipulation as being
preclusive in character.
PILIPINO TELEPHONE CORPORATION, petitioner, vs. DELFINO TECSON, respondent.
The appellate court, however, would appear to anchor its decision on the thesis that the
subscription agreement, being a mere contract of adhesion, does not bind respondent on the
D E C I S I O N venue stipulation.
VITUG, J.: Indeed, the contract herein involved is a contract of adhesion. But such an agreement is
not per se inefficacious. The rule instead is that, should there be ambiguities in a contract of
The facts, by and large, are undisputed. adhesion, such ambiguities are to be construed against the party that prepared it. If, however,
the stipulations are not obscure, but are clear and leave no doubt on the intention of the
On various dates in 1996, Delfino C. Tecson applied for six (6) cellular phone subscriptions parties, the literal meaning of its stipulations must be held controlling.
[4]

with petitioner Pilipino Telephone Corporation (PILTEL), a company engaged in the

telecommunications business, which applications were each approved and covered, A contract of adhesion is just as binding as ordinary contracts. It is true that this Court
respectively, by six mobiline service agreements. has, on occasion, struck down such contracts as being assailable when the weaker party is left
with no choice by the dominant bargaining party and is thus completely deprived of an
On 05 April 2001, respondent filed with the Regional Trial Court of Iligan City, Lanao Del opportunity to bargain effectively. Nevertheless, contracts of adhesion are not prohibited even
Norte, a complaint against petitioner for a Sum of Money and Damages. Petitioner moved for as the courts remain careful in scrutinizing the factual circumstances underlying each case to
the dismissal of the complaint on the ground of improper venue, citing a common provision in determine the respective claims of contending parties on their efficacy.
the mobiline service agreements to the effect that -
In the case at bar, respondent secured six (6) subscription contracts for cellular phones
on various dates. It would be difficult to assume that, during each of those times, respondent
Venue of all suits arising from this Agreement or any other suit directly or indirectly arising
had no sufficient opportunity to read and go over the terms and conditions embodied in the
from the relationship between PILTEL and subscriber shall be in the proper courts of Makati,
[1] agreements. Respondent continued, in fact, to acquire in the pursuit of his business
Metro Manila. Subscriber hereby expressly waives any other venues.
subsequent subscriptions and remained a subscriber of petitioner for quite sometime.
[5]
In an order, dated 15 August 2001, the Regional Trial Court of Iligan City, Lanao del Norte, In Development Bank of the Philippines vs. National Merchandising Corporation, the
denied petitioners motion to dismiss and required it to file an answer within 15 days from contracting parties, being of age and businessmen of experience, were presumed to have
receipt thereof. acted with due care and to have signed the assailed documents with full knowledge of their
import. The situation would be no less true than that which obtains in the instant suit. The
Petitioner PILTEL filed a motion for the reconsideration, through registered mail, of the [6]
circumstances in Sweet Lines, Inc. vs. Teves, wherein this Court invalidated the venue
order of the trial court. In its subsequent order, dated 08 October 2001, the trial court denied stipulation contained in the passage ticket, would appear to be rather peculiar to that
the motion for reconsideration. case. There, the Court took note of an acute shortage in inter-island vessels that left passengers
Petitioner filed a petition for certiorari under Rule 65 of the Revised Rules of Civil literally scrambling to secure accommodations and tickets from crowded and congested
Procedure before the Court of Appeals. counters. Hardly, therefore, were the passengers accorded a real opportunity to examine the
fine prints contained in the tickets, let alone reject them.
The Court of Appeals, in its decision of 30 April 2002, saw no merit in the petition and
affirmed the assailed orders of the trial court. Petitioner moved for a reconsideration, but the A contract duly executed is the law between the parties, and they are obliged to comply
[7]
appellate court, in its order of 21 January 2003, denied the motion. fully and not selectively with its terms. A contract of adhesion is no exception.
 WHEREFORE, the instant petition is GRANTED, and the questioned decision and
15
resolution of the Court of Appeals in CA-G.R. SP No. 68104 are REVERSED and SET ASIDE. Civil For its part, Cash Asia filed a Motion to Dismiss dated August 25, 2010, praying for the
16
Case No. 5572 pending before the Regional Trial Court of Iligan City, Branch 4, is DISMISSED outright dismissal of Briones’s complaint on the ground of improper venue. In this regard,
without prejudice to the filing of an appropriate complaint by respondent against petitioner Cash Asia pointed out the venue stipulation in the subject contracts stating that “all legal
with the court of proper venue. No costs. actions arising out of this notice in connection with the Real Estate Mortgage subject hereof
shall only be brought in or submitted to the jurisdiction of the proper court of Makati
SO ORDERED. 17
City.” In view thereof, it contended that all actions arising out of the subject contracts may
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur. only be exclusively brought in the courts of Makati City, and as such, Briones’s complaint
18
should be dismissed for having been filed in the City of Manila. chanRoblesvirtualLawlibrary

19
In response, Briones filed an opposition, asserting, inter alia, that he should not be covered
FIRST DIVISION
by the venue stipulation in the subject contracts as he was never a party therein. He also
reiterated that his signatures on the said contracts were
20
G.R. No. 204444, January 14, 2015 forgeries. chanRoblesvirtualLawlibrary

VIRGILIO C. BRIONES, Petitioner, v. COURT OF APPEALS AND CASH ASIA CREDIT The RTC Ruling
CORPORATION, Respondents.
21
In an Order dated September 20, 2010, the RTC denied Cash Asia’s motion to dismiss for
D E C I S I O N lack of merit. In denying the motion, the RTC opined that the parties must be afforded the
right to be heard in view of the substance of Briones’s cause of action against Cash Asia as
22
stated in the complaint. chanRoblesvirtualLawlibrary
PERLAS-BERNABE, J.:
23 24
Cash Asia moved for reconsideration which was, however, denied in an Order dated
1 2 25
Assailed in this petition for certiorari are the Decision dated March 5, 2012 and the October 22, 2010. Aggrieved, it filed a petition for certiorari before the CA.cralawred
3
Resolution dated October 4, 2012 of the Court of Appeals(CA) in CA-G.R. SP No. 117474,
4 5
which annulled the Orders dated September 20, 2010 and October 22, 2010 of the Regional The CA Ruling
Trial Court of Manila, Branch 173 (RTC) in Civil Case No. 10-124040, denying private
respondent Cash Asia Credit Corporation’s (Cash Asia) motion to dismiss on the ground of 26
In a Decision dated March 5, 2012, the CA annulled the RTC Orders, and accordingly,
improper venue.cralawred dismissed Briones’s complaint without prejudice to the filing of the same before the proper
27
court in Makati City. It held that the RTC gravely abused its discretion in denying Cash Asia’s
The Facts motion to dismiss, considering that the subject contracts clearly provide that actions arising
28
therefrom should be exclusively filed before the courts of Makati City only. As such, the CA
6
The instant case arose from a Complaint dated August 2, 2010 filed by Virgilio C. Briones concluded that Briones’s complaint should have been dismissed outright on the ground of
29
(Briones) for Nullity of Mortgage Contract, Promissory Note, Loan Agreement, Foreclosure of improper venue, this, notwithstanding Briones’s claim of forgery.
Mortgage, Cancellation of Transfer Certificate of Title (TCT) No.290846, and Damages against
7 30
Cash Asia before the RTC. In his complaint, Briones alleged that he is the owner of a Dissatisfied, Briones moved for reconsideration, which was, however, denied in a
31
property covered by TCT No. 160689 (subject property),and that, on July 15, 2010, his sister Resolution dated October 4, 2012, hence, this petition.
informed him that his property had been foreclosed and a writ of possession had already
8
been issued in favor of Cash Asia. Upon investigation, Briones discovered that: (a) on The Issue Before the Court
9 10
December 6, 2007, he purportedly executed a promissory note, loan agreement, and deed
11
of real estate mortgage covering the subject property (subject contracts) in favor of Cash The primordial issue for the Court’s resolution is whether or not the CA gravely abused its
12
Asia in order to obtain a loan in the amount of P3,500,000.00 from the latter; and (b) since discretion in ordering the outright dismissal of Briones’s complaint on the ground of
13
the said loan was left unpaid, Cash Asia proceeded to foreclose his property. In this improper venue.
relation, Briones claimed that he never contracted any loans from Cash Asia as he has been
living and working in Vietnam since October 31, 2007. He further claimed that he only went The Court’s Ruling
back to the Philippines on December 28, 2007 until January 3, 2008 to spend the holidays
with his family, and that during his brief stay in the Philippines, nobody informed him of any The petition is meritorious.
loan agreement entered into with Cash Asia. Essentially, Briones assailed the validity of the
14
foregoing contracts claiming his signature to be forged. chanRoblesvirtualLawlibrary
 33
At the outset, the Court stresses that “[t]o justify the grant of the extraordinary remedy jurisprudence in Legaspi v. Rep. of the Phils. instructs that the parties, thru a written
of certiorari, [the petitioner] must satisfactorily show that the court or quasi-judicial instrument, may either introduce another venue where actions arising from such instrument
authority gravely abused the discretion conferred upon it. Grave abuse of discretion may be filed, or restrict the filing of said actions in a certain exclusive
connotes judgment exercised in a capricious and whimsical manner that is tantamount to venue, viz.:chanroblesvirtuallawlibrary
lack of jurisdiction. To be considered ‘grave,’ discretion must be exercised in a despotic
manner by reason of passion or personal hostility, and must be so patent and gross as to The parties, however, are not precluded from agreeing in writing on an exclusive venue, as
amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by qualified by Section 4 of the same rule. Written stipulations as to venue may be restrictive
32
or to act at all in contemplation of law.” chanRoblesvirtualLawlibrary in the sense that the suit may be filed only in the place agreed upon, or merely permissive
in that the parties may file their suit not only in the place agreed upon but also in the
Guided by the foregoing considerations, the Court finds that the CA gravely abused its places fixed by law. As in any other agreement, what is essential is the ascertainment of the
discretion in ordering the outright dismissal of Briones’s complaint against Cash Asia, without intention of the parties respecting the matter.
prejudice to its re-filing before the proper court in Makati City.
As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to that such stipulation is exclusive. In the absence of qualifying or restrictive words, such as
wit:chanroblesvirtuallawlibrary “exclusively,” “waiving for this purpose any other venue,” “shall only” preceding the
designation of venue, “to the exclusion of the other courts,” or words of similar import, the
Rule 4 stipulation should be deemed as merely an agreement on an additional forum, not as
34
VENUE OF ACTIONS limiting venue to the specified place. (Emphases and underscoring supplied)

SECTION 1. Venue of real actions. — Actions affecting title to or possession of real property, In this relation, case law likewise provides that in cases where the complaint assails only the
or interest therein, shall be commenced and tried in the proper court which has jurisdiction terms, conditions, and/or coverage of a written instrument and not its validity, the exclusive
over the area wherein the real property involved, or a portion thereof, is situated. venue stipulation contained therein shall still be binding on the parties, and thus, the
35
complaint may be properly dismissed on the ground of improper venue. Conversely,
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court therefore, a complaint directly assailing the validity of the written instrument itself should
of the municipality or city wherein the real property involved, or a portion thereof, is not be bound by the exclusive venue stipulation contained therein and should be filed in
situated. accordance with the general rules on venue.To be sure, it would be inherently consistent for
a complaint of this nature to recognize the exclusive venue stipulation when it, in fact,
SEC. 2. Venue of personal actions. — All other actions may be commenced and tried where precisely assails the validity of the instrument in which such stipulation is contained.
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where he may be In this case, the venue stipulation found in the subject contracts is indeed restrictive in
found, at the election of the plaintiff. nature, considering that it effectively limits the venue of the actions arising therefrom to the
courts of Makati City. However, it must be emphasized that Briones’s complaint directly
SEC. 3. Venue of actions against nonresidents. — If any of the defendants does not reside and assails the validity of the subject contracts, claiming forgery in their execution. Given this
is not found in the Philippines, and the action affects the personal status of the plaintiff, or circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation, as
any property of said defendant located in the Philippines, the action may be commenced and his compliance therewith would mean an implicit recognition of their validity. Hence,
tried in the court of the place where the plaintiff resides, or where the property or any pursuant to the general rules on venue, Briones properly filed his complaint before a court in
portion thereof is situated or found. the City of Manila where the subject property is located.

SEC. 4. When Rule not applicable. — This Rule shall not apply – In conclusion, the CA patently erred and hence committed grave abuse of discretion in
dismissing Briones’s complaint on the ground of improper venue.chanrobleslaw
(a) In those cases where a specific rule or law provides otherwise; or
WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated March 5, 2012 and
(b) Where the parties have validly agreed in writing before the filing of the action on the the Resolution dated October 4, 2012 of the Court of Appeals in CA-G.R. SP No. 117474 are
exclusive venue thereof. hereby ANNULLED and SET ASIDE. The Orders dated September 20, 2010 and October 22,
2010 of the Regional Trial Court of Manila, Branch 173 in Civil Case No. 10-124040
Based therefrom, the general rule is that the venue of real actions is the court which has are REINSTATED.
jurisdiction over the area wherein the real property involved, or a portion thereof, is
situated; while the venue of personal actions is the court which has jurisdiction where the SO ORDERED.cralawlawlibrary
plaintiff or the defendant resides, at the election of the plaintiff. As an exception,
 matters in Metro Manila, where such gross value exceeds Two Hundred thousand
BP BLG 129 pesos (P200,000.00);

"(5) In all actions involving the contract of marriage and marital relations;
Section 9. Jurisdiction. – The Court of Appeals shall Exercise:
"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas body exercising jurisdiction of any court, tribunal, person or body exercising judicial
corpus, and quo warranto,and auxiliary writs or processes, whether or not in aid of or quasi-judicial functions;
its appellate jurisdiction;
"(7) In all civil actions and special proceedings falling within the exclusive original
2. Exclusive original jurisdiction over actions for annulment of judgements of jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian
Regional Trial Courts; and Relations as now provided by law; and

3. Exclusive appellate jurisdiction over all final judgements, resolutions, orders or "(8) In all other cases in which the demand, exclusive of interest, damages of
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, whatever kind, attorney's fees, litigation expenses, and costs or the value of the
boards or commission, including the Securities and Exchange Commission, the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in
Social Security Commission, the Employees Compensation Commission and the Civil such other cases in Metro Manila, where the demand exclusive of the
Service Commission, Except those falling within the appellate jurisdiction of the abovementioned items exceeds Two Hundred thousand pesos (P200,000.00)."
Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of this "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and
fourth paragraph od Section 17 of the Judiciary Act of 1948. Municipal Circuit Trial Courts shall exercise:

"(1) Exclusive original jurisdiction over civil actions and probate proceedings,
testate and intestate, including the grant of provisional remedies in proper cases,
"Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original where the value of the personal property, estate, or amount of the demand does
jurisdiction. not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where
such personal property, estate, or amount of the demand does not exceed Two
"(1) In all civil actions in which the subject of the litigation is incapable of pecuniary hundred thousand pesos (P200,000.00), exclusive of interest, damages of whatever
estimation; kind, attorney's fees, litigation expenses, and costs, the amount of which must be
specifically alleged: Provided, That interest, damages of whatever kind, attorney's
fees, litigation expenses, and costs shall be included in the determination of the
"(2) In all civil actions which involve the title to, or possession of, real property, or
filing fees: Provided, further, That where there are several claims or causes of
any interest therein, where the assessed value of the property involved exceeds
actions between the same or different parties, embodied in the same complaint,
Twenty thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where
the amount of the demand shall be the totality of the claims in all the causes of
such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible
action, irrespective of whether the causes of action arose out of the same or
entry into and unlawful detainer of lands or buildings, original jurisdiction over
different transactions;
which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts;
"(2) Exclusive original jurisdiction over cases of forcible entry and unlawful
detainer: Provided, That when, in such cases, the defendant raises the questions of
"(3) In all actions in admiralty and maritime jurisdiction where the demand or claim
ownership in his pleadings and the question of possession cannot be resolved
exceeds One hundred thousand pesos (P100,000.00) or, in Metro Manila, where
without deciding the issue of ownership, the issue of ownership shall be resolved
such demand or claim exceeds Two hundred thousand pesos (P200,000.00);
only to determine the issue of possession; and

"(4) In all matters of probate, both testate and intestate, where the gross value of
"(3) Exclusive original jurisdiction in all civil actions which involve title to, or
the estate exceeds One hundred thousand pesos (P100,000.00) or, in probate
possession of, real property, or any interest therein where the assessed value of
 the property or interest therein does not exceed Twenty thousand pesos the plaintiff Jose L. Espinos in the amount of P1,579.44, with legal
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value does interest thereon from the filing of the complaint on June 5, 1959; (7) that
not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of the same defendant is indebted to the plaintiff Bacolod Southern Lumber
whatever kind, attorney's fees, litigation expenses and costs: Provided, That in Yard in the amount of Pl,048.78, with legal interest thereon from the
cases of land not declared for taxation purposes, the value of such property shall filing of the complaint on June 5, 1959; (8) that the same defendant is
be determined by the assessed value of the adjacent lots." indebted to the plaintiff Jose Belzunce in the amount of P2,052.10, with
legal interest thereon from the filing of the complaint on June 5. 1959; (9)
that the defendant Margarita G. Saldajeno, having purchased at public
auction the assets of the defendant partnership over which the plaintiffs
have a preferred right, and having sold said assets for P 45,000.00, is
G.R. No. L-27343 February 28, 1979
bound to pay to each of the plaintiffs the respective amounts for which
the defendant partnership is held indebted to, them, as above indicated
MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E. TONSAY, JOSE L. ESPINOS, BACOLOD and she is hereby ordered to pay the said amounts, plus attorneys fees
SOUTHERN LUMBER YARD, and OPPEN, ESTEBAN, INC., plaintiffs-appellees, equivalent to 25% of the judgment in favor of the plaintiff Manuel G.
vs. Singson, as stipulated in Exhs. "I" "to I-17", inclusive, and 20% of the
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her husband CECILIO SALDAJENO LEON respective judgments in favor of the other plaintiffs, pursuant to. Art.
GARIBAY, TIMOTEO TUBUNGBANUA, and THE PROVINCIAL SHERIFF OF NEGROS 2208, pars. (5) and (11), of the Civil Code of the Philippines; (10) The
OCCIDENTAL, defendants, MARGARITA G. SALDAJENO and her husband CECILIO defendants Leon Garibay and Timoteo Tibungbanua are hereby ordered
SALDAJENO, defendants-appellants. to pay to the plaintiffs the respective amounts adjudged in their favor in
the event that said plaintiffs cannot recover them from the defendant
Margarita G. Saldajeno and the surety on the bond that she has filed for
the lifting of the injunction ordered by this court upon the
FERNANDEZ, J.: commencement of this case.

This is an appeal to the Court of Appeals from the judgment of the Court of First Instance of The cross-claim cf the defendant Margarita G. Saldajeno against the
Negros Occidental in Civil Cage No. 5343, entitled "Manuel G. Singson, et all vs. Isabela defendants Leon Garibay arid Timoteo Tubungbanua is hereby discussed
Sawmill, et al.,", the dispositive portion of which reads: Margarita G. Saldajeno shall pay the costs.

