Special Civil Actions Dispute Over Unpaid Rent

Special Civil Actions - Assoc.
Dean Oscar Bernardo
G.R. No. 136409 March 14, 2008
SUBHASH C. PASRICHA and JOSEPHINE A. PASRICHA, Petitioners,
vs.
DON LUIS DISON REALTY, INC., Respondent.

Special Civil Actions - Assoc. Dean Oscar Bernardo
DECISION
NACHURA, J.:
Case Nature : PETITION for review on certiorari of the decision and resolution of the
Court of Appeals.
Syllabi Class : Ejectment ; Unlawful Detainer ;
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal
of the Decision1 of the Court of Appeals (CA) dated May 26, 1998 and its Resolution2 dated
December 10, 1998 in CA-G.R. SP No. 37739 dismissing the petition filed by petitioners Josephine
and Subhash Pasricha.
The facts of the case, as culled from the records, are as follows:
Respondent Don Luis Dison Realty, Inc. and petitioners executed two Contracts of Lease3 whereby
the former, as lessor, agreed to lease to the latter Units 22, 24, 32, 33, 34, 35, 36, 37 and 38 of
the San Luis Building, located at 1006 M.Y. Orosa cor. T.M. Kalaw Streets, Ermita, Manila.
Petitioners, in turn, agreed to pay monthly rentals, as follows:
For Rooms 32/35:
From March 1, 1991 to August 31, 1991 – ₱5,000.00/₱10,000.00
From September 1, 1991 to February 29, 1992 – ₱5,500.00/₱11,000.00
From March 1, 1992 to February 28, 1993 – ₱6,050.00/₱12,100.00
For Rooms 22 and 24:
Effective July 1, 1992 – ₱10,000.00 with an increment of 10% every two years.5
For Rooms 33 and 34:
Effective April 1, 1992 – ₱5,000.00 with an increment of 10% every two years.6
For Rooms 36, 37 and 38:
Effective when tenants vacate said premises – ₱10,000.00 with an increment of 10% every two
years.7
Petitioners were, likewise, required to pay for the cost of electric consumption, water bills and
the use of telephone cables.8
The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24, 32, 33, 34 and 35
as subjects of the lease contracts.9 While the contracts were in effect, petitioners dealt with
Francis Pacheco (Pacheco), then General Manager of private respondent. Thereafter, Pacheco
was replaced by Roswinda Bautista (Ms. Bautista).10 Petitioners religiously paid the monthly
rentals until May 1992.11 After that, however, despite repeated demands, petitioners
continuously refused to pay the stipulated rent. Consequently, respondent was constrained to
refer the matter to its lawyer who, in turn, made a final demand on petitioners for the payment
of the accrued rentals amounting to ₱916,585.58.12 Because petitioners still refused to comply, a
complaint for ejectment was filed by private respondent through its representative, Ms. Bautista,
before the Metropolitan Trial Court (MeTC) of Manila.13 The case was raffled to Branch XIX and
was docketed as Civil Case No. 143058-CV.
Petitioners admitted their failure to pay the stipulated rent for the leased premises starting July
until November 1992, but claimed that such refusal was justified because of the internal squabble
in respondent company as to the person authorized to receive payment.14 To further justify their
non-payment of rent, petitioners alleged that they were prevented from using the units (rooms)
subject matter of the lease contract, except Room 35. Petitioners eventually paid their monthly
rent for December 1992 in the amount of ₱30,000.00, and claimed that respondent waived its
right to collect the rents for the months of July to November 1992 since petitioners were
prevented from using Rooms 22, 24, 32, 33, and 34.15 However, they again withheld payment of
rents starting January 1993 because of respondent’s refusal to turn over Rooms 36, 37 and 38.16
To show good faith and willingness to pay the rents, petitioners alleged that they prepared the
check vouchers for their monthly rentals from January 1993 to January 1994.17 Petitioners
further averred in their Amended Answer18 that the complaint for ejectment was prematurely
filed, as the controversy was not referred to the barangay for conciliation.
For failure of the parties to reach an amicable settlement, the pre-trial conference was
terminated. Thereafter, they submitted their respective position papers.
On November 24, 1994, the MeTC rendered a Decision dismissing the complaint for ejectment.19
It considered petitioners’ non-payment of rentals as unjustified. The court held that mere
willingness to pay the rent did not amount to payment of the obligation; petitioners should have
deposited their payment in the name of respondent company. On the matter of possession of the
subject premises, the court did not give credence to petitioners’ claim that private respondent
failed to turn over possession of the premises. The court, however, dismissed the complaint
because of Ms. Bautista’s alleged lack of authority to sue on behalf of the corporation.
Deciding the case on appeal, the Regional Trial Court (RTC) of Manila, Branch 1, in Civil Case No.
94-72515, reversed and set aside the MeTC Decision in this wise:
WHEREFORE, the appealed decision is hereby reversed and set aside and another one is rendered
ordering defendants-appellees and all persons claiming rights under them, as follows:
(1) to vacate the leased premised (sic) and restore possession thereof to plaintiff-appellant;
(2) to pay plaintiff-appellant the sum of ₱967,915.80 representing the accrued rents in arrears as
of November 1993, and the rents on the leased premises for the succeeding months in the
amounts stated in paragraph 5 of the complaint until fully paid; and
(3) to pay an additional sum equivalent to 25% of the rent accounts as and for attorney’s fees plus
the costs of this suit.
SO ORDERED.20
The court adopted the MeTC’s finding on petitioners’ unjustified refusal to pay the rent, which is
a valid ground for ejectment. It, however, faulted the MeTC in dismissing the case on the ground
of lack of capacity to sue. Instead, it upheld Ms. Bautista’s authority to represent respondent
notwithstanding the absence of a board resolution to that effect, since her authority was implied
from her power as a general manager/treasurer of the company.21
Aggrieved, petitioners elevated the matter to the Court of Appeals in a petition for review on
certiorari.22 On March 18, 1998, petitioners filed an Omnibus Motion23 to cite Ms. Bautista for
contempt; to strike down the MeTC and RTC Decisions as legal nullities; and to conduct hearings
and ocular inspections or delegate the reception of evidence. Without resolving the aforesaid
motion, on May 26, 1998, the CA affirmed24 the RTC Decision but deleted the award of attorney’s
fees.25
Petitioners moved for the reconsideration of the aforesaid decision.26 Thereafter, they filed
several motions asking the Honorable Justice Ruben T. Reyes to inhibit from further proceeding
with the case allegedly because of his close association with Ms. Bautista’s uncle-in-law.27
In a Resolution28 dated December 10, 1998, the CA denied the motions for lack of merit. The
appellate court considered said motions as repetitive of their previous arguments, irrelevant and
obviously dilatory.29 As to the motion for inhibition of the Honorable Justice Reyes, the same was
denied, as the appellate court justice stressed that the decision and the resolution were not
affected by extraneous matters.30 Lastly, the appellate court granted respondent’s motion for
execution and directed the RTC to issue a new writ of execution of its decision, with the
exception of the award of attorney’s fees which the CA deleted.31
Petitioners now come before this Court in this petition for review on certiorari raising the
following issues:
I.
Whether this ejectment suit should be dismissed and whether petitioners are entitled to damages
for the unauthorized and malicious filing by Rosario (sic) Bautista of this ejectment case, it being
clear that [Roswinda] – whether as general manager or by virtue of her subsequent designation by
the Board of Directors as the corporation’s attorney-in-fact – had no legal capacity to institute the
ejectment suit, independently of whether Director Pacana’s Order setting aside the SEC
revocation Order is a mere scrap of paper.
II.
Whether the RTC’s and the Honorable Court of Appeals’ failure and refusal to resolve the most
fundamental factual issues in the instant ejectment case render said decisions void on their face
by reason of the complete abdication by the RTC and the Honorable Justice Ruben Reyes of their
constitutional duty not only to clearly and distinctly state the facts and the law on which a
decision is based but also to resolve the decisive factual issues in any given case.
III.
Whether the (1) failure and refusal of Honorable Justice Ruben Reyes to inhibit himself, despite
his admission – by reason of his silence – of petitioners’ accusation that the said Justice enjoyed a
$7,000.00 scholarship grant courtesy of the uncle-in-law of respondent "corporation’s" purported
general manager and (2), worse, his act of ruling against the petitioners and in favor of the
respondent "corporation" constitute an unconstitutional deprivation of petitioners’ property

without due process of law.32
In addition to Ms. Bautista’s lack of capacity to sue, petitioners insist that respondent company
has no standing to sue as a juridical person in view of the suspension and eventual revocation of
its certificate of registration.33 They likewise question the factual findings of the court on the
bases of their ejectment from the subject premises. Specifically, they fault the appellate court
for not finding that: 1) their non-payment of rentals was justified; 2) they were deprived of
possession of all the units subject of the lease contract except Room 35; and 3) respondent
violated the terms of the contract by its continued refusal to turn over possession of Rooms 36, 37
and 38. Petitioners further prayed that a Temporary Restraining Order (TRO) be issued enjoining
the CA from enforcing its Resolution directing the issuance of a Writ of Execution. Thus, in a
Resolution34 dated January 18, 1999, this Court directed the parties to maintain the status quo
effective immediately until further orders.
The petition lacks merit.
We uphold the capacity of respondent company to institute the ejectment case. Although the
Securities and Exchange Commission (SEC) suspended and eventually revoked respondent’s
certificate of registration on February 16, 1995, records show that it instituted the action for
ejectment on December 15, 1993. Accordingly, when the case was commenced, its registration
was not yet revoked.35 Besides, as correctly held by the appellate court, the SEC later set aside
its earlier orders of suspension and revocation of respondent’s certificate, rendering the issue
moot and academic.36
We likewise affirm Ms. Bautista’s capacity to sue on behalf of the company despite lack of proof
of authority to so represent it. A corporation has no powers except those expressly conferred on it
by the Corporation Code and those that are implied from or are incidental to its existence. In turn,
a corporation exercises said powers through its board of directors and/or its duly authorized
officers and agents. Physical acts, like the signing of documents, can be performed only by
natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the
board of directors.37 Thus, any person suing on behalf of the corporation should present proof of
such authority. Although Ms. Bautista initially failed to show that she had the capacity to sign the
verification and institute the ejectment case on behalf of the company, when confronted with
such question, she immediately presented the Secretary’s Certificate38 confirming her authority
to represent the company.
There is ample jurisprudence holding that subsequent and substantial compliance may call for the
relaxation of the rules of procedure in the interest of justice.39 In Novelty Phils., Inc. v. Court of
Appeals,40 the Court faulted the appellate court for dismissing a petition solely on petitioner’s
failure to timely submit proof of authority to sue on behalf of the corporation. In Pfizer, Inc. v.
Galan,41 we upheld the sufficiency of a petition verified by an employment specialist despite the
total absence of a board resolution authorizing her to act for and on behalf of the corporation.
Lastly, in China Banking Corporation v. Mondragon International Philippines, Inc,42 we relaxed
the rules of procedure because the corporation ratified the manager’s status as an authorized
signatory. In all of the above cases, we brushed aside technicalities in the interest of justice. This
is not to say that we disregard the requirement of prior authority to act in the name of a
corporation. The relaxation of the rules applies only to highly meritorious cases, and when there
is substantial compliance. While it is true that rules of procedure are intended to promote rather
than frustrate the ends of justice, and while the swift unclogging of court dockets is a laudable
objective, we should not insist on strict adherence to the rules at the expense of substantial
justice.43 Technical and procedural rules are intended to help secure, not suppress, the cause of
justice; and a deviation from the rigid enforcement of the rules may be allowed to attain that
prime objective, for, after all, the dispensation of justice is the core reason for the existence of
courts.44
As to the denial of the motion to inhibit Justice Reyes, we find the same to be in order. First, the
motion to inhibit came after the appellate court rendered the assailed decision, that is, after
Justice Reyes had already rendered his opinion on the merits of the case. It is settled that a
motion to inhibit shall be denied if filed after a member of the court had already given an opinion
on the merits of the case, the rationale being that "a litigant cannot be permitted to speculate on
the action of the court x x x (only to) raise an objection of this sort after the decision has been
rendered."45 Second, it is settled that mere suspicion that a judge is partial to one of the parties
is not enough; there should be evidence to substantiate the suspicion. Bias and prejudice cannot
be presumed, especially when weighed against a judge’s sacred pledge under his oath of office to
administer justice without regard for any person and to do right equally to the poor and the rich.
There must be a showing of bias and prejudice stemming from an extrajudicial source, resulting in
an opinion on the merits based on something other than what the judge learned from his
participation in the case.46 We would like to reiterate, at this point, the policy of the Court not
to tolerate acts of litigants who, for just about any conceivable reason, seek to disqualify a judge
(or justice) for their own purpose, under a plea of bias, hostility, prejudice or prejudgment.47
We now come to the more substantive issue of whether or not the petitioners may be validly
ejected from the leased premises.
Unlawful detainer cases are summary in nature. In such cases, the elements to be proved and
resolved are the fact of lease and the expiration or violation of its terms.48 Specifically, the
essential requisites of unlawful detainer are: 1) the fact of lease by virtue of a contract, express
or implied; 2) the expiration or termination of the possessor’s right to hold possession; 3)
withholding by the lessee of possession of the land or building after the expiration or termination
of the right to possess; 4) letter of demand upon lessee to pay the rental or comply with the terms
of the lease and vacate the premises; and 5) the filing of the action within one year from the date
of the last demand received by the defendant.49
It is undisputed that petitioners and respondent entered into two separate contracts of lease
involving nine (9) rooms of the San Luis Building. Records, likewise, show that respondent
repeatedly demanded that petitioners vacate the premises, but the latter refused to heed the
demand; thus, they remained in possession of the premises. The only contentious issue is whether
there was indeed a violation of the terms of the contract: on the part of petitioners, whether they
failed to pay the stipulated rent without justifiable cause; while on the part of respondent,
whether it prevented petitioners from occupying the leased premises except Room 35.
This issue involves questions of fact, the resolution of which requires the evaluation of the
evidence presented. The MeTC, the RTC and the CA all found that petitioners failed to perform
their obligation to pay the stipulated rent. It is settled doctrine that in a civil case, the
conclusions of fact of the trial court, especially when affirmed by the Court of Appeals, are final
and conclusive, and cannot be reviewed on appeal by the Supreme Court.50 Albeit the rule admits
of exceptions, not one of them obtains in this case.51
To settle this issue once and for all, we deem it proper to assess the array of factual findings
supporting the court’s conclusion.
The evidence of petitioners’ non-payment of the stipulated rent is overwhelming. Petitioners,

however, claim that such non-payment is justified by the following: 1) the refusal of respondent
to allow petitioners to use the leased properties, except room 35; 2) respondent’s refusal to turn
over Rooms 36, 37 and 38; and 3) respondent’s refusal to accept payment tendered by
petitioners.
Petitioners’ justifications are belied by the evidence on record. As correctly held by the CA,
petitioners’ communications to respondent prior to the filing of the complaint never mentioned
their alleged inability to use the rooms.52 What they pointed out in their letters is that they did
not know to whom payment should be made, whether to Ms. Bautista or to Pacheco.53 In their
July 26 and October 30, 1993 letters, petitioners only questioned the method of computing their
electric billings without, however, raising a complaint about their failure to use the rooms.54
Although petitioners stated in their December 30, 1993 letter that respondent failed to fulfill its
part of the contract,55 nowhere did they specifically refer to their inability to use the leased
rooms. Besides, at that time, they were already in default on their rentals for more than a year.
If it were true that they were allowed to use only one of the nine (9) rooms subject of the
contract of lease, and considering that the rooms were intended for a business purpose, we
cannot understand why they did not specifically assert their right. If we believe petitioners’
contention that they had been prevented from using the rooms for more than a year before the
complaint for ejectment was filed, they should have demanded specific performance from the
lessor and commenced an action in court. With the execution of the contract, petitioners were
already in a position to exercise their right to the use and enjoyment of the property according to
the terms of the lease contract.56 As borne out by the records, the fact is that respondent turned
over to petitioners the keys to the leased premises and petitioners, in fact, renovated the rooms.
Thus, they were placed in possession of the premises and they had the right to the use and
enjoyment of the same. They, likewise, had the right to resist any act of intrusion into their
peaceful possession of the property, even as against the lessor itself. Yet, they did not lift a finger
to protect their right if, indeed, there was a violation of the contract by the lessor.
What was, instead, clearly established by the evidence was petitioners’ non-payment of rentals
because ostensibly they did not know to whom payment should be made. However, this did not
justify their failure to pay, because if such were the case, they were not without any remedy.
They should have availed of the provisions of the Civil Code of the Philippines on the consignation
of payment and of the Rules of Court on interpleader.
Article 1256 of the Civil Code provides:
Article 1256. If the creditor to whom tender of payment has been made refuses without just cause
to accept it, the debtor shall be released from responsibility by the consignation of the thing or
sum due.
Consignation alone shall produce the same effect in the following cases:
xxxx
(4) When two or more persons claim the same right to collect;
x x x x.
Consignation shall be made by depositing the things due at the disposal of a judicial authority,
before whom the tender of payment shall be proved in a proper case, and the announcement of
the consignation in other cases.57
In the instant case, consignation alone would have produced the effect of payment of the rentals.
The rationale for consignation is to avoid the performance of an obligation becoming more
onerous to the debtor by reason of causes not imputable to him.58 Petitioners claim that they
made a written tender of payment and actually prepared vouchers for their monthly rentals. But
that was insufficient to constitute a valid tender of payment. Even assuming that it was valid
tender, still, it would not constitute payment for want of consignation of the amount.
Well-settled is the rule that tender of payment must be accompanied by consignation in order
that the effects of payment may be produced.59
Moreover, Section 1, Rule 62 of the Rules of Court provides:
Section 1. When interpleader proper. – Whenever conflicting claims upon the same subject
matter are or may be made against a person who claims no interest whatever in the subject
matter, or an interest which in whole or in part is not disputed by the claimants, he may bring an
action against the conflicting claimants to compel them to interplead and litigate their several
claims among themselves.
Otherwise stated, an action for interpleader is proper when the lessee does not know to whom
payment of rentals should be made due to conflicting claims on the property (or on the right to
collect).60 The remedy is afforded not to protect a person against double liability but to protect
him against double vexation in respect of one liability.61
Notably, instead of availing of the above remedies, petitioners opted to refrain from making
payments.
Neither can petitioners validly invoke the non-delivery of Rooms 36, 37 and 38 as a justification
for non-payment of rentals. Although the two contracts embraced the lease of nine (9) rooms, the
terms of the contracts - with their particular reference to specific rooms and the monthly rental
for each - easily raise the inference that the parties intended the lease of each room separate
from that of the others.lavvphil There is nothing in the contract which would lead to the
conclusion that the lease of one or more rooms was to be made dependent upon the lease of all
the nine (9) rooms. Accordingly, the use of each room by the lessee gave rise to the corresponding
obligation to pay the monthly rental for the same. Notably, respondent demanded payment of
rentals only for the rooms actually delivered to, and used by, petitioners.
It may also be mentioned that the contract specifically provides that the lease of Rooms 36, 37
and 38 was to take effect only when the tenants thereof would vacate the premises. Absent a
clear showing that the previous tenants had vacated the premises, respondent had no obligation
to deliver possession of the subject rooms to petitioners. Thus, petitioners cannot use the
non-delivery of Rooms 36, 37 and 38 as an excuse for their failure to pay the rentals due on the
other rooms they occupied.1avvphil
In light of the foregoing disquisition, respondent has every right to exercise his right to eject the
erring lessees. The parties’ contracts of lease contain identical provisions, to wit:
In case of default by the LESSEE in the payment of rental on the fifth (5th) day of each month, the
amount owing shall as penalty bear interest at the rate of FOUR percent (4%) per month, to be
paid, without prejudice to the right of the LESSOR to terminate his contract, enter the premises,
and/or eject the LESSEE as hereinafter set forth;62
Moreover, Article 167363 of the Civil Code gives the lessor the right to judicially eject the lessees
in case of non-payment of the monthly rentals. A contract of lease is a consensual, bilateral,
onerous and commutative contract by which the owner temporarily grants the use of his property
to another, who undertakes to pay the rent therefor.64 For failure to pay the rent, petitioners
have no right to remain in the leased premises.
WHEREFORE, premises considered, the petition is DENIED and the Status Quo Order dated January
18, 1999 is hereby LIFTED. The Decision of the Court of Appeals dated May 26, 1998 and its
Resolution dated December 10, 1998 in CA-G.R. SP No. 37739 are AFFIRMED.
SO ORDERED.
G.R. No.147812. April 6, 2005
LEONARDO R. OCAMPO, Petitioners, vs. LEONORA TIRONA, Respondents.

DECISION
Court of Appeals.
Syllabi Class : Actions|Lease|Ejectment|Unlawful
Detainer|Sales|Co-Ownership|Interpleader
CARPIO, J.:
The Case
This is a petition for review1 to annul the Decision2 dated 29 November 2000 of the Court of
Appeals ("appellate court") in CA-G.R. SP No. 41686, and its Resolution dated 16 April 2001
denying the motion for reconsideration. The appellate court set aside the Decision3 dated 27
June 1996 of Branch 110 of the Regional Trial Court of Pasay City ("RTC") in Civil Case No. 96-0209.
The RTC affirmed the Decision4 dated 29 December 1995 of Branch 47 of the Metropolitan Trial
Court of Pasay City ("MTC") in Civil Case No. 754-95 ordering respondent Leonora Tirona ("Tirona")
to vacate and surrender possession of the property under litigation to petitioner Leonardo R.
Ocampo ("Ocampo"). The MTC also ordered Tirona to pay Ocampo rentals in arrears, attorney’s
fees, and costs of suit.
Antecedent Facts
Ocampo alleged that he is the owner of a parcel of land ("subject land") described in Transfer
Certificate of Title ("TCT") No. 134359, with an approximate area of 500 square meters, located
at Alvarez Street, Pasay City. Ocampo bought the subject land from Rosauro Breton, heir of the
subject land’s registered owner Alipio Breton Cruz. Possession and administration of the subject
land are claimed to be already in Ocampo’s management even though the TCT is not yet in his
name. Tirona, on the other hand, is a lessee occupying a portion of the subject land.5 The MTC
established the following facts:
According to [Ocampo], upon acquisition of ownership of the subject premises, a formal written
notice was given to [Tirona] which was received by the latter on 9 March 1995, copy of the said
formal written agreement marked as Annex "A" and likewise copy of the registry return receipt
showing that [Tirona] received Annex "A" was marked as Annex "A-1". In recognition of [Ocampo’s]
right of ownership over the subject premises, [Tirona] paid some monthly rentals due, however,
on July 5, 1995, [Ocampo] received a letter from Callejo Law Office of Room 513 Borja Bldg., 645
Sta. Cruz, Manila stating among others, that, in view of the fact that the subject premises was
declared under area for priority development, [Tirona] is invoking her right of first refusal and in
connection thereto [Tirona] will temporarily stop paying her monthly rentals until and unless the
National Housing Authority have processed the pertinent papers as regards the amount due to
[Ocampo] by reason of the implementation of the above law, a copy of the said letter marked as
Annex "B" of the Complaint. In reply to Annex "B", [Ocampo] sent a letter dated 17 July 1995
addressed to the said Callejo Law Office, copy furnished [Tirona]. A copy of the said reply of
[Ocampo] marked as Annex "C" of the Complaint, a copy of the Registry Return Receipt showing
that [Tirona] received said Annex "C" on 20 July 1995 marked as Annex "C-1" of the Complaint,
while as the original copy which was sent to Callejo Law Office was also received by said office.
On 7 August 1995, [Ocampo] wrote a letter to [Tirona] demanding upon [Tirona] to pay the rentals
in arrears for the months of April, May, June, July and August at the rate of ₱1,200 a month and to
vacate the premises, copy of the said letter dated 7 August 1995 marked as Annex "D" of the
Complaint and the signature at the bottom portion of Annex "D" clearly shows that the same was
received by [Tirona] on 8 August 1995. Despite receipt of said letter, [Tirona] failed and refused
and still fails and refuses to heed [Ocampo’s] demands.6
On 11 September 1995, Ocampo filed a complaint docketed as Civil Case No. 754-95 for unlawful
detainer and damages against Tirona before the MTC.
Tirona filed her answer on 27 September 1995. Tirona asserted that Doña Lourdes Rodriguez
Yaneza actually owns the subject land. The allegations in the answer state thus:
1. That the Assignor [one Edison A. Hindap, Sr.] is the General Overseer and Attorney-in-Fact of
DOÑA LOURDES RODRIGUEZ YANEZA, Heir/Owner of TITULO DE PROPRIEDAD DE TERENOS of 1891,
Royal Degree 01-4 Protocol, the real owner of a parcel of land allegedly claimed by [Ocampo].
2. That the Title of [Ocampo] was overlapped [sic] the Original Land Title of the Assignor.
3. That [Tirona], hereby recognized by the Assignor as co-owner by possession and hereby cede,
transfer and assign the said parcel of land in [Tirona’s] favor.
4. That [Tirona] hereby denied [sic] and discontinued [sic] all the obligations imposed by
[Ocampo], for the simple reason, the property in question is not owned by [Ocampo], but rather
owned by the Assignor, as proof of evidence herein Assignor issued a Certification for Occupancy
and Assignment in favor of [Tirona] herein attached with [sic], and the other evidence shall be
presented upon the proper hearing on the merits of this case.7
Ocampo filed a motion to strike out the answer filed and a motion for judgment on 10 October
1995. Ocampo claimed that the answer was not verified; therefore, it was as if no answer was
filed.
On 12 October 1995, Tirona filed a motion with leave to amend defendant’s answer.8 She alleged
that she filed her answer without the assistance of a lawyer due to fear that she might be unable
to file the required pleading on time. In her amended answer, Tirona maintained that Ocampo is
not the owner of the subject land. She stated that the certificate of title to the subject land is not
even registered under Ocampo’s name. Tirona also alleged that she has a right of first refusal in
case of sale of the land, pursuant to Presidential Decree ("PD") Nos. 1517,9 189310 and 1968.11
The area where the subject land is located was certified as an area under priority
development.12 Tirona asked for attorney’s fees and moral and exemplary damages.
In the spirit of substantial justice, the MTC granted Tirona’s motion to amend her answer on 20
October 1995. On 15 November 1995, the MTC directed Ocampo and Tirona to submit their
respective position papers and other evidence after the termination of the pre-trial conference.
The issue considered by the MTC for resolution was whether Ocampo may eject Tirona because of
non-payment of rent and because of the termination of Tirona’s right to possess and occupy the
subject land.
The MTC’s Ruling
The MTC ruled that Tirona does not have any reason to suspend payment of rents until after PD No.
1517, in relation to PD Nos. 1893 and 1968, is implemented in her favor. Tirona’s non-payment of
rents rendered her occupation of the subject land illegal. As owner of the subject land, Ocampo is
entitled to its use and enjoyment, as well as to recover its possession from any person unlawfully
withholding it.
The dispositive part of the MTC’s decision reads:
WHEREFORE, judgment is hereby rendered in favor of [Ocampo] and against [Tirona]:
1. Ordering [Tirona] and all other persons claiming possession under her to vacate and surrender
possession to [Ocampo] the premises known as, parcel of land located at 2132 Alvarez St., Pasay
City, covered by Transfer Certificate of Title No. 134359 of the Register of Deeds of Pasay City;
2. Ordering [Tirona] to pay the rentals in arrears covering the period from April 1995 until such
time [Tirona] shall have finally vacated the subject premises at the rate of ₱1,200 a month, with
interest at a legal rate;
3. Ordering [Tirona] to pay the sum of ₱5,000 for and as attorney’s fees; and
4. Ordering [Tirona] to pay the cost of the suit.
SO ORDERED.13
Ocampo filed a motion for execution pending appeal on 24 January 1996, while Tirona filed a
notice of appeal on 25 January 1996. The MTC directed its clerk of court to transmit the records
of the case, as well as the motion for execution pending appeal, through an order issued on 29
January 1996. The RTC issued an order on 26 February 1996 ordering both parties to file their
respective memoranda.
On 4 March 1996, Maria Lourdes Breton-Mendiola, who claimed to be the owner of the subject
land, filed a motion with leave to file intervention before the RTC.
The RTC’s Ruling
In an order dated 11 March 1996, the RTC issued a writ of execution pending appeal for the
enforcement of the MTC’s decision. The RTC stated that although Tirona perfected her appeal on
time, the record showed that she failed to pay the required supersedeas bond as well as deposit
the current rentals as mandated by Section 8, Rule 70 of the 1964 Rules of Court. In a separate
order issued on the same date, the RTC denied Maria Lourdes Breton-Mendiola’s motion with
leave to file intervention. The RTC stated that granting the motion to intervene would violate the
1964 Rules of Court and jurisprudence.
Ocampo filed his memorandum on 21 March 1996.14 He emphasized that Tirona’s assertion of a
"preferential right of first refusal" is a recognition of the sale by Rosauro Breton of the subject
land to him. Moreover, Tirona is not qualified to claim this preferential right because she is no
longer a legitimate tenant. The payment of Tirona’s monthly rent was already in arrears at the
time Ocampo filed the complaint against Tirona.
On 25 March 1996, Tirona filed a manifestation which stated that she paid both the supersedeas
bond and rent on the subject land. The RTC considered Tirona’s manifestation as a motion for
reconsideration of its previous order issuing a writ of execution pending appeal. In its order dated
15 April 1996, the RTC recalled its 11 March 1996 order and cancelled the writ of execution.
Tirona filed her memorandum also on 25 March 1996. For the first time, Tirona disclosed that
Alipio Breton is the registered owner of the subject land and that he is her landlord since 1962.
When Alipio Breton died in 1975, his children, Rosauro Breton and Maria Lourdes Breton-Mendiola,
inherited the subject land. Tirona claims she has never stopped paying her rent to Maria Lourdes
Breton-Mendiola. Tirona also stated that Rosauro Breton could not transfer ownership to the
subject land to Ocampo. On 14 July 1978, Rosauro Breton executed a deed of conveyance and
waiver in favor of his sister, Maria Lourdes Breton-Mendiola. Rosauro Breton executed another
deed of conveyance and waiver in favor of Maria Lourdes Breton-Mendiola on 9 March 1995. Thus,
Tirona claims, Ocampo cannot legally acquire title from Rosauro Breton in view of the waivers.
Maria Lourdes Breton-Mendiola is Tirona’s lessor, and is the only person who can validly file an
ejectment suit against Tirona.15
After quoting the findings of the MTC, the RTC held thus:
This Court after a careful review of the complete record of this case particularly the evidences,
applicable laws and jurisprudence relied upon by the [MTC] in finding for [Ocampo] and declaring
that [Tirona] can be lawfully ejected from the subject premises, concurs with the findings thereof.
There is therefore nothing in the record which would warrant the Court to disturb the findings of
fact and law and the conclusions reached by the [MTC].
This Court finds the decision of the lower court fully justified in granting the reliefs to [Ocampo].
WHEREFORE, judgment is hereby rendered AFFIRMING IN TOTO the decision of the [MTC] with
costs against [Tirona].
SO ORDERED.16
In its petition before the appellate court, Tirona stated that the RTC erred in the following
grounds:
1. ORDERING THE EJECTMENT OF [TIRONA] IN VIOLATION OF SECTION 2 OF PD [NO.] 2016.17
2. NOT RULING THAT [TIRONA] HAS A BETTER RIGHT OF POSSESSION OVER THE PROPERTY IN
QUESTION.
3. RULING THAT THE SUCCESSOR-IN-INTEREST OF AN UNDIVIDED IDEAL ONE-HALF PORTION,

[OCAMPO] MAY DEPRIVE THE OTHER CO-OWNER OF THE ADMINISTRATION OF ONE-HALF PORTION
BY EJECTING HER LESSEE, [TIRONA].18
The appellate court stated that the principal issue for its resolution is whether Ocampo, being the
buyer of the subject land which is not yet partitioned among the heirs, can validly evict Tirona.19
The Appellate Court’s Ruling
The appellate court considered partition of the estate of Alipio Breton as a prerequisite to
Ocampo’s action. The appellate court ruled that "[u]ntil the partition of the estate is ordered by
the Regional Trial Court of Pasay City in the pending partition proceedings and the share of each
co-heir is determined by metes and bounds, [Ocampo] cannot rightfully claim that what he
bought is part of the property occupied by [Tirona]."20 The dispositive part of the appellate
court’s decision reads thus:
WHEREFORE, the decision of the respondent court is hereby SET ASIDE and judgment is hereby
rendered dismissing the complaint of the private respondent in the court below.
SO ORDERED.21
Hence, the instant petition.
The Issues
Ocampo assigned three errors to the appellate court. Ocampo stated that the appellate court
erred in:
1. ENTERTAINING AND NOT DISMISSING THE PETITION FOR REVIEW (with prayer for its issuance of
Writ of Preliminary Injunction and immediate issuance of TRO), THE SAME HAVING BEEN FILED
BEYOND THE REGLAMENTARY PERIOD.
2. CONSIDERING AND RESOLVING AN ISSUE RAISED IN THE PETITION FOR REVIEW FOR THE FIRST
TIME ON APPEAL.
3. DECLARING THAT LEONARDO R. OCAMPO HAS NO RIGHT TO EJECT LEONORA TIRONA, NOR
DEMAND PAYMENT OF RENTALS FROM HER FOR THE USE AND OCCUPANCY OF THE LOT INVOLVED IN
THE PRESENT CASE.22
The Ruling of the Court
The petition has merit.
We agree with Ocampo’s observation that Tirona changes her theory of the case each time she
appeals.23 For this reason, we shall limit our ruling to the propriety of Ocampo’s unlawful
detainer case against Tirona.
Moreover, we have assessed the evidence on record and found that the appellate court did not
contradict the findings of facts of the MTC and RTC. Thus, we see no reason to deviate from their
findings of facts.
Unlawful Detainer
Elements to be Proved
Unlawful detainer cases are summary in nature. The elements to be proved and resolved in
unlawful detainer cases are the fact of lease and expiration or violation of its terms.24 To support
their conclusion that there was an existing lease, the MTC and RTC found that:
(1) Ocampo informed Tirona through a letter dated 1 March 1995 that he bought the subject land,
upon which Tirona’s house stands, from the previous owner and lessor Rosauro Breton;25
(2) Tirona’s continued occupancy of the subject land signifies Tirona’s acceptance of Ocampo’s
conditions of lease stated in the 1 March 1995 letter;26 and
(3) In asserting her right to possess the subject land, Tirona admitted that Ocampo is her lessor. In
the 5 July 1995 letter, Tirona was referred to as "the hereinmentioned tenant of yours."27
In Mirasol v. Magsuci, et al.,28 we ruled that the sale of a leased property places the vendee into
the shoes of the original lessor to whom the lessee bound himself to pay. The vendee acquires the
right to evict the lessee from the premises and to recover the unpaid rentals after the vendee had
notified the lessee that he had bought the leased property and that the rentals on it should be
paid to him, and the lessee refused to comply with the demand.
The following facts support the conclusion that there was a violation of the lease agreement:
(1) Tirona, through Callejo Law Office, sent a letter dated 5 July 1995 which stated that Tirona
will temporarily stop paying her monthly obligation until the National Housing Authority has
processed the pertinent papers regarding the amount due to Ocampo in view of PD 1517;29
(2) As of August 1995, Tirona has not paid her rent to Ocampo corresponding to April to August
1995;30 and
(3) In a letter dated 7 August 1995, Ocampo demanded from Tirona unpaid rent payments.31
In view of these facts, we hold that Tirona is estopped from denying her possession under a
lease32 and that there was a violation of the lease agreement. Thus, the MTC and RTC correctly
ruled against Tirona.
Ownership as an Issue
When Tirona filed her answer before the MTC, she raised the issue of ownership and ascribed
ownership of the subject lot to one Doña Lourdes Rodriguez Yaneza. Tirona later changed her
strategy and filed an amended answer that ascribed ownership of the subject lot to Maria Lourdes
Breton-Mendiola. Tirona justified the amendment by stating that she did not ask for the
assistance of a lawyer for fear of not being able to file her answer on time. This excuse is flimsy
considering that Tirona first communicated to Ocampo through Callejo Law Office. However, the
MTC still allowed Tirona to amend her answer. Tirona stated that there was no violation of the
lease agreement because she paid her rent to the real owner, Maria Lourdes Breton-Mendiola.
Contrary to Tirona’s position, the issue of ownership is not essential to an action for unlawful
detainer. The fact of the lease and the expiration of its term are the only elements of the action.
The defense of ownership does not change the summary nature of the action. The affected party
should raise the issue of ownership in an appropriate action, because a certificate of title cannot
be the subject of a collateral attack.33 Although a wrongful possessor may at times be upheld by
the courts, this is merely temporary and solely for the maintenance of public order. The question
of ownership is to be settled in the proper court and in a proper action.34
In actions for forcible entry and [unlawful] detainer, the main issue is possession de facto,
independently of any claim of ownership or possession de jure that either party may set forth in
his pleadings, and an appeal does not operate to change the nature of the original action. On
appeal, in an ejectment case, it is within the discretion of the court to look into the evidence
supporting the assigned errors relating to the alleged ownership of appellant insofar as said
evidence would indicate or determine the nature of appellant’s possession of the controverted
premises. Said court should not however resolve the issue raised by such assigned errors. The
resolution of said issues would effect an adjudication on ownership which is not sanctioned in the
summary action for unlawful detainer.35
Unlawful detainer being a summary proceeding, it was error for the appellate court to include the
issue of ownership. Had the appellate court limited its ruling to the elements to be proved in a
case of unlawful detainer, Ocampo need not even prove his ownership. When the appellate court
ruled that the case of unlawful detainer had to wait for the results of the partition proceedings, it
effectively put ownership as the main issue in the case. The issue of ownership opens a virtual
Pandora’s Box for Tirona and her supposed intervenor, Maria Lourdes Breton-Mendiola.36
Interpleader
The good faith of Tirona is put in question in her preference for Maria Lourdes Breton-Mendiola.
As a stakeholder, Tirona should have used reasonable diligence in hailing the contending
claimants to court. Tirona need not have awaited actual institution of a suit by Ocampo against
her before filing a bill of interpleader.37 An action for interpleader is proper when the lessee
does not know the person to whom to pay rentals due to conflicting claims on the property.38
The action of interpleader is a remedy whereby a person who has property whether personal or
real, in his possession, or an obligation to render wholly or partially, without claiming any right in
both, or claims an interest which in whole or in part is not disputed by the conflicting claimants,
comes to court and asks that the persons who claim the said property or who consider themselves
entitled to demand compliance with the obligation, be required to litigate among themselves, in
order to determine finally who is entitled to one or the other thing. The remedy is afforded not to
protect a person against a double liability but to protect him against a double vexation in respect
of one liability. When the court orders that the claimants litigate among themselves, there arises
in reality a new action and the former are styled interpleaders, and in such a case the pleading
which initiates the action is called a complaint of interpleader and not a cross-complaint.39
Ocampo has the right to eject Tirona from the subject land. All the elements required for an
unlawful detainer case to prosper are present. Ocampo notified Tirona that he purchased the
subject land from Tirona’s lessor. Tirona’s continued occupation of the subject land amounted to
acquiescence to Ocampo’s terms. However, Tirona eventually refused to pay rent to Ocampo,
thus violating the lease.
Finally, legal interest at the annual rate of 6% is due on the unpaid monthly rentals starting from
7 August 1995 when Ocampo made an extrajudicial demand on Tirona for payment of the monthly
rental.40 On finality of our decision, annual interest at 12%, in lieu of 6% annual interest, is due
on the amounts the MTC awarded until full payment.41
WHEREFORE, we GRANT the instant petition for review. The Decision dated 27 June 1996 of
Branch 110 of the RTC in Civil Case No. 96-0209, which affirmed the Decision dated 29 December
1995 of Branch 47 of the MTC in Civil Case No. 754-95, is REINSTATED. The Decision dated 29
November 2000 of the appellate court in CA-G.R. SP No. 41686, and its Resolution dated 16 April
2001 denying the motion for reconsideration, are SET ASIDE.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.
G.R. No. L-26443 March 25, 1969
MAKATI DEVELOPMENT CORPORATION, plaintiff-appellant,
vs.
PEDRO C. TANJUATCO and CONCRETE AGGREGATES, INC., defendants-appellees.
Salvador J. Lorayes for plaintiff-appellant.
P. C. Tanjuatco and F. Garcia for defendants-appellees.
1. Courts; Jurisdiction; Governed by Rep. Act 296, as amended.-

The jurisdiction of courts over the subject matter of justiciable controversies is governed
by Rep. Act No. 296, as amended, pursuant to which municipal courts shall have
exlusive original jurisdiction in all civil cases “in which the demand, exclusive of interest,
or the value of the property in controversy” amounts to more than “ten thousand
pesos.”
2. Courts; Jurisdiction; Congress; Its power concerning court‟s jurisdiction;
Supreme Court; Its duty.-
"The power to define, prescribe, and apportion the jurisdiction of the various courts”
belongs to Congress (Sec. 2, Art. VIII, Constitution), and is beyond the rule-making
power of the Supreme Court, which is limited to matters “concerning pleading, practice,
and procedure in all courts, and the admission to the practice of law/' (Sec. 13, Art. VIII,
Constitution).
3. Courts; Rules of Court; Implication of failure of section 19 of Rule 5 to make Rule
63 applicable to inferior courts.-
The failure of section 19 of Rule 5 of the present Rules of Court to make its Rule 63, on
interpleading, applicable to inferior courts, merely implies that ,the same are not bound
to follow Rule 63 in dealing with cases of interpleading, but may apply thereto the
general rules on procedure applicable to ordinary civil action in said courts.
CONCEPCION, C.J.:
Case Nature : APPEAL from an order of the Court of First Instance of Rizal (Pasig).
Appeal by plaintiff Makati Development Corporation from an order of dismissal of the Court of
First Instance of Rizal (Pasig), predicated upon lack of jurisdiction.
On February 21, 1963, said plaintiff and defendant Pedro C. Tanjuatco entered into a contract
whereby the latter bound himself to construct a reinforced concrete covered water reservoir,
office and pump house and water main at Forbes Park, Makati, Rizal, furnishing, inter alia, the
materials necessary therefor. Before making the final payment of the consideration agreed upon,
plaintiff inquired from the suppliers of materials, who had called its attention to unpaid bills
therefor of Tanjuatco, whether the latter had settled his accounts with them. In response to this
inquiry, Concrete Aggregates, Inc. — hereinafter referred to as the Supplier — made a claim in the
sum of P5,198.75, representing the cost of transit-mixed concrete allegedly delivered to

Tanjuatco. With his consent, plaintiff withheld said amount from the final payment made to him
and, in view of his subsequent failure to settle the issue thereon with the Supplier, on September
16, 1955, plaintiff instituted the present action, in the Court of First Instance of Rizal, against
Tanjuatco and the Supplier, to compel them "to interplead their conflicting claims."
On October 4, 1965, Tanjuatco moved to dismiss the case, upon the ground that the court had
no jurisdiction over the subject-matter of the litigation, the amount involved therein being less
than P10,000.00. 1 Finding this motion "to be well-taken", the lower court granted the same, over
plaintiffs opposition thereto, and, accordingly, issued an order, dated November 16, 1965,
dismissing the case, without costs. Hence, this appeal, in which plaintiff maintains that the
subject-matter of this litigation is not the aforementioned sum of P5,198.75, but the right to
compel the defendants "to litigate among themselves" in order to protect the plaintiff "against a
double vexation in respect to one liability."
We find no merit in this contention. There is no question in this case that plaintiff may compel
the defendants to interplead among themselves, concerning the aforementioned sum of
P5,198.75. The only issue is who among the defendants is entitled to collect the same. This is the
object of the action, which is not within the jurisdiction of the lower court. As a matter of fact,
on May 25, 1966 the Supplier sued Tanjuatco, in Civil Case No. 149173 of the Municipal Court of
Manila, for the recovery of said amount of P5,198.75, and the decision therein will settle the
question as to who has a right to the sum withheld by plaintiff herein.lawphi1.ñet
The latter relies upon Rule 63 of the present Rules of Court, prescribing the procedure in cases
of interpleading, and section 19 of Rule 5 of said Rules of Court, which, unlike section 19 of Rule 4
of the Old Rules, omits the Rules on Interpleading among those made applicable to inferior courts.
This fact does not warrant, however, the conclusion drawn therefrom by plaintiff herein. To
begin with, the jurisdiction of our courts over the subject-matter of justiciable controversies is
governed by Rep. Act No. 296, as amended, pursuant to which 2 municipal courts shall have
exclusive original jurisdiction in all civil cases "in which the demand, exclusive of interest, or the
value of the property in controversy", amounts to not more than "ten thousand pesos." Secondly,
"the power to define, prescribe, and apportion the jurisdiction of the various courts" belongs to
Congress 3 and is beyond the rule-making power of the Supreme Court, which is limited to
matters concerning pleading, practice, and procedure in all courts, and the admission to the
practice of law. 4 Thirdly, the failure of said section 19 of Rule 5 of the present Rules of Court to
make its Rule 63, on interpleading, applicable to inferior courts, merely implies that the same are
not bound to follow Rule 63 in dealing with cases of interpleading, but may apply thereto the
general rules on procedure applicable to ordinary civil action in said courts.
WHEREFORE, the order appealed from is hereby affirmed, with the costs of this instance
against plaintiff Makati Development Corporation. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee
and Barredo, JJ., concur.
G.R. No. 160031 December 18, 2008
SOCIAL JUSTICE SOCIETY (SJS), petitioner,vs.
HON. JOSE D. LINA, in his capacity as Secretary of the Department of Interior and Local
Government (DILG), Lipa City Mayor HON. VILMA SANTOS-RECTO, Pampanga Provincial
Governor HON. LITO LAPID, and Parañaque City Mayor HON. JOEY MARQUEZ, respondents.
DECISION
Case Nature : PETITION for review on certiorari of the orders of the Regional Trial
Court of Manila, Branch 14.
NACHURA, J.:
Assailed in this Rule 45 petition are the June 30, 20031 and the September 12, 20032 Orders of the
Regional Trial Court (RTC) of Manila, Branch 14 in Civil Case No. 02-104585.
Filed with the trial court on September 12, 2002, by petitioner Social Justice Society, a registered
political party, with the trial court was a petition for declaratory relief against the then Secretary
of the Department of Interior and Local Government (DILG), respondent Jose D. Lina,.3 praying
for Presented for resolution in its petition is the proper construction of Section 90 of Republic Act
(R.A.) No. 7160, which provides that:
SEC. 90. Practice of Profession.–
(a) All governors, city and municipal mayors are prohibited from practicing their profession or
engaging in any occupation other than the exercise of their functions as local chief executives.
(b) Sanggunian members may practice their professions, engage in any occupation, or teach in
schools except during session hours: Provided, That sanggunian members who are members of the
Bar shall not:
(1) Appear as counsel before any court in any civil case wherein a local government unit or any
office, agency, or instrumentality of the government is the adverse party;
(2) Appear as counsel in any criminal case wherein an officer or employee of the national or local
government is accused of an offense committed in relation to his office;
(3) Collect any fee for their appearance in administrative proceedings involving the local
government unit of which he is an official; and
(4) Use property and personnel of the Government except when the sanggunian member
concerned is defending the interest of the Government.
(c) Doctors of medicine may practice their profession even during official hours of work only on
occasions of emergency: Provided, That the officials concerned do not derive monetary
compensation therefrom. [Underscoring supplied.]
Based on the said provision, specifically paragraph (a) thereof, petitioner posited that actors who
were elected as governors, city and municipal mayors were disallowed by law to appear in movies
and television programs as one of the characters therein, for this would give them undue
advantage over their political opponents, and would considerably reduce the time that they must
devote to their constituents.4
To strengthen its point, petitioner later amended its petition to implead as additional
respondents then Lipa City Mayor Vilma Santos, then Pampanga Provincial Governor Lito Lapid,
and then Parañaque City Mayor Joey Marquez.5
Summing up the arguments of the other respondents in their respective pleadings, the DILG,
through the Office of the Solicitor General (OSG), moved for the dismissal of the petition on the
grounds that: (1) petitioner has no legal standing to file the petition, because it is not a "person
whose rights are affected" by the statute; (2) it is not the real party-in-interest; (3) there is no
judicial controversy; (4) there is no need for construction of the subject provision; (5) there is
already a breach of the statute as alleged in the petition itself; and (6) declaratory relief is not
the proper remedy.6
In the assailed June 30, 2003 Order,7 the trial court, sustaining the arguments of the DILG,
dismissed the petition for declaratory relief. It further denied, in the September 12, 2003 Order,8
petitioner’s motion for reconsideration.
Dissatisfied, petitioner filed the instant petition for review on certiorari before this Court on the
following grounds:
I.
THE REGIONAL TRIAL COURT SERIOUSLY ERRED IN DISMISSING PETITIONER’S PETITION FOR
DECLARATORY RELIEF ON PURELY TECHNICAL GROUNDS.
II.
THE REGIONAL TRIAL COURT SERIOUSLY ERRED IN NOT RESOLVING THE ISSUE RAISED IN THE
PETITION FOR DECLARATORY RELIEF.9
Petitioner contends that it, a registered political party composed of citizens, established to
relentlessly pursue social justice in the Philippines, and allowed to field candidates in the
elections, has the legal interest and the right to be informed and enlightened, on whether or not
their public officials, who are paid out of public funds, can, during their tenure, lawfully appear
as heroes or villains in movies, or comedians in television shows, and flaunt their disdain for legal
and ethical standards. The determination further of a party’s legal standing in actions for
declaratory relief involving laws should not be as rigid as when such action involves a deed, will or
contract.10
It also argues that a party’s legal standing is a procedural technicality which may be set aside
where the issues raised are of paramount public interest. In the instant case, the importance of
the issue can never be minimized or discounted. The appearance of incumbent city or municipal
mayors and provincial governors, who are actors, in movies and television programs enhances
their income but reduces considerably the time that they should devote to their constituents.
This is in violation of Section 90 of R.A. No. 7160 and Section 7 of R.A. No. 6713 or the Code of
Conduct and Ethical Standards for Public Officials and Employees. Their appearance further gives
them undue advantage in future elections over their opponents who are not actors.11
Petitioner likewise contends that the petition for declaratory relief should have been converted
by the trial court into an action for prohibition, considering that, in their pleadings, Governor
Lapid and Mayor Marquez offered justifications for their actions–financial constraints and freedom
of expression.12 Petitioner therefore prays that should the Court declares the respondents local
chief executives as unable to lawfully engage in their professions as actors, it must also prohibit
them from pursuing the same during their incumbency.13
The Court agrees with petitioner’s contentions on locus standi considering the liberal attitude it
has taken in recent decisions.
However, following rules of procedure, we find as proper the trial court’s dismissal of the petition
for declaratory relief in Civil Case No. 02-104585., the petition for declaratory relief. Readily
discernable is that the same is an inappropriate remedy to enforce compliance with Section 90 of
R.A. 7160, and to prevent local chief executives Santos-Recto, Lapid and Marquez from taking
roles in movies and television shows. The Court, thus, finds grants as apt the OSG’s move to
dismiss the case.
Indeed, an action for declaratory relief should be filed by a person interested under a deed, a will,
a contract or other written instrument, and whose rights are affected by a statute, an executive
order, a regulation or an ordinance. The purpose of the remedy is to interpret or to determine the
validity of the written instrument and to seek a judicial declaration of the parties’ rights or duties
thereunder.14 For the action to prosper, it must be shown that (1) there is a justiciable
controversy; (2) the controversy is between persons whose interests are adverse; (3) the party
seeking the relief has a legal interest in the controversy; and (4) the issue is ripe for judicial
determination.15 Suffice it to state that, in the petition filed with the trial court, petitioner
failed to allege the ultimate facts which satisfy these requisites. Not only that, as admitted by
the petitioner, the provision the interpretation of which is being sought has already been
breached by the respondents. Declaratory relief cannot thus be availed of.16
WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 137794 August 11, 2010
ERLINDA REYES and ROSEMARIE MATIENZO, Petitioners,
vs.
HON. JUDGE BELEN B. ORTIZ, Presiding, Branch 49, Metropolitan Trial Court, Caloocan City;
SPOUSES BERNARD and FLORENCIA PERL, represented by Attorney-in-Fact BENJAMIN MUCIO;
HON. JUDGE VICTORIA ISABEL A. PAREDES, Presiding, Branch 124, Regional Trial Court,
Caloocan City and SEGUNDO BAUTISTA, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 149664
SPS. ALBERTO EMBORES and LOURDES EMBORES, SPS. ROBERTO AND EVELYN PALAD, DENNIS
HENOSA and CORAZON LAURENTE, Petitioners,
vs.
HON. RAYMUNDO G. VALLEGA, Presiding Judge, Branch 52, Metropolitan Trial Court,
Caloocan City; HON. ELEANOR R. KWONG, Presiding Judge, Branch 51, Metropolitan Trial
Court, Caloocan City; HON. JUDGE BELEN B. ORTIZ, Presiding Judge, Branch 49, Metropolitan
Trial Court, Caloocan City; VICTORIA C. SALIRE-ALBIS, represented by her attorney-in-fact MR.
MENELIO C. SALIRE; MA. FE R. ROCO, ALFREDO TAN, MANUELITO ESTRELLA; and HON. JUDGE
ANTONIO FINEZA, Presiding Judge, Branch 131, Regional Trial Court, Caloocan City,
Respondents.
1. Actions; Declaratory Relief; Section 1 of Rule 63 of the Rules of Court can be

dissected into two parts-
—the first paragraph concerns declaratory relief, which has been defined as a special
civil action by any person interested under a deed, will, contract or other written
instrument or whose rights are affected by a statute, ordinance, executive order or
regulation to determine any question of construction or validity arising under the
instrument, executive order or regulation, or statute and for a declaration of his rights
and duties thereunder, and, the second paragraph pertains to (1) an action for the
reformation of an instrument; (2) an action to quiet title; and (3) an action to
consolidate ownership in a sale with a right to repurchase.—Petitioners insist that this is
mainly a petition for declaratory relief. Section 1, Rule 63 of the 1997 Rules of Court
provides: SECTION 1. Who may file petition.—Any person interested under a deed, will,
contract or other written instrument, or whose rights are affected by a statute,
executive order or regulation, ordinance, or any other governmental regulation may,
before breach or violation thereof, bring an action in the appropriate Regional Trial Court
to determine any question of construction or validity arising, and for a declaration of his
rights or duties, thereunder. An action for the reformation of an instrument, to quiet title
to real property or remove clouds therefrom, or to consolidate ownership under Article
1607 of the Civil Code, may be brought under this Rule. The foregoing section can be
dissected into two parts. The first paragraph concerns declaratory relief, which has been
defined as a special civil action by any person interested under a deed, will, contract or
other written instrument or whose rights are affected by a statute, ordinance, executive
order or regulation to determine any question of construction or validity arising under
the instrument, executive order or regulation, or statute and for a declaration of his
rights and duties thereunder. The second paragraph pertains to (1) an action for the
reformation of an instrument; (2) an action to quiet title; and (3) an action to
consolidate ownership in a sale with a right to repurchase.
2. Same; Ejectment; The established rule is that a pending civil action for ownership
such as annulment of title shall not ipso facto suspend an ejectment proceeding.-
—Bereft of merit too is petitioners‟ argument that the Caloocan City MeTC cannot
disregard the injunction order of the Quezon City RTC hearing the Annulment/Reversion
case. The established rule is that a pending civil action for ownership such as annulment
of title shall not ipso facto suspend an ejectment proceeding. The Court explained that
the rationale for this is that in an ejectment case, the issue is possession, while in an
annulment case the issue is ownership. In fact, an ejectment case can be tried apart
from an annulment case. Although there is an exception to this rule, petitioners failed to
justify that this case falls within said exception.
3. Same; Same; Courts; Injunction; No court has the power to interfere by
injunction with the judgments or decrees of a court of concurrent or coordinate
jurisdiction.-
—The foregoing order is not addressed to the Caloocan City RTC. Neither can it be
inferred from the language thereof that the Quezon City RTC intended to enjoin the
Caloocan City RTC from further proceeding with the Recovery case. The order merely
mentions the Caloocan City MeTCs. Nothing more. But more importantly, the Quezon
City RTC could not have validly enjoined the Caloocan City RTC without violating the
doctrine that no court has the power to interfere by injunction with the judgments or
decrees of a court of concurrent or coordinate jurisdiction. Spouses Ching v. Court of
Appeals, 398 SCRA 88 (2003), justifies this rule in this manner: Beginning with the case
of Orais v. Escaño, down to the subsequent cases of Nuñez v. Low, Cabigao v. del
Rosario, Hubahib v. Insular Drug Co., Inc., National Power Corp. v. De Veyra, Luciano v.
Provincial Governor, De Leon v. Hon. Judge Salvador, Cojuangco v. Villegas, Darwin v.
Tokonaga, we laid down the long standing doctrine that no court has the power to
interfere by injunction with the judgments or decrees of a court of concurrent or
coordinate jurisdiction. The various trial courts of a province or city, having the same or
equal authority, should not, cannot, and are not permitted to interfere with their
respective cases, much less with their orders or judgments. A contrary rule would
obviously lead to confusion and seriously hamper the administration of justice.
(Emphasis supplied.)
4. Same; Same; Hierarchy of Courts; The Supreme Court will not entertain direct
resort to it, except when the redress sought cannot be obtained in the proper courts or
when exceptional and compelling circumstances warrant availment of a remedy within
and calling for the exercise of this Court‟s primary jurisdiction.-
—Despite this procedural remedy available to them, petitioners, under the pretext that
they were in a quandary as to their rights under the Injunction order of the Quezon City
RTC, directly filed the instant case here. Petitioners did not bother to proffer a
compelling reason for their direct resort to this Court. This procedural faux pas proves
fatal. The Court‟s exhortation against taking a procedural shortcut cannot be
overemphasized. In Ortega v. The Quezon City Government, 469 SCRA 388 (2005), the
Court accentuated: At all events, even if this petition delves on questions of law, there
is no statutory or jurisprudential basis for according to this Court original and exclusive
jurisdiction over declaratory relief which advances only questions of law. Finally, while a
petition for declaratory relief may be treated as one for prohibition if it has far reaching
implications and raises questions that need to be resolved, there is no allegation of facts
by petitioner tending to show that she is entitled to such a writ. The judicial policy must
thus remain that this Court will not entertain direct resort to it, except when the redress
sought cannot be obtained in the proper courts or when exceptional and compelling
circumstances warrant availment of a remedy within and calling for the exercise of this
Court‟s primary jurisdiction. (Emphasis supplied.)
5. Same; Same; The subject matters to be tested in a petition for declaratory relief are
exclusive-
—the subject matter must refer to a deed, will, contract or other written instrument, or
to a statute or ordinance, to warrant declaratory relief and any other matter not
mentioned therein is deemed excluded.—The first paragraph of Section 1 of Rule 63
enumerates the subject matter to be inquired upon in a declaratory relief namely, deed,
will, contract or other written instrument, a statute, executive order or regulation, or
any government regulation. This Court, in Lerum v. Cruz, 87 Phil. 652 (1950), declared
that the subject matters to be tested in a petition for declaratory relief are exclusive,
viz.: Under this rule, only a person who is interested “under a deed, will, contract or
other written instrument, and whose rights are affected by a statute or ordinance, may
bring an action to determine any question of construction or validity arising under the
instrument or statute and for a declaration of his rights or duties thereunder.” This
means that the subject matter must refer to a deed, will, contract or other written
instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter
not mentioned therein is deemed excluded. This is under the principle of expressio unius
est exclussio alterius. (Emphasis supplied.)
DECISION
LEONARDO-DE CASTRO, J.:
Case Nature : SPECIAL CIVIL ACTIONS in the Supreme Court. Declaratory Relief,
Certiorari and Prohibition.
The instant cases are consolidated Petitions1 for Declaratory Relief, Certiorari, and Prohibition.
The petitioners in G.R. No. 137794 seek to declare null and void the proceedings in Civil Case No.
23477, an ejectment case, before the Metropolitan Trial Court (MeTC), Caloocan City, Branch 49,
and Civil Case No. C-17725, a complaint for Recovery of Possession and Ownership, filed with the
Regional Trial Court (RTC), Caloocan City, Branch 124;2 while the petitioners in G.R. No. 149664
pray for the nullity of the following ejectment proceedings before the different branches of the
Caloocan City MeTC: (1) Civil Case No. 99-25011, Branch 52; (2) Civil Case No. 22559 and Civil
Case No. 18575, Branch 49 and its appeal to the RTC, Branch 131; (3) Civil Case No. 00-25892,
Branch 51; and (4) Civil Case No. 00-25889, Branch 51.3 G.R. No. 149664 was considered closed
and terminated by the Court’s Resolution dated August 30, 2006.4
The parcels of land which are the subject matter of these cases are part of the Tala Estate,
situated between the boundaries of Caloocan City and Quezon City and encompassing an area of
7,007.9515 hectares more or less.5
In G.R. No. 137794, respondents Segundo Bautista and spouses Bernard and Florencia Perl sought
the ouster from the contested lots of Erlinda Reyes, spouses Rene and Rosemarie Matienzo and
Sergio Abejero, who are occupants of separate home lots in Camarin, Caloocan City.
The first case was commenced on December 11, 1996, by respondent Segundo Bautista, a
registered owner of the parcel of land occupied by spouses Rene and Rosemarie Matienzo. The
case was a complaint for Recovery of Possession and/or Ownership of Real Property (Recovery
case) against the latter spouses with the RTC Caloocan City, Branch 124.6 This was docketed as
Civil Case No. C-17725.7
Shortly thereafter, a separate but related action, was initiated by the Republic of the Philippines,
represented by the Director of Lands on December 27, 1996, before the Quezon City RTC, Branch
85 (re-raffled to Branch 93).8 This was a complaint for Annulment of Title/Reversion
(Annulment/Reversion case) against Biyaya Corporation and the Register of Deeds of the Cities of
Pasig, Caloocan, and Quezon, the City of Manila, and the Administrator of the Land Registration
Authority involving the Tala Estate. The case, docketed as Civil Case No. Q-96-29810, sought to
declare null and void the transfer certificates of title issued in the name of Biyaya Corporation,
and all derivative titles emanating therefrom, and to declare the land in suit to be reverted to it
as part of the patrimonial property of the State, and the same be awarded to the actual
occupants. One of the intervenors therein is Samahan ng Maliliit na Magkakapitbahay (SAMAKABA)
of which petitioners Erlinda Reyes and Rosemarie Matienzo are members.9
On May 28, 1997, the Quezon City RTC in the Annulment/Reversion case issued a Preliminary
Injunction (Injunction) freezing all ejectment cases involving the Tala Estate pending in the
MeTCs of Quezon City and Caloocan City.10
Believing that the Injunction issued by the Quezon City RTC can be beneficial to them in the
Recovery case pending before the Caloocan City RTC, on June 27, 1997, spouses Rene and
Rosemarie Matienzo filed a motion to suspend the proceedings of the Recovery case.11 On
December 8, 1997, the Caloocan City RTC, Branch 124 denied said motion.12 Spouses Matienzo
moved for the reconsideration of the motion, but the same was denied on May 14, 1998.13 The
spouses received the order denying their motion for reconsideration on June 9, 1998.14 Trial on
the merits started on December 2, 1998.15
The second case, an ejectment complaint, was commenced by spouses Bernard and Florencia Perl
on June 25, 1997, against Erlinda Reyes before the Caloocan City MeTC, Branch 49.16 It was
docketed as Civil Case No. 23477. Shortly thereafter, on July 8, 1997, spouses Perl filed the third
case, an ejectment action against Sergio Abejero. The case, which was raffled off to Branch 49 of
the Caloocan City MeTC, was docketed as Civil Case No. 23519.17 Subsequently, these two
ejectment cases were consolidated (Ejectment cases).18 In her Answer and during the
preliminary conference, Erlinda Reyes moved for the suspension of the proceedings and/or for
the dismissal of these cases citing the Injunction issued in Civil Case No. Q-96-29810.19 In its
Order20 dated January 22, 1999, the MeTC did not entertain Reyes’s motion, instead, it required
her to submit a position paper. Erlinda Reyes received the order on March 11, 1999.21 On April 16,
1999, the trial court issued a Decision ordering Erlinda to vacate the contested property.22
The Recovery case and the Ejectment cases converged when petitioners Rosemarie Matienzo and
Erlinda Reyes, joined on March 25, 1999 in filing directly with this Court the instant petition
denominated as "Declaratory Relief, Certiorari, and Prohibition," mainly assailing the denial of
their respective motions for suspension.23 Petitioners Matienzo and Reyes asked that the
proceedings in the Ejectment cases and the Recovery case be declared null and void for violating
the Injunction order of the Quezon City RTC. This case is docketed as G.R. No. 137794.
During the pendency of G.R. No. 137794, certain events supervened when the Ejectment cases
ran their course and petitioner Reyes appealed the MeTC decision to the RTC. In the RTC, the
Ejectment cases were docketed as Civil Cases Nos. C-18904-05.24 Apparently,
respondent-spouses Perl moved for the execution of the MeTC decision pending appeal, which the
RTC granted as the Writ of Execution was thereafter issued on October 20, 2000.25 Petitioner
Erlinda Reyes and company, thus, filed with this Court a motion to suspend the proceedings in the
RTC. 26 On October 25, 2000, this Court issued a Temporary Restraining Order restraining the
implementation of the said writ of execution.27
G.R. No. 149664, on the other hand, emanated from four distinct ejectment complaints filed
against petitioners Corazon Laurente, spouses Alberto and Lourdes Embores, spouses Roberto and
Evelyn Palad, and Dennis Henosa.28 The parcels of land from which petitioners were sought to be
evicted were located in Camarin, Caloocan City and within the Tala Estate.29 Petitioners were
members of Alyansa Ng Mga Naninirahan Sa Tala Friar Lands (ALNATFRAL), an intervenor in the
Reversion case.30 These ejectment cases were all filed after the Injunction order was issued on
May 28, 1997 by the Quezon City RTC in the Annulment/Reversion case. Thus, petitioners
separately invoked the said injunction in seeking the dismissal or suspension of the four
ejectment cases. Petitioners’ motions for suspension were dismissed and the trial court
proceeded to render judgments on these cases. Petitioners resorted directly to this Court in
seeking the declaration of nullity of the proceedings of these ejectment cases for violating the
prevailing injunction issued by the Quezon City RTC.
Meanwhile, on March 4, 2003, the petitioners in G.R. No. 149664 filed a motion for consolidation
asking that the said case be consolidated with G.R. No. 137794.
On April 28, 2003, this Court resolved to consolidate the two cases.
On July 28, 2006, petitioners in G.R. No. 149664 filed a Motion to Withdraw and/or Dismiss Instant
Petition31 stating that since a decision in the Annulment/Reversion case (Civil Case No.
Q-96-29810) was already issued (although they did not attach a copy thereof), the petition is
therefore rendered moot and academic as the injunction order was effective only pending
determination of the merits.
On August 30, 2006, the Court granted the motion to withdraw petition in G.R. No. 149664 and
considered the same closed and terminated.32 On October 11, 2006, G.R. No. 149664 became
final and executory.
What remains to be resolved, therefore, are the issues raised in G.R. No. 137794.
In their bid to declare null and void the proceedings in the Recovery case and the Ejectment cases,
petitioners argued that the Caloocan City MeTC, where the Ejectment cases were filed, and the
Caloocan City RTC where the Recovery case was pending, were divested of jurisdiction since the
Quezon City RTC acquired jurisdiction over the subject matter.33 Petitioners specifically alleged
that the MeTC’s refusal to suspend the Ejectment cases despite the Injunction order is
tantamount or amounting to lack of or excess of jurisdiction. As to the Caloocan City RTC, its
desistance to heed the Injunction is unjustified and contrary to well-settled jurisprudence.34
Petitioners were of the view that the interference by the Quezon City RTC was justified since no
third-party claim is involved.35
The Office of the Solicitor General (OSG) adopts the position of petitioners in praying that the
orders denying the motion to suspend proceedings and the proceedings that transpired in the
Ejectment cases be set aside for having been issued with grave abuse of discretion.36 Citing
Honda Giken Kogyo-Kabushiki Kaisha v. San Diego,37 where it was held that a writ of injunction
may be issued to a court by another court superior in rank, the OSG maintains that the Injunction
issued by the Quezon City RTC in Civil Case No. Q-96-29810 covers all metropolitan trial courts
including the Ejectment cases in Caloocan City MeTC, Branch 49.38 The OSG also maintains that
the Injunction was in accordance with the settled jurisprudence where the reversion case is being
filed by the State.
Respondent Segundo Bautista contends that petitioners resorted to a wrong remedy. He argues
that the action for declaratory relief can only prosper if the statute, deed, or contract has not
been violated.39 Hence, where the law or contract has already been breached prior to the filing
of the declaratory relief, courts can no longer assume jurisdiction since this action is not geared
towards the settling of issues arising from breach or violation of the rights and obligations of the
parties under a statute, deed, and contract, but rather it is intended to secure an authoritative
statement for guidance in their enforcement or compliance of the same.40 Since the Injunction
order of the Quezon City RTC had already been violated as early as December 8, 1997 by the
Caloocan City RTC in the Recovery case, or before the filing of this instant petition, resort to Rule
63 of the Rules of Court would not lie. Respondent Bautista insists that the instant recourse of
petitioner Matienzo was resorted to as a ploy to substitute the filing of certiorari under Rule 65,
which she already lost since the 60-day period had already expired.41 Respondent points out that
direct resort to this Court violates the rule on the hierarchy of courts. Since it was the Caloocan
City RTC which denied petitioner Matienzo’s motion to suspend proceedings, the petition for
declaratory relief should have been filed with the Court of Appeals. Direct filing with this Court is
not justified as, other than making motherhood statements, petitioner Matienzo failed to state
clearly the exceptional and compelling circumstances to justify the exercise of this Court’s
primary jurisdiction.42 He likewise contends that the Caloocan City RTC did not err in not
suspending the proceedings in the Recovery case, notwithstanding the Injunction issued by the
Quezon City RTC, since the said injunction applied only to the MeTCs of Quezon City and Caloocan
City so the RTC was excluded from the injunction order. He avers that it is the Caloocan City RTC
which is vested with the jurisdiction to hear and decide the case until its final conclusion since it
had acquired the same ahead of the Quezon City RTC. He states that being co-equal, the Quezon
City RTC had no authority to stop by injunction the Caloocan City RTC and even though there are
instances where another court may exercise coordinate jurisdiction in cases where there are
justifiable grounds, here, petitioner Matienzo has not alleged any of those circumstances.
Petitioners insist that this is mainly a petition for declaratory relief. Section 1, Rule 63 of the
1997 Rules of Court provides:
SECTION 1. Who may file petition. — Any person interested under a deed, will, contract or other
written instrument, or whose rights are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before breach or violation thereof, bring
an action in the appropriate Regional Trial Court to determine any question of construction or
validity arising, and for a declaration of his rights or duties, thereunder.
An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought
under this Rule.
The foregoing section can be dissected into two parts. The first paragraph concerns declaratory
relief, which has been defined as a special civil action by any person interested under a deed, will,
contract or other written instrument or whose rights are affected by a statute, ordinance,
executive order or regulation to determine any question of construction or validity arising under
the instrument, executive order or regulation, or statute and for a declaration of his rights and
duties thereunder. The second paragraph pertains to (1) an action for the reformation of an
instrument; (2) an action to quiet title; and (3) an action to consolidate ownership in a sale with a
right to repurchase.43
The first paragraph of Section 1 of Rule 63 enumerates the subject matter to be inquired upon in
a declaratory relief namely, deed, will, contract or other written instrument, a statute,
executive order or regulation, or any government regulation. This Court, in Lerum v. Cruz,44
declared that the subject matters to be tested in a petition for declaratory relief are exclusive,
viz:
Under this rule, only a person who is interested "under a deed, will, contract or other written
instrument, and whose rights are affected by a statute or ordinance, may bring an action to
determine any question of construction or validity arising under the instrument or statute and for
a declaration of his rights or duties thereunder." This means that the subject matter must refer to
a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant
declaratory relief. Any other matter not mentioned therein is deemed excluded. This is under the
principle of expressio unius est exclussio alterius. (Emphasis supplied.)
The foregoing holding was reiterated in Natalia Realty, Inc. v. Court of Appeals,45 wherein this
Court stressed that court orders or decisions cannot be made the subject matter of a declaratory
relief, thus:
Judge Querubin's query is not an action for declaratory relief. Section 1 of Rule 64 [now Rule 63]
of the Rules of Court provides the requisites of an action for declaratory relief. In interpreting
these requisites, the Court has ruled that:
xxxx
The letter of Judge Querubin pertained to final orders and decisions of the courts that are clearly
not the proper subjects of a petition for declaratory relief. Thus, the requisites prescribed by the
Rules of Court in an action for declaratory relief are not applicable to the letter of Judge
Querubin.46 (Emphasis supplied.)
Then again in a recent ruling of this Court, it was emphasized:
A petition for declaratory relief cannot properly have a court decision as its subject matter. In
Tanda v. Aldaya [98 Phil. 244 (1956)], we ruled that:
[A] court decision cannot be interpreted as included within the purview of the words "other
written instrument," as contended by appellant, for the simple reason that the Rules of Court
already provide for the ways by which an ambiguous or doubtful decision may be corrected or
clarified without need of resorting to the expedient prescribed by Rule 66 [now Rule 64].47
(Emphasis supplied.)
In the instant case, petitioners Erlinda Reyes and Rosemarie Matienzo assailed via Declaratory
Relief under Rule 63 of the Rules of Court, the orders of the trial courts denying their motions to
suspend proceedings. This recourse by petitioners, unfortunately, cannot be countenanced since
a court order is not one of those subjects to be examined under Rule 63.
The proper remedy that petitioner Erlinda Reyes could have utilized from the denial of her
motion to suspend proceedings in the Caloocan City MeTC was to file a motion for reconsideration
and, if it is denied, to file a petition for certiorari before the RTC pursuant to Rule 65 of the Rules
of Court. On the other hand, petitioner Matienzo should have filed a special civil action on
certiorari also under Rule 65 with the Court of Appeals from the denial of her motion by the
Caloocan City RTC. The necessity of filing the petition to the RTC in the case of Erlinda Reyes and
to the Court of Appeals in the case of Matienzo is dictated by the principle of the hierarchy of
courts.48 Both petitions must be filed within 60 days from the receipt or notice of the denial of
the motion to suspend proceedings or from the denial of the motion for reconsideration. Section 4
of Rule 65 partly provides:
Sec. 4. When and where to file the petition. - The petition shall be filed not later than sixty (60)
days from notice of the judgment, order or resolution. In case a motion for reconsideration or
new trial is timely filed, whether such motion is required or not, the petition shall be filed not
later than sixty (60) days counted from the notice of the denial of said motion.
If the petition relates to an act or an omission of a municipal trial court x x x, it shall be filed with
the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed with the Court of Appeals or with the Sandiganbayan, whether or not
the same is in aid of the court’s appellate jurisdiction.
Despite this procedural remedy available to them, petitioners, under the pretext that they were
in a quandary as to their rights under the Injunction order of the Quezon City RTC, directly filed
the instant case here. Petitioners did not bother to proffer a compelling reason for their direct
resort to this Court. This procedural faux pas proves fatal. The Court’s exhortation against taking
a procedural shortcut cannot be overemphasized. In Ortega v. The Quezon City Government, 49
the Court accentuated:
At all events, even if this petition delves on questions of law, there is no statutory or
jurisprudential basis for according to this Court original and exclusive jurisdiction over
declaratory relief which advances only questions of law.
Finally, while a petition for declaratory relief may be treated as one for prohibition if it has far
reaching implications and raises questions that need to be resolved, there is no allegation of facts
by petitioner tending to show that she is entitled to such a writ. The judicial policy must thus
remain that this Court will not entertain direct resort to it, except when the redress sought
cannot be obtained in the proper courts or when exceptional and compelling circumstances
warrant availment of a remedy within and calling for the exercise of this Court's primary
jurisdiction. (Emphasis supplied.)
To make matters worse, petitioner Matienzo obviously availed of the instant declaratory relief to
substitute for a petition for certiorari, a remedy which she sadly lost by inaction. It must be
recalled that on December 8, 1997, the Caloocan City RTC, Branch 124 denied Matienzo’s motion
to suspend proceedings.50 She moved for reconsideration, but the same was denied on May 14,
1998.51 She received the Order denying her motion for reconsideration on June 9, 1998.52 She
had 60 days therefrom to question the same before the Quezon City RTC. It was only on March 25,
1999 that petitioner Matienzo assailed the order denying her motion for reconsideration, albeit
wrongly before this Court.53 From this, it can be inferred that petitioner Matienzo’s recourse is a
belated attempt designed to salvage her lost opportunity to assail the order denying her motion
to suspend proceedings.
Also unavailing are the contentions of petitioners that the Caloocan City RTC and MeTC
committed grave abuse of discretion when they denied petitioners’ motions to suspend
proceedings. The pertinent portion of the Injunction order of the Quezon City RTC reads:
WHEREFORE, premises considered, this Court has to grant, as it hereby grants the application for
the issuance of the writ of preliminary injunction. Let a writ of preliminary Injunction be issued
ordering defendant representing Biyaya Corporation, its agents, assigns, and transferees, as well
as all other persons representing themselves as owners of certain portions of the land in question,
otherwise known as the Tala Estate, to immediately cease and desist from doing or causing to do,
further acts of disposition of the lots subject of the present complaint, such as the filing of
ejectment cases in the Municipal Trial Courts of Quezon City and Caloocan City and, the
demolition and ejectment therefrom of the members of the herein Intervenors. Accordingly, the
Metropolitan Trial Courts of Quezon City and Caloocan City are specifically ordered to cease and
desist from further conducting trials and proceedings in the ejectment cases filed and to be filed
involving the lots of the present complaint, until further orders from this Court.54 (Emphasis
supplied.)
The foregoing order is not addressed to the Caloocan City RTC. Neither can it be inferred from the
language thereof that the Quezon City RTC intended to enjoin the Caloocan City RTC from further
proceeding with the Recovery case. The order merely mentions the Caloocan City MeTCs. Nothing
more. But more importantly, the Quezon City RTC could not have validly enjoined the Caloocan
City RTC without violating the doctrine that no court has the power to interfere by injunction
with the judgments or decrees of a court of concurrent or coordinate jurisdiction.55 Spouses
Ching v. Court of Appeals56 justifies this rule in this manner:
Beginning with the case of Orais v. Escaño, down to the subsequent cases of Nuñez v. Low,
Cabigao v. del Rosario, Hubahib v. Insular Drug Co., Inc., National Power Corp. v. De Veyra,
Luciano v. Provincial Governor, De Leon v. Hon. Judge Salvador, Cojuangco v. Villegas, Darwin v.
Tokonaga, we laid down the long standing doctrine that no court has the power to interfere by
injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The
various trial courts of a province or city, having the same or equal authority, should not, cannot,
and are not permitted to interfere with their respective cases, much less with their orders or
judgments. A contrary rule would obviously lead to confusion and seriously hamper the
administration of justice. (Emphasis supplied.)
In Compania General de Tabacos de Filipinas v. Court of Appeals,57 two civil cases with identical
causes of action were filed in different RTCs, one ahead of the other. The second RTC which
acquired jurisdiction over the case issued a preliminary injunction enjoining the proceedings in
the RTC which first acquired jurisdiction of the case. Ruling against the injunction issued by the
RTC, this Court stressed:
Hence, nothing can be clearer than that Judge Rapatalo had indeed issued the questioned writ of
preliminary injunction with grave abuse of discretion amounting to excess or lack of jurisdiction
for the blatant disregard of the basic precept that no court has the power to interfere by
injunction with the judgments or orders of a co-equal and coordinate court of concurrent
jurisdiction having the power to grant the relief sought by injunction.
This Court explained in Parco vs. Court of Appeals that:
x x x Jurisdiction is vested in the court not in any particular branch or judge, and as a corollary
rule, the various branches of the Court of First Instance of a judicial district are a coordinate and
co-equal courts one branch stands on the same level as the other. Undue interference by one on
the proceedings and processes of another is prohibited by law. In the language of this Court, the
various branches of the Court of First Instance of a province or city, having as they have the same
or equal authority and exercising as they do concurrent and coordinate jurisdiction should not,
cannot, and are not permitted to interfere with their respective cases, much less with their
orders or judgments x x x.
Needless to say, adherence to a different rule would sow confusion and wreak havoc on the
orderly administration of justice, and in the ensuing melee, hapless litigants will be at a loss as to
where to appear and plead their cause.1avvphi158 (Emphasis supplied.)
While there are recognized exceptions to the foregoing rule, other than citing said cases, 59
petitioners did not explain the applicability of said exceptional cases to their petition.
Bereft of merit too is petitioners’ argument that the Caloocan City MeTC cannot disregard the
injunction order of the Quezon City RTC hearing the Annulment/Reversion case. The established
rule is that a pending civil action for ownership such as annulment of title shall not ipso facto
suspend an ejectment proceeding.60 The Court explained that the rationale for this is that in an
ejectment case, the issue is possession, while in an annulment case the issue is ownership.61 In
fact, an ejectment case can be tried apart from an annulment case.62 Although there is an
exception to this rule, petitioners failed to justify that this case falls within said exception. The
words of the Court on this matter are instructive:
In the absence of a concrete showing of compelling equitable reasons at least comparable and
under circumstances analogous to Amagan, we cannot override the established rule that a
pending civil action for ownership shall not ipso facto suspend an ejectment proceeding.
Additionally, to allow a suspension on the basis of the reasons the petitioners presented in this
case would create the dangerous precedent of allowing an ejectment suit to be suspended by an
action filed in another court by parties who are not involved or affected by the ejectment suit.63
(Emphases supplied.)
Hence, petitioners’ posture that the Ejectment cases should be suspended due to the pendency of
the Annulment/Reversion case is not meritorious.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED. The Temporary
Restraining Order dated October 25, 2000 issued by this Court is LIFTED.
SO ORDERED.
G.R. No. 125233 March 9, 2000
Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs.
ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO, LORETA L. CAYONDA and the
HONORABLE COURT OF APPEALS, respondents.
1. Co-Ownership; Redemption; Redemption by a co-owner does not terminate the

co-ownership nor give her title to the entire land subject of the co-ownership.-
Incidentally, there is no merit in petitioners‟ contention that Gertrudes‟ redemption of
the property from the Daily Savings Bank vested in her ownership over the same to the
exclusion of her co-owners. We dismissed the same argument by one of the petitioners
in Paulmitan vs. Court of Appeals, where one of the petitioners therein claimed
ownership of the entire property subject of the case by virtue of her redemption thereof
after the same was forfeited in favor of the provincial government for non-payment of
taxes. We held, however, that the redemption of the land “did not terminate the
co-ownership nor give her title to the entire land subject of the co-ownership.”
2. Sales; Land Titles; Husband and Wife; Conjugal Partnership of Gains; Where
a parcel of land, forming part of the undistributed properties of the dissolved conjugal
partnership of gains, is sold by a widow to a purchaser who merely relied on the face of
the certificate of title thereto, issued solely in the name of the widow, the purchaser
acquires a valid title to the land even as against the heirs of the deceased spouse.-
Unfortunately for private respondents, however, the property was registered in TCT No.
43100 solely in the name of “Gertrudes Isidro, widow,” Where a parcel of land, forming
part of the undistributed properties of the dissolved conjugal partnership of gains, is
sold by a widow to a purchaser who merely relied on the face of the certificate of title
thereto, issued solely in the name of the widow, the purchaser acquires a valid title to
the land even as against the heirs of the deceased spouse. The rationale for this rule is
that “a person dealing with registered land is not required to go behind the register to
determine the condition of the property. He is only charged with notice of the burdens
on the property which are noted on the face of the register or the certificate of title. To
require him to do more is to defeat one of the primary objects of the Torrens system.”
3. Sales; Pacto de Retro; Consolidation of Ownership; Usury; Article 1607 of the
Civil Code, on consolidation of ownership by the vendee by virtue of the failure of the
vendor to comply with the provisions of Article 1616, is intended to minimize the evils
which the pacto de retro sale has caused in the hands of usurers—a judicial order is
necessary in order to determine the true nature of the transaction and to prevent the
interposition of buyers in good faith while the determination is being made.-
As gleaned from the foregoing discussion, despite the Court of Appeals‟ finding and
conclusion that Gertrudes as well as private respondents failed to repurchase the
property within the period stipulated and has lost all their rights to it, it still ruled against
petitioners by affirming the Regional Trial Court‟s decision on the premise that there was
no compliance with Article 1607 of the Civil Code requiring a judicial hearing before
registration of the property in the name of petitioners. This provision states: ART. 1607.
In case of real property, the consolidation of ownership in the vendee by virtue of the
failure of the vendor to comply with the provisions of Article 1616 shall not be recorded
in the Registry of Property without a judicial order, after the vendor has been duly
heard. The aforequoted article is intended to minimize the evils which the pacto de retro
sale has caused in the hands of usurers. A judicial order is necessary in order to
determine the true nature of the transaction and to prevent the interposition of buyers
in good faith while the determination is being made.
4. Sales; Pacto de Retro; The essence of a pacto de retro sale is that title and
ownership of the property sold are immediately vested in the vendee a retro, subject to
the resolutory condition of repurchase by the vendor a retro within the reglementary
period-failure of the vendor a retro to perform said resolutory condition vests upon the
vendee by operation of law absolute title and ownership over the property sold; The
failure of a vendee a retro to consolidate his title under Article 1607 of the Civil Code
does not impair such title or ownership for the method prescribed thereunder is merely
for the purpose of registering the consolidated title.-
It bears stressing that notwithstanding Article 1607, the recording in the Registry of
Property of the consolidation of ownership of the vendee is not a condition sine qua non
to the transfer of ownership. Petitioners are the owners of the subject property since
neither Gertrudes nor her co-owners redeemed the same within the one-year period
stipulated in the “Kasunduan.” The essence of a pacto de retro sale is that title and
ownership of the property sold are immediately vested in the vendee a retro, subject to
the resolutory condition of repurchase by the vendor a retro within the stipulated period.
Failure thus of the vendor a retro to perform said resolutory condition vests upon the
vendee by operation of law absolute title and ownership over the property sold. As title
is already vested in the vendee a retro, his failure to consolidate his title under Article
1607 of the Civil Code does not impair such title or ownership for the method prescribed
thereunder is merely for the purpose of registering the consolidated title.
Case Nature : PETITION for review on certiorari of a decision of the Court of Appeals.
KAPUNAN, J.:
Private respondents, the heirs of spouses Adriano Leis and Gertrudes Isidro,1 filed an action
before the Regional Trial Court (RTC) of Pasig seeking the nullification of the contracts of sale
over a lot executed by Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title
subsequently issued in the name of the latter. Private respondents claimed that the contracts
were vitiated by fraud as Gertrudes was illiterate and already 80 years old at the time of the
execution of the contracts; that the price for the land was insufficient as it was sold only for
P39,083.00 when the fair market value of the lot should be P1,000.00 per square meter, instead
of P390.00, more or less; and that the property subject of the sale was conjugal and,
consequently, its sale without the knowledge and consent of private respondents was in
derogation of their rights as heirs.
The facts that gave rise to the complaint:
Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955, Gertrudes acquired from
the then Department of Agriculture and Natural Resources (DANR) a parcel of land with an area of
one hundred (100) square meters, situated at Bo. Sto. Niño, Marikina, Rizal and covered by
Transfer Certificate of Title (TCT) No. 42245. The Deed of Sale described Gertrudes as a widow.
On 2 March 1956, TCT No. 43100 was issued in the name of "Gertrudes Isidro," who was also
referred to therein as a "widow."
On 2 December 1973, Adriano died. It does not appear that he executed a will before his death.
On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses Alexander and
Adelaida Cruz, in the amount of P15,000.00 at 5% interest, payable on or before 5 February 1986.
The loan was secured by a mortgage over the property covered by TCT No. 43100. Gertrudes,
however, failed to pay the loan on the due date.
Unable to pay her outstanding obligation after the debt became due and payable, on 11 March
1986, Gertrudes executed two contracts in favor of petitioner Alexander Cruz. The first is
denominated as "Kasunduan" which the parties concede is a pacto de retro sale, granting
Gertrudes one year within which to repurchase the property. The second is a "Kasunduan ng
Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for the price of P39,083.00,
the same amount stipulated in the "Kasunduan."
For failure of Gertrudes to repurchase the property, ownership thereof was consolidated in the
name of Alexander Cruz in whose name TCT No. 130584 was issued on 21 April 1987, canceling
TCT No. 43100 in the name of Gertrudes Isidro.
On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private respondents,
received demands to vacate the premises from petitioners, the new owners of the property.
Private respondents responded by filing a complaint as mentioned at the outset.
On the basis of the foregoing facts, the RTC rendered a decision in favor of private respondents.
The RTC held that the land was conjugal property since the evidence presented by private
respondents disclosed that the same was acquired during the marriage of the spouses and that
Adriano contributed money for the purchase of the property. Thus, the court concluded,
Gertrudes could only sell to petitioner spouses her one-half share in the property.
The trial court also ruled that no fraud attended the execution of the contracts. Nevertheless,
the "Kasunduan," providing for a sale con pacto de retro, had superseded the "Kasunduan ng
Tuwirang Bilihan" the deed of absolute sale. The trial court did not consider the pacto de retro
sale an equitable mortgage, despite the allegedly insufficient price. Nonetheless, the trial court
found for private respondents. It rationalized that petitioners failed to comply with the provisions
of Article 1607 of the Civil Code requiring a judicial order for the consolidation of the ownership
in the vendee a retro to be recorded in the Registry of Property.
The dispositive portion of the RTC's Decision reads:
WHEREFORE, in the light of all the foregoing, judgment is hereby rendered:
1. Declaring Exhibit G — "Kasunduan ng Tuwirang Bilihan" Null and Void and declar[ing] that the
title issued pursuant thereto is likewise Null and Void;
2. Declaring the property in litigation as conjugal property;
3. Ordering the Registry of Deeds of Marikina Branch to reinstate the title of Gertrudes Isidro;
4. Ordering the plaintiff[s] [sic] to comply with the provision[s] of Article 1607 in relation to
Article 1616 of the Civil Code;
5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal damages for the violation of
plaintiffs' rights;
6. Ordering the defendant[s] to pay plaintiff[s] the sum of P8,000.00 as and for attorney's fees;
7. Dismissing defendant[s'] counterclaim; and
8. Ordering defendant[s] to pay the cost of suit.
SO ORDERED.2
Petitioners appealed to the Court of Appeals in vain. The Court of Appeals affirmed the decision
of the Regional Trial Court, holding that since the property was acquired during the marriage of
Gertrudes to Adriano, the same was presumed to be conjugal property under Article 160 of the
Civil Code. The appellate court, like the trial court, also noted that petitioner did not comply
with the provisions of Article 1607 of the Civil Code.
Petitioners are now before this Court seeking the reversal of the decision of the Court of Appeals.
First, they contend that the subject property is not conjugal but is owned exclusively by
Gertrudes, who was described in the Deed of Sale between Gertrudes and the DANR as well as in
TCT No. 43100 as a widow. Second, assuming the land was conjugal property, petitioners argue
that the same became Gertrudes' exclusively when, in 1979, she mortgaged the property to the
Daily Savings Bank and Loan Association. The bank later foreclosed on the mortgage in 1981 but
Gertrudes redeemed the same in 1983.
The paraphernal or conjugal nature of the property is not determinative of the ownership of the
disputed property. If the property was paraphernal as contended by petitioners, Gertrudes Isidro
would have the absolute right to dispose of the same, and absolute title and ownership was
vested in petitioners upon the failure of Gertrudes to redeem the property. On the other hand, if
the property was conjugal as private respondents maintain, upon the death of Adriano Leis, the
conjugal partnership was terminate,3 entitling Gertrudes to one-half of the property.4 Adriano's
rights to the other half, in turn, were transmitted upon his death to his heirs,5 which includes his
widow Gertrudes, who is entitled to the same share as that of each of the legitimate children.6
Thus, as a result of the death of Adriano, a regime of co-ownership arose between Gertrudes and
the other heirs in relation to the property.
Incidentally, there is no merit in petitioners' contention that Gertrudes' redemption of the

property from the Daily Savings Bank vested in ownership over the same to the exclusion of her
co-owners. We dismissed the same argument by one of the petitioners in Paulmitan vs. Court of
Appeals,7 where one of the petitioners therein claimed ownership of the entire property subject
of the case by virtue of her redemption thereof after the same was forfeited in favor of the
provincial government for non-payment of taxes. We held however, that the redemption of the
land "did not terminate the co-ownership nor give her title to the entire land subject of the
co-ownership." We expounded, quoting our pronouncement in Adille vs. Court of Appeals:8
The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the
property held in common?
Essentially, it is the petitioner's contention that the property subject of dispute devolved upon
him upon the failure of his co-heirs to join him in its redemption within the period required by law.
He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code,
giving the vende a retro the right to demand redemption of the entire property.
There is no merit in this petition.

The right of repurchase may be exercised by a co-owner with respect to his share alone (CIVL
CODE, art. 1612; CIVIL CODE (1889), art. 1514.). While the records show that petitioner redeemed
the property in its entirety, shouldering the expenses therefor, that did not make him the owner
of all of it. In other words, it did not put to end the existing state of co-ownership (Supra, Art.
489). There is no doubt that redemption of property entails a necessary expense. Under the Civil
Code:
Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned in common and to the taxes. Any one of the
latter may exempt himself from this obligation by renouncing so much of his undivided interest as
may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is
prejudicial to the co-ownership.
The result is that the property remains to be in a condition of co-ownership. While a vendee a
retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption,"
the redemption by one co-heir or co-owner of the property in its totality does not vest in him
ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a
retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the
provision does not give to the redeeming co-owner the right to the entire property. It does not
provide for a mode of terminating a co-ownership.
It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common. Article 493 of the Civil Code provides:
Art. 493. Each co-owner shall have the full ownership of his part of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.
Unfortunately for private respondents, however, the property was registered in TCT No. 43100
solely in the name of "Gertrudes Isidro, widow." Where a parcel of land, forming past of the
undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a
purchaser who merely relied on the face of the certificate of title thereto, issued solely in the
name of the widow, the purchaser acquires a valid title to the land even as against the heirs of
the deceased spouse. The rationale for this rule is that "a person dealing with registered land is
not required to go behind the register to determine the condition of the property. He is only
charged with notice of the burdens on the property which are noted on the face of the register or
the certificate of title. To require him to do more is to defeat one of the primary objects of the
Torrens system."9
As gleaned from the foregoing discussion, despite the Court of Appeals' finding and conclusion
that Gertrudes as well as private respondents failed to repurchase the property within the period
stipulated and has lost all their rights to it, it still ruled against petitioners by affirming the
Regional Trial Court's decision on the premise that there was no compliance with Article 1607 of
the Civil Code requiring a judicial hearing before registration of the property in the name of
petitioners. This provision states:
Art. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the
failure of the vendor to comply with the provisions of article 1616 shall not be recorded in the
Registry of Property without a judicial order, after the vendor has been duly heard.
The aforequoted article is intended to minimize the evils which the pacto de retro sale has caused
in the hands of usurers.1âwphi1 A judicial order is necessary in order to determine the true
nature of the transaction and to prevent the interposition of buyers in good faith while the
determination is being made. 10
It bears stressing that notwithstanding Article 1607, the recording in the Registry of Property of
the consolidation of ownership of the vendee is not a condition sine qua non to the transfer of
ownership. Petitioners are the owners of the subject property since neither Gertrudes nor her
co-owners redeemed the same within the one-year period stipulated in the "Kasunduan." The
essence of a pacto de retro sale is that title and ownership of the property sold are immediately
vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a
retro within the stipulated period. Failure thus of the vendor a retro to perform said resolutory
condition vests upon the vendee by operation of law absolute title and ownership over the
property sold. As title is already vested in the vendee a retro, his failure to consolidate his title
under Article 1607 of the Civil Code does not impair such title or ownership for the method
prescribed thereunder is merely for the purpose of registering the consolidated title. 11
WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the petitioners are deemed
owners of the property by reason of the failure of the vendor, Gertrudes Isidro, to repurchase the
same within the period stipulated. However, Transfer Certificate of Title No. 130584, in the name
of Alexander M. Cruz, which was issued without judicial order, is hereby ordered CANCELLED, and
Transfer Certificate of Title No. 43100 in the name of Gertrudes Isidro is ordered REINSTATED,
without prejudice to compliance by petitioners with the provisions of Article 1607 of the Civil
Code.1âwphi1.nêt
SO ORDERED.
Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur.
Pardo, J., on official business abroad.
G.R. No. 167391 June 8, 2011
PHIL-VILLE DEVELOPMENT AND HOUSING CORPORATION, Petitioner, vs.
MAXIMO BONIFACIO, CEFERINO R. BONIFACIO, APOLONIO B. TAN, BENITA B. CAINA, CRISPINA B.

PASCUAL, ROSALIA B. DE GRACIA, TERESITA S. DORONIA, CHRISTINA GOCO AND ARSENIO C.
BONIFACIO, in their capacity as the surviving heirs of the late ELEUTERIA RIVERA VDA. DE
BONIFACIO, Respondents.
1. Land Titles; Quieting of Title; In an action for quieting of title, the competent
court is tasked to determine the respective rights of the complainant and the other
claimants, not only to place things in their proper places, and make the claimant, who
has no rights to said immovable, respect and not disturb the one so entitled, but also for
the benefit of both, so that whoever has the right will see every cloud of doubt over the
property dissipated, and he can thereafter fearlessly introduce any desired
improvements, as well as use, and even abuse the property.-
—Quieting of title is a common law remedy for the removal of any cloud upon, doubt, or
uncertainty affecting title to real property. Whenever there is a cloud on title to real
property or any interest in real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in
fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title,
an action may be brought to remove such cloud or to quiet the title. In such action, the
competent court is tasked to determine the respective rights of the complainant and the
other claimants, not only to place things in their proper places, and make the claimant,
who has no rights to said immovable, respect and not disturb the one so entitled, but
also for the benefit of both, so that whoever has the right will see every cloud of doubt
over the property dissipated, and he can thereafter fearlessly introduce any desired
improvements, as well as use, and even abuse the property.
2. Same; Same; Same; The nature of the relief in an action for declaratory relief is
that the judgment in the case can be carried into effect without requiring the parties to
pay damages or to perform any act.-
—In the present case, petitioner filed a complaint for quieting of title after it was served
a notice to vacate but before it could be dispossessed of the subject properties. Notably,
the Court of Appeals, in CA-G.R. SP No. 43034, had earlier set aside the Order which
granted partial partition in favor of Eleuteria Rivera and the Writ of Possession issued
pursuant thereto. And although petitioner‟s complaint is captioned as Quieting of Title
and Damages, all that petitioner prayed for, is for the court to uphold the validity of its
titles as against that of respondents‟. This is consistent with the nature of the relief in an
action for declaratory relief where the judgment in the case can be carried into effect
without requiring the parties to pay damages or to perform any act. Thus, while
petitioner was not able to demonstrate that respondents‟ TCT No. C-314537 in the name
of Eleuteria Rivera constitutes a cloud over its title, it has nevertheless successfully
established its ownership over the subject properties and the validity of its titles which
entitles it to declaratory relief.
3. Same; Same; Declaratory Relief; A petition for declaratory relief gives a
practical remedy for ending controversies that have not reached the state
where another relief is immediately available; and supplies the need for a form of
action that will set controversies at rest before they lead to a repudiation of obligations,
an invasion of rights, and a commission of wrongs.-
—An action for declaratory relief presupposes that there has been no actual breach of
the instruments involved or of the rights arising thereunder. Since the purpose of an
action for declaratory relief is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, or contract for their guidance in the
enforcement thereof, or compliance therewith, and not to settle issues arising from an
alleged breach thereof, it may be entertained before the breach or violation of the
statute, deed or contract to which it refers. A petition for declaratory relief gives a
practical remedy for ending controversies that have not reached the state where
another relief is immediately available; and supplies the need for a form of action that
will set controversies at rest before they lead to a repudiation of obligations, an invasion
of rights, and a commission of wrongs.
4. Same; Same; An action to quiet title is characterized as a proceeding quasi in rem.-
—Significantly, an action to quiet title is characterized as a proceeding quasi in rem. In
an action quasi in rem, an individual is named a defendant and the purpose of the
proceeding is to subject his interests to the obligation or loan burdening the property.
Actions quasi in rem deal with the status, ownership or liability of a particular property
but which are intended to operate on these questions only as between the particular
parties to the proceedings and not to ascertain or cut off the rights or interests of all
possible claimants. The judgment therein is binding only upon the parties who joined in
the action.
5. Same; Same; Elements.-
—The cloud on title consists of: (1) any instrument, record, claim, encumbrance or
proceeding; (2) which is apparently valid or effective; (3) but is in truth and in fact
invalid, ineffective, voidable, or unenforceable; and (4) may be prejudicial to the title
sought to be quieted. The fourth element is not present in the case at bar.
6. Same; Same; Requisites.-
—In order that an action for quieting of title may prosper, two requisites must concur:
(1) the plaintiff or complainant has a legal or equitable title or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy.
Court of Appeals.
VILLARAMA, JR., J.:
This petition for review on certiorari1 seeks to set aside the Decision2 dated January 31, 2005 and
Resolution3 dated March 15, 2005 of the Court of Appeals in CA-G.R. SP No. 62211. The Court of
Appeals dismissed the Complaint4 for Quieting of Title and Damages filed by Phil-Ville
Development and Housing Corporation (Phil-Ville) and denied its Motion for Reconsideration.5
The factual antecedents, as culled from the records, are as follows.

Phil-Ville Development and Housing Corporation is the registered owner of three parcels of land
designated as Lots 1-G-1, 1-G-2 and 1-G-3 of the subdivision plan Psd-1-13-006209, located in
Caloocan City, having a total area of 8,694 square meters and covered by Transfer Certificates of
Title (TCT) Nos. 270921,6 2709227 and 270923.8 Prior to their subdivision, the lots were
collectively designated as Lot 1-G of the subdivision plan Psd-2731 registered in the name of
Phil-Ville under TCT No. T-148220.9 Said parcels of land form part of Lot 23-A of the Maysilo
Estate originally covered by Original Certificate of Title (OCT) No. 99410 registered on May 3,
1917 in the name of Isabel Gil de Sola as the judicial administratrix of the estate of Gonzalo
Tuason and thirty-one (31) others. Phil-Ville acquired the lots by purchase from N. Dela Merced
and Sons, Inc. on July 24, 1984.
Earlier, on September 27, 1961, a group composed of Eleuteria Rivera, Bartolome P. Rivera,
Josefa R. Aquino, Gregorio R. Aquino, Pelagia R. Angeles, Modesta R. Angeles, Venancio R.
Angeles, Felipe R. Angeles Fidela R. Angeles and Rosauro R. Aquino, claiming to be the heirs of
Maria de la Concepcion Vidal, a co-owner to the extent of 1-189/1000% of the properties covered
by OCT Nos. 982, 983, 984, 985 and 994 of the Hacienda Maysilo, filed a petition with the Court of
First Instance (CFI) of Rizal in Land Registration Case No. 4557. They prayed for the substitution
of their names on OCT No. 994 in place of Maria de la Concepcion Vidal. Said petition was granted
by the CFI in an Order11 dated May 25, 1962.
Afterwards, the alleged heirs of Maria de la Concepcion Vidal filed a petition for the partition of
the properties covered by OCT Nos. 982, 983, 984, 985 and 994. The case was docketed as Civil
Case No. C-424 in the CFI of Rizal, Branch 12, Caloocan City. On December 29, 1965, the CFI
granted the petition and appointed three commissioners to determine the most equitable division
of the properties.12 Said commissioners, however, failed to submit a recommendation.
Thirty-one (31) years later, on May 22, 1996, Eleuteria Rivera filed a Supplemental Motion13 in
Civil Case No. C-424, for the partition and segregation of portions of the properties covered by
OCT No. 994. The Regional Trial Court (RTC), Branch 120, of Caloocan City, through Judge Jaime
D. Discaya, to whom the case was transferred, granted said motion. In an Order14 dated
September 9, 1996, Judge Discaya directed the segregation of portions of Lots 23, 28-A-1 and
28-A-2 and ordered the Register of Deeds of Caloocan City to issue to Eleuteria Rivera new
certificates of title over them. Three days later, the Register of Deeds of Caloocan, Yolanda O.
Alfonso, issued to Eleuteria Rivera TCT No. C-31453715 covering a portion of Lot 23 with an area
of 14,391.54 square meters. On December 12, 1996, the trial court issued another Order directing
the acting Branch Clerk to issue a Certificate of Finality of the Order dated September 9, 1996.
Thereafter, one Rosauro R. Aquino filed a petition for certiorari contesting said Order of
December 12, 1996 and impugning the partial partition and adjudication to Eleuteria Rivera of
Lots 23, 28-A-1 and 28-A-2 of the Maysilo Estate. The case was docketed as CA-G.R. SP No. 43034
at the Court of Appeals.
Meanwhile, a writ of possession16 was issued in Eleuteria Rivera’s favor on December 26, 1996
upon the Order17 of Judge Discaya issued on the same date. Accordingly, Sheriff Cesar L. Cruz
served a Notice to Vacate18 dated January 2, 1997 upon Phil-Ville, requiring it to vacate Lots 23-A
and 28. Bonifacio Shopping Center, Inc., which occupied Lot 28-A-2, was also served a copy of the
notice. Aggrieved, Bonifacio Shopping Center, Inc. filed a petition for certiorari and prohibition,
docketed as CA-G.R. SP No. 43009, before the Court of Appeals. In a Decision19 dated February 19,
1997, the appellate court set aside and declared as void the Order and Writ of Possession dated
December 26, 1996 and the Notice to Vacate dated January 2, 1997. The appellate court
explained that a party who has not been impleaded in a case cannot be bound by a writ of
possession issued in connection therewith.
Subsequently, on February 22, 1997, Eleuteria Rivera Vda. de Bonifacio died at the age of 96.20
On April 23, 1997, the Secretary of Justice issued Department Order No. 137 creating a special
committee to investigate the circumstances surrounding the issuance of OCT No. 994 and its
derivative titles.
On April 29, 1997, the Court of Appeals rendered a Decision21 in CA-G.R. SP No. 43034 granting
Rosauro R. Aquino’s petition and setting aside the RTC’s Order of September 9, 1996, which
granted Eleuteria Rivera’s prayer for partition and adjudicated in her favor portions of Lots 23,
28-A-1 and 28-A-2 of the Maysilo Estate. The appellate court likewise set aside the Order and the
Writ of Possession dated December 26, 1996.
Nonetheless, on June 5, 1997, petitioner filed a complaint for quieting of title and damages
against the surviving heirs of Eleuteria Rivera Vda. de Bonifacio (namely Maximo R. Bonifacio,
Ceferino R. Bonifacio, Apolonia B. Tan, Benita B. Caina, Crispina B. Pascual, Rosalia B. de Gracia,
Teresita S. Doronia, Christina B. Goco, Arsenio C. Bonifacio, Carmen B. Bernardino and Danilo C.
Bonifacio) and the Register of Deeds of Caloocan City. The case was docketed as Civil Case No.
C-507 in the RTC of Caloocan City, Branch 122.
On October 7, 1997, then Senator Marcelo B. Fernan filed P.S. Resolution No. 1032 directing the
Senate Committees on Justice and Human Rights and on Urban Planning, Housing and
Resettlement to conduct a thorough investigation, in aid of legislation, of the irregularities
surrounding the titling of the properties in the Maysilo Estate.
In a Decision22 dated March 24, 2000, the Caloocan RTC ordered the quieting of Phil-Ville’s titles
over Lots 1-G-1, 1-G-2 and 1-G-3, declaring as valid TCT Nos. 270921, 270922 and 270923 in
Phil-Ville’s name. The fallo of said Decision reads:
WHEREFORE, and in view of the foregoing, judgment is hereby rendered as follows:
1. Ordering the quieting of title of the plaintiff over Lots 1-G-1, 1-G-2 and 1-G-3, all the subd.
plan Psd-1-13-006209, being a portion of Lot 1-G, Psd-2731, LRC Rec. No. 4429, situated in
Kalookan City, as owner thereof in fee simple and with full faith and credit;
2. Declaring Transfer Ce[r]tificates of Title Nos. 270921, 270922 and 270923 in the name of
Phil-Ville Development and Housing Corporation over the foregoing parcels of land issued by the
Registry of Deeds for Kalookan City, as valid and effective;
3. Declaring Transfer Certificate of Title No. C-314537 over Lot 23, being a portion of Maysilo
Estate situated in Maysilo, Kalookan City, in the name of Eleuteria Rivera, issued by the Registry
of Deeds for Kalookan City, as null and void and with no force and effect;
4. Ordering the private defendants to surrender to the Registry of Deeds for Kalookan City, thru
this Court, the Owner’s Duplicate Certificate of said Transfer Certificate of Title No. C-314537 in
the name of Eleuteria Rivera;
5. Directing the public defendant, Register of Deeds of Kalookan City to cancel both Transfer
Certificate of Title Nos. C-314537 in the name of Eleuteria Rivera on file with the Register of
Deeds for Kalookan City, and the Owner’s Duplicate copy of Transfer Certificate of Title No.
C-314537 being required to be surrendered by the private defendants; and
6. Ordering the private defendants to pay plaintiff, jointly and severally, the sum of ₱10,000.00,
as and by way of attorney’s fees, plus the costs of suit.
SO ORDERED.23
In upholding Phil-Ville’s titles, the trial court adopted the conclusion in Senate Committee Report
No. 103124 dated May 25, 1998 that there is only one OCT No. 994, registered on May 3, 1917, and
that OCT No. 994, purportedly registered on April 19, 1917 (from which Eleuteria Rivera’s title
originated) does not exist. The trial court also found that it was physically impossible for
respondents to be the heirs of Eleuteria Rivera’s grandmother, Maria de la Concepcion Vidal, one
of the registered owners of OCT No. 994, because Maria de la Concepcion was born sometime in
1903, later than Eleuteria Rivera who was born in 1901.25 Lastly, the RTC pointed out that
contrary to the contentions of Rivera’s heirs, there is no overlapping of titles inasmuch as Lot 23
lies far from Lot 23-A, where Phil-Ville’s lands are located.
On April 13, 2000, Atty. K.V. Faylona, on behalf of respondents, addressed a letter26 to the
Branch Clerk of Court of the Caloocan City RTC requesting the complete address of Phil-Ville and
its counsel. Supposedly, respondents’ counsels of record, Attys. Nicomedes Tolentino and Jerry D.
Bañares, had abandoned the defense but still kept the records of the case. Thus, the Notice of
Appeal27 on behalf of respondents was filed by Atty. Faylona while two of the heirs, Danilo
Bonifacio and Carmen Bernardino, filed a separate Notice of Appeal28 through their own counsel.
The appeals were consolidated and docketed as CA-G.R. CV No. 66547.
On April 17, 2000, respondents withdrew their appeal and instead filed before this Court a
Petition for Review on Certiorari,29 which was docketed as G.R. No. 142640. In a Resolution30
dated September 25, 2000, the Court referred the petition to the Court of Appeals for
adjudication on the merits since the case does not involve pure questions of law. Respondents
moved for reconsideration of the Resolution, but the Court denied their motion. Thus,
respondents’ petition was transferred to the Court of Appeals and docketed as CA-G.R. SP No.
62211.
Meanwhile, on October 17, 2002, the Court of Appeals rendered a Decision31 in CA-G.R. CV No.
66547, dismissing the appeal as regards Danilo Bonifacio and Carmen Bernardino. Yet, along with
Danilo and Carmen, respondents moved for reconsideration on the contention that they are not
bound by the judgment since they had withdrawn their appeal therein. The Court of Appeals
denied said motion in a Resolution dated June 7, 2004. Danilo, Carmen and respondents elevated
the case to the Supreme Court through a Petition for Review on Certiorari, which was docketed as
G.R. No. 163397. Said petition, however, was denied by this Court in a Resolution dated
September 8, 2004 for being filed out of time.
Subsequently, on January 31, 2005, the Court of Appeals promulgated its assailed Decision in
CA-G.R. SP No. 62211, setting aside the RTC judgment and dismissing Phil-Ville’s complaint. The
appellate court held that the RTC had no jurisdiction to hear Phil-Ville’s complaint as it
effectively seeks to annul the Order dated May 25, 1962 of the CFI in LRC No. 4557, which
directed the substitution of the late Eleuteria Rivera and her co-heirs in place of Maria de la
Concepcion Vidal as registered owners on OCT No. 994. The appellate court likewise affirmed the
validity of OCT No. 994 registered on April 19, 1917 citing the Supreme Court Decisions in
Metropolitan Waterworks and Sewerage Systems v. Court of Appeals32 and Heirs of Luis J.
Gonzaga v. Court of Appeals33 as precedents.
Phil-Ville sought reconsideration34 of the decision, but the Court of Appeals denied its motion in
the assailed Resolution dated March 15, 2005. Hence, this petition.
Petitioner alleges that:
I.
THE HONORABLE COURT OF APPEALS (FORMER NINTH DIVISION) ACTED WITHOUT JURISDICTION
ON THE PETITION FOR REVIEW OF RESPONDENTS MAXIMO BONIFACIO, ET AL. IN CA-G.R SP NO.
62211 BECAUSE OF THE EARLIER DISMISSAL OF THEIR APPEAL IN CA-G.R NO. 66547.
II.
THE HONORABLE COURT OF APPEALS (FORMER NINTH DIVISION) ACTED WITHOUT JURISDICTION
ON THE PETITION FOR REVIEW FILED BY RESPONDENTS MAXIMO BONIFACIO, ET AL. IN CA-G.R. NO.
SP 62211 WHICH DOES NOT RAISE PURE QUESTION[S] OF LAW OR ISSUE[S] OF JURISDICTION AND
THEREFORE THE PROPER REMEDY AVAILABLE TO THEM IS ORDINARY APPEAL WHICH, AS STATED,
HAD ALREADY BEEN DISMISSED IN CA-G.R. CV NO. 66547.
III.
THE HONORABLE COURT OF APPEALS (FORMER NINTH DIVISION) COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN HOLDING THAT THE TRIAL
COURT HAS NO JURISDICTION ON THE COMPLAINT FOR QUIETING OF TITLE FILED BY PETITIONER
PHIL-VILLE IN CIVIL CASE NO. C-507, OR IN THE ALTERNATIVE, IN FAILING TO DECLARE
RESPONDENTS MAXIMO [BONIFACIO], ET AL. ALREADY IN ESTOPPEL TO RAISE THE SAID ISSUE OF
JURISDICTION.35
Condensed, petitioner puts in issue the following: (1) whether the Court of Appeals committed
grave abuse of discretion in taking cognizance of respondents’ petition; and (2) whether the Court
of Appeals committed grave abuse of discretion in declaring that the trial court had no
jurisdiction over Civil Case No. C-507.
Pertinently, however, the genuine issue in this case is whether TCT No. C-314537 in the name of
Eleuteria Rivera constitutes a cloud over petitioner’s titles over portions of Lot 23-A of the
Maysilo Estate.
Petitioner argues mainly that the Court of Appeals acted without jurisdiction in resolving
respondents’ petition for review since it had dismissed their appeal in CA-G.R. CV No. 66547 for
failure to file brief. Petitioner also points out that respondents’ petition is defective because
Maximo Bonifacio alone signed its verification and certification of non-forum shopping without
proof that he was authorized to sign for the other respondents. It contends that the ruling in
MWSS v. Court of Appeals and Heirs of Gonzaga v. Court of Appeals will not invalidate its titles
because it is not a party to any of said cases. As well, petitioner invokes the finding in the joint
investigation by the Senate and the Department of Justice (DOJ) that there is only one OCT No.
994, that is, the one registered on May 3, 1917. It maintains that the trial court had jurisdiction to
hear its action since it is one for quieting of title and not for annulment of the CFI Order dated
May 25, 1962.
Conversely, respondents rely on MWSS v. Court of Appeals and Heirs of Gonzaga v. Court of
Appeals that upheld the titles emanating from OCT No. 994 registered on April 19, 1917.
Therefore, they insist that petitioner has no cause of action to seek the nullification of their title
which is a derivative of said OCT. Respondents reiterate that since they had withdrawn their
appeal in CA-G.R. CV No. 66547, the Court of Appeals decision therein applies only to Danilo
Bonifacio and Carmen Bernardino. Lastly, they believe that petitioner’s action is one for
annulment of judgment, which is foreign to the jurisdiction of the trial court.
Petitioner argues in its first two assignments of errors that the Court of Appeals acted with grave
abuse of discretion in entertaining respondents’ petition. However, said contention deserves
scant consideration since the Court of Appeals, in CA-G.R. SP No. 62211, properly assumed
jurisdiction over respondents’ case after the same was referred to it by this Court through our
Resolution dated September 25, 2000. The issue raised by respondents, as petitioners in G.R. No.
142640, was purely a question of fact that is beyond the power of this Court to resolve. Essentially,
respondents asked the Court to determine the ownership of the lots purportedly covered by
petitioner’s titles.
Neither do we find merit in petitioner’s contention that the dismissal of the appeal in CA-G.R. CV
No. 66547 is binding on respondents. The appellate court itself recognized the withdrawal of
appeal filed by respondents, thus:
… However, defendants Maximo R. Bonifacio, et al. withdrew their appeal so that the only
appellants herein are defendants-appellants Danilo R. Bonifacio, et al.36
So did the trial court err in taking cognizance of petitioner’s action for quieting of title contrary
to respondents’ assertion that it is actually one for annulment of the CFI Order dated May 25,
1962? To this query, we rule in the negative.
The nature of an action is determined by the material allegations of the complaint and the
character of the relief sought by plaintiff, and the law in effect when the action was filed
irrespective of whether he is entitled to all or only some of such relief.37
In its complaint, petitioner alleges:
27. That said TCT No. C-314537 of the late Eleuteria Rivera, although apparently valid and
effective, are in truth and in fact invalid and ineffective[;]
27.1. An examination of Decree No. 36455 issued on April 19, 1917 in LRC Case No. 4429 and also
of OCT No. 994 which was issued … pursuant thereto will show that Lot 23 covered by the said TCT
No. C-3145[3]7 of the late Eleuteria Rivera is not one of the 34 parcels of land covered by said
Decree No. 36455 and OCT 994;
27.2. That, as hereinbefore stated, the same TCT No. C-314537 of the late Eleuteria Rivera is a
direct transfer from OCT No. 994 which was registered on April 19, 1917. The fact, however, is
that there is only one OCT No. 994 which was issued … pursuant to Decree No. 36455 in LRC Case
No. 4429 and said OCT 994 was registered with the Register of Deeds of Rizal on May 3, 1917. The
Office of the Register of Deeds of Caloocan City or of Malabon or of Pasig City has no record of any
OCT No. 994 that was allegedly registered on April 19, 1917;
27.3. That said TCT No. C-314537 of the late Eleuteria Rivera could not cover Lot 23-A or any
portion/s thereof because, as hereinbefore recited, the whole of Lot 23-A had been totally
disposed of as early as July 24, 1923 and she and/or any of her alleged predecessors-in-interest is
not among those named in the memorandum of encumbrances of OCT No. 994 as vendees or
vendors of said Lot 23-A;38
Ultimately, petitioner submits that a cloud exists over its titles because TCT No. C-314537 in the
name of Eleuteria Rivera purports to cover the same parcels of land covered by petitioner’s TCT
Nos. 270921, 270922 and 270923. It points out that what appears to be a valid and effective TCT
No. C-314537 is, in truth, invalid because it covers Lot 23 which is not among those described in
the OCT No. 994 on file with the Register of Deeds of Rizal and registered on May 3, 1917.
Petitioner notes that the OCT No. 994 allegedly registered on April 19, 1917 and from which TCT
No. C-314537 was derived, is not found in the records of the Register of Deeds. In other words,
the action seeks the removal of a cloud from Phil-Ville’s title and/or the confirmation of its
ownership over the disputed properties as the successor-in-interest of N. Dela Merced and Sons,
Inc.
Quieting of title is a common law remedy for the removal of any cloud upon, doubt, or
uncertainty affecting title to real property. Whenever there is a cloud on title to real property or
any interest in real property by reason of any instrument, record, claim, encumbrance, or
proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title. In such action, the competent court is tasked to
determine the respective rights of the complainant and the other claimants, not only to place
things in their proper places, and make the claimant, who has no rights to said immovable,
respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has
the right will see every cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as well as use, and even abuse the property.39
In order that an action for quieting of title may prosper, two requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest in the real property subject of
the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on
his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.40
As regards the first requisite, we find that petitioner was able to establish its title over the real
properties subject of this action. Petitioner submitted in evidence the Deed of Absolute Sale41 by
which it acquired the subject property from N. Dela Merced and Sons, Inc., as well as copies of
OCT No. 994 dated May 3, 1917 and all the derivative titles leading to the issuance of TCT Nos.
270921, 270922 and 270923 in petitioner’s name as follows:
1avvphi1
Title No. Registration Date Holder
8004 July 24, 1923 Vedasto Galino
8059 September 3, 1923 -ditto-
8160 October 24, 1923 -ditto-
8164 November 6, 1923 Juan Cruz Sanchez
8321 February 26, 1924 -ditto-
8734 September 11, 1924 Emilio Sanchez

12946 November 21, 1927 -ditto-
28315 July 16, 1935 Eastern Syndicate Mining Co., Inc.
39163 November 18, 1939 Royal Lawrence Rutter
43559 July 26, 1941 Mapua Institute of Technology
18767 June 16, 1950 Sofia Nepomuceno
57541 March 13, 1958 Leona N. de Jesus, Pacifico Nepomuceno, Sofia Nepomuceno, Soledad
Nepomuceno de Jesus
81679 December 15, 1960 Pacifico Nepomuceno, Sofia N. Jugo, Soledad N. de Jesus
(81680) 17745 December 15, 1960 Pacifico Nepomuceno & Co.
C-13794 April 21, 1978 Pacifico Nepomuceno & Co. Inc.
C-14603 May 16, 1978 N. de La Merced & Sons, Inc.
T-148220 April 22, 1987 Phil-Ville Development and Housing Corp.42
Petitioner likewise presented the Proyecto de particion de la Hacienda de Maysilo43 to prove that
Lot 23-A, of which petitioner’s Lots 1-G-1, 1-G-2 and 1-G-3 form part, is among the 34 lots
covered by OCT No. 994 registered on May 3, 1917. It produced tax receipts accompanied by a
Certification44 dated September 15, 1997 issued by the City Treasurer of Caloocan stating that
Phil-Ville has been religiously paying realty taxes on the lots. Its documentary evidence also
includes a Plan45 prepared by the Chief of the Geodetic Surveys Division showing that Lot 23-A of
the Maysilo Estate is remotely situated from Lot 23 portion of the Maysilo Estate. Petitioner ties
these pieces of evidence to the finding in the DOJ Committee Report46 dated August 28, 1997 and
Senate Committee Report No. 1031 dated May 25, 1998 that, indeed, there is only one OCT No.
994, that is, the one registered on May 3, 1917.
On the other hand, respondents have not adduced competent evidence to establish their title to
the contested property or to dispute petitioner’s claim over the same. It must be noted that the
RTC Order dated September 9, 1996 in Civil Case No. C-424, which resulted in the issuance of TCT
No. C-314537 in the name of Eleuteria Rivera had long been set aside by the Court of Appeals in
CA-G.R. SP No. 43034. Clearly, respondents’ claim anchored primarily on TCT No. C-314537 lacks
legal basis. Rather, they rely simply on the Court’s pronouncement in MWSS v. Court of Appeals
and Heirs of Gonzaga v. Court of Appeals that OCT No. 994 registered on May 3, 1917 and all titles
emanating from it are void.
The Supreme Court sustained said decisions in the case of Manotok Realty, Inc. v. CLT Realty
Development Corporation47 promulgated on November 29, 2005. In said case, the Court declared
void the titles of the Manotoks and Aranetas which were derived from OCT No. 994 registered on
May 3, 1917 consistent with its ruling in MWSS and Gonzaga. The Court disregarded the DOJ and
Senate reports on the alleged anomalies surrounding the titling of the Maysilo Estate.
However, on motion for reconsideration, the Court issued a Resolution48 dated December 14,
2007 which created a Special Division of the Court of Appeals to hear the consolidated cases on
remand. The Special Division was tasked to hear and receive evidence, conclude the proceedings
and submit to the Court a report on its findings as well as recommend conclusions within three
months from the finality of said Resolution. However, to guide the proceedings before the Special
Division, the Court laid the following definitive conclusions:
… First, there is only one OCT 994. As it appears on the record, that mother title was received for
transcription by the Register of Deeds on 3 May 1917, and that should be the date which should be
reckoned as the date of registration of the title. It may also be acknowledged, as appears on the
title, that OCT No. 994 resulted from the issuance of the decree of registration on [19] April 1917,
although such date cannot be considered as the date of the title or the date when the title took
effect.
Second. Any title that traces its source to OCT No. 994 dated [19] April 1917 is void, for such
mother title is inexistent. The fact that the Dimson and CLT titles made specific reference to an
OCT No. 994 dated [19] April 1917 casts doubt on the validity of such titles since they refer to an
inexistent OCT. This error alone is, in fact, sufficient to invalidate the Dimson and CLT claims
over the subject property if singular reliance is placed by them on the dates appearing on their
respective titles.
Third. The decisions of this Court in MWSS v. Court of Appeals and Gonzaga v. Court of Appeals
cannot apply to the cases at bar, especially in regard to their recognition of an OCT No. 994 dated
19 April 1917, a title which we now acknowledge as inexistent. Neither could the conclusions in
MWSS [and] Gonzaga with respect to an OCT No. 994 dated 19 April 1917 bind any other case
operating under the factual setting the same as or similar to that at bar.49 (Emphasis supplied.)
Eventually, on March 31, 2009, the Supreme Court issued a Resolution50 reversing its Decision of
November 29, 2005 and declaring certain titles in the names of Araneta and Manotok valid. In the
course of discussing the flaws of Jose Dimson’s title based on his alleged 25% share in the
hereditary rights of Bartolome Rivera, Eleuteria Rivera’s co-petitioner in LRC No. 4557, the Court
noted:
… However, the records of these cases would somehow negate the rights of Rivera to claim from
Vidal. The Verification Report of the Land Registration Commission dated 3 August 1981 showed
that Rivera was 65 years old on 17 May 1963 (as gathered from the records of Civil Case Nos. 4429
and 4496). It can thus be deduced that, if Rivera was already 65 years old in 1963, then he must
have been born around 1898. On the other hand, Vidal was only nine (9) years in 1912; hence, she
could have been born only on [1903]. This alone creates an unexplained anomalous, if not
ridiculous, situation wherein Vidal, Rivera’s alleged grandmother, was seven (7) years younger
than her alleged grandson. Serious doubts existed as to whether Rivera was in fact an heir of Vidal,
for him to claim a share in the disputed portions of the Maysilo Estate.51
The same is true in this case. The Death Certificate52 of Eleuteria Rivera reveals that she was 96
years old when she died on February 22, 1997. That means that she must have been born in 1901.
That makes Rivera two years older than her alleged grandmother Maria de la Concepcion Vidal
who was born in 1903. Hence, it was physically impossible for Eleuteria Rivera to be an heir of
Maria de la Concepcion Vidal.
Moreover, the Partition Plan of the Maysilo Estate shows that Lot 23-A was awarded, not to Maria
de la Concepcion Vidal, but to Isabel Tuason, Esperanza Tuason, Trinidad Jurado, Juan O’ Farrell
and Angel O’ Farrell.53 What Vidal received as her share were Lot 6 and portions of Lots 10 and 17,
all subject to the usufructuary right of her mother Mercedes Delgado. This was not at all disputed
by respondents.
On the other hand, Vedasto Galino, who was the holder of TCT No. 8004 registered on July 24,
1923 and to whom petitioner traces its titles, was among the successful petitioners in Civil Case
No. 391 entitled Rosario Negrao, et al. v. Concepcion Vidal, et al., who sought the issuance of
bills of sale in favor of the actual occupants of certain portions of the Maysilo Estate.
Be that as it may, the second requisite in an action for quieting of title requires that the deed,
claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be
in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of
any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial
to said title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or
any interest therein.
Thus, the cloud on title consists of: (1) any instrument, record, claim, encumbrance or
proceeding; (2) which is apparently valid or effective; (3) but is in truth and in fact invalid,
ineffective, voidable, or unenforceable; and (4) may be prejudicial to the title sought to be
quieted. The fourth element is not present in the case at bar.
While it is true that TCT No. C-314537 in the name of Eleuteria Rivera is an instrument that
appeared to be valid but was subsequently shown to be invalid, it does not cover the same parcels
of land that are described in petitioner’s titles. Foremost, Rivera’s title embraces a land
measuring 14,391.54 square meters while petitioner’s lands has an aggregate area of only 8,694
square meters. On the one hand, it may be argued that petitioner’s land could be subsumed
within Rivera’s 14,391.54-square meter property. Yet, a comparison of the technical descriptions
of the parties’ titles negates an overlapping of their boundaries.
The technical description of respondents’ TCT No. C-314537 reads:
A parcel of land (Lot 23, being a portion of Maysilo Estate) situated in Maysilo, Caloocan, Metro
Manila, Island of Luzon. Bounded on the NW., along line 1-2 by Blk. 2; on the SW., along line 2-3
by Jacinto Street, along lines 3-4-5 by Blk. 4; along line 5-6 by Bustan St., and San Diego St., on
the S., along lines 6-7-8 by Blk. 13, all of Caloocan Cadastre; on the NE., along line 8-9 by
Caloocan Cadastre; and on the N., along line 9-1 by Epifanio de los Santos Avenue. Beginning at a
point marked "1" on plan, being S. 28 deg. 30’E., 530.50 m. from MBM No. 1, Caloocan Cadastre;
thence S. 07 deg. 20’W., 34.00 m. to point 2; S. 17 deg. 10’E., 12.00 m. to point 3; (0/illegible)
S. 15 deg. 31’E., 31.00 m. to point 4; S. 27 deg. 23’E., 22.50 m. to point 5;
S. 38 deg. 41’E., 43.20 m. to point 6; S. 71 deg. 35’E., 10.60 m. to point 7;
N. 84 deg. 30’E., 38.80 m. to point 8; N. 11 deg. 40’W., 131.20 m. to point 9;
N. 89 deg. 10’W., 55.00 m. to the point of beginning; containing an area of FOURTEEN THOUSAND
THREE HUNDRED NINETY ONE SQUARE METERS AND FIFTY FOUR SQUARE DECIMETERS (14,391.54).
more or less. All points referred to are indicated on the plan and are marked on the ground by Old
Ps. cyl. conc. mons. 15 x 60 cm.; bearings true;54 (Emphasis supplied).
On the other hand, the technical description of petitioner’s lands before they were subdivided
under TCT No. T-148220 is as follows:
A parcel of land (Lot No. 1-G of the subdivision plan Psd-2731, being a portion of Lot 23-A, Maysilo
Estate, GLRO Rec. No. 4429), situated in the Municipality of Caloocan, Province of Rizal. Bounded
on the North., by Calle A. Samson; on the East., by properties of Gregoria de Jesus, Arcadio de
Jesus and Felix de Jesus; on the South., by properties of Lucas Bustamante and Patricio Galauran;
and on the West., by property of Patricio Galauran; and Lot No. 1-E of the subdivision plan.
Beginning at a point marked "1" on plan, being N.69 deg. 27’E., 1600.19 m. from BLLM No. 1, Mp.
of Caloocan, more or less, thence S. 21 deg. 25’E., 44.78 m. to point 2; thence S. 14 deg. 57’E.,
37.24 m. to point 3; thence S. 81 deg. 11’W., 20.28 m. to point 4; thence S. 86 deg. 06’W., 15.45
m. to point 5; thence N. 67 deg. 20’W., 15.91 m. to point 6; thence N. 35 deg. 19’W., 37.56 m. to
point 7; thence N. 27 deg. 11’W., 12.17 m. to point 8; thence N. 19 deg. 26’W., 23.32 m. to point
9; thence N. 13 deg. 08’W., 28.25 m. to point 10; thence S. 78 deg. 45’W., 13.00 m. to point 11;
thence N. 0 deg. 56’E., 48.92 m. to point 12; thence N. 89 deg. 13’E., 53.13 m. to point 13;
thence S. 21 deg. 24’E., 67.00 m. to the point of beginning; containing an area of EIGHT
THOUSAND SIX HUNDRED NINETY FOUR (8,694) SQUARE METERS, more or less. All points referred
to are indicated on the plan and are marked on the ground points 1,2,3 and 13 by Old PLS conc.
mons. point 4,6,7,8 and 9 by Old PLS stone mons.; points 5 to 10 and old stakes points 11 and 12
by PLS conc. mons. bearings true, declination 1 deg. 08’E., date of the original survey, Sept. 8-27,
Oct. 4-21 and Nov. 17-18, 1911 and that of the subdivision survey, Oct. 14 and 15, 1927.55
(Emphasis supplied).
Such disparity in location is more vividly illustrated in the Plan prepared by Engr. Privadi J.G.
Dalire, Chief of the Geodetic Surveys Division, showing the relative positions of Lots 23 and 23-A.
As it appears on the Plan, the land covered by respondents’ TCT No. C-314537 lies far west of
petitioner’s lands under TCT Nos. 270921, 270922 and 270923. Strictly speaking, therefore, the
existence of TCT No. C-314537 is not prejudicial to petitioner’s titles insofar as it pertains to a
different land.
Significantly, an action to quiet title is characterized as a proceeding quasi in rem.56 In an action

quasi in rem, an individual is named a defendant and the purpose of the proceeding is to subject
his interests to the obligation or loan burdening the property. Actions quasi in rem deal with the
status, ownership or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to ascertain or cut off
the rights or interests of all possible claimants. The judgment therein is binding only upon the
parties who joined in the action.57
Yet, petitioner was well aware that the lots encompassed by its titles are not the same as that
covered by respondents’ title. In its complaint, Phil-Ville alleges:
27.4. That Lot 23, being a portion of Maysilo Estate, as described in said TCT No. C-314537 of the
late Eleuteria Rivera when plotted using its tie line to MBM No. 1, Caloocan Cadastre is outside Lot
23-A of the Maysilo Estate. This must be so because Lot 23 is not [a] portion of Lot 23-A, Maysilo
Estate….58
This brings petitioner’s action within the purview of Rule 63 of the Rules of Court on Declaratory
Relief. Section 1 of Rule 63 provides:
SECTION 1. Who may file petition.-Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or regulation,
ordinance or any other governmental regulation may, before breach or violation thereof, bring an
action in the appropriate Regional Trial Court to determine any question of construction or
validity arising, and for a declaration of his rights or duties, thereunder.
under this Rule. (Emphasis supplied).
An action for declaratory relief presupposes that there has been no actual breach of the
instruments involved or of the rights arising thereunder. Since the purpose of an action for
declaratory relief is to secure an authoritative statement of the rights and obligations of the
parties under a statute, deed, or contract for their guidance in the enforcement thereof, or
compliance therewith, and not to settle issues arising from an alleged breach thereof, it may be
entertained before the breach or violation of the statute, deed or contract to which it refers. A
petition for declaratory relief gives a practical remedy for ending controversies that have not
reached the state where another relief is immediately available; and supplies the need for a form
of action that will set controversies at rest before they lead to a repudiation of obligations, an
invasion of rights, and a commission of wrongs.
In the present case, petitioner filed a complaint for quieting of title after it was served a notice
to vacate but before it could be dispossessed of the subject properties. Notably, the Court of
Appeals, in CA-G.R. SP No. 43034, had earlier set aside the Order which granted partial partition
in favor of Eleuteria Rivera and the Writ of Possession issued pursuant thereto. And although
petitioner’s complaint is captioned as Quieting of Title and Damages, all that petitioner prayed
for, is for the court to uphold the validity of its titles as against that of respondents’. This is
consistent with the nature of the relief in an action for declaratory relief where the judgment in
the case can be carried into effect without requiring the parties to pay damages or to perform any
act.59
Thus, while petitioner was not able to demonstrate that respondents’ TCT No. C-314537 in the
name of Eleuteria Rivera constitutes a cloud over its title, it has nevertheless successfully
established its ownership over the subject properties and the validity of its titles which entitles it
to declaratory relief.
WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated January 31,
2005 and Resolution dated March 15, 2005 of the Court of Appeals in CA-G.R. SP No. 62211 are SET
ASIDE. The Decision dated March 24, 2000 of the Caloocan RTC in Civil Case No. C-507 is hereby
REINSTATED and UPHELD.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 169454 December 27, 2007
THE HEIRS OF MARCELINO DORONIO, NAMELY: REGINA AND FLORA, BOTH SURNAMED DORONIO,
Petitioners, vs.
HEIRS OF FORTUNATO DORONIO, NAMELY: TRINIDAD ROSALINA DORONIO-BALMES, MODING

DORONIO, FLORENTINA DORONIO, AND ANICETA ALCANTARA-MANALO, Respondents.
Case Nature : PETITION for review on certiorari of a decision of the Court of Appeals.
DECISION
REYES, R.T., J.:

For Our review on certiorari is the Decision1 of the Court of Appeals (CA) reversing that2 of the
Regional Trial Court (RTC), Branch 45, Anonas, Urdaneta City, Pangasinan, in an action for
reconveyance and damages. The CA declared respondents as rightful owners of one-half of the
subject property and directed petitioners to execute a registerable document conveying the same
to respondents.
The Facts
Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the registered owners of a
parcel of land located at Barangay Cabalitaan, Asingan, Pangasinan covered by Original
Certificate of Title (OCT) No. 352.3 The courts below described it as follows:
Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con propriedad de
Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y Alejandro Najorda; por el SO
con propriedad de Geminiano Mendoza y por el NO con el camino para Villasis; midiendo una
extension superficial mil ciento cincuenta y dos metros cuadrados.4
The spouses had children but the records fail to disclose their number. It is clear, however, that
Marcelino Doronio and Fortunato Doronio, now both deceased, were among them and that the
parties in this case are their heirs. Petitioners are the heirs of Marcelino Doronio, while
respondents are the heirs of Fortunato Doronio.
On April 24, 1919, a private deed of donation propter nuptias5 was executed by spouses Simeon
Doronio and Cornelia Gante in favor of Marcelino Doronio and the latter’s wife, Veronica Pico.
One of the properties subject of said deed of donation is the one that it described as follows:
Fourth – A piece of residential land located in the barrio of Cabalitian but we did not measure it,
the area is bounded on the north by Gabriel Bernardino; on the east by Fortunato Doronio; on the
south by Geminiano Mendoza and on the west by a road to Villasis. Constructed on said land is a
house of light materials – also a part of the dowry. Value …200.00.6
It appears that the property described in the deed of donation is the one covered by OCT No. 352.
However, there is a significant discrepancy with respect to the identity of the owner of adjacent
property at the eastern side. Based on OCT No. 352, the adjacent owners are Zacarias Najorda
and Alejandro Najorda, whereas based on the deed of donation, the owner of the adjacent
property is Fortunato Doronio. Furthermore, said deed of donation remained a private document
as it was never notarized.7
Both parties have been occupying the subject land for several decades8 although they have
different theories regarding its present ownership. According to petitioners, they are now the
owners of the entire property in view of the private deed of donation propter nuptias in favor of
their predecessors, Marcelino Doronio and Veronica Pico.
Respondents, on the other hand, claim that only half of the property was actually incorporated in
the said deed of donation because it stated that Fortunato Doronio, instead of Zacarias Najorda
and Alejandro Najorda, is the owner of the adjacent property at the eastern side. Respondents
posit that the donors respected and segregated the possession of Fortunato Doronio of the eastern
half of the land. They are the ones who have been possessing said land occupied by their
predecessor, Fortunato Doronio.
Eager to obtain the entire property, the heirs of Marcelino Doronio and Veronica Pico filed, on
January 11, 1993, before the RTC in Urdaneta, Pangasinan a petition "For the Registration of a
Private Deed of Donation"9 docketed as Petition Case No. U-920. No respondents were named in
the said petition10 although notices of hearing were posted on the bulletin boards of Barangay
Cabalitaan, Municipalities of Asingan and Lingayen.11
During the hearings, no one interposed an objection to the petition.12 After the RTC ordered a
general default,13 the petition was eventually granted on September 22, 1993. This led to the
registration of the deed of donation, cancellation of OCT No. 352 and issuance of a new Transfer
Certificate of Title (TCT) No. 44481 in the names of Marcelino Doronio and Veronica Pico.14 Thus,
the entire property was titled in the names of petitioners’ predecessors.
On April 28, 1994, the heirs of Fortunato Doronio filed a pleading before the RTC in the form of a
petition in the same Petition Case No. U-920. The petition was for the reconsideration of the
decision of the RTC that ordered the registration of the subject deed of donation. It was prayed in
the petition that an order be issued declaring null and void the registration of the private deed of
donation and that TCT No. 44481 be cancelled. However, the petition was dismissed on May 13,
1994 on the ground that the decision in Petition Case No. U-920 had already become final as it
was not appealed.
Determined to remain in their possessed property, respondent heirs of Fortunato Doronio (as
plaintiffs) filed an action for reconveyance and damages with prayer for preliminary injunction15
against petitioner heirs of Marcelino Doronio (as defendants) before the RTC, Branch 45, Anonas,
Urdaneta City, Pangasinan. Respondents contended, among others, that the subject land is
different from what was donated as the descriptions of the property under OCT No. 352 and under
the private deed of donation were different. They posited that spouses Simeon Doronio and
Cornelia Gante intended to donate only one-half of the property.
During the pre-trial conference, the parties stipulated, among others, that the property was
originally covered by OCT No. 352 which was cancelled by TCT No. 44481. They also agreed that
the issues are: (1) whether or not there was a variation in the description of the property subject
of the private deed of donation and OCT No. 352; (2) whether or not respondents had acquired
one-half of the property covered by OCT No. 352 by acquisitive prescription; (3) whether or not
the transfer of the whole property covered by OCT No. 352 on the basis of the registration of the
private deed of donation notwithstanding the discrepancy in the description is valid; (4) whether
or not respondents are entitled to damages; and (5) whether or not TCT No. 44481 is valid.16
RTC Decision
After due proceedings, the RTC ruled in favor of petitioner heirs of Marcelino Doronio
(defendants). It concluded that the parties admitted the identity of the land which they all
occupy;17 that a title once registered under the torrens system cannot be defeated by adverse,
open and notorious possession or by prescription;18 that the deed of donation in consideration of
the marriage of the parents of petitioners is valid, hence, it led to the eventual issuance of TCT
No. 44481 in the names of said parents;19 and that respondent heirs of Fortunato Doronio
(plaintiffs) are not entitled to damages as they are not the rightful owners of the portion of the
property they are claiming.20
The RTC disposed of the case, thus:
WHEREFORE, premises considered, the Court hereby renders judgment DISMISSING the herein
Complaint filed by plaintiffs against defendants.21
Disagreeing with the judgment of the RTC, respondents appealed to the CA. They argued that the
trial court erred in not finding that respondents’ predecessor-in-interest acquired one-half of the
property covered by OCT No. 352 by tradition and/or intestate succession; that the deed of
donation dated April 26, 1919 was null and void; that assuming that the deed of donation was
valid, only one-half of the property was actually donated to Marcelino Doronio and Veronica Pico;
and that respondents acquired ownership of the other half portion of the property by acquisitive
prescription.22
CA Disposition
In a Decision dated January 26, 2005, the CA reversed the RTC decision with the following
disposition:
WHEREFORE, the assailed Decision dated June 28, 2002 is REVERSED and SET ASIDE. Declaring the
appellants as rightful owners of one-half of the property now covered by TCT No. 44481, the
appellees are hereby directed to execute a registerable document conveying the same to
appellants.
SO ORDERED.23
The appellate court determined that "(t)he intention to donate half of the disputed property to
appellees’ predecessors can be gleaned from the disparity of technical descriptions appearing in
the title (OCT No. 352) of spouses Simeon Doronio and Cornelia Gante and in the deed of donation
propter nuptias executed on April 24, 1919 in favor of appellees’ predecessors."24
The CA based its conclusion on the disparity of the following technical descriptions of the
property under OCT No. 352 and the deed of donation, to wit:
The court below described the property covered by OCT No. 352 as follows:
"Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con propriedad de
Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y Alejandro Najorda; por el SO
con propriedad de Geminiano Mendoza y por el NO con el camino para Villasis; midiendo una
extension superficial mil ciento cincuenta y dos metros cuadrados."
On the other hand, the property donated to appellees’ predecessors was described in the deed of
donation as:
"Fourth – A piece of residential land located in the barrio of Cabalitian but we did not measure it,
the area is bounded on the north by Gabriel Bernardino; on the east by Fortunato Doronio; on the
south by Geminiano Mendoza and on the west by a road to Villasis. Constructed on said land is a
house of light materials – also a part of the dowry. Value …200.00."25 (Emphasis ours)
Taking note "that the boundaries of the lot donated to Marcelino Doronio and Veronica Pico differ
from the boundaries of the land owned by spouses Simeon Doronio and Cornelia Gante," the CA
concluded that spouses Simeon Doronio and Cornelia Gante donated only half of the property
covered by OCT No. 352.26
Regarding the allegation of petitioners that OCT No. 352 is inadmissible in evidence, the CA
pointed out that, "while the OCT is written in the Spanish language, this document already forms
part of the records of this case for failure of appellees to interpose a timely objection when it was
offered as evidence in the proceedings a quo. It is a well-settled rule that any objection to the
admissibility of such evidence not raised will be considered waived and said evidence will have to
form part of the records of the case as competent and admitted evidence."27
The CA likewise ruled that the donation of the entire property in favor of petitioners’
predecessors is invalid on the ground that it impairs the legitime of respondents’ predecessor,
Fortunato Doronio. On this aspect, the CA reasoned out:
Moreover, We find the donation of the entire property in favor of appellees’ predecessors invalid
as it impairs the legitime of appellants’ predecessor. Article 961 of the Civil Code is explicit. "In
default of testamentary heirs, the law vests the inheritance, x x x, in the legitimate x x x relatives
of the deceased, x x x." As Spouses Simeon Doronio and Cornelia Gante died intestate, their
property shall pass to their lawful heirs, namely: Fortunato and Marcelino Doronio. Donating the
entire property to Marcelino Doronio and Veronica Pico and excluding another heir, Fortunato,
tantamounts to divesting the latter of his rightful share in his parents’ inheritance. Besides, a
person’s prerogative to make donations is subject to certain limitations, one of which is that he
cannot give by donation more than what he can give by will (Article 752, Civil Code). If he does, so
much of what is donated as exceeds what he can give by will is deemed inofficious and the
donation is reducible to the extent of such excess.28
Petitioners were not pleased with the decision of the CA. Hence, this petition under Rule 45.
Issues
Petitioners now contend that the CA erred in:

1. DECLARING ADMISSIBILITY OF THE ORIGINAL CERTIFICATE OF TITLE NO. 352 DESPITE OF LACK
OF TRANSLATION THEREOF.
2. (RULING THAT) ONLY HALF OF THE DISPUTED PROPERTY WAS DONATED TO THE
PREDECESSORS-IN-INTEREST OF THE HEREIN APPELLANTS.
3. (ITS) DECLARATION THAT THE DONATION PROPTER NUPTIAS IS INNOFICIOUS, IS PREMATURE,

AND THUS IT IS ILLEGAL AND UNPROCEDURAL.29
Our Ruling
OCT No. 352 in Spanish Although Not
Translated into English or Filipino Is
Admissible For Lack of Timely Objection
Petitioners fault the CA for admitting OCT No. 352 in evidence on the ground that it is written in
Spanish language. They posit that "(d)ocumentary evidence in an unofficial language shall not be
admitted as evidence, unless accompanied with a translation into English or Filipino."30
The argument is untenable. The requirement that documents written in an unofficial language
must be accompanied with a translation in English or Filipino as a prerequisite for its admission in
evidence must be insisted upon by the parties at the trial to enable the court, where a translation
has been impugned as incorrect, to decide the issue.31 Where such document, not so
accompanied with a translation in English or Filipino, is offered in evidence and not objected to,
either by the parties or the court, it must be presumed that the language in which the document
is written is understood by all, and the document is admissible in evidence.32
Moreover, Section 36, Rule 132 of the Revised Rules of Evidence provides:
SECTION 36. Objection. – Objection to evidence offered orally must be made immediately after
the offer is made.
Objection to a question propounded in the course of the oral examination of a witness shall be
made as soon as the grounds therefor shall become reasonably apparent.
An offer of evidence in writing shall be objected to within three (3) days after notice of the offer
unless a different period is allowed by the court.
In any case, the grounds for the objections must be specified. (Emphasis ours)
Since petitioners did not object to the offer of said documentary evidence on time, it is now too
late in the day for them to question its admissibility. The rule is that evidence not objected may
be deemed admitted and may be validly considered by the court in arriving at its judgment.33
This is true even if by its nature, the evidence is inadmissible and would have surely been
rejected if it had been challenged at the proper time.34
As a matter of fact, instead of objecting, petitioners admitted the contents of Exhibit "A," that is,
OCT No. 352 in their comment35 on respondents’ formal offer of documentary evidence. In the
said comment, petitioners alleged, among others, that "Exhibits A, B, C, D, E, F and G, are
admitted but not for the purpose they are offered because these exhibits being public and official
documents are the best evidence of that they contain and not for what a party would like it to
prove."36 Said evidence was admitted by the RTC.37 Once admitted without objection, even
though not admissible under an objection, We are not inclined now to reject it.38 Consequently,
the evidence that was not objected to became property of the case, and all parties to the case
are considered amenable to any favorable or unfavorable effects resulting from the said
evidence.39
Issues on Impairment of Legitime
Should Be Threshed Out in a Special
Proceeding, Not in Civil Action for
Reconveyance and Damages
On the other hand, petitioners are correct in alleging that the issue regarding the impairment of
legitime of Fortunato Doronio must be resolved in an action for the settlement of estates of
spouses Simeon Doronio and Cornelia Gante. It may not be passed upon in an action for
reconveyance and damages. A probate court, in the exercise of its limited jurisdiction, is the best
forum to ventilate and adjudge the issue of impairment of legitime as well as other related
matters involving the settlement of estate.40
An action for reconveyance with damages is a civil action, whereas matters relating to settlement
of the estate of a deceased person such as advancement of property made by the decedent,
partake of the nature of a special proceeding. Special proceedings require the application of
specific rules as provided for in the Rules of Court.41
As explained by the Court in Natcher v. Court of Appeals:42
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special proceedings,
in this wise:
x x x a) A civil action is one by which a party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong.
A civil action may either be ordinary or special. Both are governed by the rules for ordinary civil
actions, subject to specific rules prescribed for a special civil action.
xxxx
c) A special proceeding is a remedy by which a party seeks to establish a status, a right or a

particular fact.
As could be gleaned from the foregoing, there lies a marked distinction between an action and a
special proceeding. An action is a formal demand of one’s right in a court of justice in the manner
prescribed by the court or by the law. It is the method of applying legal remedies according to
definite established rules. The term "special proceeding" may be defined as an application or
proceeding to establish the status or right of a party, or a particular fact. Usually, in special
proceedings, no formal pleadings are required unless the statute expressly so provides. In special
proceedings, the remedy is granted generally upon an application or motion.
Citing American Jurisprudence, a noted authority in Remedial Law expounds further:
It may accordingly be stated generally that actions include those proceedings which are instituted
and prosecuted according to the ordinary rules and provisions relating to actions at law or suits in
equity, and that special proceedings include those proceedings which are not ordinary in this
sense, but is instituted and prosecuted according to some special mode as in the case of
proceedings commenced without summons and prosecuted without regular pleadings, which are
characteristics of ordinary actions x x x. A special proceeding must therefore be in the nature of a
distinct and independent proceeding for particular relief, such as may be instituted
independently of a pending action, by petition or motion upon notice.
Applying these principles, an action for reconveyance and annulment of title with damages is a
civil action, whereas matters relating to settlement of the estate of a deceased person such as
advancement of property made by the decedent, partake of the nature of a special proceeding,
which concomitantly requires the application of specific rules as provided for in the Rules of
Court.
Clearly, matters which involve settlement and distribution of the estate of the decedent fall
within the exclusive province of the probate court in the exercise of its limited jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or
alleged to have been made by the deceased to any heir may be heard and determined by the
court having jurisdiction of the estate proceedings, and the final order of the court thereon shall
be binding on the person raising the questions and on the heir.
While it may be true that the Rules used the word "may," it is nevertheless clear that the same
provision contemplates a probate court when it speaks of the "court having jurisdiction of the
estate proceedings."
Corollarily, the Regional Trial Court in the instant case, acting in its general jurisdiction, is devoid
of authority to render an adjudication and resolve the issue of advancement of the real property
in favor of herein petitioner Natcher, inasmuch as Civil Case No. 71075 for reconveyance and
annulment of title with damages is not, to our mind, the proper vehicle to thresh out said
question. Moreover, under the present circumstances, the RTC of Manila, Branch 55, was not
properly constituted as a probate court so as to validly pass upon the question of advancement
made by the decedent Graciano Del Rosario to his wife, herein petitioner Natcher.
We likewise find merit in petitioners’ contention that before any conclusion about the legal share
due to a compulsory heir may be reached, it is necessary that certain steps be taken first.43 The
net estate of the decedent must be ascertained, by deducting all payable obligations and charges
from the value of the property owned by the deceased at the time of his death; then, all
donations subject to collation would be added to it. With the partible estate thus determined,
the legitime of the compulsory heir or heirs can be established; and only then can it be
ascertained whether or not a donation had prejudiced the legitimes.44
Declaration of Validity of Donation
Can Be Challenged by an Interested
Party Not Impleaded in Petition for
Quieting of Title or Declaratory Relief
or Where There is No Res Judicata.
Moreover, This Court Can Consider
a Factual Matter or Unassigned Error
in the Interest of Substantial Justice.
Nevertheless, petitioners cannot preclude the determination of validity of the deed of donation
on the ground that (1) it has been impliedly admitted by respondents; (2) it has already been
determined with finality by the RTC in Petition Case No. U-920; or (3) the only issue in an action
for reconveyance is who has a better right over the land.45
The validity of the private deed of donation propter nuptias in favor of petitioners’ predecessors
was one of the issues in this case before the lower courts. The pre-trial order46 of the RTC stated
that one of the issues before it is "(w)hether or not the transfer of the whole property covered by
OCT No. 352 on the basis of the private deed of donation notwithstanding the discrepancy in the
description is valid." Before the CA, one of the errors assigned by respondents is that "THE TRIAL
COURT ERRED IN NOT FINDING THAT THE PRIVATE DEED OF DONATION DATED APRIL 26, 1919 WAS
NULL AND VOID."47
The issue of the validity of donation is likewise brought to Us by petitioners as they stated in their
Memorandum48 that one of the issues to be resolved is regarding the alleged fact that "THE
HONORABLE COURT OF APPEALS ERRED IN FINDING THE DONATION INVALID." We are thus poised
to inspect the deed of donation and to determine its validity.
We cannot agree with petitioners’ contention that respondents may no longer question the
validity of the deed of donation on the ground that they already impliedly admitted it. Under the
provisions of the Civil Code, a void contract is inexistent from the beginning. The right to set up
the defense of its illegality cannot be waived.49 The right to set up the nullity of a void or
non-existent contract is not limited to the parties as in the case of annullable or voidable
contracts; it is extended to third persons who are directly affected by the contract.50
Consequently, although respondents are not parties in the deed of donation, they can set up its
nullity because they are directly affected by the same.51 The subject of the deed being the land
they are occupying, its enforcement will definitely affect them.
Petitioners cannot also use the finality of the RTC decision in Petition Case No. U-92052 as a
shield against the verification of the validity of the deed of donation. According to petitioners,
the said final decision is one for quieting of title.53 In other words, it is a case for declaratory
relief under Rule 64 (now Rule 63) of the Rules of Court, which provides:
SECTION 1. Who may file petition. – Any person interested under a deed, will, contract or other
written instrument, or whose rights are affected by a statute, executive order or regulation, or
ordinance, may, before breach or violation thereof, bring an action to determine any question of
construction or validity arising under the instrument or statute and for a declaration of his rights
or duties thereunder.
under this rule.
SECTION 2. Parties. – All persons shall be made parties who have or claim any interest which
would be affected by the declaration; and no declaration shall, except as otherwise provided in
these rules, prejudice the rights of persons not parties to the action. (Emphasis ours)
However, respondents were not made parties in the said Petition Case No. U-920.1âwphi1 Worse,
instead of issuing summons to interested parties, the RTC merely allowed the posting of notices
on the bulletin boards of Barangay Cabalitaan, Municipalities of Asingan and Lingayen, Pangasinan.
As pointed out by the CA, citing the ruling of the RTC:
x x x In the said case or Petition No. U-920, notices were posted on the bulletin boards of
barangay Cabalitaan, Municipalities of Asingan and Lingayen, Pangasinan, so that there was a
notice to the whole world and during the initial hearing and/or hearings, no one interposed
objection thereto.54
Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in personam,
but being against the person in respect of the res, these proceedings are characterized as quasi in
rem.55 The judgment in such proceedings is conclusive only between the parties.56 Thus,
respondents are not bound by the decision in Petition Case No. U-920 as they were not made
parties in the said case.
The rules on quieting of title57 expressly provide that any declaration in a suit to quiet title shall
not prejudice persons who are not parties to the action.
That respondents filed a subsequent pleading58 in the same Petition Case No. U-920 after the
decision there had become final did not change the fact that said decision became final without
their being impleaded in the case. Said subsequent pleading was dismissed on the ground of
finality of the decision.59
Thus, the RTC totally failed to give respondents their day in court. As a result, they cannot be
bound by its orders. Generally accepted is the principle that no man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not bound by judgment rendered
by the court.60
Moreover, for the principle of res judicata to apply, the following must be present: (1) a decision
on the merits; (2) by a court of competent jurisdiction; (3) the decision is final; and (4) the two
actions involve identical parties, subject matter and causes of action.61 The fourth element is
not present in this case. The parties are not identical because respondents were not impleaded in
Petition Case No. U-920. While the subject matter may be the same property covered by OCT No.
352, the causes of action are different. Petition Case No. U-920 is an action for declaratory relief
while the case below is for recovery of property.
We are not persuaded by petitioners’ posture that the only issue in this action for reconveyance is
who has a better right over the land; and that the validity of the deed of donation is beside the
point.62 It is precisely the validity and enforceability of the deed of donation that is the
determining factor in resolving the issue of who has a better right over the property. Moreover,
notwithstanding procedural lapses as to the appropriateness of the remedies prayed for in the
petition filed before Us, this Court can brush aside the technicalities in the interest of justice. In
some instances, this Court even suspended its own rules and excepted a case from their operation
whenever the higher interests of justice so demanded.63
Moreover, although respondents did not directly raise the issue of validity of the deed of donation
at the commencement of the case before the trial court, it was stipulated64 by the parties during
the pre-trial conference. In any event, this Court has authority to inquire into any question
necessary in arriving at a just decision of a case before it.65 Though not specifically questioned by
the parties, additional issues may also be included, if deemed important for substantial justice to
be rendered.66
Furthermore, this Court has held that although a factual issue is not squarely raised below, still in
the interest of substantial justice, this Court is not prevented from considering a pivotal factual
matter. The Supreme Court is clothed with ample authority to review palpable errors not assigned
as such if it finds that their consideration is necessary in arriving at a just decision.67
A rudimentary doctrine on appealed cases is that this Court is clothed with ample authority to
review matters, even if they are not assigned as errors on appeal, if it finds that their
consideration is necessary at arriving at a just decision of the case.68 Also, an unassigned error
closely related to an error properly assigned or upon which the determination of the question
raised by the error properly assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as an error.69
Donation Propter Nuptias of Real
Property Made in a Private Instrument
Before the New Civil Code Took Effect
on August 30, 1950 is Void
We now focus on the crux of the petition, which is the validity of the deed of donation.1avvphi1 It
is settled that only laws existing at the time of the execution of a contract are applicable to it and
not the later statutes, unless the latter are specifically intended to have retroactive effect.70
Accordingly, the Old Civil Code applies in this case as the donation propter nuptias was executed
in 1919, while the New Civil Code took effect only on August 30, 1950.
Under the Old Civil Code, donations propter nuptias must be made in a public instrument in which
the property donated must be specifically described.71 Article 1328 of the Old Civil Code provides
that gifts propter nuptias are governed by the rules established in Title 2 of Book 3 of the same
Code. Article 633 of that title provides that the gift of real property, in order to be valid, must
appear in a public document.72 It is settled that a donation of real estate propter nuptias is void
unless made by public instrument.73
In the instant case, the donation propter nuptias did not become valid. Neither did it create any
right because it was not made in a public instrument.74 Hence, it conveyed no title to the land in
question to petitioners’ predecessors.
Logically, then, the cancellation of OCT No. 352 and the issuance of a new TCT No. 44481 in favor
of petitioners’ predecessors have no legal basis. The title to the subject property should,
therefore, be restored to its original owners under OCT No. 352.
Direct reconveyance to any of the parties is not possible as it has not yet been determined in a
proper proceeding who among the heirs of spouses Simeon Doronio and Cornelia Gante is entitled
to it. It is still unproven whether or not the parties are the only ones entitled to the properties of
spouses Simeon Doronio and Cornelia Gante. As earlier intimated, there are still things to be done
before the legal share of all the heirs can be properly adjudicated.75
Titled Property Cannot Be Acquired
By Another By Adverse Possession
or Extinctive Prescription
Likewise, the claim of respondents that they became owners of the property by acquisitive
prescription has no merit. Truth to tell, respondents cannot successfully invoke the argument of
extinctive prescription. They cannot be deemed the owners by acquisitive prescription of the
portion of the property they have been possessing. The reason is that the property was covered by
OCT No. 352. A title once registered under the torrens system cannot be defeated even by
adverse, open and notorious possession; neither can it be defeated by prescription.76 It is notice
to the whole world and as such all persons are bound by it and no one can plead ignorance of the
registration.77
The torrens system is intended to guarantee the integrity and conclusiveness of the certificate of
registration, but it cannot be used for the perpetration of fraud against the real owner of the
registered land.78 The system merely confirms ownership and does not create it. Certainly, it
cannot be used to divest the lawful owner of his title for the purpose of transferring it to another
who has not acquired it by any of the modes allowed or recognized by law. It cannot be used to
protect a usurper from the true owner, nor can it be used as a shield for the commission of fraud;
neither does it permit one to enrich himself at the expense of another.79 Where such an illegal
transfer is made, as in the case at bar, the law presumes that no registration has been made and
so retains title in the real owner of the land.80
Although We confirm here the invalidity of the deed of donation and of its resulting TCT No.
44481, the controversy between the parties is yet to be fully settled. The issues as to who truly
are the present owners of the property and what is the extent of their ownership remain
unresolved. The same may be properly threshed out in the settlement of the estates of the
registered owners of the property, namely: spouses Simeon Doronio and Cornelia Gante.
WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A new one is entered:
(1) Declaring the private deed of donation propter nuptias in favor of petitioners’ predecessors
NULL AND VOID; and
(2) Ordering the Register of Deeds of Pangasinan to:
(a) CANCEL Transfer Certificate of Title No. 44481 in the names of Marcelino Doronio and
Veronica Pico; and
(b) RESTORE Original Certificate of Title No. 352 in the names of its original owners, spouses
Simeon Doronio and Cornelia Gante.
SO ORDERED.
G.R. No. 73022 February 9, 1989
GEORGIA ADLAWAN, Owner, RAMON VILLORDON and MANUEL VILLORDON, Shareholders and
Operators/Managers of the GALLERA BAGONG LIPUNAN, and the SANGGUNIANG BAYAN OF
MINGLANILLA, CEBU, petitioners,
vs.
THE HON. INTERMEDIATE APPELLATE COURT, THE HON. REGIONAL TRIAL COURT, Branch XIII,
Cebu City, the PHILIPPINE GAME FOWL COMMISSION, NICOLAS ENAD, ABELARDO LARUMBE and
MARTINIANO DE LA CALSADA, all Shareholders of the MINGLANILLA JUNIOR COLISEUM,
respondents.
1. Public Corporations; Local Government; Municipal Council; Operation of

Cockpits; It is discretionary upon the municipal council to fix the location of cockpits in
their jurisdiction, and determine the allowable distance thereof from public buildings
thru the passage of ordinances.-
Prior to the imposition of martial law, the governing law on Philippine cockfighting was
Republic Act No. 1224, effective on May 17, 1955, which specifically vested regulatory
and supervisory powers over cockpits in the local legislative bodies. x x x It is clear from
this statutory provision that it is discretionary upon the municipal council to fix the
location of cockpits in their jurisdiction and determine the allowable distance thereof
from public buildings, thru the passage of a municipal ordinance. Republic Act. No.
1224, however, specifically prohibits the retroactive application of any such municipal
ordinance to cockpits already existing at the time of its enactment, specifically with
respect to the fixing of distances at which said cockpits may be established.
2. Public Corporations; Local Government; Municipal Mayors; Authority to
Issue Permits for Operation of Cockpits; Sec. 6, PD 449 specifically entrusts the
sole authority to issue licenses for the operation of cockpits to municipal Mayors.-
Section 6 of Presidential Decree No. 449 empowered the municipal mayors to issue
licenses for the operation of cockpits, initially subject to the approval of the Chief of
Constabulary or his authorized representative and, as later amended, subject to the
review and supervision of the Philippine Gamefowl Commission. For all intents and
purposes, this provision of law specifically entrusts the sole authority to issue permits to
the mayors. The municipal council‟s duty is merely to ratify the mayor‟s decision before
the same can be actually implemented. But the council cannot, on its own instance or
initiative, pass upon the licensability of a particular cockpit and thereafter recommend it
to the mayor for approval. This reverse procedure is what petitioners would wish to be
adopted, albeit erroneously, in pleading the aforementioned Resolution No. 40 which
recognized petitioners‟ Gallera as the legal municipal cockpit. Furthermore, Resolution
No. 40 was passed by the Municipal Council of Minglanilla with the concurrence only of
the vice-mayor. The then mayor of Minglanilla, the late Felicisimo Cana, had no
participation therein, as correctly found by the trial court. On these considerations, said
ultra vires resolution has no binding effect and cannot be plausibly invoked by
petitioners.
3. Remedial Law; Civil Procedure; Declaratory Relief; Affirmative Reliefs; Even
if the action is one for declaratory judgment, but the complaint alleges other matters
sufficient to make out a case for specific performance, and defendant failed to challenge
the form of action availed of, the court may grant such affirmative reliefs as the
evidence may warrant.-
A note on a procedural aspect in this case is, however, in order. This action was initiated
on a petition for declaratory relief, ostensibly for declaration of the rights and obligations
of the parties under the laws and ordinances involved therein or invoked by them.
Consequently, in such special civil action the judgment does not essentially entail an
executory process since generally, other than a declaration of such rights and duties,
other affirmative reliefs, as these are understood in ordinary civil actions, are not sought
by the proponent. However, the Court has held that although the action is for a
declaratory judgment but the allegations in the complaints are sufficient to make out a
case for specific performance or recovery of property with claims for damages, and the
defendants did not raise an issue in the trial court to challenge the remedy or form of the
action availed of, the court can grant such affirmative relief as may be warranted by the
evidence. This decisional rule applies to the case at bar.
REGALADO, J.:
Case Nature : PETITION to review the resolution of the then Intermediate Appellate
Court.
Before the Court is a petition to declare null and void the decision of the former Court of First
Instance of Cebu, Branch XIII, in Special Civil Action No. R-13186 for declaratory relief with
injunction, and the resolution of the then Intermediate Appellate Court dismissing the appeal
therefrom. Petitioners further seek the cancellation or setting aside of the entry of judgment
made on September 17, 1985 by the respondent appellate court consequent to its aforesaid
dismissal of the appeal.
Prior to the advent of martial law, there were two cockpits operating under license in the
municipality of Minglanilla, Cebu, namely, (1) the Minglanilla Junior Coliseum (hereinafter also
referred to as the Coliseum), which has been existing since July, 1955, now owned and operated
by private respondents after their acquisition thereof from their predecessor-in-interest Felix
Obejero, 1 and which is located in the center of the poblacion of the Municipality of Minglanilla;
and (2) the Gallera Bagong Lipunan, formerly known as Bag-Ong Bulangan, and later also known as
La Gallera de Minglanilla (hereinafter also referred to as Gallera), which was established in 1967,
then owned and operated by Catalino Villaflor who was succeeded by several operators and
eventually by herein petitioners, and which is located in Barrio Calajoan of the same municipality.
2
With the promulgation of Presidential Decree No. 449, otherwise known as the Cockfighting Law
of 1974, which provided for the "one cockpit for every municipality" rule, the present controversy
arose.
The findings of respondent trial court establish that on November 27, 1972, the Office of the
Mayor of Minglanilla, Cebu, received a radio message from the Cebu Provincial Command of the
Philippine Constabulary laying down the policy governing cockpits, the pertinent provisions of
which state that: (1) only licensed municipal cockpits shall be allowed to operate in every
municipality; (2) barrio cockpits, even if licensed shall not be allowed to operate; (3) if there is
no municipal cockpit, a barrio cockpit may be allowed or considered a municipal cockpit when the
mayor certifies to that effect; and (4) in no case shall the operation of more than one cockpit be
allowed in every municipality. With the receipt of the aforesaid message, the question arose as to
which cockpit shall remain to operate and which shall be closed, the final determination whereof
was held in abeyance, with the municipal council of Minglanilla instead referring the matter to
the Philippine Constabulary unit which had jurisdiction over the same. Thereafter, the Provincial
Command rendered a decision, dated December 8, 1972, upholding the Coliseum, private
respondents' cockpit, as the municipal cockpit of Minglanilla, Cebu. The then operator of the
barrio cockpit Bag-Ong Bulangan, or Gallera as previously indicated, appealed the decision to the
Zone Commander who in turn referred the matter back to said municipal council. 3
Thereafter, the Committee on Laws and Ordinances of the Municipal Council of Minglanilla
submitted a report on the cockpit controversy, which was adopted 4 and later approved by the
Municipal Council 5 recommending the retention and certification of the Bag-Ong Bulangan, or
the Gallera, as the municipal cockpit of Minglanilla. The Committee based its recommendation on
Section 1 of Republic Act No. 1224, which was approved on May 7, 1955 and was then the
prevailing law on cockpits, and an Unnumbered Provincial Circular, supposedly circularized by the
Office of the Provincial Governor of Cebu on January 3, 1969 and entitled "Prohibition to Establish
and/or Operate Cockpits within the Poblaciones of Municipalities and Municipal Districts and
within a Radius of 200 Lineal Meters from any Public Building, Schools, Hospitals and Churches,
Request for —." 6
The committee reported that under Republic Act No. 1224 the power to determine the distance
limit of cockpits from certain public structures is left to the discretion of the municipal board or
council, except that no municipal ordinance fixing the distances of cockpits shall apply to those
already licensed and operating at the time of the enactment of such municipal ordinance. It also
noted that Paragraph 5 of the aforestated Unnumbered Provincial Circular provides that, in the
exercise of their discretion, the local officials are requested to prohibit the establishment,
maintenance and/or operation of cockpits within the poblacion of the municipality, the same to
be allowed only within a reasonable distance but in no case less than 200 lineal meters from any
public buildings, schools, hospitals and churches, as in the case of other amusement places
mentioned in the law. 7
On the basis of the actual distances of the Coliseum and the Gallera cockpits from the aforesaid
public structures, the committee concluded that the Coliseum failed to meet the required
distance limit, hence it opined that the Gallera should rightfully be maintained as the municipal
cockpit. The committee agreed that Republic Act No. 1224 prohibits the retroactive application
of any municipal ordinance, which may subsequently be passed pursuant thereto, to a licensed
cockpit already existing at the time of the enactment of the ordinance. In this regard, the
committee observed that Municipal Ordinance No. 4 adopted by the Municipal Council on
February 9, 1969 provided for only a 50 meter limit, but it contended that said ordinance could
not be properly invoked by herein private respondents because of its theory that the same is not
valid and enforceable for lack of approval from the Provincial Board of Cebu.8
Subsequently, Resolution No. 40, Series of 1973, was passed wherein the municipal council
"resolved to request the Municipal Mayor of this municipality to make and issue a Certification to
the effect that the "BAGONG BULANGAN" Cockpit is the Municipal Cockpit at Calajoan of this
municipality ..." 9
Aggrieved by the actuations and resolutions of the municipal council, herein private respondents
Nicolas Enad and Abelardo Larumbe filed an action for declaratory relief with injunction, as
petitioners praying for a judicial interpretation of their rights under all pertinent laws governing
cockpits, against the municipal council, the mayor of Minglanilla and Catalino Villaflor, the then
owner of Gallera, before the aforementioned Court of First Instance of Cebu which in due course
rendered the decision subject of this petition, the fallo of which reads:
IN VIEW OF THE FOREGOING, Judgment is hereby rendered in favor of the petitioners and against
the respondents, as follows:
a. Orders the Municipal Mayor to issue immediately upon receipt of the decision the
license-permit for the year 1982 to and in favor of petitioners for having complied (sic) all
requirements of pertinent laws;
b. Orders the Sangguniang Bayan of Minglanilla to pass a resolution confirming the license-permit
issued by the Mayor to the petitioners immediately upon receipt of this decision;
c. Orders the Philippine Gamefowl Commission to register, accept the registration or cause the
registration immediately upon receipt of this decision, the petitioners' cockpit for the year 1982
and all the years thereafter;
d. Orders the immediate closure of respondent's cockpit, Bagong Bulangan, now known as
Gallera de Minglanilla; and
e. Declare (sic) the Writ of Preliminary Injunction as PERMANENT, against the Municipal Mayor of
Minglanilla, Cebu, the Sannguniang Bayan of Minglanilla, Cebu, all police agencies local or
otherwise and the Philippine Gamefowl Commission. 10
From this decision, Ma. Luz Rosete Diores, who had acquired the Gallera cockpit from Catalino
Villaflor, appealed to the then Intermediate Appellate Court under CA-G.R. UDK No. 4914. During
the pendency of this appeal, Diores executed a deed of absolute sale, dated July 14, 1984,
whereby she ceded and transferred all her rights and interests over the Gallera cockpit to herein
petitioner Georgia Adlawan, payable on installment basis until October 15, 1985. 11
Thereafter, Diores filed a motion to withdraw and/or dismiss her appeal on September 12, 1985
and respondent appellate court granted the same and considered the appeal withdrawn. 12 Said
resolution became final and was entered on September 13, 1985. 13
On September 19, 1985, petitioner Georgia Adlawan, allegedly as the new owner of the Gallera,
filed a motion for the reconsideration of the aforesaid order of dismissal alleging, inter alia, that
Diores acted with malice and bad faith in moving for the withdrawal and/or dismissal of the
appeal since the latter was no longer the owner of the Gallera cockpit the same having been sold
to said petitioner who thus became the real party in interest in the appeal. 14
On October 14, 1985, upon motion of herein private respondents, the trial court ordered the
issuance of a writ of execution for the enforcement of its decision by reason of the dismissal of
the appeal therefrom. 15
Meanwhile, on October 10, 1985 the Philippine Gamefowl Commission passed a resolution
ordering the cancellation and revocation of the certificate of registration of Gallera Bagong
Lipunan and approving the registration of Minglanilla Junior Coliseum. 16
Subsequently, on November 27, 1985 the Intermediate Appellate Court denied petitioner's motion
for reconsideration on the ground that entry of judgment had already been made on September
13, 1985. 17
Hence, this resort to Us, petitioners contending that the decision of the respondent trial court is
illegal for having been rendered with obvious disregard of existing laws and is, therefore, null and
void.
Such submission cannot be sustained; the denial of this recourse is irremissible.

Prior to the imposition of martial law, the governing law on Philippine cockfighting was Republic
Act No. 1224, effective on May 17, 1955, which specifically vested regulatory and supervisory
powers over cockpits in the local legislative bodies, thus:
Section 1. The municipal or city board or council of each chartered city and the municipal council
of each municipality and municipal district shall have the power to regulate or prohibit by
ordinance the establishment, maintenance and operation of cockpits, ... and other similar places
of amusement within its territorial jurisdiction: Provided, however, That no such places of
amusement mentioned herein shall be established, maintained and/or operated within a radius of
200 lineal meters in the case of nightclubs, ... and 50 lineal meters in the case of dancing
schools, ...except cockpits the distance of which shall be left to the discretion of the municipal
council, from any public building, schools, hospitals and churches: Provided, further, that no
municipal or city ordinance fixing distances at which such places of amusement may be
established or operated shall apply to those already licensed and operating at the time of the
enactment of such municipal ordinance, nor will the subject opening of any public building or
other premises from which distances shall be measured prejudice any place of amusement
already then licensed and operating, ...(Emphasis supplied).
It is clear from this statutory provision that it is discretionary upon the municipal council to fix
the location of cockpits in their jurisdiction and determine the allowable distance thereof from
public buildings, thru the passage of a municipal ordinance. Republic Act No. 1224, however,
specifically prohibits the retroactive application of any such municipal ordinance to cockpits
already existing at the time of its enactment, specifically with respect to the fixing of distances
at which said cockpits may be established.
In accordance therewith and as hereinbefore stated, the Municipal Council of Minglanilla passed
Ordinance No. 4 on February 9,1969 which provided that municipal cockpits must be at least 50
lineal meters away from public buildings.
Considering the specific proscription against the retroactive application of such municipal
ordinances, since the Minglanilla Junior Coliseum was established in 1955 whereas Municipal
Ordinance No. 4 was passed only in 1969, obviously the provisions thereof cannot prejudice or
adversely affect the existence and operation of said cockpit.
Assuming arguendo that private respondents' cockpit is indeed covered by the municipal
ordinance, the same is well within the limits allowed therein. It was duly certified by the
Provincial Engineer of Cebu City, 18 after proper investigation, that the Minglanilla cockpit is
located more than the required 50 lineal meter distance from the public buildings contemplated,
in accordance with the mandate of the pertinent local legislation.
Contrary to petitioners' pretension that the law unqualifiedly provides for a 200 lineal meter
distance limit, a cursory perusal of Presidential Decree No. 449 (Cockfighting Law) and
Presidential Decree No. 1802 (creating the Philippine Gamefowl Commission) reveals that neither
of these issuances imposed any mandatory delimitation except when there is no existing local
ordinance which prescribes a limit on distances.
PresidentialDecree No. 449 specifically states in Section 5 thereof that:
(c) Cockpits Site and Construction. Cockpits shall be constructed and operated within the
appropriate areas as prescribed in the Zoning Law or Ordinance. In the absence of such law or
ordinance, the local executives shall see to it that no cockpits are constructed within or near
existing residential or commercial areas, hospitals, school buildings, churches, or other public
buildings. ...
This subsequent law merely adopted and upheld the discretionary power of the local officials in
determining the proper location of cockpits vis-a-vis the public buildings contemplated in and
recognized by Republic Act No. 1224. That the limitation prescribed by the zoning ordinance
controls is further stressed by the later enactment, Presidential Decree No. 449. This
discretionary power was thereafter exercised with the passage of Municipal Ordinance No. 4. We
do not find the enactment of Id ordinance to have been attended with grave abuse of discretion
or any flaw which would render it invalid and for which reason it should remain enforceable until
it is repealed or revoked.
On this score, We have reviewed the research findings of the court a quo which are hereunder
quoted with approval:
A careful study on all laws on cockpits as: RA 1224, PD 449 and PD 1802, this Court finds that it is
not mandatory that a cockpit should not be less than 200 meters from a public building except
when there is no ordinance in a given municipality. As petitioners had correctly claimed, there is
no law before, during and after Martial Law which mandates that a cockpit should not be less than
200 meters from a public building. While RA 1224 mentions about 200 meters distance from public
buildings, the same refers only to nightclubs, cabarets, and similar places, but when it comes to
cockpit, the local government is given the authority to determine the distance. Again this (sic)
substantially reiterated in Sec. 6, PD 449; while PD 1802 is silent on the specific distance of a
cockpit from a public building. The implementing rules and regulations duly promulgated by the
Philippine Gamefowl Commission practically quoted and reproduced verbatim Sec. 6 of PD 449. It
reiterates the provision in PD 449 that a cockpit shall be operated in accordance with existing
ordinance. This is the first phase of the provision. In the absence of an existing ordinance the
local executive, referring to the may, must see to it that no cockpit shall be allowed to operate
within 200 meters from a residential or commercial area. In the Municipality of Minglanilla
Ordinance No. 4 is the prevailing ordinance. 19
The Municipal Council of Minglanilla, relying on the Unnumbered Provincial Circular 20 in

recommending the retention of Bag-Ong Bulangan, or Gallera, as the municipal cockpit, merely
cited the title of the alleged circular. However, there is no showing, nor did the council
demonstrate, how that circular affected or could have negated the application of the
exclusionary clause in Section 1 of Republic Act No. 1224. Consequently, such exception continues
to operate in favor of private respondents' cockpit.
Section 6 of Presidential Decree No. 449 empowered the municipal mayors to issue licenses for
the operation of cockpits, initially subject to the approval of the Chief of Constabulary or his
authorized representative and, as later amended, subject to the review and supervision of the
Philippine Gamefowl Commission. 21 For all intents and purposes, this provision of law
specifically entrusts the sole authority to issue permits to the mayors. The municipal council's
duty is merely to ratify the mayor's decision before the same can be actually implemented. But
the Council cannot, on its own instance or initiative, pass upon the licensability of a particular
cockpit and thereafter recommend it to the mayor for approval. This reverse procedure is what
petitioners would wish to be adopted, albeit erroneously, in pleading the aforementioned
Resolution No. 40 which recognized petitioners' Gallera as the legal municipal cockpit.
Furthermore, Resolution No. 40 was passed by the Municipal Council of Minglanilla with the
concurrence only of the vice- mayor. The then mayor of Minglanilla, the late Felicisimo Cana, had
no participation therein, as correctly found by the trial court. 22 On these considerations, said
ultra vires resolution has no binding effect and cannot be plausibly invoked by petitioners.
Advertence is made to the fact that the Philippine Gamefowl Commission subsequently ordered
the cancellation of the registration certificate of petitioner's cockpit, but that in 1986 it granted
an interlocutory order to Gallera to operate. We have, however, held that with regard to ordinary
local cockpits, and where the holding of international derbies is not involved, it is the mayor who
has the primary authority to issue permits, with the authorization of the Sanggunian and on the
basis of guidelines issued by said commission. The commission can merely supervise compliance
with said guidelines but cannot disapprove a license granted by the mayor and issue a cockpit
license to another. Its aforesaid actuations, therefore, do not detract from the factual and legal
conclusions as hereinbefore discussed. 23
The observations of the trial court correctly show that the equities of this case also decidedly
incline in favor of private respondents' cause. While the contending cockpits both possess the
qualifications as to distance, even from the standpoint of seniority the Coliseum enjoys the
distinct advantage of having been in operation since 1955 while the Gallera was established only
in 1967. Also, the former is located in the poblacion while the latter is in a barrio. These, and the
other points already discussed, establish the right of private respondents' Coliseum to be
considered the municipal cockpit of Minglanilla, Cebu.
With the resolution of the foregoing decisive issues, it is not necessary to pass upon the other
minutiae posed by the parties, some of which are of dubious factual or probative value.
A note on a procedural aspect in this case is, however, in order. This action was initiated on a
petition for declaratory relief, ostensibly for a declaration of the rights and obligations of the
parties under the laws and ordinances involved therein or invoked by them. Consequently, in such
special civil action the judgment does not essentially entail an executory process since generally,
other than a declaration of such rights and duties, 24 other affirmative reliefs, as these are
understood in ordinary civil actions, are not sought by the proponent.
However, the Court has held that although the action is for a declaratory judgment but the
allegations in the complaints are sufficient to make out a case for specific performance25 or
recovery of property 26 with claims for damages, and the defendants did not raise an issue in the
trial court to challenge the remedy or form of the action availed of, the court can grant such
affirmative relief as may be warranted by the evidence. This decisional rule applies to the case at
bar.
WHEREFORE, the petition is DENIED and the challenged decision and resolution are AFFIRMED.
SO ORDERED.
Melencio-Herrera, (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.
G.R. No. 213525 January 27, 2015
FORTUNE LIFE INSURANCE COMPANY, INC., Petitioner, vs.
COMMISSION ON AUDIT (COA) PROPER; COA REGIONAL OFFICE NO. VI-WESTERN VISAYAS;
AUDIT GROUP LGS-B, PROVINCE OF ANTIQUE; AND PROVINCIAL GOVERNMENT OF ANTIQUE,
Respondents.
Case Nature : MOTION FOR RECONSIDERATION of a decision of the Supreme Court.

Syllabi Class : Remedial Law ; Special Civil Actions ; Certiorari ; Grave Abuse of
Discretion ; Words and Phrases ;
Syllabi:
1. Same; Same; Same; Grave Abuse of Discretion; Words and Phrases; Grave
abuse of discretion implies such capricious and whimsical exercise of
judgment as to be equivalent to lack or excess of jurisdiction; in other words,
power is exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so patent or so gross as to
amount to an evasion of a positive duty or to a virtual refusal either to perform the duty
enjoined or to act at all in contemplation of law.-
—Grave abuse of discretion implies such capricious and whimsical exercise of judgment
as to be equivalent to lack or excess of jurisdiction; in other words, power is exercised
in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility;
and such exercise is so patent or so gross as to amount to an evasion of a positive duty
or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation
of law.
2. Remedial Law; Civil Procedure; Registered Mail; Proof of Service; Section
13, Rule 13 of the Rules of Court requires that if the service is done by registered mail,
proof of service shall consist of the affidavit of the person effecting the mailing and the
registry receipt, both of which must be appended to the paper being served.-
—The petitioner obviously ignores that Section 13, Rule 13 of the Rules of Court
concerns two types of proof of service, namely: the affidavit and the registry receipt,
viz.: Section 13. Proof of Service.—x x x. If service is made by registered mail, proof
shall be made by such affidavit and the registry receipt issued by the mailing office. The
registry return card shall be filed immediately upon its receipt by the sender, or in lieu
thereof the unclaimed letter together with the certified or sworn copy of the notice given
by the postmaster to the addressee. Section 13 thus requires that if the service is done
by registered mail, proof of service shall consist of the affidavit of the person effecting
the mailing and the registry receipt, both of which must be appended to the paper being
served. A compliance with the rule is mandatory, such that there is no proof of service
if either or both are not submitted.
3. Same; Special Civil Actions; Certiorari; The petition for certiorari under Rule 64
is similar to the petition for certiorari under Rule 65, and assails a judgment or final
order of the Commission on Elections (COMELEC), or the Commission on Audit (COA).-
—As to the nature of the procedures, Rule 42 governs an appeal from the judgment or
final order rendered by the Regional Trial Court in the exercise of its appellate
jurisdiction. Such appeal is on a question of fact, or of law, or of mixed question of fact
and law, and is given due course only upon a prima facie showing that the Regional Trial
Court committed an error of fact or law warranting the reversal or modification of the
challenged judgment or final order. In contrast, the petition for certiorari under Rule 64
is similar to the petition for certiorari under Rule 65, and assails a judgment or final
order of the Commission on Elections (COMELEC), or the Commission on Audit (COA).
The petition is not designed to correct only errors of jurisdiction, not errors of judgment.
Questions of fact cannot be raised except to determine whether the COMELEC or the
COA were guilty of grave abuse of discretion amounting to lack or excess of jurisdiction.
The reglementary periods under Rule 42 and Rule 64 are different. In the former, the
aggrieved party is allowed 15 days to file the petition for review from receipt of the
assailed decision or final order, or from receipt of the denial of a motion for new trial or
reconsideration. In the latter, the petition is filed within 30 days from notice of the
judgment or final order or resolution sought to be reviewed. The filing of a motion for
new trial or reconsideration, if allowed under the procedural rules of the Commission
concerned, interrupts the period; hence, should the motion be denied, the aggrieved
party may file the petition within the remaining period, which shall not be less than five
days in any event, reckoned from the notice of denial.
Division: EN BANC
Docket Number: G.R. No. 213525
Counsel: The Solicitor General for respondents.
Ponente: BERSAMIN
Case Nature : MOTION FOR RECONSIDERATION of a decision of the Supreme Court.
RESOLUTION
BERSAMIN, J.:
Petitioner Fortune Life Insurance Company, Inc. seeks the Reconsideration1 of the resolution
promulgated on August 19, 2014,2 whereby the Court dismissed its petition for certiorari under
Rule 64 in relation to Rule 65 of the Rules of Courtdue to its non-compliance with the provisions of
Rule 64, particularly for:(a) the late filing of the petition; (b) the non-submission of the proof of
service and verified declaration; and (c) the failure to show grave abuse of discretion on the part
of the respondents.3
Antecedents
Respondent Provincial Government of Antique (LGU) and the petitioner executed a memorandum
of agreement concerning the life insurance coverage of qualified barangaysecretaries, treasurers
and tanod, the former obligating ₱4,393,593.60for the premium payment, and subsequently
submitting the corresponding disbursement voucher to COA Antique for pre-audit.4 The latter
office disallowed the payment for lack of legal basis under Republic Act No. 7160 (Local
Government Code). Respondent LGU appealed but its appeal was denied.
Consequently, the petitioner filed its petition for money claim in the COA.5 On November 15,
2012, the COA issued its decision denying the petition,6 holding that under Section 447 and
Section 458 of the Local Government Code only municipal or city governments are expressly
vested with the power to secure group insurance coverage for barangayworkers; and noting the
LGU’s failure to comply with the requirement of publication under Section 21 of Republic Act No.
9184 (Government Procurement Reform Act).
The petitioner received a copy of the COA decision on December 14, 2012,7 and filed its motion
for reconsideration on January 14, 2013.8 However, the COA denied the motion,9 the denial
being received by the petitioner on July 14, 2014.10
Hence, the petitioner filed the petition for certiorari on August 12, 2014, but the petition for
certiorari was dismissed as earlier stated through the resolution promulgated on August 19,2014
for (a) the late filing of the petition; (b) the non-submission of the proof of service and verified
declaration; and (c) the failure to show grave abuse of discretion on the part of the respondents.
Issues
In its motion for reconsideration, the petitioner submits that it filed the petition for certiorari
within the reglementary period following the fresh period rule enunciated in Neypes v. Court of
Appeals;11 and that the petition for certiorari included an affidavit of service in compliance with
Section 3, Rule 13 of the Rules of Court. It admits having overlooked the submission of a verified
declaration; and prays that the declaration attached to the motion for reconsideration be
admitted by virtue of its substantial compliance with the Efficient Use of Paper Rule12 by
previously submitting a compact disc (CD) containing the petition for certiorari and its annexes. It
disagrees with the Court, insisting that it showed and proved grave abuse of discretion on the part
of the COA in issuing the assailed decision.
Ruling
We deny the motion for reconsideration for being without merit.
Petitioner did not comply with
the rule on proof of service
The petitioner claims that the affidavit of service attached to the petition for certiorari complied
with the requirement on proof of service.
The claim is unwarranted. The petitioner obviously ignores that Section 13, Rule 13 of the Rules
of Court concerns two types of proof of service, namely: the affidavit and the registry receipt, viz:
Section 13. Proof of Service. – x x x. If service is made by registered mail, proof shall be made by
such affidavit and the registry receipt issued by the mailing office. The registry return card shall
be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter
together with the certified or sworn copy of the notice given by the postmaster to the addressee.
Section 13 thus requires that if the service is done by registered mail, proof of service shall
consist of the affidavit of the person effecting the mailing and the registry receipt, both of which
must be appended to the paper being served. A compliance withthe rule is mandatory, such that
there is no proof of service if either or both are not submitted.13
Here, the petition for certiorari only carried the affidavit of service executed by one Marcelino T.
Pascua, Jr., who declared that he had served copies of the petition by registered mail "under
Registry Receipt Nos. 70449, 70453, 70458,70498 and 70524 attached tothe appropriate spaces
found on pages 64-65 of the petition."14 The petition only bore, however, the cut print-outs of
what appeared to be the registry receipt numbers of the registered matters, not the registry
receipts themselves. The rule requires to be appended the registry receipts, nottheir
reproductions. Hence, the cut print-outs did not substantially comply with the rule. This was the
reason why the Court held in the resolution of August 19, 2014 that the petitioner did not comply
with the requirement of proof of service.15
II
Fresh Period Ruleunder Neypes
did not apply to the petition for certiorari
under Rule 64 of the Rules of Court
The petitioner posits that the fresh period rule applies because its Rule 64 petition is akin to a
petition for review brought under Rule 42 of the Rules of Court; hence, conformably with the
fresh period rule, the period to file a Rule 64 petition should also be reckoned from the receipt of
the order denying the motion for reconsideration or the motion for new trial.16
The petitioner’s position cannot be sustained.
There is no parity between the petition for review under Rule 42 and the petition for certiorari
under Rule 64.
As to the nature of the procedures, Rule 42 governs an appeal from the judgment or final order
rendered by the Regional Trial Court in the exercise of its appellate jurisdiction. Such appeal is on
a question of fact, or of law, or of mixed question of fact and law, and is given due course only
upon a prima facie showing that the Regional Trial Court committed an error of fact or law
warranting the reversal or modification of the challenged judgment or final order.17 In contrast,
the petition for certiorari under Rule 64 is similar to the petition for certiorari under Rule 65, and
assails a judgment or final order of the Commission on Elections (COMELEC), or the Commission on
Audit (COA). The petition is not designed to correct only errors of jurisdiction, not errors of
judgment.18 Questions of fact cannot be raised except to determine whether the COMELEC or the
COA were guilty of grave abuse of discretion amounting to lack or excess of jurisdiction.
The reglementary periods under Rule42 and Rule 64 are different. In the former, the aggrieved
party is allowed 15 days to file the petition for review from receipt of the assailed decision or
final order, or from receipt of the denial of a motion for new trial or reconsideration.19 In the
latter, the petition is filed within 30 days from notice of the judgment or final order or resolution
sought to be reviewed. The filing of a motion for new trial or reconsideration, if allowed under
the procedural rules of the Commission concerned, interrupts the period; hence, should the
motion be denied, the aggrieved party may file the petition within the remaining period, which
shall not be less than five days in any event, reckoned from the notice of denial.20
The petitioner filed its motion for reconsideration on January 14, 2013, which was 31 days after
receiving the assailed decision of the COA on December 14, 2012.21 Pursuant to Section 3 of Rule
64, it had only five days from receipt of the denial of its motion for reconsideration to file the
petition. Considering that it received the notice of the denial on July 14, 2014, it had only until
July19, 2014 to file the petition. However, it filed the petition on August 13, 2014, which was 25
days too late.
We ruled in Pates v. Commission on Elections22 that the belated filing of the petition for
certiorari under Rule 64 on the belief that the fresh period ruleshould apply was fatal to the
recourse. As such, the petitioner herein should suffer the same fate for having wrongly assumed
that the fresh period rule under Neypes23 applied. Rules of procedure may be relaxed only to
relieve a litigant of an injustice that is not commensurate with the degree of his thoughtlessness
in not complying with the prescribed procedure.24 Absent this reason for liberality, the petition
cannot be allowed to prosper.
III
Petition for certiorari further lacked merit
The petition for certiorari is also dismissible for its lack of merit.
The petitioner insists on having fully shown that the COA committed grave abuse of discretion, to
wit: (1) the challenged decision was rendered by a divided COA proper; (2) the COA took almost a
year before promulgating its decision, and more thana year in resolving the motion for
reconsideration, in contravention of the express mandate of the Constitution; (3) the resolution
denying the motion for reconsideration was made up of only two sentences; (4) the matter
involved a novel issue that called for an interpretation of the pertinent provisions of the Local
Government Code; and (5) in issuing the resolution, COA Commissioners Grace Pulido-Tan and
Heidi L. Mendoza made it appear that they knew the Local Government Code better than former
Senator Aquilino Pimentel who offered an opinion on the matter.25
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as to be
equivalent to lack or excess of jurisdiction; in other words, power is exercised in an arbitrary or
despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so
patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to
perform the duty enjoined or to act at all in contemplation of law.26
A close look indicates that the petition for certioraridid not sufficiently disclose how the COA
committed grave abuse of its discretion. For sure, the bases cited by the petitioner did not
approximate grave abuse of discretion. To start with, the supposed delays taken by the COA in
deciding the appeal were neither arbitrary nor whimsical on its part. Secondly, the mere
terseness of the denial of the motion for reconsideration was not a factor in demonstrating an
abuse of discretion. And, lastly, the fact that Senator Pimentel, even if he had been the main
proponent of the Local Government Codein the Legislature, expressed an opinion on the issues
different from the COA Commissioners’ own did not matter, for it was the latter’s adjudication
that had any value and decisiveness on the issues by virtue of their being the Constitutionally
officials entrusted with the authority for that purpose.
It is equally relevant to note that the COA denied the money claim of the petitioner for the
further reason of lack of sufficient publication as required by the Government Procurement Act.
In that light, the COA acted well within its authority in denying the petitioner’s claim.
IV
Petitioner and its counsel
exhibited harshness and disrespect
towards the Court and its Members
The petitioner contends that the Court erred in appreciating the petitioner’s non-compliance
with the requirement of the proof of service, alleging that even "a perfunctory scrutiny" of the
petition for certiorari and its annexes could have easily shown that it had attached an affidavit of
service to the petition. It goes on to make the following statements, viz:
25. Apparently, the staff of the Justice-in-charge failed to verify the PETITION and its annexes up
to its last page, thus, the erroneous finding that there was non-submission of the proof of service;
26. In turn, the same omission was hoisted upon the other members of this Honorable Court who
took the observation from the office of the Justice-in-charge, to be the obtaining fact, when in
truth and in fact, it is not;27
The petitioner and its counsel thereby exhibited their plain inability to accept the ill
consequences of their own shortcomings, and instead showed an unabashed propensity to readily
lay blame on others like the Court and its Members. In doing so, they employed harsh and
disrespectful language that accused the Court and its Members of ignorance and recklessness in
the performance of their function of adjudication.
We do not tolerate such harsh and disrespectful language being uttered against the Court and its
Members. We consider the accusatory language particularly offensive because it was unfounded
and undeserved. As this resolution earlier clarifies, the petition for certiorari did not contain a
proper affidavit of service.We do not need to rehash the clarification. Had the petitioner and its
counsel been humbler to accept their self-inflicted situation and more contrite, they would have
desisted from their harshness and disrespect towards the Court and its Members. Although we are
not beyond error, we assure the petitioner and its counsel that our resolutions and
determinations are arrived at or reached with much care and caution, aware that the lives,
properties and rights of the litigants are always at stake. If there be errors, they would be
unintended, and would be the result of human oversight. But in this instance the Court and its
Members committed no error. The petition bore only cut reproductions of the supposed registry
receipts, which even a mere "perfunctory scrutiny" would not pass as the original registry receipts
required by the Rules of Court.
Accordingly, the petitioner and its counsel, Atty. Eduardo S. Fortaleza, should fully explain in
writing why they should not be punished for indirect contempt of court for their harsh and
disrespectful language towards the Court and its Members; and, in his case, Atty. Fortaleza should
further show cause why he should" not be disbarred.
WHEREFORE, the Court DENIES the Motion for Reconsideration for its lack of merit; ORDERS the
petitioner and its counsel, Atty. Eduardo S. Fortaleza, to show cause in writing within ten (10)
days from notice why they should not be punished for indirect contempt of court; and FURTHER
DIRECTS Atty. Fortaleza to show cause in the same period why he should not be disbarred.
SO ORDERED.
G.R. Nos. 179431-32 June 22, 2010
LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION (CIBAC),
Petitioner, vs.
COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 180443
LUIS K. LOKIN, JR., Petitioner, vs.
COMMISSION ON ELECTIONS (COMELEC), EMMANUEL JOEL J. VILLANUEVA, CINCHONA C.