1
IN VIEW OF THE FOREGOING CONSIDERATIONS, it is hereby held. (1) that SO ORDERED.
the contract, Appendix "F", of the Partial Stipulation of Facts, Exh. "A",
has not created a chattel mortgage lien on the machineries and other In a resolution promulgated on February 3, 1967, the Court of Appeals certified the records
chattels mentioned therein, all of which are property of the defendant of this case to the Supreme Court "considering that the resolution of this appeal involves
2
partnership "Isabela Sawmill", (2) that the plaintiffs, as creditors of the purely questions or question of law over which this Court has no jurisdiction ...
defendant partnership, have a preferred right over the assets of the said
partnership and over the proceeds of their sale at public auction, superior On June 5. 1959, Manuel G. Singsong, Jose Belzunce, Agustin E. Tonsay, Jose L. Espinos,
to the right of the defendant Margarita G. Saldajeno, as creditor of the Bacolod Southern Lumber Yard, and Oppen, Esteban, Inc. filed in the Court of first Instance of
partners Leon Garibay and Timoteo Tubungbanua; (3) that the defendant Negros Occidental, Branch I, against "Isabela Sawmill", Margarita G. Saldajeno and her
Isabela Sawmill' is indebted to the plaintiff Oppen, Esteban, Inc. in the husband Cecilio Saldajeno, Leon Garibay, Timoteo Tubungbanua and the Provincial Sheriff of
amount of P1,288.89, with legal interest thereon from the filing of the Negros Occidental a complaint the prayer of which reads:
complaint on June 5, 1959; (4) that the same defendant is indebted to the
plaintiff Manuel G. Singsong in the total amount of P5,723.50, with
WHEREFORE, the plaintiffs respectfully pray:
interest thereon at the rate of 1 % per month from May 6, 1959, (the
date of the statements of account, Exhs. "L" and "M"), and 25% of the
total indebtedness at the time of payment, for attorneys' fees, both (1) That a writ of preliminary injunction be issued restraining the
interest and attorneys fees being stipulated in Exhs. "I" to "17", inclusive; defendant Provincial Sheriff of Negros Occidental from proceeding with
(5) that the same defendant is indebted to the plaintiff Agustin E. Tonsay the sales at public auction that he advertised in two notices issued by him
in the amount of P933.73, with legal interest thereon from the filing of on May 18, 1959 in connection with Civil Case No. 5223 of this Honorable
the complaint on June 5, 1959; (6) that the same defendant is indebted to
 Court, until further orders of this Court; and to make said injunction 2. That the defendant Isabela Sawmill has been dissolved by virtue of an
permanent after hearing on the merits: action entitled "In the matter of: Dissolution of Isabela Sawmill as
partnership, etc. Margarita G. Saldajeno et al. vs. Isabela Sawmill, et al.,
(2) That after hearing, the defendant partnership be ordered; to pay to Civil Case No. 4787, Court of First Instance of Negros Occidental;
the plaintiff Manuel G. Singson the sum of P3,723.50 plus 1% monthly
interest thereon and 25% attorney's fees, and costs; to pay to the plaintiff 3. That as a result of the said dissolution and the decision of the Court of
JoseBelzunce the sum of P2,052.10, plus 6% annual interest thereon and First Instance of Negros Occidental in the aforesaid case, the other
25% for attorney's fees, and costs;to pay to the plaintiff Agustin E. Tonsay defendants herein Messrs. Leon Garibay and Timoteo Tubungbanua
the sum of P993.73 plus 6% annual interest thereon and 25% attorney's became the successors-in-interest to the said defunct partnership and
fees, and costs; to pay to the plaintiff Bacolod Southern Lumber Yard the have bound themselves to answere for any and all obligations of the
sum of P1,048.78, plus 6% annual interest thereon and 25% attorney's defunct partnership to its creditors and third persons;
fees, and costs; and to pay to the plaintiff Oppen, Esteban, Inc. the sum
of P1,350.89, plus 6% annual interest thereon and 25% attorney's fees 4. That to secure the performance of the obligations of the other
and costs: defendants Leon Garibay and Timoteo Tubungbanua to the answering
defendant herein, the former have constituted a chattel mortgage over
(3) That the so-called Chattel Mortgage executed by the defendant Leon the properties mentioned in the annexes to that instrument entitled
Garibay and Timoteo Tubungbanua in favor of the defendant Margarita "Assignment of Rights with Chattel Mortgage" entered into on May 26,
G. Saldajeno on May 26, 1958 be declared null and void being in fraud of 1968 and duly registered in the Register of Deeds of Negros Occidental on
creditors of the defendant partnership and without valuable the same date:
consideration insofar as the said defendant is concerned:
5. That all the plaintiffs herein, with the exceptionof the plaintiff Oppen,
(4) That the Honorable Court order the sale of public auction of the assets Esteban, Inc. are creditors of Messrs. Leon Garibay and Timoteo
of the defendnat partnership in case the latter fails to pay the judgment Tubungbanua and not of the defunct Isabela Sawmill and as such they
that the plaintiffs may recover in the action, with instructions that the have no cause of action against answering defendant herein and the
proceeds of the sale b e applied in payment of said judgment before any defendant Isabela Sawmill;
part of saod proceeds is paid to the defendant Margarita G. Saldajeno;
6. That all the plaintiffs herein, except for the plaintiff Oppen, Esteban,
(5) That the defendant Leon Garibay, Timoteo Tubungbanua, and Inc. granted cash advances, gasoline, crude oil, motor oil, grease, rice and
Margarita G. Saldajeno be declared jointly liable to the plaintifs for nipa to the defendants Leon Garibay and Timoteo Tubungbanua with the
whatever deficiency may remain unpaid after the proceeds of the sale of knowledge and notice that the Isabela Sawmill as a former partnership of
the assets of the defendnt partnership are supplied in payment of the defendants Margarita G. Isabela Sawmill as a former partnership of
judgment that said plaintiffs may recover in this action; defendants Margarita G. Saldajeno, Leon Garibay and Timoteo
Tubungbanua, has already been dissolved;
(6) The plaintiffs further pray for all other remedies to which the
Honorable Court will find them entitled to, with costs to the defendants. 7. That this Honorable Court has no jurisdictionover the claims of the
plaintiffs Oppen, Esteban, Inc., Agustin R. Tonsay, Jose L. Espinos, and the
3
Bacolod City, June 4, 1959. Bacolod Southern Lumber Yard, it appearing that the amounts sought to
be recovered by them in this action is less than P2,000.00 each, exclusive
of interests;
The action was docketed as Civil Case No. 5343 of said court.

8. That in so far as the claims of these alleged creditors plaintiffs are

In their amended answer, the defendants Margarita G. Saldajeno and her husband, Cecilio
concerned, there is a misjoinder of parties because this is not a class suit,
Saldajeno, alleged the following special and affirmative defenses:
and therefore this Honorable Court cannot take jurisdictionof the claims
for payment;
xxx xxx xxx
9. That the claims of plaintiffs-creditors, except Oppen, Esteban, Inc. go
beyond the limit mentioned inthe statute of frauds, Art. 1403 of the Civil
 Code, and are therefor unenforceable, even assuming that there were THE COURT A QUO ERRED IN ISSUING THE WRIT OF PRELIMINARY
such credits and claims; INJUNCTION.

10. That this Honorable Court has no jurisdiction in this case for it is well V
settled in law and in jurisprudence that a court of first instance has no
power or jurisdiction to annul judgments or decrees of a coordinate court THE COURT A QUO ERRED IN HOLDING THAT THE CHATTEL MORTGAGE
because other function devolves upon the proper appellate court; DATED MAY 26, 1958, WHICH CONSTITUTED THE JUDGMENT IN CIVIL
(Lacuna, et al. vs. Ofilada, et al., G.R. No. L-13548, September 30, 1959; CASE NO. 4797 AND WHICH WAS FORECLOSED IN CIVIL CASE NO. 5223
Cabigao vs. del Rosario, 44 Phil. 182; PNB vs. Javellana, 49 O.G. No. 1, (BOTH OF THE COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL) WAS
p.124), as it appears from the complaint in this case to annul the decision NULL AND VOID.
of this same court, but of another branch (Branch II, Judge Querubin
4
presiding).
VI

Said defendants interposed a cross-claim against the defendsants Leon Garibay and Timoteo
THE COURT A QUO ERRED IN HOLDING THAT THE CHATTLES ACQUIRED
Tubungbanua praying "that in the event that judgment be rendered ordering defendant cross
BY DEFENDANT-APPELLANT MARGARITA G. SALDAJENO IN THE
claimant to pay to the plaintiffs the amount claimed in the latter's complaint, that the cross
FORECLOSURE SALE IN CIVIL CASE NO. 5223 CONSTITUTED 'ALL THE
claimant whatever amount is paid by the latter to the plaintiff in accordance to the said
5 ASSETS OF THE DEFENDNAT PARTNERSHIP.
judgment. ...

VII
After trial, judgment was rendered in favor of the plaintiffs and against the defendants.

THE COURT A QUO ERRED IN HOLDING THAT DEFENDANT-APPELLANT

The defendants, Margarita G. Saldajeno and her husband Cecilio Saldajeno, appealed to the
MARGARITA G. SALDAJENO BECAME PRIMARILY LIABLE TO THE
Court of Appeals assigning the following errors:
PLAINTFFS-APPELLEES FOR HAVING ACQUIRED THE MORTGAGED
CHATTLES IN THE FORECLOSURE SALE CONDUCTED IN CONNECTION
I WITH CIVIL CASE NO. 5223.

THE COURT A QUO ERRED IN ASSUMING JURISDICTION OVER THE CASE. VIII

II THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT

MARGARITA G. SALDAJENO LIABLE FOR THE OBLIGATIONS OF MESSRS.
THE COURT A QUO ERRED IN HOLDING THAT THE ISSUE WITH REFERENCE LEON GARIBAY AND TIMOTEO TUBUNGBANUA, INCURRED BY THE
TO THE WITHDRAWAL OF DEFENDANT-APPELLANT MARGARITA G. LATTER AS PARTNERS IN THE NEW 'ISABELA SAWMILL', AFTER THE
SALDAJENO FROM THE PARTNERSHIP "SABELA SAWMILL" WAS WHETHER DISSOLUTION OF THE OLD PARTNERSHIP IN WHICH SAID MARGARITA G.
OR NOT SUCH WITHDRAWAL CAUSED THE "COMPLETE DISAPPEARANCE" SALDAJENO WAS A PARTNER.
OR "EXTINCTION" OF SAID PARTNERSHIP.
IX
III
THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT
THE COURT A QUO ERRED IN OT HOLDING THAT THE WITHDRAWAL OF MARGARITA G. SALDAJENO LIABLE TO THE PLAINTIFFS-APPELLEES FOR
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AS A PARTNER ATTORNEY'S FEES.
THEREIN DISSOLVED THE PARTNERSHIP "ISABELA SAWMILL" (FORMED
ON JAN. 30, 1951 AMONG LEON GARIBAY, TIMOTEO TUBUNGBANUA X
AND SAID MARGARITA G. SALDAJENO).
THE COURT A QUO ERRED IN NOT DISMISSING THE COMPLAINT OF THE
IV PLAINTIFFS-APPELLEES.
 XI entered into a "Memorandum Agreement", a copy of
which is hereto attached as Appendix 'E' in Civil Case
THE COURT A QUO ERRED IN DISMISSING THE CROSS-CLAIM OF 4797 of the Court of First Instance of Negros
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AGAINST CROSS- Occidental.
6
DEFENDANTS LEON GARIBAY AND TIMOTEO TUBUNGBANUA.
6. That on May 26, 1958 the defendants Leon
The facts, as found by the trial court, are: Garibay, Timoteo Tubungbanua and Margarita G.
Saldajeno executed a document entitled "Assignment
of Rights with Chattel Mortgage", a copy of which
At the commencement of the hearing of the case on the merits the
documents and its Annexes "A" to "A-5" forming a
plaintiffs and the defendant Cecilio and Margarita g. Saldajeno submittee
part of the record of the above mentioned Civil Case
a Partial Stipulation of Facts that was marked as Exh. "A". Said stipulation
No. 4797, which deed was referred to in the Decision
reads as folows:
of the Court ofFirst Instance of Negros Occidental in
Civil Case No. 4797 dated May 29, 1958, a copy of
1. That on January 30, 1951 the defendants Leon which is hereto attached as Appendix "F" and "F-1"
Garibay, Margarita G. Saldejeno, and Timoteo respectively.
Tubungbanua entered into a Contract of Partnership
under the firm name "Isabela Sawmill", a copy of
7. That thereafter the defendants Leon Garibay and
which is hereto attached Appendix "A".
Timoteo Tubungbanua did not divide the assets and
properties of the "Isabela Sawmill" between them,
2. That on February 3, 1956 the plaintiff Oppen, but they continued the business of said partnership
Esteban, Inc. sold a Motor Truck and two Tractors to under the same firm name "Isabela Sawmill".
the partnership Isabela Sawmill for the sum of
P20,500.00. In order to pay the said purcahse price,
8. That on May 18, 1959 the Provincial Sheriff of
the said partnership agreed to make arrangements
Negros Occidental published two (2) notices that he
with the International Harvester Company at Bacolod
would sell at public auction on June 5, 1959 at
City so that the latter would sell farm machinery to
Isabela, Negros Occidental certain trucks, tractors,
Oppen, Esteban, Inc. with the understanding that the
machinery, officeequipment and other things that
price was to be paid by the partnership. A copy of the
were involved in Civil Case No. 5223 of the Court of
corresponding contract of sle is attached hereto as
First Instance of Negros Occidental, entitled
Appendix "B".
"Margarita G. Saldajeno vs. Leon Garibay, et al." See
Appendices "G" and "G-1".
3. That through the method of payment stipulated in
the contract marked as Appendix "B" herein, the
9. That on October 15, 1969 the Provincial Sheriff of
International Harvester Company has been paid a
Negros Occidental executed a Certificate ofSale in
total of P19,211.11, leaving an unpaid balance of
favor of the defendant Margarita G. Saldajeno, as a
P1,288.89 as shown in the statements hereto
result of the sale conducted by him on October 14
attached as Appendices "C", "C-1", and "C-2".
and 15, 1959 for the enforcement of the judgment
rendered in Civil Case No. 5223 of the Court of First
4. That on April 25, 1958 Civil Case No. 4797 was filed Instance of Negros Occidental, a certified copy of
by the spouses Cecilio Saldajeno and Margarita G. which certificte of sale is hereto attached as Appendix
Saldajeno against the Isabela Sawmill, Leon Garibay, "H".
and Timoteo Tubungbanua, a copy of which
Complaint is attached as Appendix 'D'.
10. That on October 20, 1959 the defendant
Margarita G. Saldajeno executed a deed of sale in
5. That on April 27, 1958 the defendants LeonGaribay, favor of the Pan Oriental Lumber Company
Timoteo Tubungbanua and Margarita G. Saldajeno transfering to the latter for the sum of P45,000.00 the
 trucks, tractors, machinery, and other things that she Yard P920.56 worth of lumber, leaving an outstanding balance of
had purchashed at a public auction referred to in the P1,579.44.
foregoing paragraph, a certified true copy of which
Deed of Sale is hereto attached as Appendix "I". The plaintiff Bacolod Southern Lumber Yard proved through the
testimony of the witness Cayetano Palmares an its Exhs. "P" to "Q-1" that
11. The plaintiffs and the defendants Cecilio on October 11, 1958 said plaintiff advanced the sum of P1,500.00 to the
Saldajeno and Margarita G. Saldajeno reserve the defendsant 'Isabela Sawmill', that against the said cash advance, the
right to present additional evidence at the hearing of defendant partnership delivered to the said plaintiff on November 19,
this case. 1958 P377.72 worth of lumber, and P73.54 worth of lumber on January
27, 1959, leaving an outstanding balance of P1,048.78.
Forming parts of the above copied stipulation are documents that were
marked as Appendices "A", "B", "C", "C-1", "C-2", "D", "E", "F", "F-1", "G", The plaintiff Jose Balzunce proved through the testimony of Leon Garibay
"G-1", "H", and "I". whom he called as his witness, and through the Exhs. "R" to "E" that from
September 14, 1958 to November 27, 1958 he sold to the defedant
The plaintiffs and the defendants Cecilio and Margarita G. Saldajeno "Isabela Sawmill" gasoline, motor fuel, and lubricating oils, and that on
presented additional evidence, mostly documentary, while the cross- account of said transactions, the defendant partnersip ownes him an
defendants did not present any evidence. The case hardly involves unpaid balance of P2,052.10.
quetions of fact at all, but only questions of law.
Appendix "H" of the stipulation Exh. "A" shows that on October 13 and
The fact that the defendnat 'Isabela Sawmill' is indebted to theplaintiff 14, 1959 the Provincial Sheriff sold to the defendant Margrita G.
Oppen, Esteban, Inc. in the amount of P1,288.89 as the unpaid balance of Saldajeno for P38,040.00 the assets of the defendsant "Isabela Sawmill"
an obligation of P20,500.00 contracted on February 3, 10956 is expressly which the defendants Leon G. Garibay and Timoteo Tubungbanua had
admitted in paragraph 2 and 3 of the Stipulation, Exh. "A" and its mortgaged to her, and said purchase price was applied to the judgment
Appendices "B", "C", "C-1", and "C-2". that she has obtained against he said mortgagors in Civil Case No. 5223 of
this Court.
The plaintiff Agustin E. Tonssay proved by his own testimony and his
Exhs. "B" to"G" that from October 6, 1958 to November 8, 1958 he Appendix "I" of the same stipulation Exh. "A" shows that on October 20,
advanced a total of P4,200.00 to the defendant 'Isabela Sawmill'. Agaist 1959 the defendant Margarita G. Saldajeno sold to the PAN ORIENTAL
the said advances said defendant delivered to Tonsay P3,266.27 worth of LUMBER COMPANY for P45,000.00 part of the said properties that she
lumber, leavng an unpaid balance of P933.73, which balance was had bought at public aucton one week before.
confirmed on May 15, 1959 by the defendant Leon Garibay, as Manager
7
of the defendant partnership. xxx xxx xxx