GONZALES and ARMI JANE R. BORJE, Respondents.
Case Nature : SPECIAL CIVIL ACTIONS in the Supreme Court. Certiorari and
Mandamus.
Syllabi Class : Administrative Law|Election Law|Party-List System
Syllabi:
1. Election Law; Election Protests; Quo Warranto; Words and
Phrases; “Election Protest,” and “Quo Warranto,” Distinguished.-
—An election protest proposes to oust the winning candidate from office. It is strictly a
contest between the defeated and the winning candidates, based on the grounds of
electoral frauds and irregularities, to determine who between them has actually
obtained the majority of the legal votes cast and is entitled to hold the office. It can only
be filed by a candidate who has duly filed a certificate of candidacy and has been voted
for in the preceding elections. A special civil action for quo warranto refers to questions
of disloyalty to the State, or of ineligibility of the winning candidate. The objective of the
action is to unseat the ineligible person from the office, but not to install the petitioner
in his place. Any voter may initiate the action, which is, strictly speaking, not a contest
where the parties strive for supremacy because the petitioner will not be seated even if
the respondent may be unseated.
2. Same; Same; Same; An axiom in administrative law postulates that administrative
authorities should not act arbitrarily and capriciously in the issuance of their
Implementing Rules and Regulations (IRRs), but must ensure that their IRRs are
reasonable and fairly adapted to secure the end in view.-
—The insertion of the new ground was invalid. An axiom in administrative law postulates
that administrative authorities should not act arbitrarily and capriciously in the issuance
of their IRRs, but must ensure that their IRRs are reasonable and fairly adapted to
secure the end in view. If the IRRs are shown to bear no reasonable relation to the
purposes for which they were authorized to be issued, they must be held to be invalid
and should be struck down.
3. Same; Election Law; Party-List System; The success of the party-list system
could only be ensured by avoiding any arbitrariness on the part of the party-list
organizations, by seeing to the transparency of the system, and by guaranteeing that
the electorate would be afforded the chance of making intelligent and informed choices
of their party-list representatives.-
—We further note that the new ground would not secure the object of R.A. No. 7941 of
developing and guaranteeing a full, free and open party-list electoral system. The
success of the system could only be ensured by avoiding any arbitrariness on the part of
the party-list organizations, by seeing to the transparency of the system, and by
guaranteeing that the electorate would be afforded the chance of making intelligent and
informed choices of their party-list representatives.
4. Same; Same; Same; Same; Words and Phrases; To reword means to alter
the wording of or to restate in other words; to rephrase is to phrase anew or in a
new form.-
—The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to
Section 8 of R.A. No. 7941, because it has merely reworded and rephrased the statutory
provision‟s phraseology. The explanation does not persuade. To reword means to alter
the wording of or to restate in other words; to rephrase is to phrase anew or in a new
form. Both terms signify that the meaning of the original word or phrase is not altered.
However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A.
No. 7941, because it established an entirely new ground not found in the text of the
provision. The new ground granted to the party-list organization the unilateral right to
withdraw its nomination already submitted to the COMELEC, which Section 8 of R.A. No.
7941 did not allow to be done. Neither was the grant of the unilateral right contemplated
by the drafters of the law, who precisely denied the right to withdraw the nomination (as
the quoted record of the deliberations of the House of Representatives has indicated).
The grant thus conflicted with the statutory intent to save the nominee from falling
under the whim of the party-list organization once his name has been submitted to the
COMELEC, and to spare the electorate from the capriciousness of the party-list
organizations.
5. Same; Same; Same; Same; When the statute itself enumerates the exceptions to
the application of the general rule, the exceptions are strictly but reasonably construed-
—the exceptions extend only as far as their language fairly warrants, and all doubts
should be resolved in favor of the general provision rather than the exceptions; The
appropriate and natural office of the exception is to exempt something from the scope of
the general words of a statute, which is otherwise within the scope and meaning of such
general words.—When the statute itself enumerates the exceptions to the application of
the general rule, the exceptions are strictly but reasonably construed. The exceptions
extend only as far as their language fairly warrants, and all doubts should be resolved in
favor of the general provision rather than the exceptions. Where the general rule is
established by a statute with exceptions, none but the enacting authority can curtail the
former. Not even the courts may add to the latter by implication, and it is a rule that an
express exception excludes all others, although it is always proper in determining the
applicability of the rule to inquire whether, in a particular case, it accords with reason
and justice. The appropriate and natural office of the exception is to exempt something
from the scope of the general words of a statute, which is otherwise within the scope
and meaning of such general words. Consequently, the existence of an exception in a
statute clarifies the intent that the statute shall apply to all cases not excepted.
Exceptions are subject to the rule of strict construction; hence, any doubt will be
resolved in favor of the general provision and against the exception. Indeed, the liberal
construction of a statute will seem to require in many circumstances that the exception,
by which the operation of the statute is limited or abridged, should receive a restricted
construction.
6. Same; Same; Same; Same; Allowing the party-list organization to change its
nominees through withdrawal of their nominations, or to alter the order of the
nominations after the submission of the list of nominees circumvents the voters‟
demand for transparency.-
—The prohibition is not arbitrary or capricious; neither is it without reason on the part of
lawmakers. The COMELEC can rightly presume from the submission of the list that the
list reflects the true will of the party-list organization. The COMELEC will not concern
itself with whether or not the list contains the real intended nominees of the party-list
organization, but will only determine whether the nominees pass all the requirements
prescribed by the law and whether or not the nominees possess all the qualifications and
none of the disqualifications. Thereafter, the names of the nominees will be published in
newspapers of general circulation. Although the people vote for the party-list
organization itself in a party-list system of election, not for the individual nominees,
they still have the right to know who the nominees of any particular party-list
organization are. The publication of the list of the party-list nominees in newspapers of
general circulation serves that right of the people, enabling the voters to make
intelligent and informed choices. In contrast, allowing the party-list organization to
change its nominees through withdrawal of their nominations, or to alter the order of the
nominations after the submission of the list of nominees circumvents the voters‟
demand for transparency. The lawmakers‟ exclusion of such arbitrary withdrawal has
eliminated the possibility of such circumvention.
7. Same; Same; Same; Statutory Construction; Prohibitive or negative words can
rarely, if ever, be directory, for there is but one way to obey the command “thou shall
not,” and that is to completely refrain from doing the forbidden act, subject to certain
exceptions stated in the law itself.-
—The usage of “No” in Section 8—“No change of names or alteration of the order of
nominees shall be allowed after the same shall have been submitted to the COMELEC
except in cases where the nominee dies, or withdraws in writing his nomination, or
becomes incapacitated, in which case the name of the substitute nominee shall be
placed last in the list”—renders Section 8 a negative law, and is indicative of the
legislative intent to make the statute mandatory. Prohibitive or negative words can
rarely, if ever, be directory, for there is but one way to obey the command “thou shall
not,” and that is to completely refrain from doing the forbidden act, subject to certain
exceptions stated in the law itself, like in this case.
8. Same; Election Law; Party-List System; The Legislature deprived the
party-list organization of the right to change its nominees or to alter the order
of nominees once the list is submitted to the Commission on Elections
(COMELEC), except when: (a) the nominee dies; (b) the nominee withdraws
in writing his nomination; or (c) the nominee becomes incapacitated.-
—The provision is daylight clear. The Legislature thereby deprived the party-list
organization of the right to change its nominees or to alter the order of nominees once
the list is submitted to the COMELEC, except when: (a) the nominee dies; (b) the
nominee withdraws in writing his nomination; or (c) the nominee becomes
incapacitated. The provision must be read literally because its language is plain and free
from ambiguity, and expresses a single, definite, and sensible meaning. Such meaning
is conclusively presumed to be the meaning that the Legislature has intended to convey.
Even where the courts should be convinced that the Legislature really intended some
other meaning, and even where the literal interpretation should defeat the very
purposes of the enactment, the explicit declaration of the Legislature is still the law,
from which the courts must not depart. When the law speaks in clear and categorical
language, there is no reason for interpretation or construction, but only for application.
Accordingly, an administrative agency tasked to implement a statute may not construe
it by expanding its meaning where its provisions are clear and unambiguous.
9. Same; Same; Requisites for Validity of Administrative Implementing Rules
and Regulations (IRRs); It is axiomatic that the clear letter of the law is controlling
and cannot be amended by a mere administrative rule issued for its implementation.-
—The authority to make IRRs in order to carry out an express legislative purpose, or to
effect the operation and enforcement of a law is not a power exclusively legislative in
character, but is rather administrative in nature. The rules and regulations adopted and
promulgated must not, however, subvert or be contrary to existing statutes. The
function of promulgating IRRs may be legitimately exercised only for the purpose of
carrying out the provisions of a law. The power of administrative agencies is confined to
implementing the law or putting it into effect. Corollary to this is that administrative
regulation cannot extend the law and amend a legislative enactment. It is axiomatic that
the clear letter of the law is controlling and cannot be amended by a mere administrative
rule issued for its implementation. Indeed, administrative or executive acts shall be
valid only when they are not contrary to the laws or the Constitution. To be valid,
therefore, the administrative IRRs must comply with the following requisites to be valid:
1. Its promulgation must be authorized by the Legislature; 2. It must be within the
scope of the authority given by the Legislature; 3. It must be promulgated in accordance
with the prescribed procedure; and 4. It must be reasonable.
10. Administrative Law; Delegation of Powers; As a general rule, the
Legislature cannot surrender or abdicate its legislative power, for doing so
will be unconstitutional; Under certain circumstances, the Legislature can delegate
to executive officers and administrative boards the authority to adopt and promulgate
Implementing Rules and Regulations (IRRs), but the Legislature must declare the policy
of the law and fix the legal principles that are to control in given cases.-
—The legislative power of the Government is vested exclusively in the Legislature in

accordance with the doctrine of separation of powers. As a general rule, the Legislature
cannot surrender or abdicate its legislative power, for doing so will be unconstitutional.
Although the power to make laws cannot be delegated by the Legislature to any other
authority, a power that is not legislative in character may be delegated. Under certain
circumstances, the Legislature can delegate to executive officers and administrative
boards the authority to adopt and promulgate IRRs. To render such delegation lawful,
the Legislature must declare the policy of the law and fix the legal principles that are to
control in given cases. The Legislature should set a definite or primary standard to guide
those empowered to execute the law. For as long as the policy is laid down and a proper
standard is established by statute, there can be no unconstitutional delegation of
legislative power when the Legislature leaves to selected instrumentalities the duty of
making subordinate rules within the prescribed limits, although there is conferred upon
the executive officer or administrative board a large measure of discretion. There is a
distinction between the delegation of power to make a law and the conferment of an
authority or a discretion to be exercised under and in pursuance of the law, for the
power to make laws necessarily involves a discretion as to what it shall be.
11. Same; Same; Same; The mere filing of several cases based on the same incident
does not necessarily constitute forum shopping-
—the test is whether the several actions filed involve the same transactions and the
same essential facts and circumstances.—The filing of identical petitions in different
courts is prohibited, because such act constitutes forum shopping, a malpractice that is
proscribed and condemned as trifling with the courts and as abusing their processes.
Forum shopping is an improper conduct that degrades the administration of justice.
Nonetheless, the mere filing of several cases based on the same incident does not
necessarily constitute forum shopping. The test is whether the several actions filed
involve the same transactions and the same essential facts and circumstances. The
actions must also raise identical causes of action, subject matter, and issues. Elsewise
stated, forum shopping exists where the elements of litis pendentia are present, or
where a final judgment in one case will amount to res judicata in the other.
12. Actions; Forum Shopping; Pleadings and Practice; What is truly important to
consider in determining whether forum shopping exists or not is the vexation caused to
the courts and the litigants by a party who accesses different courts and administrative
agencies to rule on the same or related causes or to grant the same or substantially the
same reliefs, in the process creating the possibility of conflicting decisions being
rendered by the different fora upon the same issue.-
—Forum shopping consists of the filing of multiple suits involving the same parties for
the same cause of action, either simultaneously or successively, for the purpose of
obtaining a favorable judgment. Thus, forum shopping may arise: (a) whenever as a
result of an adverse decision in one forum, a party seeks a favorable decision (other
than by appeal or certiorari) in another; or (b) if, after having filed a petition in the
Supreme Court, a party files another petition in the Court of Appeals, because he
thereby deliberately splits appeals “in the hope that even as one case in which a
particular remedy is sought is dismissed, another case (offering a similar remedy) would
still be open”; or (c) where a party attempts to obtain a writ of preliminary injunction
from a court after failing to obtain the writ from another court. What is truly important
to consider in determining whether forum shopping exists or not is the vexation caused
to the courts and the litigants by a party who accesses different courts and
administrative agencies to rule on the same or related causes or to grant the same or
substantially the same reliefs, in the process creating the possibility of conflicting
decisions being rendered by the different fora upon the same issue.
13. Same; Same; Same; Certiorari; Certiorari, not an election protest or quo
warranto, is the proper recourse to review a Commission on Elections (COMELEC)
resolution approving the withdrawal the nomination of its original nominees and
substituting them with others, even if the substitute nominees have already been
proclaimed and have taken their oath of office.-
—The controversy involving Lokin is neither an election protest nor an action for quo
warranto, for it concerns a very peculiar situation in which Lokin is seeking to be seated
as the second nominee of CIBAC. Although an election protest may properly be available
to one party-list organization seeking to unseat another party-list organization to
determine which between the defeated and the winning party-list organizations actually
obtained the majority of the legal votes, Lokin‟s case is not one in which a nominee of a
particular party-list organization thereby wants to unseat another nominee of the same
party-list organization. Neither does an action for quo warranto lie, considering that the
case does not involve the ineligibility and disloyalty of Cruz-Gonzales to the Republic of
the Philippines, or some other cause of disqualification for her. Lokin has correctly
brought this special civil action for certiorari against the COMELEC to seek the review of
the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of
Article IX-A of the 1987 Constitution, notwithstanding the oath and assumption of office
by Cruz-Gonzales. The constitutional mandate is now implemented by Rule 64 of the
1997 Rules of Civil Procedure, which provides for the review of the judgments, final
orders or resolutions of the COMELEC and the Commission on Audit. As Rule 64 states,
the mode of review is by a petition for certiorari in accordance with Rule 65 to be filed in
the Supreme Court within a limited period of 30 days. Undoubtedly, the Court has
original and exclusive jurisdiction over Lokin‟s petitions for certiorari and for mandamus
against the COMELEC.
Division: EN BANC
DECISION
BERSAMIN, J.:
The principal question posed in these consolidated special civil actions for certiorari and
mandamus is whether the Commission on Elections (COMELEC) can issue implementing rules and
regulations (IRRs) that provide a ground for the substitution of a party-list nominee not written in
Republic Act (R.A.) No. 7941,1 otherwise known as the Party-List System Act, the law that the
COMELEC thereby implements.
Common Antecedents
The Citizens’ Battle Against Corruption (CIBAC) was one of the organized groups duly registered
under the party-list system of representation that manifested their intent to participate in the
May 14, 2007 synchronized national and local elections. Together with its manifestation of intent
to participate,2 CIBAC, through its president, Emmanuel Joel J. Villanueva, submitted a list of
five nominees from which its representatives would be chosen should CIBAC obtain the required
number of qualifying votes. The nominees, in the order that their names appeared in the
certificate of nomination dated March 29, 2007,3 were: (1) Emmanuel Joel J. Villanueva; (2)
herein petitioner Luis K. Lokin, Jr.; (3) Cinchona C. Cruz-Gonzales; (4) Sherwin Tugna; and (5)
Emil L. Galang. The nominees’ certificates of acceptance were attached to the certificate of
nomination filed by CIBAC. The list of nominees was later published in two newspapers of general
circulation, The Philippine Star News4 (sic) and The Philippine Daily Inquirer.5
Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of nomination,
substitution and amendment of the list of nominees dated May 7, 2007,6 whereby it withdrew the
nominations of Lokin, Tugna and Galang and substituted Armi Jane R. Borje as one of the
nominees. The amended list of nominees of CIBAC thus included: (1) Villanueva, (2)
Cruz-Gonzales, and (3) Borje.
Following the close of the polls, or on June 20, 2007, Villanueva sent a letter to COMELEC
Chairperson Benjamin Abalos,7 transmitting therewith the signed petitions of more than 81% of
the CIBAC members, in order to confirm the withdrawal of the nomination of Lokin, Tugna and
Galang and the substitution of Borje. In their petitions, the members of CIBAC averred that Lokin
and Tugna were not among the nominees presented and proclaimed by CIBAC in its proclamation
rally held in May 2007; and that Galang had signified his desire to focus on his family life.
On June 26, 2007, CIBAC, supposedly through its counsel, filed with the COMELEC en banc sitting
as the National Board of Canvassers a motion seeking the proclamation of Lokin as its second
nominee.8 The right of CIBAC to a second seat as well as the right of Lokin to be thus proclaimed
were purportedly based on Party-List Canvass Report No. 26, which showed CIBAC to have
garnered a grand total of 744,674 votes. Using all relevant formulas, the motion asserted that
CIBAC was clearly entitled to a second seat and Lokin to a proclamation.
The motion was opposed by Villanueva and Cruz-Gonzales.
Notwithstanding Villanueva’s filing of the certificate of nomination, substitution and amendment

of the list of nominees and the petitions of more than 81% of CIBAC members, the COMELEC failed
to act on the matter, prompting Villanueva to file a petition to confirm the certificate of
nomination, substitution and amendment of the list of nominees of CIBAC on June 28, 2007.9
On July 6, 2007, the COMELEC issued Resolution No. 8219,10 whereby it resolved to set the
matter pertaining to the validity of the withdrawal of the nominations of Lokin, Tugna and Galang
and the substitution of Borje for proper disposition and hearing. The case was docketed as E.M.
No. 07-054.
In the meantime, the COMELEC en banc, sitting as the National Board of Canvassers, issued
National Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 200711 to partially
proclaim the following parties, organizations and coalitions participating under the Party-List
System as having won in the May 14, 2007 elections, namely: Buhay Hayaan Yumabong, Bayan
Muna, CIBAC, Gabriela Women's Party, Association of Philippine Electric Cooperatives, Advocacy
for Teacher Empowerment Through Action, Cooperation and Harmony Towards Educational
Reforms, Inc., Akbayan! Citizen's Action Party, Alagad, Luzon Farmers Party, Cooperative-Natco
Network Party, Anak Pawis, Alliance of Rural Concerns and Abono; and to defer the proclamation
of the nominees of the parties, organizations and coalitions with pending disputes until final
resolution of their respective cases.
The COMELEC en banc issued another resolution, NBC Resolution No. 07-72 dated July 18, 2007,12
proclaiming Buhay Hayaan Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC,
Gabriela Women's Party, and Association of Philippine Electric Cooperatives to an additional seat
each; and holding in abeyance the proclamation of the nominees of said parties, organizations
and coalitions with pending disputes until the final resolution of their respective cases.
With the formal declaration that CIBAC was entitled to an additional seat, Ricardo de los Santos,
purportedly as secretary general of CIBAC, informed Roberto P. Nazareno, Secretary General of
the House of Representatives, of the promulgation of NBC Resolution No. 07-72 and requested
that Lokin be formally sworn in by Speaker Jose de Venecia, Jr. to enable him to assume office.
Nazareno replied, however, that the request of Delos Santos could not be granted because
COMELEC Law Director Alioden D. Dalaig had notified him of the pendency of E.M. 07-054.
On September 14, 2007, the COMELEC en banc resolved E.M. No. 07-05413 thuswise:
WHEREFORE, considering the above discussion, the Commission hereby approves the withdrawal
of the nomination of Atty. Luis K. Lokin, Sherwin N. Tugna and Emil Galang as second, third and
fourth nominees respectively and the substitution thereby with Atty. Cinchona C. Cruz-Gonzales
as second nominee and Atty. Armi Jane R. Borje as third nominee for the party list CIBAC. The
new order of CIBAC's nominees therefore shall be:
1. Emmanuel Joel J. Villanueva
2. Cinchona C. Cruz-Gonzales
3. Armi Jane R. Borje

SO ORDERED.
The COMELEC en banc explained that the actions of Villanueva in his capacity as the president of
CIBAC were presumed to be within the scope of his authority as such; that the president was
charged by Section 1 of Article IV of the CIBAC By-Laws to oversee and direct the corporate
activities, which included the act of submitting the party's manifestation of intent to participate
in the May 14, 2007 elections as well as its certificate of nominees; that from all indications,
Villanueva as the president of CIBAC had always been provided the leeway to act as the party's
representative and that his actions had always been considered as valid; that the act of
withdrawal, although done without any written Board approval, was accomplished with the
Board’s acquiescence or at least understanding; and that the intent of the party should be given
paramount consideration in the selection of the nominees.
As a result, the COMELEC en banc proclaimed Cruz-Gonzales as the official second nominee of
CIBAC.14 Cruz-Gonzales took her oath of office
as a Party-List Representative of CIBAC on September 17, 2007.15
Precís of the Consolidated Cases
In G.R. No. 179431 and G.R. No. 179432, Lokin seeks through mandamus to compel respondent
COMELEC to proclaim him as the official second nominee of CIBAC.
In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 promulgated on January 12,
2007;16 and the resolution dated September 14, 2007 issued in E.M. No. 07-054 (approving
CIBAC’s withdrawal of the nominations of Lokin, Tugna and Galang as CIBAC’s second, third and
fourth nominees, respectively, and the substitution by Cruz-Gonzales and Borje in their stead,
based on the right of CIBAC to change its nominees under Section 13 of Resolution No. 7804).17
He alleges that Section 13 of Resolution No. 7804 expanded Section 8 of R.A. No. 7941.18 the law
that the COMELEC seeks to thereby implement.
In its comment, the COMELEC asserts that a petition for certiorari is an inappropriate recourse in
law due to the proclamation of Cruz-Gonzales as Representative and her assumption of that office;
that Lokin’s proper recourse was an electoral protest filed in the House of Representatives
Electoral Tribunal (HRET); and that, therefore, the Court has no jurisdiction over the matter
being raised by Lokin.
For its part, CIBAC posits that Lokin is guilty of forum shopping for filing a petition for mandamus
and a petition for certiorari, considering that both petitions ultimately seek to have him
proclaimed as the second nominee of CIBAC.
Issues
The issues are the following:
(a) Whether or not the Court has jurisdiction over the controversy;
(b) Whether or not Lokin is guilty of forum shopping;
(c) Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the
Party-List System Act; and
(d) Whether or not the COMELEC committed grave abuse of discretion amounting to lack or excess
of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the amendment
of the list of nominees of CIBAC without any basis in fact or law and after the close of the polls,
and in ruling on matters that were intra-corporate in nature.
Ruling
The petitions are granted.
The Court has jurisdiction over the case
The COMELEC posits that once the proclamation of the winning party-list organization has been
done and its nominee has assumed office, any question relating to the election, returns and
qualifications of the candidates to the House of Representatives falls under the jurisdiction of the
HRET pursuant to Section 17, Article VI of the 1987 Constitution. Thus, Lokin should raise the
question he poses herein either in an election protest or in a special civil action for quo warranto
in the HRET, not in a special civil action for certiorari in this Court.
We do not agree.
An election protest proposes to oust the winning candidate from office. It is strictly a contest
between the defeated and the winning candidates, based on the grounds of electoral frauds and
irregularities, to determine who between them has actually obtained the majority of the legal
votes cast and is entitled to hold the office. It can only be filed by a candidate who has duly filed
a certificate of candidacy and has been voted for in the preceding elections.
A special civil action for quo warranto refers to questions of disloyalty to the State, or of
ineligibility of the winning candidate. The objective of the action is to unseat the ineligible
person from the office, but not to install the petitioner in his place. Any voter may initiate the
action, which is, strictly speaking, not a contest where the parties strive for supremacy because
the petitioner will not be seated even if the respondent may be unseated.
The controversy involving Lokin is neither an election protest nor an action for quo warranto, for
it concerns a very peculiar situation in which Lokin is seeking to be seated as the second nominee
of CIBAC. Although an election protest may properly be available to one party-list organization
seeking to unseat another party-list organization to determine which between the defeated and
the winning party-list organizations actually obtained the majority of the legal votes, Lokin’s case
is not one in which a nominee of a particular party-list organization thereby wants to unseat
another nominee of the same party-list organization. Neither does an action for quo warranto lie,
considering that the case does not involve the ineligibility and disloyalty of Cruz-Gonzales to the
Republic of the Philippines, or some other cause of disqualification for her.
Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the
review of the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of
Article IX-A of the 1987 Constitution, notwithstanding the oath and assumption of office by
Cruz-Gonzales. The constitutional mandate is now implemented by Rule 64 of the 1997 Rules of
Civil Procedure, which provides for the review of the judgments, final orders or resolutions of the
COMELEC and the Commission on Audit. As Rule 64 states, the mode of review is by a petition for
certiorari in accordance with Rule 65 to be filed in the Supreme Court within a limited period of
30 days. Undoubtedly, the Court has original and exclusive jurisdiction over Lokin’s petitions for
certiorari and for mandamus against the COMELEC.
Petitioner is not guilty of forum shopping
Forum shopping consists of the filing of multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, for the purpose of obtaining a favorable
judgment. Thus, forum shopping may arise: (a) whenever as a result of an adverse decision in one
forum, a party seeks a favorable decision (other than by appeal or certiorari) in another; or (b) if,
after having filed a petition in the Supreme Court, a party files another petition in the Court of
Appeals, because he thereby deliberately splits appeals "in the hope that even as one case in
which a particular remedy is sought is dismissed, another case (offering a similar remedy) would
still be open"; or (c) where a party attempts to obtain a writ of preliminary injunction from a
court after failing to obtain the writ from another court.19
What is truly important to consider in determining whether forum shopping exists or not is the
vexation caused to the courts and the litigants by a party who accesses different courts and
administrative agencies to rule on the same or related causes or to grant the same or substantially
the same reliefs, in the process creating the possibility of conflicting decisions being rendered by
the different fora upon the same issue.20
The filing of identical petitions in different courts is prohibited, because such act constitutes
forum shopping, a malpractice that is proscribed and condemned as trifling with the courts and as
abusing their processes. Forum shopping is an improper conduct that degrades the administration
of justice.21
Nonetheless, the mere filing of several cases based on the same incident does not necessarily
constitute forum shopping. The test is whether the several actions filed involve the same
transactions and the same essential facts and circumstances.22 The actions must also raise
identical causes of action, subject matter, and issues.23 Elsewise stated, forum shopping exists
where the elements of litis pendentia are present, or where a final judgment in one case will
amount to res judicata in the other.24
Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him as the second
nominee of CIBAC upon the issuance of NBC Resolution No. 07-72 (announcing CIBAC’s
entitlement to an additional seat in the House of Representatives), and to strike down the
provision in NBC Resolution No. 07-60 and NBC Resolution No. 07-72 holding in abeyance "all
proclamation of the nominees of concerned parties, organizations and coalitions with pending
disputes shall likewise be held in abeyance until final resolution of their respective cases." He has
insisted that the COMELEC had the ministerial duty to proclaim him due to his being CIBAC’s
second nominee; and that the COMELEC had no authority to exercise discretion and to suspend or
defer the proclamation of winning party-list organizations with pending disputes.
On the other hand, Lokin has resorted to the petition for certiorari to assail the September 14,
2007 resolution of the COMELEC (approving the withdrawal of the nomination of Lokin, Tugna and
Galang and the substitution by Cruz-Gonzales as the second nominee and Borje as the third
nominee); and to challenge the validity of Section 13 of Resolution No. 7804, the COMELEC’s basis
for allowing CIBAC’s withdrawal of Lokin’s nomination.
Applying the test for forum shopping, the consecutive filing of the action for certiorari and the
action for mandamus did not violate the rule against forum shopping even if the actions involved
the same parties, because they were based on different causes of action and the reliefs they
sought were different.
Invalidity of Section 13 of Resolution No. 7804
The legislative power of the Government is vested exclusively in the Legislature in accordance
with the doctrine of separation of powers. As a general rule, the Legislature cannot surrender or
abdicate its legislative power, for doing so will be unconstitutional. Although the power to make
laws cannot be delegated by the Legislature to any other authority, a power that is not legislative
in character may be delegated.25
Under certain circumstances, the Legislature can delegate to executive officers and
administrative boards the authority to adopt and promulgate IRRs. To render such delegation
lawful, the Legislature must declare the policy of the law and fix the legal principles that are to
control in given cases. The Legislature should set a definite or primary standard to guide those
empowered to execute the law. For as long as the policy is laid down and a proper standard is
established by statute, there can be no unconstitutional delegation of legislative power when the
Legislature leaves to selected instrumentalities the duty of making subordinate rules within the
prescribed limits, although there is conferred upon the executive officer or administrative board
a large measure of discretion. There is a distinction between the delegation of power to make a
law and the conferment of an authority or a discretion to be exercised under and in pursuance of
the law, for the power to make laws necessarily involves a discretion as to what it shall be.26
The authority to make IRRs in order to carry out an express legislative purpose, or to effect the
operation and enforcement of a law is not a power exclusively legislative in character, but is
rather administrative in nature. The rules and regulations adopted and promulgated must not,
however, subvert or be contrary to existing statutes. The function of promulgating IRRs may be
legitimately exercised only for the purpose of carrying out the provisions of a law. The power of
administrative agencies is confined to implementing the law or putting it into effect. Corollary to
this is that administrative regulation cannot extend the law and amend a legislative enactment. It
is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere
administrative rule issued for its implementation. Indeed, administrative or executive acts shall
be valid only when they are not contrary to the laws or the Constitution.27
To be valid, therefore, the administrative IRRs must comply with the following requisites to be
valid:28
1. Its promulgation must be authorized by the Legislature;
2. It must be within the scope of the authority given by the Legislature;
3. It must be promulgated in accordance with the prescribed procedure; and
4. It must be reasonable.
The COMELEC is constitutionally mandated to enforce and administer all laws and regulations
relative to the conduct of an election, a plebiscite, an initiative, a referendum, and a recall.29 In
addition to the powers and functions conferred upon it by the Constitution, the COMELEC is also
charged to promulgate IRRs implementing the provisions of the Omnibus Election Code or other
laws that the COMELEC enforces and administers.30
The COMELEC issued Resolution No. 7804 pursuant to its powers under the Constitution, Batas
Pambansa Blg. 881, and the Party-List System Act.31 Hence, the COMELEC met the first requisite.
The COMELEC also met the third requisite. There is no question that Resolution No. 7804
underwent the procedural necessities of publication and dissemination in accordance with the
procedure prescribed in the resolution itself.
Whether Section 13 of Resolution No. 7804 was valid or not is thus to be tested on the basis of
whether the second and fourth requisites were met. It is in this respect that the challenge of
Lokin against Section 13 succeeds.
As earlier said, the delegated authority must be properly exercised. This simply means that the
resulting IRRs must not be ultra vires as to be issued beyond the limits of the authority conferred.
It is basic that an administrative agency cannot amend an act of Congress,32 for administrative
IRRs are solely intended to carry out, not to supplant or to modify, the law. The administrative
agency issuing the IRRs may not enlarge, alter, or restrict the provisions of the law it administers
and enforces, and cannot engraft additional non-contradictory requirements not contemplated by
the Legislature.33
Section 8 of R.A. No. 7941 reads:

Section 8. Nomination of Party-List Representatives.-Each registered party, organization or

coalition shall submit to the COMELEC not later that forty-five (45) days before the election a list
of names, not less than five (5), from which party-list representatives shall be chosen in case it
obtains the required number of votes.
A person may be nominated in one (1) list only. Only persons who have given their consent in
writing may be named in the list. The list shall not include any candidate of any elective office or
a person who has lost his bid for an elective office in the immediately preceding election. No
change of names or alteration of the order of nominees shall be allowed after the same shall have
been submitted to the COMELEC except in cases where the nominee dies, or withdraws in writing
his nomination, becomes incapacitated in which case the name of the substitute nominee shall be
placed last in the list. Incumbent sectoral representatives in the House of Representatives who
are nominated in the party-list system shall not be considered resigned.
The provision is daylight clear. The Legislature thereby deprived the party-list organization of the
right to change its nominees or to alter the order of nominees once the list is submitted to the
COMELEC, except when: (a) the nominee dies; (b) the nominee withdraws in writing his
nomination; or (c) the nominee becomes incapacitated. The provision must be read literally
because its language is plain and free from ambiguity, and expresses a single, definite, and
sensible meaning. Such meaning is conclusively presumed to be the meaning that the Legislature
has intended to convey. Even where the courts should be convinced that the Legislature really
intended some other meaning, and even where the literal interpretation should defeat the very
purposes of the enactment, the explicit declaration of the Legislature is still the law, from which
the courts must not depart.34 When the law speaks in clear and categorical language, there is no
reason for interpretation or construction, but only for application.35 Accordingly, an
administrative agency tasked to implement a statute may not construe it by expanding its
meaning where its provisions are clear and unambiguous.36
The legislative intent to deprive the party-list organization of the right to change the nominees or
to alter the order of the nominees was also expressed during the deliberations of the Congress,
viz:
MR. LAGMAN: And again on Section 5, on the nomination of party list representatives, I do not see
any provision here which prohibits or for that matter allows the nominating party to change the
nominees or to alter the order of prioritization of names of nominees. Is the implication correct
that at any time after submission the names could still be changed or the listing altered?
MR. ABUEG: Mr. Speaker, that is a good issue brought out by the distinguished Gentleman from
Albay and perhaps a perfecting amendment may be introduced therein. The sponsoring
committee will gladly consider the same.
MR. LAGMAN: In other words, what I would like to see is that after the list is submitted to the
COMELEC officially, no more changes should be made in the names or in the order of listing.
MR. ABUEG: Mr. Speaker, there may be a situation wherein the name of a particular nominee has
been submitted to the Commission on Elections but before election day the nominee changed his
political party affiliation. The nominee is therefore no longer qualified to be included in the party
list and the political party has a perfect right to change the name of that nominee who changed
his political party affiliation.
MR. LAGMAN: Yes of course. In that particular case, the change can be effected but will be the
exception rather than the rule. Another exception most probably is the nominee dies, then there
has to be a change but any change for that matter should always be at the last part of the list so
that the prioritization made by the party will not be adversely affected.37
The usage of "No" in Section 8 – "No change of names or alteration of the order of nominees shall
be allowed after the same shall have been submitted to the COMELEC except in cases where the
nominee dies, or withdraws in writing his nomination, or becomes incapacitated, in which case
the name of the substitute nominee shall be placed last in the list" – renders Section 8 a negative
law, and is indicative of the legislative intent to make the statute mandatory. Prohibitive or
negative words can rarely, if ever, be directory, for there is but one way to obey the command
"thou shall not," and that is to completely refrain from doing the forbidden act,38 subject to
certain exceptions stated in the law itself, like in this case.
Section 8 does not unduly deprive the party-list organization of its right to choose its nominees,
but merely divests it of the right to change its nominees or to alter the order in the list of its
nominees’ names after submission of the list to the COMELEC.
The prohibition is not arbitrary or capricious; neither is it without reason on the part of
lawmakers. The COMELEC can rightly presume from the submission of the list that the list reflects
the true will of the party-list organization. The COMELEC will not concern itself with whether or
not the list contains the real intended nominees of the party-list organization, but will only
determine whether the nominees pass all the requirements prescribed by the law and whether or
not the nominees possess all the qualifications and none of the disqualifications. Thereafter, the
names of the nominees will be published in newspapers of general circulation. Although the
people vote for the party-list organization itself in a party-list system of election, not for the
individual nominees, they still have the right to know who the nominees of any particular
party-list organization are. The publication of the list of the party-list nominees in newspapers of
general circulation serves that right of the people, enabling the voters to make intelligent and
informed choices. In contrast, allowing the party-list organization to change its nominees through
withdrawal of their nominations, or to alter the order of the nominations after the submission of
the list of nominees circumvents the voters’ demand for transparency. The lawmakers’ exclusion
of such arbitrary withdrawal has eliminated the possibility of such circumvention.
Exceptions in Section 8 of R.A. 7941 are exclusive
Section 8 of R.A. No. 7941 enumerates only three instances in which the party-list organization
can substitute another person in place of the nominee whose name has been submitted to the
COMELEC, namely: (a) when the nominee dies; (b) when the nominee withdraws in writing his
nomination; and (c) when the nominee becomes incapacitated.
The enumeration is exclusive, for, necessarily, the general rule applies to all cases not falling
under any of the three exceptions.
When the statute itself enumerates the exceptions to the application of the general rule, the
exceptions are strictly but reasonably construed. The exceptions extend only as far as their
language fairly warrants, and all doubts should be resolved in favor of the general provision rather
than the exceptions. Where the general rule is established by a statute with exceptions, none but
the enacting authority can curtail the former. Not even the courts may add to the latter by
implication, and it is a rule that an express exception excludes all others, although it is always
proper in determining the applicability of the rule to inquire whether, in a particular case, it
accords with reason and justice.391avvphi1
The appropriate and natural office of the exception is to exempt something from the scope of the
general words of a statute, which is otherwise within the scope and meaning of such general
words. Consequently, the existence of an exception in a statute clarifies the intent that the
statute shall apply to all cases not excepted. Exceptions are subject to the rule of strict
construction; hence, any doubt will be resolved in favor of the general provision and against the
exception. Indeed, the liberal construction of a statute will seem to require in many
circumstances that the exception, by which the operation of the statute is limited or abridged,
should receive a restricted construction.
Section 13 of Resolution No. 7804 expanded
the exceptions under Section 8 of R.A. No. 7941
Section 13 of Resolution No. 7804 states:
Section 13. Substitution of nominees. – A party-list nominee may be substituted only when he dies,
or his nomination is withdrawn by the party, or he becomes incapacitated to continue as such, or
he withdraws his acceptance to a nomination. In any of these cases, the name of the substitute
nominee shall be placed last in the list of nominees.
No substitution shall be allowed by reason of withdrawal after the polls.
Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides four instances, the fourth
being when the "nomination is withdrawn by the party."
Lokin insists that the COMELEC gravely abused its discretion in expanding to four the three
statutory grounds for substituting a nominee.
We agree with Lokin.
The COMELEC, despite its role as the implementing arm of the Government in the enforcement
and administration of all laws and regulations relative to the conduct of an election,40 has
neither the authority nor the license to expand, extend, or add anything to the law it seeks to
implement thereby. The IRRs the COMELEC issues for that purpose should always accord with the
law to be implemented, and should not override, supplant, or modify the law. It is basic that the
IRRs should remain consistent with the law they intend to carry out.41
Indeed, administrative IRRs adopted by a particular department of the Government under

legislative authority must be in harmony with the provisions of the law, and should be for the sole
purpose of carrying the law’s general provisions into effect. The law itself cannot be expanded by
such IRRs, because an administrative agency cannot amend an act of Congress.42
The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to Section 8 of
R.A. No. 7941,43 because it has merely reworded and rephrased the statutory provision’s
phraseology.
The explanation does not persuade.
To reword means to alter the wording of or to restate in other words; to rephrase is to phrase
anew or in a new form.44 Both terms signify that the meaning of the original word or phrase is not
altered.
However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A. No. 7941,
because it established an entirely new ground not found in the text of the provision. The new
ground granted to the party-list organization the unilateral right to withdraw its nomination
already submitted to the COMELEC, which Section 8 of R.A. No. 7941 did not allow to be done.
Neither was the grant of the unilateral right contemplated by the drafters of the law, who
precisely denied the right to withdraw the nomination (as the quoted record of the deliberations
of the House of Representatives has indicated). The grant thus conflicted with the statutory
intent to save the nominee from falling under the whim of the party-list organization once his
name has been submitted to the COMELEC, and to spare the electorate from the capriciousness of
the party-list organizations.
We further note that the new ground would not secure the object of R.A. No. 7941 of developing
and guaranteeing a full, free and open party-list electoral system. The success of the system
could only be ensured by avoiding any arbitrariness on the part of the party-list organizations, by
seeing to the transparency of the system, and by guaranteeing that the electorate would be
afforded the chance of making intelligent and informed choices of their party-list
representatives.
The insertion of the new ground was invalid. An axiom in administrative law postulates that
administrative authorities should not act arbitrarily and capriciously in the issuance of their IRRs,
but must ensure that their IRRs are reasonable and fairly adapted to secure the end in view. If the
IRRs are shown to bear no reasonable relation to the purposes for which they were authorized to
be issued, they must be held to be invalid and should be struck down.45
Effect of partial nullity of Section 13 of Resolution No. 7804

An IRR adopted pursuant to the law is itself law.46 In case of conflict between the law and the IRR,
the law prevails. There can be no question that an IRR or any of its parts not adopted pursuant to
the law is no law at all and has neither the force nor the effect of law.47 The invalid rule,
regulation, or part thereof cannot be a valid source of any right, obligation, or power.
Considering that Section 13 of Resolution No. 7804 – to the extent that it allows the party-list
organization to withdraw its nomination already submitted to the COMELEC – was invalid, CIBAC’s
withdrawal of its nomination of Lokin and the others and its substitution of them with new
nominees were also invalid and ineffectual. It is clear enough that any substitution of Lokin and
the others could only be for any of the grounds expressly stated in Section 8 of R.A. No. 7941.
Resultantly, the COMELEC’s approval of CIBAC’s petition of withdrawal of the nominations and its
recognition of CIBAC’s substitution, both through its assailed September 14, 2007 resolution,
should be struck down for lack of legal basis. Thereby, the COMELEC acted without jurisdiction,
having relied on the invalidly issued Section 13 of Resolution No. 7804 to support its action.
WHEREFORE, we grant the petitions for certiorari and mandamus.
We declare Section 13 of Resolution No. 7804 invalid and of no effect to the extent that it
authorizes a party-list organization to withdraw its nomination of a nominee once it has
submitted the nomination to the Commission on Elections.
Accordingly, we annul and set aside:
(a) The resolution dated September 14, 2007 issued in E. M. No. 07-054 approving Citizens’ Battle
Against Corruption’s withdrawal of the nominations of Luis K. Lokin, Jr., Sherwin N. Tugna, and
Emil Galang as its second, third, and fourth nominees, respectively, and ordering their
substitution by Cinchona C. Cruz-Gonzales as second nominee and Armi Jane R. Borje as third
nominee; and
(b) The proclamation by the Commission on Elections of Cinchona C. Cruz-Gonzales as a Party-List

Representative representing Citizens’ Battle Against Corruption in the House of Representatives.
We order the Commission on Elections to forthwith proclaim petitioner Luis K. Lokin, Jr. as a
Party-List Representative representing Citizens’ Battle Against Corruption in the House of
Representatives.
We make no pronouncements on costs of suit.
SO ORDERED.
G.R. No. 193978 February 28, 2012
JELBERT B. GALICTO, Petitioner,
vs.
H. E. PRESIDENT BENIGNO SIMEON C. AQUINO III, in his capacity as President of the Republic of
the Philippines; ATTY. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary; and
FLORENCIO B. ABAD, in his capacity as Secretary of the Department of Budget and
Management, Respondents.
I. Case Nature : SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and
Prohibition.
J. Syllabi Class : Constitutional Law|Public Officers|Executive
Department|Government-Owned or Controlled Corporations
(GOCCs)|Government Financial Institutions (GFIs)
K. Syllabi:
L. 1. Remedial Law; Special Civil
Actions; Certiorari; Prohibition; Executive Orders; Since the issuance of
an Executive Order (EO) is not judicial, quasi-judicial or a mandatory
act, a petition for certiorari and prohibition is an incorrect
remedy; instead a petition for declaratory relief under Rule 63 of the Rules of
Court, filed with the Regional Trial Court (RTC), is the proper recourse.-
M. —Under the Rules of Court, petitions for Certiorari and Prohibition are
availed of to question judicial, quasi-judicial and mandatory acts. Since the
issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for
certiorari and prohibition is an incorrect remedy; instead a petition for
declaratory relief under Rule 63 of the Rules of Court, filed with the Regional Trial
Court (RTC), is the proper recourse to assail the validity of EO 7: Section 1. Who
may file petition. Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may, before breach
or violation thereof, bring an action in the appropriate Regional Trial Court to
determine any question of construction or validity arising, and for a declaration
of his rights or duties, thereunder.
N. 2. Constitutional Law; Public Officers; Executive
Department; Government-Owned and Controlled Corporations
(GOCCs); Government Financial Institutions (GFIs); View that absent any
showing of grave abuse of discretion on his part, the Court should recognize in
the President as Chief Executive the power and duty to protect and promote
public interest thru the rationalization of the compensation and position
classification system in executive departments, bureaus, offices and agencies,
including Government-Owned and Controlled Corporations (GOCCs) and
Government Financial Institutions (GFIs).-
O. —Accountability of public office is a safeguard of representative democracy.
All who serve in government must always be aware that they are exercising a
public trust. They must bear in mind that public funds are scarce resources and
should therefore be used prudently and judiciously. Hence, where there are
findings that government funds are being wasted due to operational inefficiency
and lack of fiscal responsibility in the executive departments, bureaus, offices or
agencies, the President as Chief Executive should not be deprived of the
authority to control, stop, check or at least manage the situation. Absent any
showing of grave abuse of discretion on his part, the Court should recognize in
the President as Chief Executive the power and duty to protect and promote
public interest thru the rationalization of the compensation and position
classification system in executive departments, bureaus, offices and agencies,
including GOCCs and GFIs.
P. 3. Same; Same; Bonus; View that a bonus is not a demandable and
enforceable obligation.-
Q. —There could have been no violation of substantive due process as

petitioner, or anybody for that matter, cannot properly claim a right to receive
bonuses. A bonus is not a demandable and enforceable obligation. By definition,
a “bonus” is a gratuity or act of liberality of the giver which cannot be demanded
as a matter of right by the recipient. It is something given in addition to what is
ordinarily received by or strictly due to the recipient. The grant thereof is
basically a management prerogative which cannot be forced upon the employer
who may not be obliged to assume the onerous burden of granting bonuses or
other benefits aside from the employee‟s basic salaries or wages, especially so if
it is incapable of doing so. Thus, there can be no oppression to speak of even if
these privileges (bonuses, allowances and incentives) cease to be given. All the
more reason should the President‟s judgment as Chief Executive be accorded
respect if he directs the temporary stoppage of the grant of bonuses when he
deems it to be prejudicial to public interest or too onerous because of the
government‟s fiscal condition. It is therefore clear that the suspension of the
grant of bonuses and the imposition of a moratorium on salary increases under
EO 7 do not deprive petitioner of any property right. As such, any declaration that
such suspension or moratorium violates substantive due process cannot be
justified.
R. 4. Same; Public Officers; Wages; View that a public officer does not have
a vested right to salary and his compensation may be altered, decreased or
discontinued, in the absence of a constitutional prohibition.-
S. —The right of a public officer to receive compensation can only arise out of
the rendition of the public services related to his or her office. The right to
compensation arises out of the performance by the public officer of his duties.
Thus, a public officer‟s right to salary is limited only to salaries which he has
already earned or accrued for services rendered. Other than that, a public officer
does not have a vested right to salary and his compensation may be altered,
decreased or discontinued, in the absence of a constitutional prohibition. If no
vested right to salary generally pertains to a public officer, there is no cogent
reason to support the claim to a right to future salary increase. The grant of any
salary increase in the future is something that is merely anticipatory of a
prospective benefit, something that is contingent on various factors. That is why
it is a mere expectancy, which does not give rise to a vested right.
T. 5. Constitutional Law; Congress; Bills; Joint Resolutions; View that
under the Rules of both the Senate and the House of Representatives, a joint
resolution, like a bill, is required to be enrolled, examined, undergo three
readings and signed by the presiding officer of each House and then presented to
the President for approval.-
U. —Under the Rules of both the Senate and the House of Representatives, a
joint resolution, like a bill, is required to be enrolled, examined, undergo three
readings and signed by the presiding officer of each House. A joint resolution, like
a bill, is also presented to the President for approval. There is no real difference
between a bill and a joint resolution. A joint resolution also satisfies the two
requisites before a bill becomes law—approval by both Houses of Congress after
three readings and approval by the President. Thus, a joint resolution, upon
approval by the President, is law. Even the Rules of the House of Representatives
acknowledge this: SEC 58. Third Reading. x x x No bill or joint resolution shall
become law unless it passes three (3) readings on separate days and printed
copies thereof in its final form are distributed to the Members three (3) days
before its passage except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency.
V. 6. Statutory Construction; View that provisions of law should be read and
understood in their entirety and all parts thereof should be seen as constituting a
coherent whole.-
W. —Provisions of law should be read and understood in their entirety and all
parts thereof should be seen as constituting a coherent whole. In this context,
the recognition under Section 9 of Joint Resolution No. 4 of the authority granted
to exempt entities like Philhealth to determine their own compensation and
position classification system seeks to exclude them from the salary adjustments
provided in Joint Resolution No. 4.
X. 7. Remedial Law; Civil Procedure; Locus Standi; View that mere
interest as a member of the Bar and an empty invocation of a duty in “making
sure that laws and orders by officials of the Philippine government are legally
issued and implemented” does not suffice to clothe one with standing.-
Y. —Neither can petitioner rely on his membership in the Philippine Bar to
support his legal standing. Mere interest as a member of the Bar and an empty
invocation of a duty in “making sure that laws and orders by officials of the
Philippine government are legally issued and implemented” does not suffice to
clothe one with standing. It is clear from the foregoing that petitioner failed to
satisfy the irreducible minimum condition that will trigger the exercise of judicial
power. Lacking a leg on which he may base his personality to bring this action,
petitioner‟s claim of sufficient standing should fail.
Z. 8. Administrative Law; Public Officers; View that a public officer has a
vested right only to salaries already earned or accrued, he does not have a
“right” to an increase in salary.-
AA. —A public officer has a vested right only to salaries already earned or
accrued. Salary increases are a mere expectancy. They are by nature volatile and
dependent on numerous variables, including the company‟s fiscal situation, the
employee‟s future performance on the job, or the employee‟s continued stay in a
position. Thus, petitioner does not have a “right” to an increase in salary. There
is no vested right to salary increases. There must be a lawful decree or order
supporting an employee‟s claim. In this case, petitioner failed to point to any
lawful decree or order supporting his entitlement to future increases in salary, as
no such decree or order yet exists.
BB. 9. “Moratorium,” Defined; Words and Phrases; View that a
moratorium is an authorized postponement in the performance of an obligation
or a suspension of a specific activity.-
CC. —EO 7 simply imposes a moratorium on increases in salaries, allowances
and other benefits of officials and employees of GOCCs and GFIs and directs the
suspension of all allowances bonuses and incentives of GOCC and GFI officials.
Moratorium is defined as an authorized postponement in the performance of an
obligation or a suspension of a specific activity. Section 9 of EO 7 is not a
permanent prohibition on petitioner‟s perceived right to receive future increases.
Nor is it an absolute ban on salary increases as it ensures that, like all other
officials and employees of the government, officials and employees of GOCCs
and GFIs will continue to enjoy the salary increases mandated under EO 8011
dated June 17, 2009 and EO 900 dated June 23, 2010.
DD. 10. Remedial Law; Civil Procedure; Parties; View that a party who
assails the constitutionality of a statute or an official act must have a direct and
personal interest. He must show not only that the law or any governmental act is
invalid, but also that he sustained or is in immediate danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers
thereby in some indefinite way.-
EE. —The irreducible minimum condition for the exercise of judicial power is a
requirement that a party “show he personally has suffered some actual or
threatened injury” to his rights. A party who assails the constitutionality of a
statute or an official act must have a direct and personal interest. He must show
not only that the law or any governmental act is invalid, but also that he
sustained or is in immediate danger of sustaining some direct injury as a result of
its enforcement, and not merely that he suffers thereby in some indefinite way.
He must show that he has been or is about to be denied some right or privilege
to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of. For this
reason, petitioner‟s reliance on his status as PhilHealth employee, without more,
is a frail thread that fails to sustain the burden of locus standi required of anyone
who may properly invoke the Court‟s power of judicial review.
FF. 11. Same; Same; Courts; View that courts do not decide all kinds of cases
dumped on their laps and do not open their doors to all parties or entities
claiming a grievance.-
GG. —Courts do not decide all kinds of cases dumped on their laps and do not
open their doors to all parties or entities claiming a grievance. Locus standi is
intended to assure a vigorous adversary presentation of the case. More
importantly, it warrants the judiciary‟s overruling the determination of a
coordinate, democratically elected organ of government. It thus goes to the very
essence of representative democracies.
HH. 12. Constitutional Law; Judicial Review; View that the power of judicial
review is a sword that must be unsheathed with restraint.-
II. —The power of judicial review is a sword that must be unsheathed with
restraint. To ensure this, certain justiciability doctrines must be complied with as
a prerequisite for the Court‟s exercise of its awesome power to declare the act of
a co-equal branch invalid for being unconstitutional. These doctrines are
important as they are intertwined with the principle of separation of powers.
They help define the judicial role; they determine when it is appropriate for
courts to review (a legal issue) and when it is necessary to defer to the other
branches of government.
JJ. 13. Administrative Law; Public Officers; Government-Owned and
Controlled Corporations (GOCC);View that accountability in public office
requires rationality and efficiency in both administrative and financial operations
of all government offices, government-owned and controlled corporations
(GOCCs) included.-
KK. —Accountability in public office requires rationality and efficiency in both
administrative and financial operations of all government offices,
government-owned and controlled corporations (GOCCs) included. As a
corollary, public funds must be utilized in a way that will promote transparency,
accountability and prudence. The nation was recently informed that GOCCs,
most of which enjoyed privileges not afforded to other offices and agencies of the
National Government, suffer from serious fiscal deficit. Yet, officers and
employees of these GOCCs continue to receive hefty perks and excessive
allowances presenting a stark disconnect and causing the further depletion of
limited resources. In the face of such situation, where the President as Chief
Executive makes a decisive move to stave off the financial hemorrhage and
administrative inefficiency of government corporations, the Court should not
invalidate the Chief Executive‟s action without a clear showing of grave abuse of
discretion on his part.
LL. 14. Remedial Law; Civil Procedure; Moot and Academic; A moot case
is “one that ceases to present a justiciable controversy by virtue of supervening
events, so that a declaration thereon would be of no practical use or value.-
MM. —A moot case is “one that ceases to present a justiciable controversy by
virtue of supervening events, so that a declaration thereon would be of no
practical use or value.” “[A]n action is considered „moot‟ when it no longer
presents a justiciable controversy because the issues involved have become
academic or dead[,] or when the matter in dispute has already been resolved and
hence, one is not entitled to judicial intervention unless the issue is likely to be
raised again between the parties x x x. Simply stated, there is nothing for the x
x x court to resolve as [its] determination x x x has been overtaken by
subsequent events.”
NN. 15. Constitutional Law; Executive Department; Government-Owned
and Controlled Corporations;Government-Owned and Controlled
Corporations (GOCC) Governance Act of 2011 (R.A. No. 10149);With the
enactment of the GOCC Governance Act of 2011, the President is now authorized
to fix the compensation framework of Government-Owned and Controlled
Corporations (GOCCs) and Government Financial Institutions (GFIs).-
OO. —With the enactment of the GOCC Governance Act of 2011, the President is
now authorized to fix the compensation framework of GOCCs and GFIs. The
pertinent provisions read: Section 5. Creation of the Governance Commission for
Government-Owned or Controlled Corporations.—There is hereby created an
advisory, monitoring, and oversight body with authority to formulate, implement
and coordinate policies to be known as the Governance Commission for
Government-Owned or-Controlled Corporations, hereinafter referred to as the
GCG, which shall be attached to the Office of the President. The GCG shall have
the following powers and functions: x x x x h) Conduct compensation studies,
develop and recommend to the President a competitive compensation and
remuneration system which shall attract and retain talent, at the same time
allowing the GOCC to be financially sound and sustainable; x x x x Section 8.
Coverage of the Compensation and Position Classification System.—The GCG,
after conducting a compensation study, shall develop a Compensation and
Position Classification System which shall apply to all officers and employees of
the GOCCs whether under the Salary Standardization Law or exempt therefrom
and shall consist of classes of positions grouped into such categories as the GCG
may determine, subject to approval of the President. Section 9. Position Titles
and Salary Grades.—All positions in the Positions Classification System, as
determined by the GCG and as approved by the President, shall be allocated to
their proper position titles and salary grades in accordance with an Index of
Occupational Services, Position Titles and Salary Grades of the Compensation
and Position Classification System, which shall be prepared by the GCG and
approved by the President. x x x x [N]o GOCC shall be exempt from the coverage
of the Compensation and Position Classification System developed by the GCG
under this Act. As may be gleaned from these provisions, the new law amended
R.A. No. 7875 and other laws that enabled certain GOCCs and GFIs to fix their
own compensation frameworks; the law now authorizes the President to fix the
compensation and position classification system for all GOCCs and GFIs, as well
as other entities covered by the law. This means that, the President can now
reissue an EO containing these same provisions without any legal constraints.
PP. 16. Same; Same; Pleadings and Practice; The defective jurat in the
Verification/Certification of Non-Forum Shopping is not a fatal
defect; the verification is only a formal, not a jurisdictional, requirement that
the Court may waive.-
QQ. —Te point raised by the respondents regarding the petitioner‟s defective
jurat is correct. Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for
a current identification document issued by an official agency bearing the
photograph and signature of the individual as competent evidence of identity.
Nevertheless, we hasten to clarify that the defective jurat in the
Verification/Certification of Non-Forum Shopping is not a fatal defect, as we held
in In-N-Out Burger, Inc. v. Sehwani, Incorporated, 575 SCRA 535 (2008). The
verification is only a formal, not a jurisdictional, requirement that the Court may
waive.
RR. 17. Same; Same; Same; A party is allowed to raise a constitutional
question when (1) he can show that he will personally suffer some
actual or threatened injury because of the allegedly illegal conduct of
the government; (2) the injury is fairly traceable to the challenged
action; and (3) the injury is likely to be redressed by a favorable action.-
SS. —As a general rule, a party is allowed to “raise a constitutional question”
when (1) he can show that he will personally suffer some actual or threatened
injury because of the allegedly illegal conduct of the government; (2) the injury
is fairly traceable to the challenged action; and (3) the injury is likely to be
redressed by a favorable action. Jurisprudence defines interest as “material
interest, an interest in issue and to be affected by the decree, as distinguished
from mere interest in the question involved, or a mere incidental interest. By real
interest is meant a present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate, or consequential interest.”
TT. 18. Same; Civil Procedure; Parties; “Locus Standi,” Defined; Words
and Phrases; Locus standi or legal standing has been defined as a personal and
substantial interest in a case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged.-
UU. —“Locus standi or legal standing has been defined as a personal and
substantial interest in a case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged. The gist
of the question on standing is whether a party alleges such personal stake in the
outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions.” This requirement of standing
relates to the constitutional mandate that this Court settle only actual cases or
controversies.
VV.
WW. Division: EN BANC

XX.
YY. Docket Number: G.R. No. 193978
ZZ.
AAA. Counsel: The Solicitor General
BBB.
CCC. PonenteJ : BRION,
RESOLUTION
BRION, J.:
Before us is a Petition for Certiorari and Prohibition with Application for Writ of Preliminary
Injunction and/or Temporary Restraining Order,1 seeking to nullify and enjoin the
implementation of Executive Order No. (EO) 7 issued by the Office of the President on September
8, 2010. Petitioner Jelbert B. Galicto asserts that EO 7 is unconstitutional for having been issued
beyond the powers of the President and for being in breach of existing laws.
The petitioner is a Filipino citizen and an employee of the Philippine Health Insurance
Corporation (PhilHealth).2 He is currently holding the position of Court Attorney IV and is assigned
at the PhilHealth Regional Office CARAGA.3
Respondent Benigno Simeon C. Aquino III is the President of the Republic of the Philippines (Pres.
Aquino); he issued EO 7 and has the duty of implementing it. Respondent Paquito N. Ochoa, Jr. is
the incumbent Executive Secretary and, as the alter ego of Pres. Aquino, is tasked with the
implementation of EO 7. Respondent Florencio B. Abad is the incumbent Secretary of the
Department of Budget and Management (DBM) charged with the implementation of EO 7.4
The Antecedent Facts
On July 26, 2010, Pres. Aquino made public in his first State of the Nation Address the alleged
excessive allowances, bonuses and other benefits of Officers and Members of the Board of
Directors of the Manila Waterworks and Sewerage System – a government owned and controlled
corporation (GOCC) which has been unable to meet its standing obligations.5 Subsequently, the
Senate of the Philippines (Senate), through the Senate Committee on Government Corporations
and Public Enterprises, conducted an inquiry in aid of legislation on the reported excessive
salaries, allowances, and other benefits of GOCCs and government financial institutions (GFIs).6
Based on its findings that "officials and governing boards of various [GOCCs] and [GFIs] x x x have
been granting themselves unwarranted allowances, bonuses, incentives, stock options, and other
benefits [as well as other] irregular and abusive practices,"7 the Senate issued Senate Resolution
No. 17 "urging the President to order the immediate suspension of the unusually large and
apparently excessive allowances, bonuses, incentives and other perks of members of the
governing boards of [GOCCs] and [GFIs]."8
Heeding the call of Congress, Pres. Aquino, on September 8, 2010, issued EO 7, entitled "Directing
the Rationalization of the Compensation and Position Classification System in the [GOCCs] and
[GFIs], and for Other Purposes." EO 7 provided for the guiding principles and framework to
establish a fixed compensation and position classification system for GOCCs and GFIs. A Task
Force was also created to review all remunerations of GOCC and GFI employees and officers,
while GOCCs and GFIs were ordered to submit to the Task Force information regarding their
compensation. Finally, EO 7 ordered (1) a moratorium on the increases in the salaries and other
forms of compensation, except salary adjustments under EO 8011 and EO 900, of all GOCC and GFI
employees for an indefinite period to be set by the President,9 and (2) a suspension of all
allowances, bonuses and incentives of members of the Board of Directors/Trustees until
December 31, 2010.10
EO 7 was published on September 10, 2010.11 It took effect on September 25, 2010 and precluded
the Board of Directors, Trustees and/or Officers of GOCCs from granting and releasing bonuses
and allowances to members of the board of directors, and from increasing salary rates of and
granting new or additional benefits and allowances to their employees.
The Petition
The petitioner claims that as a PhilHealth employee, he is affected by the implementation of EO 7,

which was issued with grave abuse of discretion amounting to lack or excess of jurisdiction, based
on the following arguments:
I.
EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF LEGAL BASIS DUE TO THE FOLLOWING
GROUNDS:
A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR EXECUTIVE ORDER NO. 7 BECAUSE THE
GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS WERE SUBSEQUENTLY GRANTED THE
POWER TO FIX COMPENSATION LONG AFTER SUCH POWER HAS BEEN REVOKED BY P.D. 1597 AND
R.A. 6758.
B. THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS DO NOT NEED TO HAVE ITS

COMPENSATION PLANS, RATES AND POLICIES REVIEWED BY THE DBM AND APPROVED BY THE
PRESIDENT BECAUSE P.D. 1597 REQUIRES ONLY THE GOCCs TO REPORT TO THE OFFICE TO THE
PRESIDENT THEIR COMPENSATION PLANS AND RATES BUT THE SAME DOES NOT GIVE THE
PRESIDENT THE POWER OF CONTROL OVER THE FISCAL POWER OF THE GOCCs.
C. J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE AS LEGAL BASIS BECAUSE IT HAD NOT RIPENED
INTO X X X LAW, THE SAME NOT HAVING BEEN PUBLISHED.
D. ASSUMING ARGUENDO THAT J.R. NO. 1, S. 2004 (sic) AND J.R. 4, S. 2009 ARE VALID, STILL THEY
ARE NOT APPLICABLE AS LEGAL BASIS BECAUSE THEY ARE NOT LAWS WHICH MAY VALIDLY
DELEGATE POWER TO THE PRESIDENT TO SUSPEND THE POWER OF THE BOARD TO FIX
COMPENSATION.
II.
EXECUTIVE ORDER NO. 7 IS INVALID FOR DIVESTING THE BOARD OF DIRECTORS OF [THE] GOCCS OF
THEIR POWER TO FIX THE COMPENSATION, A POWER WHICH IS A LEGISLATIVE GRANT AND WHICH
COULD NOT BE REVOKED OR MODIFIED BY AN EXECUTIVE FIAT.
III.
EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH IS A DEROGATION OF CONGRESSIONAL

PREROGATIVE AND IS THEREFORE UNCONSTITUTIONAL.
IV.
THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM ARE ULTRA VIRES ACTS BECAUSE J.R. NO.
4 DOES NOT EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH POWERS.
V.
EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE BECAUSE IT HAS NO SUFFICIENT STANDARDS AND
IS THEREFORE ARBITRARY, UNREASONABLE AND A VIOLATION OF SUBSTANTIVE DUE PROCESS.
VI.
EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION AND DISCRETION AS TO WHAT THE LAW
SHALL BE AND IS THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE POWER.
VII.
CONSISTENT WITH THE DECISION OF THE SUPREME COURT IN PIMENTEL V. AGUIRRE CASE,
EXECUTIVE ORDER NO. 7 IS ONLY DIRECTORY AND NOT MANDATORY.12
The Case for the Respondents
On December 13, 2010, the respondents filed their Comment. They pointed out the following
procedural defects as grounds for the petition’s dismissal: (1) the petitioner lacks locus standi; (2)
the petitioner failed to attach a board resolution or secretary’s certificate authorizing him to
question EO 7 in behalf of PhilHealth; (3) the petitioner’s signature does not indicate his PTR
Number, Mandatory Continuing Legal Education (MCLE) Compliance Number and Integrated Bar of
the Philippines (IBP) Number; (4) the jurat of the Verification and Certification of Non-Forum
Shopping failed to indicate a valid identification card as provided under A.M. No. 02-8-13-SC; (5)
the President should be dropped as a party respondent as he is immune from suit; and (6)
certiorari is not applicable to this case.13
The respondents also raised substantive defenses to support the validity of EO 7. They claim that
the President exercises control over the governing boards of the GOCCs and GFIs; thus, he can fix
their compensation packages. In addition, EO 7 was issued in accordance with law for the purpose
of controlling the grant of excessive salaries, allowances, incentives and other benefits to GOCC
and GFI employees. They also advocate the validity of Joint Resolution (J.R.) No. 4, which they
point to as the authority for issuing EO 7.14
Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) No. 10149,15 otherwise known
as the "GOCC Governance Act of 2011." Section 11 of RA 10149 expressly authorizes the President
to fix the compensation framework of GOCCs and GFIs.
The Court’s Ruling
We resolve to DISMISS the petition for its patent formal and procedural infirmities, and for having
been mooted by subsequent events.
A. Certiorari is not the proper remedy.
Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question
judicial, quasi-judicial and mandatory acts. Since the issuance of an EO is not judicial,
quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an incorrect remedy;
instead a petition for declaratory relief under Rule 63 of the Rules of Court, filed with the
Regional Trial Court (RTC), is the proper recourse to assail the validity of EO 7:
Section 1. Who may file petition. Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before breach or violation thereof, bring
an action in the appropriate Regional Trial Court to determine any question of construction or
validity arising, and for a declaration of his rights or duties, thereunder. (Emphases ours.)
Liga ng mga Barangay National v. City Mayor of Manila16 is a case in point.17 In Liga, we dismissed
the petition for certiorari to set aside an EO issued by a City Mayor and insisted that a petition for
declaratory relief should have been filed with the RTC. We painstakingly ruled:
After due deliberation on the pleadings filed, we resolve to dismiss this petition for certiorari.
First, the respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto
themselves any judicial or quasi-judicial prerogatives. A petition for certiorari under Rule 65 of
the 1997 Rules of Civil Procedure is a special civil action that may be invoked only against a
tribunal, board, or officer exercising judicial or quasi-judicial functions.
Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:
SECTION 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
Elsewise stated, for a writ of certiorari to issue, the following requisites must concur: (1) it must
be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2)
the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave
abuse of discretion amounting [to] lack or excess of jurisdiction; and (3) there is no appeal or any
plain, speedy, and adequate remedy in the ordinary course of law.
A respondent is said to be exercising judicial function where he has the power to determine what
the law is and what the legal rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties.
Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc.,
of public administrative officers or bodies … required to investigate facts or ascertain the
existence of facts, hold hearings, and draw conclusions from them as a basis for their official
action and to exercise discretion of a judicial nature."
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary
that there be a law that gives rise to some specific rights of persons or property under which
adverse claims to such rights are made, and the controversy ensuing therefrom is brought before
a tribunal, board, or officer clothed with power and authority to determine the law and
adjudicate the respective rights of the contending parties.
The respondents do not fall within the ambit of tribunal, board, or officer exercising judicial or
quasi-judicial functions. As correctly pointed out by the respondents, the enactment by the City
Council of Manila of the assailed ordinance and the issuance by respondent Mayor of the
questioned executive order were done in the exercise of legislative and executive functions,
respectively, and not of judicial or quasi-judicial functions. On this score alone, certiorari will not
lie.
Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and
executive order. It, thus, partakes of the nature of a petition for declaratory relief over which
this Court has only appellate, not original, jurisdiction. Section 5, Article VIII of the Constitution
provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of
Court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation
is in question. (Italics supplied).
As such, this petition must necessar[ily] fail, as this Court does not have original jurisdiction over
a petition for declaratory relief even if only questions of law are involved.18
Likewise, in Southern Hemisphere Engagement Network, Inc. v. Anti Terrorism Council,19 we

similarly dismissed the petitions for certiorari and prohibition challenging the constitutionality of
R.A. No. 9372, otherwise known as the "Human Security Act of 2007," since the respondents
therein (members of the Anti-Terrorism Council) did not exercise judicial or quasi-judicial
functions.
While we have recognized in the past that we can exercise the discretion and rulemaking
authority we are granted under the Constitution,20 and set aside procedural considerations to
permit parties to bring a suit before us at the first instance through certiorari and/or
prohibition,21 this liberal policy remains to be an exception to the general rule, and thus, has its
limits. In Concepcion v. Commission on Elections (COMELEC),22 we emphasized the importance of

availing of the proper remedies and cautioned against the wrongful use of certiorari in order to
assail the quasi-legislative acts of the COMELEC, especially by the wrong party. In ruling that
liberality and the transcendental doctrine cannot trump blatant disregard of procedural rules,
and considering that the petitioner had other available remedies (such as a petition for
declaratory relief with the appropriate RTC under the terms of Rule 63 of the Rules of Court), as
in this case, we categorically ruled:
The petitioner’s unusual approaches and use of Rule 65 of the Rules of Court do not appear to us
to be the result of any error in reading Rule 65, given the way the petition was crafted. Rather, it
was a backdoor approach to achieve what the petitioner could not directly do in his individual
capacity under Rule 65. It was, at the very least, an attempted bypass of other available, albeit
lengthier, modes of review that the Rules of Court provide. While we stop short of concluding that
the petitioner’s approaches constitute an abuse of process through a manipulative reading and
application of the Rules of Court, we nevertheless resolve that the petition should be dismissed
for its blatant violation of the Rules. The transgressions alleged in a petition, however weighty
they may sound, cannot be justifications for blatantly disregarding the rules of procedure,
particularly when remedial measures were available under these same rules to achieve the
petitioner’s objectives. For our part, we cannot and should not – in the name of liberality and the
"transcendental importance" doctrine – entertain these types of petitions. As we held in the very
recent case of Lozano, et al. vs. Nograles, albeit from a different perspective, our liberal
approach has its limits and should not be abused.23 [emphasis supplied]
B. Petitioner lacks locus standi.
"Locus standi or legal standing has been defined as a personal and substantial interest in a case
such that the party has sustained or will sustain direct injury as a result of the governmental act
that is being challenged. The gist of the question on standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of difficult
constitutional questions."24 This requirement of standing relates to the constitutional mandate
that this Court settle only actual cases or controversies.25
Thus, as a general rule, a party is allowed to "raise a constitutional question" when (1) he can
show that he will personally suffer some actual or threatened injury because of the allegedly
illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and
(3) the injury is likely to be redressed by a favorable action.26
Jurisprudence defines interest as "material interest, an interest in issue and to be affected by the
decree, as distinguished from mere interest in the question involved, or a mere incidental
interest. By real interest is meant a present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate, or consequential interest."27
To support his claim that he has locus standi to file the present petition, the petitioner contends
that as an employee of PhilHealth, he "stands to be prejudiced by [EO] 7, which suspends or
imposes a moratorium on the grants of salary increases or new or increased benefits to officers
and employees of GOCC[s] and x x x curtail[s] the prerogative of those officers who are to fix and
determine his compensation."28 The petitioner also claims that he has standing as a member of
the bar in good standing who has an interest in ensuring that laws and orders of the Philippine
government are legally and validly issued and implemented.
The respondents meanwhile argue that the petitioner is not a real party-in-interest since future
increases in salaries and other benefits are merely contingent events or expectancies.29 The
petitioner, too, is not asserting a public right for which he is entitled to seek judicial protection.
Section 9 of EO 7 reads:
Section 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. –

Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of
allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order
No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby
imposed until specifically authorized by the President. [emphasis ours]
In the present case, we are not convinced that the petitioner has demonstrated that he has a
personal stake or material interest in the outcome of the case because his interest, if any, is
speculative and based on a mere expectancy. In this case, the curtailment of future increases in
his salaries and other benefits cannot but be characterized as contingent events or expectancies.
To be sure, he has no vested rights to salary increases and, therefore, the absence of such right
deprives the petitioner of legal standing to assail EO 7.
It has been held that as to the element of injury, such aspect is not something that just anybody
with some grievance or pain may assert. It has to be direct and substantial to make it worth the
court’s time, as well as the effort of inquiry into the constitutionality of the acts of another
department of government. If the asserted injury is more imagined than real, or is merely
superficial and insubstantial, then the courts may end up being importuned to decide a matter
that does not really justify such an excursion into constitutional adjudication.30 The rationale for
this constitutional requirement of locus standi is by no means trifle. Not only does it assure the
vigorous adversary presentation of the case; more importantly, it must suffice to warrant the
Judiciary’s overruling the determination of a coordinate, democratically elected organ of

government, such as the President, and the clear approval by Congress, in this case. Indeed, the
rationale goes to the very essence of representative democracies.31
Neither can the lack of locus standi be cured by the petitioner’s claim that he is instituting the
present petition as a member of the bar in good standing who has an interest in ensuring that laws
and orders of the Philippine government are legally and validly issued. This supposed interest has
been branded by the Court in Integrated Bar of the Phils. (IBP) v. Hon. Zamora,32 "as too general
an interest which is shared by other groups and [by] the whole citizenry."33 Thus, the Court ruled
in IBP that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more,
while undoubtedly true, is not sufficient to clothe it with standing in that case. The Court made a
similar ruling in Prof. David v. Pres. Macapagal-Arroyo34 and held that the petitioners therein,
who are national officers of the IBP, have no legal standing, having failed to allege any direct or
potential injury which the IBP, as an institution, or its members may suffer as a consequence of
the issuance of Presidential Proclamation No. 1017 and General Order No. 5.35
We note that while the petition raises vital constitutional and statutory questions concerning the
power of the President to fix the compensation packages of GOCCs and GFIs with possible
implications on their officials and employees, the same cannot "infuse" or give the petitioner
locus standi under the transcendental importance or paramount public interest doctrine. In
Velarde v. Social Justice Society,36 we held that even if the Court could have exempted the case
from the stringent locus standi requirement, such heroic effort would be futile because the
transcendental issue could not be resolved any way, due to procedural infirmities and
shortcomings, as in the present case.37 In other words, giving due course to the present petition
which is saddled with formal and procedural infirmities explained above in this Resolution, cannot
but be an exercise in futility that does not merit the Court’s liberality. As we emphasized in
Lozano v. Nograles,38 "while the Court has taken an increasingly liberal approach to the rule of
locus standi, evolving from the stringent requirements of ‘personal injury’ to the broader
‘transcendental importance’ doctrine, such liberality is not to be abused."39
Finally, since the petitioner has failed to demonstrate a material and personal interest in the
issue in dispute, he cannot also be considered to have filed the present case as a representative
of PhilHealth. In this regard, we cannot ignore or excuse the blatant failure of the petitioner to
provide a Board Resolution or a Secretary’s Certificate from PhilHealth to act as its
representative.
C. The petition has a defective jurat.