The plaintiff Manuel G. Singsong proved by his own testimony and by his It is contended by the appellants that the Court of First Instance of Negros Occidental had no
Exhs. "J" to "L" that from May 25, 1988 to January 13, 1959 he sold on jurisdiction over Civil Case No. 5343 because the plaintiffs Oppen, Esteban, Inc., Agustin R.
credit to the defendnat "Isabela Sawmill" rice and bran, on account of Tonsay, Jose L. Espinos and the Bacolod Southern Lumber Yard sought to collect sums of
which business transaction there remains an unpaid balance of moeny, the biggest amount of which was less than P2,000.00 and, therefore, within the
P3,580.50. The same plaintiff also proved that the partnership ownes him jurisdiction of the municipal court.
the sum of P143.00 for nipa shingles bought from him on credit and
unpaid for. This contention is devoid of merit because all the plaintiffs also asked for the nullity of the
assignment of right with chattel mortgage entered into by and between Margarita G.
The plaintiff Jose L. Espinos proved through the testimony of his witness Saldajeno and her former partners Leon Garibay and Timoteo Tubungbanua. This cause of
Cayetano Palmares and his Exhs. "N" to "O-3" that he owns the "Guia action is not capable of pecuniary estimation and falls under the jurisdiction of the Court of
Lumber Yard", that on October 11, 1958 said lumber yard advanced the First Instnace. Where the basic issue is something more than the right to recover a sum of
sum of P2,500.00 to the defendant "Isabela Sawmill", that against the money and where the money claim is purely incidental to or a consequence of the principal
said cash advance, the defendant partnership delivered to Guia Lumber relief sought, the action is as a case where the subject of the litigation is not capable of
pecuniary estimation and is cognizable exclusively by the Court of First Instance.
The jurisdiction of all courts in the Philippines, in so far as the authority thereof depends may have suffered as a result of the breach committed by defendant, and
upon the nature of litigation, is defined in the amended Judiciary Act, pursuant to which not later on precluded from recovering damages by the rule against
courts of first instance shall have exclusive original jurisdiction over any case the subject splitting a cause of action and discouraging multiplicitly of suits.
matter of which is not capable of pecuniary estimation. An action for the annulment of a
8
judgment and an order of a court of justice belongs to th category. The foregoing doctrine was reiterated in The Good Development Corporation vs.
10
Tutaan, where this Court held:
In determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of On the issue of which court has jurisdiction, the case of SENO vs.
the principal action or remedy sought. If it is primarily for the recovery of a sum of money, Pastolante, et al., is in point. It was ruled therein that although the
the cliam is considered capable of pecuniary estimation, and whether jurisdiciton is in the purposes of an action is to recover an amount plus interest which comes
municipal courts or in the courts of first instance would depend on the amount of the claim. within the original jurisidction of the Justice of the Peace Court, yet when
However, where the basic issue is something other than the right to recover a sum of money, said action involves the foreclosure of a chattel mortgage covering
where the money claim is purely incidental to, or a consequence of, the principal relief personal properties valued at more than P2,000, (now P10,000.00) the
sought, this Court has considered such actions as cases where the subject ogf the litigation action should be instituted before the Court of First Instance.
may not be estimated in terms of money, and are cognizable exclusively by courts of first
instance.
In the instanct, case, the action is to recover the amount of P1,520.00
9
plus interest and costs, and involves the foreclosure of a chattel
In Andres Lapitan vs. SCANDIA, Inc., et al., this Court held: mortgage of personal properties valued at P15,340.00, so that it is clearly
within the competence of the respondent court to try and resolve.
Actions for specific performance of contracts have been expressly
prounounced to be exclusively cognizable by courts of first instance: De In the light of the foregoing recent rulings, the Court of First Instance of Negros Occidental
Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturers' did no err in exercising jurisidction over Civil Case No. 5343.
Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogent
reason appears, and none is here advanced by the parties, why an actin
The appellants also contend that the chattel mortgage may no longer be annulled because it
for rescission (or resolution) should be differently treated, a "rescission"
had been judicially approved in Civil Case No. 4797 of the Court of First Instance of Negros
being a counterpart, so to speak, of "specific performance'. In both cases,
Occidental and said chattel mortgage had been ordered foreclosed in Civil Case No. 5223 of
the court would certainly have to undertake an investigation into facts
the same court.
that would justify one act of the other. No award for damages may be
had in an action for resicssion without first conducting an inquiry into
matters which would justify the setting aside of a contract, in the same On the question of whether a court may nullify a final judgment of another court of co-equal,
manner that courts of first instance would have to make findings of fact concurrent and coordinate jusridiction, this Court originally ruled that:
and law in actions not capable of pecuniary estimnation espressly held to
be so by this Court, arising from issues like those arised in Arroz v. A court has no power to interfere with the judgments or decrees of a
Alojado, et al., L-22153, March 31, 1967 (the legality or illegality of the court of concurrent or coordinate jurisdiction having equal power to
conveyance sought for and the determination of the validity of the grant the relief sought by the injunction.
money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950
(validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 The various branches of the Court of First Instance of Manila are in a
(validity of a mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 sense coordinate courts and cannot be allowed to interfere with each
(the relations of the parties, the right to support created by the relation, 11
others' judgments or decrees.
etc., in actions for support); De Rivera, et al. v. Halili, L-15159, September
30, 1963 (the validity or nullity of documents upon which claims are 12
predicated). Issues of the same nature may be raised by a party against The foregoing doctrine was reiterated in a 1953 case where this Court said:
whom an action for rescission has been brought, or by the plaintiff
himself. It is, therefore, difficult to see why a prayer for damages in an The rule which prohibits a Judge from intertering with the actuations of
action for rescission should be taken as the basis for concluding such the Judge of another branch of the same court is not infringed when the
action for resiccison should be taken as the basis for concluding such Judge who modifies or annuls the order isued by the other Judge acts in
action as one cpable of pecuniary estimation - a prayer which must be the same case and belongs to the same court (Eleazar vs. Zandueta, 48
included in the main action if plaintiff is to be compensated for what he Phil. 193. But the rule is infringed when the Judge of a branch of the court
 issues a writ of preliminary injunction in a case to enjoint the sheriff from the action to annul the judgment should necessarily follow the venue of
carrying out an order by execution issued in another case by the Judge of the previous action ...
another branch of the same court. (Cabigao and Izquierdo vs. Del Rosario
et al., 44 Phil. 182). The present doctrine which postulate that one court or one branch of a
court may not annul the judgment of another court or branch, not only
13
This ruling was maintained in 1967. In Mas vs. Dumaraog, the judgment sought to be opens the door to a violation of Section 2 of Rule 4, (of the Rules of
annulled was rendered by the Court of First Instance of Iloilo and the action for annullment Court) but also limit the opportunity for the application of said rule.
was filed with the Court of First Instance of Antique, both courts belonging to the same
Judicial District. This Court held that: Our conclusion must therefore be that a court of first instance or a
branch thereof has the authority and jurisdiction to take cognizance of,
The power to open, modify or vacant a judgment is not only possessed by and to act in, suit to annul final and executory judgment or order
but restricted to the court in which the judgment was rendered. rendered by another court of first instance or by another branch of the
same court...
The reason of this Court was:
17
In February 1974 this Court reiterated the ruling in the Dulap case.
Pursuant to the policy of judicial stability, the judgment of a court of
competent jurisdiction may not be interfered with by any court In the light of the latest ruling of the Supreme Court, there is no doubt that one branch of the
concurrrent jurisdiction. Court of First Instance of Negros Occidental can take cognizance of an action to nullify a final
judgment of the other two branches of the same court.
Again, in 1967 this Court ruled that the jurisdiction to annul a judgement of a branch of the
court of First Instance belongs solely to the very same branch which rendered the It is true that the dissolution of a partnership is caused by any partner ceasing to be
14 18
judgement. associated in the carrying on of the business. However, on dissolution, the partnershop is
19
not terminated but continuous until the winding up to the business.
15
Two years later, the same doctrine was laid down in the Sterling Investment case.
The remaining partners did not terminate the business of the partnership "Isabela Sawmill".
In December 1971, however, this court re-examined and reversed its earlier doctrine on the Instead of winding up the business of the partnership, they continued the business still in the
16
matter. In Dupla v. Court of Appeals, this Tribunal, speaking through Mr. Justice Villamor name of said partnership. It is expressly stipulated in the memorandum-agreement that the
declared: remaining partners had constituted themselves as the partnership entity, the "Isabela
20
Sawmill".
... the underlying philosophy expressed in the Dumara-og case, the policy
of judicial stability, to the end that the judgment of a court of competent There was no liquidation of the assets of the partnership. The remaining partners, Leon
jurisdiction may not be interfered with by any court of concurrent Garibay and Timoteo Tubungbanua, continued doing the business of the partnership in the
jurisdiction may not be interfered with by any court of concurrent name of "Isabela Sawmill". They used the properties of said partnership.
jurisdiciton, this Court feels that this is as good an occasion as any to re-
examine the doctrine laid down ... The properties mortgaged to Margarita G. Saldajeno by the remaining partners, Leon Garibay
and Timoteo Tubungbanua, belonged to the partnership "Isabela Sawmill." The appellant,
In an action to annul the judgment of a court, the plaintiff's cause of Margarita G. Saldajeno, was correctly held liable by the trial court because she purchased at
action springs from the alleged nullity of the judgment based on one public auction the properties of the partnership which were mortgaged to her.
ground or another, particularly fraud, which fact affords the plaintiff a
right to judicial interference in his behalf. In such a suit the cause of It does not appear that the withdrawal of Margarita G. Saldajeno from the partnership was
action is entirely different from that in the actgion which grave rise to the published in the newspapers. The appellees and the public in general had a right to expect
judgment sought to be annulled, for a direct attack against a final and that whatever, credit they extended to Leon Garibay and Timoteo Tubungbanua doing the
executory judgment is not a incidental to, but is the main object of the business in the name of the partnership "Isabela Sawmill" could be enforced against the
proceeding. The cause of action in the two cases being distinct and proeprties of said partnership. The judicial foreclosure of the chattel mortgage executed in
separate from each other, there is no plausible reason why the venue of favor of Margarita G. Saldajeno did not relieve her from liability to the creditors of the
partnership.
The appellant, margrita G. Saldajeno, cannot complain. She is partly to blame for not insisting appellants, Margarita G. Saldajeno and her husband Cecilio Saldajeno, whatever they shall
on the liquidaiton of the assets of the partnership. She even agreed to let Leon Garibay and pay to the plaintiffs-appellees, without pronouncement as to costs.
Timoteo Tubungbanua continue doing the business of the partnership "Isabela Sawmill" by
entering into the memorandum-agreement with them. SO ORDERED.

Although it may be presumed that Margarita G. Saldajeno had action in good faith, the THIRD DIVISION
appellees aslo acted in good faith in extending credit to the partnership. Where one of two
innocent persons must suffer, that person who gave occasion for the damages to be caused
must bear the consequences. Had Margarita G. Saldajeno not entered into the
memorandum-agreement allowing Leon Garibay and Timoteo Tubungbanua to continue
[G.R. No. 134230. July 17, 2002]
doing the business of the aprtnership, the applees would not have been misled into thinking
that they were still dealing with the partnership "Isabela Sawmill". Under the facts, it is of no
moment that technically speaking the partnership "Isabela Sawmill" was dissolved by the
withdrawal therefrom of Margarita G. Saldajeno. The partnership was not terminated and it
continued doping business through the two remaining partners. JOVENAL OUANO, petitioner, vs. PGTT INTERNATIONAL INVESTMENT CORPORATION and
HON. JUDGE RAMON G. CODILLA, JR.,respondents.
The contention of the appellant that the appleees cannot bring an action to annul the chattel
mortgage of the propertiesof the partnership executed by Leon Garibay and Timoteo D E C I S I O N
Tubungbanua in favor of Margarita G. Saldajeno has no merit.
SANDOVAL-GUTIERREZ, J.:

As a rule, a contract cannot be assailed by one who is not a party thereto. However, when a
PGTT International Investment Corporation (PGTT), respondent, is a corporation duly
contract prejudices the rights of a third person, he may file an action to annul the contract.
organized under existing laws, with address at YASCO Bldg., M. J. Cuenco Ave., Cebu City.

This Court has held that a person, who is not a party obliged principally or subsidiarily under On December 11, 1997, PGTT filed with the Regional Trial Court (RTC), Branch 20, Cebu
a contract, may exercised an action for nullity of the contract if he is prejudiced in his rights City, a verified complaint against Jovenal Ouano, petitioner, docketed as Civil Case No. CEB-
with respect to one of the contracting parties, and can show detriment which would 21319, entitled PGTT INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs. JUVENAL
21
positively result to him from the contract in which he has no intervention. OUANO, Defendant, for Recovery of Ownership and Possession of Real Property and
[1]
Damages. In its complaint, PGTT alleged that it is the owner of Lot Nos. 1-10, Block 2 of the
The plaintiffs-appellees were prejudiced in their rights by the execution of the chattel Sunnymeade Crescent Subdivision located at Pit-os, Talamban, Cebu City. Sometime in
mortgage over the properties of the partnership "Isabela Sawmill" in favopr of Margarita G. October of 1996, PGTT found that Ouano uprooted the concrete monuments of the said lots,
Saldajeno by the remaining partners, Leon Garibay and Timoteo Tubungbanua. Hence, said plowed them and planted corn thereon. Despite PGTTs demand that he vacate the lots and
appelees have a right to file the action to nullify the chattel mortgage in question. restore them to their original condition, Ouano refused, claiming he is the owner and lawful
possessor of the 380 square meters he occupied.Due to Ouanos wrongful act, PGTT was
deprived of the use of its property and suffered damages in the amount of P100,000.00 a
The portion of the decision appealed from ordering the appellants to pay attorney's fees to year. Likewise, PGTT was constrained to file the subject action and hired the services of his
the plaintiffs-appellees cannot be sustained. There is no showing that the appellants counsel for P100,000.00. PGTT prayed:
displayed a wanton disregard of the rights of the plaintiffs. Indeed, the appellants believed in
good faith, albeit erroneously, that they are not liable to pay the claims.
"WHEREFORE, in view of all the foregoing, it is most respectfully prayed that after due notice
and hearing, judgment be rendered ordering defendant (Jovenal Ouano) to vacate the
The defendants-appellants have a right to be reimbursed whatever amounts they shall pay premises and restore the lots to their original condition; pay plaintiff (PGTT) P100,000.00 as
the appellees by their co-defendants Leon Garibay and Timoteo Tubungbanua. In the damages per year, beginning October, 1996 until he shall have vacated the premises and
memorandum-agreement, Leon Garibay and Timoteo Tubungbaun undertook to release restored the lots to their original condition; pay P100,000.00 as attorney's fees; and
22
Margarita G. Saldajeno from any obligation of "Isabela Sawmill" to third persons. pay P50,000.00 as expenses of litigation.

WHEREFORE, the decision appealed from is hereby affirmed with the elimination of the [2]
"Plaintiff prays for such other reliefs and remedies, just and equitable under the premises."
portion ordering appellants to pay attorney's fees and with the modification that the
defendsants, Leon Garibay and Timoteo Tubungbanua, should reimburse the defendants-
 On February 5, 1998, Ouano filed a motion to dismiss the complaint on the ground that to those matters within its exclusive jurisdiction, and to prevent further over-crowding of its
[12]
it is the Municipal Trial Court (MTC), not the RTC, which has jurisdiction over it considering that docket. Unfortunately, the instant petition does not allege any special and compelling
the assessed value of the lots involved is only P2,910, as indicated in the latest tax reason to justify a direct recourse to this Court. However, we deem it more appropriate and
[3]
declaration, citing Section 19 (paragraph 2) and Section 33 (paragraph 3) of Batas Pambansa practical to resolve the controversy in order to avoid further delay, but only in this instance.
[4]
Bilang 129 (The Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691.
The lone issue for our resolution is whether the RTC has jurisdiction over Civil Case No.
In its opposition to Ouanos motion, PGTT contends that the RTC has jurisdiction since CEB-21319.
[5]
the market value of the lots is P49,760.00. Besides, the complaint is not only an action for
recovery of ownership and possession of real property, but also for damages The complaint seeks to recover from private respondent the ownership and possession
exceeding P100,000.00, over which claim the RTC has exclusive original jurisdiction under of the lots in question and the payment of damages. Since the action involves ownership and
Section 19 (paragraph 8) of the same law. possession of real property, the jurisdiction over the subject matter of the claim is determined
by the assessed value, not the market value, thereof, pursuant to Batas Pambansa Blg. 129,
On March 6, 1998, the RTC, presided by Judge Ramon G. Codilla, Jr., issued an Order as amended by R.A. 7691. Section 33 (paragraph 3) of the said law provides:
denying the motion to dismiss, holding that:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
This court believes that this court has jurisdiction to try this case considering that the real Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts and Municipal
properties consist of ten parcels of land in a subdivision and the court takes note that there is Circuit Trial Courts shall exercise:
a discrepancy somewhere by the Office of the City Assessor in the Assessment of the parcels
of land for only less than P2,000.00 and that the government is very much at a loss by these x x x.
[6]
unrealistic valuation.
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of,
Ouano filed a motion for reconsideration but was likewise denied by the RTC in its Order real property, or any interest therein where the assessed value of the property or interest
dated May 27, 1998. The trial court ruled it has jurisdiction over the case because (i)t is of therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro
judicial knowledge that the real properties situated in Cebu City command a higher valuation Manila, where such assessed value does not exceed Fifty Thousand Pesos
than those indicated in the tax declaration. The observation of plaintiffs (PGTTs) counsel as to (P50,000.00) exclusive of interest, damages of whatever kind, attorneys fees, litigation
the issue on damages is likewise sustained considering that, being a corporation, it may have expenses and costs: Provided, That in cases of land not declared for taxation purposes, the
[7]
incurred damages in the form of unrealized profits. value of such property shall be determined by the assessed value of the adjacent lots.
Hence the present petition for certiorari filed by Ouano under Rule 65 of the 1997 Rules
of Civil Procedure, as amended, assailing the Orders of respondent judge dated March 6, 1998 x x x. (Emphasis ours)
and May 27, 1998 as having been issued with grave abuse of discretion amounting to lack or
excess of jurisdiction. Likewise, Section 19 (paragraph 2) of the same law reads:
At the outset, it is necessary to stress that a direct recourse to this Court is highly
improper, for it violates the established policy of strict observance of the judicial hierarchy of Sec. 19. Jurisdiction in civil cases. - The Regional Trial Court shall exercise exclusive
[8]
courts. We need to reiterate, for the guidance of petitioner, that this Courts original original jurisdiction:
jurisdiction to issue a writ of certiorari (as well as prohibition, mandamus, quo
warranto, habeas corpus and injunction) is concurrent with the Court of Appeals (CA), as in the x x x.
[9]
present case, and with the RTCs in proper cases within their respective regions. However,
this concurrence of jurisdiction does not grant a party seeking any of the extraordinary writs (2) In all civil actions, which involve the title to, or possession of, real property, or any
the absolute freedom to file his petition with the court of his choice. This Court is a court of interest therein, where the assessed value of the property involved exceeds Twenty
last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds
[10]
the Constitution and immemorial tradition. The hierarchy of courts determines the Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful
appropriate forum for such petitions. Thus, petitions for the issuance of such extraordinary detainer of lands or buildings, original jurisdiction over which is conferred upon the
writs against the first level (inferior) courts should be filed with the RTC, and those against the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
[11]
latter, with the CA. A direct invocation of this Courts original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor, clearly and
specifically set out in the petition. This is the established policy. It is a policy that is necessary x x x. (Emphasis ours)
to prevent inordinate demands upon this Courts time and attention which are better devoted
 It is undisputed that the assessed value of the property involved, as shown by the WHEREFORE, the instant petition is GRANTED. The assailed Orders issued by respondent
corresponding tax declaration, is only P2,910.00. As such, the complaint is well within the RTC on March 6, 1998 and May 27, 1998 in Civil Case No. CEB-21319 are SET
MTCs P20,000.00 jurisdictional limit. ASIDE. Accordingly, the complaint is ordered DISMISSED.

The finding of respondent judge that the value of the lots is higher than that indicated in SO ORDERED.
the tax declaration and that, therefore, the RTC has jurisdiction over the case is highly
speculative. It is elementary that the tax declaration indicating the assessed value of the Puno, (Chairman), Panganiban, and Carpio, JJ., concur.
property enjoys the presumption of regularity as it has been issued by the proper government
agency.
FIRST DIVISION
Respondent judge further held that since the complaint also seeks the recovery of
damages exceeding P100,000.00, then it is within the competence of the RTC pursuant to IRENE SANTE AND REYNALDO SANTE, G.R. No. 173915
Section 19 (paragraph 8) of Batas Pambansa Blg. 129, as amended by R.A. 7691, which states: Petitioners,
Present:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original
jurisdiction: - versus - PUNO, C.J., Chairperson,
CARPIO MORALES,
LEONARDO-DE CASTRO,
x x x
HON. EDILBERTO T. CLARAVALL, in his capacity as BERSAMIN, and
Presiding Judge of Branch 60, Regional Trial Court VILLARAMA, JR., JJ.
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, of Baguio City, and VITA N. KALASHIAN,
attorneys fees, litigation expenses, and costs or the value of the property in controversy Respondents. Promulgated:
exceeds One Hundred Thousand Pesos (P100,000.00) or, in such other cases in Metro Manila,
where the demand, exclusive of the above mentioned items exceeds Two hundred thousand February 22, 2010
pesos (P200,000.00). (Emphasis ours) x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

The above provision does not apply to the instant case. It is applicable only to all other DECISION
cases other than an action involving title to, or possession of real property in which the
assessed value is the controlling factor in determining the courts jurisdiction. Besides, the same
VILLARAMA, JR., J.:
provision explicitly excludes from the determination of the jurisdictional amount the demand
for interest, damages of whatever kind, attorneys fees, litigation expenses, and costs. The
exclusion of such damages is reiterated in Section 33, paragraph 3 of the same Batas Pambansa [1]
Before this Court is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure,
Blg. 129, as amended, quoted earlier. The said damages are merely incidental to, or a [2]
as amended, filed by petitioners Irene and Reynaldo Sante assailing the Decision dated January
consequence of, the main cause of action for recovery of ownership and possession of real [3]
31, 2006 and the Resolution dated June 23, 2006 of the Seventeenth Division of the Court of
property. In this connection, this Court issued Administrative Circular No. 09-94 setting the Appeals in CA-G.R. SP No. 87563. The assailed decision affirmed the orders of the Regional Trial
guidelines in the implementation of R.A. 7691. Paragraph 2 states: Court (RTC) of Baguio City, Branch 60, denying their motion to dismiss the complaint for damages
filed by respondent Vita Kalashian against them.
2. The exclusion of the term damages of whatever kind in determining the jurisdictional
amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. 7691, The facts, culled from the records, are as follows:
applies to cases where the damages are merely incidental to or a consequence of the main
cause of action. However, in cases where the claim for damages is the main cause of action,
or one of the causes of action, the amount of such claim shall be considered in determining On April 5, 2004, respondent filed before the RTC of Baguio City a complaint for
[4]
the jurisdiction of the court. (Emphasis ours) damages against petitioners. In her complaint, docketed as Civil Case No. 5794-R, respondent
alleged that while she was inside the Police Station of Natividad, Pangasinan, and in the
presence of other persons and police officers, petitioner Irene Sante uttered words, which
We thus find that in issuing the assailed orders denying petitioners motion to dismiss, when translated in English are as follows, How many rounds of sex did you have last night with
thus taking cognizance of the case, the RTC committed grave abuse of discretion. your boss, Bert? You fuckin bitch! Bert refers to Albert Gacusan, respondents friend and one
(1) of her hired personal security guards detained at the said station and who is a suspect in
the killing of petitioners close relative. Petitioners also allegedly went around Natividad,
Pangasinan telling people that she is protecting and cuddling the suspects in the aforesaid that the totality of claim rule used for determining which court had jurisdiction could not be applied
killing. Thus, respondent prayed that petitioners be held liable to pay moral damages in the to the instant case because plaintiffs claim for exemplary damages was not a separate and distinct
amount of P300,000.00; P50,000.00 as exemplary damages; P50,000.00 attorneys cause of action from her claim of moral damages, but merely incidental to it. Thus, the prayer for
fees; P20,000.00 litigation expenses; and costs of suit. exemplary damages should be excluded in computing the total amount of the claim.

[5]
Petitioners filed a Motion to Dismiss on the ground that it was the Municipal Trial Court in On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 87563, rendered a
Cities (MTCC) and not the RTC of Baguio, that had jurisdiction over the case. They argued that decision affirming the September 17, 2004 Order of the RTC denying petitioners Motion to
the amount of the claim for moral damages was not more than the jurisdictional amount Dismiss Ad Cautelam. In the said decision, the appellate court held that the total or aggregate
of P300,000.00, because the claim for exemplary damages should be excluded in computing amount demanded in the complaint constitutes the basis of jurisdiction. The Court of Appeals
the total claim. did not find merit in petitioners posture that the claims for exemplary damages and attorneys
fees are merely incidental to the main cause and should not be included in the computation of
[6]
On June 24, 2004, the trial court denied the motion to dismiss citing our ruling in Movers- the total claim.
[7]
Baseco Integrated Port Services, Inc. v. Cyborg Leasing Corporation. The trial court held that
the total claim of respondent amounted to P420,000.00 which was above the jurisdictional The Court of Appeals additionally ruled that respondent can amend her complaint by
amount for MTCCs outside Metro Manila. The trial court also later issued Orders on July 7, increasing the amount of moral damages from P300,000.00 to P1,000,000.00, on the ground
[8] [9]
2004 and July 19, 2004, respectively reiterating its denial of the motion to dismiss and that the trial court has jurisdiction over the original complaint and respondent is entitled to
denying petitioners motion for reconsideration. amend her complaint as a matter of right under the Rules.

Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and Unable to accept the decision, petitioners are now before us raising the following issues:
[10]
Prohibition, docketed as CA-G.R. SP No. 85465, before the Court of Appeals. Meanwhile, on
[11] I.
July 14, 2004, respondent and her husband filed an Amended Complaint increasing the
claim for moral damages from P300,000.00 to P1,000,000.00. Petitioners filed a Motion to
Dismiss with Answer Ad Cautelam and Counterclaim, but the trial court denied their motion in WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION
[12]
an Order dated September 17, 2004. AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION ON THE PART OF
THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE COURT OF
[13]
APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL COURT OF
Hence, petitioners again filed a Petition for Certiorari and Prohibition before the Court of BAGUIO CITY BRANCH 60 HAS JURISDICTION OVER THE SUBJECT MATTER
Appeals, docketed as CA-G.R. SP No. 87563, claiming that the trial court committed grave OF THE CASE FOR DAMAGES AMOUNTING TO P300,000.00;
abuse of discretion in allowing the amendment of the complaint to increase the amount of
moral damages from P300,000.00 to P1,000,000.00. The case was raffled to the Seventeenth II.
Division of the Court of Appeals.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE
On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a decision in CA-G.R. PART OF THE HONORABLE RESPONDENT JUDGE OF THE REGIONAL TRIAL
SP No. 85465, as follows: COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE COMPLAINANT TO
AMEND THE COMPLAINT (INCREASING THE AMOUNT OF DAMAGES TO
WHEREFORE, finding grave abuse of discretion on the part of [the] 1,000,000.00 TO CONFER JURISDICTION OVER THE SUBJECT MATTER OF
Regional Trial Court of Baguio, Branch 60, in rendering the assailed Orders THE CASE DESPITE THE PENDENCY OF A PETITION FOR CERTIORARI FILED
dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-R the instant AT THE COURT OF APPEALS, SEVENTH DIVISION, DOCKETED AS CA G.R. NO.
[15]
petition for certiorari is GRANTED. The assailed Orders are 85465.
hereby ANNULLED and SET ASIDE. Civil Case No. 5794-R for damages is
ordered DISMISSED for lack of jurisdiction.
In essence, the basic issues for our resolution are:
[14]
SO ORDERED.
1) Did the RTC acquire jurisdiction over the case? and

The Court of Appeals held that the case clearly falls under the jurisdiction of the MTCC as the 2) Did the RTC commit grave abuse of discretion in allowing the amendment
allegations show that plaintiff was seeking to recover moral damages in the amount of P300,000.00, of the complaint?
which amount was well within the jurisdictional amount of the MTCC. The Court of Appeals added
Petitioners insist that the complaint falls under the exclusive jurisdiction of the MTCC. They to P200,000.00 took effect on March 20, 1999. Meanwhile, the second adjustment
maintain that the claim for moral damages, in the amount of P300,000.00 in the original from P200,000.00 to P300,000.00 became effective on February 22, 2004 in accordance with
complaint, is the main action. The exemplary damages being discretionary should not be OCA Circular No. 65-2004 issued by the Office of the Court Administrator on May 13, 2004.
included in the computation of the jurisdictional amount. And having no jurisdiction over the
subject matter of the case, the RTC acted with grave abuse of discretion when it allowed the Based on the foregoing, there is no question that at the time of the filing of the complaint on
amendment of the complaint to increase the claim for moral damages in order to confer April 5, 2004, the MTCCs jurisdictional amount has been adjusted to P300,000.00.
jurisdiction.

[16] But where damages is the main cause of action, should the amount of moral damages prayed
In her Comment, respondent averred that the nature of her complaint is for recovery of for in the complaint be the sole basis for determining which court has jurisdiction or should
damages. As such, the totality of the claim for damages, including the exemplary damages as the total amount of all the damages claimed regardless of kind and nature, such as exemplary
well as the other damages alleged and prayed in the complaint, such as attorneys fees and damages, nominal damages, and attorneys fees, etc., be used?
litigation expenses, should be included in determining jurisdiction. The total claim
being P420,000.00, the RTC has jurisdiction over the complaint. [19]
In this regard, Administrative Circular No. 09-94 is instructive:

We deny the petition, which although denominated as a petition for certiorari, we treat as a x x x x
petition for review on certiorari under Rule 45 in view of the issues raised.
2. The exclusion of the term damages of whatever kind in determining the
[17] [18] jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg.
Section 19(8) of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, states: 129, as amended by R.A. No. 7691, applies to cases where the damages are
merely incidental to or a consequence of the main cause of
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
action. However, in cases where the claim for damages is the main cause
exclusive original jurisdiction:
of action, or one of the causes of action, the amount of such claim shall
be considered in determining the jurisdiction of the court. (Emphasis
x x x x
ours.)
(8) In all other cases in which the demand, exclusive of interest, damages
of whatever kind, attorneys fees, litigation expenses, and costs or the value In the instant case, the complaint filed in Civil Case No. 5794-R is for the recovery of damages for the
of the property in controversy exceeds One hundred thousand pesos alleged malicious acts of petitioners. The complaint principally sought an award of moral and
(P100,000.00) or, in such other cases in Metro Manila, where the demand, exemplary damages, as well as attorneys fees and litigation expenses, for the alleged shame and
exclusive of the abovementioned items exceeds Two hundred thousand injury suffered by respondent by reason of petitioners utterance while they were at a police station
pesos (P200,000.00). in Pangasinan. It is settled that jurisdiction is conferred by law based on the facts alleged in the

complaint since the latter comprises a concise statement of the ultimate facts constituting the
[20]
plaintiffs causes of action. It is clear, based on the allegations of the complaint, that respondents
Section 5 of Rep. Act No. 7691 further provides: main action is for damages. Hence, the other forms of damages being claimed by respondent, e.g.,
exemplary damages, attorneys fees and litigation expenses, are not merely incidental to or
SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional consequences of the main action but constitute the primary relief prayed for in the complaint.
amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two [21]
In Mendoza v. Soriano, it was held that in cases where the claim for damages is the main
hundred thousand pesos (P200,000.00). Five (5) years thereafter, such cause of action, or one of the causes of action, the amount of such claim shall be considered
jurisdictional amounts shall be adjusted further to Three hundred in determining the jurisdiction of the court. In the said case, the respondents claim
thousand pesos (P300,000.00): Provided, however, That in the case of of P929,000.06 in damages and P25,000 attorneys fees plus P500 per court appearance was
Metro Manila, the abovementioned jurisdictional amounts shall be held to represent the monetary equivalent for compensation of the alleged injury. The Court
adjusted after five (5) years from the effectivity of this Act to Four hundred therein held that the total amount of monetary claims including the claims for damages was
thousand pesos (P400,000.00). the basis to determine the jurisdictional amount.

[22]
Also, in Iniego v. Purganan, the Court has held:
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the first adjustment in
jurisdictional amount of first level courts outside of Metro Manila from P100,000.00
 The amount of damages claimed is within the jurisdiction of the RTC, since This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of
[1]
it is the claim for all kinds of damages that is the basis of determining the the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 63737 as well as its
[2]
jurisdiction of courts, whether the claims for damages arise from the same Resolution denying the motion for the reconsideration of the said decision.
or from different causes of action.

x x x x
The Antecedents

Considering that the total amount of damages claimed was P420,000.00, the Court of Appeals
was correct in ruling that the RTC had jurisdiction over the case. On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and Prescilla, all surnamed
Hilario, filed a complaint with the Regional Trial Court (RTC) of Romblon, Romblon, Branch 71,
against private respondent Allan T. Salvador. They alleged therein, inter alia, as follows:
Lastly, we find no error, much less grave abuse of discretion, on the part of the Court of Appeals
in affirming the RTCs order allowing the amendment of the original complaint
from P300,000.00 to P1,000,000.00 despite the pendency of a petition for certiorari filed 2. That, the plaintiffs are co-owners by inheritance from Concepcion Mazo Salvador of
before the Court of Appeals. While it is a basic jurisprudential principle that an amendment a parcel of land designated as Cad. Lot No. 3113-part, located at Sawang,
cannot be allowed when the court has no jurisdiction over the original complaint and the Romblon, Romblon, which property was [adjudged] as the hereditary share of
[23]
purpose of the amendment is to confer jurisdiction on the court, here, the RTC clearly had their father, Brigido M. Hilario, Jr. when their father was still single, and which
jurisdiction over the original complaint and amendment of the complaint was then still a adjudication was known by the plaintiffs[] fathers co-heirs;
[24]
matter of right.
3. That, sometime in 1989, defendant constructed his dwelling unit of mixed materials
on the property of the plaintiffs father without the knowledge of the herein
WHEREFORE, the petition is DENIED, for lack of merit. The Decision and Resolution plaintiffs or their predecessors-in-interest;
of the Court of Appeals dated January 31, 2006 and June 23, 2006, respectively,
are AFFIRMED. The Regional Trial Court of Baguio City, Branch 60 is DIRECTED to continue with
4. That, demands have been made of the defendant to vacate the premises but the
the trial proceedings in Civil Case No. 5794-R with deliberate dispatch.
latter manifested that he have (sic) asked the prior consent of their grandmother,
Concepcion Mazo Salvador;
No costs.
5. That, to reach a possible amicable settlement, the plaintiffs brought the matter to
the Lupon of Barangay Sawang, to no avail, evidenced by the CERTIFICATE TO FILE
SO ORDERED.
ACTION hereto attached as ANNEX B;
SECOND DIVISION
6. That, the unjustified refusal of the defendant to vacate the property has caused the
plaintiffs to suffer shame, humiliation, wounded feelings, anxiety and sleepless
nights;
[G.R. No. 160384. April 29, 2005]
7. That, to protect their rights and interest, plaintiffs were constrained to engage the
[3]
services of a lawyer.

CESAR T. HILARIO, for himself and as Attorney-in-Fact of IBARRA, NESTOR, LINA and The petitioners prayed that, after due proceedings, judgment be rendered in their favor,
PRESCILLA, all surnamed HILARIO, petitioners, vs. ALLAN T. thus:
SALVADOR, respondent.

HEIRS OF SALUSTIANO SALVADOR, namely, REGIDOR M. SALVADOR and VIRGINIA WHEREFORE, it is prayed of this Honorable Court that after due process (sic), an order be
SALVADOR-LIM, respondents-intervenors. issued for the defendant to vacate and peacefully turn over to the plaintiffs the occupied
property and that defendant be made to pay plaintiffs:
D E C I S I O N
a. actual damages, as follows:
CALLEJO, SR., J.:
 a.1. transportation expenses in connection with the projected settlement On April 8, 1997, Regidor and Virginia Salvador filed their Answer-in-
[10]
of the case amounting to P1,500.00 and for the subsequent Intervention making common cause with the private respondent. On her own motion,
[11]
attendance to the hearing of this case at P1,500.00 each schedule; however, Virginia Salvador was dropped as intervenor.

During trial, the petitioners adduced in evidence Tax Declaration No. 8590-A showing
a.2. attorneys fees in the amount of P20,000.00 and P500.00 for every [12]
that in 1991 the property had an assessed value of P5,950.00.
court appearance;
On June 3, 1999, the trial court rendered judgment finding in favor of the petitioners.
b. moral and exemplary damages in such amount incumbent upon the Honorable The dispositive portion of the decision reads:
Court to determine; and
WHEREFORE, as prayed for, judgment is rendered:
[4]
c. such other relief and remedies just and equitable under the premises.
Ordering the defendant to vacate and peacefully turn over to the plaintiffs the occupied
The private respondent filed a motion to dismiss the complaint on the ground of lack of property; and
jurisdiction over the nature of the action, citing Section 33 of Batas Pambansa (B.P.) Blg. 129,
[5]
as amended by Section 3(3) of Republic Act (R.A.) No. 7691. He averred that Dismissing defendants counterclaim.

[13]
(1) the complaint failed to state the assessed value of the land in dispute; SO ORDERED.
(2) the complaint does not sufficiently identify and/or describe the parcel of land referred to
as the subject-matter of this action; Aggrieved, the private respondent and respondent-intervenor Regidor Salvador
appealed the decision to the CA, which rendered judgment on May 23, 2003 reversing the
both of which are essential requisites for determining the jurisdiction of the Court where the ruling of the RTC and dismissing the complaint for want of jurisdiction. The fallo of the decision
case is filed. In this case, however, the assessed value of the land in question is totally absent is as follows:
in the allegations of the complaint and there is nothing in the relief prayed for which can be
picked-up for determining the Courts jurisdiction as provided by law. IN VIEW OF THE FOREGOING, the appealed decision is REVERSED, and the case DISMISSED,
without prejudice to its refilling in the proper court.
In the face of this predicament, it can nevertheless be surmised by reading between the lines,
that the assessed value of the land in question cannot exceed P20,000.00 and, as such, it falls SO ORDERED.
[14]

within the jurisdiction of the Municipal Trial Court of Romblon and should have been filed
[6]
before said Court rather than before the RTC.
The CA declared that the action of the petitioners was one for the recovery of ownership
[7]
and possession of real property. Absent any allegation in the complaint of the assessed value
The petitioners opposed the motion. They contended that the RTC had jurisdiction over of the property, the Municipal Trial Court (MTC) had exclusive jurisdiction over the action,
the action since the court can take judicial notice of the market value of the property in [15]
conformably to Section 33 of R.A. No. 7691.
question, which was P200.00 per square meter and considering that the property was 14,797
square meters, more or less, the total value thereof is P3,500,000.00. Besides, according to the The petitioners filed a motion for reconsideration of the said decision, which the
[16]
petitioners, the motion to dismiss was premature and the proper time to interpose it is when appellate court denied. Hence, they filed the instant petition, with the following assignment
the [petitioners] introduced evidence that the land is of such value. of errors:
[8]
On November 7, 1996, the RTC issued an Order denying the motion to dismiss, holding I
that the action was incapable of pecuniary estimation, and therefore, cognizable by the RTC as
provided in Section 19(1) of B.P. Blg. 129, as amended. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN HOLDING
THAT THE INSTANT CASE, ACCION REINVINDICATORIA, FALLS WITHIN THE EXCLUSIVE
After the denial of the motion to dismiss, the private respondent filed his answer with
[9] ORIGINAL JURISDICTION OF THE MUNICIPAL TRIAL COURT OF ROMBLON, AND NOT WITH
counterclaim. Traversing the material allegations of the complaint, he contended that the
petitioners had no cause of action against him since the property in dispute was the conjugal THE REGIONAL TRIAL COURT OF ROMBLON.
property of his grandparents, the spouses Salustiano Salvador and Concepcion Mazo-Salvador.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR IN Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
ORDERING THE REFILING OF THE CASE IN THE [PROPER] COURT, INSTEAD OF DECIDING THE Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts and Municipal
CASE ON THE MERITS BASED ON THE COMPLETE RECORDS ELEVATED BEFORE SAID Circuit Trial Courts shall exercise:
[17]
APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE DECISION OF THE TRIAL COURT.
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein
The Ruling of the Court does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty Thousand Pesos (P50,000.00) exclusive of
interest, damages of whatever kind, attorneys fees, litigation expenses and costs: Provided,
The lone issue for our resolution is whether the RTC had jurisdiction over the action of That in cases of land not declared for taxation purposes, the value of such property shall be
the petitioners, the plaintiffs in the RTC, against the private respondent, who was the determined by the assessed value of the adjacent lots.
defendant therein.
Section 19(2) of the law, likewise, provides that:
The petitioners maintain that the RTC has jurisdiction since their action is an accion
reinvindicatoria, an action incapable of pecuniary estimation; thus, regardless of the assessed
Sec. 19. Jurisdiction in civil cases. The Regional Trial Court shall exercise exclusive original
value of the subject property, exclusive jurisdiction falls within the said court. Besides,
jurisdiction:
according to the petitioners, in their opposition to respondents motion to dismiss, they made
mention of the increase in the assessed value of the land in question in the amount of P3.5
million. Moreover, the petitioners maintain that their action is also one for damages (2) In all civil actions, which involve the title to, or possession of, real property, or any
exceeding P20,000.00, over which the RTC has exclusive jurisdiction under R.A. No. 7691. interest therein, where the assessed value of the property involved exceeds Twenty
Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds
The petition has no merit. Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred upon the
It bears stressing that the nature of the action and which court has original and exclusive
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.
jurisdiction over the same is determined by the material allegations of the complaint, the type
of relief prayed for by the plaintiff and the law in effect when the action is filed, irrespective of
[18]
whether the plaintiffs are entitled to some or all of the claims asserted therein. The caption The jurisdiction of the court over an action involving title to or possession of land is now
of the complaint is not determinative of the nature of the action. Nor does the jurisdiction of determined by the assessed value of the said property and not the market value thereof. The
the court depend upon the answer of the defendant or agreement of the parties or to the assessed value of real property is the fair market value of the real property multiplied by the
[20]
waiver or acquiescence of the parties. assessment level. It is synonymous to taxable value. The fair market value is the price at
which a property may be sold by a seller, who is not compelled to sell, and bought by a buyer,
We do not agree with the contention of the petitioners and the ruling of the CA that the who is not compelled to buy.
action of the petitioners in the RTC was an accion reinvindicatoria. We find and so rule that the
action of the petitioners was an accion publiciana, or one for the recovery of possession of the Even a cursory reading of the complaint will show that it does not contain an allegation
[21]
real property subject matter thereof. An accion reinvindicatoria is a suit which has for its object stating the assessed value of the property subject of the complaint. The court cannot take
[22]
the recovery of possession over the real property as owner. It involves recovery of ownership judicial notice of the assessed or market value of lands. Absent any allegation in the
and possession based on the said ownership. On the other hand, an accion publiciana is one complaint of the assessed value of the property, it cannot thus be determined whether the
for the recovery of possession of the right to possess. It is also referred to as an ejectment suit RTC or the MTC had original and exclusive jurisdiction over the petitioners action.
filed after the expiration of one year after the occurrence of the cause of action or from the
[19] We note that during the trial, the petitioners adduced in evidence Tax Declaration No.
unlawful withholding of possession of the realty.
8590-A, showing that the assessed value of the property in 1991 was P5,950.00. The
The action of the petitioners filed on September 3, 1996 does not involve a claim of petitioners, however, did not bother to adduce in evidence the tax declaration containing the
ownership over the property. They allege that they are co-owners thereof, and as such, assessed value of the property when they filed their complaint in 1996. Even assuming that
entitled to its possession, and that the private respondent, who was the defendant, the assessed value of the property in 1991 was the same in 1995 or 1996, the MTC, and not
constructed his house thereon in 1989 without their knowledge and refused to vacate the the RTC had jurisdiction over the action of the petitioners since the case involved title to or
[23]
property despite demands for him to do so. They prayed that the private respondent vacate possession of real property with an assessed value of less than P20,000.00.
the property and restore possession thereof to them.
We quote with approval, in this connection, the CAs disquisition:
When the petitioners filed their complaint on September 3, 1996, R.A. No. 7691 was
already in effect. Section 33(3) of the law provides:
The determining jurisdictional element for the accion reinvindicatoria is, as RA 7691 determining the courts jurisdiction. The said damages are merely incidental to, or a
[26]
discloses, the assessed value of the property in question. For properties in the provinces, the consequence of, the main cause of action for recovery of possession of real property.
RTC has jurisdiction if the assessed value exceeds P20,000, and the MTC, if the value
is P20,000 or below. An assessed value can have reference only to the tax rolls in the Since the RTC had no jurisdiction over the action of the petitioners, all the proceedings
municipality where the property is located, and is contained in the tax declaration. In the therein, including the decision of the RTC, are null and void. The complaint should perforce be
[27]
case at bench, the most recent tax declaration secured and presented by the plaintiffs- dismissed.
appellees is Exhibit B. The loose remark made by them that the property was worth 3.5 WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court
million pesos, not to mention that there is absolutely no evidence for this, is irrelevant in the of Appeals in CA-G.R. CV No. 63737 are AFFIRMED. Costs against the petitioners.
light of the fact that there is an assessed value. It is the amount in the tax declaration that
should be consulted and no other kind of value, and as appearing in Exhibit B, this is P5,950. SO ORDERED.
The case, therefore, falls within the exclusive original jurisdiction of the Municipal Trial Court
of Romblon which has jurisdiction over the territory where the property is located, and not
the court a quo.
[24]
Republic of the Philippines
Supreme Court
It is elementary that the tax declaration indicating the assessed value of the property Manila
enjoys the presumption of regularity as it has been issued by the proper government
[25]
agency. THIRD DIVISION
Unavailing also is the petitioners argumentation that since the complaint, likewise, seeks
the recovery of damages exceeding P20,000.00, then the RTC had original jurisdiction over OTILIA STA. ANA, G.R. No. 164340
their actions. Section 33(3) of B.P. Blg. 129, as amended, quoted earlier, explicitly excludes Petitioner,
from the determination of the jurisdictional amount the demand for interest, damages of Present:
whatever kind, attorneys fees, litigation expenses, and costs. This Court issued Administrative
Circular No. 09-94 setting the guidelines in the implementation of R.A. No. 7691, and paragraph YNARES-SANTIAGO, J.,
2 thereof states that - versus - Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
2. The exclusion of the term damages of whatever kind in determining the jurisdictional
NACHURA, and
amount under Section 19(8) and Section 33(1) of B.P. Blg. 129, as amended by R.A. 7691,
REYES, JJ.
applies to cases where the damages are merely incidental to or a consequence of the main
SPOUSES LEON G. CARPO and AURORA CARPO,
cause of action. However, in cases where the claim for damages is the main cause of action,
Respondents. Promulgated:
or one of the causes of action, the amount of such claim shall be considered in determining