The respondents claim that the petition should be dismissed for failing to comply with Section 3,
Rule 7 of the Rules of Civil Procedure, which requires the party or the counsel representing him to
sign the pleading and indicate an address that should not be a post office box. The petition also
allegedly violated the Supreme Court En Banc Resolution dated November 12, 2001, requiring
counsels to indicate in their pleadings their Roll of Attorneys Number, their PTR Number and their
IBP Official Receipt or Lifetime Member Number; otherwise, the pleadings would be considered
unsigned and dismissible. Bar Matter No. 1922 likewise states that a counsel should note down his
MCLE Certificate of Compliance or Certificate of Exemption in the pleading, but the petitioner
had failed to do so.40
We do not see any violation of Section 3, Rule 7 of the Rules of Civil Procedure as the petition
bears the petitioner’s signature and office address. The present suit was brought before this
Court by the petitioner himself as a party litigant and not through counsel. Therefore, the
requirements under the Supreme Court En Banc Resolution dated November 12, 2001 and Bar
Matter No. 1922 do not apply. In Bar Matter No. 1132, April 1, 2003, we clarified that a party who
is not a lawyer is not precluded from signing his own pleadings as this is allowed by the Rules of
Court; the purpose of requiring a counsel to indicate his IBP Number and PTR Number is merely to
protect the public from bogus lawyers. A similar construction should be given to Bar Matter No.
1922, which requires lawyers to indicate their MCLE Certificate of Compliance or Certificate of
Exemption; otherwise, the provision that allows parties to sign their own pleadings will be
negated.
However, the point raised by the respondents regarding the petitioner’s defective jurat is correct.
Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for a current identification document
issued by an official agency bearing the photograph and signature of the individual as competent
evidence of identity. Nevertheless, we hasten to clarify that the defective jurat in the
Verification/Certification of Non-Forum Shopping is not a fatal defect, as we held in In-N-Out
Burger, Inc. v. Sehwani, Incorporated.41 The verification is only a formal, not a jurisdictional,
requirement that the Court may waive.
D. The petition has been mooted by supervening events.
Because of the transitory nature of EO 7, it has been pointed out that the present case has
already been rendered moot by these supervening events: (1) the lapse on December 31, 2010 of
Section 10 of EO 7 that suspended the allowances and bonuses of the directors and trustees of
GOCCs and GFIs; and (2) the enactment of R.A. No. 10149 amending the provisions in the charters
of GOCCs and GFIs empowering their board of directors/trustees to determine their own
compensation system, in favor of the grant of authority to the President to perform this act.
With the enactment of the GOCC Governance Act of 2011, the President is now authorized to fix
the compensation framework of GOCCs and GFIs. The pertinent provisions read:
Section 5. Creation of the Governance Commission for Government-Owned or -Controlled

Corporations. — There is hereby created an advisory, monitoring, and oversight body with
authority to formulate, implement and coordinate policies to be known as the Governance
Commission for Government-Owned or-Controlled Corporations, hereinafter referred to as the
GCG, which shall be attached to the Office of the President. The GCG shall have the following
powers and functions:
xxxx
h) Conduct compensation studies, develop and recommend to the President a competitive

compensation and remuneration system which shall attract and retain talent, at the same time
allowing the GOCC to be financially sound and sustainable;
xxxx
Section 8. Coverage of the Compensation and Position Classification System. — The GCG, after
conducting a compensation study, shall develop a Compensation and Position Classification
System which shall apply to all officers and employees of the GOCCs whether under the Salary
Standardization Law or exempt therefrom and shall consist of classes of positions grouped into
such categories as the GCG may determine, subject to approval of the President.
Section 9. Position Titles and Salary Grades. — All positions in the Positions Classification System,
as determined by the GCG and as approved by the President, shall be allocated to their proper
position titles and salary grades in accordance with an Index of Occupational Services, Position
Titles and Salary Grades of the Compensation and Position Classification System, which shall be
prepared by the GCG and approved by the President.
xxxx
[N]o GOCC shall be exempt from the coverage of the Compensation and Position Classification
System developed by the GCG under this Act.
As may be gleaned from these provisions, the new law amended R.A. No. 7875 and other laws that
enabled certain GOCCs and GFIs to fix their own compensation frameworks; the law now
authorizes the President to fix the compensation and position classification system for all GOCCs
and GFIs, as well as other entities covered by the law. This means that, the President can now
reissue an EO containing these same provisions without any legal constraints.1âwphi1
A moot case is "one that ceases to present a justiciable controversy by virtue of supervening
events, so that a declaration thereon would be of no practical use or value."42 "[A]n action is
considered ‘moot’ when it no longer presents a justiciable controversy because the issues
involved have become academic or dead[,] or when the matter in dispute has already been
resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be
raised again between the parties x x x. Simply stated, there is nothing for the x x x court to
resolve as [its] determination x x x has been overtaken by subsequent events."43
This is the present situation here. Congress, thru R.A. No. 10149, has expressly empowered the
President to establish the compensation systems of GOCCs and GFIs. For the Court to still rule
upon the supposed unconstitutionality of EO 7 will merely be an academic exercise. Any further
discussion of the constitutionality of EO 7 serves no useful purpose since such issue is moot in its
face in light of the enactment of R.A. No. 10149. In the words of the eminent constitutional law
expert, Fr. Joaquin Bernas, S.J., "the Court normally [will not] entertain a petition touching on an
issue that has become moot because x x x there would [be] no longer x x x a ‘flesh and blood’ case
for the Court to resolve."44
All told, in view of the supervening events rendering the petition moot, as well as its patent
formal and procedural infirmities, we no longer see any reason for the Court to resolve the other
issues raised in the certiorari petition.
WHEREFORE, premises considered, the petition is DISMISSED. No costs.
SO ORDERED.
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 209287 July 1, 2014
MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M.

TAGUIWALO, PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON,
PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA
WOMEN'S PARTY REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAY AN MUNA PARTY-LIST
REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K.
DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO, CHAIRPERSON,
ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH ACT NOW,Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N.
OCHOA, JR., EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE
DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209135
AUGUSTO L. SY JUCO JR., Ph.D., Petitioner,

vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND
MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAP A CITY AS THE SENATE
PRESIDENT OF THE PHILIPPINES, Respondents.
x-----------------------x
G.R. No. 209136
MANUELITO R. LUNA, Petitioner,

vs.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL
CAPACITY AS ALTER EGO OF THE PRESIDENT, Respondents.
x-----------------------x
G.R. No. 209155
ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner,

vs.
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF
BUDGET AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209164
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M.

BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B.
ABAD, Respondents.
x-----------------------x
G.R. No. 209260
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,

vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM),Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN MABANTE AND REV. JOSE L.
GONZALEZ,Petitioners,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED
BY SENATE PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED
BY SPEAKER FELICIANO BELMONTE, JR.; THE EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR.; THE DEPARTMENT OF BUDGET AND MANAGEMENT,
REPRESENTED BY SECRETARY FLORENCIO ABAD; THE DEPARTMENT OF FINANCE,
REPRESENTED BY SECRETARY CESAR V. PURISIMA; AND THE BUREAU OF TREASURY,
REPRESENTED BY ROSALIA V. DE LEON, Respondents.
x-----------------------x
G.R. No. 209517
CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN CEMENT OF GOVERNMENT

EMPLOYEES (COURAGE), REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO DASMARINAS,
JR.; ROSALINDA NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE
CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY (CUENHA); MANUEL
BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES
ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT
CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS NATIONAL
PRESIDENT OF THE DEPARTMENT OF AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA);
ALBERT MAGALANG, FOR HIMSELF AND AS PRESIDENT OF THE ENVIRONMENT AND
MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND
AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG MMDA
(KKKMMDA),Petitioners,
vs.
BENIGNO SIMEON C. AQUINO Ill, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO
OCHOA, JR., EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD, SECRETARY OF THE
x-----------------------x
G.R. No. 209569
VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L.

JIMENEZ, Petitioner,
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE
Araullo vs. Aquino III 728 SCRA 1 , July 01, 2014

Case Title : VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L.
JIMENEZ, petitioner, vs. PAQUITO N. OCHOA, EXECUTIVE SECRETARY, and FLORENCIO B. ABAD,
SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, respondents.Case Nature :
SPECIAL CIVIL ACTIONS in the Supreme Court. Certiorari and Prohibition.
Syllabi Class : Constitutional Law|Operative Fact Doctrine
Syllabi:
1. Same; Operative Fact Doctrine; View that the general rule is that a declaration of
unconstitutionality of any act means that such act has no legal existence: It is null and void
ab initio; The existing exception is the doctrine of operative facts.-
—The general rule is that a declaration of unconstitutionality of any act means that such act has
no legal existence: It is null and void ab initio. The existing exception is the doctrine of operative
facts. The application of this doctrine should, however, be limited to situations where (a) there
is a showing of good faith in the acts involved or (b) where in equity we find that the difficulties
that will be borne by the public far outweigh rigid application to the effect of legal nullity of an
act. The doctrine saves only the effects of the unconstitutional act. It does not hint or even
determine whether there can be any liability arising from such acts. Whether the constitutional
violation is in good faith or in bad faith, or whether any administrative or criminal liability is
forthcoming, is the subject of other proceedings in other forums.
2. Constitutional Law; Judicial Power; Courts; The Constitution vests judicial power in the
Supreme Court (SC) and in such lower courts as may be established by law.-
—The Constitution vests judicial power in the Court and in such lower courts as may be
established by law. In creating a lower court, Congress concomitantly determines the jurisdiction
of that court, and that court, upon its creation, becomes by operation of the Constitution one of
the repositories of judicial power. However, only the Court is a constitutionally created court,
the rest being created by Congress in its exercise of the legislative power.
3. Same; Same; The Constitution states that judicial power includes the duty of the courts of
justice not only “to settle actual controversies involving rights which are legally demandable and
enforceable” but also “to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.”-
—The Constitution states that judicial power includes the duty of the courts of justice not only
“to settle actual controversies involving rights which are legally demandable and enforceable”
but also “to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.” It
has thereby expanded the concept of judicial power, which up to then was confined to its
traditional ambit of settling actual controversies involving rights that were legally demandable
and enforceable.
4. Remedial Law; Special Civil Actions; Certiorari; Prohibition; The present Rules of Court
uses two special civil actions for determining and correcting grave abuse of discretion amounting
to lack or excess of jurisdiction.-
—What are the remedies by which the grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government may be determined
under the Constitution? The present Rules of Court uses two special civil actions for determining
and correcting grave abuse of discretion amounting to lack or excess of jurisdiction. These are the
special civil actions for certiorari and prohibition, and both are governed by Rule 65. A similar
remedy of certiorari exists under Rule 64, but the remedy is expressly applicable only to the
judgments and final orders or resolutions of the Commission on Elections and the Commission on
Audit.
5. Same; Same; Same; Same; Certiorari is to be distinguished from prohibition by the fact that
it is a corrective remedy used for the re-examination of some action of an inferior tribunal, and
is directed to the cause or proceeding in the lower court and not to the court itself, while
prohibition is a preventative remedy issuing to restrain future action, and is directed to the court
itself.-
—Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is
to be distinguished from prohibition by the fact that it is a corrective remedy used for the
reexamination of some action of an inferior tribunal, and is directed to the cause or proceeding in
the lower court and not to the court itself, while prohibition is a preventative remedy issuing to
restrain future action, and is directed to the court itself.
6. Same; Same; Same; Same; Petitions for certiorari and prohibition are appropriate remedies
to raise constitutional issues and to review and/or prohibit or nullify the acts of legislative and
executive officials.-
—With respect to the Court, the remedies of certiorari and prohibition are necessarily broader in
scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of
jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial,
quasi-judicial or ministerial functions but also to set right, undo and restrain any act of grave
abuse of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of
the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial
functions. This application is expressly authorized by the text of the second paragraph of Section
1, supra. Thus, petitions for certiorari and prohibition are appropriate remedies to raise
constitutional issues and to review and/or prohibit or nullify the acts of legislative and executive
officials. Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act
of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or
instrumentality of the Government, the Court is not at all precluded from making the inquiry
provided the challenge was properly brought by interested or affected parties. The Court has
been thereby entrusted expressly or by necessary implication with both the duty and the
obligation of determining, in appropriate cases, the validity of any assailed legislative or
executive action. This entrustment is consistent with the republican system of checks and
balances.
DECISION
BERSAMIN, J.:
For resolution are the consolidated petitions assailing the constitutionality of the Disbursement
Acceleration Program(DAP), National Budget Circular (NBC) No. 541, and related issuances of the
Department of Budget and Management (DBM) implementing the DAP.
At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a provision of
the fundamental law that firmly ordains that "[n]o money shall be paid out of the Treasury except
in pursuance of an appropriation made by law." The tenor and context of the challenges posed by
the petitioners against the DAP indicate that the DAP contravened this provision by allowing the
Executive to allocate public money pooled from programmed and unprogrammed funds of its
various agencies in the guise of the President exercising his constitutional authority under Section
25(5) of the 1987 Constitution to transfer funds out of savings to augment the appropriations of
offices within the Executive Branch of the Government. But the challenges are further
complicated by the interjection of allegations of transfer of funds to agencies or offices outside of
the Executive.
Antecedents
What has precipitated the controversy?
On September 25, 2013, Sen. Jinggoy Ejercito Estrada delivered a privilege speech in the Senate of
the Philippines to reveal that some Senators, including himself, had been allotted an additional
₱50 Million each as "incentive" for voting in favor of the impeachment of Chief Justice Renato C.
Corona.
Responding to Sen. Estrada’s revelation, Secretary Florencio Abad of the DBM issued a public
statement entitled Abad: Releases to Senators Part of Spending Acceleration Program, 1 explaining
that the funds released to the Senators had been part of the DAP, a program designed by the DBM
to ramp up spending to accelerate economic expansion. He clarified that the funds had been
released to the Senators based on their letters of request for funding; and that it was not the first
time that releases from the DAP had been made because the DAP had already been instituted in
2011 to ramp up spending after sluggish disbursements had caused the growth of the gross
domestic product (GDP) to slow down. He explained that the funds under the DAP were usually
taken from (1) unreleased appropriations under Personnel Services; 2 (2) unprogrammed funds; (3)
carry-over appropriations unreleased from the previous year; and (4) budgets for slow-moving
items or projects that had been realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website3 that the DAP releases had been sourced from
savings generated by the Government, and from unprogrammed funds; and that the savings had
been derived from (1) the pooling of unreleased appropriations, like unreleased Personnel
Services4 appropriations that would lapse at the end of the year, unreleased appropriations of
slow-moving projects and discontinued projects per zero based budgeting findings; 5 and (2) the
withdrawal of unobligated allotments also for slow-moving programs and projects that had been
earlier released to the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of savings, 6 namely: (1) Section
25(5), Article VI of the 1987 Constitution, which granted to the President the authority to augment
an item for his office in the general appropriations law; (2) Section 49 (Authority to Use Savings for
Certain Purposes) and Section 38 (Suspension of Expenditure Appropriations), Chapter 5, Book VI

of Executive Order (EO) No. 292 (Administrative Code of 1987); and (3) the General Appropriations
Acts (GAAs) of 2011, 2012 and 2013, particularly their provisions on the (a) use of savings; (b)
meanings of savings and augmentation; and (c) priority in the use of savings.
As for the use of unprogrammed funds under the DAP, the DBM cited as legal bases the special
provisions on unprogrammed fund contained in the GAAs of 2011, 2012 and 2013.
The revelation of Sen. Estrada and the reactions of Sec. Abad and the DBM brought the DAP to the
consciousness of the Nation for the first time, and made this present controversy inevitable. That
the issues against the DAP came at a time when the Nation was still seething in anger over
Congressional pork barrel – "an appropriation of government spending meant for localized projects
and secured solely or primarily to bring money to a representative’s district" 7 – excited the Nation
as heatedly as the pork barrel controversy.
Nine petitions assailing the constitutionality of the DAP and the issuances relating to the DAP were
filed within days of each other, as follows: G.R. No. 209135 (Syjuco), on October 7, 2013; G.R. No.
209136 (Luna), on October 7, 2013; G.R. No. 209155 (Villegas), 8 on October 16, 2013; G.R. No.
209164 (PHILCONSA), on October 8, 2013; G.R. No. 209260 (IBP), on October 16, 2013; G.R. No.
209287 (Araullo), on October 17, 2013; G.R. No. 209442 (Belgica), on October 29, 2013; G.R. No.
209517 (COURAGE), on November6, 2013; and G.R. No. 209569 (VACC), on November 8, 2013.
In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s attention NBC No. 541
(Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as
of June 30, 2012), alleging that NBC No. 541, which was issued to implement the DAP, directed the
withdrawal of unobligated allotments as of June 30, 2012 of government agencies and offices with
low levels of obligations, both for continuing and current allotments.
In due time, the respondents filed their Consolidated Comment through the Office of the Solicitor
General (OSG).
The Court directed the holding of oral arguments on the significant issues raised and joined.
Issues
Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral
arguments were limited to the following, to wit:
Procedural Issue:
A. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the
constitutionality and validity of the Disbursement Acceleration Program (DAP), National Budget
Circular (NBC) No. 541, and all other executive issuances allegedly implementing the DAP.
Subsumed in this issue are whether there is a controversy ripe for judicial determination, and the
standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: "No
money shall be paid out of the Treasury except in pursuance of an appropriation made by law."
C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly implementing
the DAP violate Sec. 25(5), Art. VI of the 1987 Constitution insofar as:
(a)They treat the unreleased appropriations and unobligated allotments withdrawn

from government agencies as "savings" as the term is used in Sec. 25(5), in relation to
the provisions of the GAAs of 2011, 2012 and 2013;
(b)They authorize the disbursement of funds for projects or programs not provided in
the GAAs for the Executive Department; and
(c)They "augment" discretionary lump sum appropriations in the GAAs.
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of checks and
balances, and (3) the principle of public accountability enshrined in the 1987 Constitution
considering that it authorizes the release of funds upon the request of legislators.
E. Whether or not factual and legal justification exists to issue a temporary restraining order to
restrain the implementation of the DAP, NBC No. 541, and all other executive issuances allegedly
implementing the DAP.
In its Consolidated Comment, the OSG raised the matter of unprogrammed funds in order to
support its argument regarding the President’s power to spend. During the oral arguments, the
propriety of releasing unprogrammed funds to support projects under the DAP was considerably
discussed. The petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442 (Belgica) dwelled on
unprogrammed funds in their respective memoranda. Hence, an additional issue for the oral
arguments is stated as follows:
F. Whether or not the release of unprogrammed funds under the DAP was in accord with the GAAs.
During the oral arguments held on November 19, 2013, the Court directed Sec. Abad to submit a
list of savings brought under the DAP that had been sourced from (a) completed programs; (b)
discontinued or abandoned programs; (c) unpaid appropriations for compensation; (d) a certified
copy of the President’s directive dated June 27, 2012 referred to in NBC No. 541; and (e) all
circulars or orders issued in relation to the DAP.9
In compliance, the OSG submitted several documents, as follows:
(1) A certified copy of the Memorandum for the President dated June 25, 2012 (Omnibus
Authority to Consolidate Savings/Unutilized Balances and their Realignment); 10
(2) Circulars and orders, which the respondents identified as related to the DAP, namely:
a. NBC No. 528 dated January 3, 2011 (Guidelines on the Release of Funds for FY
2011);
b. NBC No. 535 dated December 29, 2011 (Guidelines on the Release of Funds for FY
2012);
c. NBC No. 541 dated July 18, 2012 (Adoption of Operational Efficiency Measure –
Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012);
d. NBC No. 545 dated January 2, 2013 (Guidelines on the Release of Funds for FY
2013);
e. DBM Circular Letter No. 2004-2 dated January 26, 2004 (Budgetary Treatment of
Commitments/Obligations of the National Government);
f. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013 (Revised Guidelines on
the Submission of Quarterly Accountability Reports on Appropriations, Allotments,
Obligations and Disbursements);
g. NBC No. 440 dated January 30, 1995 (Adoption of a Simplified Fund Release
System in the Government).
(3) A breakdown of the sources of savings, including savings from discontinued projects and
unpaid appropriations for compensation from 2011 to 2013
On January 28, 2014, the OSG, to comply with the Resolution issued on January 21, 2014 directing
the respondents to submit the documents not yet submitted in compliance with the directives of
the Court or its Members, submitted several evidence packets to aid the Court in understanding
the factual bases of the DAP, to wit:
(1) First Evidence Packet11 – containing seven memoranda issued by the DBM through Sec.
Abad, inclusive of annexes, listing in detail the 116 DAP identified projects approved and
duly signed by the President, as follows:
a. Memorandum for the President dated October 12, 2011 (FY 2011 Proposed
Disbursement Acceleration Program (Projects and Sources of Funds);
b. Memorandum for the President dated December 12, 2011 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and its Realignment);
c. Memorandum for the President dated June 25, 2012 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and their Realignment);
d. Memorandum for the President dated September 4, 2012 (Release of funds for
other priority projects and expenditures of the Government);
e. Memorandum for the President dated December 19, 2012 (Proposed Priority
Projects and Expenditures of the Government);
f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and their Realignment to Fund the
Quarterly Disbursement Acceleration Program); and
g. Memorandum for the President dated September 25, 2013 (Funding for the Task
Force Pablo Rehabilitation Plan).
(2) Second Evidence Packet12 – consisting of 15 applications of the DAP, with their
corresponding Special Allotment Release Orders (SAROs) and appropriation covers;
(3) Third Evidence Packet13 – containing a list and descriptions of 12 projects under the
DAP;
(4) Fourth Evidence Packet14 – identifying the DAP-related portions of the Annual Financial
Report (AFR) of the Commission on Audit for 2011 and 2012;
(5) Fifth Evidence Packet15 – containing a letter of Department of Transportation and

Communications(DOTC) Sec. Joseph Abaya addressed to Sec. Abad recommending the
withdrawal of funds from his agency, inclusive of annexes; and
(6) Sixth Evidence Packet16 – a print-out of the Solicitor General’s visual presentation for
the January 28, 2014 oral arguments.
On February 5, 2014,17 the OSG forwarded the Seventh Evidence Packet,18 which listed the sources
of funds brought under the DAP, the uses of such funds per project or activity pursuant to DAP, and
the legal bases thereof.
On February 14, 2014, the OSG submitted another set of documents in further compliance with the
Resolution dated January 28, 2014, viz:
(1) Certified copies of the certifications issued by the Bureau of Treasury to the effect that the
revenue collections exceeded the original revenue targets for the years 2011, 2012 and 2013,
including collections arising from sources not considered in the original revenue targets, which
certifications were required for the release of the unprogrammed funds as provided in Special
Provision No. 1 of Article XLV, Article XVI, and Article XLV of the 2011, 2012 and 2013 GAAs; and (2)
A report on releases of savings of the Executive Department for the use of the Constitutional
Commissions and other branches of the Government, as well as the fund releases to the Senate and
the Commission on Elections (COMELEC).
RULING
I.
Procedural Issue:
a) The petitions under Rule 65 are proper remedies
All the petitions are filed under Rule 65 of the Rules of Court, and include applications for the
issuance of writs of preliminary prohibitory injunction or temporary restraining orders. More
specifically, the nature of the petitions is individually set forth hereunder, to wit:
G.R. No. 209135 (Syjuco) Certiorari, Prohibition and Mandamus

G.R. No. 209136 (Luna) Certiorariand Prohibition
G.R. No. 209155 (Villegas) Certiorariand Prohibition
G.R. No. 209164 (PHILCONSA) Certiorariand Prohibition
G.R. No. 209260 (IBP) Prohibition
G.R. No. 209287 (Araullo) Certiorariand Prohibition
G.R. No. 209442 (Belgica) Certiorari

G.R. No. 209517 (COURAGE) Certiorari and Prohibition
G.R. No. 209569 (VACC) Certiorari and Prohibition
The respondents submit that there is no actual controversy that is ripe for adjudication in the
absence of adverse claims between the parties;19 that the petitioners lacked legal standing to sue
because no allegations were made to the effect that they had suffered any injury as a result of the
adoption of the DAP and issuance of NBC No. 541; that their being taxpayers did not immediately
confer upon the petitioners the legal standing to sue considering that the adoption and
implementation of the DAP and the issuance of NBC No. 541 were not in the exercise of the taxing
or spending power of Congress;20 and that even if the petitioners had suffered injury, there were
plain, speedy and adequate remedies in the ordinary course of law available to them, like assailing
the regularity of the DAP and related issuances before the Commission on Audit (COA) or in the
trial courts.21
The respondents aver that the special civil actions of certiorari and prohibition are not proper
actions for directly assailing the constitutionality and validity of the DAP, NBC No. 541, and the
other executive issuances implementing the DAP.22
In their memorandum, the respondents further contend that there is no authorized proceeding
under the Constitution and the Rules of Court for questioning the validity of any law unless there
is an actual case or controversy the resolution of which requires the determination of the
constitutional question; that the jurisdiction of the Court is largely appellate; that for a court of
law to pass upon the constitutionality of a law or any act of the Government when there is no case
or controversy is for that court to set itself up as a reviewer of the acts of Congress and of the
President in violation of the principle of separation of powers; and that, in the absence of a
pending case or controversy involving the DAP and NBC No. 541, any decision herein could amount
to a mere advisory opinion that no court can validly render. 23
The respondents argue that it is the application of the DAP to actual situations that the petitioners
can question either in the trial courts or in the COA; that if the petitioners are dissatisfied with the
ruling either of the trial courts or of the COA, they can appeal the decision of the trial courts by
petition for review on certiorari, or assail the decision or final order of the COA by special civil
action for certiorari under Rule 64 of the Rules of Court. 24
The respondents’ arguments and submissions on the procedural issue are bereft of merit.
Section 1, Article VIII of the 1987 Constitution expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may
be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
Thus, the Constitution vests judicial power in the Court and in such lower courts as may be
established by law. In creating a lower court, Congress concomitantly determines the jurisdiction
of that court, and that court, upon its creation, becomes by operation of the Constitution one of
the repositories of judicial power.25 However, only the Court is a constitutionally created court,
the rest being created by Congress in its exercise of the legislative power.
The Constitution states that judicial power includes the duty of the courts of justice not only "to
settle actual controversies involving rights which are legally demandable and enforceable" but
also "to determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government." It has
thereby expanded the concept of judicial power, which up to then was confined to its traditional
ambit of settling actual controversies involving rights that were legally demandable and
enforceable.
The background and rationale of the expansion of judicial power under the 1987 Constitution were
laid out during the deliberations of the 1986 Constitutional Commission by Commissioner Roberto
R. Concepcion (a former Chief Justice of the Philippines) in his sponsorship of the proposed
provisions on the Judiciary, where he said:–
The Supreme Court, like all other courts, has one main function: to settle actual controversies
involving conflicts of rights which are demandable and enforceable. There are rights which are
guaranteed by law but cannot be enforced by a judicial party. In a decided case, a husband
complained that his wife was unwilling to perform her duties as a wife. The Court said: "We can
tell your wife what her duties as such are and that she is bound to comply with them, but we
cannot force her physically to discharge her main marital duty to her husband. There are some
rights guaranteed by law, but they are so personal that to enforce them by actual compulsion
would be highly derogatory to human dignity." This is why the first part of the second paragraph of
Section 1 provides that: Judicial power includes the duty of courts to settle actual controversies
involving rights which are legally demandable or enforceable…
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a
presidential system of government, the Supreme Court has, also, another important function. The
powers of government are generally considered divided into three branches: the Legislative, the
Executive and the Judiciary. Each one is supreme within its own sphere and independent of the
others. Because of that supremacy power to determine whether a given law is valid or not is
vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a
duty to pass judgmenton matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature, by claiming that such matters constitute a political
question. (Bold emphasis supplied)26
Upon interpellation by Commissioner Nolledo, Commissioner Concepcion clarified the scope of

judicial power in the following manner:–
MR. NOLLEDO. x x x
The second paragraph of Section 1 states: "Judicial power includes the duty of courts of justice to
settle actual controversies…" The term "actual controversies" according to the Commissioner
should refer to questions which are political in nature and, therefore, the courts should not refuse
to decide those political questions. But do I understand it right that this is restrictive or only an
example? I know there are cases which are not actual yet the court can assume jurisdiction. An
example is the petition for declaratory relief.
May I ask the Commissioner’s opinion about that?
MR. CONCEPCION. The Supreme Court has no jurisdiction to grant declaratory judgments.
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in
the Supreme Court alone but also in other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions with
jurisdictional questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a
question as to whether the government had authority or had abused its authority to the extent of
lacking jurisdiction or excess of jurisdiction, that is not a political question. Therefore, the court
has the duty to decide.27
Our previous Constitutions equally recognized the extent of the power of judicial review and the
great responsibility of the Judiciary in maintaining the allocation of powers among the three great
branches of Government. Speaking for the Court in Angara v. Electoral Commission,28 Justice Jose
P. Laurel intoned:
x x x In times of social disquietude or political excitement, the great landmarks of the Constitution
are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial
department is the only constitutional organ which can be called upon to determine the proper
allocation of powers between the several department and among the integral or constituent units
thereof.
xxxx
The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality of
the judiciary as the rational way. And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other department; it does not in reality
nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the Constitution. x x x 29
What are the remedies by which the grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government may be determined
under the Constitution?
The present Rules of Court uses two special civil actions for determining and correcting grave
abuse of discretion amounting to lack or excess of jurisdiction. These are the special civil actions
for certiorari and prohibition, and both are governed by Rule 65. A similar remedy of certiorari
exists under Rule 64, but the remedy is expressly applicable only to the judgments and final orders
or resolutions of the Commission on Elections and the Commission on Audit.
The ordinary nature and function of the writ of certiorari in our present system are aptly explained
in Delos Santos v. Metropolitan Bank and Trust Company:30
In the common law, from which the remedy of certiorari evolved, the writ of certiorari was issued
out of Chancery, or the King’s Bench, commanding agents or officers of the inferior courts to
return the record of a cause pending before them, so as to give the party more sure and speedy
justice, for the writ would enable the superior court to determine from an inspection of the record
whether the inferior court’s judgment was rendered without authority. The errors were of such a
nature that, if allowed to stand, they would result in a substantial injury to the petitioner to whom
no other remedy was available. If the inferior court acted without authority, the record was then
revised and corrected in matters of law. The writ of certiorari was limited to cases in which the
inferior court was said to be exceeding its jurisdiction or was not proceeding according to essential
requirements of law and would lie only to review judicial or quasi-judicial acts.
The concept of the remedy of certiorari in our judicial system remains much the same as it has
been in the common law. In this jurisdiction, however, the exercise of the power to issue the writ
of certiorari is largely regulated by laying down the instances or situations in the Rules of Court in
which a superior court may issue the writ of certiorari to an inferior court or officer. Section 1,
Rule 65 of the Rules of Court compellingly provides the requirements for that purpose, viz:
xxxx
The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes
the commission of grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere
abuse of discretion is not enough to warrant the issuance of the writ. The abuse of discretion must
be grave, which means either that the judicial or quasi-judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent
judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined
or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or
quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction.31
Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to
be distinguished from prohibition by the fact that it is a corrective remedy used for the
re-examination of some action of an inferior tribunal, and is directed to the cause or proceeding in
the lower court and not to the court itself, while prohibition is a preventative remedy issuing to
restrain future action, and is directed to the court itself. 32 The Court expounded on the nature and
function of the writ of prohibition in Holy Spirit Homeowners Association, Inc. v. Defensor: 33
A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a
quasi-legislative function. Prohibition is an extraordinary writ directed against any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial

functions, ordering said entity or person to desist from further proceedings when said proceedings
are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with grave
abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law. Prohibition lies against judicial or ministerial functions, but not against
legislative or quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep
a lower court within the limits of its jurisdiction in order to maintain the administration of justice
in orderly channels. Prohibition is the proper remedy to afford relief against usurpation of
jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling
matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by
the law, or where there is no adequate remedy available in the ordinary course of law by which
such relief can be obtained. Where the principal relief sought is to invalidate an IRR, petitioners’
remedy is an ordinary action for its nullification, an action which properly falls under the
jurisdiction of the Regional Trial Court. In any case, petitioners’ allegation that "respondents are
performing or threatening to perform functions without or in excess of their jurisdiction" may
appropriately be enjoined by the trial court through a writ of injunction or a temporary restraining
order.
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or prohibition may be issued to correct
errors of jurisdiction committed not only by a tribunal, corporation, board or officer exercising
judicial, quasi-judicial or ministerial functions but also to set right, undo and restrain any act of
grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or
instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or
ministerial functions. This application is expressly authorized by the text of the second paragraph
of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional
issues and to review and/or prohibit or nullify the acts of legislative and executive officials.34
Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act of grave
abuse of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of
the Government, the Court is not at all precluded from making the inquiry provided the challenge
was properly brought by interested or affected parties. The Court has been thereby entrusted
expressly or by necessary implication with both the duty and the obligation of determining, in
appropriate cases, the validity of any assailed legislative or executive action. This entrustment is
consistent with the republican system of checks and balances.35
Following our recent dispositions concerning the congressional pork barrel, the Court has become
more alert to discharge its constitutional duty. We will not now refrain from exercising our
expanded judicial power in order to review and determine, with authority, the limitations on the
Chief Executive’s spending power.
b) Requisites for the exercise of the

power of judicial review were
complied with
The requisites for the exercise of the power of judicial review are the following, namely: (1) there
must bean actual case or justiciable controversy before the Court; (2) the question before the
Court must be ripe for adjudication; (3) the person challenging the act must be a proper party; and
(4) the issue of constitutionality must be raised at the earliest opportunity and must be the very
litis mota of the case.36
The first requisite demands that there be an actual case calling for the exercise of judicial power
by the Court.37 An actual case or controversy, in the words of Belgica v. Executive Secretary
Ochoa:38
x x x is one which involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute. In other words, "[t]here must be a contrariety of legal rights that can be interpreted and
enforced on the basis of existing law and jurisprudence." Related to the requirement of an actual
case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when
the act being challenged has had a direct adverse effect on the individual challenging it. It is a
prerequisite that something had then been accomplished or performed by either branch before a
court may come into the picture, and the petitioner must allege the existence of an immediate or
threatened injury to itself as a result of the challenged action." "Withal, courts will decline to pass
upon constitutional issues through advisory opinions, bereft as they are of authority to resolve
hypothetical or moot questions."
An actual and justiciable controversy exists in these consolidated cases. The incompatibility of the
perspectives of the parties on the constitutionality of the DAP and its relevant issuances satisfy the
requirement for a conflict between legal rights. The issues being raised herein meet the requisite
ripeness considering that the challenged executive acts were already being implemented by the
DBM, and there are averments by the petitioners that such implementation was repugnant to the
letter and spirit of the Constitution. Moreover, the implementation of the DAP entailed the
allocation and expenditure of huge sums of public funds. The fact that public funds have been
allocated, disbursed or utilized by reason or on account of such challenged executive acts gave
rise, therefore, to an actual controversy that is ripe for adjudication by the Court.
It is true that Sec. Abad manifested during the January 28, 2014 oral arguments that the DAP as a
program had been meanwhile discontinued because it had fully served its purpose, saying: "In
conclusion, Your Honors, may I inform the Court that because the DAP has already fully served its
purpose, the Administration’s economic managers have recommended its termination to the
President. x x x."39
The Solicitor General then quickly confirmed the termination of the DAP as a program, and urged
that its termination had already mooted the challenges to the DAP’s constitutionality, viz:
DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its
constitutionality. Any constitutional challenge should no longer be at the level of the program,
which is now extinct, but at the level of its prior applications or the specific disbursements under
the now defunct policy. We challenge the petitioners to pick and choose which among the 116 DAP
projects they wish to nullify, the full details we will have provided by February 5. We urge this
Court to be cautious in limiting the constitutional authority of the President and the Legislature to
respond to the dynamic needs of the country and the evolving demands of governance, lest we end
up straight jacketing our elected representatives in ways not consistent with our constitutional
structure and democratic principles.40
A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events, so that a declaration thereon would be of no practical use or value. 41
The Court cannot agree that the termination of the DAP as a program was a supervening event that
effectively mooted these consolidated cases. Verily, the Court had in the past exercised its power
of judicial review despite the cases being rendered moot and academic by supervening events,
like: (1) when there was a grave violation of the Constitution; (2) when the case involved a
situation of exceptional character and was of paramount public interest; (3) when the
constitutional issue raised required the formulation of controlling principles to guide the Bench,
the Bar and the public; and (4) when the case was capable of repetition yet evading review. 42
Assuming that the petitioners’ several submissions against the DAP were ultimately sustained by
the Court here, these cases would definitely come under all the exceptions. Hence, the Court
should not abstain from exercising its power of judicial review.
Did the petitioners have the legal standing to sue?
Legal standing, as a requisite for the exercise of judicial review, refers to "a right of appearance in
a court of justice on a given question."43 The concept of legal standing, or locus standi, was
particularly discussed in De Castro v. Judicial and Bar Council, 44 where the Court said:
In public or constitutional litigations, the Court is often burdened with the determination of the
locus standi of the petitioners due to the ever-present need to regulate the invocation of the
intervention of the Court to correct any official action or policy in order to avoid obstructing the
efficient functioning of public officials and offices involved in public service. It is required,
therefore, that the petitioner must have a personal stake in the outcome of the controversy, for,
as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions." Accordingly, it has been held that the interest of a person assailing the
constitutionality of a statute must be direct and personal. He must be able to show, not only that
the law or any government act is invalid, but also that he sustained or is in imminent danger of
sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby
in some indefinite way. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected
to some burdens or penalties by reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for
determining whether a petitioner in a public action had locus standi. There, the Court held that
the person who would assail the validity of a statute must have "a personal and substantial interest
in the case such that he has sustained, or will sustain direct injury as a result." Vera was followed
in Custodio v. President of the Senate, Manila Race Horse Trainers’ Association v. De la Fuente,
Anti-Chinese League of the Philippines v. Felix, and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi, being a mere procedural
technicality, can be waived by the Court in the exercise of its discretion. For instance, in 1949, in
Araneta v. Dinglasan, the Court liberalized the approach when the cases had "transcendental
importance." Some notable controversies whose petitioners did not pass the direct injury test
were allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the issues
raised by the petition due to their "far reaching implications," even if the petitioner had no
personality to file the suit. The liberal approach of Aquino v. Commission on Elections has been
adopted in several notable cases, permitting ordinary citizens, legislators, and civic organizations
to bring their suits involving the constitutionality or validity of laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a supposedly illegal or
unconstitutional executive or legislative action rests on the theory that the petitioner represents
the public in general. Although such petitioner may not be as adversely affected by the action
complained against as are others, it is enough that he sufficiently demonstrates in his petition that
he is entitled to protection or relief from the Court in the vindication of a public right.
Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus
standi. That is not surprising, for even if the issue may appear to concern only the public in general,
such capacities nonetheless equip the petitioner with adequate interest to sue. In David v.
Macapagal-Arroyo, the Court aptly explains why:
Case law in most jurisdiction snow allows both "citizen" and "taxpayer" standing in public actions.
The distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a
taxpayer’s suit is in a different category from the plaintiff in a citizen’s suit. In the former, the
plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere
instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v.
Collins: "In matter of mere public right, however…the people are the real parties…It is at least the
right, if not the duty, of every citizen to interfere and see that a public offence be properly
pursued and punished, and that a public grievance be remedied." With respect to taxpayer’s suits,
Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to
restrain the unlawful use of public funds to his injury cannot be denied." 45
The Court has cogently observed in Agan, Jr. v. Philippine International Air Terminals Co.,
Inc.46 that "[s]tanding is a peculiar concept in constitutional law because in some cases, suits are
not brought by parties who have been personally injured by the operation of a law or any other
government act but by concerned citizens, taxpayers or voters who actually sue in the public
interest."
Except for PHILCONSA, a petitioner in G.R. No. 209164, the petitioners have invoked their
capacities as taxpayers who, by averring that the issuance and implementation of the DAP and its
relevant issuances involved the illegal disbursements of public funds, have an interest in
preventing the further dissipation of public funds. The petitioners in G.R. No. 209287 (Araullo) and
G.R. No. 209442 (Belgica) also assert their right as citizens to sue for the enforcement and
observance of the constitutional limitations on the political branches of the Government.47
On its part, PHILCONSA simply reminds that the Court has long recognized its legal standing to
bring cases upon constitutional issues.48 Luna, the petitioner in G.R. No. 209136, cites his
additional capacity as a lawyer. The IBP, the petitioner in G.R. No. 209260, stands by "its avowed
duty to work for the rule of law and of paramount importance of the question in this action, not to
mention its civic duty as the official association of all lawyers in this country." 49
Under their respective circumstances, each of the petitioners has established sufficient interest in
the outcome of the controversy as to confer locus standi on each of them.
In addition, considering that the issues center on the extent of the power of the Chief Executive to
disburse and allocate public funds, whether appropriated by Congress or not, these cases pose
issues that are of transcendental importance to the entire Nation, the petitioners included. As
such, the determination of such important issues call for the Court’s exercise of its broad and wise
discretion "to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised."50
II.
Substantive Issues
1.
Overview of the Budget System
An understanding of the Budget System of the Philippines will aid the Court in properly
appreciating and justly resolving the substantive issues.
a) Origin of the Budget System
The term "budget" originated from the Middle English word bouget that had derived from the Latin
word bulga (which means bag or purse).51
In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the
financial program of the National Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year for which it was intended to
be effective based on the results of operations during the preceding fiscal years. The term was
given a different meaning under Republic Act No. 992 (Revised Budget Act) by describing the
budget as the delineation of the services and products, or benefits that would accrue to the public
together with the estimated unit cost of each type of service, product or benefit. 52 For a forthright
definition, budget should simply be identified as the financial plan of the Government, 53 or "the
master plan of government."54
The concept of budgeting has not been the product of recent economies. In reality, financing
public goals and activities was an idea that existed from the creation of the State.55 To protect the
people, the territory and sovereignty of the State, its government must perform vital functions
that required public expenditures. At the beginning, enormous public expenditures were spent for
war activities, preservation of peace and order, security, administration of justice, religion, and
supply of limited goods and services.56 In order to finance those expenditures, the State raised
revenues through taxes and impositions.57 Thus, budgeting became necessary to allocate public
revenues for specific government functions.58 The State’s budgeting mechanism eventually
developed through the years with the growing functions of its government and changes in its
market economy.
The Philippine Budget System has been greatly influenced by western public financial institutions.
This is because of the country’s past as a colony successively of Spain and the United States for a
long period of time. Many aspects of the country’s public fiscal administration, including its
Budget System, have been naturally patterned after the practices and experiences of the western
public financial institutions. At any rate, the Philippine Budget System is presently guided by two
principal objectives that are vital to the development of a progressive democratic government,
namely: (1) to carry on all government activities under a comprehensive fiscal plan developed,
authorized and executed in accordance with the Constitution, prevailing statutes and the
principles of sound public management; and (2) to provide for the periodic review and disclosure
of the budgetary status of the Government in such detail so that persons entrusted by law with the
responsibility as well as the enlightened citizenry can determine the adequacy of the budget
actions taken, authorized or proposed, as well as the true financial position of the Government. 59
b) Evolution of the Philippine Budget System
The budget process in the Philippines evolved from the early years of the American Regime up to
the passage of the Jones Law in 1916. A Budget Office was created within the Department of
Finance by the Jones Law to discharge the budgeting function, and was given the responsibility to
assist in the preparation of an executive budget for submission to the Philippine Legislature. 60
As early as under the 1935 Constitution, a budget policy and a budget procedure were established,
and subsequently strengthened through the enactment of laws and executive acts.61 EO No. 25,
issued by President Manuel L. Quezon on April 25, 1936, created the Budget Commission to serve
as the agency that carried out the President’s responsibility of preparing the budget. 62 CA No. 246,
the first budget law, went into effect on January 1, 1938 and established the Philippine budget
process. The law also provided a line-item budget as the framework of the Government’s
budgeting system,63 with emphasis on the observance of a "balanced budget" to tie up proposed
expenditures with existing revenues.
CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA) No.
992,whereby Congress introduced performance-budgeting to give importance to functions,
projects and activities in terms of expected results.64 RA No. 992 also enhanced the role of the
Budget Commission as the fiscal arm of the Government. 65
The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that
culminated in the enactment of PD No. 1177 that President Marcos issued on July30, 1977, and of
PD No. 1405, issued on June 11, 1978. The latter decree converted the Budget Commission into the
Ministry of Budget, and gave its head the rank of a Cabinet member.
The Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO
No. 711. The OBM became the DBM pursuant to EO No. 292 effective on November 24, 1989.
c) The Philippine Budget Cycle66
Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2)
Budget Legislation; (3) Budget Execution; and (4) Accountability. Each phase is distinctly separate
from the others but they overlap in the implementation of the budget during the budget year.
c.1.Budget Preparation67
The budget preparation phase is commenced through the issuance of a Budget Call by the DBM.
The Budget Call contains budget parameters earlier set by the Development Budget Coordination
Committee (DBCC) as well as policy guidelines and procedures to aid government agencies in the
preparation and submission of their budget proposals. The Budget Call is of two kinds, namely: (1)
a National Budget Call, which is addressed to all agencies, including state universities and colleges;
and (2) a Corporate Budget Call, which is addressed to all government-owned and -controlled
corporations (GOCCs) and government financial institutions (GFIs).
Following the issuance of the Budget Call, the various departments and agencies submit their
respective Agency Budget Proposals to the DBM. To boost citizen participation, the current
administration has tasked the various departments and agencies to partner with civil society
organizations and other citizen-stakeholders in the preparation of the Agency Budget Proposals,
which proposals are then presented before a technical panel of the DBM in scheduled budget
hearings wherein the various departments and agencies are given the opportunity to defend their
budget proposals. DBM bureaus thereafter review the Agency Budget Proposals and come up with
recommendations for the Executive Review Board, comprised by the DBM Secretary and the DBM’s
senior officials. The discussions of the Executive Review Board cover the prioritization of programs
and their corresponding support vis-à-vis the priority agenda of the National Government, and
their implementation.
The DBM next consolidates the recommended agency budgets into the National Expenditure
Program (NEP)and a Budget of Expenditures and Sources of Financing (BESF). The NEP provides the
details of spending for each department and agency by program, activity or project (PAP), and is
submitted in the form of a proposed GAA. The Details of Selected Programs and Projects is the
more detailed disaggregation of key PAPs in the NEP, especially those in line with the National
Government’s development plan. The Staffing Summary provides the staffing complement of each
department and agency, including the number of positions and amounts allocated.
The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the
Cabinet for further refinements or reprioritization. Once the NEP and the BESF are approved by
the President and the Cabinet, the DBM prepares the budget documents for submission to Congress.
The budget documents consist of: (1) the President’s Budget Message, through which the President
explains the policy framework and budget priorities; (2) the BESF, mandated by Section 22, Article
VII of the Constitution,68 which contains the macroeconomic assumptions, public sector context,
breakdown of the expenditures and funding sources for the fiscal year and the two previous years;
and (3) the NEP.
Public or government expenditures are generally classified into two categories, specifically: (1)
capital expenditures or outlays; and (2) current operating expenditures. Capital expenditures are
the expenses whose usefulness lasts for more than one year, and which add to the assets of the
Government, including investments in the capital of government-owned or controlled
corporations and their subsidiaries.69 Current operating expenditures are the purchases of goods
and services in current consumption the benefit of which does not extend beyond the fiscal
year.70 The two components of current expenditures are those for personal services (PS), and
those for maintenance and other operating expenses(MOOE).
Public expenditures are also broadly grouped according to their functions into: (1) economic
development expenditures (i.e., expenditures on agriculture and natural resources,
transportation and communications, commerce and industry, and other economic development
efforts);71 (2) social services or social development expenditures (i.e., government outlay on
education, public health and medicare, labor and welfare and others); 72 (3) general government
or general public services expenditures (i.e., expenditures for the general government, legislative
services, the administration of justice, and for pensions and gratuities);73 (4) national defense
expenditures (i.e., sub-divided into national security expenditures and expenditures for the
maintenance of peace and order);74 and (5) public debt.75
Public expenditures may further be classified according to the nature of funds, i.e., general fund,
special fund or bond fund.76
On the other hand, public revenues complement public expenditures and cover all income or
receipts of the government treasury used to support government expenditures. 77
Classical economist Adam Smith categorized public revenues based on two principal sources,
stating: "The revenue which must defray…the necessary expenses of government may be drawn
either, first from some fund which peculiarly belongs to the sovereign or commonwealth, and
which is independent of the revenue of the people, or, secondly, from the revenue of the
people."78 Adam Smith’s classification relied on the two aspects of the nature of the State: first,
the State as a juristic person with an artificial personality, and, second, the State as a sovereign or
entity possessing supreme power. Under the first aspect, the State could hold property and engage
in trade, thereby deriving what is called its quasi private income or revenues, and which
"peculiarly belonged to the sovereign." Under the second aspect, the State could collect by
imposing charges on the revenues of its subjects in the form of taxes. 79
In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax
revenues(i.e., compulsory contributions to finance government activities); 80 (2) capital
revenues(i.e., proceeds from sales of fixed capital assets or scrap thereof and public domain, and
gains on such sales like sale of public lands, buildings and other structures, equipment, and other
properties recorded as fixed assets); 81 (3) grants(i.e., voluntary contributions and aids given to
the Government for its operation on specific purposes in the form of money and/or materials, and
do not require any monetary commitment on the part of the recipient); 82 (4) extraordinary
income(i.e., repayment of loans and advances made by government corporations and local
governments and the receipts and shares in income of the Banko Sentral ng Pilipinas, and other
receipts);83 and (5) public borrowings(i.e., proceeds of repayable obligations generally with
interest from domestic and foreign creditors of the Government in general, including the National
Government and its political subdivisions). 84
More specifically, public revenues are classified as follows: 85
General Income Specific Income

1. Subsidy Income from National 1. Income Taxes
Government 2. Property Taxes
2. Subsidy from Central Office 3. Taxes on Goods and Services
3. Subsidy from Regional 4. Taxes on International Trade and
Office/Staff Bureaus Transactions
4. Income from Government 5. Other Taxes 6.Fines and Penalties-Tax
Services Revenue
5. Income from Government 7. Other Specific Income
Business Operations
6. Sales Revenue
7. Rent Income
8. Insurance Income
9. Dividend Income
10. Interest Income
11. Sale of Confiscated Goods and
Properties
12. Foreign Exchange (FOREX)
Gains
13. Miscellaneous Operating and
Service Income
14. Fines and Penalties-Government
Services and Business Operations
15. Income from Grants and

Donations
c.2. Budget Legislation86
The Budget Legislation Phase covers the period commencing from the time Congress receives the
President’s Budget, which is inclusive of the NEPand the BESF, up to the President’s approval of
the GAA. This phase is also known as the Budget Authorization Phase, and involves the significant
participation of the Legislative through its deliberations.
Initially, the President’s Budget is assigned to the House of Representatives’ Appropriations

Committee on First Reading. The Appropriations Committee and its various Sub-Committees
schedule and conduct budget hearings to examine the PAPs of the departments and agencies.
Thereafter, the House of Representatives drafts the General Appropriations Bill (GAB). 87
The GABis sponsored, presented and defended by the House of Representatives’ Appropriations
Committee and Sub-Committees in plenary session. As with other laws, the GAB is approved on
Third Reading before the House of Representatives’ version is transmitted to the Senate.88
After transmission, the Senate conducts its own committee hearings on the GAB. To expedite
proceedings, the Senate may conduct its committee hearings simultaneously with the House of
Representatives’ deliberations. The Senate’s Finance Committee and its Sub-Committees may
submit the proposed amendments to the GAB to the plenary of the Senate only after the House of
Representatives has formally transmitted its version to the Senate. The Senate version of the GAB
is likewise approved on Third Reading.89
The House of Representatives and the Senate then constitute a panel each to sit in the Bicameral
Conference Committee for the purpose of discussing and harmonizing the conflicting provisions of
their versions of the GAB. The "harmonized" version of the GAB is next presented to the President
for approval.90 The President reviews the GAB, and prepares the Veto Message where budget items
are subjected to direct veto,91 or are identified for conditional implementation.
If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for the ensuing
fiscal year, the GAA for the preceding fiscal year shall be deemed re-enacted and shall remain in
force and effect until the GAB is passed by the Congress. 92
c.3. Budget Execution93
With the GAA now in full force and effect, the next step is the implementation of the budget. The
Budget Execution Phase is primarily the function of the DBM, which is tasked to perform the
following procedures, namely: (1) to issue the programs and guidelines for the release of funds; (2)
to prepare an Allotment and Cash Release Program; (3) to release allotments; and (4) to issue
disbursement authorities.
The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the
various departments and agencies are required to submit Budget Execution Documents(BED) to
outline their plans and performance targets by laying down the physical and financial plan, the
monthly cash program, the estimate of monthly income, and the list of obligations that are not yet
due and demandable.
Thereafter, the DBM prepares an Allotment Release Program (ARP)and a Cash Release Program
(CRP).The ARP sets a limit for allotments issued in general and to a specific agency. The CRP fixes
the monthly, quarterly and annual disbursement levels.
Allotments, which authorize an agency to enter into obligations, are issued by the DBM.
Allotments are lesser in scope than appropriations, in that the latter embrace the general
legislative authority to spend. Allotments may be released in two forms – through a comprehensive
Agency Budget Matrix (ABM),94 or, individually, by SARO.95
Armed with either the ABM or the SARO, agencies become authorized to incur obligations96 on
behalf of the Government in order to implement their PAPs. Obligations may be incurred in various
ways, like hiring of personnel, entering into contracts for the supply of goods and services, and
using utilities.
In order to settle the obligations incurred by the agencies, the DBM issues a disbursement
authority so that cash may be allocated in payment of the obligations. A cash or disbursement
authority that is periodically issued is referred to as a Notice of Cash Allocation (NCA), 97 which
issuance is based upon an agency’s submission of its Monthly Cash Program and other required
documents. The NCA specifies the maximum amount of cash that can be withdrawn from a
government servicing bank for the period indicated. Apart from the NCA, the DBM may issue a
Non-Cash Availment Authority(NCAA) to authorize non-cash disbursements, or a Cash
Disbursement Ceiling(CDC) for departments with overseas operations to allow the use of income
collected by their foreign posts for their operating requirements.
Actual disbursement or spending of government funds terminates the Budget Execution Phase and
is usually accomplished through the Modified Disbursement Scheme under which disbursements
chargeable against the National Treasury are coursed through the government servicing banks.
c.4. Accountability98
Accountability is a significant phase of the budget cycle because it ensures that the government
funds have been effectively and efficiently utilized to achieve the State’s socio-economic goals. It
also allows the DBM to assess the performance of agencies during the fiscal year for the purpose of
implementing reforms and establishing new policies.
An agency’s accountability may be examined and evaluated through (1) performance targets and
outcomes; (2) budget accountability reports; (3) review of agency performance; and (4) audit
conducted by the Commission on Audit(COA).
2.
Nature of the DAP as a fiscal plan
a. DAP was a program designed to

promote economic growth
Policy is always a part of every budget and fiscal decision of any Administration.99 The national
budget the Executive prepares and presents to Congress represents the Administration’s
"blueprint for public policy" and reflects the Government’s goals and strategies. 100 As such, the
national budget becomes a tangible representation of the programs of the Government in
monetary terms, specifying therein the PAPs and services for which specific amounts of public
funds are proposed and allocated.101 Embodied in every national budget is government
spending.102
When he assumed office in the middle of 2010, President Aquino made efficiency and transparency
in government spending a significant focus of his Administration. Yet, although such focus resulted
in an improved fiscal deficit of 0.5% in the gross domestic product (GDP) from January to July of
2011, it also unfortunately decelerated government project implementation and payment
schedules.103 The World Bank observed that the Philippines’ economic growth could be reduced,
and potential growth could be weakened should the Government continue with its underspending
and fail to address the large deficiencies in infrastructure. 104 The economic situation prevailing in
the middle of 2011 thus paved the way for the development and implementation of the DAP as a
stimulus package intended to fast-track public spending and to push economic growth by investing
on high-impact budgetary PAPs to be funded from the "savings" generated during the year as well
as from unprogrammed funds.105 In that respect, the DAP was the product of "plain executive
policy-making" to stimulate the economy by way of accelerated spending.106The Administration
would thereby accelerate government spending by: (1) streamlining the implementation process
through the clustering of infrastructure projects of the Department of Public Works and Highways
(DPWH) and the Department of Education (DepEd),and (2) front loading PPP-related
projects107 due for implementation in the following year.108
Did the stimulus package work?
The March 2012 report of the World Bank,109 released after the initial implementation of the DAP,
revealed that the DAP was partially successful. The disbursements under the DAP contributed 1.3
percentage points to GDP growth by the fourth quarter of 2011.110 The continued implementation
of the DAP strengthened growth by 11.8% year on year while infrastructure spending rebounded
from a 29% contraction to a 34% growth as of September 2013. 111
The DAP thus proved to be a demonstration that expenditure was a policy instrument that the
Government could use to direct the economies towards growth and development. 112 The
Government, by spending on public infrastructure, would signify its commitment of ensuring
profitability for prospective investors.113 The PAPs funded under the DAP were chosen for this
reason based on their: (1) multiplier impact on the economy and infrastructure development; (2)
beneficial effect on the poor; and (3) translation into disbursements. 114
b. History of the implementation of

the DAP, and sources of funds
under the DAP
How the Administration’s economic managers conceptualized and developed the DAP, and finally
presented it to the President remains unknown because the relevant documents appear to be
scarce.
The earliest available document relating to the genesis of the DAP was the memorandum of
October 12,2011 from Sec. Abad seeking the approval of the President to implement the proposed
DAP. The memorandum, which contained a list of the funding sources for ₱72.11 billion and of the
proposed priority projects to be funded,115reads:
MEMORANDUM FOR THE PRESIDENT
xxxx
SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS AND SOURCES

OF FUNDS)
DATE: OCTOBER 12, 2011
Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program
totaling ₱72.11 billion. We are already working with all the agencies concerned for the immediate
execution of the projects therein.
A. Fund Sources for the Acceleration Program
Amount
(In Action
Fund Sources Description
million Requested
Php)
FY 2011 30,000 Unreleased Personnel Declare as

Unreleased Services (PS) savings and
Personal appropriations which approve/
Services (PS) will lapse at the end of authorize its use
Appropriations FY 2011 but may be for the 2011
pooled as savings and Disbursement
realigned for priority Acceleration
programs that require Program
immediate funding
FY 2011 482 Unreleased

Unreleased appropriations (slow
Appropriations moving projects and
programs for
discontinuance)
FY 2010 12,336 Supported by the GFI Approve and

Unprogrammed Dividends authorize its use
Fund for the 2011
Disbursement
Acceleration
Program
FY 2010 21,544 Unreleased With prior

Carryover appropriations (slow approval from
Appropriation moving projects and the President in
programs for November 2010
discontinuance) and to declare as
savings from Zero-based savings and with
Budgeting authority to use
Initiative for priority
projects
FY 2011 Budget 7,748 FY 2011 Agency For information

items for Budget items that can
realignment be realigned within the

agency to fund new fast
disbursing projects
DPWH-3.981 Billion
DA – 2.497 Billion
DOT – 1.000 Billion
DepEd – 270 Million
TOTAL 72.110
B. Projects in the Disbursement Acceleration Program
(Descriptions of projects attached as Annex A)
GOCCs and GFIs

Agency/Project Allotment
(SARO and NCA Release) (in Million Php)
1. LRTA: Rehabilitation of LRT 1 and 2 1,868
2. NHA: 11,050
a. Resettlement of North Triangle residents to 450

Camarin A7
b. Housing for BFP/BJMP 500
c. On-site development for families living 10,000
along dangerous
d. Relocation sites for informal settlers 100
along Iloilo River and its tributaries
3. PHIL. HEART CENTER: Upgrading of 357
ageing physical plant and medical equipment
4. CREDIT INFO CORP: Establishment of 75
centralized credit information system
5. PIDS: purchase of land to relocate the PIDS 100
office and building construction
6. HGC: Equity infusion for credit insurance 400
and mortgage guaranty operations of HGC
7. PHIC: Obligations incurred (premium 1,496
subsidy for indigent families) in January-June
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the
delay in the certification of the LGU
counterpart. Without it, the NG is obliged to
pay the full amount.
8. Philpost: Purchase of foreclosed property. 644
Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege

9. BSP: First equity infusion out of Php 40B 10,000
capitalization under the BSP Law
10. PCMC: Capital and Equipment Renovation 280
11. LCOP: 105
a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program 35
(Stem-Cell Research – subject to legal 70
review and presentation)
12. TIDCORP: NG Equity infusion 570
TOTAL 26,945
NGAs/LGUs
Agency/Project Allotment
(SARO) Cash
(In Million Requirement
Php) (NCA)
13. DOF-BIR: NPSTAR
centralization of data
processing and others (To be
synchronized with GFMIS
activities) 758 758
14. COA: IT infrastructure
program and hiring of
additional litigational experts 144 144
15. DND-PAF: On Base Housing
Facilities and Communication
Equipment 30 30
16. DA: 2,959 2,223
a. Irrigation, FMRs and
Integrated Community Based
Multi-Species
Hatchery and Aquasilvi 1,629 1,629
Farming
b. Mindanao Rural 919 183
Development Project
c. NIA Agno River Integrated
Irrigation Project 411 411
17. DAR: 1,293 1,293
a. Agrarian Reform
Communities Project 2 1,293 132
b. Landowners Compensation 5,432
18. DBM: Conduct of National

Survey of
Farmers/Fisherfolks/Ips 625 625
19. DOJ: Operating requirements
of 50 investigation agents and
15 state attorneys 11 11
20. DOT: Preservation of the Cine
Corregidor Complex 25 25
21. OPAPP: Activities for Peace
Process (PAMANA- Project
details: budget breakdown,
implementation plan, and
conditions on fund release
attached as Annex B) 1,819 1,819
22. DOST 425 425
a. Establishment of National
Meterological and Climate
Center 275 275
b. Enhancement of Doppler
Radar Network for National
Weather Watch, Accurate
Forecasting and Flood Early
Warning 190 190
23. DOF-BOC: To settle the
principal obligations with
PDIC consistent with the
agreement with the CISS and
SGS 2,800 2,800
24. OEO-FDCP: Establishment of
the National Film Archive and
local cinematheques, and other
local activities 20 20
25. DPWH: Various infrastructure
projects 5,500 5,500
26. DepEd/ERDT/DOST: Thin
Client Cloud Computing
Project 270 270
27. DOH: Hiring of nurses and
midwives 294 294
28. TESDA: Training Program in
partnership with BPO industry
and other sectors 1,100 1,100
29. DILG: Performance Challenge
Fund (People Empowered
Community Driven
Development with DSWD and
NAPC) 250 50
30. ARMM: Comprehensive Peace
and Development Intervention 8,592 8,592
31. DOTC-MRT: Purchase of
additional MRT cars 4,500 -
32. LGU Support Fund 6,500 6,500
33. Various Other Local Projects 6,500 6,500
34. Development Assistance to the
Province of Quezon 750 750
TOTAL 45,165 44,000
C. Summary
Fund Sources
Identified for Allotments Cash
Approval for Release Requirements for
(In Million Release in FY
Php) 2011
Total 72,110 72,110 70,895
GOCCs 26,895 26,895
NGAs/LGUs 45,165 44,000
For His Excellency’s Consideration
(Sgd.) FLORENCIO B. ABAD
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
OCT 12, 2011
The memorandum of October 12, 2011 was followed by another memorandum for the President
dated December 12, 2011116 requesting omnibus authority to consolidate the savings and
unutilized balances for fiscal year 2011. Pertinent portions of the memorandum of December 12,
2011 read:
MEMORANDUM FOR THE PRESIDENT
xxxx
SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment
DATE: December 12, 2011
This is to respectfully request for the grant of Omnibus Authority to consolidate savings/unutilized
balances in FY 2011 corresponding to completed or discontinued projects which may be pooled to
fund additional projects or expenditures.
In addition, Mr. President, this measure will allow us to undertake projects even if their
implementation carries over to 2012 without necessarily impacting on our budget deficit cap next
year.
BACKGROUND
1.0 The DBM, during the course of performance reviews conducted on the agencies’
operations, particularly on the implementation of their projects/activities, including
expenses incurred in undertaking the same, have identified savings out of the 2011
General Appropriations Act. Said savings correspond to completed or discontinued
projects under certain departments/agencies which may be pooled, for the
following:
1.1 to provide for new activities which have not been anticipated during
preparation of the budget;
1.2 to augment additional requirements of on-going priority projects; and
1.3 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF,
Calamity Fund, Contingent Fund
1.4 to cover for the modifications of the original allotment class allocation as
a result of on-going priority projects and implementation of new activities
2.0 x x x x
2.1 x x x
2.2 x x x
ON THE UTILIZATION OF POOLED SAVINGS
3.0 It may be recalled that the President approved our request for omnibus authority
to pool savings/unutilized balances in FY 2010 last November 25, 2010.
4.0 It is understood that in the utilization of the pooled savings, the DBM shall secure
the corresponding approval/confirmation of the President. Furthermore, it is
assured that the proposed realignments shall be within the authorized Expenditure
level.
5.0 Relative thereto, we have identified some expenditure items that may be
sourced from the said pooled appropriations in FY 2010 that will expire on December
31, 2011 and appropriations in FY 2011 that may be declared as savings to fund
additional expenditures.
5.1 The 2010 Continuing Appropriations (pooled savings) is proposed to be

spent for the projects that we have identified to be immediate actual
disbursements considering that this same fund source will expire on December
31, 2011.
5.2 With respect to the proposed expenditure items to be funded from the FY
2011 Unreleased Appropriations, most of these are the same projects for
which the DBM is directed by the Office of the President, thru the Executive
Secretary, to source funds.
6.0 Among others, the following are such proposed additional projects that have
been chosen given their multiplier impact on economy and infrastructure
development, their beneficial effect on the poor, and their translation into
disbursements. Please note that we have classified the list of proposed projects as
follows:
7.0 x x x
FOR THE PRESIDENT’S APPROVAL
8.0 Foregoing considered, may we respectfully request for the President’s approval
for the following:
8.1 Grant of omnibus authority to consolidate FY 2011 savings/unutilized

balances and its realignment; and
8.2 The proposed additional projects identified for funding.
For His Excellency’s consideration and approval.
(Sgd.)
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
DEC 21, 2011
Substantially identical requests for authority to pool savings and to fund proposed projects were
contained in various other memoranda from Sec. Abad dated June 25, 2012, 117 September 4,
2012,118 December 19, 2012,119May 20, 2013,120 and September 25, 2013.121 The President
apparently approved all the requests, withholding approval only of the proposed projects
contained in the June 25, 2012 memorandum, as borne out by his marginal note therein to the
effect that the proposed projects should still be "subject to further discussions." 122
In order to implement the June25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption of
Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30,
2012),123 reproduced herein as follows:
NATIONAL BUDGET CIRCULAR No. 541
July 18, 2012
TO: All Heads of Departments/Agencies/State Universities and Colleges and other Offices of the
National Government, Budget and Planning Officers; Heads of Accounting Units and All Others
Concerned
SUBJECT : Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated

Allotments as of June 30, 2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code of 1987),
periodically reviews and evaluates the departments/agencies’ efficiency and effectiveness in
utilizing budgeted funds for the delivery of services and production of goods, consistent with the
government priorities.
In the event that a measure is necessary to further improve the operational efficiency of the
government, the President is authorized to suspend or stop further use of funds allotted for any
agency or expenditure authorized in the General Appropriations Act. Withdrawal and pooling of
unutilized allotment releases can be effected by DBM based on authority of the President, as
mandated under Sections 38 and 39, Chapter 5, Book VI of EO 292.
For the first five months of 2012, the National Government has not met its spending targets. In
order to accelerate spending and sustain the fiscal targets during the year, expenditure measures
have to be implemented to optimize the utilization of available resources.
Departments/agencies have registered low spending levels, in terms of obligations and

disbursements per initial review of their 2012 performance. To enhance agencies’ performance,
the DBM conducts continuous consultation meetings and/or send call-up letters, requesting them
to identify slow-moving programs/projects and the factors/issues affecting their performance
(both pertaining to internal systems and those which are outside the agencies’ spheres of control).
Also, they are asked to formulate strategies and improvement plans for the rest of 2012.
Notwithstanding these initiatives, some departments/agencies have continued to post low

obligation levels as of end of first semester, thus resulting to substantial unobligated allotments.
In line with this, the President, per directive dated June 27, 2012 authorized the withdrawal of
unobligated allotments of agencies with low levels of obligations as of June 30, 2012, both for
continuing and current allotments. This measure will allow the maximum utilization of available
allotments to fund and undertake other priority expenditures of the national government.
2.0 Purpose
2.1 To provide the conditions and parameters on the withdrawal of unobligated

allotments of agencies as of June 30, 2012 to fund priority and/or fast-moving
programs/projects of the national government;
2.2 To prescribe the reports and documents to be used as bases on the withdrawal of
said unobligated allotments; and
2.3 To provide guidelines in the utilization or reallocation of the withdrawn

allotments.
3.0 Coverage
3.1 These guidelines shall cover the withdrawal of unobligated allotments as of June
30, 2012 of all national government agencies (NGAs) charged against FY 2011
Continuing Appropriation (R.A. No.10147) and FY 2012 Current Appropriation (R.A.
No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the

implementation of programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared

as savings by the agencies concerned based on their updated/validated list of
pensioners.
3.2 The withdrawal of unobligated allotments may cover the identified programs,
projects and activities of the departments/agencies reflected in the DBM list shown
as Annex A or specific programs and projects as may be identified by the agencies.
4.0 Exemption
These guidelines shall not apply to the following:
4.1 NGAs
4.1.1 Constitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy

under the Philippine Constitution; and
4.1.2 State Universities and Colleges, adopting the Normative Funding

allocation scheme i.e., distribution of a predetermined budget ceiling.
4.2 Fund Sources
4.2.1 Personal Services other than pension benefits;
4.2.2 MOOE items earmarked for specific purposes or subject to realignment

conditions per General Provisions of the GAA:
• Confidential and Intelligence Fund;