the jurisdiction of the court.
November 28, 2008

Neither may the petitioners find comfort and solace in Section 19(8) of B.P. Blg. 129, as x------------------------------------------------------------------------------------x
amended, which states:

SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original DECISION
jurisdiction:
NACHURA, J.:
[1]
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil
[2]
attorney's fees, litigation expenses, and costs or the value of the property in controversy Procedure seeking the reversal of the Court of Appeals (CA) Decision dated March 5, 2004
[3]
which reversed and set aside the Decision of the Department of Agrarian Reform
exceeds One Hundred Thousand Pesos (P100,000.00) or, in such other cases in Metro Manila, [4]
Adjudication Board (DARAB) dated June 24, 1998 and reinstated the Decision of the
where the demand, exclusive of the above-mentioned items exceeds Two Hundred Thousand
Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated October 12, 1993.
Pesos (P200,000.00).


The said provision is applicable only to all other cases other than an action involving title
to, or possession of real property in which the assessed value is the controlling factor in The Facts

[5]
Respondent Leon Carpo (Leon) and his brother Francisco G. Carpo are the registered co- On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in
owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision, the payment of the rentals due the respondents. The PARAD found that the deposit made with
[6]
situated at Sta. Rosa, Laguna, covered by Transfer Certificate of Title (TCT) No. T-17272 of Republic Planters Bank was actually in the names of petitioner and Marciano, hence, personal
the Register of Deeds of Laguna, with an area of 91,337 square meters, more or less. A portion to them. The PARAD also found that it was only during the hearing that petitioner and
thereof, consisting of 3.5 hectares, pertained to Leon and his wife, respondent Aurora Carpo. Marciano deposited the amount of P40,000.00 with the Universal Savings Bank for the unpaid
It was devoted to rice and corn production (subject land) and was tenanted by one Domingo rentals. As such the PARAD considered the deposits as late payments and as implied admission
[7]
Pastolero (Domingo), husband of Adoracion Pastolero (Adoracion). When Domingo passed that indeed petitioner and Marciano did not pay the past rentals when they fell due. The
away, Adoracion together with her son Elpidio Pastolero, assumed the tenancy rights of PARAD further held and disposed thus:
Domingo over the subject land.
The intent of the defendant to subject the said area under PD 27 should
However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang pass the criteria set. Foremost is the determination of the aggregate
[8]
Salaysay with the conformity of Leon, and for a consideration of P72,500.00, transferred her riceland of plaintiff. He must have more than seven (7) hectares of land
[9]
rights in favor of petitioner Otilia Sta. Ana (petitioner) who, together with her husband, principally devoted to the planting of palay. Area over seven (7) hectares
Marciano de la Cruz (Marciano), became the new tenants of the subject land. shall be the one to be covered by PD 27 on Operation Land Transfer (OLT).
In the case at bar, defendants failed to prove that plaintiff has more than
[10]
At the outset, the parties had a harmonious tenancy relationship. Unfortunately, the required riceland. In fact the subject 3.5 hectares are jointly owned by
circumstances transpired which abraded the relationship. The Department of Agrarian Reform two. Hence, coverage for OLT is remote.
(DAR) mediated in order to amicably settle the controversy, but no settlement was reached by
the parties. Thus, the instant case. Defendant claimed that plaintiff is covered by LOI 474, and therefore, he
is zero retention of area. In reference to said law, wherein it provides
[11]
In their Complaint for Ejectment due to Non-Payment of Lease Rentals dated landowner with other agricultural land of more than 7 hectares, or have
December 1, 1989, respondents alleged that it was their agreement with petitioner and other industrial lands from where he and his family derived resources,
Marciano to increase the existing rentals from 36 cavans to 45 cavans, and that, if respondents then, the owner cannot retain any riceland. However, this is not applicable
wanted to repossess the property, they only had to pay the petitioner the amount in the instant case, as the defendant failed to prove that plaintiff has other
of P72,500.00, the same amount paid by the latter to Adoracion. Respondents further averred source of income from where they will derive their sustenance.
that despite repeated demands, petitioner refused to pay the actual rentals from July 1985 to
September 1989, in violation of Presidential Decree (P.D.) No. 817; and that the subject land WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
had been declared, upon the recommendation of the Human Settlements Committee, suitable
for commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of a) Ordering the ejectment of defendant from the subject
Sta. Rosa, Laguna. Respondents prayed that petitioner be ejected from the subject land and landholding for non-payment of lease rentals;
be directed to pay P75,016.00 as unpaid rentals.
b) Ordering the defendant Marciano de la Cruz to surrender
[12]
In their Answer dated January 26, 1990, petitioner and Marciano denied that the possession and cultivation of the subject land to herein
there was an agreement to increase the existing rental which was already fixed at 36 cavans plaintiffs;
of palay, once or twice a year depending on the availability of irrigation water; that neither
was there an agreement as to the future surrender of the land in favor of the respondents; that c) Ordering the defendant to pay as actual damage the
they did not refuse to pay the rentals because they even sent verbal and written notices to amount of P75,016.00 corresponding to the unpaid rentals
the respondents, advising them to accept the same; and that in view of the latters failure to from July 18, 1985 up to September 16, 1989[; and]
respond, petitioner and Marciano were compelled to sell the harvest and to deposit the d) [D]eclaring the subject land not covered by Presidential
proceeds thereof in Savings Account No. 9166 with the Universal Savings Bank at Sta. Rosa, Decree No. 27, Republic Act [No.] 6657, and Executive
Laguna under the names of Leon and Marciano. As their special affirmative defense, petitioner Order No. 228.
and Marciano claimed that Marciano is a farmer-beneficiary of the subject land pursuant to SO ORDERED.
P.D. 27. Petitioner and Marciano prayed for the outright dismissal of the complaint and for the
declaration of Marciano as full owner of the subject land.
[13]
Petitioner and Marciano sought relief from the DARAB.
Thereafter, trial on the merits ensued.
The PARADs Ruling
The DARABs Ruling
 and Marciano did not legally comply with their duties as tenants. Moreover, the CA held that
the subject land was not covered by P.D. 27, Republic Act (R.A.) No. 6657 and Executive Order
On June 24, 1998, the DARAB held: (E.O.) No. 228, since the same had become a residential, commercial and industrial land, to
wit:
It is a fundamental rule in this jurisdiction that for non-payment
of lease rentals to warrant the dispossession and ejectment of a tenant, In the case at bar, We opted to give more weight to the petitioners
the same must be made in a willful and deliberate manner (Cabero v. contention that the subject landholding is for residential, commercial, and
Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster or industrial purposes as declared by zoning ordinance of 1981 of the town
ejectment of a farmer-tenant, the willful and deliberate intent not to pay of Sta. Rosa, Laguna upon recommendation of the Human Settlement
lease rentals and/or share can be ascertained when there is a Committee xxx. The vicinity map of the subject landholding shows that it
determination of will not to do a certain act. is almost beside Nissan Motors Technopa[r]k and surrounded by the South
Expressway and several companies such as the Coca-Cola Bottlers
Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa
Considering the circumstances obtaining in this case, it cannot
Cruz, National Road. The vicinity map shows therefore that the subject
be concluded that the defendants-appellants deliberately failed or
landholding is a residential, commercial, and industrial area exempted
refused to pay their lease rentals. It was not the fault of defendants-
from the coverage of P.D. No. 27, Republic Act. No. 6657 and Executive
appellants herein that the rentals did not reach the plaintiffs-appellees
Order No. 228.
because the latter choose to lend a deaf ear to the notices sent to them.

Clearly, therefore plaintiffs-appellees failed to show by substantial

evidence that the defendants-appellants deliberately failed or refused to
The CA ruled in favor of the respondents in this wise:
pay their lease rentals. It has been held that the mere failure of a tenant

to pay the landowners share does not necessarily give the latter the right

to eject the former when there is lack of deliberate intent on the part of
WHEREFORE, premises considered and pursuant to applicable law and
the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
jurisprudence on the matter, the present Petition is hereby GRANTED.
Accordingly, the decision of the Department of Agrarian Reform
Thus: Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City
(promulgated on June 24, 1998) is hereby REVERSED and SET ASIDEand a
WHEREFORE, finding the appeal interposed by the defendants-appellants new one entered- REINSTATING the decision of the Department of
to be meritorious, the Decision appealed from is hereby SET ASIDE and Agrarian Reform Adjudication Board-Region IV, Office of the Provincial
another judgment issued as follows: Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No
pronouncement as to costs.
1. Enjoining plaintiffs-appellees to respect the peaceful
possession and cultivation of the land in suit by the
defendants-appellants; and SO ORDERED.
[15]
Petitioner filed a Motion for Reconsideration assailing the aforementioned Decision which
2. Directing the MARO of Sta. Rosa, Laguna to assist the parties [16]
the CA, however, denied in its Resolution dated June 28, 2004.
in the proper accounting of lease rentals to be paid by the
defendants-appellants to the plaintiffs-appellees. Hence, this Petition based on the following grounds:

No costs. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING
UPON ITSELF WHAT IS OTHERWISE DARS POWER TO DETERMINE WHET
SO ORDERED. HERTHE SUBJECT AGRICULTURAL LAND HAS
[14]
Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away. BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.

The CAs Ruling THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT
EQUATED LAND RECLASSIFICATION WITH LAND CONVERSION FOR
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and PURPOSES OF DETERMINING THE PROPRIETY OF EJECTMENT OF AN
Marciano failed to pay the rentals and that there was no valid tender of payment. The CA AGRICULTURAL LESSEE.
added that this failure to pay was tainted with bad faith and deliberate intent. Thus, petitioner
 [20]
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED verbal and written notices for Leon to accept their lease rentals were fraudulent designs to
TO NOTE THAT AN EJECTMENT SUIT BASED ON A CLAIM OF NON- disguise the deliberate intent of petitioner not to pay the lease rentals; that when Leon went
PAYMENT OF LEASE RENTAL IS DIAMETRICALLY ANTITHETICAL TO THE to petitioner's residence, petitioner did not pay the P10,000.00 due as lease rentals; that
CLAIM THAT THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT A during the hearing before the PARAD, when respondents' counsel requested that they be
RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA EXEMPTED FROM furnished a bank certificate as to the existence of said bank deposits in Republic Planters Bank
THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT NO. 6657 AND EXECUTIVE as of April 20, 1987 and October 1, 1987, petitioner herself commented, Nagdeposito ho talaga
[21]
ORDER NO. 228. kami sa pangalan namin; that the statement of petitioner is an admission that bank
deposits, if any, were made, not in the name of Leon as contained in the written notices, but
THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT ADOPTED THE rather in the names of petitioner and Marciano; that such certificate was not introduced in
FINDING OF DARAB-REGION IV, OFFICE OF THE PROVINCIAL evidence and that upon inquiry, said deposits do not actually exist; that per recent inquiry, the
ADJUDICATOR, STA. CRUZ, LAGUNA INSTEAD OF THAT OF THE DARAB- bank deposit in Universal Savings Bank only contains P1,020.19 due to previous withdrawals
CENTRAL--IS VIOLATIVE OF SEC. 14, ART. VIII OF THE 1987 CONSTITUTION made by Marciano; that the foregoing circumstances indicate a pattern of fraudulent
FOR HAVING DECIDED WITHOUT EXPRESSING THEREIN CLEARLY AND misrepresentations by the petitioner to mislead the DARAB into believing that petitioner and
DISTINCTLY THE FACTS AND THE LAW ON WHICH SAID DECISION IS BASED. Marciano did not deliberately refuse to pay the lease rentals; that from July 18, 1985 up to the
present, petitioner failed to pay the lease rentals showing again, the deliberate refusal to pay;
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO that this default on the part of the petitioner has been recurring for several years already, thus
SURMISES AND CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE depriving the respondents as landowners of their share of the subject land in violation of the
HEREIN PETITIONER AND HER DECEASED HUSBAND TO DELIVER THE LEASE principle of social justice; that as raised in respondents Omnibus Supplemental Motion for
[22] [23]
RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND Reconsideration before the DARAB and as found by the CA based on its vicinity map, the
WITH DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS THEREOF. subject land is of a residential, commercial and industrial character, exempted from agrarian
reform coverage; and that the DARAB erred in not finding the sale of the tenancy rights of
Petitioner asseverates that there is no evidence to support respondents' claim that the failure Adoracion to petitioner and Marciano for P72,500.00 violative of P.D. 27 even if the same was
to pay the lease rentals was tainted with malevolence, as the records are replete with acts with Leon's consent. The sale, respondents contend was therefore, null and void ab initio, not
[24]
indicative of good faith on the part of the petitioner and Marciano and bad faith on the part of susceptible of any ratification.
respondents. Our Ruling

Moreover, petitioner claimed that the power to determine whether or not the Before we resolve this case on the merits, a procedural issue must be disposed of.
subject land is non-agricultural, hence, exempt from the coverage of the Comprehensive
Agrarian Reform Law (CARL), lies with the DAR, and not with the courts; that mere Respondents strongly argue that the instant Petition was filed out of time because,
[25]
reclassification by way of a zoning ordinance does not warrant the dispossession of a tenant while petitioner originally claimed to have received her copy of the CA Resolution dated
[26]
but conversion does, and entitles the tenant to payment of disturbance compensation; the June 28, 2004, denying her Motion for Reconsideration, on July 12, 2004, petitioner
legal concepts of reclassification and conversion are separate and distinct from each other; eventually admitted, after respondents showed proof to the contrary, that she actually
[27]
that respondents' complaint before the PARAD alleged and established the fact that the received the said Resolution on July 7, 2004. Thus, petitioner had only up to July 22, 2004 to
[28]
subject land is a riceland, therefore, agricultural; that the CA failed to explain why it upheld the appeal the CA's ruling to this Court. In this case, petitioner filed her Motion for Extension of
findings of the PARAD on the issue of non-payment of lease rentals; and that though the issue Time to File Petition for Review on Certiorari (Motion) on July 23, 2004. As such, there was no
of non-payment of lease rentals is a question of fact, due to the conflict of the factual findings more period to extend. Further, the instant Petition was filed on August 27, 2004, or three (3)
of the PARAD and CA with those of the DARAB, petitioner asks that this Court review the days beyond the thirty-day extended period. Hence, respondents submit that the CA decision
[17] [29]
evidence on record, and pursuant to the CA decision in Cabero v. Caturna, et al., rule on had already become final and executory.
whether petitioner willfully and deliberately refused to pay lease rentals as to warrant her
[18]
dispossession from the subject land. Petitioner alleges that on July 15, 2004, she met with her counsel to engage the
latter's legal services. During said meeting, counsel asked petitioner about the date of receipt
On the other hand, respondents aver that petitioner and her family are wealthy, as of the assailed CA Resolution. Petitioner replied that she received her copy on July 12,
[19] [30]
they own numerous properties in Sta. Rosa, Laguna including a luxurious house; that, as 2004. On July 20, 2004, counsel filed an Entry of Appearance with the CA. On July 23, 2004,
such, petitioner cannot be considered as a landless tenant deserving the protection of agrarian petitioner through counsel filed the Motion for Extension of Time to File Petition for
reform laws; that the DARAB negated the highest degree of respect the factual findings of the Review. On August 11, 2004, petitioner received a copy of respondents' Opposition to the
PARAD deserved; that petitioner's claims that Marciano repeatedly made Motion. Thereafter, upon verification, petitioner admitted that she received the copy of the
CA Resolution on July 7, 2004. Thus, her Motion was admittedly filed one day late. Petitioner
begs the indulgence of this Court for her oversight and mistake, attributing the same to her
lack of education and old age.
 on that allegation. The PARAD held that petitioner should be ejected for non-payment of lease
Rules of procedure are merely tools designed to facilitate the attainment of justice. rentals. It also ruled that the subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O.
If the application of the Rules would tend to frustrate rather than to promote justice, it is No. 228, not on the basis of the allegation in the complaint, but on the respondents' right of
always within our power to suspend the rules or except a particular case from their operation. retention.
Law and jurisprudence grant to courts the prerogative to relax compliance with the procedural
rules, even the most mandatory in character, mindful of the duty to reconcile the need to put
[31]
an end to litigation speedily and the parties' right to an opportunity to be heard. On appeal, the DARAB concentrated on the issue of petitioners failure to pay lease
rentals. When the DARAB ruled that petitioner and Marciano did not deliberately fail to pay
[32]
Our recent ruling in Tanenglian v. Lorenzo is instructive: said rentals, respondents raised a new issue in their Omnibus Motion that the transaction
between Adoracion and petitioner was void in violation of P.D. No. 27, despite the conformity
We have not been oblivious to or unmindful of the extraordinary situations of Leon. This issue was not resolved by the DARAB.
that merit liberal application of the Rules, allowing us, depending on the
circumstances, to set aside technical infirmities and give due course to the Finally, when the case reached the CA, the appellate court affirmed the findings of
appeal. In cases where we dispense with the technicalities, we do not the PARAD that petitioner and Marciano deliberately and in bad faith did not pay the lease
mean to undermine the force and effectivity of the periods set by law. In rentals. The CA, however, also held that the subject land had already become a residential,
those rare cases where we did not stringently apply the procedural rules, commercial and industrial area based on the vicinity map showing that the land was
there always existed a clear need to prevent the commission of a grave surrounded by commercial and industrial establishments.
injustice. Our judicial system and the courts have always tried to maintain Without doubt, the PARAD acted without jurisdiction when it held that the subject
a healthy balance between the strict enforcement of procedural laws and land was no longer covered by our agrarian laws because of the retention rights of the
the guarantee that every litigant be given the full opportunity for the just respondents. The CA likewise acted without jurisdiction when it ruled that the land had
and proper disposition of his cause. become non-agricultural based on a zoning ordinance of 1981 on the strength of a mere
vicinity map. These rulings violated the doctrine of primary jurisdiction.

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over
In this case, petitioner was one day late in filing her Motion for Extension. To deny
which jurisdiction has initially been lodged in an administrative body of special competence.
the Petition on this ground alone is too harsh a penalty for a days delay, taking into
For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR);
consideration the time, resources and effort spent by petitioner and even by the respondents,
more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB).
in order to pursue this case all the way to this Court. Thus, we dispense with the apparent
Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate
procedural defect and resolve this case on the merits. The ends of justice are better served
agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of
when cases are determined on the merits with all parties given full opportunity to ventilate
[33] agrarian reform, except those falling under the exclusive original jurisdiction of the
their causes and defenses rather than on technicality or some procedural imperfections. [34]
Department of Agriculture and the Department of Environment and Natural Resources.


The Petition is impressed with merit. [35]
In Department of Agrarian Reform v. Abdulwahid, we held:


In sum, there are two (2) ultimate issues that require resolution in this case:
As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is
1) Whether the CA erred in ruling that the subject land had already become
vested with the primary jurisdiction to determine and adjudicate agrarian
residential, commercial and/or industrial, thus, excluded from the coverage of our
reform matters and shall have the exclusive jurisdiction over all matters
laws on agrarian reform; and
involving the implementation of the agrarian reform program." The DARAB

has primary, original and appellate jurisdiction "to determine and
2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals when
adjudicate all agrarian disputes, cases, controversies, and matters or
the same fell due as to warrant her dispossession of the subject land.
incidents involving the implementation of the Comprehensive Agrarian

Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A.
On the first issue, we rule in the affirmative.
No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws
To recapitulate, the instant case sprang from a Complaint for Ejectment based on
and their implementing rules and regulations."
Non-Payment of lease rentals. Though an allegation was made by the respondents that the

land had been declared, upon the recommendation of the Human Settlements Committee,
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is
suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the
defined to include "(d) . . . any controversy relating to tenurial
Municipality of Sta. Rosa, no argument was advanced by respondents to support such
arrangements, whether leasehold, tenancy, stewardship or otherwise over
allegation, in the same way that no prayer for the ejectment of the tenants was raised based
lands devoted to agriculture, including disputes concerning farmworkers
 associations or representation of persons in negotiating, fixing, 3.10 Issuance of Certificate of Exemption for land subject of
maintaining, changing or seeking to arrange terms or conditions of such Voluntary Offer to Sell (VOS) and Compulsory
tenurial arrangements. It includes any controversy relating to Acquisition (CA) found unsuitable for agricultural
compensation of lands acquired under this Act and other terms and purposes;
conditions of transfer of ownership from landowners to farmworkers, 3.11 Application for conversion of agricultural land to residential,
tenants and other agrarian reform beneficiaries, whether the disputants commercial, industrial, or other non-agricultural uses
stand in the proximate relation of farm operator and beneficiary, and purposes including protests or oppositions
landowner and tenant, or lessor and lessee." thereto;
3.12 Determination of the rights of agrarian reform beneficiaries
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are to homelots;
within the primary and exclusive original jurisdiction of the PARAD and the DARAB, while issues 3.13 Disposition of excess area of the tenants/farmer-
of retention and non-coverage of a land under agrarian reform, among others, are within the beneficiary's landholdings;
domain of the DAR Secretary. 3.14 Increase in area of tillage of a tenant/farmer-beneficiary;
3.15 Conflict of claims in landed estates administered by DAR and
Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides: its predecessors; or
3.16 Such other agrarian cases, disputes, matters or concerns
referred to it by the Secretary of the DAR.
SECTION 3. Agrarian Law Implementation Cases. The Adjudicator
or the Board shall have no jurisdiction over matters involving the
administrative implementation of RA No. 6657, otherwise known as the Verily, there is an established tenancy relationship between petitioner and
Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian respondents in this case. An action for Ejectment for Non-Payment of lease rentals is
laws as enunciated by pertinent rules and administrative orders, which clearly an agrarian dispute, cognizable at the initial stage by
[36]
shall be under the exclusive prerogative of and cognizable by the Office of the PARAD and thereafter by the DARAB. But issues with respect to the retention rights of
the Secretary of the DAR in accordance with his issuances, to wit: the respondents as landowners and the exclusion/exemption of the subject land from the
coverage of agrarian reform are issues not cognizable by the PARAD and the DARAB, but by
3.1 Classification and identification of landholdings for coverage the DAR Secretary because, as aforementioned, the same are Agrarian Law Implementation
under the agrarian reform program and the initial (ALI) Cases.
issuance of CLOAs and EPs, including protests or
oppositions thereto and petitions for lifting of such It has not escaped our notice that, as this case progressed and reached a higher level
coverage; in the hierarchy of tribunals, the respondents would, invariably, proffer an additional theory
3.2 Classification, identification, inclusion, exclusion, or defense, in order to effect petitioners eviction from the land. As a consequence, the simple
qualification, or disqualification of potential/actual issue of ejectment based on non-payment of rentals has been muddled.
farmer-beneficiaries;
3.3 Subdivision surveys of land under CARP; Proof necessary for the resolution of the issue of the land being covered by, or
3.4 Recall, or cancellation of provisional lease rentals, Certificates excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian laws, as
of Land Transfers (CLTs) and CARP Beneficiary well as of the issue of the right of retention of the respondents, was not offered in
Certificates (CBCs) in cases outside the purview of evidence. Worse, the PARAD resolved the issue of retention even if it was not raised by the
Presidential Decree (PD) No. 816, including the respondents at that level, and even if the PARAD had no jurisdiction over the same.
issuance, recall, or cancellation of EPs or CLOAs not yet
registered with the Register of Deeds; Likewise, the CA ruled that the land had ceased being agricultural on the basis of a
3.5 Exercise of the right of retention by the landowner; mere vicinity map, in open disregard of the Doctrine of Primary Jurisdiction, since the issue
3.6 Application for exemption from coverage under Section 10 of was within the province of the Secretary of DAR.
RA 6657;
3.7 Application for exemption pursuant to Department of Justice We take this opportunity to remind the PARAD and the CA that courts of justice have
(DOJ) Opinion No. 44 (1990); no power to decide a question not in issue. A judgment that goes beyond the issues, and
3.8 Exclusion from CARP coverage of agricultural land used for purports to adjudicate something on which the parties were not heard, is extra-judicial,
livestock, swine, and poultry raising; irregular and invalid. This norm applies not only to courts of justice, but also to quasi-judicial
3.9 Cases of exemption/exclusion of fish pond and prawn farms
from the coverage of CARP pursuant to RA 7881;
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the
retention rights of the respondents, and the CA decision on the non-agricultural character of Respondents failed to discharge such burden. The agricultural tenant's failure to pay
the land subject of this controversy -- these issues not having passed the scrutiny of the DAR the lease rentals must be willful and deliberate in order to warrant his dispossession of the
[37]
Secretary -- are premature and irregular. land that he tills.

Thus, we cannot allow ourselves to fall into the same error as that committed by the Petitioner's counsel opines that there appears to be no decision by this Court on the
PARAD and the CA, and resolve the issue of the non-agricultural nature of the subject land by matter; he thus submits that we should use the CA decision in Cabero v. Caturna. This is not
[43]
receiving, at this stage, pieces of evidence and evaluating the same, without the respondents correct. In an En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al., we held
having first introduced them in the proper forum. The Office of the DAR Secretary is in a better that under our law and jurisprudence, mere failure of a tenant to pay the landholder's share
position to resolve the issues on retention and exclusion/exemption from agrarian reform does not necessarily give the latter the right to eject the former when there is lack of deliberate
coverage, being the agency lodged with such authority inasmuch it possesses the necessary intent on the part of the tenant to pay. This ruling has not been overturned.
[38]
expertise on the matter.

Likewise, we refrain from entertaining the issue raised by respondents that The term deliberate is characterized by or results from slow, careful, thorough
[44]
petitioner and her family are not landless tenants and are therefore not deserving of any calculation and consideration of effects and consequences. The term willful, on the other
protection under our laws on agrarian reform, because fairness and due process dictate that hand, is defined as one governed by will without yielding to reason or without regard to
[39] [45]
issues not raised in the proceedings below should not be raised for the first time on appeal. reason.

On the second issue, we rule in the negative. We agree with the findings of the DARAB that it was not the fault of petitioner that
the lease rentals did not reach the respondents because the latter chose to ignore the notices
sent to them. To note, as early as November 10, 1986, Marciano executed an
[40] [46]
Under Section 37 of Republic Act No. 3844, as amended, coupled with the fact that the Affidavit stating that Leon refused to receive the respective lease rentals consisting of 37
respondents are the complainants themselves, the burden of proof to show the existence of a cavans for November 1985 and July 1986. For 1987, Marciano wrote Leon two
[47]
lawful cause for the ejectment letters informing him of the availability of the lease rentals for April and October of the same
of the petitioner as an agricultural lessee rests upon the respondents as year. On April 27, 1988, Marciano sought DAR intervention and mediation with respect to the
[48]
execution of a leasehold contract and the fixing of the leasehold rentals. Meetings were set
[49]
but respondents failed to attend. The dispute was referred to the barangay but the parties
[41] [50]
agricultural lessors. This proceeds from the principle that a tenancy relationship, once failed to amicably settle.
established, entitles the tenant to security of tenure. Petitioner can only be ejected from the
[42]
agricultural landholding on grounds provided by law. Section 36 of the same law pertinently These factual circumstances negate the PARAD findings of Marcianos and
provides: petitioner's deliberate and willful intent not to pay lease rentals. Good faith was clearly
demonstrated by Marciano and petitioner when, because respondents refused to accept the
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding any proffered payment, they even went to the point of seeking government intervention in order
agreement as to the period or future surrender, of the land, an agricultural to address their problems with respondents. Absent such deliberate and willful refusal to pay
lessee shall continue in the enjoyment and possession of his landholding lease rentals, petitioner's ejectment from the subject land is not justified.
except when his dispossession has been authorized by the Court in a
judgment that is final and executory if after due hearing it is shown that:

x x x x WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of
Appeals in CA-G.R. SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the
(6) The agricultural lessee does not pay the lease rental when it falls due: Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 in DARAB
Provided, That if the non-payment of the rental shall be due to crop failure Case No. 2203 is REINSTATED without prejudice to the rights of respondent-spouses Leon and
to the extent of seventy-five per centum as a result of a fortuitous event, Aurora Carpo to seek recourse from the Office of the Department of Agrarian Reform (DAR)
the non-payment shall not be a ground for dispossession, although the Secretary on the other issues they raised. No costs.
obligation to pay the rental due that particular crop is not thereby
extinguished; SO ORDERED.

x x x x

 Republic of the Philippines that no previous demand had been made on the Surety for the satisfaction of the judgment.
SUPREME COURT Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the
Manila judgment, the plaintiffs filed a second motion for execution against the counterbond. On the
date set for the hearing thereon, the Court, upon motion of the Surety's counsel, granted the
EN BANC latter a period of five days within which to answer the motion. Upon its failure to file such
answer, the Court granted the motion for execution and the corresponding writ was issued.
G.R. No. L-21450 April 15, 1968
Subsequently, the Surety moved to quash the writ on the ground that the same was issued
without the required summary hearing provided for in Section 17 of Rule 59 of the Rules of
SERAFIN TIJAM, ET AL., plaintiffs-appellees,
Court. As the Court denied the motion, the Surety appealed to the Court of Appeals from
vs.
such order of denial and from the one denying its motion for reconsideration (Id. p. 97). Its
MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA
record on appeal was then printed as required by the Rules, and in due time it filed its brief
BAGUIO, defendants,
raising therein no other question but the ones covered by the following assignment of errors:
MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding company and defendant-
appellant.
I. That the Honorable Court a quo erred in issuing its order dated November 2,
1957, by holding the incident as submitted for resolution, without a summary
F. S. Urot and G. A. Uriate for plaintiffs-appellees.
hearing and compliance with the other mandatory requirements provided for in
Carlos J. Cuizon for defendants Gavino Sibonghanoy and Lucia Baguio.
Section 17, Rule 59 of the Rules of Court.
Villaluz Law Office, Velasco Law Office, Pages and Soberano for defendant-appellant Manila
Surety and Fidelity Company, Inc.
II. That the Honorable Court a quo erred in ordering the issuance of execution
against the herein bonding company-appellant.
DIZON, J.:

III. That the Honorable Court a quo erred in denying the motion to quash the writ
On July 19, 1948 — barely one month after the effectivity of Republic Act No. 296 known as
of execution filed by the herein bonding company-appellant as well as its
the Judiciary Act of 1948 — the spouses Serafin Tijam and Felicitas Tagalog commenced Civil
subsequent motion for reconsideration, and/or in not quashing or setting aside the
Case No. R-660 in the Court of First Instance of Cebu against the spouses Magdaleno
writ of execution.
Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with legal interest
thereon from the date of the filing of the complaint until the whole obligation is paid, plus
costs. As prayed for in the complaint, a writ of attachment was issued by the court against Not one of the assignment of errors — it is obvious — raises the question of lack of
defendants' properties, but the same was soon dissolved upon the filing of a counter-bond jurisdiction, neither directly nor indirectly.
by defendants and the Manila Surety and Fidelity Co., Inc. hereinafter referred to as the
Surety, on the 31st of the same month. Although the appellees failed to file their brief, the Court of Appeals, on December 11, 1962,
decided the case affirming the orders appealed from.
After being duly served with summons the defendants filed their answer in which, after
making some admissions and denials of the material averments of the complaint, they On January 8, 1963 — five days after the Surety received notice of the decision, it filed a
interposed a counterclaim. This counterclaim was answered by the plaintiffs. motion asking for extension of time within which to file a motion for reconsideration. The
Court of Appeals granted the motion in its resolution of January 10 of the same year. Two
After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs days later the Surety filed a pleading entitled MOTION TO DISMISS, alleging substantially that
and, after the same had become final and executory, upon motion of the latter, the Court appellees action was filed in the Court of First Instance of Cebu on July 19, 1948 for the
issued a writ of execution against the defendants. The writ having been returned unsatisfied, recovery of the sum of P1,908.00 only; that a month before that date Republic Act No. 296,
the plaintiffs moved for the issuance of a writ of execution against the Surety's bond (Rec. on otherwise known as the Judiciary Act of 1948, had already become effective, Section 88 of
Appeal, pp. 46-49), against which the Surety filed a written opposition (Id. pp. 49) upon two which placed within the original exclusive jurisdiction of inferior courts all civil actions where
grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety for the value of the subject-matter or the amount of the demand does not exceed P2,000.00,
the payment of the amount due under the judgment. Upon these grounds the Surety prayed exclusive of interest and costs; that the Court of First Instance therefore had no jurisdiction
the Court not only to deny the motion for execution against its counter-bond but also the to try and decide the case. Upon these premises the Surety's motion prayed the Court of
following affirmative relief : "to relieve the herein bonding company of its liability, if any, Appeals to set aside its decision and to dismiss the case. By resolution of January 16, 1963
under the bond in question" (Id. p. 54) The Court denied this motion on the ground solely the Court of Appeals required the appellees to answer the motion to dismiss, but they failed
to do so. Whereupon, on May 20 of the same year, the Court resolved to set aside its As already stated, the action was commenced in the Court of First Instance of Cebu on July
decision and to certify the case to Us. The pertinent portions of its resolution read as follows: 19, 1948, that is, almostfifteen years before the Surety filed its motion to dismiss on January
12, 1963 raising the question of lack of jurisdiction for the first time.
It would indeed appear from the record that the action at bar, which is a suit for
collection of money in the sum of exactly P1,908.00 exclusive of interest, was It must be remembered that although the action, originally, was exclusively against the
originally instituted in the Court of First Instance of Cebu on July 19, 1948. But Sibonghanoy spouses the Surety became a quasi-party therein since July 31, 1948 when it
about a month prior to the filing of the complaint, more specifically on June 17, filed a counter-bond for the dissolution of the writ of attachment issued by the court of
1948, the Judiciary Act of 1948 took effect, depriving the Court of First Instance of origin (Record on Appeal, pp. 15-19). Since then, it acquired certain rights and assumed
original jurisdiction over cases in which the demand, exclusive of interest, is not specific obligations in connection with the pending case, in accordance with sections 12 and
more than P2,000.00. (Secs. 44[c] and 86[b], R.A. No. 296.) 17, Rule 57, Rules of Court (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65
Phil. 170).
We believe, therefore, that the point raised in appellant's motion is an important
one which merits serious consideration. As stated, the complaint was filed on July Upon the filing of the first motion for execution against the counter-bond the Surety not only
19, 1948. This case therefore has been pending now for almost 15 years, and filed a written opposition thereto praying for its denial but also asked for an
throughout the entire proceeding appellant never raised the question of additional affirmative relief — that it be relieved of its liability under the counter-bond upon
jurisdiction until after receipt of this Court's adverse decision. the grounds relied upon in support of its opposition — lack of jurisdiction of the court a
quo not being one of them.
There are three cases decided by the Honorable Supreme Court which may be
worthy of consideration in connection with this case, namely: Tyson Tan, et al. vs. Then, at the hearing on the second motion for execution against the counter-bond, the
Filipinas Compañia de Seguros, et al., G.R. No. L-10096, March 23, 1956; Pindangan Surety appeared, through counsel, to ask for time within which to file an answer or
Agricultural Co., Inc. vs. Jose P. Dans, etc., et al., G.R. No. L-14591, September 26, opposition thereto. This motion was granted, but instead of such answer or opposition, the
1962; and Alfredo Montelibano, et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. No. Surety filed the motion to dismiss mentioned heretofore.
L-15092, September 29, 1962, wherein the Honorable Supreme Court frowned
upon the 'undesirable practice' of appellants submitting their case for decision and A party may be estopped or barred from raising a question in different ways and for different
then accepting the judgment, if favorable, but attacking it for lack of jurisdiction reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel
when adverse. by laches.