• Savings from Traveling, Communication, Transportation and Delivery,

Repair and Maintenance, Supplies and Materials and Utility which shall
be used for the grant of Collective Negotiation Agreement incentive
benefit;
• Savings from mandatory expenditures which can be realigned only in

the last quarter after taking into consideration the agency’s full year
requirements, i.e., Petroleum, Oil and Lubricants, Water, Illumination,
Power Services, Telephone, other Communication Services and Rent.
4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-Government Fund, International

Commitments Fund, PAMANA, Priority Development Assistance Fund,
Calamity Fund, Budgetary Support to GOCCs and Allocation to LGUs, among
others;
4.2.5 Quick Response Funds; and
4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium and

Special Accounts in the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to undertake procurement

activities notwithstanding the implementation of the policy of withdrawal of
unobligated allotments until the end of the third quarter, FY 2012. Even without the
allotments, the agency shall proceed in undertaking the procurement processes (i.e.,
procurement planning up to the conduct of bidding but short of awarding of contract)
pursuant to GPPB Circular Nos. 02-2008 and 01-2009 and DBM Circular Letter No.
2010-9.
5.2 For the purpose of determining the amount of unobligated allotments that shall
be withdrawn, all departments/agencies/operating units (OUs) shall submit to DBM
not later than July 30, 2012, the following budget accountability reports as of June
30, 2012;
• Statement of Allotments, Obligations and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular,
the agency’s latest report available shall be used by DBM as basis for withdrawal of
allotment. The DBM shall compute/approximate the agency’s obligation level as of
June 30 to derive its unobligated allotments as of same period. Example: If the March
31 SAOB or FRO reflects actual obligations of P 800M then the June 30 obligation
level shall approximate to ₱1,600 M (i.e., ₱800 M x 2 quarters).
5.4 All released allotments in FY 2011 charged against R.A. No. 10147 which
remained unobligated as of June 30, 2012 shall be immediately considered for
withdrawal. This policy is based on the following considerations:
5.4.1 The departments/agencies’ approved priority programs and projects

are assumed to be implementation-ready and doable during the given fiscal
year; and
5.4.2 The practice of having substantial carryover appropriations may imply

that the agency has a slower-than-programmed implementation capacity or
agency tends to implement projects within a two-year timeframe.
5.5. Consistent with the President’s directive, the DBM shall, based on evaluation of
the reports cited above and results of consultations with the departments/agencies,
withdraw the unobligated allotments as of June 30, 2012 through issuance of
negative Special Allotment Release Orders (SAROs).
5.6 DBM shall prepare and submit to the President, a report on the magnitude of
withdrawn allotments. The report shall highlight the agencies which failed to submit
the June 30 reports required under this Circular.
5.7 The withdrawn allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs
concerned, from which the allotments were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and
projects of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to
fund priority programs and projects not considered in the 2012 budget but
expected to be started or implemented during the current year.
5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs concerned may submit to DBM a
Special Budget Request (SBR), supported with the following:
5.8.1 Physical and Financial Plan (PFP);
5.8.2 Monthly Cash Program (MCP); and
5.8.3 Proof that the project/activity has started the procurement processes
i.e., Proof of Posting and/or Advertisement of the Invitation to Bid.
5.9 The deadline for submission of request/s pertaining to these categories shall be
until the end of the third quarter i.e., September 30, 2012. After said cut-off date,
the withdrawn allotments shall be pooled and form part of the overall savings of the
national government.
5.10 Utilization of the consolidated withdrawn allotments for other priority

programs and projects as cited under item 5.7.3 of this Circular, shall be subject to
approval of the President. Based on the approval of the President, DBM shall issue
the SARO to cover the approved priority expenditures subject to submission by the
agency/OU concerned of the SBR and supported with PFP and MCP.
5.11 It is understood that all releases to be made out of the withdrawn allotments
(both 2011 and 2012 unobligated allotments) shall be within the approved
Expenditure Program level of the national government for the current year. The
SAROs to be issued shall properly disclose the appropriation source of the release to
determine the extent of allotment validity, as follows:
• For charges under R.A. 10147 – allotments shall be valid up to December 31,
2012; and
• For charges under R.A. 10155 – allotments shall be valid up to December 31,
2013.
5.12 Timely compliance with the submission of existing BARs and other reportorial
requirements is reiterated for monitoring purposes.
6.0 Effectivity
This circular shall take effect immediately.
(Sgd.) FLORENCIO B. ABAD

Secretary
As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and
departments as of June 30, 2012 that were charged against the continuing appropriations for fiscal
year 2011 and the 2012 GAA (R.A. No. 10155) were subject to withdrawal through the issuance of
negative SAROs, but such allotments could be either: (1) reissued for the original PAPs of the
concerned agencies from which they were withdrawn; or (2) realigned to cover additional funding
for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs of any
agency and to fund priority PAPs not considered in the 2012 budget but expected to be started or
implemented in 2012. Financing the other priority PAPs was made subject to the approval of the
President. Note here that NBC No. 541 used terminologies like "realignment" and "augmentation" in
the application of the withdrawn unobligated allotments.
Taken together, all the issuances showed how the DAP was to be implemented and funded, that is
— (1) by declaring "savings" coming from the various departments and agencies derived from
pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing
unprogrammed funds; and (3) applying the "savings" and unprogrammed funds to augment existing
PAPs or to support other priority PAPs.
c. DAP was not an appropriation

measure; hence, no appropriation
law was required to adopt or to
implement it
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact a law to
establish the DAP, or to authorize the disbursement and release of public funds to implement the
DAP. Villegas, PHILCONSA, IBP, Araullo, and COURAGE observe that the appropriations funded
under the DAP were not included in the 2011, 2012 and 2013 GAAs. To petitioners IBP, Araullo, and
COURAGE, the DAP, being actually an appropriation that set aside public funds for public use,
should require an enabling law for its validity. VACC maintains that the DAP, because it involved
huge allocations that were separate and distinct from the GAAs, circumvented and duplicated the
GAAs without congressional authorization and control.
The petitioners contend in unison that based on how it was developed and implemented the DAP
violated the mandate of Section 29(1), Article VI of the 1987 Constitution that "[n]o money shall be
paid out of the Treasury except in pursuance of an appropriation made by law."
The OSG posits, however, that no law was necessary for the adoption and implementation of the
DAP because of its being neither a fund nor an appropriation, but a program or an administrative
system of prioritizing spending; and that the adoption of the DAP was by virtue of the authority of
the President as the Chief Executive to ensure that laws were faithfully executed.
We agree with the OSG’s position.
The DAP was a government policy or strategy designed to stimulate the economy through
accelerated spending. In the context of the DAP’s adoption and implementation being a function
pertaining to the Executive as the main actor during the Budget Execution Stage under its
constitutional mandate to faithfully execute the laws, including the GAAs, Congress did not need
to legislate to adopt or to implement the DAP. Congress could appropriate but would have nothing
more to do during the Budget Execution Stage. Indeed, appropriation was the act by which
Congress "designates a particular fund, or sets apart a specified portion of the public revenue or of
the money in the public treasury, to be applied to some general object of governmental
expenditure, or to some individual purchase or expense."124 As pointed out in Gonzales v.
Raquiza:125 ‘"In a strict sense, appropriation has been defined ‘as nothing more than the legislative
authorization prescribed by the Constitution that money may be paid out of the Treasury,’ while
appropriation made by law refers to ‘the act of the legislature setting apart or assigning to a
particular use a certain sum to be used in the payment of debt or dues from the State to its
creditors.’"126
On the other hand, the President, in keeping with his duty to faithfully execute the laws, had
sufficient discretion during the execution of the budget to adapt the budget to changes in the
country’s economic situation.127 He could adopt a plan like the DAP for the purpose. He could pool
the savings and identify the PAPs to be funded under the DAP. The pooling of savings pursuant to
the DAP, and the identification of the PAPs to be funded under the DAP did not involve
appropriation in the strict sense because the money had been already set apart from the public
treasury by Congress through the GAAs. In such actions, the Executive did not usurp the power
vested in Congress under Section 29(1), Article VI of the Constitution.
3.
Unreleased appropriations and withdrawn
unobligated allotments under the DAP
were not savings, and the use of such
appropriations contravened Section 25(5),
Article VI of the 1987 Constitution.
Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by the Executive
to ramp up spending to accelerate economic growth, the challenges posed by the petitioners
constrain us to dissect the mechanics of the actual execution of the DAP. The management and
utilization of the public wealth inevitably demands a most careful scrutiny of whether the
Executive’s implementation of the DAP was consistent with the Constitution, the relevant GAAs
and other existing laws.
a. Although executive discretion

and flexibility are necessary in
the execution of the budget, any
transfer of appropriated funds
should conform to Section 25(5),
Article VI of the Constitution
We begin this dissection by reiterating that Congress cannot anticipate all issues and needs that
may come into play once the budget reaches its execution stage. Executive discretion is necessary
at that stage to achieve a sound fiscal administration and assure effective budget implementation.
The heads of offices, particularly the President, require flexibility in their operations under
performance budgeting to enable them to make whatever adjustments are needed to meet
established work goals under changing conditions.128 In particular, the power to transfer funds can
give the President the flexibility to meet unforeseen events that may otherwise impede the
efficient implementation of the PAPs set by Congress in the GAA.
Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to
the GAAs,129particularly when the funds are grouped to form lump sum accounts. 130 It is assumed
that the agencies of the Government enjoy more flexibility when the GAAs provide broader
appropriation items.131 This flexibility comes in the form of policies that the Executive may adopt
during the budget execution phase. The DAP – as a strategy to improve the country’s economic
position – was one policy that the President decided to carry out in order to fulfill his mandate
under the GAAs.
Denying to the Executive flexibility in the expenditure process would be counterproductive. In

Presidential Spending Power,132 Prof. Louis Fisher, an American constitutional scholar whose
specialties have included budget policy, has justified extending discretionary authority to the
Executive thusly:
[T]he impulse to deny discretionary authority altogether should be resisted. There are many
number of reasons why obligations and outlays by administrators may have to differ from
appropriations by legislators. Appropriations are made many months, and sometimes years, in
advance of expenditures. Congress acts with imperfect knowledge in trying to legislate in fields
that are highly technical and constantly undergoing change. New circumstances will develop to
make obsolete and mistaken the decisions reached by Congress at the appropriation stage. It is not
practicable for Congress to adjust to each new development by passing separate supplemental
appropriation bills. Were Congress to control expenditures by confining administrators to narrow
statutory details, it would perhaps protect its power of the purse but it would not protect the
purse itself. The realities and complexities of public policy require executive discretion for the
sound management of public funds.
xxxx
x x x The expenditure process, by its very nature, requires substantial discretion for administrators.
They need to exercise judgment and take responsibility for their actions, but those actions ought
to be directed toward executing congressional, not administrative policy. Let there be discretion,
but channel it and use it to satisfy the programs and priorities established by Congress.
In contrast, by allowing to the heads of offices some power to transfer funds within their
respective offices, the Constitution itself ensures the fiscal autonomy of their offices, and at the
same time maintains the separation of powers among the three main branches of the Government.
The Court has recognized this, and emphasized so in Bengzon v. Drilon,133 viz:
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions
and constraints on the manner the independent constitutional offices allocate and utilize the
funds appropriated for their operations is anathema to fiscal autonomy and violative not only of
the express mandate of the Constitution but especially as regards the Supreme Court, of the
independence and separation of powers upon which the entire fabric of our constitutional system
is based.
In the case of the President, the power to transfer funds from one item to another within the
Executive has not been the mere offshoot of established usage, but has emanated from law itself.
It has existed since the time of the American Governors-General.134 Act No. 1902 (An Act
authorizing the Governor-General to direct any unexpended balances of appropriations be
returned to the general fund of the Insular Treasury and to transfer from the general fund moneys
which have been returned thereto), passed on May 18, 1909 by the First Philippine
Legislature,135 was the first enabling law that granted statutory authority to the President to
transfer funds. The authority was without any limitation, for the Act explicitly empowered the
Governor-General to transfer any unexpended balance of appropriations for any bureau or office
to another, and to spend such balance as if it had originally been appropriated for that bureau or
office.
From 1916 until 1920, the appropriations laws set a cap on the amounts of funds that could be
transferred, thereby limiting the power to transfer funds. Only 10% of the amounts appropriated
for contingent or miscellaneous expenses could be transferred to a bureau or office, and the
transferred funds were to be used to cover deficiencies in the appropriations also for
miscellaneous expenses of said bureau or office.
In 1921, the ceiling on the amounts of funds to be transferred from items under miscellaneous
expenses to any other item of a certain bureau or office was removed.
During the Commonwealth period, the power of the President to transfer funds continued to be
governed by the GAAs despite the enactment of the Constitution in 1935. It is notable that the
1935 Constitution did not include a provision on the power to transfer funds. At any rate, a shift in
the extent of the President’s power to transfer funds was again experienced during this era, with
the President being given more flexibility in implementing the budget. The GAAs provided that the
power to transfer all or portions of the appropriations in the Executive Department could be made
in the "interest of the public, as the President may determine." 136
In its time, the 1971 Constitutional Convention wanted to curtail the President’s seemingly
unbounded discretion in transferring funds.137 Its Committee on the Budget and Appropriation
proposed to prohibit the transfer of funds among the separate branches of the Government and
the independent constitutional bodies, but to allow instead their respective heads to augment
items of appropriations from savings in their respective budgets under certain limitations. 138 The
clear intention of the Convention was to further restrict, not to liberalize, the power to transfer
appropriations.139 Thus, the Committee on the Budget and Appropriation initially considered
setting stringent limitations on the power to augment, and suggested that the augmentation of an
item of appropriation could be made "by not more than ten percent if the original item of
appropriation to be augmented does not exceed one million pesos, or by not more than five
percent if the original item of appropriation to be augmented exceeds one million pesos." 140 But
two members of the Committee objected to the ₱1,000,000.00 threshold, saying that the amount
was arbitrary and might not be reasonable in the future. The Committee agreed to eliminate the
₱1,000,000.00 threshold, and settled on the ten percent limitation. 141
In the end, the ten percent limitation was discarded during the plenary of the Convention, which
adopted the following final version under Section 16, Article VIII of the 1973 Constitution, to wit:
(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the
Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions may by law be authorized to augment any item in the general
appropriations law for their respective offices from savings in other items of their respective
appropriations.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from one item
to another, unless Congress enacted a law authorizing the President, the Prime Minister, the
Speaker, the Chief Justice of the Supreme Court, and the heads of the Constitutional omissions to
transfer funds for the purpose of augmenting any item from savings in another item in the GAA of
their respective offices. The leeway was limited to augmentation only, and was further
constricted by the condition that the funds to be transferred should come from savings from
another item in the appropriation of the office.142
On July 30, 1977, President Marcos issued PD No. 1177, providing in its Section 44 that:
Section 44. Authority to Approve Fund Transfers. The President shall have the authority to transfer
any fund appropriated for the different departments, bureaus, offices and agencies of the
Executive Department which are included in the General Appropriations Act, to any program,
project, or activity of any department, bureau or office included in the General Appropriations Act
or approved after its enactment.
The President shall, likewise, have the authority to augment any appropriation of the Executive
Department in the General Appropriations Act, from savings in the appropriations of another
department, bureau, office or agency within the Executive Branch, pursuant to the provisions of
Article VIII, Section 16 (5) of the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44 for
contravening Section 16(5)of the 1973 Constitution, ruling:
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted under said
Section 16. It empowers the President to indiscriminately transfer funds from one department,
bureau, office or agency of the Executive Department to any program, project or activity of any
department, bureau or office included in the General Appropriations Act or approved after its
enactment, without regard as to whether or not the funds to be transferred are actually savings in
the item from which the same are to be taken, or whether or not the transfer is for the purpose of
augmenting the item to which said transfer is to be made. It does not only completely disregard
the standards set in the fundamental law, thereby amounting to an undue delegation of legislative
powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render
the provision in question null and void.143
It is significant that Demetria was promulgated 25 days after the ratification by the people of the
1987 Constitution, whose Section 25(5) of Article VI is identical to Section 16(5), Article VIII of the
1973 Constitution, to wit:
Section 25. x x x
xxxx
5) No law shall be passed authorizing any transfer of appropriations; however, the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to
augment any item in the general appropriations law for their respective offices from savings in
other items of their respective appropriations.
xxxx
The foregoing history makes it evident that the Constitutional Commission included Section 25(5),
supra, to keep a tight rein on the exercise of the power to transfer funds appropriated by Congress
by the President and the other high officials of the Government named therein. The Court stated
in Nazareth v. Villar:144
In the funding of current activities, projects, and programs, the general rule should still be that
the budgetary amount contained in the appropriations bill is the extent Congress will determine as
sufficient for the budgetary allocation for the proponent agency. The only exception is found in
Section 25 (5), Article VI of the Constitution, by which the President, the President of the Senate,
the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions are authorized to transfer appropriations to augmentany
item in the GAA for their respective offices from the savings in other items of their respective
appropriations. The plain language of the constitutional restriction leaves no room for the
petitioner’s posture, which we should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section 25(5),
Article VI of the Constitution limiting the authority to transfer savings only to augment another
item in the GAA is strictly but reasonably construed as exclusive. As the Court has expounded in
Lokin, Jr. v. Commission on Elections:
When the statute itself enumerates the exceptions to the application of the general rule, the
exceptions are strictly but reasonably construed. The exceptions extend only as far as their
language fairly warrants, and all doubts should be resolved in favor of the general provision rather
than the exceptions. Where the general rule is established by a statute with exceptions, none but
the enacting authority can curtail the former. Not even the courts may add to the latter by
implication, and it is a rule that an express exception excludes all others, although it is always
proper in determining the applicability of the rule to inquire whether, in a particular case, it
accords with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the
general words of a statute, which is otherwise within the scope and meaning of such general words.
Consequently, the existence of an exception in a statute clarifies the intent that the statute shall
apply to all cases not excepted. Exceptions are subject to the rule of strict construction; hence,
any doubt will be resolved in favor of the general provision and against the exception. Indeed, the
liberal construction of a statute will seem to require in many circumstances that the exception, by
which the operation of the statute is limited or abridged, should receive a restricted construction.
Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on the
President’s discretion over the appropriations during the Budget Execution Phase.
b. Requisites for the valid transfer of

appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must be made upon a
concurrence of the following requisites, namely:
(1) There is a law authorizing the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and the heads of the
Constitutional Commissions to transfer funds within their respective offices;
(2) The funds to be transferred are savings generated from the appropriations for their
respective offices; and (3) The purpose of the transfer is to augment an item in the general
appropriations law for their respective offices.
b.1. First Requisite–GAAs of 2011 and

2012 lacked valid provisions to
authorize transfers of funds under
the DAP; hence, transfers under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution, must have an
implementing law for it to be operative. That law, generally, is the GAA of a given fiscal year. To
comply with the first requisite, the GAAs should expressly authorize the transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
In the 2011 GAA, the provision that gave the President and the other high officials the authority to
transfer funds was Section 59, as follows:
Section 59. Use of Savings. The President of the Philippines, the Senate President, the Speaker of
the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional
Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment
any item in this Act from savings in other items of their respective appropriations.
In the 2012 GAA, the empowering provision was Section 53, to wit:
Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment
any item in this Act from savings in other items of their respective appropriations.
In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM as justification
for the use of savings under the DAP.145
A reading shows, however, that the aforequoted provisions of the GAAs of 2011 and 2012 were
textually unfaithful to the Constitution for not carrying the phrase "for their respective offices"
contained in Section 25(5), supra. The impact of the phrase "for their respective offices" was to
authorize only transfers of funds within their offices (i.e., in the case of the President, the
transfer was to an item of appropriation within the Executive). The provisions carried a different
phrase ("to augment any item in this Act"), and the effect was that the 2011 and 2012 GAAs
thereby literally allowed the transfer of funds from savings to augment any item in the GAAs even
if the item belonged to an office outside the Executive. To that extent did the 2011 and 2012 GAAs
contravene the Constitution. At the very least, the aforequoted provisions cannot be used to claim
authority to transfer appropriations from the Executive to another branch, or to a constitutional
commission.
Apparently realizing the problem, Congress inserted the omitted phrase in the counterpart
provision in the 2013 GAA, to wit:
Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings
in their respective appropriations to augment actual deficiencies incurred for the current year in
any item of their respective appropriations.
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra, existed,
there still remained two other requisites to be met, namely: that the source of funds to be
transferred were savings from appropriations within the respective offices; and that the transfer
must be for the purpose of augmenting an item of appropriation within the respective offices.
b.2. Second Requisite – There were

no savings from which funds
could be sourced for the DAP
Were the funds used in the DAP actually savings?
The petitioners claim that the funds used in the DAP — the unreleased appropriations and
withdrawn unobligated allotments — were not actual savings within the context of Section 25(5),
supra, and the relevant provisions of the GAAs. Belgica argues that "savings" should be understood
to refer to the excess money after the items that needed to be funded have been funded, or those
that needed to be paid have been paid pursuant to the budget. 146 The petitioners posit that there
could be savings only when the PAPs for which the funds had been appropriated were actually
implemented and completed, or finally discontinued or abandoned. They insist that savings could
not be realized with certainty in the middle of the fiscal year; and that the funds for "slow-moving"
PAPs could not be considered as savings because such PAPs had not actually been abandoned or
discontinued yet.147 They stress that NBC No. 541, by allowing the withdrawn funds to be reissued
to the "original program or project from which it was withdrawn," conceded that the PAPs from
which the supposed savings were taken had not been completed, abandoned or discontinued. 148
The OSG represents that "savings" were "appropriations balances," being the difference between
the appropriation authorized by Congress and the actual amount allotted for the appropriation;
that the definition of "savings" in the GAAs set only the parameters for determining when savings
occurred; that it was still the President (as well as the other officers vested by the Constitution
with the authority to augment) who ultimately determined when savings actually existed because
savings could be determined only during the stage of budget execution; that the President must be
given a wide discretion to accomplish his tasks; and that the withdrawn unobligated allotments
were savings inasmuch as they were clearly "portions or balances of any programmed
appropriation…free from any obligation or encumbrances which are (i) still available after the
completion or final discontinuance or abandonment of the work, activity or purpose for which the
appropriation is authorized…"
We partially find for the petitioners.
In ascertaining the meaning of savings, certain principles should be borne in mind. The first
principle is that Congress wields the power of the purse. Congress decides how the budget will be
spent; what PAPs to fund; and the amounts of money to be spent for each PAP. The second
principle is that the Executive, as the department of the Government tasked to enforce the laws,
is expected to faithfully execute the GAA and to spend the budget in accordance with the
provisions of the GAA.149 The Executive is expected to faithfully implement the PAPs for which
Congress allocated funds, and to limit the expenditures within the allocations, unless exigencies
result to deficiencies for which augmentation is authorized, subject to the conditions provided by
law. The third principle is that in making the President’s power to augment operative under the
GAA, Congress recognizes the need for flexibility in budget execution. In so doing, Congress
diminishes its own power of the purse, for it delegates a fraction of its power to the Executive. But
Congress does not thereby allow the Executive to override its authority over the purse as to let the
Executive exceed its delegated authority. And the fourth principle is that savings should be actual.
"Actual" denotes something that is real or substantial, or something that exists presently in fact, as
opposed to something that is merely theoretical, possible, potential or hypothetical. 150
The foregoing principles caution us to construe savings strictly against expanding the scope of the
power to augment. It is then indubitable that the power to augment was to be used only when the
purpose for which the funds had been allocated were already satisfied, or the need for such funds
had ceased to exist, for only then could savings be properly realized. This interpretation prevents
the Executive from unduly transgressing Congress’ power of the purse.
The definition of "savings" in the GAAs, particularly for 2011, 2012 and 2013, reflected this
interpretation and made it operational, viz:
Savings refer to portions or balances of any programmed appropriation in this Act free from any
obligation or encumbrance which are: (i) still available after the completion or final
discontinuance or abandonment of the work, activity or purpose for which the appropriation is
authorized; (ii) from appropriations balances arising from unpaid compensation and related costs
pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations
balances realized from the implementation of measures resulting in improved systems and
efficiencies and thus enabled agencies to meet and deliver the required or planned targets,
programs and services approved in this Act at a lesser cost.
The three instances listed in the GAAs’ aforequoted definition were a sure indication that savings
could be generated only upon the purpose of the appropriation being fulfilled, or upon the need
for the appropriation being no longer existent.
The phrase "free from any obligation or encumbrance" in the definition of savings in the GAAs
conveyed the notion that the appropriation was at that stage when the appropriation was already
obligated and the appropriation was already released. This interpretation was reinforced by the
enumeration of the three instances for savings to arise, which showed that the appropriation
referred to had reached the agency level. It could not be otherwise, considering that only when
the appropriation had reached the agency level could it be determined whether (a) the PAP for
which the appropriation had been authorized was completed, finally discontinued, or abandoned;
or (b) there were vacant positions and leaves of absence without pay; or (c) the required or
planned targets, programs and services were realized at a lesser cost because of the
implementation of measures resulting in improved systems and efficiencies.
The DBM declares that part of the savings brought under the DAP came from "pooling of unreleased
appropriations such as unreleased Personnel Services appropriations which will lapse at the end of
the year, unreleased appropriations of slow moving projects and discontinued projects per
Zero-Based Budgeting findings."
The declaration of the DBM by itself does not state the clear legal basis for the treatment of
unreleased or unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere description of the
status of the items as unalloted or unreleased. They have not yet ripened into categories of items
from which savings can be generated. Appropriations have been considered "released" if there has
already been an allotment or authorization to incur obligations and disbursement authority. This
means that the DBM has issued either an ABM (for those not needing clearance), or a SARO (for
those needing clearance), and consequently an NCA, NCAA or CDC, as the case may be.
Appropriations remain unreleased, for instance, because of noncompliance with documentary
requirements (like the Special Budget Request), or simply because of the unavailability of funds.
But the appropriations do not actually reach the agencies to which they were allocated under the
GAAs, and have remained with the DBM technically speaking. Ergo, unreleased appropriations
refer to appropriations with allotments but without disbursement authority.
For us to consider unreleased appropriations as savings, unless these met the statutory definition
of savings, would seriously undercut the congressional power of the purse, because such
appropriations had not even reached and been used by the agency concerned vis-à-vis the PAPs for
which Congress had allocated them. However, if an agency has unfilled positions in its plantilla
and did not receive an allotment and NCA for such vacancies, appropriations for such positions,
although unreleased, may already constitute savings for that agency under the second instance.
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of
"savings" in the GAA, that is, as "portions or balances of any programmed appropriation in this Act
free from any obligation or encumbrance." But the first part of the definition was further qualified
by the three enumerated instances of when savings would be realized. As such, unobligated
allotments could not be indiscriminately declared as savings without first determining whether
any of the three instances existed. This signified that the DBM’s withdrawal of unobligated
allotments had disregarded the definition of savings under the GAAs.
Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE appropriations
are deemed divided into twelve monthly allocations within the fiscal year; hence, savings could be
generated monthly from the excess or unused MOOE appropriations other than the Mandatory
Expenditures and Expenditures for Business-type Activities because of the physical impossibility to
obligate and spend such funds as MOOE for a period that already lapsed. Following this observation,
MOOE for future months are not savings and cannot be transferred.
The DBM’s Memorandum for the President dated June 25, 2012 (which became the basis of NBC No.
541) stated:
ON THE AUTHORITY TO WITHDRAW UNOBLIGATED ALLOTMENTS

5.0 The DBM, during the course of performance reviews conducted on the agencies’
operations, particularly on the implementation of their projects/activities, including
expenses incurred in undertaking the same, have been continuously calling the attention of
all National Government agencies (NGAs) with low levels of obligations as of end of the first
quarter to speedup the implementation of their programs and projects in the second
quarter.
6.0 Said reminders were made in a series of consultation meetings with the concerned
agencies and with call-up letters sent.
7.0 Despite said reminders and the availability of funds at the department’s disposal, the
level of financial performance of some departments registered below program, with the
targeted obligations/disbursements for the first semester still not being met.
8.0 In order to maximize the use of the available allotment, all unobligated balances as of
June 30, 2012, both for continuing and current allotments shall be withdrawn and pooled to
fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of
slow moving projects to be identified by the agencies and their catch up plans to be
evaluated by the DBM.
It is apparent from the foregoing text that the withdrawal of unobligated allotments would be
based on whether the allotments pertained to slow-moving projects, or not. However, NBC No.
541 did not set in clear terms the criteria for the withdrawal of unobligated allotments, viz:
3.1. These guidelines shall cover the withdrawal of unobligated allotments as of June 30,
2012 ofall national government agencies (NGAs) charged against FY 2011 Continuing
Appropriation (R.A. No. 10147) and FY 2012 Current Appropriation (R.A. No. 10155),
pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the

implementation of programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as

savings by the agencies concerned based on their undated/validated list of
pensioners.
A perusal of its various provisions reveals that NBC No. 541 targeted the "withdrawal of
unobligated allotments of agencies with low levels of obligations" 151 "to fund priority and/or
fast-moving programs/projects."152 But the fact that the withdrawn allotments could be
"[r]eissued for the original programs and projects of the agencies/OUs concerned, from which the
allotments were withdrawn"153 supported the conclusion that the PAPs had not yet been finally
discontinued or abandoned. Thus, the purpose for which the withdrawn funds had been
appropriated was not yet fulfilled, or did not yet cease to exist, rendering the declaration of the
funds as savings impossible.
Worse, NBC No. 541 immediately considered for withdrawal all released allotments in 2011
charged against the 2011 GAA that had remained unobligated based on the following
considerations, to wit:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to
be implementation-ready and doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency
has a slower-than-programmed implementation capacity or agency tends to implement
projects within a two-year timeframe.
Such withdrawals pursuant to NBC No. 541, the circular that affected the unobligated allotments
for continuing and current appropriations as of June 30, 2012, disregarded the 2-year period of
availability of the appropriations for MOOE and capital outlay extended under Section 65, General
Provisions of the 2011 GAA, viz:
Section 65. Availability of Appropriations. — Appropriations for MOOE and capital outlays
authorized in this Act shall be available for release and obligation for the purpose specified, and
under the same special provisions applicable thereto, for a period extending to one fiscal year
after the end of the year in which such items were appropriated: PROVIDED, That appropriations
for MOOE and capital outlays under R.A. No. 9970 shall be made available up to the end of FY 2011:
PROVIDED, FURTHER, That a report on these releases and obligations shall be submitted to the
Senate Committee on Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:
Section 63. Availability of Appropriations. — Appropriations for MOOE and capital outlays
authorized in this Act shall be available for release and obligation for the purpose specified, and
under the same special provisions applicable thereto, for a period extending to one fiscal year
after the end of the year in which such items were appropriated: PROVIDED, That a report on these
releases and obligations shall be submitted to the Senate Committee on Finance and the House
Committee on Appropriations, either in printed form or by way of electronic document. 154
Thus, another alleged area of constitutional infirmity was that the DAP and its relevant issuances
shortened the period of availability of the appropriations for MOOE and capital outlays.
Congress provided a one-year period of availability of the funds for all allotment classes in the
2013 GAA (R.A. No. 10352), to wit:
Section 63. Availability of Appropriations.— All appropriations authorized in this Act shall be
available for release and obligation for the purposes specified, and under the same special
provisions applicable thereto, until the end of FY 2013: PROVIDED, That a report on these releases
and obligations shall be submitted to the Senate Committee on Finance and House Committee on
Appropriations, either in printed form or by way of electronic document.
Yet, in his memorandum for the President dated May 20, 2013, Sec. Abad sought omnibus authority
to consolidate savings and unutilized balances to fund the DAP on a quarterly basis, viz:
7.0 If the level of financial performance of some department will register below program,
even with the availability of funds at their disposal, the targeted obligations/disbursements
for each quarter will not be met. It is important to note that these funds will lapse at the
end of the fiscal year if these remain unobligated.
8.0 To maximize the use of the available allotment, all unobligated balances at the end of
every quarter, both for continuing and current allotments shall be withdrawn and pooled to
fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of
slow moving projects to be identified by the agencies and their catch up plans to be
evaluated by the DBM.
The validity period of the affected appropriations, already given the brief Lifes pan of one year,
was further shortened to only a quarter of a year under the DBM’s memorandum dated May 20,
2013.
The petitioners accuse the respondents of forcing the generation of savings in order to have a
larger fund available for discretionary spending. They aver that the respondents, by withdrawing
unobligated allotments in the middle of the fiscal year, in effect deprived funding for PAPs with
existing appropriations under the GAAs.155
The respondents belie the accusation, insisting that the unobligated allotments were being
withdrawn upon the instance of the implementing agencies based on their own assessment that
they could not obligate those allotments pursuant to the President’s directive for them to spend
their appropriations as quickly as they could in order to ramp up the economy. 156
We agree with the petitioners.
Contrary to the respondents’ insistence, the withdrawals were upon the initiative of the DBM itself.
The text of NBC No. 541 bears this out, to wit:
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn,
all departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012,
the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s
latest report available shall be used by DBM as basis for withdrawal of allotment. The DBM shall
compute/approximate the agency’s obligation level as of June 30 to derive its unobligated
allotments as of same period. Example: If the March 31 SAOB or FRO reflects actual obligations of
P 800M then the June 30 obligation level shall approximate to ₱1,600 M (i.e., ₱800 M x 2 quarters).
The petitioners assert that no law had authorized the withdrawal and transfer of unobligated
allotments and the pooling of unreleased appropriations; and that the unbridled withdrawal of
unobligated allotments and the retention of appropriated funds were akin to the impoundment of
appropriations that could be allowed only in case of "unmanageable national government budget
deficit" under the GAAs,157 thus violating the provisions of the GAAs of 2011, 2012 and 2013
prohibiting the retention or deduction of allotments. 158
In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as
a last-ditch effort of the Executive to push agencies into actually spending their appropriations;
that such policy did not amount to an impoundment scheme, because impoundment referred to
the decision of the Executive to refuse to spend funds for political or ideological reasons; and that
the withdrawal of allotments under NBC No. 541 was made pursuant to Section 38, Chapter 5, Book
VI of the Administrative Code, by which the President was granted the authority to suspend or
otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the
public interest so required.
The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated
allotments and the pooling of unreleased appropriations were invalid for being bereft of legal
support. Nonetheless, such withdrawal of unobligated allotments and the retention of
appropriated funds cannot be considered as impoundment.
According to Philippine Constitution Association v. Enriquez:159 "Impoundment refers to a refusal

by the President, for whatever reason, to spend funds made available by Congress. It is the failure
to spend or obligate budget authority of any type." Impoundment under the GAA is understood to
mean the retention or deduction of appropriations. The 2011 GAA authorized impoundment only in
case of unmanageable National Government budget deficit, to wit:
Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized

under this Act shall be impounded through retention or deduction, unless in accordance with the
rules and regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the
purposes, programs, projects and activities authorized under this Act, except those covered under
the Unprogrammed Fund, shall be released pursuant to Section 33 (3), Chapter 5, Book VI of E.O.
No. 292.
Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of

appropriations authorized in this Act shall be effected only in cases where there is an
unmanageable national government budget deficit.
Unmanageable national government budget deficit as used in this section shall be construed to
mean that (i) the actual national government budget deficit has exceeded the quarterly budget
deficit targets consistent with the full-year target deficit as indicated in the FY 2011 Budget of
Expenditures and Sources of Financing submitted by the President and approved by Congress
pursuant to Section 22, Article VII of the Constitution, or (ii) there are clear economic indications
of an impending occurrence of such condition, as determined by the Development Budget
Coordinating Committee and approved by the President.
The 2012 and 2013 GAAs contained similar provisions.
The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment
because it entailed only the transfer of funds, not the retention or deduction of appropriations.
Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be
applicable. They uniformly stated:
Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from

appropriations provided in this Act shall be transmitted intact or in full to the office or agency
concerned. No retention or deduction as reserves or overhead shall be made, except as authorized
by law, or upon direction of the President of the Philippines. The COA shall ensure compliance
with this provision to the extent that sub-allotments by agencies to their subordinate offices are in
conformity with the release documents issued by the DBM.
The provision obviously pertained to the retention or deduction of allotments upon their release
from the DBM, which was a different matter altogether. The Court should not expand the meaning
of the provision by applying it to the withdrawal of allotments.
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to
justify the withdrawal of unobligated allotments. But the provision authorized only the suspension
or stoppage of further expenditures, not the withdrawal of unobligated allotments, to wit:
Section 38. Suspension of Expenditure of Appropriations.- Except as otherwise provided in the

General Appropriations Act and whenever in his judgment the public interest so requires, the
President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop
further expenditure of funds allotted for any agency, or any other expenditure authorized in the
General Appropriations Act, except for personal services appropriations used for permanent
officials and employees.
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38,
supra, but instead transferred the funds to other PAPs.
It is relevant to remind at this juncture that the balances of appropriations that remained
unexpended at the end of the fiscal year were to be reverted to the General Fund.1âwphi1 This
was the mandate of Section 28, Chapter IV, Book VI of the Administrative Code, to wit:
Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.-

Unexpended balances of appropriations authorized in the General Appropriation Act shall revert to
the unappropriated surplus of the General Fund at the end of the fiscal year and shall not
thereafter be available for expenditure except by subsequent legislative enactment: Provided,
that appropriations for capital outlays shall remain valid until fully spent or reverted: provided,
further, that continuing appropriations for current operating expenditures may be specifically
recommended and approved as such in support of projects whose effective implementation calls
for multi-year expenditure commitments: provided, finally, that the President may authorize the
use of savings realized by an agency during given year to meet non-recurring expenditures in a
subsequent year.
The balances of continuing appropriations shall be reviewed as part of the annual budget
preparation process and the preparation process and the President may approve upon
recommendation of the Secretary, the reversion of funds no longer needed in connection with the
activities funded by said continuing appropriations.
The Executive could not circumvent this provision by declaring unreleased appropriations and
unobligated allotments as savings prior to the end of the fiscal year.
b.3. Third Requisite – No funds from

savings could be transferred under
the DAP to augment deficient items

not provided in the GAA
The third requisite for a valid transfer of funds is that the purpose of the transfer should be "to
augment an item in the general appropriations law for the respective offices." The term "augment"
means to enlarge or increase in size, amount, or degree. 160
The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for
the PAP item to be augmented must be deficient, to wit: –
x x x Augmentation implies the existence in this Act of a program, activity, or project with an
appropriation, which upon implementation, or subsequent evaluation of needed resources, is
determined to be deficient. In no case shall a non-existent program, activity, or project, be
funded by augmentation from savings or by the use of appropriations otherwise authorized in this
Act.
In other words, an appropriation for any PAP must first be determined to be deficient before it
could be augmented from savings. Note is taken of the fact that the 2013 GAA already made this
quite clear, thus:
Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings
in their respective appropriations to augment actual deficiencies incurred for the current year in
any item of their respective appropriations.
As of 2013, a total of ₱144.4 billion worth of PAPs were implemented through the DAP. 161
Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012.162 Sec. Abad has
reported that 9% of the total DAP releases were applied to the PAPs identified by the legislators.163
The petitioners disagree, however, and insist that the DAP supported the following PAPs that had
not been covered with appropriations in the respective GAAs, namely:
(i) ₱1.5 billion for the Cordillera People’s Liberation Army;
(ii) ₱1.8 billion for the Moro National Liberation Front;
(iii) ₱700 million for assistance to Quezon Province;164
(iv) ₱50 million to ₱100 (million) each to certain senators;165
(v) ₱10 billion for the relocation of families living along dangerous zones under the National
Housing Authority;
(vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;
(vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;
(viii) ₱8.6 billion for the ARMM comprehensive peace and development program;
(ix) ₱6.5 billion augmentation of LGU internal revenue allotments
(x) ₱5 billion for crucial projects like tourism road construction under the Department of
Tourism and the Department of Public Works and Highways;
(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;
(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and
(xiii) ₱4 billion for the DepEd-PPP school infrastructure projects.166
In refutation, the OSG argues that a total of 116 DAP-financed PAPs were implemented, had
appropriation covers, and could properly be accounted for because the funds were released
following and pursuant to the standard practices adopted by the DBM. 167 In support of its argument,
the OSG has submitted seven evidence packets containing memoranda, SAROs, and other
pertinent documents relative to the implementation and fund transfers under the DAP. 168
Upon careful review of the documents contained in the seven evidence packets, we conclude that
the "savings" pooled under the DAP were allocated to PAPs that were not covered by any
appropriations in the pertinent GAAs.
For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk, Exposure,
Assessment and Mitigation (DREAM) project under the Department of Science and Technology
(DOST) covered the amount of ₱1.6 Billion,169 broken down as follows:
APPROPRIATION PARTICULARS AMOUNT

CODE AUTHORIZED
A.03.a.01.a Generation of new knowledge and
technologies and research capability
building in priority areas identified as
strategic to National Development
Personnel Services P 43,504,024
Maintenance and Other Operating 1,164,517,589
Expenses 391,978,387
Capital Outlays P 1,600,000,000
the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated
only ₱537,910,000 for MOOE, but nothing for personnel services and capital outlays, to wit:
Personnel Maintenance Capital TOTAL

Services and Other Outlays
Operating
Expenditures
III. Operations
a. Funding Assistance to Science 177,406,000 1,887,365,000 49,090,000 2,113,861,000
and Technology Activities
1. Central Office 1,554,238,000 1,554,238,000
a. Generation of new
knowledge and
technologies and research
capability building in
priority areas identified as
strategic to National
Development 537,910,000 537,910,000
Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the
appropriation by Congress for the program Generation of new knowledge and technologies and
research capability building in priority areas identified as strategic to National Development, the
Executive allotted funds for personnel services and capital outlays. The Executive thereby
substituted its will to that of Congress. Worse, the Executive had not earlier proposed any amount
for personnel services and capital outlays in the NEP that became the basis of the 2011 GAA.170
It is worth stressing in this connection that the failure of the GAAs to set aside any amounts for an
expense category sufficiently indicated that Congress purposely did not see fit to fund, much less
implement, the PAP concerned. This indication becomes clearer when even the President himself
did not recommend in the NEP to fund the PAP. The consequence was that any PAP requiring
expenditure that did not receive any appropriation under the GAAs could only be a new PAP, any
funding for which would go beyond the authority laid down by Congress in enacting the GAAs. That
happened in some instances under the DAP.
In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy and
Emerging Technology Research and Development (DOST-PCIEETRD)171 for Establishment of the
Advanced Failure Analysis Laboratory, which reads:
APPROPRIATION PARTICULARS AMOUNT

CODE AUTHORIZED
Development, integration and coordination of
the National Research System for Industry,
A.02.a Energy and Emerging Technology and Related
Fields
Capital Outlays P 300,000,000
the appropriation code and the particulars appearing in the SARO did not correspond to the
program specified in the GAA, whose particulars were Research and Management
Services(inclusive of the following activities: (1) Technological and Economic Assessment for
Industry, Energy and Utilities; (2) Dissemination of Science and Technology Information; and (3)
Management of PCIERD Information System for Industry, Energy and Utilities. Even assuming that
Development, integration and coordination of the National Research System for Industry, Energy
and Emerging Technology and Related Fields– the particulars stated in the SARO – could fall under
the broad program description of Research and Management Services– as appearing in the SARO, it
would nonetheless remain a new activity by reason of its not being specifically stated in the GAA.
As such, the DBM, sans legislative authorization, could not validly fund and implement such PAP
under the DAP.
In defending the disbursements, however, the OSG contends that the Executive enjoyed sound
discretion in implementing the budget given the generality in the language and the broad policy
objectives identified under the GAAs;172 and that the President enjoyed unlimited authority to
spend the initial appropriations under his authority to declare and utilize savings, 173 and in
keeping with his duty to faithfully execute the laws.
Although the OSG rightly contends that the Executive was authorized to spend in line with its
mandate to faithfully execute the laws (which included the GAAs), such authority did not translate
to unfettered discretion that allowed the President to substitute his own will for that of Congress.
He was still required to remain faithful to the provisions of the GAAs, given that his power to spend
pursuant to the GAAs was but a delegation to him from Congress. Verily, the power to spend the
public wealth resided in Congress, not in the Executive. 174 Moreover, leaving the spending power
of the Executive unrestricted would threaten to undo the principle of separation of powers. 175
Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse
whenever it deliberates and acts on the budget proposal submitted by the Executive. 176 Its power
of the purse is touted as the very foundation of its institutional strength, 177 and underpins "all
other legislative decisions and regulating the balance of influence between the legislative and
executive branches of government."178 Such enormous power encompasses the capacity to
generate money for the Government, to appropriate public funds, and to spend the
money.179 Pertinently, when it exercises its power of the purse, Congress wields control by
specifying the PAPs for which public money should be spent.
It is the President who proposes the budget but it is Congress that has the final say on matters of
appropriations.180For this purpose, appropriation involves two governing principles, namely: (1) "a
Principle of the Public Fisc, asserting that all monies received from whatever source by any part of
the government are public funds;" and (2) "a Principle of Appropriations Control, prohibiting
expenditure of any public money without legislative authorization." 181To conform with the
governing principles, the Executive cannot circumvent the prohibition by Congress of an
expenditure for a PAP by resorting to either public or private funds. 182 Nor could the Executive
transfer appropriated funds resulting in an increase in the budget for one PAP, for by so doing the
appropriation for another PAP is necessarily decreased. The terms of both appropriations will
thereby be violated.
b.4 Third Requisite – Cross-border

augmentations from savings were
prohibited by the Constitution
By providing that the President, the President of the Senate, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, and the Heads of the Constitutional
Commissions may be authorized to augment any item in the GAA "for their respective offices,"
Section 25(5), supra, has delineated borders between their offices, such that funds appropriated
for one office are prohibited from crossing over to another office even in the guise of
augmentation of a deficient item or items. Thus, we call such transfers of funds cross-border
transfers or cross-border augmentations.
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the entire
Executive, with respect to the President; the Senate, with respect to the Senate President; the
House of Representatives, with respect to the Speaker; the Judiciary, with respect to the Chief
Justice; the Constitutional Commissions, with respect to their respective Chairpersons.
Did any cross-border transfers or augmentations transpire?

During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border
augmentations, to wit:
JUSTICE BERSAMIN:
Alright, the whole time that you have been Secretary of Department of Budget and Management,
did the Executive Department ever redirect any part of savings of the National Government under
your control cross border to another department?
SECRETARY ABAD:
Well, in the Memos that we submitted to you, such an instance, Your Honor
JUSTICE BERSAMIN:
Can you tell me two instances? I don’t recall having read your material.
SECRETARY ABAD:
Well, the first instance had to do with a request from the House of Representatives. They started
building their e-library in 2010 and they had a budget for about 207 Million but they lack about 43
Million to complete its 250 Million requirements. Prior to that, the COA, in an audit observation
informed the Speaker that they had to continue with that construction otherwise the whole
building, as well as the equipments therein may suffer from serious deterioration. And at that time,
since the budget of the House of Representatives was not enough to complete 250 Million, they
wrote to the President requesting for an augmentation of that particular item, which was granted,
Your Honor. The second instance in the Memos is a request from the Commission on Audit. At the
time they were pushing very strongly the good governance programs of the government and
therefore, part of that is a requirement to conduct audits as well as review financial reports of
many agencies. And in the performance of that function, the Commission on Audit needed
information technology equipment as well as hire consultants and litigators to help them with
their audit work and for that they requested funds from the Executive and the President saw that
it was important for the Commission to be provided with those IT equipments and litigators and
consultants and the request was granted, Your Honor.
JUSTICE BERSAMIN:
These cross border examples, cross border augmentations were not supported by appropriations…
SECRETARY ABAD:
They were, we were augmenting existing items within their… (interrupted)
JUSTICE BERSAMIN:
No, appropriations before you augmented because this is a cross border and the tenor or text of
the Constitution is quite clear as far as I am concerned. It says here, "The power to augment may
only be made to increase any item in the General Appropriations Law for their respective offices."
Did you not feel constricted by this provision?
SECRETARY ABAD:
Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations,
Your Honor. What we thought we did was to transfer savings which was needed by the Commission
to address deficiency in an existing item in both the Commission as well as in the House of
Representatives; that’s how we saw…(interrupted)
JUSTICE BERSAMIN:
So your position as Secretary of Budget is that you could do that?
SECRETARY ABAD:
In an extreme instances because…(interrupted)
JUSTICE BERSAMIN:
No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.
SECRETARY ABAD:
Well, in that particular situation when the request was made by the Commission and the House of
Representatives, we felt that we needed to respond because we felt…(interrupted). 183
The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were
transferred under the DAP respectively to the COA184 and the House of Representatives.185 Those
transfers of funds, which constituted cross-border augmentations for being from the Executive to
the COA and the House of Representatives, are graphed as follows: 186
AMOUNT
DATE (In thousand pesos)
OFFICE PURPOSE
RELEASED Reserve Releases
Imposed
Commission on IT Infrastructure Program 11/11/11 143,700
Audit and hiring of additional
litigation experts
Congress – Completion of the 07/23/12 207,034 250,000
House of construction of the (Savings of HOR)
Representatives Legislative Library and
Archives
Building/Congressional
e-library
The respondents further stated in their memorandum that the President "made available" to the
"Commission on Elections the savings of his department upon [its] request for funds…" 187 This was
another instance of a cross-border augmentation.
The respondents justified all the cross-border transfers thusly:

99. The Constitution does not prevent the President from transferring savings of his department to
another department upon the latter’s request, provided it is the recipient department that uses
such funds to augment its own appropriation. In such a case, the President merely gives the other
department access to public funds but he cannot dictate how they shall be applied by that
department whose fiscal autonomy is guaranteed by the Constitution.188
In the oral arguments held on February 18, 2014, Justice Vicente V. Mendoza, representing
Congress, announced a different characterization of the cross-border transfers of funds as in the
nature of "aid" instead of "augmentation," viz:
HONORABLE MENDOZA:
The cross-border transfers, if Your Honors please, is not an application of the DAP. What were
these cross-border transfers? They are transfers of savings as defined in the various General
Appropriations Act. So, that makes it similar to the DAP, the use of savings. There was a
cross-border which appears to be in violation of Section 25, paragraph 5 of Article VI, in the sense
that the border was crossed. But never has it been claimed that the purpose was to augment a
deficient item in another department of the government or agency of the government. The
cross-border transfers, if Your Honors please, were in the nature of [aid] rather than
augmentations. Here is a government entity separate and independent from the Executive
Department solely in need of public funds. The President is there 24 hours a day, 7 days a week.
He’s in charge of the whole operation although six or seven heads of government offices are given
the power to augment. Only the President stationed there and in effect in-charge and has the
responsibility for the failure of any part of the government. You have election, for one reason or
another, the money is not enough to hold election. There would be chaos if no money is given as an
aid, not to augment, but as an aid to a department like COA. The President is responsible in a way
that the other heads, given the power to augment, are not. So, he cannot very well allow this, if
Your Honor please.189
JUSTICE LEONEN:
May I move to another point, maybe just briefly. I am curious that the position now, I think, of
government is that some transfers of savings is now considered to be, if I’m not mistaken, aid not
augmentation. Am I correct in my hearing of your argument?
HONORABLE MENDOZA:
That’s our submission, if Your Honor, please.
JUSTICE LEONEN:
May I know, Justice, where can we situate this in the text of the Constitution? Where do we
actually derive the concepts that transfers of appropriation from one branch to the other or what
happened in DAP can be considered a said? What particular text in the Constitution can we situate
this?
HONORABLE MENDOZA:
There is no particular provision or statutory provision for that matter, if Your Honor please. It is
drawn from the fact that the Executive is the executive in-charge of the success of the
government.
JUSTICE LEONEN:
So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the
government?
HONORABLE MENDOZA:
Yes, if Your Honor, please.
JUSTICE LEONEN:
A while ago, Justice Carpio mentioned that the remedy is might be to go to Congress. That there
are opportunities and there have been opportunities of the President to actually go to Congress
and ask for supplemental budgets?
HONORABLE MENDOZA:
If there is time to do that, I would say yes.
JUSTICE LEONEN:
So, the theory of aid rather than augmentation applies in extra-ordinary situation?
HONORABLE MENDOZA:
Very extra-ordinary situations.
JUSTICE LEONEN:
But Counsel, this would be new doctrine, in case?
HONORABLE MENDOZA:
Yes, if Your Honor please.190
Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of
Section 25(5), supra, disallowing cross border transfers was disobeyed. Cross-border transfers,
whether as augmentation, or as aid, were prohibited under Section 25(5), supra.
4.
Sourcing the DAP from unprogrammed
funds despite the original revenue targets
not having been exceeded was invalid
Funding under the DAP were also sourced from unprogrammed funds provided in the GAAs for 2011,
2012,and 2013. The respondents stress, however, that the unprogrammed funds were not brought
under the DAP as savings, but as separate sources of funds; and that, consequently, the release
and use of unprogrammed funds were not subject to the restrictions under Section 25(5), supra.
The documents contained in the Evidence Packets by the OSG have confirmed that the
unprogrammed funds were treated as separate sources of funds. Even so, the release and use of
the unprogrammed funds were still subject to restrictions, for, to start with, the GAAs precisely
specified the instances when the unprogrammed funds could be released and the purposes for
which they could be used.
The petitioners point out that a condition for the release of the unprogrammed funds was that the
revenue collections must exceed revenue targets; and that the release of the unprogrammed
funds was illegal because such condition was not met. 191
The respondents disagree, holding that the release and use of the unprogrammed funds under the
DAP were in accordance with the pertinent provisions of the GAAs. In particular, the DBM avers
that the unprogrammed funds could be availed of when any of the following three instances occur,
to wit: (1) the revenue collections exceeded the original revenue targets proposed in the BESFs
submitted by the President to Congress; (2) new revenues were collected or realized from sources
not originally considered in the BESFs; or(3) newly-approved loans for foreign assisted projects
were secured, or when conditions were triggered for other sources of funds, such as perfected
loan agreements for foreign-assisted projects.192 This view of the DBM was adopted by all the
respondents in their Consolidated Comment.193
The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as
appropriations that provided standby authority to incur additional agency obligations for priority
PAPs when revenue collections exceeded targets, and when additional foreign funds are
generated.194 Contrary to the DBM’s averment that there were three instances when
unprogrammed funds could be released, the BESFs envisioned only two instances. The third
mentioned by the DBM – the collection of new revenues from sources not originally considered in
the BESFs – was not included. This meant that the collection of additional revenues from new
sources did not warrant the release of the unprogrammed funds. Hence, even if the revenues not
considered in the BESFs were collected or generated, the basic condition that the revenue
collections should exceed the revenue targets must still be complied with in order to justify the
release of the unprogrammed funds.
The view that there were only two instances when the unprogrammed funds could be released was
bolstered by the following texts of the Special Provisions of the 2011 and 2012 GAAs, to wit:
2011 GAA
1. Release of Fund. The amounts authorized herein shall be released only when the revenue
collections exceed the original revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution, including savings generated from
programmed appropriations for the year: PROVIDED, That collections arising from sources not
considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for
foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be
sufficient basis for the issuance of a SARO covering the loan proceeds: PROVIDED, FURTHERMORE,
That if there are savings generated from the programmed appropriations for the first two quarters
of the year, the DBM may, subject to the approval of the President, release the pertinent
appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%) of the said
savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total
savings from programmed appropriations for the year shall be subject to fiscal programming and
approval of the President.
2012 GAA
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue
Congress pursuant to Section 22, Article VII of the Constitution: PROVIDED, That collections arising
from sources not considered in the aforesaid original revenue targets may be used to cover
releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved
loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose
shall be sufficient basis for the issuance of a SARO covering the loan proceeds.
As can be noted, the provisos in both provisions to the effect that "collections arising from sources
not considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund" gave the authority to use such additional revenues for appropriations
funded from the unprogrammed funds. They did not at all waive compliance with the basic
requirement that revenue collections must still exceed the original revenue targets.
In contrast, the texts of the provisos with regard to additional revenues generated from
newly-approved foreign loans were clear to the effect that the perfected loan agreement would
be in itself "sufficient basis" for the issuance of a SARO to release the funds but only to the extent
of the amount of the loan. In such instance, the revenue collections need not exceed the revenue
targets to warrant the release of the loan proceeds, and the mere perfection of the loan
agreement would suffice.
It can be inferred from the foregoing that under these provisions of the GAAs the additional
revenues from sources not considered in the BESFs must be taken into account in determining if
the revenue collections exceeded the revenue targets. The text of the relevant provision of the
2013 GAA, which was substantially similar to those of the GAAs for 2011 and 2012, already made
this explicit, thus:
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue
Congress pursuant to Section 22, Article VII of the Constitution, including collections arising from
sources not considered in the aforesaid original revenue target, as certified by the BTr: PROVIDED,
That in case of newly approved loans for foreign-assisted projects, the existence of a perfected
loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the
loan proceeds.
Consequently, that there were additional revenues from sources not considered in the revenue
target would not be enough. The total revenue collections must still exceed the original revenue
targets to justify the release of the unprogrammed funds (other than those from newly-approved
foreign loans).
The present controversy on the unprogrammed funds was rooted in the correct interpretation of
the phrase "revenue collections should exceed the original revenue targets." The petitioners take
the phrase to mean that the total revenue collections must exceed the total revenue target stated
in the BESF, but the respondents understand the phrase to refer only to the collections for each
source of revenue as enumerated in the BESF, with the condition being deemed complied with
once the revenue collections from a particular source already exceeded the stated target.
The BESF provided for the following sources of revenue, with the corresponding revenue target
stated for each source of revenue, to wit:
TAX REVENUES
Taxes on Net Income and Profits

Taxes on Property
Taxes on Domestic Goods and Services
General Sales, Turnover or VAT

Selected Excises on Goods
Selected Taxes on Services

Taxes on the Use of Goods or Property or Permission to Perform Activities
Other Taxes
Taxes on International Trade and Transactions
NON-TAX REVENUES
Fees and Charges

BTR Income
Government Services
Interest on NG Deposits
Interest on Advances to Government Corporations
Income from Investments
Interest on Bond Holdings
Guarantee Fee
Gain on Foreign Exchange
NG Income Collected by BTr
Dividends on Stocks
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income
NG Share from MIAA Profit
Privatization
Foreign Grants
Thus, when the Court required the respondents to submit a certification from the Bureau of
Treasury (BTr) to the effect that the revenue collections had exceeded the original revenue
targets,195 they complied by submitting certifications from the BTr and Department of Finance
(DOF) pertaining to only one identified source of revenue – the dividends from the shares of stock
held by the Government in government-owned and controlled corporations.
To justify the release of the unprogrammed funds for 2011, the OSG presented the certification
dated March 4, 2011 issued by DOF Undersecretary Gil S. Beltran, as follows:
This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the
programmed income from dividends from shares of stock in government-owned and controlled
corporations is 5.5 billion.
This is to certify further that based on the records of the Bureau of Treasury, the National
Government has recorded dividend income amounting to ₱23.8 billion as of 31 January 2011.196
For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer
Roberto B. Tan, viz:
This is to certify that the actual dividend collections remitted to the National Government for the
period January to March 2012 amounted to ₱19.419 billion compared to the full year program of
₱5.5 billion for 2012.197
And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued by National
Treasurer Rosalia V. De Leon, to wit:
This is to certify that the actual dividend collections remitted to the National Government for the
period January to May 2013 amounted to ₱12.438 billion compared to the full year program of
₱10.0198 billion for 2013.
Moreover, the National Government accounted for the sale of the right to build and operate the
NAIA expressway amounting to ₱11.0 billion in June 2013.199
The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011,
₱19.419 billion in 2012, and ₱12.438 billion in 2013 the BTr had exceeded only the ₱5.5 billion in
target revenues in the form of dividends from stocks in each of 2011 and 2012, and only the ₱10
billion in target revenues in the form of dividends from stocks in 2013.
However, the requirement that revenue collections exceed the original revenue targets was to be
construed in light of the purpose for which the unprogrammed funds were incorporated in the
GAAs as standby appropriations to support additional expenditures for certain priority PAPs should
the revenue collections exceed the resource targets assumed in the budget or when additional
foreign project loan proceeds were realized. The unprogrammed funds were included in the GAAs
to provide ready cover so as not to delay the implementation of the PAPs should new or additional
revenue sources be realized during the year.200 Given the tenor of the certifications, the
unprogrammed funds were thus not yet supported by the corresponding resources. 201
The revenue targets stated in the BESF were intended to address the funding requirements of the
proposed programmed appropriations. In contrast, the unprogrammed funds, as standby
appropriations, were to be released only when there were revenues in excess of what the
programmed appropriations required. As such, the revenue targets should be considered as a
whole, not individually; otherwise, we would be dealing with artificial revenue surpluses. The
requirement that revenue collections must exceed revenue target should be understood to mean
that the revenue collections must exceed the total of the revenue targets stated in the BESF.
Moreover, to release the unprogrammed funds simply because there was an excess revenue as to
one source of revenue would be an unsound fiscal management measure because it would
disregard the budget plan and foster budget deficits, in contravention of the Government’s surplus
budget policy.202
We cannot, therefore, subscribe to the respondents’ view.
5.
Equal protection, checks and balances,
and public accountability challenges
The DAP is further challenged as violative of the Equal Protection Clause, the system of checks and
balances, and the principle of public accountability.
With respect to the challenge against the DAP under the Equal Protection Clause, 203 Luna argues
that the implementation of the DAP was "unfair as it [was] selective" because the funds released
under the DAP was not made available to all the legislators, with some of them refusing to avail
themselves of the DAP funds, and others being unaware of the availability of such funds. Thus, the
DAP practised "undue favoritism" in favor of select legislators in contravention of the Equal
Protection Clause.
Similarly, COURAGE contends that the DAP violated the Equal Protection Clause because no
reasonable classification was used in distributing the funds under the DAP; and that the Senators
who supposedly availed themselves of said funds were differently treated as to the amounts they
respectively received.
Anent the petitioners’ theory that the DAP violated the system of checks and balances, Luna
submits that the grant of the funds under the DAP to some legislators forced their silence about
the issues and anomalies surrounding the DAP. Meanwhile, Belgica stresses that the DAP, by
allowing the legislators to identify PAPs, authorized them to take part in the implementation and
execution of the GAAs, a function that exclusively belonged to the Executive; that such situation
constituted undue and unjustified legislative encroachment in the functions of the Executive; and
that the President arrogated unto himself the power of appropriation vested in Congress because
NBC No. 541 authorized the use of the funds under the DAP for PAPs not considered in the 2012
budget.
Finally, the petitioners insist that the DAP was repugnant to the principle of public accountability
enshrined in the Constitution,204 because the legislators relinquished the power of appropriation
to the Executive, and exhibited a reluctance to inquire into the legality of the DAP.
The OSG counters the challenges, stating that the supposed discrimination in the release of funds
under the DAP could be raised only by the affected Members of Congress themselves, and if the
challenge based on the violation of the Equal Protection Clause was really against the
constitutionality of the DAP, the arguments of the petitioners should be directed to the
entitlement of the legislators to the funds, not to the proposition that all of the legislators should
have been given such entitlement.
The challenge based on the contravention of the Equal Protection Clause, which focuses on the
release of funds under the DAP to legislators, lacks factual and legal basis. The allegations about
Senators and Congressmen being unaware of the existence and implementation of the DAP, and
about some of them having refused to accept such funds were unsupported with relevant data.
Also, the claim that the Executive discriminated against some legislators on the ground alone of
their receiving less than the others could not of itself warrant a finding of contravention of the
Equal Protection Clause. The denial of equal protection of any law should be an issue to be raised
only by parties who supposedly suffer it, and, in these cases, such parties would be the few
legislators claimed to have been discriminated against in the releases of funds under the DAP. The
reason for the requirement is that only such affected legislators could properly and fully bring to
the fore when and how the denial of equal protection occurred, and explain why there was a
denial in their situation. The requirement was not met here. Consequently, the Court was not put
in the position to determine if there was a denial of equal protection. To have the Court do so
despite the inadequacy of the showing of factual and legal support would be to compel it to
speculate, and the outcome would not do justice to those for whose supposed benefit the claim of
denial of equal protection has been made.
The argument that the release of funds under the DAP effectively stayed the hands of the
legislators from conducting congressional inquiries into the legality and propriety of the DAP is
speculative. That deficiency eliminated any need to consider and resolve the argument, for it is
fundamental that speculation would not support any proper judicial determination of an issue
simply because nothing concrete can thereby be gained. In order to sustain their constitutional
challenges against official acts of the Government, the petitioners must discharge the basic
burden of proving that the constitutional infirmities actually existed. 205 Simply put, guesswork and
speculation cannot overcome the presumption of the constitutionality of the assailed executive
act.
We do not need to discuss whether or not the DAP and its implementation through the various
circulars and memoranda of the DBM transgressed the system of checks and balances in place in
our constitutional system. Our earlier expositions on the DAP and its implementing issuances
infringing the doctrine of separation of powers effectively addressed this particular concern.
Anent the principle of public accountability being transgressed because the adoption and
implementation of the DAP constituted an assumption by the Executive of Congress’ power of
appropriation, we have already held that the DAP and its implementing issuances were policies
and acts that the Executive could properly adopt and do in the execution of the GAAs to the extent
that they sought to implement strategies to ramp up or accelerate the economy of the country.
6.
Doctrine of operative fact was applicable
After declaring the DAP and its implementing issuances constitutionally infirm, we must now deal
with the consequences of the declaration.
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall
not be excused by disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution.
A legislative or executive act that is declared void for being unconstitutional cannot give rise to
any right or obligation.206 However, the generality of the rule makes us ponder whether rigidly
applying the rule may at times be impracticable or wasteful. Should we not recognize the need to
except from the rigid application of the rule the instances in which the void law or executive act
produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one,
has been exhaustively explained in De Agbayani v. Philippine National Bank:207
The decision now on appeal reflects the orthodox view that an unconstitutional act, for that
matter an executive order or a municipal ordinance likewise suffering from that infirmity, cannot
be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its being to all intents and
purposes a mere scrap of paper. As the new Civil Code puts it: ‘When the courts declare a law to
be inconsistent with the Constitution, the former shall be void and the latter shall govern.’
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws of the Constitution. It is understandable why it should be so, the Constitution
being supreme and paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be complied with. This
is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may have changed their positions.
What could be more fitting than that in a subsequent litigation regard be had to what has been
done while such legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact
must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is
the governmental organ which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise the power of judicial
review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such
adjudication.
In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior
to such a determination [of unconstitutionality], is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,
with respect to particular relations, individual and corporate, and particular conduct, private and
official.’"
The doctrine of operative fact recognizes the existence of the law or executive act prior to the
determination of its unconstitutionality as an operative fact that produced consequences that
cannot always be erased, ignored or disregarded. In short, it nullifies the void law or executive act
but sustains its effects. It provides an exception to the general rule that a void or unconstitutional
law produces no effect.208 But its use must be subjected to great scrutiny and circumspection, and
it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only as
a matter of equity and fair play.209 It applies only to cases where extraordinary circumstances
exist, and only when the extraordinary circumstances have met the stringent conditions that will
permit its application.
We find the doctrine of operative fact applicable to the adoption and implementation of the DAP.
Its application to the DAP proceeds from equity and fair play. The consequences resulting from the
DAP and its related issuances could not be ignored or could no longer be undone.
To be clear, the doctrine of operative fact extends to a void or unconstitutional executive act. The
term executive act is broad enough to include any and all acts of the Executive, including those
that are quasi legislative and quasi-judicial in nature. The Court held so in Hacienda Luisita, Inc. v.
Presidential Agrarian Reform Council:210
Nonetheless, the minority is of the persistent view that the applicability of the operative fact
doctrine should be limited to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are
quasi-legislative in nature. Thus, the minority concludes that the phrase ‘executive act’ used in
the case of De Agbayani v. Philippine National Bank refers only to acts, orders, and rules and
regulations that have the force and effect of law. The minority also made mention of the
Concurring Opinion of Justice Enrique Fernando in Municipality of Malabang v. Benito, where it
was supposedly made explicit that the operative fact doctrine applies to executive acts, which are
ultimately quasi-legislative in nature.
We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case
elaborates what ‘executive act’ mean. Moreover, while orders, rules and regulations issued by the
President or the executive branch have fixed definitions and meaning in the Administrative Code
and jurisprudence, the phrase ‘executive act’ does not have such specific definition under existing
laws. It should be noted that in the cases cited by the minority, nowhere can it be found that the
term ‘executive act’ is confined to the foregoing. Contrarily, the term ‘executive act’ is broad
enough to encompass decisions of administrative bodies and agencies under the executive
department which are subsequently revoked by the agency in question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the
Presidential Commission on Good Government (PCGG) and as Chief Presidential Legal Counsel
(CPLC) which was declared unconstitutional by this Court in Public Interest Center, Inc. v. Elma. In
said case, this Court ruled that the concurrent appointment of Elma to these offices is in violation
of Section 7, par. 2, Article IX-B of the 1987 Constitution, since these are incompatible offices.
Notably, the appointment of Elma as Chairman of the PCGG and as CPLC is, without a question, an
executive act. Prior to the declaration of unconstitutionality of the said executive act, certain
acts or transactions were made in good faith and in reliance of the appointment of Elma which
cannot just be set aside or invalidated by its subsequent invalidation.
In Tan v. Barrios, this Court, in applying the operative fact doctrine, held that despite the
invalidity of the jurisdiction of the military courts over civilians, certain operative facts must be
acknowledged to have existed so as not to trample upon the rights of the accused therein.
Relevant thereto, in Olaguer v. Military Commission No. 34, it was ruled that ‘military tribunals
pertain to the Executive Department of the Government and are simply instrumentalities of the
executive power, provided by the legislature for the President as Commander-in-Chief to aid him
in properly commanding the army and navy and enforcing discipline therein, and utilized under his
orders or those of his authorized military representatives.’
Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued
by the executive department that are accorded the same status as that of a statute or those which
are quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact doctrine only to executive
issuances like orders and rules and regulations, said principle can nonetheless be applied, by
analogy, to decisions made by the President or the agencies under the executive department. This
doctrine, in the interest of justice and equity, can be applied liberally and in a broad sense to
encompass said decisions of the executive branch. In keeping with the demands of equity, the
Court can apply the operative fact doctrine to acts and consequences that resulted from the
reliance not only on a law or executive act which is quasi-legislative in nature but also on decisions
or orders of the executive branch which were later nullified. This Court is not unmindful that such
acts and consequences must be recognized in the higher interest of justice, equity and fairness.
Significantly, a decision made by the President or the administrative agencies has to be complied
with because it has the force and effect of law, springing from the powers of the President under
the Constitution and existing laws. Prior to the nullification or recall of said decision, it may have
produced acts and consequences in conformity to and in reliance of said decision, which must be
respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving the SDP of
HLI. (Bold underscoring supplied for emphasis)
In Commissioner of Internal Revenue v. San Roque Power Corporation, 211 the Court likewise
declared that "for the operative fact doctrine to apply, there must be a ‘legislative or executive
measure,’ meaning a law or executive issuance." Thus, the Court opined there that the operative
fact doctrine did not apply to a mere administrative practice of the Bureau of Internal Revenue,
viz:
Under Section 246, taxpayers may rely upon a rule or ruling issued by the Commissioner from the
time the rule or ruling is issued up to its reversal by the Commissioner or this Court. The reversal
is not given retroactive effect. This, in essence, is the doctrine of operative fact. There must,
however, be a rule or ruling issued by the Commissioner that is relied upon by the taxpayer in good
faith. A mere administrative practice, not formalized into a rule or ruling, will not suffice because
such a mere administrative practice may not be uniformly and consistently applied. An
administrative practice, if not formalized as a rule or ruling, will not be known to the general
public and can be availed of only by those with informal contacts with the government agency.
It is clear from the foregoing that the adoption and the implementation of the DAP and its related
issuances were executive acts.1avvphi1 The DAP itself, as a policy, transcended a merely
administrative practice especially after the Executive, through the DBM, implemented it by issuing
various memoranda and circulars. The pooling of savings pursuant to the DAP from the allotments
made available to the different agencies and departments was consistently applied throughout the
entire Executive. With the Executive, through the DBM, being in charge of the third phase of the
budget cycle – the budget execution phase, the President could legitimately adopt a policy like the
DAP by virtue of his primary responsibility as the Chief Executive of directing the national economy
towards growth and development. This is simply because savings could and should be determined
only during the budget execution phase.
As already mentioned, the implementation of the DAP resulted into the use of savings pooled by
the Executive to finance the PAPs that were not covered in the GAA, or that did not have proper
appropriation covers, as well as to augment items pertaining to other departments of the
Government in clear violation of the Constitution. To declare the implementation of the DAP
unconstitutional without recognizing that its prior implementation constituted an operative fact
that produced consequences in the real as well as juristic worlds of the Government and the
Nation is to be impractical and unfair. Unless the doctrine is held to apply, the Executive as the
disburser and the offices under it and elsewhere as the recipients could be required to undo
everything that they had implemented in good faith under the DAP. That scenario would be
enormously burdensome for the Government. Equity alleviates such burden.
The other side of the coin is that it has been adequately shown as to be beyond debate that the
implementation of the DAP yielded undeniably positive results that enhanced the economic
welfare of the country. To count the positive results may be impossible, but the visible ones, like
public infrastructure, could easily include roads, bridges, homes for the homeless, hospitals,
classrooms and the like. Not to apply the doctrine of operative fact to the DAP could literally cause
the physical undoing of such worthy results by destruction, and would result in most undesirable
wastefulness.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative
fact does not always apply, and is not always the consequence of every declaration of
constitutional invalidity. It can be invoked only in situations where the nullification of the effects
of what used to be a valid law would result in inequity and injustice; 212 but where no such result
would ensue, the general rule that an unconstitutional law is totally ineffective should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the
PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of
the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there
are concrete findings of good faith in their favor by the proper tribunals determining their criminal,
civil, administrative and other liabilities.
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and
DECLARES the following acts and practices under the Disbursement Acceleration Program,
National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for being in
violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of
powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the
declaration of the withdrawn unobligated allotments and unreleased appropriations as
savings prior to the end of the fiscal year and without complying with the statutory
definition of savings contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the appropriations
of other offices outside the Executive; and
(c) The funding of projects, activities and programs that were not covered by any
appropriation in the General Appropriations Act.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a
certification by the National Treasurer that the revenue collections exceeded the revenue targets
for non-compliance with the conditions provided in the relevant General Appropriations Acts.
SO ORDERED.
G.R. No. 163108 February 23, 2005
GLENN CABALLES y CHUA, petitioner, vs.
COURT OF APPEALS, HON. EMMANUEL D. LAUREA, HON. BENJAMIN T. ANTONIO, and PEOPLE
OF THE PHILIPPINES, respondents.
Case Nature : SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