Considering, however, that the Supreme Court has the "exclusive" appellate Laches, in a general sense is failure or neglect, for an unreasonable and unexplained length of
jurisdiction over "all cases in which the jurisdiction of any inferior court is in issue" time, to do that which, by exercising due diligence, could or should have been done earlier; it
(See. 1, Par. 3[3], Judiciary Act of 1948, as amended), we have no choice but to is negligence or omission to assert a right within a reasonable time, warranting a
certify, as we hereby do certify, this case to the Supreme Court.1äwphï1.ñët presumption that the party entitled to assert it either has abandoned it or declined to assert
it.
ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948 as amended, let
the record of this case be forwarded to the Supreme Court. The doctrine of laches or of "stale demands" is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale claims and, unlike the statute
It is an undisputed fact that the action commenced by appellees in the Court of First Instance of limitations, is not a mere question of time but is principally a question of the inequity or
of Cebu against the Sibonghanoy spouses was for the recovery of the sum of P1,908.00 only unfairness of permitting a right or claim to be enforced or asserted.
— an amount within the original exclusive jurisdiction of inferior courts in accordance with
the provisions of the Judiciary Act of 1948 which had taken effect about a month prior to the It has been held that a party can not invoke the jurisdiction of a court to sure affirmative
date when the action was commenced. True also is the rule that jurisdiction over the subject relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or
matter is conferred upon the courts exclusively by law, and as the lack of it affects the very question that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just
authority of the court to take cognizance of the case, the objection may be raised at any cited, by way of explaining the rule, it was further said that the question whether the court
stage of the proceedings. However, considering the facts and circumstances of the present had jurisdiction either of the subject-matter of the action or of the parties was not important
case — which shall forthwith be set forth — We are of the opinion that the Surety is now in such cases because the party is barred from such conduct not because the judgment or
barred by laches from invoking this plea at this late hour for the purpose of annuling order of the court is valid and conclusive as an adjudication, but for the reason that such a
everything done heretofore in the case with its active participation. practice can not be tolerated — obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and encountering company for payment of the amount due under the judgment" (Record on Appeal,
an adverse decision on the merits, it is too late for the loser to question the jurisdiction or p. 60).
power of the court (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283;
St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. Hence, plaintiffs made the necessary demand upon the surety for satisfaction of
58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction the judgment, and upon the latter's failure to pay the amount due, plaintiffs again
of a court in a particular matter to secure an affirmative relief, to afterwards deny that same filed a motion dated October 31, 1957, for issuance of writ of execution against the
jurisdiction to escape a penalty. surety, with notice of hearing on November 2, 1957. On October 31, 1957, the
surety received copy of said motion and notice of hearing.
Upon this same principle is what We said in the three cases mentioned in the resolution of
the Court of Appeals of May 20, 1963 (supra) — to the effect that we frown upon the It appears that when the motion was called on November 2, 1957, the surety's
"undesirable practice" of a party submitting his case for decision and then accepting the counsel asked that he be given time within which to answer the motion, and so an
judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse — as well order was issued in open court, as follows:1äwphï1.ñët
as in Pindañgan etc. vs. Dans, et al., G.R. L-14591, September 26, 1962; Montelibano, et al.,
vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court
As prayed for, Atty. Jose P. Soberano, Jr., counsel for the Manila Surety &
of Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277.
Fidelity Co., Inc., Cebu Branch, is given until Wednesday, November 6,
1957, to file his answer to the motion for the issuance of a writ of
The facts of this case show that from the time the Surety became a quasi-party on July 31, execution dated October 30, 1957 of the plaintiffs, after which this
1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance incident shall be deemed submitted for resolution.
of Cebu to take cognizance of the present action by reason of the sum of money involved
which, according to the law then in force, was within the original exclusive jurisdiction of
SO ORDERED.
inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a
quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain
affirmative relief and submitted its case for a final adjudication on the merits. It was only Given in open court, this 2nd day of November, 1957, at Cebu City,
after an adverse decision was rendered by the Court of Appeals that it finally woke up to Philippines.
raise the question of jurisdiction. Were we to sanction such conduct on its part, We would in
effect be declaring as useless all the proceedings had in the present case since it was (Sgd.) JOSE M. MENDOZA
commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once Judge
more. The inequity and unfairness of this is not only patent but revolting.
(Record on Appeal, pp.
Coming now to the merits of the appeal: after going over the entire record, We have become 64-65, emphasis ours)
persuaded that We can do nothing better than to quote in toto, with approval, the decision
rendered by the Court of Appeals on December 11, 1962 as follows: Since the surety's counsel failed to file any answer or objection within the period
given him, the court, on December 7, 1957, issued an order granting plaintiffs'
In Civil Case No. R-660 of the Court of First Instance of Cebu, which was a suit for motion for execution against the surety; and on December 12, 1957, the
collection of a sum of money, a writ of attachment was issued against defendants' corresponding writ of execution was issued.
properties. The attachment, however, was subsequently discharged under Section
12 of Rule 59 upon the filing by defendants of a bond subscribed by Manila Surety On December 24, 1957, the surety filed a motion to quash the writ of execution on
& Fidelity Co., Inc. the ground that the same was "issued without the requirements of Section 17, Rule
59 of the Rules of Court having been complied with," more specifically, that the
After trial, judgment was rendered in favor of plaintiffs. same was issued without the required "summary hearing". This motion was denied
by order of February 10, 1958.
The writ of execution against defendants having been returned totally unsatisfied,
plaintiffs moved, under Section 17 of Rule 59, for issuance of writ of execution On February 25, 1958, the surety filed a motion for reconsideration of the above-
against Manila Surety & Fidelity Co., Inc. to enforce the obligation of the bond. But stated order of denial; which motion was likewise denied by order of March 26,
the motion was, upon the surety's opposition, denied on the ground that there was 1958.
"no showing that a demand had been made, by the plaintiffs to the bonding
From the above-stated orders of February 10, 1958 and March 26, 1958 — denying It is also urged that although according to Section 17 of Rule 59, supra, there is no
the surety's motion to quash the writ of execution and motion for reconsideration, need for a separate action, there must, however, be a separate judgment against
respectively — the surety has interposed the appeal on hand. the surety in order to hold it liable on the bond (Appellant's Brief, p. 15). Not so, in
our opinion. A bond filed for discharge of attachment is, per Section 12 of Rule 59,
The surety insists that the lower court should have granted its motion to quash the "to secure the payment to the plaintiff of any judgment he may recover in the
writ of execution because the same was issued without the summary hearing action," and stands "in place of the property so released". Hence, after the
required by Section 17 of Rule 59, which reads; judgment for the plaintiff has become executory and the execution is "returned
unsatisfied" (Sec. 17, Rule 59), as in this case, the liability of the bond automatically
attaches and, in failure of the surety to satisfy the judgment against the defendant
"Sec. 17. When execution returned unsatisfied, recovery had upon bond.
despite demand therefor, writ of execution may issue against the surety to enforce
— If the execution be returned unsatisfied in whole or in part, the surety
the obligation of the bond.
or sureties on any bond given pursuant to the provisions of this role to
secure the payment of the judgment shall become finally charged on such
bond, and bound to pay to the plaintiff upon demand the amount due UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with costs
under the judgment, which amount may be recovered from such surety against the appellant Manila Surety and Fidelity Company, Inc.
or sureties after notice and summary hearing in the same action."
(Emphasis ours) Republic of the Philippines
SUPREME COURT
Summary hearing is "not intended to be carried on in the formal manner in which Manila
ordinary actions are prosecuted" (83 C.J.S. 792). It is, rather, a procedure by which
a question is resolved "with dispatch, with the least possible delay, and in FIRST DIVISION
preference to ordinary legal and regular judicial proceedings" (Ibid, p. 790). What is
essential is that "the defendant is notified or summoned to appear and is given an G.R. No. L-34362 November 19, 1982
opportunity to hear what is urged upon him, and to interpose a defense, after MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS ADMINISTRATOR OF
which follows an adjudication of the rights of the parties" (Ibid., pp. 793-794); and THE ESTATE OF DOMINGO MAGALI, petitioners,
as to the extent and latitude of the hearing, the same will naturally lie upon the vs.
discretion of the court, depending upon the attending circumstances and the HON. PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE COURT OF FIRST
nature of the incident up for consideration. INSTANCE OF PANGASINAN, BRANCH I, and FRANCISCO RAMOS, respondents.

In the case at bar, the surety had been notified of the plaintiffs' motion for Eugenio Ramos for petitioners.
execution and of the date when the same would be submitted for consideration. In
fact, the surety's counsel was present in court when the motion was called, and it
Rogelio P. Closa for respondents.
was upon his request that the court a quo gave him a period of four days within
which to file an answer. Yet he allowed that period to lapse without filing an
answer or objection. The surety cannot now, therefore, complain that it was
deprived of its day in court.
VASQUEZ, J.:
It is argued that the surety's counsel did not file an answer to the motion "for the
simple reason that all its defenses can be set up during the hearing of the motion The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the respondent Court
even if the same are not reduced to writing" (Appellant's brief, p. 4). There is against the private respondent is sought to be annulled and set aside by this Petition For
obviously no merit in this pretense because, as stated above, the record will show Review On Certiorari.
that when the motion was called, what the surety's counsel did was to ask that he
be allowed and given time to file an answer. Moreover, it was stated in the order The antecedent material facts are not disputed. Sometime in 1961, a judgment for a sum of
given in open court upon request of the surety's counsel that after the four-day money was rendered in favor of Independent Mercantile Corporation against a certain
period within which to file an answer, "the incident shall be deemed submitted for Manuel Magali by the Municipal Court of Manila in Civil Case No. 85136. After said judgment
resolution"; and counsel apparently agreed, as the order was issued upon his became final, a writ of execution was issued on July 31, 1961. The Notice of Levy made on
instance and he interposed no objection thereto. September 21, 1961 on a parcel of land covered by Transfer Certificate of Title No. 9138
registered in the name of "Domingo Magali, married to Modesta Calimlim", specified that the
said levy was only against "all rights, title, action, interest and participation of the defendant 13.) A Motion For Reconsideration filed by the petitioners was denied by the respondent
Manuel Magali over the parcel of land described in this title. " The Certificate of Sale Judge in his Order of September 2, 1971. (Ibid., pp. 13-15.) A second Motion For
executed by the Provincial Sheriff of Pangasinan on October 17, 1961 in favor of Independent Reconsideration was similarly denied in the Order dated September 29, 197 1. (Rollo, pp. 16-
Mercantile Corporation also stated that the sale referred only to the rights and interest of 17.) Hence, this Petition.
Manuel Magali over the land described in TCT No. 9138. Manuel Magali is one of the several
children of Domingo Magali who had died in 1940 and herein petitioner Modesta Calimlim. We find merit in this appeal.

However, when the Sheriff issued the final Deed of Sale on January 25, 1963, it was It is error to consider the dismissal of the petition filed by the herein petitioner in LRC Record
erroneously stated therein that the sale was with respect to "the parcel of land described in No. 39492 for the cancellation of TCT No. 68568 as a bar by prior judgment against the filing
this title" (referring to TCT No. 9138) and not only over the rights and interest of Manuel of Civil Case No. SCC-180. In order to avail of the defense of res judicata, it must be shown,
Magali in the same. The execution of the said final Deed of Sale was annotated at the back of among others, that the judgment in the prior action must have been rendered by a court
said title. with the proper jurisdiction to take cognizance of the proceeding in which the prior judgment
or order was rendered. If there is lack of jurisdiction over the subject-matter of the suit or of
On February 23, 1967, Independent Mercantile Corporation filed a petition in the respondent the parties, the judgment or order cannot operate as an adjudication of the controversy. (2
Court to compel Manuel Magali to surrender the owner's duplicate of TCT No. 9138 in order Moran Comments on the Rules of Court, 1970 Edition, p. 364.) This essential element of the
that the same may be cancelled and a new one issued in the name of the said corporation. defense of bar by prior judgment or res judicata does not exist in the case presently
Not being the registered owner and the title not being in his possession, Manuel Magali considered.
failed to comply with the order of the Court directing him to surrender the said title. On June
20, 1967, Independent Mercantile Corporation filed an ex-parte petition to declare TCT No. The petition filed by the herein petitioners in LRC Record No. 39492 was an apparent
9138 as cancelled and to issue a new title in its name. The said petition was granted by the invocation of the authority of the respondent Court sitting as a land registration court,
respondent Court and in its Order dated July 13, 1967, it directed the issuance of a new Although the said petition did not so state, that reliance was apparently placed on Section
certificate of title in the name of the Independent Mercantile Corporation and the 112 of the Land Registration Act. It has been settled by consistent rulings of this Court that a
cancellation of TCT No. 9138. By virtue of said Order, the Register of Deeds of Pangasinan court of first instance, acting as a land registration court, is a court of limited and special
issued a new title in the name of the corporation, Identified as TCT No. 68568. jurisdiction. As such, its proceedings are not adequate for the litigation of issues pertaining to
an ordinary civil action, such as, questions involving ownership or title to real property.
On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of Domingo Magali, (Bareng vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA 418; Manalo vs.
upon learning that her husband's title over the parcel of land had been cancelled, filed a Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA 747; Santos vs. Aquino, 101 SCRA
petition with the respondent Court, sitting as a cadastral court, praying for the cancellation of 377.) In Hu chon Sunpongco vs. Heirs of Nicolas Ronquillo, L- 27040, December 19, 1970, 36
TCT No. 68568. An opposition to the said petition was filed by Independent Mercantile SCRA 395, we have held that:
Corporation. After the parties submitted their respective Memoranda, the respondent Court
issued an Order dated June 3, 1968 dismissing the petition. (Rollo, pp. 31-38.) Section 112 of Act 496 confers authority upon the land registration court
to order the cancellation, alteration or amendment of a certificate of title
The herein petitioners did not appeal the dismissal of the petition they filed in LRC Record but withdraws from the Court the power to pass upon any question
No. 39492 for the cancellation of TCT No. 68568. Instead, on January 11, 1971, they filed the concerning ownership of the registered property, or any incident where
complaint in Civil Case No. SCC-180 praying for the cancellation of the conveyances and sales the issues involved have become controversial.
that had been made with respect to the property, covered by TCT No. 9138 previously
registered in the name of Domingo Magali, married to Modesta Calimlim. Named as It may hardly be questioned that the issues raised by the petitioners in their petition to
defendant in said civil case was herein private respondent Francisco Ramos who claimed to cancel TCT No. 68568 refer to the ownership or title over the property covered thereby. The
have bought the property from Independent Mercantile Corporation on July 25, 1967. Private said petition presented before the respondent Court in the exercise of its limited jurisdiction
respondent Francisco Ramos, however, failed to obtain a title over the property in his name as a cadastral court, the question of who should be considered the true and lawful owner of
in view of the existence of an adverse claim annotated on the title thereof at the instance of the parcel of land embraced in said title. The petitioners alleged therein that they are the
the herein petitioners. true owners of the property, and that TCT No. 68568 which they sought to cancel was issued
as a result of the errors which were not of their own making. In short, the petition raised a
Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No. SCC-180 on the highly controversial matter which is beyond the judicial competence of a cadastral court to
ground that the same is barred by prior judgement or by statute of limitations (Rollo. pp. 42- pass upon or to adjudicate.
45). Resolving the said Motion, the respondent Court, in its Order dated April 21, 1971,
dismissed Civil Case No. SCC- 180 on the ground of estoppel by prior judgment. (Ibid., pp, 10-
It may neither be claimed that the parties have mutually agreed to submit the aforesaid Independent Mercantile Corporation was dismissed upon a finding by the respondent Court
issues for the determination by the court, it being a fact that herein private respondent was that the same was "without merit." No explanation was given for such dismissal nor why the
not a party in the petition in LRC Record No. 39492. Incidentally, although the said petition petition lacked merit. There was no hearing, and the petition was resolved solely on the basis
was filed by the herein petitioners on November 21, 1967, the Opposition filed by of memoranda filed by the parties which do not appear of record. It is even a possibility that
Independent Mercantile Corporation to the said petition made no mention of the alleged such dismissal was in view of the realization of the respondent Court that, sitting as a
sale of the property in question in favor of private respondent Francisco Ramos on July 5, cadastral court, it lacked the authority to entertain the petition involving as it does a highly
1967. This circumstance places in grave doubt the sincerity of said sale and the claim that the controversial issue. Upon such petition being dismissed, the petitioners instituted Civil Case
private respondent was an innocent purchaser for value of the property in question. No. SCC-180 on January 1, 1971, or only two and one-half years after the dismissal of their
petition in LRC Record No. 39492. Hence, we see no unreasonable delay in the assertion by
In the order of the respondent Judge dated September 29, 1971 denying the second motion the petitioners of their right to claim the property which rightfully belongs to them. They can
for reconsideration, he cited the case of Tijam vs. Sibonghanoy, 23 SCRA 29, to uphold the hardly be presumed to have abandoned or waived such right by inaction within an
view that the petitioners are deemed estopped from questioning the jurisdiction of the unreasonable length of time or inexcusable negligence. In short, their filing of Civil Case No.
respondent Court in having taken cognizance of the petition for cancellation of TCT No. SCC-180 which in itself is an implied non-acceptance of the validity of the proceedings had in
68568, they being the ones who invoked the jurisdiction of the said Court to grant the LRC Record No. 39492 may not be deemed barred by estoppel by laches.
affirmative relief prayed for therein. We are of the opinion that the ruling laid down
in Sibonghanoy may not be applied herein. Neither its factual backdrop nor the philosophy of It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken
the doctrine therein expounded fits the case at bar. cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant
circumstances. The equitable defense of estoppel requires knowledge or consciousness of
A rule that had been settled by unquestioned acceptance and upheld in decisions so the facts upon which it is based. The same thing is true with estoppel by conduct which may
numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a be asserted only when it is shown, among others, that the representation must have been
matter of law and may not be conferred by consent or agreement of the parties. The lack of made with knowledge of the facts and that the party to whom it was made is ignorant of the
jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This truth of the matter. (De Castro vs. Gineta, 27 SCRA 623.) The filing of an action or suit in a
doctrine has been qualified by recent pronouncements which stemmed principally from the court that does not possess jurisdiction to entertain the same may not be presumed to be
ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said deliberate and intended to secure a ruling which could later be annulled if not favorable to
case had been applied to situations which were obviously not contemplated therein. The the party who filed such suit or proceeding. Instituting such an action is not a one-sided
exceptional circumstance involved in Sibonghanoy which justified the departure from the affair. It can just as well be prejudicial to the one who filed the action or suit in the event that
accepted concept of non-waivability of objection to jurisdiction has been ignored and, he obtains a favorable judgment therein which could also be attacked for having been
instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling rendered without jurisdiction. The determination of the correct jurisdiction of a court is not a
in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing simple matter. It can raise highly debatable issues of such importance that the highest
altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by tribunal of the land is given the exclusive appellate jurisdiction to entertain the same. The
estoppel. point simply is that when a party commits error in filing his suit or proceeding in a court that
lacks jurisdiction to take cognizance of the same, such act may not at once be deemed
sufficient basis of estoppel. It could have been the result of an honest mistake, or of
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the questioned
divergent interpretations of doubtful legal provisions. If any fault is to be imputed to a party
ruling was held to be barred by estoppel by laches. It was ruled that the lack of jurisdiction
taking such course of action, part of the blame should be placed on the court which shall
having been raised for the first time in a motion to dismiss filed almost fifteen (15) years
entertain the suit, thereby lulling the parties into believing that they pursued their remedies
after the questioned ruling had been rendered, such a plea may no longer be raised for being
in the correct forum. Under the rules, it is the duty of the court to dismiss an action
barred by laches. As defined in said case, laches is "failure or neglect, for an unreasonable
"whenever it appears that the court has no jurisdiction over the subject matter." (Sec. 2, Rule
and unexplained length of time, to do that which, by exercising due diligence, could or should
9, Rules of Court.) Should the court render a judgment without jurisdiction, such judgment
have been done earlier; it is negligence or omission to assert a right within a reasonable time,
may be impeached or annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10)
warranting a presumption that the party entitled to assert has abandoned it or declined to
years from the finality of the same. (Art. 1144, par. 3, Civil Code.)
assert it."

The inequity of barring the petitioners from vindicating their right over their property in Civil
The petitioners in the instant case may not be faulted with laches. When they learned that
Case No. SCC-180 is rendered more acute in the face of the undisputed fact that the property
the title to the property owned by them had erroneously and illegally been cancelled and
in question admittedly belonged to the petitioners, and that the title in the name of the
registered in the name of another entity or person who had no right to the same, they filed a
private respondent was the result of an error committed by the Provincial Sheriff in issuing
petition to cancel the latter's title. It is unfortunate that in pursuing said remedy, their
the deed of sale in the execution proceeding. The justness of the relief sought by herein
counsel had to invoke the authority of the respondent Court as a cadastral court, instead of
its capacity as a court of general jurisdiction. Their petition to cancel the title in the name of
petitioners may not be ignored or rendered futile by reason of a doctrine which is of highly On 9 July 1998, petitioner sent a letter addressed to respondent, requiring an
doubtful applicability herein. explanation for the transaction with De Manuel, as well as for his failure to pay back the loan
[3]
according to the conditions agreed upon. In his reply letter dated 13 July 1998, respondent
WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. The Motion To admitted having incurred the loan, but offered no definitive explanation for his failure to repay
Dismiss filed by the private respondent in Civil Case No. SCC-180 shall be deemed denied and the same.
the respondent Court is ordered to conduct further proceedings in the case. With costs [4]
Petitioner, through a Memorandum dated 24 August 1998, imposed the penalty of
against the private respondent. suspension on respondent for 4 days, from 27 August to 1 September 1998, for violating
[5]
Company Policy No. 2.17 and ordered his transfer to the Administration Department.
SO ORDERED. [6]
On 2 September 1998, respondent wrote a letter to petitioner, stating that he wanted
to sign a transfer memo before assuming his new position.
SECOND DIVISION
[7]
On September 7, 1998, he was handed the Payroll Change Advice (PCA), indicating his
new assignment to the Traffic and Order Department of Metromedia. Nonetheless,
[8]
respondent stopped reporting for work. On 16 September 1998, he sent a letter to petitioner
[G.R. No. 154295. July 29, 2005] communicating his refusal to accept the transfer.