Syllabi Class : Remedial Law|Certiorari|Habeas Corpus
Syllabi:
1. Remedial Law; Certiorari; The well-settled rule is that certiorari is not available
where the aggrieved party‟s remedy of appeal is plain, speedy and adequate in the
ordinary course, the reason being that certiorari cannot co-exist with an appeal or any
other adequate remedy.-
Following the rule, the petitioner should have appealed to this Court from the CA
decision denying his petition for a writ of habeas corpus, as well as the denial of his
motion for reconsideration thereof; instead, the petitioner filed a petition for certiorari
under Rule 65 of the Rules of Court, as amended. The well-settled rule is that certiorari
is not available where the aggrieved party‟s remedy of appeal is plain, speedy and
adequate in the ordinary course, the reason being that certiorari cannot co-exist with an
appeal or any other adequate remedy. The existence and availability of the right to
appeal are antithetical to the availment of the special civil action for certiorari. These
two remedies are mutually exclusive. An appeal in this case would still have been a
speedy and adequate remedy. Con- sequently, when the petitioner filed his petition in
this Court, the decision of the CA was already final and executory.
2. Remedial Law; Habeas Corpus; A decision in a habeas corpus action stands in no

different position than with any other proceeding and if the appealed decision is to be
reviewed by an appellate court, the remedy is by writ of error because the error
committed by the court is an error of judgment and not an error of jurisdiction.-
It bears stressing that a decision in a habeas corpus action stands in no different
position than with any other proceeding and if the appealed decision is to be reviewed by
an appellate court, the remedy is by writ of error because the error committed by the
court is an error of judgment and not an error of jurisdiction.
3. Remedial Law; Habeas Corpus; Habeas corpus is not in the nature of a writ of
error, nor intended as substitute for the trial court‟s function; The inquiry in a habeas
corpus proceeding is addressed to the question of whether the proceedings and the
assailed order are for any reason null and void.-
Habeas corpus is not in the nature of a writ of error; nor intended as substitute for the
trial court‟s function. It cannot take the place of appeal, certiorari or writ of error. The
writ cannot be used to investigate and consider questions of error that might be raised
relating to procedure or on the merits. The inquiry in a habeas corpus proceeding is
addressed to the question of whether the proceedings and the assailed order are, for
any reason, null and void. The writ is not ordinarily granted where the law provides for
other remedies in the regular course, and in the absence of exceptional circumstances.
Moreover, habeas corpus should not be granted in advance of trial. The orderly course
of trial must be pursued and the usual remedies exhausted before resorting to the writ
where exceptional circumstances are extant.
4. Remedial Law; Habeas Corpus; A writ of habeas corpus which is regarded as a
“palladium of liberty” is a prerogative writ which does not issue as a matter of right but
in the sound discretion of the court or judge.-
A writ of habeas corpus, which is regarded as a “palladium of liberty” is a prerogative
writ which does not issue as a matter of right but in the sound discretion of the court or
judge. It, is, however, a writ of right on proper formalities being made by proof. Resort
to the writ is to inquire into the criminal act of which a complaint is made but unto the
right of liberty, notwithstanding the act, and the immediate purpose to be served is
relief from illegal restraint. The primary, if not the only object of the writ of habeas
corpus ad subjuciendum is to determine the legality of the restraint under which a
person is held.
5. Remedial Law; Habeas Corpus; The Supreme Court agrees with the CA that a
petition for a writ of habeas corpus cannot be joined with the special civil action for
certiorari because the two remedies are governed by a different set of rules.-
Our review of the petitioner‟s material averments in his petition before the CA reveals
that it was a “petition for habeas corpus or, in the alternative, a petition for a writ of
certiorari.” The petitioner assailed therein the orders of the trial court denying his
petition for bail and his motion to dismiss on the ground that he was deprived of his right
to a speedy disposition of the case against him, and questioned Judge Laurea‟s order of
inhibition. We agree with the CA that a petition for a writ of habeas corpus cannot be
joined with the special civil action for certiorari because the two remedies are governed
by a different set of rules. Rule 2, Section 5(b) of the Rules of Court mandates that the
joinder of causes of action shall not include special actions or actions governed by
special rules, thus proscribing the joinder of a special proceeding with a special civil
action.
6. Remedial Law; Habeas Corpus; A petition for a writ of habeas corpus is a remedy
different from the special civil action of certiorari under Rule 65 of the Rules of Court, as
amended.-
We also agree with the ruling of the CA that a petition for a writ of habeas corpus is a
remedy different from the special civil action of certiorari under Rule 65 of the Rules of
Court, as amended. The writ of habeas corpus is a collateral attack on the processes,
orders, or judgment of the trial court, while certiorari is a direct attack of said processes,
orders, or judgment on the ground of lack of jurisdiction or grave abuse of discretion
amounting to excess or lack of jurisdiction. A writ of certiorari reaches only jurisdictional
errors. It has no other use, except to bring before the court a record material to be
considered in exercising jurisdiction. A writ of certiorari reaches the record. On the other
hand, a writ of habeas corpus reaches the body but not the record; it also reaches
jurisdictional matters but does not reach the record.
7. Remedial Law; Habeas Corpus; A petition for the issuance of a writ of habeas
corpus may be filed if one is deprived of his right to a speedy disposition of the case
under Article IV, Section 16 of the 1987 Constitution and of his right to due process.-
We agree with the petitioner that a petition for the issuance of a writ of habeas corpus
may be filed if one is deprived of his right to a speedy disposition of the case under
Article IV, Section 16 of the 1987 Constitution and of his right to due process. However,
the petitioner never invoked in the trial court his constitutional right to a speedy
disposition of the case against him. What he invoked was his right to a speedy trial
under Rule 119 of the 2000 Rules of Criminal Procedure. He invoked his constitutional
right to a speedy disposition of the case against him, for the first time, only in the Court
of Appeals when he filed his petition for habeas corpus.
Division: SECOND DIVISION
Counsel: Noel S. Sorreda, The Solicitor General
DECISION
CALLEJO, SR., J.:
Before us is a petition for certiorari under Rule 65 of the Revised Rules of Court filed by the
petitioner for the nullification of the Resolution of the Court of Appeals1 which dismissed his
petition for the issuance of a writ of habeas corpus for his release from detention despite the
pendency of People of the Philippines v. Glenn Caballes2 for rape, and its resolution denying his
motion for reconsideration thereof.
The antecedents are as follows:
On November 19, 2001, petitioner Glenn Chua Caballes was charged with rape of a minor in the
Regional Trial Court (RTC) of Malabon City. The case was docketed as Criminal Case No. 25756-MN
and raffled to Branch 169, presided by Judge Emmanuel D. Laurea. Because the petitioner was
charged with a non-bailable offense, he was detained.
The petitioner was arraigned on February 7, 2002 and pleaded not guilty to the offense charged.
The prosecution presented two (2) witnesses, namely, Venice Vera Pio, the private complainant,
and her mother. The petitioner, through counsel, commenced his cross-examination of Pio, but
failed to complete the same. In January 2003, the petitioner engaged the services of a new
counsel, Atty. Noel S. Sorreda, who entered his appearance as defense counsel.3
During the trial of February 26, 2003, the petitioner continued his cross-examination of Pio but
still failed to terminate the same. The trial was set on March 6, 2003 for the petitioner to
terminate his cross-examination of Pio. However, due to the illness of the private prosecutor, the
trial on the said date did not proceed. The trial was further reset to March 17, 2003 during which
the petitioner continued with his cross-examination of the private complainant. Thereafter, the
continuation of trial was set on April 3, 21, and 30, 2003. On April 3, 2003, the petitioner
concluded his cross-examination of Pio. The prosecution declared that its next witness would be
Dr. Jose Arnel Marquez, the Medico-Legal Officer of the Philippine National Police (PNP) Crime
Laboratory, who had conducted a medico-legal examination of the private complainant, but
stated that he had not been subpoenad. The prosecution prayed for the cancellation of the trial
scheduled on April 21, 2003 to give the prosecution time to secure and cause the service of a
subpoena duces tecum on him. The petitioner conformed to the motion of the prosecution.
On April 28, 2003, the petitioner filed a petition for bail.4
The trial of April 30, 2003 did not proceed because the petitioner’s counsel filed a Manifestation5
that his presence was required in an execution sale in Cavite. The said counsel manifested that he
reserved his right to cross-examine any witness the prosecution would present in case trial would
proceed on that date; on the other hand, in the event that the trial court would cancel the trial,
he would be available in May 2003 and during the first half of June 2003.
The trial court reset the hearing of the case to 8:30 a.m. of June 19, 2003 and gave the
prosecution ten (10) days to file its opposition6 to the petitioner’s petition for bail. It likewise
ordered the issuance of a subpoena to Dr. Jose Arnel Marquez to require him to attend the trial on
the said date.
On May 5, 2003, the petitioner filed a motion7 seeking an earlier trial date, invoking his right to
speedy trial under the Speedy Trial Act of 1998. He also filed a motion for the urgent resolution of
his petition for bail.8
On May 12, 2003, the petitioner filed another motion9 praying that the hearing scheduled on June
19, 2003 be moved to an earlier date, preferably on May 26, 28 or 29, 2003. In the meantime, the
prosecution filed its comment/opposition10 to the petitioner’s petition for bail.
On May 13, 2003, the court issued an Order11 declaring that the petition for bail was submitted
for its resolution and denying the petitioner’s motion for an earlier trial date. On June 16, 2003,
the trial court issued its Order12 denying the petition for bail, on its finding that the evidence of
guilt against the petitioner was strong.
During the trial of June 19, 2003, Dr. Marquez failed to appear before the court because, in the
meantime, he had been assigned to the Eastern Police District and failed to receive the subpoena
issued to him by the court. The prosecution prayed for continuance, but the petitioner objected
and invoked his right to speedy trial. The court, nevertheless, granted the motion and reset the
trial to July 17, 2003.
On June 27, 2003, the court issued a subpoena duces tecum/ad testificandum to Dr. Jose Arnel
Marquez requiring him to appear for the trial set on July 17, 2003.13
On July 4, 2003, the petitioner filed a Motion for Reconsideration of the court’s Order dated June
16, 2003 denying his petition for bail. His motion was set for hearing, also on July 17, 2003.
However, the petitioner preempted the resolution of his motion for reconsideration and filed a
Motion to Dismiss14 the case on July 11, 2003 on the ground that his right to speedy trial had been
violated. He made the following allegations:
1. The hearings in the instant case have more often than not been scheduled more than one
month apart;
2. In the hearing on April 30, 2003, in particular, the day before undersigned counsel had filed a
Manifestation stating inter alia that his available dates for the next hearing may be "any Monday,
Wednesday or Thursday for the whole of May 2003 and the first half of June 2003, except on May
14 and 21" – yet Atty. Manalaysay asked for the next hearing on June 19 which is already outside
or beyond the dates mentioned in the manifestation, and which was more than 1-1/2 months
away, but which the Honorable Court nonetheless granted;
3. Atty. Manalaysay has never been able to present any "good cause" as to how come he was not
able to present Dr. Marquez on April 30, 2003, and then again on June 19, 2003; and as aforesaid,
his absence on March 6, 2003 has not been supported by any medical certificate;
4. The first hearing in the instant case was held on June 13, 2002, thus it has now been more than
one year, or close to 400 days ago since trial started; neither has there been any authorization
from the Supreme Court that the trial period may exceed 180 days;
5. There has been no statement by the Honorable Court in any of its orders granting continuance
that "the ends of justice served by taking such action outweigh the best interest of the public and
the accused in a speedy trial;"
6. As above stated, it appears that the prosecution made a false statement before the Honorable
Court in claiming they had asked Dr. Marquez to testify in the June 19, 2003 hearing, when in fact
they had not.15
Dr. Jose Arnel Marquez had apparently still not received the subpoena issued by the trial court,
because of which the prosecution again failed to present him as a witness during the trial of July
17, 2003. The prosecution prayed for continuance, to which the petitioner vigorously objected.
The court, however, granted the motion and reset the trial to August 11, 2003.16
On July 24, 2003, Judge Laurea issued an Order17 inhibiting himself from hearing the case "to
avoid being misunderstood, to preserve his reputation for probity and objectivity and to live up to
the ideal impartial administration of justice." The case was re-raffled to Branch 170, presided by
Judge Benjamin T. Antonio, who calendared the case for trial on September 8, 2003. Nevertheless,
on August 11, 2003, the petitioner filed a Motion for Reconsideration18 of Judge Laurea’s Order
dated July 24, 2003, which the latter denied, on the finding that no cogent reason was presented
to reconsider the same.19
During the hearing on September 8, 2003, Judge Antonio granted the private prosecutor’s motion
to be given five (5) days within which to oppose the petitioner’s motion to dismiss. Judge Antonio
also set the trial on September 18, 2003.20 On the latter date, the trial court issued an Omnibus
Order21 denying the petitioner’s motion to dismiss. The trial court reasoned that there was no
violation of the petitioner’s right to speedy trial, considering that the apparent delays could not
be attributed to the fault of the prosecution alone. The trial court noted that the petitioner also
sought Postponements of the trials.
Anent the motion for reconsideration of the court’s Order dated June 16, 2003 which denied the
petition for bail, the trial court considered the same as having been abandoned by the petitioner
upon the filing of his motion to dismiss the case without waiting for the resolution of his motion
for reconsideration on his petition for bail.
The petitioner then filed with the Court of Appeals (CA) a "Petition for Habeas Corpus and/or
Certiorari and Prohibition."22 On October 2, 2003, the CA issued a Resolution requiring the
petitioner to inform the court of his choice of remedy within five (5) days from notice thereof. In
compliance therewith, the petitioner filed a manifestation with the appellate court that he had
chosen his petition to be treated as a petition for habeas corpus without prejudice "to the
concomitant application of certiorari if the court considered the same necessary or appropriate
to give effect to the writ of habeas corpus."
The petitioner averred that (a) he was deprived of his right to a speedy trial and his constitutional
right to a speedy disposition of the case; (b) Judge Laurea erred in inhibiting himself from the
case; (c) the trial court committed grave abuse of its discretion in denying his petition for bail;
and (d) Judge Antonio had prejudged the case against him.
On December 9, 2003, the CA issued its assailed Resolution dismissing the petition, viz:
WHEREFORE, for being the wrong or improper remedy, the PETITION FOR HABEAS CORPUS is
DISMISSED.
SO ORDERED.23
According to the appellate court, while the petitioner manifested his preference that his petition
be treated as a petition for habeas corpus, the same was not the proper remedy to review and
examine the proceedings before the trial court and as a relief from the petitioner’s perceived
oppressive situation in the trial court. The CA further emphasized that a writ of habeas corpus is
not a writ of error; that it could not exercise its certiorari jurisdiction over the acts or omission of
the respondent judge as a concomitant remedy; and that the remedy for habeas corpus and
certiorari are different in nature, scope and purpose. The appellate court declared that the
petitioner failed to present any evidence to prove that there was any intentional or deliberate
delay caused to prejudice him; nor was there any malice in the failure of the prosecution to
promptly serve the subpoena duces tecum/ad testificandum to its witnesses. The court also noted
that the resetting of petitioner’s case may also be attributed to the voluminous work of the RTC
involved.
The petitioner filed a motion for reconsideration of the said decision contending that (a) the
congestion of the trial court’s calendar is not a valid ground for continuance of the trial; (b) the
trial court failed to secure an extension of time of the trial period from the Supreme Court; (c)
the trial court should have given a precedence to the case, the charge therein being a heinous
crime; (d) his petition for a writ of habeas corpus was proper because his continued detention had
become illegal, following the prosecutor and the trial court’s violation of his right to a speedy
trial, and the trial court’s denial of his motion to dismiss the case and his petition for bail which
was tainted with grave abuse of discretion; and (e) a writ of habeas corpus may be issued with the
writ of certiorari for the purpose of review. However, the CA denied the petitioner’s motion for
lack of merit.
The petitioner filed a petition for certiorari in this Court under Rule 65 of the Rules of Court
reiterating the grounds contained in his motion for reconsideration of the CA decision. The
petitioner averred that the appellate court committed grave abuse of discretion amounting to
excess or lack of jurisdiction in rendering its resolution, as well as the resolution denying his
motion for reconsideration thereof.
In its comment on the petition, the Office of the Solicitor General submits that a petition for a
writ of habeas corpus is not the proper remedy to assail the trial court’s order denying his petition
for bail, motion to dismiss the case, and Judge Laurea’s order of inhibition. The OSG posits that
the petitioner was not deprived of his constitutional right to a speedy disposition of his case as
well as under the Speedy Trial Act.
The issues for resolution are the following: (a) whether or not the decision of the CA is already
final and executory; (b) whether the proper remedy from the appellate court’s denial of a
petitioner for a writ if habeas corpus is a petition for certiorari under Rule 65 of the Rules of Court;
and (c) if in the affirmative, whether or not the petitioner is entitled to the issuance of the writ.
On the first issue, we find and so rule that the petitioner’s recourse to this Court via a petition for
certiorari from the decision of the CA dismissing his petition for a writ of habeas corpus is
inappropriate. Section 39 of Batas Pambansa Blg. 129 provides that the period for appeal from the
judgment of any court in habeas corpus cases shall be forty-eight (48) hours from notice of the
judgment appealed from. While the said provision was not incorporated in the 1997 Rules of Civil
Procedure, this Court approved Administrative Matter No. 01-1-03-SC amending Section 3, Rule
41of the said Rules, which took effect on July 15, 2001, thus:
SEC. 3. Period of ordinary appeal; appeal in habeas corpus cases.—The appeal shall be taken
within fifteen (15) days from notice of the judgment or final order appealed from. Where a record
on appeal is required, the appellant shall file a notice of appeal and a record on appeal within
thirty (30) days from notice of the judgment or final order. However, an appeal in habeas corpus
cases shall be taken within forty-eight (48) hours from notice of the judgment or final order
appealed from.
The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No
motion for extension of time to file a motion for new trial or reconsideration shall be allowed.
Following the rule, the petitioner should have appealed to this Court from the CA decision
denying his petition for a writ of habeas corpus, as well as the denial of his motion for
reconsideration thereof; instead, the petitioner filed a petition for certiorari under Rule 65 of the
Rules of Court, as amended. The well-settled rule is that certiorari is not available where the
aggrieved party’s remedy of appeal is plain, speedy and adequate in the ordinary course, the
reason being that certiorari cannot co-exist with an appeal or any other adequate remedy. The
existence and availability of the right to appeal are antithetical to the availment of the special
civil action for certiorari. These two remedies are mutually exclusive.24 An appeal in this case
would still have been a speedy and adequate remedy. Consequently, when the petitioner filed his
petition in this Court, the decision of the CA was already final and executory.
It bears stressing that a decision in a habeas corpus action stands in no different position than
with any other proceeding and if the appealed decision is to be reviewed by an appellate court,
the remedy is by writ of error because the error committed by the court is an error of judgment
and not an error of jurisdiction.25
Besides, as correctly held by the CA, a writ of habeas corpus is not the proper remedy to assail the
trial court’s denial of the petitioner’s motion to dismiss the case, the denial of the petition for
bail, as well as the voluntary inhibition of Judge Laurea.
A petition for the issuance of a writ of habeas corpus is a special proceeding governed by Rule 102
of the Rules of Court, as amended. In Ex Parte Billings,26 it was held that habeas corpus is that of
a civil proceeding in character. It seeks the enforcement of civil rights. Resorting to the writ is
not to inquire into the criminal act of which the complaint is made, but into the right of liberty,
notwithstanding the act and the immediate purpose to be served is relief from illegal restraint.
The rule applies even when instituted to arrest a criminal prosecution and secure freedom. When
a prisoner petitions for a writ of habeas corpus, he thereby commences a suit and prosecutes a
case in that court.27
Habeas corpus is not in the nature of a writ of error; nor intended as substitute for the trial
court’s function.28 It cannot take the place of appeal, certiorari or writ of error. The writ cannot
be used to investigate and consider questions of error that might be raised relating to procedure
or on the merits. The inquiry in a habeas corpus proceeding is addressed to the question of
whether the proceedings and the assailed order are, for any reason, null and void.29 The writ is
not ordinarily granted where the law provides for other remedies in the regular course, and in the
absence of exceptional circumstances. Moreover, habeas corpus should not be granted in advance
of trial.30 The orderly course of trial must be pursued and the usual remedies exhausted before
resorting to the writ where exceptional circumstances are extant. In another case, it was held
that habeas corpus cannot be issued as a writ of error or as a means of reviewing errors of law and
irregularities not involving the questions of jurisdiction occurring during the course of the trial,
subject to the caveat that constitutional safeguards of human life and liberty must be preserved,
and not destroyed.31 It has also been held that where restraint is under legal process, mere
errors and irregularities, which do not render the proceedings void, are not grounds for relief by
habeas corpus because in such cases, the restraint is not illegal.32
Habeas corpus is a summary remedy. It is analogous to a proceeding in rem when instituted for
the sole purpose of having the person of restraint presented before the judge in order that the
cause of his detention may be inquired into and his statements final.33 The writ of habeas corpus
does not act upon the prisoner who seeks relief, but upon the person who holds him in what is
alleged to be the unlawful authority.34 Hence, the only parties before the court are the
petitioner (prisoner) and the person holding the petitioner in custody, and the only question to be
resolved is whether the custodian has authority to deprive the petitioner of his liberty.35 The writ
may be denied if the petitioner fails to show facts that he is entitled thereto ex merito
justicias.36
A writ of habeas corpus, which is regarded as a "palladium of liberty" is a prerogative writ which
does not issue as a matter of right but in the sound discretion of the court or judge. It, is, however,
a writ of right on proper formalities being made by proof.37 Resort to the writ is to inquire into
the criminal act of which a complaint is made but unto the right of liberty, notwithstanding the
act, and the immediate purpose to be served is relief from illegal restraint.38 The primary, if not
the only object of the writ of habeas corpus ad subjuciendum is to determine the legality of the
restraint under which a person is held.39
Our review of the petitioner’s material averments in his petition before the CA reveals that it was
a "petition for habeas corpus or, in the alternative, a petition for a writ of certiorari" The
petitioner assailed therein the orders of the trial court denying his petition for bail and his motion
to dismiss on the ground that he was deprived of his right to a speedy disposition of the case
against him, and questioned Judge Laurea’s order of inhibition. We agree with the CA that a
petition for a writ of habeas corpus cannot be joined with the special civil action for certiorari
because the two remedies are governed by a different set of rules. Rule 2, Section 5(b) of the
Rules of Court mandates that the joinder of causes of action shall not include special actions or
actions governed by special rules, thus proscribing the joinder of a special proceeding with a
special civil action.
We also agree with the ruling of the CA that a petition for a writ of habeas corpus is a remedy
different from the special civil action of certiorari under Rule 65 of the Rules of Court, as
amended. The writ of habeas corpus is a collateral attack on the processes, orders, or judgment
of the trial court, while certiorari is a direct attack of said processes, orders, or judgment on the
ground of lack of jurisdiction or grave abuse of discretion amounting to excess or lack of
jurisdiction. A writ of certiorari reaches only jurisdictional errors. It has no other use, except to
bring before the court a record material to be considered in exercising jurisdiction. A writ of
certiorari reaches the record. On the other hand, a writ of habeas corpus reaches the body but
not the record; it also reaches jurisdictional matters but does not reach the record. However,
when jurisdiction is obtained by the issuance of a writ of habeas corpus, to bring the body of the
person whose liberty is involved into court, and if it is necessary, to provide the record upon
which the detention is based, that may be accomplished by using a writ of certiorari as an
ancillary proceeding, i.e., it is subordinate to or in aid of the primary action for the purpose of
impeaching the record. When a writ of certiorari is issued as the foundation of jurisdiction to
bring it and direct upon the validity of a judicial determination by any body or officer,
jurisdictional questions only are reached, and such questions pertaining to the detention made by
the officer or body particularly complained of.40
The petitioner manifested to the appellate court that his petition should be treated as a petition
for habeas corpus. Even then, the CA rightly dismissed the petition because the petitioner failed
to establish his right to the writ. The records show that the petitioner was charged with rape
punishable by reclusion perpetua and was detained based on the said charge; hence, if the
evidence of his guilt is strong, he shall not be admitted to bail regardless of the stage of the
criminal prosecution.41 There is no question that the trial court had jurisdiction over the offense
charged and over the person of the petitioner. The jail warden has the authority and, in fact, is
mandated to detain the petitioner until granted bail by the court, or the case against him
dismissed, or until he is acquitted after trial. The petitioner failed to establish that his
incarceration pendente lite was illegal, and likewise failed to establish exceptional circumstances
warranting the issuance of a writ of habeas corpus by the appellate court.1a\^/phi1.net
In Galvez v. Court of Appeals,42 the Court ruled that a petition for habeas corpus is not the
proper remedy to assail the denial thereof:
… The original jurisdiction to grant or deny bail rested with said respondent. The correct course
was for petitioner to invoke that jurisdiction by filing a petition to be admitted to bail, claiming a
right to bail per se by reason of the weakness of the evidence against him. Only after that remedy
was denied by the trial court should the review jurisdiction of this Court have been invoked, and
even then, not without first applying to the Court of Appeals if appropriate relief was also
available there.43
The remedy of the petitioner from the Order of the trial court denying his petition for bail was to
file a petition for certiorari in the CA if the trial court committed a grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the said order.44 If the petitioner had done
so, his petition would have been granted because as gleaned from the assailed order of the trial
court, it failed to summarize the testimonies of the private complainant and that of her mother.
Hence, such order is invalid.45 The trial court would have had to issue another order containing
the summary of the testimonies of the private complainant and her mother, including its findings
and conclusions. However, the petitioner would still not be entitled to be released from
detention in the meantime.
It bears stressing that under the second paragraph of Section 1, Rule 13746 of the Rules of Court,
the voluntary inhibition of a Judge is addressed to his sound discretion for just or valid reasons,
the primary consideration being that the people’s faith in the courts of justice is not impaired.47
The petitioner should have thus filed a petition for certiorari and/or prohibition in the CA, instead
of a petition for habeas corpus.
In cases where the right of the accused to a speedy trial is violated by the prosecution, the
remedy lies in the procedure provided for under Republic Act No. 8493, as implemented by Rule
119 of the 2000 Rules of Criminal Procedure. Section 8 of the said Rule provides:
SEC. 8. Sanctions.— In any case in which private counsel for the accused, the public attorney, or
the prosecutor:
(a) Knowingly allows the case to be set for trial without disclosing that a necessary witness would
be unavailable for trial;
(b) Files a motion solely for delay which he knows is totally frivolous and without merit;
(c) Makes a statement for the purpose of obtaining continuance which he knows to be false and
which is material to the granting of a continuance; or
(d) Willfully fails to proceed to trial without justification consistent with the provisions hereof,
the court may punish such counsel, attorney, or prosecutor, as follows:
(1) By imposing on a counsel privately retained in connection with the defense of an accused, a
fine not exceeding twenty thousand pesos (₱20,000.00)
(2) By imposing on any appointed counsel de oficio, public attorney, or prosecutor a fine not
exceeding five thousand pesos (₱5,000.00); and
(3) By denying any defense counsel or prosecutor the right to practice before the court trying the
case for a period not exceeding thirty (30) days. The punishment provided for by this section shall
be without prejudice to any appropriate criminal action or other sanction authorized under these
Rules.
If the trial court acted with grave abuse of its discretion amounting to excess of lack of
jurisdiction in granting the prosecution’s motion for the resetting of the trial over the petitioner’s
objections, the more appropriate remedy would have been to file a petition for certiorari and/or
a petition for mandamus to compel the trial court to comply with the timeline provided for by the
said Rule for trial and termination of the case.
It was inappropriate for the petitioner to file a petition for habeas corpus assailing the trial
court’s order denying his motion to dismiss the case for failure to comply with the timeline
provided for by the said Rules. Reading and evaluating the assailed Order of the trial court dated
September 18, 2000, it cannot be gainsaid that the court violated the right of the petitioner to
speedy trial. Thus:
The instant motion is anchored on the alleged violation of and/or to enforce the right of the
accused to speedy trial. In invoking such right, the accused contends that the failure of the
prosecution to present the medico-legal officer who examined the victim on two (2) occasions,
and the non-appearance of the private prosecutor on one occasion caused undue delay in the
proceedings of this case.
The prosecution vigorously opposed the Motion to Dismiss and claimed that since the prosecution
has not yet rested its case, the Court may not be able to appreciate the merits of the instant
motion in the light of the unfinished presentation of evidence for the prosecution and that the
grounds relied by the defense do not touch on the sufficiency of the prosecution’s evidence to
prove the guilt of the accused beyond reasonable doubt, but rather on the alleged delay and
failure to present Dr. Jose Arnel Marquez of the PNP Crime Laboratory.
After due consideration, the Court finds the instant motion untenable.l^vvphi1.net The alleged
delay and failure to present the medico-legal officer cannot be attributed to the fault of the
prosecution and/or the Court. The prosecution and the Court cannot encroach on the right of the
medico-legal officer to appear inasmuch as his schedule conflicted with the hearings set for his
appearance. Moreover, delays assailed by defense counsel that violated accused’ right to speedy
trial are not all at the instance of the prosecution. In fact, the defense, contributed to the delay
since the former defense counsel and even the present defense counsel sought postponements of
the hearings.
Be that as it may, despite the non-presentation of the medico-legal officer, the Court (Branch 169)
proceeded in resolving the Petition for Bail of the accused (albeit unfavorable to the cause of the
accused) on the basis of the sole testimony of the complainant, which is backed up by several
jurisprudence to this effect. The defense, filed a Motion for Reconsideration of said denial after
he has filed a Motion to Dismiss. The filing of these pleadings adds to the delay until the Presiding
Judge who denied the Petition for Bail voluntarily inhibited himself from this case. Then when the
Motion to Dismiss was set for hearing, the Court, in an attempt to expedite the proceedings,
suggested for the parties to stipulate on the medical findings of the medico-legal officer so as to
dispense with his presentation. Defense counsel, however, would not want to enter into such a
stipulation. Hence, another delay.48
We agree with the petitioner that a petition for the issuance of a writ of habeas corpus may be
filed if one is deprived of his right to a speedy disposition of the case under Article IV, Section 16
of the 1987 Constitution and of his right to due process.49 However, the petitioner never invoked
in the trial court his constitutional right to a speedy disposition of the case against him. What he
invoked was his right to a speedy trial under Rule 119 of the 2000 Rules of Criminal Procedure. He
invoked his constitutional right to a speedy disposition of the case against him, for the first time,
only in the Court of Appeals when he filed his petition for habeas corpus.
Even then, the petitioner failed to establish his claim that he was deprived of his right to a speedy
disposition of the case. In Marilyn Corpuz, et al., v. Sandiganbayan,50 the Court had the occasion
to state –
The right of the accused to a speedy trial and to a speedy disposition of the case against him was
designed to prevent the oppression of the citizen by holding criminal prosecution suspended over
him for an indefinite time, and to prevent delays in the administration of justice by mandating
the courts to proceed with reasonable dispatch in the trial of criminal cases. Such right to a
speedy trial and a speedy disposition of a case is violated only when the proceeding is attended by
vexatious, capricious and oppressive delays. The inquiry as to whether or not an accused has been
denied such right is not susceptible by precise qualification. The concept of a speedy disposition
is a relative term and must necessarily be a flexible concept.
While justice is administered with dispatch, the essential ingredient is orderly, expeditious and
not mere speed. It cannot be definitely said how long is too long in a system where justice is
supposed to be swift, but deliberate. It is consistent with delays and depends upon circumstances.
It secures rights to the accused, but it does not preclude the rights of public justice. Also, it must
be borne in mind that the rights given to the accused by the Constitution and the Rules of Court
are shields, not weapons; hence, courts are to give meaning to that intent.
The Court emphasized in the same case that:
A balancing test of applying societal interests and the rights of the accused necessarily compels
the court to approach speedy trial cases on an ad hoc basis.
In determining whether the accused has been deprived of his right to a speedy disposition of the
case and to a speedy trial, four factors must be considered: (a) length of delay; (b) the reason for
the delay; (c) the defendant’s assertion of his right; and (d) prejudice to the defendant.
Prejudice should be assessed in the light of the interest of the defendant that the speedy trial was
designed to protect, namely: to prevent oppressive pre-trial incarceration; to minimize anxiety
and concerns of the accused to trial; and to limit the Possibility that his defense will be impaired.
Of these, the most serious is the last, because the inability of a defendant adequately to prepare
his case skews the fairness of the entire system. There is also prejudice if the defense witnesses
are unable to recall accurately the events of the distant past. Even if the accused is not
imprisoned prior to trial, he is still disadvantaged by restraints on his liberty and by living under a
cloud of anxiety, suspicion and often, hostility. His financial resources may be drained, his
association is curtailed, and he is subjected to public obloquy.
Delay is a two-edged sword. It is the government that bears the burden of proving its case beyond
reasonable doubt. The passage of time may make it difficult or impossible for the government to
carry its burden. The Constitution and the Rules do not require impossibilities or extraordinary
efforts, diligence or exertion from courts or the prosecutor, nor contemplate that such right shall
deprive the State of a reasonable opportunity of fairly prosecuting criminals. As held in Williams v.
United States, for the government to sustain its right to try the accused despite a delay, it must
show two things: (a) that the accused suffered no serious prejudice beyond that which ensued
from the ordinary and inevitable delay; and (b) that there was no more delay than is reasonably
attributable to the ordinary processes of justice.
Closely related to the length of delay is the reason or justification of the State for such delay.
Different weights should be assigned to different reasons or justifications invoked by the State.
For instance, a deliberate attempt to delay the trial in order to hamper or prejudice the defense
should be weighted heavily against the State. Also, it is improper for the prosecutor to
intentionally delay to gain some tactical advantage over the defendant or to harass or prejudice
him. On the other hand, the heavy case load of the prosecution or a missing witness should be
weighted less heavily against the State.
In this case, the petitioner was arraigned on February 7, 2002. In the meantime, he was able to
present only two witnesses. The petitioner failed to terminate the cross-examination of the
private complainant by the year 2002. The Court cannot determine the reason for the delay
because the records of the RTC are not before it. Neither of the parties made any explanation for
the delay; nor is there any showing that the counsel of the petitioner complained about the delay.
Aside from the petitioner’s claim that the private prosecutor failed to give good cause for his
failure to present Dr. Jose Arnel Marquez during the trial dates April 30, 2003 and June 19, 2003,
as well as to substantiate his absence during the trial of March 6, 2003 with a medical certificate,
the petitioner failed to support his claim in his pleadings before the CA and in this Court. On the
other hand, the counsel of the petitioner was absent during the trial on April 30, 2003 because he
had to attend an execution sale in Cavite. The petitioner’s counsel gave priority to the execution
sale and asked for a resetting despite the fact that his client, the petitioner, was detained for a
quasi-heinous crime. While it is true that the trial was reset to June 19, 2003, or more than one
month from April 30, 2003, the petitioner’s counsel himself manifested that he was available for
trial during the first half of June 2003. There was a difference of only four (4) days from the trial
date set by the court and the available dates suggested by the petitioner’s counsel. It bears
stressing that trial dates cannot be set solely at the convenience of the petitioner’s counsel. The
trial dates available in the calendar of the court and of the prosecutor must also be taken into
account.1ªvvphi1.nét
Hence, it cannot be said that the petitioner was deprived of his right to a speedy disposition of
the case simply because the private prosecutor failed to submit a medical certificate for his
absence during the trial of March 6, 2003. The petitioner could have asked the court to cite the
private prosecutor in contempt of court for his failure to submit the said certificate; he failed to
do so. Moreover, the petitioner failed to establish any serious prejudice by the delay of the trial,
and that the State deliberately delayed the trial to prejudice him.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No costs.
SO ORDERED.
G.R. No. 175723 February 4, 2014
THE CITY OF MANILA, represented by MAYOR JOSE L. ATIENZA, JR., and MS. LIBERTY M.
TOLEDO, in her capacity as the City Treasurer of Manila, Petitioners,
vs.
HON. CARIDAD H. GRECIA-CUERDO, in her capacity as Presiding Judge of the Regional Trial
Court, Branch 112, Pasay City; SM MART, INC.; SM PRIME HOLDINGS, INC.; STAR APPLIANCES
CENTER; SUPERVALUE, INC.; ACE HARDWARE PHILIPPINES, INC.; WATSON PERSONAL CARE
STORES, PHILS., INC.; JOLLIMART PHILS., CORP.; SURPLUS MARKETING CORPORATION and
SIGNATURE LINES, Respondents.

Syllabi Class : Remedial Law|Civil Procedure|Courts|Court of Tax
Appeals|Jurisdiction|Certiorari
Division: EN BANC
DECISION
PERALTA, J.:
Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking
to reverse and set aside the Resolutions1 dated April 6, 2006 and November 29, 2006 of the Court
of Appeals (CA) in CA-G.R. SP No. 87948.
The antecedents of the case, as summarized by the CA, are as follows:
The record shows that petitioner City of Manila, through its treasurer, petitioner Liberty Toledo,
assessed taxes for the taxable period from January to December 2002 against private respondents
SM Mart, Inc., SM Prime Holdings, Inc., Star Appliances Center, Supervalue, Inc., Ace Hardware
Philippines, Inc., Watsons Personal Care Stores Phils., Inc., Jollimart Philippines Corp., Surplus
Marketing Corp. and Signature Lines. In addition to the taxes purportedly due from private
respondents pursuant to Section 14, 15, 16, 17 of the Revised Revenue Code of Manila (RRCM),
said assessment covered the local business taxes petitioners were authorized to collect under
Section 21 of the same Code. Because payment of the taxes assessed was a precondition for the
issuance of their business permits, private respondents were constrained to pay the
₱19,316,458.77 assessment under protest.
On January 24, 2004, private respondents filed [with the Regional Trial Court of Pasay City] the
complaint denominated as one for "Refund or Recovery of Illegally and/or Erroneously-Collected
Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction"
which was docketed as Civil Case No. 04-0019-CFM before public respondent's sala [at Branch 112].
In the amended complaint they filed on February 16, 2004, private respondents alleged that, in
relation to Section 21 thereof, Sections 14, 15, 16, 17, 18, 19 and 20 of the RRCM were violative of
the limitations and guidelines under Section 143 (h) of Republic Act. No. 7160 [Local Government
Code] on double taxation. They further averred that petitioner city's Ordinance No. 8011 which
amended pertinent portions of the RRCM had already been declared to be illegal and
unconstitutional by the Department of Justice.2
In its Order3 dated July 9, 2004, the RTC granted private respondents' application for a writ of
preliminary injunction.
Petitioners filed a Motion for Reconsideration4 but the RTC denied it in its Order5 dated October
15, 2004.
Petitioners then filed a special civil action for certiorari with the CA assailing the July 9, 2004 and
October 15, 2004 Orders of the RTC.6
In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners' petition for certiorari
holding that it has no jurisdiction over the said petition. The CA ruled that since appellate
jurisdiction over private respondents' complaint for tax refund, which was filed with the RTC, is
vested in the Court of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic
Act No. 9282 (RA 9282), it follows that a petition for certiorari seeking nullification of an
interlocutory order issued in the said case should, likewise, be filed with the CTA.
Petitioners filed a Motion for Reconsideration,7 but the CA denied it in its Resolution dated
November 29, 2006.
Hence, the present petition raising the following issues:
I- Whether or not the Honorable Court of Appeals gravely erred in dismissing the case for lack of
jurisdiction.
II- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction in enjoining by issuing a Writ of Injunction the petitioners, their
agents and/or authorized representatives from implementing Section 21 of the Revised Revenue
Code of Manila, as amended, against private respondents.
III- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting
to lack or excess of jurisdiction in issuing the Writ of Injunction despite failure of private
respondents to make a written claim for tax credit or refund with the City Treasurer of Manila.
IV- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting
to lack or excess of jurisdiction considering that under Section 21 of the Manila Revenue Code, as
amended, they are mere collecting agents of the City Government.
V- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction in issuing the Writ of Injunction because petitioner City of Manila and
its constituents would result to greater damage and prejudice thereof. (sic)8
Without first resolving the above issues, this Court finds that the instant petition should be denied
for being moot and academic.
Upon perusal of the original records of the instant case, this Court discovered that a Decision9 in
the main case had already been rendered by the RTC on August 13, 2007, the dispositive portion
of which reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby renders JUDGMENT in favor of the
plaintiff and against the defendant to grant a tax refund or credit for taxes paid pursuant to
Section 21 of the Revenue Code of the City of Manila as amended for the year 2002 in the
following amounts:
To plaintiff SM Mart, Inc. - P 11,462,525.02
To plaintiff SM Prime Holdings, Inc. - 3,118,104.63
To plaintiff Star Appliances Center - 2,152,316.54
To plaintiff Supervalue, Inc. - 1,362,750.34

To plaintiff Ace Hardware Phils., Inc. - 419,689.04
To plaintiff Watsons Personal Care Health - 231,453.62
Stores Phils., Inc.
To plaintiff Jollimart Phils., Corp. - 140,908.54
To plaintiff Surplus Marketing Corp. - 220,204.70
To plaintiff Signature Mktg. Corp. - 94,906.34
TOTAL: - P 19,316,458.77
Defendants are further enjoined from collecting taxes under Section 21, Revenue Code of Manila
from herein plaintiff.
SO ORDERED.10
The parties did not inform the Court but based on the records, the above Decision had already
become final and executory per the Certificate of Finality11 issued by the same trial court on
October 20, 2008. In fact, a Writ of Execution12 was issued by the RTC on November 25, 2009. In
view of the foregoing, it clearly appears that the issues raised in the present petition, which
merely involve the incident on the preliminary injunction issued by the RTC, have already become
moot and academic considering that the trial court, in its decision on the merits in the main case,
has already ruled in favor of respondents and that the same decision is now final and executory.
Well entrenched is the rule that where the issues have become moot and academic, there is no
justiciable controversy, thereby rendering the resolution of the same of no practical use or
value.13
In any case, the Court finds it necessary to resolve the issue on jurisdiction raised by petitioners
owing to its significance and for future guidance of both bench and bar. It is a settled principle
that courts will decide a question otherwise moot and academic if it is capable of repetition, yet
evading review.14
However, before proceeding, to resolve the question on jurisdiction, the Court deems it proper to
likewise address a procedural error which petitioners committed.
Petitioners availed of the wrong remedy when they filed the instant special civil action for
certiorari under Rule 65 of the Rules of Court in assailing the Resolutions of the CA which
dismissed their petition filed with the said court and their motion for reconsideration of such
dismissal. There is no dispute that the assailed Resolutions of the CA are in the nature of a final
order as they disposed of the petition completely. It is settled that in cases where an assailed
judgment or order is considered final, the remedy of the aggrieved party is appeal. Hence, in the
instant case, petitioner should have filed a petition for review on certiorari under Rule 45, which
is a continuation of the appellate process over the original case.15
Petitioners should be reminded of the equally-settled rule that a special civil action for certiorari
under Rule 65 is an original or independent action based on grave abuse of discretion amounting
to lack or excess of jurisdiction and it will lie only if there is no appeal or any other plain, speedy,
and adequate remedy in the ordinary course of law.16 As such, it cannot be a substitute for a lost
appeal.17
Nonetheless, in accordance with the liberal spirit pervading the Rules of Court and in the interest
of substantial justice, this Court has, before, treated a petition for certiorari as a petition for
review on certiorari, particularly (1) if the petition for certiorari was filed within the
reglementary period within which to file a petition for review on certiorari; (2) when errors of
judgment are averred; and (3) when there is sufficient reason to justify the relaxation of the
rules.18 Considering that the present petition was filed within the 15-day reglementary period for
filing a petition for review on certiorari under Rule 45, that an error of judgment is averred, and
because of the significance of the issue on jurisdiction, the Court deems it proper and justified to
relax the rules and, thus, treat the instant petition for certiorari as a petition for review on
certiorari.
Having disposed of the procedural aspect, we now turn to the central issue in this case. The basic
question posed before this Court is whether or not the CTA has jurisdiction over a special civil
action for certiorari assailing an interlocutory order issued by the RTC in a local tax case.
This Court rules in the affirmative.
On June 16, 1954, Congress enacted Republic Act No. 1125 (RA 1125) creating the CTA and giving
to the said court jurisdiction over the following:
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds
of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other
matters arising under the National Internal Revenue Code or other law or part of law administered
by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees
or other money charges; seizure, detention or release of property affected fines, forfeitures or
other penalties imposed in relation thereto; or other matters arising under the Customs Law or
other law or part of law administered by the Bureau of Customs; and
(3) Decisions of provincial or City Boards of Assessment Appeals in cases involving the assessment
and taxation of real property or other matters arising under the Assessment Law, including rules
and regulations relative thereto.
On March 30, 2004, the Legislature passed into law Republic Act No. 9282 (RA 9282) amending RA
1125 by expanding the jurisdiction of the CTA, enlarging its membership and elevating its rank to
the level of a collegiate court with special jurisdiction. Pertinent portions of the amendatory act
provides thus:
Sec. 7. Jurisdiction. - The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments,

refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other
matters arising under the National Internal Revenue or other laws administered by the Bureau of
Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments,

refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other
matters arising under the National Internal Revenue Code or other laws administered by the
Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period
of action, in which case the inaction shall be deemed a denial;
3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided
or resolved by them in the exercise of their original or appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or
other money charges, seizure, detention or release of property affected, fines, forfeitures or
other penalties in relation thereto, or other matters arising under the Customs Law or other laws
administered by the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate
jurisdiction over cases involving the assessment and taxation of real property originally decided
by the provincial or city board of assessment appeals;
6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for
review from decisions of the Commissioner of Customs which are adverse to the Government
under Section 2315 of the Tariff and Customs Code;
7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product,
commodity or article, and the Secretary of Agriculture in the case of agricultural product,
commodity or article, involving dumping and countervailing duties under Section 301 and 302,
respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No.
8800, where either party may appeal the decision to impose or not to impose said duties.
b. Jurisdiction over cases involving criminal offenses as herein provided:
1. Exclusive original jurisdiction over all criminal offenses arising from violations of the National
Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of
Internal Revenue or the Bureau of Customs: Provided, however, That offenses or felonies
mentioned in this paragraph where the principal amount of taxes and fees, exclusive of charges
and penalties, claimed is less than One million pesos (₱1,000,000.00) or where there is no
specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA shall
be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, the
criminal action and the corresponding civil action for the recovery of civil liability for taxes and
penalties shall at all times be simultaneously instituted with, and jointly determined in the same
proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it
the filing of the civil action, and no right to reserve the filing of such civil action separately from
the criminal action will be recognized.
2. Exclusive appellate jurisdiction in criminal offenses:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax cases
originally decided by them, in their respected territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in
the exercise of their appellate jurisdiction over tax cases originally decided by the Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their respective
jurisdiction.
c. Jurisdiction over tax collection cases as herein provided:
1. Exclusive original jurisdiction in tax collection cases involving final and executory assessments
for taxes, fees, charges and penalties: Provides, however, that collection cases where the
principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One
million pesos (₱1,000,000.00) shall be tried by the proper Municipal Trial Court, Metropolitan
Trial Court and Regional Trial Court.
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax
collection cases originally decided by them, in their respective territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in
the Exercise of their appellate jurisdiction over tax collection cases originally decided by the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their
respective jurisdiction.19
A perusal of the above provisions would show that, while it is clearly stated that the CTA has
exclusive appellate jurisdiction over decisions, orders or resolutions of the RTCs in local tax cases
originally decided or resolved by them in the exercise of their original or appellate jurisdiction,
there is no categorical statement under RA 1125 as well as the amendatory RA 9282, which
provides that th e CTA has jurisdiction over petitions for certiorari assailing interlocutory orders
issued by the RTC in local tax cases filed before it.
The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of
original jurisdiction which must be expressly conferred by the Constitution or by law and cannot
be implied from the mere existence of appellate jurisdiction.20 Thus, in the cases of Pimentel v.
COMELEC,21 Garcia v. De Jesus,22 Veloria v. COMELEC,23 Department of Agrarian Reform
Adjudication Board v. Lubrica,24 and Garcia v. Sandiganbayan,25 this Court has ruled against the
jurisdiction of courts or tribunals over petitions for certiorari on the ground that there is no law
which expressly gives these tribunals such power.26 It must be observed, however, that with the
exception of Garcia v. Sandiganbayan,27 these rulings pertain not to regular courts but to
tribunals exercising quasi-judicial powers. With respect to the Sandiganbayan, Republic Act No.
824928 now provides that the special criminal court has exclusive original jurisdiction over
petitions for the issuance of the writs of mandamus, prohibition, certiorari, habeas corpus,
injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction.
In the same manner, Section 5 (1), Article VIII of the 1987 Constitution grants power to the
Supreme Court, in the exercise of its original jurisdiction, to issue writs of certiorari, prohibition
and mandamus. With respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129
(BP 129) gives the appellate court, also in the exercise of its original jurisdiction, the power to
issue, among others, a writ of certiorari,whether or not in aid of its appellate jurisdiction. As to
Regional Trial Courts, the power to issue a writ of certiorari, in the exercise of their original
jurisdiction, is provided under Section 21 of BP 129.
The foregoing notwithstanding, while there is no express grant of such power, with respect to the
CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power
shall be vested in one Supreme Court and in such lower courts as may be established by law and
that judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government.
On the strength of the above constitutional provisions, it can be fairly interpreted that the power
of the CTA includes that of determining whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order
in cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that
the CTA, by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these
cases.
Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must
have the authority to issue, among others, a writ of certiorari. In transferring exclusive
jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law
intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such
appellate jurisdiction. There is no perceivable reason why the transfer should only be considered
as partial, not total.
Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason
& Co., Inc. v. Jaramillo, et al.29 that "if a case may be appealed to a particular court or judicial
tribunal or body, then said court or judicial tribunal or body has jurisdiction to issue the
extraordinary writ of certiorari, in aid of its appellate jurisdiction."30 This principle was affirmed
in De Jesus v. Court of Appeals,31 where the Court stated that "a court may issue a writ of
certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or
writ of error, the final orders or decisions of the lower court."32 The rulings in J.M. Tuason and De
Jesus were reiterated in the more recent cases of Galang, Jr. v. Geronimo33 and Bulilis v.
Nuez.34
Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other
means necessary to carry it into effect may be employed by such court or officer.
If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition
lies with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and
the CTA, of jurisdiction over basically the same subject matter – precisely the split-jurisdiction
situation which is anathema to the orderly administration of justice.35 The Court cannot accept
that such was the legislative motive, especially considering that the law expressly confers on the
CTA, the tribunal with the specialized competence over tax and tariff matters, the role of judicial
review over local tax cases without mention of any other court that may exercise such power.
Thus, the Court agrees with the ruling of the CA that since appellate jurisdiction over private
respondents' complaint for tax refund is vested in the CTA, it follows that a petition for certiorari
seeking nullification of an interlocutory order issued in the said case should, likewise, be filed
with the same court. To rule otherwise would lead to an absurd situation where one court decides
an appeal in the main case while another court rules on an incident in the very same case.
Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to
split jurisdiction to conclude that the intention of the law is to divide the authority over a local
tax case filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of
certiorari against interlocutory orders of the RTC but giving to the CTA the jurisdiction over the
appeal from the decision of the trial court in the same case. It is more in consonance with logic
and legal soundness to conclude that the grant of appellate jurisdiction to the CTA over tax cases
filed in and decided by the RTC carries with it the power to issue a writ of certiorari when
necessary in aid of such appellate jurisdiction. The supervisory power or jurisdiction of the CTA to
issue a writ of certiorari in aid of its appellate jurisdiction should co-exist with, and be a
complement to, its appellate jurisdiction to review, by appeal, the final orders and decisions of
the RTC, in order to have complete supervision over the acts of the latter.36
A grant of appellate jurisdiction implies that there is included in it the power necessary to
exercise it effectively, to make all orders that will preserve the subject of the action, and to give
effect to the final determination of the appeal. It carries with it the power to protect that
jurisdiction and to make the decisions of the court thereunder effective. The court, in aid of its
appellate jurisdiction, has authority to control all auxiliary and incidental matters necessary to
the efficient and proper exercise of that jurisdiction.1âwphi1 For this purpose, it may, when
necessary, prohibit or restrain the performance of any act which might interfere with the proper
exercise of its rightful jurisdiction in cases pending before it.37
Lastly, it would not be amiss to point out that a court which is endowed with a particular
jurisdiction should have powers which are necessary to enable it to act effectively within such
jurisdiction. These should be regarded as powers which are inherent in its jurisdiction and the
court must possess them in order to enforce its rules of practice and to suppress any abuses of its
process and to defeat any attempted thwarting of such process.
In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level as the CA and
shall possess all the inherent powers of a court of justice.
Indeed, courts possess certain inherent powers which may be said to be implied from a general
grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are
such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are
essential to the existence, dignity and functions of the courts, as well as to the due
administration of justice; or are directly appropriate, convenient and suitable to the execution of
their granted powers; and include the power to maintain the court's jurisdiction and render it
effective in behalf of the litigants.38
Thus, this Court has held that "while a court may be expressly granted the incidental powers
necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive
legislation, implies the necessary and usual incidental powers essential to effectuate it, and,
subject to existing laws and constitutional provisions, every regularly constituted court has power
to do all things that are reasonably necessary for the administration of justice within the scope of
its jurisdiction and for the enforcement of its judgments and mandates."39 Hence, demands,
matters or questions ancillary or incidental to, or growing out of, the main action, and coming
within the above principles, may be taken cognizance of by the court and determined, since such
jurisdiction is in aid of its authority over the principal matter, even though the court may thus be
called on to consider and decide matters which, as original causes of action, would not be within
its cognizance.40
Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA
to take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in
a local tax case is included in the powers granted by the Constitution as well as inherent in the
exercise of its appellate jurisdiction.
Finally, it would bear to point out that this Court is not abandoning the rule that, insofar as
quasi-judicial tribunals are concerned, the authority to issue writs of certiorari must still be
expressly conferred by the Constitution or by law and cannot be implied from the mere existence
of their appellate jurisdiction. This doctrine remains as it applies only to quasi-judicial bodies.
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO ARICAYOS, respondents.
Case Nature : SPECIAL CIVIL ACTION in the Supreme Court.