Respondent duly filed a complaint for constructive dismissal, non-payment of backwages

and other money claims with the labor arbiter, a copy of which petitioner received on 28
[9]
September 1998. The complaint was resolved in favor of respondent. In a Decision dated 28
METROMEDIA TIMES CORPORATION and/or ROBINA GOKONGWIE-PE, petitioner, May 1999, Labor Arbiter Manuel P. Asuncion concluded that respondent did not commit
vs. JOHNNY PASTORIN, respondent. insubordination or disobedience so as to warrant his transfer, and that petitioner was not
aggrieved by respondents failure to settle his obligation with De Manuel. The dispositive
D E C I S I O N portion read:

TINGA, J.:
WHEREFORE, the respondents are hereby ordered to reinstate the complainant to his former
[1]
position, with full backwages from the time his salary was withheld until he is actually
At issue in this Petition for Review on certiorari under Rule 45 is whether or not lack of reinstated. As of this date, the complainants backwages has reached the sum of P97,324.17.
jurisdiction over the subject matter of the case, heard and decided by the labor arbiter, may th
The respondents are further directed to pay the complainant his 13 month pay for 1998 in
be raised for the first time before the National Labor Relations Commission (NLRC) by a litigant the sum of P3,611.89. The claims for allowance and unpaid commission are dismissed for lack
who had actively participated in the proceedings, which it belatedly questioned. of sufficient basis to make an award.
The facts, culled from the records, are as follows:
[10]
SO ORDERED.
Johnny Pastorin (Respondent) was employed by Metromedia Times Corporation
(Petitioner) on 10 December 1990 as a Field Representative/Collector. His task entailed the
Petitioner lodged an appeal with the NLRC, raising as a ground the lack of jurisdiction of
periodic collection of receivables from dealers of petitioner's newspapers. Prior to the subject
the labor arbiter over respondents complaint. Significally, this issue was not raised by
incident, respondent claimed to have received a termination letter dated 7 May 1998 from [11]
petitioner in the proceedings before the Labor Arbiter. In its Decision dated 16 March 2001,
management terminating his services for tardiness effective 16 June 1988. Respondent,
the NLRC reversed the Labor Arbiter on the ground that thee latter had no jurisdiction over the
member of Metro Media Times Employees Union, was not dismissed due to the intervention
case, it being a grievance issue properly cognizable by the voluntary arbitrator. The decretal
of the labor union, the collective bargaining agent in the company.
portion of the NLRC Decision reads:
In May 1998, he obtained a loan from one of the dealers whom he dealt with, Gloria A.
de Manuel (De Manuel), amounting to Nine Thousand Pesos (P9,000.00). After paying One WHEREFORE, the decision under review is REVERSED and SET ASIDE, and a new one entered,
Thousand One Hundred Twenty-five Pesos (P1,125.00), respondent reneged on the balance of DISMISSING the complaint for lack of jurisdiction.
his loan. De Manuel wrote a letter dated 6 July 1998 to petitioner, and seeking assistance for
collection on the remainder of the loan. She claimed that when respondent became remissed SO ORDERED.
[12]

on his personal obligation, he stopped collecting periodically the outstanding dues of De
[2]
Manuel
 The motion for reconsideration having been denied on 18 May 2001, respondent jurisdiction is conferred by law and lack of jurisdiction may be questioned at any time even on
[13]
elevated the case before the Court of Appeals (CA) through a petition for certiorari under appeal.
Rule 65.
The Court of Appeals adopted the principles in the cases of Martinez, Marquez and ABS-
The CA Fifteenth Division reversed the Decision of NLRC, and reinstated the earlier ruling CBN in resolving the jurisdictional issue presented for its resolution, to wit:
of the Labor Arbiter. Adopting the doctrines by this Court in the cases of Alfredo Marquez v.
[14]
Sec. of Labor and ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Indeed, we agree with petitioner that private respondent was estopped from raising the
[15]
Corporation, the CA ruled that the active participation of the party against whom the action question of jurisdiction before public respondent NLRC and the latter gravely abused its
was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial discretion in addressing said question in private respondents favor. As early as Martinez vs.
body where the action is pending, is tantamount to an invocation of that jurisdiction and a De la Merced, 174 SCRA 182, the Supreme Court has clearly ruled thus: For it has been
willingness to abide by the resolution of the case and will bar said party from later on consistently held by this Court that while lack of jurisdiction may be assailed at any stage, a
impugning the court or bodys jurisdiction. The appellate court then disposed the case in this partys active participation in the proceedings before a court without jurisdiction will estop
wise: such party from assailing such lack of jurisdiction.

WHEREFORE, foregoing premises considered, the petition having merit, in fact and in law, . . . .
is hereby GIVEN DUE COURSE. Accordingly, the challenged resolution/decision and orders of
public respondent NLRC are hereby REVERSED and SET ASIDE and the decision of the Labor
th The same principle was adopted by the Highest Tribunal in the case of Alfredo Marquez vs.
Arbiter dated May 28, 1999 REINSTATED with a slight modification, that the 13 month pay
Sec. of Labor, 171 SCRA 337 and quoted in the latter case of ABS-CBN Supervisors Employees
be in the amount of P7,430.50. No costs.
Union Members vs. ABS-CBN Broadcasting Corporation, 304 SCRA 497, where it was ruled
[16]
that: The active participation of the party against whom the action was brought, coupled with
SO ORDERED. his failure to object to the jurisdiction of the court or quasi-judicial body where the action is
pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the
[17] [18]
Petitioner sought reconsideration of the above Decision but the CA denied the resolution of the case and will bar said party from later on impugning the court or bodys
[19] [31]
motion in the assailed Resolution dated 27 June 2002. Hence, its recourse to this Court, jurisdiction.
elevating the following issues:

I. We rule differently. A cursory glance at these cases will lead one to the conclusion that
a party who does not raise the jurisdictional question at the outset will be estopped to raise it
on appeal. However, a more circumspect analysis would reveal that the cases cited by
WHETHER OR NOT METROMEDIA IS ESTOPPED FROM QUESTIONING THE JURISDICTION OF respondent do not fall squarely within the issue and factual circumstances of the instant case.
THE LABOR ARBITER OVER THE SUBJECT MATTER OF THE CASE FOR THE FIRST TIME ONLY IN We proceed to demonstrate.
THEIR APPEAL BEFORE THE NLRC.
The notion that the defense of lack of jurisdiction may be waived by estoppel on the
[32]
II. party invoking the same most prominently emerged in Tijam v. Sibonghanoy. Indeed,
the Marquez case relied upon by the CA is in turn grounded on Tijam, where We held that:
WHETHER OR NOT THE AWARD OF 13TH MONTH PAY BY THE LABOR ARBITER MAY BE
MODIFIED, NOTWITHSTANDING THAT THE SAME WAS NEVER ASSIGNED AS AN ERROR. . . . a party can not invoke the jurisdiction of a court to secure affirmative relief against his
opponent and, after obtaining or failing to obtain such relief, repudiate or question that same
jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of
Anent the first assignment of error, there are divergent jurisprudential doctrines
[20] explaining the rule, it was further said that the question whether the court had jurisdiction
touching on this issue. On the one hand are the cases of Martinez v. Merced, Marquez v.
[21] [22] [23] either of the subject-matter of the action or of the parties is barred from such conduct not
Secretary of Labor, Ducat v. Court of Appeals, Bayoca v. Nogales, Jimenez v.
[24] [25] because the judgment or order of the court is valid and conclusive as an adjudication, but for
Patricia, Centeno v. Centeno, and ABS-CBN Supervisors Employee Union Members v. ABS-
[26] the reason that such a practice can not be toleratedobviously for reasons of public policy.
CBN Broadcasting Corporation, all adhering to the doctrine that a partys active participation
in the actual proceedings before a court without jurisdiction will estop him from assailing such
lack of jurisdiction. Respondent heavily relies on this doctrinal jurisprudence. Furthermore, it has also been held that after voluntarily submitting a cause and encountering
an adverse decision on the merits, it is too late for the loser to question the jurisdiction or
[27] [28]
On the other hand, the cases of Dy v. NLRC, La Naval Drug v. CA, De Rossi vs. power of the court . . . And in Littleton vs. Burges, 16 Wyo, 58, the Court said that it is not
[29] [30]
CA and Union Motors Corporation v. NLRC buttress the position of petitioner that right for a party who has affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a said order by seeking parameters before the trial court. It is now too late for petitioner to
[33]
penalty. question subject order of the trial court. Petitioner cannot be allowed to make a mockery of
judicial processes, by changing his position from one of the agreement to disagreement, to
However, Tijam represented an exceptional case wherein the party invoking lack of suit his needs. If the parties acquiesced in submitting an issue for determination by the trial
jurisdiction did so only after fifteen (15) years, and at a stage when the proceedings had already court, they are estopped from questioning the jurisdiction of the same court to pass upon
been elevated to the Court of Appeals. Even Marquez recognizes that Tijam stands as an the issue. Petitioner is consequently estopped from questioning subject order of the trial
[38]
[34]
exception, rather than a general rule. The CA perhaps though felt comfortable court.
citing Marquez owing to the pronouncement therein that the Court would not hesitate to
apply Tijam even absent the extraordinary circumstances therein: Centeno involved the question of jurisdiction of the Department of Agrarian Reform
Arbitration Board (DARAB). The Court did rule therein that participation by certain parties in
. . . where the entertainment of the jurisdictional issue at a belated stage of the proceedings the administrative proceedings without raising any objection thereto, bars them from any
[39]
will result in a failure of justice and render nugatory the constitutional imperative of jurisdictional infirmity after an adverse decision is rendered against them. Still, the Court
protection to labor.
[35] did recognize therein that the movants questioning jurisdiction had actually sought and
litigated for affirmative reliefs before the DARAB in support of a submitted counterclaim. No
similar circumstance obtains in this case concerning the petitioner.
In this case, jurisdiction of the labor arbiter was questioned as early as during appeal
before the NLRC, whereas in Marquez, the question of jurisdiction was raised for the first time Evidently, none of these cited precedents squarely operates as stare decisis on this case,
only before this Court. The viability of Marquez as controlling doctrine in this case is diminished involving as they did different circumstances. The question now lies as to whether the
owing to the radically different circumstances in these two cases. A similar observation can be precedents cited by petitioner are more apropos to this case.
[36]
made as to the Bayoca and Jimenez cases.
Petitioner seeks to convince this Court that the instant case falls squarely within the
Neither do the other like-minded cases squarely settle the issue in favor of the purview of this Courts ruling in the case of Dy. Admittedly, a different factual mileu was present
respondent. In the case of Martinez, the issue is not jurisdiction by estoppel but waiver of insofar as the questioned jurisdiction was alleged to have been properly lodged in the SEC
preliminary conference. In that case, we said: instead of NLRC. Yet the rationale employed by the Court therein warrants serious
consideration. The aforementioned case was ruled in this wise:
As pointed out by petitioners, private respondents had at least three opportunities to raise
the question of lack of preliminary conference first, when private respondents filed a motion . . . .More importantly, estoppel cannot be invoked to prevent this Court from taking up the
for extension of time to file their position paper; second, at the time when they actually filed question of jurisdiction, which has been apparent on the face of the pleadings since the start
their position paper in which they sought affirmative relief from the Metropolitan Trial Court; of litigation before the Labor Arbiter. It is well settled that the decision of a tribunal not
and third; when they filed a motion for reconsideration of the order of the Metropolitan Trial vested with appropriate jurisdiction is null and void. Thus, in Calimlim vs. Ramirez, this Court
Court expunging from the records the position paper of private respondents, in which motion held:
private respondents even urged the court to sustain their position paper. And yet, in none of
these instances was the issue of lack of preliminary conference raised or even hinted at by "A rule that had been settled by unquestioned acceptance and upheld in decisions so
private respondents. In fine, these are acts amounting to a waiver of the irregularity of the numerous to cite is that the jurisdiction of a court over the subject matter of the action is a
proceedings. For it has been consistently held by this Court that while lack of jurisdiction may matter of law and may not be conferred by consent or agreement of the parties. The lack of
be assailed at any stage, a party's active participation in the proceedings before a court jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This
[37]
without jurisdiction will estop such party from assailing such lack of jurisdiction. doctrine has been qualified by recent pronouncements which stemmed principally from the
ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said
The case of Ducat was categorical in saying that if the parties acquiesced in submitting case had been applied to situations which were obviously not contemplated therein. The
an issue for determination by the trial court, they are estopped from questioning the exceptional circumstances involved in Sibonghanoy which justified the departure from the
jurisdiction of the same court to pass upon the issue. But this should be taken in the context accepted concept of non-waivability of objection to jurisdiction has been ignored and,
of the agreement of the parties. We quote from said case: instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in
Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing
Petitioners filing of a Manifestion and Urgent Motion to Set Parameters of Computation is altogether the time honored principle that the issue of jurisdiction is not lost by waiver or by
indicative of its conformity with the questioned order of the trial court referring the matter estoppel.
of computation of the excess to SGV and simultaneously thereafter, the issuance of a writ of
possession. If petitioner thought that subject order was wrong, it could have taken recourse . . . .
to the Court of Appeals but petitioner did not. Instead he manifested his acquiescence in the
It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken the defense may be interposed at any time, even on appeal or even after final judgment.
cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant Moreover, the principle of estoppel cannot be invoked to prevent this court from taking up
[44]
circumstances. The equitable defense of estoppel requires knowledge or consciousness of the question of jurisdiction.
the facts upon which it is based. The same thing is true with estoppel by conduct which may
be asserted only when it is shown, among others, that the representation must have been [45]
The rulings in Lozon v. NLRC addresses the issue at hand. This Court came up with a
made with knowledge of the facts and that the party to whom it was made is ignorant of the clear rule as to when jurisdiction by estoppel applies and when it does not:
truth of the matter (De Castro vs. Gineta, 27 SCRA 623). The filing of an action or suit in a
court that does not possess jurisdiction to entertain the same may not be presumed to be
Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it
deliberate and intended to secure a ruling which could later be annulled if not favorable to
appears that the court has no jurisdiction over the subject matter, the action shall be
the party who filed such suit or proceeding in a court that lacks jurisdiction to take
dismissed (Section 2, Rule 9, Rules of Court). This defense may be interposed at any time,
cognizance of the same, such act may not at once be deemed sufficient basis of estoppel. It
during appeal (Roxas vs. Rafferty, 37 Phil. 957) or even after final judgment (Cruzcosa vs.
could have been te result of an honest mistake or of divergent interpretation of doubtful
Judge Concepcion, et al., 101 Phil. 146). Such is understandable, as this kind of jurisdiction is
legal provisions. If any fault is to be imputed to a party taking such course of action, part of
conferred by law and not within the courts, let alone the parties, to themselves determine or
the blame should be placed on the court which shall entertain the suit, thereby lulling the
conveniently set aside. In People vs. Casiano(111 Phil. 73, 93-94), this Court, on the issue of
parties into believing that they pursued their remedies in the correct forum. Under the rules,
estoppel, held:
it is the duty of the court to dismiss an action `whenever it appears that court has no
jurisdiction over the subject matter.' (Section 2, Rule 9, Rules of Court) Should the Court
render a judgment without jurisdiction, such judgment may be impeached or annulled for "The operation of the principle of estoppel on the question of jurisdiction seemingly depends
lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of the same upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but
[40]
(Art. 1144, par. 3, Civil Code). the case was tried and decided upon the theory that it had jurisdiction, the parties are not
barred, on appeal, from assailing such jurisdiction, for the same 'must exist as a matter of
[41] law, and may not be conferred by consent of the parties or by estoppel' (5 C.J.S., 861-
The jurisdiction of the Labor Arbiter was assailed in the cases of De Rossi v. NLRC and
[42] 863). However, if the lower court had jurisdiction, and the case was heard and decided
Union Motors Corporation v. NLRC during appeal to the NLRC. Since the same circumstance
upon a given theory, such, for instance, as that the court had no jurisdiction, the party who
obtains in this case, the rulings therein, favorable as they are to the petitioner, are germane.
induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent
In De Rossi, this Court elucidated: positionthat the lower court had jurisdiction. Here, the principle of estoppel applies. The
rule that jurisdiction is conferred by law, and does not depend upon the will of the parties,
[46]
Petitioner maintains that MICC can not question now the issue of jurisdiction of the NLRC, has no bearing thereon. (Emphasis supplied)
considering that MICC did not raise this matter until after the case had been brought on
appeal to the NLRC. However, it has long been established as a rule, that jurisdiction of a Verily, Lozon, Union Motors, Dy and De Rossi aptly resolve the jurisdictional issue obtaining in
tribunal, agency, or office, is conferred by law, and its lack of jurisdiction may be questioned this case. Applying the guidelines in Lozon, the labor arbiter assumed jurisdiction when he
at any time even on appeal. In La Naval Drug Corporation vs. Court of Appeals, 236 SCRA 78, should not. In fact, the NLRC correctly reversed the labor arbiters decision and ratiocinated:
90, this Court said:
What appears at first blush to be an issue which pertains to the propriety of complainants
"Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it reassignment to another job on account of his having contracted a private loan, is one which
appears that the court has no jurisdiction over the subject matter, the action shall be may be considered as falling within the jurisdiction of the Office of the Labor Arbiter.
dismissed. This defense may be interposed at any time, during appeal or even after final Nevertheless, since the complainant is a union member, he should be bound by the
[47]
judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not covenants provided for in the Collective Bargaining Agreement.
within the courts, let alone the parties, to themselves determine or conveniently set
[43]
aside." . . . .

We held in the Union Motors Case: Based on the foregoing considerations, it appears that the issue of validity of complainants
reassignment stemmed from the exercise of a management prerogative which is a matter apt
The long-established rule is that jurisdiction over a subject matter is conferred by law. [Ilaw for resolution by a Grievance Committee, the parties having opted to consider such as a
at Buklod ng Manggaggawa v. NLRC, 219 SCRA 536 (1993); Atlas Developer & Steel grievable issue. Further, a review of the records would show that the matter of reassignment
Industries, Inc. v. Sarmiento Enterprises, Inc., 184 SCRA 153 (1990); Tijam v. Sibonghanoy, 23 is one not directly related to the charge of complainants having committed an act which is
SCRA 29, 30 (1968)]. Estoppel does not apply to confer jurisdiction to a tribunal that has none inimical to respondents interest, since the latter had already been addressed to by
over a cause of action. Where it appears that the court or tribunal has no jurisdiction, then complainants service of a suspension order. The transfer, in effect, is one which properly falls
under Section 1, Article IV of the Collective Bargaining Agreement and, as such, questions as
[48]
to the enforcement thereof is one which falls under the jurisdiction of the labor arbiter.

In line with the cases cited above and applying the general rule that estoppel does not
confer jurisdiction, petitioner is not estopped from assailing the jurisdiction of the labor arbiter
before the NLRC on appeal.

Respondent relied solely on estoppel to oppose petitioners claim of lack of jurisdiction

on the part of the labor arbiter. He adduced no other legal ground in support of his contention
that the Labor Arbiter had jurisdiction over the case. Thus, his claim falls flat in light of our
pronouncement, and more so considering the NLRCs correct observation that jurisdiction over
grievance issues, such as the propriety of the reassignment of a union member falls under the
jurisdiction of the voluntary arbitrator.

Since jurisdiction does not lie with the Labor Arbiter, it is futile to discuss about the
th
computation of the 13 month pay.

WHEREFORE, the questioned decision of the Labor Arbiter and the Court of Appeals are
hereby REVERSED and SET ASIDE, and the decision of the NLRC in dismissing the complaint for
lack of jurisdiction REINSTATED.

SO ORDERED.