Certiorari.
Syllabi Class : Labor Law|Judicial Review|Appeals|Pleadings and
Practice|Jurisdiction|Statutes|Statutory
Construction|Certiorari|Hierarchy of Courts
Division: EN BANC
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein
private respondent before the National Labor Relations Commission (NLRC), Regional Arbitration
Branch No. III, in San Fernando, Pampanga. Private respondent alleges that he started working as
Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995. However, there
was no contract of employment executed between him and petitioner nor was his name included
in the semi-monthly payroll. On January 22, 1996, he was dismissed from his employment for
allegedly misappropriating P38,000.00 which was intended for payment by petitioner of its value
added tax (VAT) to the Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that private respondent was not its employee but only the
uncle of Amelita Malabed, the owner of petitioner St. Martin's Funeral Home. Sometime in 1995,
private respondent, who was formerly working as an overseas contract worker, asked for financial
assistance from the mother of Amelita. Since then, as an indication of gratitude, private
respondent voluntarily helped the mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took over the
management of the business. She then discovered that there were arrears in the payment of taxes
and other government fees, although the records purported to show that the same were already
paid. Amelita then made some changes in the business operation and private respondent and his
wife were no longer allowed to participate in the management thereof. As a consequence, the
latter filed a complaint charging that petitioner had illegally terminated his employment.2
Based on the position papers of the parties, the labor arbiter rendered a decision in favor of
petitioner on October 25, 1996 declaring that no employer-employee relationship existed
between the parties and, therefore, his office had no jurisdiction over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC contending that the
labor arbiter erred (1) in not giving credence to the evidence submitted by him; (2) in holding
that he worked as a "volunteer" and not as an employee of St. Martin Funeral Home from February
6, 1995 to January 23, 1996, or a period of about one year; and (3) in ruling that there was no
employer-employee relationship between him and petitioner.4
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and
remanding the case to the labor arbiter for immediate appropriate proceedings.5 Petitioner then
filed a motion for reconsideration which was denied by the NLRC in its resolution dated August 18,
1997 for lack of merit,6 hence the present petition alleging that the NLRC committed grave abuse
of discretion.7
Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent
and opportune to reexamine the functional validity and systemic practicability of the mode of
judicial review it has long adopted and still follows with respect to decisions of the NLRC. The
increasing number of labor disputes that find their way to this Court and the legislative changes
introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor
Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act
of 1980) now stridently call for and warrant a reassessment of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in the Department
of Labor by P.D. No. 21 on October 14, 1972, and its decisions were expressly declared to be
appealable to the Secretary of Labor and, ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take effect
six months after its promulgation. 8 Created and regulated therein is the present NLRC which was
attached to the Department of Labor and Employment for program and policy coordination only.9
Initially, Article 302 (now, Article 223) thereof also granted an aggrieved party the remedy of
appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently
amended said provision and abolished such appeals. No appellate review has since then been
provided for.
Thus, to repeat, under the present state of the law, there is no provision for appeals from the
decision of the NLRC. 10 The present Section 223, as last amended by Section 12 of R.A. No. 6715,
instead merely provides that the Commission shall decide all cases within twenty days from
receipt of the answer of the appellee, and that such decision shall be final and executory after
ten calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no jurisdiction to
review the decisions of the NLRC, and formerly of the Secretary of Labor, since there is no legal
provision for appellate review thereof, the Court nevertheless rejected that thesis. It held that
there is an underlying power of the courts to scrutinize the acts of such agencies on questions of
law and jurisdiction even though no right of review is given by statute; that the purpose of
judicial review is to keep the administrative agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that part of the checks and balances which restricts
the separation of powers and forestalls arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of
the aggrieved party is to timely file a motion for reconsideration as a precondition for any further
or subsequent remedy, 12 and then seasonably avail of the special civil action of certiorari under
Rule 65, 13 for which said Rule has now fixed the reglementary period of sixty days from notice of
the decision. Curiously, although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this
Court may still take cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided
as follows:
Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and
quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial
Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards, or
commissions, except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive
evidence and perform any and all acts necessary to resolve factual issues raised in cases falling
within its original and appellate jurisdiction, including the power to grant and conduct new trials
or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code
of the Philippines and by the Central Board of Assessment Appeals. 15
Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective
March 18, 1995, to wit:
Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and
quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial
Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Social Security Commission,
the Employees Compensation Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence
and perform any and all acts necessary to resolve factual issues raised in cases falling within its
original and appellate jurisdiction, including the power to grant and conduct new trials or further
proceedings. Trials or hearings in the Court of Appeals must be continuous and must be completed
within, three (3) months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower appellate court,
16 the following amendments of the original provisions of Section 9 of B.P. No. 129 were effected
by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the Philippines and
the Central Board of Assessment Appeals was deleted and replaced by a new paragraph granting
the Court of Appeals limited powers to conduct trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of the
section, such that the original exclusionary clause therein now provides "except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis supplied).
3. Contrarily, however, specifically added to and included among the quasi-judicial agencies
over which the Court of Appeals shall have exclusive appellate jurisdiction are the Securities and
Exchange Commission, the Social Security Commission, the Employees Compensation Commission
and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impassè, both in point of purpose and terminology.
As earlier explained, our mode of judicial review over decisions of the NLRC has for some time
now been understood to be by a petition for certiorari under Rule 65 of the Rules of Court. This is,
of course, a special original action limited to the resolution of jurisdictional issues, that is, lack or
excess of jurisdiction and, in almost all cases that have been brought to us, grave abuse of
discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive
appellate jurisdiction to the Court of Appeals over all final adjudications of the Regional Trial
Courts and the quasi-judicial agencies generally or specifically referred to therein except, among
others, "those falling within the appellate jurisdiction of the Supreme Court in accordance
with . . . the Labor Code of the Philippines under Presidential Decree No. 442, as amended, . . . ."
This would necessarily contradict what has been ruled and said all along that appeal does not lie
from decisions of the NLRC. 17 Yet, under such excepting clause literally construed, the appeal
from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary
implication.
The same exceptive clause further confuses the situation by declaring that the Court of Appeals
has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and those
specified cases in Section 17 of the Judiciary Act of 1948. These cases can, of course, be properly
excluded from the exclusive appellate jurisdiction of the Court of Appeals. However, because of
the aforementioned amendment by transposition, also supposedly excluded are cases falling
within the appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is
illogical and impracticable, and Congress could not have intended that procedural gaffe, since
there are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are
within the appellate jurisdiction of the Supreme Court or of any other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that there
may have been an oversight in the course of the deliberations on the said Act or an imprecision in
the terminology used therein. In fine, Congress did intend to provide for judicial review of the
adjudications of the NLRC in labor cases by the Supreme Court, but there was an inaccuracy in the
term used for the intended mode of review. This conclusion which we have reluctantly but
prudently arrived at has been drawn from the considerations extant in the records of Congress,
more particularly on Senate Bill No. 1495 and the Reference Committee Report on S. No. 1495/H.
No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship speech 19 from
which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129, reorganized the Court
of Appeals and at the same time expanded its jurisdiction and powers. Among others, its
appellate jurisdiction was expanded to cover not only final judgment of Regional Trial Courts, but
also all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial agencies,
instrumentalities, boards and commissions, except those falling within the appellate jurisdiction
of the Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129 and of
subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of the Judiciary Act of
1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme Court by the
transfer of some of its burden of review of factual issues to the Court of Appeals. However,
whatever benefits that can be derived from the expansion of the appellate jurisdiction of the
Court of Appeals was cut short by the last paragraph of Section 9 of Batas Pambansa Blg. 129
which excludes from its coverage the "decisions and interlocutory orders issued under the Labor
Code of the Philippines and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme Court are labor cases.
Hence, Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in Section 9 and,
additionally, extends the coverage of appellate review of the Court of Appeals in the decision(s)
of the Securities and Exchange Commission, the Social Security Commission, and the Employees
Compensation Commission to reduce the number of cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the ideal
situation of drastically reducing the workload of the Supreme Court without depriving the
litigants of the privilege of review by an appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice Teehankee in 1986 in the
Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the Supreme Court of the burden of

reviewing these cases which present no important issues involved beyond the particular fact and
the parties involved, so that the Supreme Court may wholly devote its time to cases of public
interest in the discharge of its mandated task as the guardian of the Constitution and the
guarantor of the people's basic rights and additional task expressly vested on it now "to determine
whether or not there has been a grave abuse of discretion amounting to lack of jurisdiction on the
part of any branch or instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It has been cut down to
300,000 cases some five years ago. I understand we are now back to 400,000 cases. Unless we
distribute the work of the appellate courts, we shall continue to mount and add to the number of
cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we have submitted, the
Committee on Justice and Human Rights requests the support and collegial approval of our
Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent session, the following Committee Amendment was

introduced by the said sponsor and the following proceedings transpired: 20
Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with the
Constitution," add the phrase "THE LABOR CODE OF THE PHILIPPINES UNDER P.D. 442, AS
AMENDED." So that it becomes clear, Mr. President, that issues arising from the Labor Code will
still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was also discussed
with our Colleagues in the House of Representatives and as we understand it, as approved in the
House, this was also deleted, Mr. President.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee amendments.
(Emphasis supplied).
xxx xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on
second reading and being a certified bill, its unanimous approval on third reading followed. 21
The Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452, having
theretofore been approved by the House of Representatives, the same was likewise approved by
the Senate on February 20, 1995, 22 inclusive of the dubious formulation on appeals to the
Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the
Supreme Court were eliminated, the legislative intendment was that the special civil action of
certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The use
of the word "appeal" in relation thereto and in the instances we have noted could have been a
lapsus plumae because appeals by certiorari and the original action for certiorari are both modes
of judicial review addressed to the appellate courts. The important distinction between them,
however, and with which the Court is particularly concerned here is that the special civil action of
certiorari is within the concurrent original jurisdiction of this Court and the Court of Appeals; 23
whereas to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed
would not subserve, but would subvert, the intention of Congress as expressed in the sponsorship
speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that
recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial review
would be circuitous and would prolong the proceedings. On the contrary, as he commendably and
realistically emphasized, that procedure would be advantageous to the aggrieved party on this
reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals
would give litigants the advantage to have all the evidence on record be reexamined and
reweighed after which the findings of facts and conclusions of said bodies are correspondingly
affirmed, modified or reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings
of the Court of Appeals are final and may not be reversed on appeal to the Supreme Court. A
perusal of the records will reveal appeals which are factual in nature and may, therefore, be
dismissed outright by minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a
law, on this score we add the further observations that there is a growing number of labor cases
being elevated to this Court which, not being a trier of fact, has at times been constrained to
remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the
Court of Appeals is procedurally equipped for that purpose, aside from the increased number of
its component divisions; and that there is undeniably an imperative need for expeditious action
on labor cases as a major aspect of constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the
NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions
for certiorari under Rule 65. Consequently, all such petitions should hence forth be initially filed
in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made in accordance with their
hierarchical order, this pronouncement in Santiago vs. Vasquez, et al. 25 should be taken into
account:
One final observation. We discern in the proceedings in this case a propensity on the part of
petitioner, and, for that matter, the same may be said of a number of litigants who initiate
recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief
directly from this Court despite the fact that the same is available in the lower courts in the
exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought
therein. This practice must be stopped, not only because of the imposition upon the precious time
of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the
adjudication of the case which often has to be remanded or referred to the lower court as the
proper forum under the rules of procedure, or as better equipped to resolve the issues since this
Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not
entertain direct resort to it unless the redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances justify availment of a remedy within
and calling for the exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby
REMANDED, and all pertinent records thereof ordered to be FORWARDED, to the Court of Appeals
for appropriate action and disposition consistent with the views and ruling herein set forth,
without pronouncement as to costs.
SO ORDERED.
G.R. No. 169042 October 5, 2011
ERDITO QUARTO, Petitioner,
vs.
THE HONORABLE OMBUDSMAN SIMEON MARCELO, CHIEF SPECIAL PROSECUTOR DENNIS VILLA
IGNACIO, LUISITO M. TABLAN, RAUL B. BORILLO, and LUIS A. GAYYA, Respondents.
Case Nature : SPECIAL CIVIL ACTION in the

Supreme Court. Certiorari and Mandamus.
Syllabi Class : Immunity from Suit|Ombudsman
Syllabi:
1. Special Civil
Actions; Appeals; Mandamus; Certiorari; As
extraordinary writs, both Sections 1 (certiorari) and
3 (mandamus), Rule 65 of the Rules of Court
require, as a pre-condition for these remedies, that
there be no other plain, speedy and adequate
remedy in the ordinary course of law.-
—As extraordinary writs, both Sections 1 (certiorari)
and 3 (mandamus), Rule 65 of the Rules of Court
require, as a pre-condition for these remedies, that
there be no other plain, speedy and adequate
remedy in the ordinary course of law.
2. Immunity from Suit; Ombudsman; The Court
reiterates its policy of non-interference with the
Ombudsman‟s exercise of his investigatory and
prosecutory powers and respects the initiative and
independence inherent in the Ombudsman who,
“beholden to no one, acts as the champion of the
people and the preserver of the integrity of the
public service.”-
—Consistent with this purpose and subject to the
command of paragraph 2, Section 1, Article VIII of
the 1987 Constitution, the Court reiterates its policy
of non-interference with the Ombudsman‟s exercise
of his investigatory and prosecutory powers (among
them, the power to grant immunity to witnesses),
and respects the initiative and independence
inherent in the Ombudsman who, “beholden to no

one, acts as the champion of the people and the
preserver of the integrity of the public service.”
3. Administrative Proceedings; An
administrative case is altogether different from a
criminal case, such that the disposition in the former
does not necessarily result in the same disposition
for the latter, although both may arise from the
same set of facts.-
—The fact that the respondents had previously been
found administratively liable, based on the same set
of facts, does not necessarily make them the “most
guilty.” An administrative case is altogether different
from a criminal case, such that the disposition in the
former does not necessarily result in the same
disposition for the latter, although both may arise
from the same set of facts. The most that we can
read from the finding of liability is that the
respondents have been found to be administratively
guilty by substantial evidence—the quantum of proof
required in an administrative proceeding.
4. Same; Ombudsman; An immunity statute does
not, and cannot, rule out a review by this Court of
the Ombudsman‟s exercise of discretion.-
—An immunity statute does not, and cannot, rule out
a review by this Court of the Ombudsman‟s exercise
of discretion. Like all other officials under our
constitutional scheme of government, all their acts

must adhere to the Constitution.
5. Same; The authority to choose the individual to
whom immunity would be granted is a constituent
part of the process and is essentially an executive
function.-
—While the legislature is the source of the power to
grant immunity, the authority to implement is
lodged elsewhere. The authority to choose the
individual to whom immunity would be granted is a
constituent part of the process and is essentially an
executive function.
6. Immunity from Suit; The power to grant
immunity from prosecution is essentially a legislative
prerogative.-
—The power to grant immunity from prosecution is
essentially a legislative prerogative. The exclusive
power of Congress to define crimes and their nature
and to provide for their punishment concomitantly
carries the power to immunize certain persons from
prosecution to facilitate the attainment of state
interests, among them, the solution and prosecution
of crimes with high political, social and economic
impact.
7. Same; Same; Same; Ombudsman; If, on the
basis of the same evidence, the Ombudsman
arbitrarily excludes from an indictment some
individuals while impleading all others, the remedy
of mandamus lies since he is duty-bound, as a rule,

to include in the information all persons who appear
responsible for the offense involved.-
—If, on the basis of the same evidence, the
Ombudsman arbitrarily excludes from an indictment
some individuals while impleading all others, the
remedy of mandamus lies since he is duty-bound, as
a rule, to include in the information all persons who
appear responsible for the offense involved.
8. Same; Same; Same; In matters involving
the exercise of judgment and discretion,
mandamus may only be resorted to, to compel
the respondent to take action; it cannot be used
to direct the manner or the particular way discretion
is to be exercised.-
—Mandamus is the proper remedy to compel the
performance of a ministerial duty imposed by law
upon the respondent. In matters involving the
exercise of judgment and discretion, mandamus
may only be resorted to, to compel the respondent
to take action; it cannot be used to direct the
manner or the particular way discretion is to be
exercised.
DECISION
BRION, J.:
Before the Court is a petition for certiorari and mandamus1 filed by Erdito Quarto (petitioner)
assailing the Ombudsman’s January 7, 20042 and November 4, 20043 resolutions which granted
Luisito M. Tablan, Raul B. Borillo, and Luis A. Gayya (collectively, respondents) immunity from
prosecution, resulting in the respondents’ exclusion from the criminal informations filed before
the Sandiganbayan. The petitioner seeks to nullify the immunity granted to the respondents, and
to compel the Ombudsman to include them as accused in the informations for estafa through
falsification of public documents4 and for violation of Section 3(e), Republic Act (RA) No. 3019.5
FACTUAL ANTECEDENTS
The petitioner is the Chief of the Central Equipment and Spare Parts Division (CESPD),6 Bureau of
Equipment (BOE), Department of Public Works and Highways (DPWH), Port Area, Manila. As CESPD
Chief, he is also the Head of the Special Inspectorate Team (SIT) of the DPWH.7 The respondents
are members of the SIT.8
On January 9, 2002, DPWH Secretary Simeon Datumanong created a committee to investigate

alleged anomalous transactions involving the repairs and/or purchase of spare parts of DPWH
service vehicles in 2001.9 On January 17, 2002, the committee designated the DPWH Internal
Audit Service (IAS) as its Technical Working Group to conduct the actual investigation.10
In the course of its investigation, the DPWH-IAS11 learned that the emergency repairs and/or
purchase of spare parts of DPWH service vehicles basically undergo the following documentary
process:
I. Determination of repairs and/or spare parts needed
a. The end-user requesting repair brings the service vehicle to the Motorpool Section, CESPD for
initial inspection and preparation of Job Order; and
b. Based on the Job Order, the SIT conducts a pre-repair inspection (to determine the necessity of
repair and whether the repair is emergency in nature) and prepares a Pre-Repair Inspection
Report, with a recommendation for its approval by the CESPD Chief.
II. Preparation and Approval of Requisition for Supplies and/or Equipment with accompanying
documents (Job Order and Pre-Inspection Report)
a. The Procurement Section, Administrative Manpower Management Service (AMMS) prepares the
Requisition for Supplies and Equipment (RSE), the Canvass Quotation of three Suppliers, the
Certificate of Emergency Purchase, and the Certificate of Fair Wear and Tear;
b. The end-user signs the RSE with the recommending approval of the concerned head of office;
and
c. The AMMS Director approves the RSE.
III. Repair of Vehicles
a. The end-user selects the repair shop/auto supply from accredited establishments;
b. The selected repair shop/auto supply repairs the service vehicle and issues the corresponding
sales invoice and/or official receipt;
c. The end-user accepts the repair and executes a Certificate of Acceptance;
d. The SIT conducts a post-repair inspection (to check if the vehicle was repaired and whether the
repair conformed to specifications) and prepares a Post-Repair Inspection Report, with a
recommendation for its approval by the CESPD Chief. The Motorpool and the end-user would
prepare the Report of Waste Materials also for the signature of the CESPD Chief; and
e. The Assets and Supply Management and Control Division recommends payment of the
expense/s incurred.
The processing of the payment of claims for reimbursement follows the above process.
Based on this procedure, the DPWH-IAS discovered that from March to December 2001, several
emergency repairs and/or purchase of spare parts of hundreds of DPWH service vehicles, which
were approved and paid by the government, did not actually take place, resulting in government
losses of approximately ₱143 million for this ten-month period alone.12
Thus, Atty. Irene D. Ofilada of the DPWH-IAS filed before the Office of the Ombudsman13 a
Complaint-Affidavit14 and a Supplemental Complaint-Affidavit15 charging several high-ranking
DPWH officials and employees – including the petitioner, the respondents, and other private
individuals who purportedly benefited from the anomalous transactions – with Plunder, Money
Laundering, Malversation, and violations of RA No. 3019 and the Administrative Code.16
Atty. Ofilada imputed the following acts to the petitioner:
With dishonesty and grave misconduct, [the petitioner] x x x approved four (4) job orders for [the]
repairs [and/or] purchase of spare parts of [the vehicle assigned to Atty. Ofilada,] noted the
certificate of urgency of said repairs [and/or] purchase[,] concurred with both the pre-repair and
post repair inspection reports thereon, participated in the accomplishment of the supporting
Requisition for Supplies and Equipment (RSE) x x x[,] and participated in the approval of the
disbursement voucher authorizing payment of said repairs as necessary and lawful [even if said
vehicle was never referred to the Motorpool Section, CESPD for repair].
The documents relating to [this vehicle] were filed within a period of one month (between
September to October 2001) [and] were used to authorize the payment of said non existent ghost
repairs to the damage and prejudice of the [DPWH.]17 (emphases ours)
On the other hand, Atty. Ofilada charged the respondents with the following:
With dishonesty and grave misconduct, [respondents] as members of the [SIT] xxx accomplished
and signed Pre-Repair Inspection and Post Repair Inspection Reports in support of the four job
orders [and made] it appear that the vehicle was inspected prior and after the alleged repair
[although they knew that the vehicle was never turned over for inspection]. The accomplishment
of the Pre-Repair and Post-Repair Inspection Report[s] led to the preparation of the Request for
Supplies and Equipment which was the basis of the preparation of the disbursement vouchers
ultimately authorizing the payment of the said repairs thru reimbursement scheme to the damage
and prejudice of the DPWH.
x x x the [P]re-[R]epair and [P]ost-[R]epair [I]nspection [R]eports of the [SIT] xxx are fictitious
and falsified as no actual inspection could have transpired[.]18 (emphasis ours)
The petitioner denied the allegations against him, claiming that he merely relied on his
subordinates when he signed the job orders and the inspection reports.19 In contrast, the
respondents admitted the existence of irregularities in the repairs and/or purchase of spare parts
of DPWH service vehicles, and offered to testify and to provide evidence against the DPWH
officials and employees involved in the anomaly in exchange for their immunity from prosecution.
The respondents submitted:
5.2 x x x since we assumed our duties as members of the SIT xxx, we observed that [the] DPWH
vehicles were being sent to the repair shop in violation of the prescribed guidelines governing the
emergency repair of a service vehicle. In most instances, service vehicles are immediately
brought to a car repair shop of the end-user’s choice without bringing it first to the [Motorpool
Section, CESPD, BOE] for the preparation of the required job order by [Gayya] of the Motorpool
Section and the pre-repair inspection to be conducted by the SIT. After the purported repairs are
done, SIT members are made to sign a post-repair inspection report which already includes a
typed-in recommendation for the payment of repairs, and the signature of the Head of the [SIT]
indicating his alleged concurrence with the findings of the SIT despite the absence of an actual
inspection. The post-repair inspection report is accompanied by the following attachments, to wit:
a) a falsified job order signed by the head of the [SIT] and the Chief of the Motorpool Section x x
x [and] e) an empty or falsified [p]re-repair inspection report[.]
5.3 Initially[,] we tried to curb the above anomalous practices being perpetrated by suppliers and
officials of the DPWH x x x [by making] known [our] objections to the questionable job orders for
the proposed repairs of DPWH service vehicles[,] thus:
a. On July, 9, 1999, [Tablan] wrote the Head of the SIT a memorandum x x x stating that the job
orders for [several identified vehicles] x x x violated the prohibition against splitting of job orders
x x x. [Tablan recommended for public bidding the proposed repairs for the said vehicles].
b. In connection with the job orders involving [several identified vehicles] x x x Tablan and Borillo
wrote the Head of the SIT a Memorandum x x x recommending that the whereabouts of the
end-user be verified, and the service vehicle be re-inspected and/or disposed of.
c. Since the July 9, 1999 Memorandum was returned to x x x Tablan without any action being
undertaken by the SIT Chief, [Tablan and Borillo] reiterated the recommendation for the public
bidding of the proposed repairs described therein[.]
6. In our attempts to perform our sworn duties, however, we incurred the displeasure of the
suppliers, the head of [SIT] and other officials of the DPWH who threatened various
administrative sanctions against us if we should not accede to their wishes. x x x
7. In addition to the foregoing, there are other factors which conspired to prevent us from
properly performing our duties. For one, the DPWH processes an average of 3,000 repairs per
calendar year. Given the staggering number and extent of repairs, including the volume of
paperwork, it was practically impossible for [us] to implement the rules which proved too tedious
under the circumstance. As such, a "short-cut" of the rules was necessary to accommodate the
demands of the end-user, the suppliers, our superiors, and other executives of the DPWH. x x x
8. The anomalous practices of the DPWH executives and suppliers in the purported repair of
DPWH service vehicles were indeed more widespread and rampant in the year 2001. As a
precautionary measure, we took the initiative of photocopying these sets of falsified documents
as they were presented to us before we affixed our respective signatures thereon. We grouped
these documents into Sets A and B[.]
xxxx
11. x x x That the service vehicle x x x has not been actually inspected by [Tablan and Borillo] is
attested to by the pre and post repair inspection reports initially bearing the signature of the
head of the SIT as concurring official without the required signatures of Borillo and Tablan. More
importantly, these DPWH officials did not bother, in a majority of cases, to "cover their tracks"
when they prepared and signed the pre and post repair inspection reports on the same dates.
Based on proper procedure, a post repair inspection report is to be accomplished only after the
preparation and approval of the Job Order, pre-repair inspection report, RSE, Cash Invoice and
Acceptance by the end-user. In this case, the RSE, Cash Invoice and Certificate of Acceptance are
dated much later than the post-repair inspection report. Since xxx there was no actual pre-repair
and post-repair inspection conducted, the foregoing sample instances paved the way for the
"ghost repairs" of DPWH service vehicles, to the detriment and prejudice of the government.
12. Because of the anomalous transactions, the joke circulating around the DPWH is that we are
actually the directors of the DPWH since we are the "last to sign," so to speak. That the
signature[s] of the [respondent] SIT members are merely pro forma is all the more pronounced in
a sample set consisting of a number of pre-repair inspection reports for a particular month in 2001.
The pre-repair inspection reports of the service vehicles indicated therein are empty of any
findings and bear the signature of the head of the SIT as concurring official. All the foregoing
documents above detailed negate the convenient excuse proffered by DPWH executives that they
sign the documents only after the SIT had inspected the service vehicle and prepared the pre and
post repair inspection reports.
xxxx
14.1 xxx the above examples are only a representative sampling of the extent of the anomalous
transactions involving DPWH service vehicles which can be considered "ghost repairs." There are
more instances wherein [we] are willing to testify to in exchange for immunity from
prosecution.20 (emphases ours)
After conducting preliminary investigation, the Ombudsman filed with the Sandiganbayan21
several informations charging a number of DPWH officials and employees with plunder,22 estafa
through falsification of official/commercial documents and violation of Section 3(e), RA No. 3019.
On the other hand, the Ombudsman granted the respondents’ request for immunity in exchange
for their testimonies and cooperation in the prosecution of the cases filed.
The petitioner initially filed a certiorari petition with the Sandiganbayan, questioning the
Ombudsman’s grant of immunity in the respondents’ favor. The Sandiganbayan, however,
dismissed the petition for lack of jurisdiction and advised the petitioner to instead question the
Ombudsman’s actions before this Court.23 Hence, this present petition.
THE PETITION
The petitioner argues that the Ombudsman should have included the respondents in the
informations since it was their inspection reports that actually paved the way for the commission
of the alleged irregularities.24 The petitioner asserts that the respondents’ criminal complicity
clearly appears since "no repair could have started" and "no payment for repairs, ghost or not,"
could have been made without the respondents’ pre-repair and post-repair inspection reports. By
excluding the respondents in the informations, the Ombudsman is engaged in "selective
prosecution" which is a clear case of grave abuse of discretion.
The petitioner claims that before the Ombudsman may avail of the respondents as state witnesses,
they must be included first in the informations filed with the court. Thereafter, the Ombudsman
can ask the court for their discharge so that they can be utilized as state witnesses under the
conditions laid down in Section 17, Rule 119 of the Rules of Court since the court has the "sole
province" to determine whether these conditions exist.
These conditions require, inter alia, that there should be "absolute necessity" for the testimony of
the proposed witness and that he/she should not appear to be the "most guilty." The petitioner
claims that the respondents failed to comply with these conditions as the Ombudsman’s
"evidence," which became the basis of the informations subsequently filed, shows that the
respondents’ testimony is not absolutely necessary; in fact, the manner of the respondents’
participation proves that they are the "most guilty" in the premises.
THE COMMENTS OF THE OMBUDSMAN AND THE RESPONDENTS
The Ombudsman counters that RA No. 6770 (the Ombudsman Act of 1989) expressly grants him
the power to grant immunity from prosecution to witnesses. Given this power, the Ombudsman
asserts that Section 17, Rule 119 of the Rules of Court, which presupposes that the witness is
originally included in the information, is inapplicable to the present case since the decision on
whom to prosecute is an executive, not a judicial, prerogative.25
The Ombudsman invokes this Court’s policy of non-interference in the Ombudsman’s exercise of
his discretion in matters involving his investigatory and prosecutorial powers.26 The petitioner’s
claim that the respondents are the "most guilty" is a matter of defense which the petitioner may
raise not in this proceeding, but in the trial proper.27
On the other hand, the respondents submit that the Ombudsman has ample discretion in
determining who should be included in the information on the basis of his finding of probable
cause. The courts can only interfere in the Ombudsman’s exercise of his discretion in case of a
clear showing of grave abuse of discretion, which the petitioner failed to establish.28
THE PETITIONER’S REPLY29
While conceding that the Ombudsman has the power and the discretion to grant immunity to the
respondents, the petitioner asserts that this power must be exercised within the confines of
Section 17, Rule 119 of the Rules of Court which requires, inter alia, that the proposed witness
must not appear to be the "most guilty." By ignoring this provision and extending immunity to the
respondents whose false reports ultimately led to the payment for supposed repairs, and who are,
thus, the "real culprits,"30 the Ombudsman gravely abused his discretion – a fatal defect
correctible by certiorari.
Amplifying on the respondents’ "guilt," the petitioner cites the DPWH’s decision in an
administrative case which the Civil Service Commission affirmed, finding the respondents guilty
of dishonesty and grave misconduct involving the same set of facts.31
OUR RULING
We dismiss the petition on two grounds: first, the petitioner did not avail of the remedies
available to him before filing this present petition; and, second, within the context of the Court’s
policy of non-interference with the Ombudsman’s exercise of his investigatory and prosecutory
powers, the petitioner failed to establish that the grant of immunity to the respondents was
attended by grave abuse of discretion.
I. The petitioner did not exhaust remedies available in the ordinary course of law
As extraordinary writs, both Sections 1 (certiorari) and 3 (mandamus), Rule 65 of the Rules of
Court require, as a pre-condition for these remedies, that there be no other plain, speedy and
adequate remedy in the ordinary course of law. In the present case, the petitioner has not shown
that he moved for a reconsideration of the assailed resolutions based substantially on the same
grounds stated in this present petition.32 Neither did the petitioner file a motion for the inclusion
of the respondents in the informations before filing the present petition.33 These are adequate
remedies that the petitioner chose to forego; he bypassed these remedies and proceeded to seek
recourse through the present petition.34
Similarly, the petitioner has not shown that he filed the present petition with this Court within
the sixty-day reglementary period35 from notice of the assailed Ombudsman’s resolutions. He did
not do so, of course, since he initially and erroneously filed a certiorari petition with the
Sandiganbayan. We remind the petitioner that the remedy from the Ombudsman’s orders or
resolutions in criminal cases is to file a petition for certiorari under Rule 6536 with this Court.37
The petition likewise fails even on the merits.
II. The respondents’ exclusion in the informations is grounded on the Ombudsman’s grant of
immunity
Mandamus is the proper remedy to compel the performance of a ministerial duty imposed by law
upon the respondent.38 In matters involving the exercise of judgment and discretion, mandamus
may only be resorted to, to compel the respondent to take action; it cannot be used to direct the
manner or the particular way discretion is to be exercised.39
In the exercise of his investigatory and prosecutorial powers, the Ombudsman is generally no
different from an ordinary prosecutor in determining who must be charged.40 He also enjoys the
same latitude of discretion in determining what constitutes sufficient evidence to support a
finding of probable cause (that must be established for the filing of an information in court)41 and
the degree of participation of those involved or the lack thereof. His findings and conclusions on
these matters are not ordinarily subject to review by the courts except when he gravely abuses
his discretion,42 i.e., when his action amounts to an evasion of a positive duty or a virtual refusal
to perform a duty enjoined by law, or when he acts outside the contemplation of law.43
If, on the basis of the same evidence, the Ombudsman arbitrarily excludes from an indictment
some individuals while impleading all others, the remedy of mandamus lies44 since he is
duty-bound, as a rule, to include in the information all persons who appear responsible for the
offense involved.45
Citing the cases of Guiao v. Figueroa46 and Castro, Jr., et al. v. Castañeda and Liceralde,47 the
petitioner argues for the inclusion of the respondents in the criminal informations, pointing out
that the respondents accomplished the inspection reports that allegedly set in motion the
documentary process in the repair of the DPWH vehicles; these reports led to the payment by the
government and the consequent losses.
In Guiao and Castro, we ruled that mandamus lies to compel a prosecutor who refuses (i) to
include in the information certain persons, whose participation in the commission of a crime
clearly appears, and (ii) to follow the proper procedure for the discharge of these persons in order
that they may be utilized as prosecution witnesses.
These cited cases, however, did not take place in the same setting as the present case as they
were actions by the public prosecutor, not by the Ombudsman. In the present case, the
Ombudsman granted the respondents immunity from prosecution pursuant to RA No. 6770 which
specifically empowers the Ombudsman to grant immunity "in any hearing, inquiry or proceeding
being conducted by the Ombudsman or under its authority, in the performance or in the
furtherance of its constitutional functions and statutory objectives." The pertinent provision –
Section 17 of this law – provides:
Sec. 17. Immunities. – x x x.
Under such terms and conditions as it may determine, taking into account the pertinent
provisions of the Rules of Court, the Ombudsman may grant immunity from criminal prosecution
to any person whose testimony or whose possession and production of documents or other
evidence may be necessary to determine the truth in any hearing, inquiry or proceeding being
conducted by the Ombudsman or under its authority, in the performance or in the furtherance of
its constitutional functions and statutory objectives. The immunity granted under this and the
immediately preceding paragraph shall not exempt the witness from criminal prosecution for
perjury or false testimony nor shall he be exempt from demotion or removal from office.
[emphasis ours]
To briefly outline the rationale for this provision, among the most important powers of the State
is the power to compel testimony from its residents; this power enables the government to secure
vital information necessary to carry out its myriad functions.48 This power though is not absolute.
The constitutionally-enshrined right against compulsory self-incrimination is a leading exception.
The state’s power to compel testimony and the production of a person’s private books and papers
run against a solid constitutional wall when the person under compulsion is himself sought to be
penalized. In balancing between state interests and individual rights in this situation, the
principles of free government favor the individual to whom the state must yield.491avvphi1
A state response to the constitutional exception to its vast powers, especially in the field of
ordinary criminal prosecution and in law enforcement and administration, is the use of an
immunity statute.50 Immunity statutes seek a rational accommodation between the imperatives
of an individual’s constitutional right against self-incrimination51 (considered the fount from
which all statutes granting immunity emanate52) and the legitimate governmental interest in
securing testimony.53 By voluntarily offering to give information on the commission of a crime
and to testify against the culprits, a person opens himself to investigation and prosecution if he
himself had participated in the criminal act. To secure his testimony without exposing him to the
risk of prosecution, the law recognizes that the witness can be given immunity from
prosecution.54 In this manner, the state interest is satisfied while respecting the individual’s
constitutional right against self-incrimination.
III. Nature of the power to grant immunity
The power to grant immunity from prosecution is essentially a legislative prerogative.55 The
exclusive power of Congress to define crimes and their nature and to provide for their punishment
concomitantly carries the power to immunize certain persons from prosecution to facilitate the
attainment of state interests, among them, the solution and prosecution of crimes with high
political, social and economic impact.56 In the exercise of this power, Congress possesses broad
discretion and can lay down the conditions and the extent of the immunity to be granted.57
Early on, legislations granting immunity from prosecution were few.58 However, their number
escalated with the increase of the need to secure vital information in the course and for purposes
of prosecution. These statutes59 considered not only the importance of the testimony sought, but
also the unique character of some offenses and of some situations where the criminal participants
themselves are in the best position to give useful testimony.60 RA No. 6770 or the Ombudsman
Act of 1989 was formulated along these lines and reasoning with the vision of making the
Ombudsman the protector of the people against inept, abusive and corrupt government officers
and employees.61 Congress saw it fit to grant the Ombudsman the power to directly confer
immunity to enable his office to effectively carry out its constitutional and statutory mandate of
ensuring effective accountability in the public service.62
IV. Considerations in the grant of immunity
While the legislature is the source of the power to grant immunity, the authority to implement is
lodged elsewhere. The authority to choose the individual to whom immunity would be granted is a
constituent part of the process and is essentially an executive function. Mapa, Jr. v.
Sandiganbayan63 is instructive on this point:
The decision to grant immunity from prosecution forms a constituent part of the prosecution
process. It is essentially a tactical decision to forego prosecution of a person for government to
achieve a higher objective. It is a deliberate renunciation of the right of the State to prosecute all
who appear to be guilty of having committed a crime. Its justification lies in the particular need
of the State to obtain the conviction of the more guilty criminals who, otherwise, will probably
elude the long arm of the law. Whether or not the delicate power should be exercised, who
should be extended the privilege, the timing of its grant, are questions addressed solely to the
sound judgment of the prosecution. The power to prosecute includes the right to determine who
shall be prosecuted and the corollary right to decide whom not to prosecute. In reviewing the
exercise of prosecutorial discretion in these areas, the jurisdiction of the respondent court is
limited. For the business of a court of justice is to be an impartial tribunal, and not to get
involved with the success or failure of the prosecution to prosecute. Every now and then, the
prosecution may err in the selection of its strategies, but such errors are not for neutral courts to
rectify, any more than courts should correct the blunders of the defense. [emphasis ours]
RA No. 6770 fully recognizes this prosecutory prerogative by empowering the Ombudsman to
grant immunity, subject to "such terms and conditions" as he may determine. The only textual
limitation imposed by law on this authority is the need to take "into account the pertinent
provisions of the Rules of Court," – i.e., Section 17, Rule 119 of the Rules of Court.64 This
provision requires that:
(a) There is absolute necessity for the testimony of the accused whose discharge is requested;
(b) There is no other direct evidence available for the proper prosecution of the offense
committed, except the testimony of said accused;
(c) The testimony of said accused can be substantially corroborated in its material points;
(d) Said accused does not appear to be the most guilty; and
(e) Said accused has not at any time been convicted of any offense involving moral turpitude.
This Rule is itself unique as, without detracting from the executive nature of the power to
prosecute and the power to grant immunity, it clarifies that in cases already filed with the
courts,65 the prosecution merely makes a proposal and initiates the process of granting immunity
to an accused-witness in order to utilize him as a witness against his co-accused.66 As we
explained in Webb v. De Leon67 in the context of the Witness Protection, Security and Benefit
Act:
The right to prosecute vests the prosecutor with a wide range of discretion — the discretion of
whether, what and whom to charge, the exercise of which depends on a smorgasbord of factors
which are best appreciated by prosecutors. We thus hold that it is not constitutionally
impermissible for Congress to enact R.A. No. 6981 vesting in the Department of Justice the power
to determine who can qualify as a witness in the program and who shall be granted immunity from
prosecution. Section 9 of Rule 119 does not support the proposition that the power to choose who
shall be a state witness is an inherent judicial prerogative. Under this provision, the court is given
the power to discharge a state witness only because it has already acquired jurisdiction over the
crime and the accused. The discharge of an accused is part of the exercise of jurisdiction but is
not a recognition of an inherent judicial function. [emphasis ours]
Thus, it is the trial court that determines whether the prosecution’s preliminary assessment of
the accused-witness’ qualifications to be a state witness satisfies the procedural norms.68 This
relationship is in reality a symbiotic one as the trial court, by the very nature of its role in the
administration of justice,69 largely exercises its prerogative based on the prosecutor’s findings
and evaluation. On this point, the Court’s pronouncement in the 1918 case of United States v.
Abanzado70 is still very much relevant:
A trial judge cannot be expected or required to inform himself with absolute certainty at the very
outset of the trial as to everything which may be developed in the course of the trial in regard to
the guilty participation of the accused in the commission of the crime charged in the complaint. If
that were practicable or possible there would be little need for the formality of a trial. He must
rely in large part upon the suggestions and the information furnished by the prosecuting officer in
coming to his conclusions as to the "necessity for the testimony of the accused whose discharge is
requested"; as to the availability or nonavailability of other direct or corroborative evidence; as
to which of the accused is "most guilty," and the like.
Notably, this cited case also observes that the Rules-provided guidelines are mere express
declarations of the conditions which the courts ought to have in mind in exercising their sound
discretion in granting the prosecution’s motion for the discharge of an accused.71 In other words,
these guidelines are necessarily implied in the discretion granted to the courts.
RA No. 6770 recognizes that these same principles should apply when the Ombudsman directly
grants immunity to a witness. The same consideration – to achieve the greater and higher purpose
of securing the conviction of the most guilty and the greatest number among the accused72 – is
involved whether the grant is secured by the public prosecutor with active court intervention, or
by the Ombudsman. If there is any distinction at all between the public prosecutor and the
Ombudsman in this endeavor, it is in the specificity of and the higher priority given by law to the
Ombudsman’s purpose and objective – to focus on offenses committed by public officers and
employees to ensure accountability in the public service. This accounts for the Ombudsman’s
unique power to grant immunity by itself and even prior to the filing of information in court, a
power that the public prosecutor himself generally does not enjoy.73
V. Extent of judicial review of a bestowed immunity
An immunity statute does not, and cannot, rule out a review by this Court of the Ombudsman’s
exercise of discretion. Like all other officials under our constitutional scheme of government, all
their acts must adhere to the Constitution.74 The parameters of our review, however, are narrow.
In the first place, what we review are executive acts of a constitutionally independent
Ombudsman.75 Also, we undertake the review given the underlying reality that this Court is not a
trier of facts. Since the determination of the requirements under Section 17, Rule 119 of the
Rules of Court is highly factual in nature, the Court must, thus, generally defer to the judgment of
the Ombudsman who is in a better position (than the Sandiganbayan or the defense) to know the
relative strength and/or weakness of the evidence presently in his possession and the kind, tenor
and source of testimony he needs to enable him to prove his case.76 It should not be forgotten,
too, that the grant of immunity effectively but conditionally results in the extinction of the
criminal liability the accused-witnesses might have incurred, as defined in the terms of the
grant.77 This point is no less important as the grant directly affects the individual and enforces
his right against self-incrimination. These dynamics should constantly remind us that we must
tread softly, but not any less critically, in our review of the Ombudsman’s grant of immunity.
From the point of view of the Court’s own operations, we are circumscribed by the nature of the
review powers granted to us under the Constitution and the Rules of Court. We rule on the basis
of a petition for certiorari under Rule 65 and address mainly the Ombudsman’s exercise of
discretion. Our room for intervention only occurs when a clear and grave abuse of the exercise of
discretion is shown. Necessarily, this limitation similarly reflects on the petitioner who comes to
us on the allegation of grave abuse of discretion; the petitioner himself is bound to clearly and
convincingly establish that the Ombudsman gravely abused his discretion in granting immunity in
order to fully establish his case.78
As a last observation, we note the unique wording of the grant of the power of immunity to the
Ombudsman. It is not without significance that the law encompassed (and appears to have
pointedly not separated) the consideration of Section 17, Rule 119 of the Rules of Court within
the broader context of "such terms and conditions as the Ombudsman may determine." This
deliberate statutory wording, to our mind, indicates the intent to define the role of Section 17,
Rule 119 in the Ombudsman’s exercise of discretion. It suggests a broad grant of discretion that
allows the Ombudsman’s consideration of factors other than those outlined under Section 17,
Rule 119; the wording creates the opening for the invocation, when proper, of the constitutional
and statutory intents behind the establishment of the Ombudsman.
Based on these considerations, we shall now proceed to determine whether the petitioner has
clearly and convincingly shown that the Ombudsman gravely abused his discretion in granting
immunity to the respondents.
Va. Absolute necessity for testimony of the respondents
Under the factual and legal situation before us, we find that the petitioner miserably failed to
clearly and convincingly establish that the Ombudsman gravely abused his discretion in granting
immunity to the respondents. While he claims that both conditions (a) and (d) of Section 17, Rule
119 of the Rules of Court are absent, we observe his utter lack of argument addressing the
"absolute necessity" of the respondents’ testimony. In fact, the petitioner simply concluded that
the requirement of "absolute necessity" does not exist based on the Ombudsman’s "evidence,"
without even attempting to explain how he arrived at this conclusion.
We note in this regard that the respondents’ proposed testimony tends to counteract the
petitioner’s personal defense of good faith (i.e., that he had no actual participation and merely
relied on his subordinates) in approving the job orders and in his concurrence with the inspection
reports. In their Joint Counter-Affidavit, the respondents narrated the accused DPWH
officials/employees’ flagrant disregard of the proper procedure and the guidelines in the repair
of DPWH service vehicles which culminated in losses to the government. Particularly telling is the
respondents’ statement that a number of pre-repair inspection reports for a particular month in
2001 bear the petitioner’s signature despite the fact that these reports are not supported by
findings from the respondents as SIT members.79 This kind of statement cannot but impact on
how the Ombudsman viewed the question of "absolute necessity" of the respondents’ testimony
since this testimony meets the defense of good faith head-on to prove the prosecution’s
allegations. Under these circumstances, we cannot preempt, foreclose, nor replace with our own
the Ombudsman’s position on this point as it is clearly not without basis.
Vb. The respondents do not appear to be the "most guilty"
Similarly, far from concluding that the respondents are the "most guilty," we find that the
circumstances surrounding the preparation of the inspection reports can significantly lessen the
degree of the respondents’ criminal complicity in defrauding the government. Again, this is a
matter that the Ombudsman, in the exercise of his discretion, could not have avoided when he
considered the grant of immunity to the respondents.
We note, too, that while the petitioner incessantly harped on the respondents’ role in the
preparation of the inspection reports, yet, as head of the SIT, he was eerily silent on the
circumstances surrounding this preparation, particularly on the respondents’ explanation that
they tried "to curb the anomalous practices"80 in the DPWH. We are aware, of course, that the
present petition merely questions the immunity granted to the respondents and their consequent
exclusion from the informations; it does not assail the finding of probable cause against the
petitioner himself. This current reality may explain the petitioner’s silence on the respondents’
assertions; the respondents’ allegations, too, still have to be proven during the trial. However,
these considerations are not sufficient to save the petitioner from the necessity of controverting
the respondents’ allegations, even for the limited purpose of the present petition, since his
counter-assertion on this basic ground (that the respondents bear the most guilt) is essential and
critical to the viability of his petition.
In considering the respondents’ possible degree of guilt, we are keenly aware of their admission
that they resorted to a "short-cut"81 in the procedure to be observed in the repairs and/or
purchase of emergency parts of DPWH service vehicles. To our mind, however, this admission
does not necessarily result in making the respondents the "most guilty" in the premises; not even a
semblance of being the "most guilty" can be deduced therefrom.
In sum, the character of the respondents’ involvement vis-à-vis the crimes filed against the DPWH
officials/employees, coupled with the substance of the respondents’ disclosures, compels this
Court to take a dim view of the position that the Ombudsman gravely abused his discretion in
granting immunity to the respondents. The better view is that the Ombudsman simply saw the
higher value of utilizing the respondents themselves as witnesses instead of prosecuting them in
order to fully establish and strengthen its case against those mainly responsible for the criminal
act, as indicated by the available evidence.1avvphi1
VI. The respondents’ administrative liability has no bearing at all on the immunity granted to the
respondents
The fact that the respondents had previously been found administratively liable, based on the
same set of facts, does not necessarily make them the "most guilty." An administrative case is
altogether different from a criminal case, such that the disposition in the former does not
necessarily result in the same disposition for the latter, although both may arise from the same
set of facts.82 The most that we can read from the finding of liability is that the respondents have
been found to be administratively guilty by substantial evidence – the quantum of proof required
in an administrative proceeding. The requirement of the Revised Rules of Criminal Procedure
(which RA No. 6770 adopted by reference) that the proposed witness should not appear to be the
"most guilty" is obviously in line with the character83 and purpose84 of a criminal proceeding, and
the much stricter standards85 observed in these cases. They are standards entirely different from
those applicable in administrative proceedings.
VII. The policy of non-interference with the Ombudsman’s investigatory and prosecutory powers
cautions a stay of judicial hand
The Constitution and RA No. 6770 have endowed the Office of the Ombudsman with a wide
latitude of investigatory and prosecutory powers, freed, to the extent possible within our
governmental system and structure, from legislative, executive, or judicial intervention, and
insulated from outside pressure and improper influence.86 Consistent with this purpose and
subject to the command of paragraph 2, Section 1, Article VIII of the 1987 Constitution,87 the
Court reiterates its policy of non-interference with the Ombudsman’s exercise of his investigatory
and prosecutory powers (among them, the power to grant immunity to witnesses88), and respects
the initiative and independence inherent in the Ombudsman who, "beholden to no one, acts as
the champion of the people and the preserver of the integrity of the public service."89 Ocampo IV
v. Ombudsman90 best explains the reason behind this policy:
The rule is based not only upon respect for the investigatory and prosecutory powers granted by
the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the
functions of the courts will be grievously hampered by innumerable petitions assailing the
dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to
complaints filed before it, in much the same way that the courts would be extremely swamped if
they could be compelled to review the exercise of discretion on the part of the fiscals or
prosecuting attorneys each time they decide to file an information in court or dismiss a complaint
by a private complainant.
Following this policy, we deem it neither appropriate nor advisable to interfere with the
Ombudsman’s grant of immunity to the respondents, particularly in this case, where the
petitioner has not clearly and convincingly shown the grave abuse of discretion that would call for
our intervention.
WHEREFORE, the petition is hereby DISMISSED. Costs against the petitioner.
SO ORDERED.
G.R. No.
October 2, 2009
NATIONAL HOME MORTGAGE FINANCE CORPORATION, Petitioner,
vs.
MARIO ABAYARI, MAY ALMINE, MA. VICTORIA ALPAJARO, FLORANTE AMORES, ANGELINA
ANCHETA, ANGELINE ODIEM-ARANETA, CECILIA PACIBLE, MIRIAM BAJADO, EDUARDO BALAURO,
EVANGELINA BALIAO, LUISA BANUA, RIZALINA BENLAYO, MARJORIE BINAG, CRESENCIA BISNAR,
CARMELITA BREBONERIA, JOSELYN BUNYI, EMILIO CABAMONGAN, JR., PAZ DIVINA CABANERO,
RAUL CABANILLA, LEONILA WYNDA CADA, CELSTINA CASAO, ELIZABETH CASAS, ARNULFO
CATALAN, FRANCIS DE LA CHICA, JAIME CORTES, JAIME DE LA CRUZ, JHONNY CUSTODIO, MA.
BELINDA DAPULA, REMEDIOS DEBUQUE, REBECCA DECARA, JOCELYN DIEGO, JAIME DUQUE,
LUCIA ENRIQUEZ, MA. LUCIA ESPEROS, HELEN EVANGELISTA, CELSO FERNANDEZ, EDILBERTO
SAN GABRIEL, REYNALDO SAN GABRIEL, EDMUNDO GARAIS, JENNILYN GOZADO, EVELYN
GUEVARRA, MA. MAGDALENA HIDONA, VICTORINO INDEFONSO, JR., GRACE CECILLE JAVIER,
MARIETA JOSE, MA. CECILIA KAPAW-AN, EVANGELINE LABAY, SENORA LUCUNSAY, MILAGROSO
ALLAN LAMBAN, VIOLETA DE LEON, CHARITO LONTAYAO, REMEDIOS LOYOLA, NORA
MALALUAN, ALBERTO MALIFICIADO, DENNIS MANZANO, MA. CONCEPCION MARQUEZ,
REYNALDO MASILANG, MAGDALENA MENDOZA, MELCHOR NANUD, MILAGROS NEPOMUCENO,
ROSEMARIE NEPOMUCENO, APOLO NISPEROS, ANNALIZA NOBRERA, EVANGELINE NUESCA,
YUMINA PABLO, GLORIA PANGANIBAN, ROGELIO PAQUIZ, ROLANDO PAREDES, NORA PEDROSO,
MARIA HILNA DELA PEÑA VICTORIA, PEÑARADA, MELVIN PERALTA, DOROTHY PEREZ,
FREDERICK MICHAEL PORTACION, ROMMEL RABACA, RODERICK REALUBIT, GWENDOLYN
REMORIN, ANTONIO DE LOS REYES, NERISSA REYES, NENITA ROBRIGADO, ALLAN ROMERO, MA.
ROSARIO ROMULO, LUIS DEL ROSARIO, CRISTINA ROSAS, DEXTER SALAZAR, MAGDALENA
SALOMON, OLIVIA SALOMON, ELENITA SANCHEZ, ANGELINA SANTELICES, ANABELLE SANTOS,

SHARLENE SANTOS, JAIME SINGH DELMASINGUN, EVELYN SO, MILAGROS SOLMIRANO,
CHRISTINE TALUSIK, CYRIL ROMUADO TEJA EFREN TESORERO, PENNYLANE TIONGSON,
CYPRIANO TOMINES, RONILO UMALI, MA. LOURSES VALDUAZA, MA. ANTONIA VALENZUELA,
EDWIN VANGUARDIA, CARLO VEGA, ANNAMOR VELASCO, ESTEFANIA VILLANUEVA,
CANDELARIA YODICO, Respondents.
DECISION
DEL CASTILLO, J.:
In this petition for review1 under Rule 45 of the Rules of Court, the National Home Mortgage
Finance Corporation assails the August 20, 2004 Decision2 of the Court of Appeals in CA-G.R. SP
No. 82637, which dismissed its petition for certiorari from the October 14, 20033 and December
15, 20034 Orders issued by the Regional Trial Court (RTC) of Makati City, Branch 138.5 The said
Orders, in turn, respectively granted the issuance of a writ of execution and denied petitioner’s
motion for reconsideration in Civil Case No. 99-1209 – a case for mandamus.
The antecedents follow.
Petitioner, the National Home Mortgage Finance Corporation (NHMFC), is a government-owned

and controlled corporation created under the authority of Presidential Decree No. 1267 for the
primary purpose of developing and providing a secondary market for home mortgages granted by
public and/or private home-financing institutions. 6 In its employ were respondents,7 mostly
rank-and-file employees, who all profess as having been hired after June 30, 1989.8
On July 1, 1989, Republic Act No. 6758, otherwise known as The Compensation and Position
Classification Act of 1989, was enacted and was subsequently approved on August 21, 1989.
Section 12 thereof directed that all allowances – namely representation and transportation
allowance, clothing and laundry allowance, subsistence allowance, hazard pay and other
allowances as may be determined by the budget department – enjoyed by covered employees
should be deemed included in the standardized salary rates prescribed therein, and that the
other additional compensation being received by incumbents only as of July 1, 1989 not
integrated into the standardized salary rates should continue to be authorized. To implement the
law, the Department of Budget and Management (DBM) issued Corporate Compensation Circular
No. 10.9 Section 5.510 thereof excluded certain allowances and benefits from integration into the
standardized basic salary but continued their grant to those who were incumbents as of June 30,
1989 and who were actually receiving the benefits as of said date. These are the allowances
involved in this case.
Respondents filed a petition for mandamus with the RTC of Makati City, Branch 13811 to compel
petitioner to pay them meal, rice, medical, dental, optical and children’s allowances, as well as
longevity pay, which allegedly were already being enjoyed by other NHMFC employees as early as
July 1, 1989. In its April 27, 2001 Decision, the trial court ruled favorably and ordered petitioner
to pay respondents the allowances prayed for, retroactive to the respective dates of
appointment.12 The dispositive portion of the Decision reads:
WHEREFORE, judgment is hereby rendered in favor of the petitioners and respondent is ordered
to pay petitioners their meal allowance, rice allowance, medical allowance, longevity pay and
children’s allowance retroactive to the dates of their respective appointments up to the present
or for the time that they were employed by the respondent.
SO ORDERED.13
In arriving at the conclusion that respondents were entitled to the prayed-for benefits, the trial
court explained, thus,
The use of the word "only" before the words July 1, 1989 in section 12 of Republic Act No. 6758
appears to be the source of the dispute.
Section 12 is clear that other additional compensation being received by incumbents only as of
July 1, 1989 that are not integrated into the standardized salary rates shall continue to be
authorized. The law is prospective in effect and it does not say that such additional compensation
shall not continue to be authorized for employees appointed after June 30, 1989. The use of the
word "only" before the words "as of July 1, 1989" qualifies the additional compensation which can
be continued. The foregoing applies to all employees whether permanent or casual.
DBM Circular No. 10, the Implementing Rules and Regulations particularly section 5.5 thereof…use
the word "only" for incumbents as of June 30, 1989 and by implication the same shall not apply to
employees appointed after June 30, 1989. This is in effect another qualification limiting the grant
of benefits to those who are incumbents as of June 30, 1989, a condition not imposed by Section
12 of Republic Act No. 6758 for which reason it has to be strike (sic) down.14
Petitioner timely filed an appeal with the Court of Appeals.15 In its November 21, 2001 Decision,
the appellate court affirmed the trial court’s ruling.16 No appeal was taken from the decision and
upon its finality,17 respondents moved for execution.18
However, the motion for execution was withdrawn when on May 12, 2002, petitioner and
respondents executed a Compromise Agreement in which petitioner bound itself to comply with
the decision rendered in the case, except that the payment of the allowances adjudicated in
favor of respondents would be made in four installments instead. It was, likewise stipulated
therein that the parties waive all claims against each other. The trial court did not take any
positive action on the compromise except to note the same since the parties did not intend to
novate the April 27, 2001 Decision.19 On that basis, petitioner had started paying respondents the
arrears in benefits.
Conflict arose when the DBM sent a letter20 dated July 15, 2003 to NHMFC President Angelico
Salud disallowing the payment of certain allowances, including those awarded by the trial court
to respondents. A reading of the letter reveals that the disallowance was made in accordance
with the 2002 NHMFC Corporate Operating Budget previously issued by the DBM.
To abide by the DBM’s directive, petitioner then issued a memorandum stating that effective
August 2003, the grant of benefits to its covered employees, including those awarded to
respondents, would be curtailed pursuant to the DBM letter.21 This eventuality compelled
respondents to file for the second time a motion for a writ of execution of the trial court’s April
27, 2001 decision. 22
In its October 14, 2003 Order,23 the trial court found merit in respondents’ motion; hence, it
directed the execution of the judgment. Petitioner moved for reconsideration24 but it was
denied.25 On February 16, 2004, the trial court issued a Writ of Execution/Garnishment with a
directive to the sheriff to tender to respondents the amount of their collective claim equivalent
to ₱4,806,530.00 to be satisfied out of petitioners goods and chattels and if the same be not
sufficient, out of its existing real property.26 Respondents then sought the garnishment of its
funds under the custody of the Land Bank of the Philippines.27
Bent on preventing execution, petitioner filed a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 82637.28 In it, petitioner ascribed grave abuse of discretion to the
trial court in ordering the execution of the judgment. It pointed out that the trial court
disregarded the fact that the DBM’s issuance amounted to a supervening event, or an occurrence
that changed the situation of the parties that would make the continued payment of allowances
to respondents impossible and illegal, and disregarded the DBM’s exclusive authority to allow or
disallow the payment of the benefits in question.29 It likewise faulted the trial court in ordering
the garnishment of its funds despite the settled rule that government funds may not be garnished
in the absence of an appropriation made by law.301avvphi1
The Court of Appeals, however, found no grave abuse of discretion on the part of the trial court;
hence, in its August 20, 2004 Decision, it dismissed the petition for lack of merit.31
In its present recourse, petitioner, on the one hand, insists that it is difficult not to consider the
issuance of the DBM in this case as a supervening event that would make the execution of the trial
court’s decision inequitable and/or impossible, since the determination of entitlement to
benefits and allowances among government employees is within the agency’s exclusive authority.
It argues that, hence, both the trial court and the Court of Appeals were in error to order the
execution of the decision as the same totally disregards the rule that issuances of administrative
agencies are valid and enforceable.32 Again, it asserts that the garnishment of its funds was not
in order as there was no existing appropriation therefor.33
Respondents, on the other hand, argue in the main that inasmuch as the core issue of whether
they were entitled to the schedule of benefits under Section 12 of R.A. No. 6758 had already been
settled by both the trial court in Civil Case No. 99-1209 and the Court of Appeals in CA-G.R. SP No.
66303, the DBM letter should not be allowed to interfere with the decision and render the same
ineffective. Since the said decision had already attained finality, they posit that execution
appeared to be the only just and equitable measure under the premises34 and that garnishment
lies against petitioner’s funds inasmuch as it has a personality separate and distinct from the
government.35
There is partial merit in the petition.
To begin with, a writ of mandamus is a command issuing from a court of law of competent
jurisdiction, in the name of the state or sovereign, directed to an inferior court, tribunal, or
board, or to some corporation or person, requiring the performance of a particular duty therein
specified, which duty results from the official station of the party to whom the writ is directed, or
from operation of law.36 It is employed to compel the performance, when refused, of a
ministerial duty37 which, as opposed to a discretionary one, is that which an officer or tribunal
performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal
authority, without regard to or the exercise of his or its own judgment upon the propriety or
impropriety of the act done.38
A favorable judgment rendered in a special civil action for mandamus is in the nature of a special
judgment. As such, it requires the performance of any other act than the payment of money or
the sale or delivery of real or personal property the execution of which is governed by Section 11,
Rule 39 of the Rules of Court39 which states:
SECTION 11. Execution of Special Judgment.—When the judgment requires the performance of
any act other than those mentioned in the two preceding sections, a certified copy of the
judgment shall be attached to the writ of execution and shall be served by the officer upon the
party against whom the same is rendered, or upon any other person required thereby, or by law,
to obey the same, and such party or person may be punished for contempt if he disobeys such
judgment.
While the April 17, 2001 Decision of the trial court ordered petitioner to pay the benefits claimed
by respondents, it by no means ordered the payment of a specific sum of money and instead
merely directed petitioner to extend to respondents the benefits under R.A. No. 6758 and its
implementing rules. Being a special judgment, the decision may not be executed in the same way
as a judgment for money handed down in an ordinary civil case governed by Section 9, Rule 39 of
the Rules Court which sanctions garnishment of debts and credits to satisfy a monetary award.
Garnishment is proper only when the judgment to be enforced is one for payment of a sum of
money. It cannot be employed to implement a special judgment such as that rendered in a special
civil action for mandamus.40
On this score, not only did the trial court exceed the scope of its judgment when it awarded the
benefits claimed by respondents. It also committed a blatant error when it issued the February 16,
2004 Order directing the garnishment of petitioner’s funds with the Land Bank of the Philippines
equivalent to ₱4,806,530.00, even though the said amount was not specified in the decision it
sought to implement.
Be that as it may, assuming for the sake of argument that execution by garnishment could
proceed in this case against the funds of petitioner, it must bear stress that the latter is a
government-owned or controlled corporation with a charter of its own. Its juridical personality is
separate and distinct from the government and it can sue and be sued in its name.41 As such,
while indeed it cannot evade the effects of the execution of an adverse judgment and may not
ordinarily place its funds beyond an order of garnishment issued in ordinary cases,42 it is
imperative in order for execution to ensue that a claim for the payment of the judgment award be
first filed with the Commission on Audit (COA).43
Under Commonwealth Act No. 327,44 as amended by P.D. No. 1445,45 the COA, as one of the
three independent constitutional commissions, is specifically vested with the power, authority
and duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property owned or held in trust by the government, or any of its
subdivisions, agencies or instrumentalities, including government-owned and controlled
corporations.46 To ensure the effective discharge of its functions, it is vested with ample powers,
subject to constitutional limitations, to define the scope of its audit and examination and
establish the techniques and methods required therefor, to promulgate accounting and auditing
rules and regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds
and properties.47 Section 1,48 Rule II of the COA Rules of Procedure materially provides:
Section 1. General Jurisdiction.—The Commission on Audit shall have the power, authority and
duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property, owned or held in trust by, or pertaining to the
Government, or any of its subdivisions, agencies or instrumentalities, including government
owned and controlled corporations with original charters, and on a post-audit basis: (a)
constitutional bodies, commissions and offices that have been granted fiscal autonomy under the
Constitution; (b) autonomous state colleges and universities; (c) other government-owned or
controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving
subsidy or equity directly or indirectly, from or through the government, which are required by
law or the granting institution to submit to such audit as a condition of subsidy or equity. However,
where the internal control system of the audited agencies is inadequate, the Commission may
adopt such measures, including temporary or special pre-audit, as are necessary or appropriate to
correct the deficiencies. It shall keep the general accounts of the Government, and for such
period as may be provided by law, preserve the vouchers and other supporting papers pertaining
thereto.
xxxx
Specifically, such jurisdiction shall extend over but not limited to the following: x x x Money
claims due from or owing to any government agency x x x.49
Clearly, the matter of allowing or disallowing a money claim against petitioner is within the
primary power of the COA to decide. This no doubt includes money claims arising from the
implementation of R.A. No. 6758.50 Respondents’ claim against petitioner, although it has
already been validated by the trial court’s final decision, likewise belongs to that class of claims;
hence, it must first be filed with the COA before execution could proceed. And from the decision
therein, the aggrieved party is afforded a remedy by elevating the matter to this Court via a
petition for certiorari51 in accordance with Section 1 Rule XI, of the COA Rules of Procedure. It
states:
Section 1. Petition for Certiorari. - Any decision, order or resolution of the Commission may be
brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days from
receipt of a copy thereof in the manner provided by law, the Rules of Court and these Rules.
When the decision, order or resolution adversely affects the interest of any government agency,
the appeal may be taken by the proper head of the agency.1avvphi1
At this juncture, it is unmistakable that the recourse of respondents in CA-G.R. SP No. 82637 as
well as in the petition before us is at best premature. Thus, the Court cannot possibly rule on the
merits of the petition lest we would only be preempting the action of the COA on the matter.
Suffice it to say that the propriety or regularity of respondents’ claim under the judgment of the
trial court may properly be addressed by the COA in an appropriate action. And even if we
endeavor to take great lengths in deciding the merits of the case and determine the propriety of
the DBM’s issuance, its sufficiency to prevent the execution of the final judgment rendered in this
case, and the entitlement or non-entitlement of each one of the respondents to the benefits
under R.A. No. 6758, the same would nevertheless be a futile exercise. This, because after having
pored over the records of the case, we found nothing sufficient to support respondents’ uniform
claim that they were incumbents as of July 1, 1989 – the date provided in Section 12 of R.A. 6758
– except perhaps their bare contention that they were all hired after June 30, 1989.
With this disquisition, we find no compelling reason to unnecessarily lengthen the discussion by
undeservingly proceeding further with the other issues propounded by the parties.
WHEREFORE, the petition is GRANTED IN PART. The Writ of Execution dated February 16, 2004
issued in Civil Case No. 99-1209 is hereby SET ASIDE. The Regional Trial Court of Makati, Branch
138 is DIRECTED to issue a writ of execution in accordance with this Decision and execute the
judgment pursuant to Section 11, Rule 39, of the Rules of Court.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
METROPOLITAN MANILA G.R. Nos. 171947-48

DEVELOPMENT AUTHORITY,
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, Present:
DEPARTMENT OF EDUCATION,
CULTURE AND SPORTS,[1] PUNO, C.J.,
DEPARTMENT OF HEALTH, QUISUMBING,
DEPARTMENT OF AGRICULTURE, YNARES-SANTIAGO,
DEPARTMENT OF PUBLIC CARPIO,
WORKS AND HIGHWAYS, AUSTRIA-MARTINEZ,
DEPARTMENT OF BUDGET AND CORONA,
MANAGEMENT, PHILIPPINE CARPIO MORALES,
COAST GUARD, PHILIPPINE AZCUNA,

NATIONAL POLICE MARITIME TINGA,
GROUP, and DEPARTMENT OF CHICO-NAZARIO,
THE INTERIOR AND LOCAL VELASCO, JR.,
GOVERNMENT, NACHURA,
Petitioners, REYES,
LEONARDO-DE CASTRO, and
- versus - BRION, JJ.
CONCERNED RESIDENTS OF
MANILA BAY, represented and
joined by DIVINA V. ILAS,
SABINIANO ALBARRACIN,
MANUEL SANTOS, JR., DINAH
DELA PEA, PAUL DENNIS
QUINTERO, MA. VICTORIA
LLENOS, DONNA CALOZA,
FATIMA QUITAIN, VENICE
SEGARRA, FRITZIE TANGKIA,
SARAH JOELLE LINTAG,
HANNIBAL AUGUSTUS BOBIS,
FELIMON SANTIAGUEL, and Promulgated:
JAIME AGUSTIN R. OPOSA,
Respondents. December 18, 2008
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:

The need to address environmental pollution, as a cause of climate change, has of late
gained the attention of the international community. Media have finally trained their sights on
the ill effects of pollution, the destruction of forests and other critical habitats, oil spills, and
the unabated improper disposal of garbage. And rightly so, for the magnitude of environmental
destruction is now on a scale few ever foresaw and the wound no longer simply heals by
itself.[2] But amidst hard evidence and clear signs of a climate crisis that need bold action, the
voice of cynicism, naysayers, and procrastinators can still be heard.
This case turns on government agencies and their officers who, by the nature of their
respective offices or by direct statutory command, are tasked to protect and preserve, at the
first instance, our internal waters, rivers, shores, and seas polluted by human activities. To
most of these agencies and their official complement, the pollution menace does not seem to
carry the high national priority it deserves, if their track records are to be the norm. Their
cavalier attitude towards solving, if not mitigating, the environmental pollution problem, is a
sad commentary on bureaucratic efficiency and commitment.

At the core of the case is the Manila Bay, a place with a proud historic past, once
brimming with marine life and, for so many decades in the past, a spot for different contact
recreation activities, but now a dirty and slowly dying expanse mainly because of the abject
official indifference of people and institutions that could have otherwise made a difference.
This case started when, on January 29, 1999, respondents Concerned Residents of
Manila Bay filed a complaint before the Regional Trial Court (RTC) in Imus, Cavite against
several government agencies, among them the petitioners, for the cleanup, rehabilitation, and
protection of the Manila Bay. Raffled to Branch 20 and docketed as Civil Case No. 1851-99 of
the RTC, the complaint alleged that the water quality of the Manila Bay had fallen way below
the allowable standards set by law, specifically Presidential Decree No. (PD) 1152 or the
Philippine Environment Code. This environmental aberration, the complaint stated, stemmed
from:
x x x [The] reckless, wholesale, accumulated and ongoing acts of omission or

commission [of the defendants] resulting in the clear and present danger to public
health and in the depletion and contamination of the marine life of Manila Bay, [for
which reason] ALL defendants must be held jointly and/or solidarily liable and be
collectively ordered to clean up Manila Bay and to restore its water quality to class B
waters fit for swimming, skin-diving, and other forms of contact recreation.[3]
In their individual causes of action, respondents alleged that the continued neglect of
petitioners in abating the pollution of the Manila Bay constitutes a violation of, among others:
(1) Respondents constitutional right to life, health, and a balanced ecology;

(2) The Environment Code (PD 1152);
(3) The Pollution Control Law (PD 984);
(4) The Water Code (PD 1067);
(5) The Sanitation Code (PD 856);
(6) The Illegal Disposal of Wastes Decree (PD 825);
(7) The Marine Pollution Law (PD 979);
(8) Executive Order No. 192;
(9) The Toxic and Hazardous Wastes Law (Republic Act No. 6969);
(10) Civil Code provisions on nuisance and human relations;
(11) The Trust Doctrine and the Principle of Guardianship; and
(12) International Law
Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be ordered to clean
the Manila Bay and submit to the RTC a concerted concrete plan of action for the purpose.
The trial of the case started off with a hearing at the Manila Yacht Club followed by an
ocular inspection of the Manila Bay. Renato T. Cruz, the Chief of the Water Quality
Management Section, Environmental Management Bureau, Department of Environment and

Natural Resources (DENR), testifying for petitioners, stated that water samples collected from
different beaches around the Manila Bay showed that the amount of fecal coliform content
ranged from 50,000 to 80,000 most probable number (MPN)/ml when what DENR
Administrative Order No. 34-90 prescribed as a safe level for bathing and other forms of
contact recreational activities, or the SB level, is one not exceeding 200 MPN/100 ml.[4]
Rebecca de Vera, for Metropolitan Waterworks and Sewerage System (MWSS) and in
behalf of other petitioners, testified about the MWSS efforts to reduce pollution along
the Manila Bay through the Manila Second Sewerage Project. For its part, the Philippine Ports
Authority (PPA) presented, as part of its evidence, its memorandum circulars on the study
being conducted on ship-generated waste treatment and disposal, and its Linis Dagat (Clean
the Ocean) project for the cleaning of wastes accumulated or washed to shore.
The RTC Ordered Petitioners to Clean Up and Rehabilitate Manila Bay

On September 13, 2002, the RTC rendered a Decision[5] in favor of respondents. The
dispositive portion reads:
WHEREFORE, finding merit in the complaint, judgment is hereby rendered

ordering the abovenamed defendant-government agencies, jointly and solidarily, to
clean up and rehabilitate Manila Bay and restore its waters to SB classification to
make it fit for swimming, skin-diving and other forms of contact recreation. To
attain this, defendant-agencies, with defendant DENR as the lead agency, are
directed, within six (6) months from receipt hereof, to act and perform their
respective duties by devising a consolidated, coordinated and concerted scheme of
action for the rehabilitation and restoration of the bay.
In particular:
Defendant MWSS is directed to install, operate and maintain adequate [sewerage]

treatment facilities in strategic places under its jurisdiction and increase their
capacities.
Defendant LWUA, to see to it that the water districts under its wings, provide,
construct and operate sewage facilities for the proper disposal of waste.
Defendant DENR, which is the lead agency in cleaning up Manila Bay, to install,
operate and maintain waste facilities to rid the bay of toxic and hazardous
substances.
Defendant PPA, to prevent and also to treat the discharge not only of ship-generated
wastes but also of other solid and liquid wastes from docking vessels that contribute
to the pollution of the bay.
Defendant MMDA, to establish, operate and maintain an adequate and appropriate

sanitary landfill and/or adequate solid waste and liquid disposal as well as other
alternative garbage disposal system such as re-use or recycling of wastes.
Defendant DA, through the Bureau of Fisheries and Aquatic Resources, to revitalize
the marine life in Manila Bay and restock its waters with indigenous fish and other
aquatic animals.
Defendant DBM, to provide and set aside an adequate budget solely for the purpose
of cleaning up and rehabilitation of Manila Bay.
Defendant DPWH, to remove and demolish structures and other nuisances that
obstruct the free flow of waters to the bay. These nuisances discharge solid and
liquid wastes which eventually end up inManila Bay. As the construction and
engineering arm of the government, DPWH is ordered to actively participate in

removing debris, such as carcass of sunken vessels, and other non-biodegradable
garbage in the bay.
Defendant DOH, to closely supervise and monitor the operations of septic and
sludge companies and require them to have proper facilities for the treatment and
disposal of fecal sludge and sewage coming from septic tanks.
Defendant DECS, to inculcate in the minds and hearts of the people through
education the importance of preserving and protecting the environment.
Defendant Philippine Coast Guard and the PNP Maritime Group, to protect at all
costs the Manila Bay from all forms of illegal fishing.
No pronouncement as to damages and costs.
SO ORDERED.
The MWSS, Local Water Utilities Administration (LWUA), and PPA filed before the Court of
Appeals (CA) individual Notices of Appeal which were eventually consolidated and docketed
as CA-G.R. CV No. 76528.
On the other hand, the DENR, Department of Public Works and Highways (DPWH),
Metropolitan Manila Development Authority (MMDA), Philippine Coast Guard (PCG),
Philippine National Police (PNP) Maritime Group, and five other executive departments and
agencies filed directly with this Court a petition for review under Rule 45. The Court, in a
Resolution of December 9, 2002, sent the said petition to the CA for consolidation with the
consolidated appeals of MWSS, LWUA, and PPA, docketed as CA-G.R. SP No. 74944.
Petitioners, before the CA, were one in arguing in the main that the pertinent provisions
of the Environment Code (PD 1152) relate only to the cleaning of specific pollution incidents
and do not cover cleaning in general. And apart from raising concerns about the lack of funds
appropriated for cleaning purposes, petitioners also asserted that the cleaning of
the Manila Bay is not a ministerial act which can be compelled by mandamus.
The CA Sustained the RTC
By a Decision[6] of September 28, 2005, the CA denied petitioners appeal and affirmed
the Decision of the RTC in toto, stressing that the trial courts decision did not require
petitioners to do tasks outside of their usual basic functions under existing laws.[7]
Petitioners are now before this Court praying for the allowance of their Rule 45 petition
on the following ground and supporting arguments:

THE [CA] DECIDED A QUESTION OF SUBSTANCE NOT
HERETOFORE PASSED UPON BY THE HONORABLE COURT, I.E., IT
AFFIRMED THE TRIAL COURTS DECISION DECLARING THAT SECTION
20 OF [PD] 1152 REQUIRES CONCERNED GOVERNMENT AGENCIES TO
REMOVE ALL POLLUTANTS SPILLED AND DISCHARGED IN THE WATER
SUCH AS FECAL COLIFORMS.
ARGUMENTS
I
[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY TO THE
CLEANING OF SPECIFIC POLLUTION INCIDENTS AND [DO] NOT COVER
CLEANING IN GENERAL
II
THE CLEANING OR REHABILITATION OF THE MANILA BAY IS
NOT A MINISTERIAL ACT OF PETITIONERS THAT CAN BE COMPELLED
BY MANDAMUS.
The issues before us are two-fold. First, do Sections 17 and 20 of PD 1152 under the
headings, Upgrading of Water Quality and Clean-up Operations, envisage a cleanup in
general or are they limited only to the cleanup of specific pollution incidents? And second, can
petitioners be compelled by mandamus to clean up and rehabilitate the ManilaBay?
On August 12, 2008, the Court conducted and heard the parties on oral arguments.
Our Ruling
We shall first dwell on the propriety of the issuance of mandamus under the premises.
The Cleaning or Rehabilitation of Manila Bay

Can be Compelled by Mandamus
Generally, the writ of mandamus lies to require the execution of a ministerial duty. [8] A
ministerial duty is one that requires neither the exercise of official discretion nor
judgment.[9] It connotes an act in which nothing is left to the discretion of the person executing
it. It is a simple, definite duty arising under conditions admitted or proved to exist and imposed
by law.[10] Mandamus is available to compel action, when refused, on matters involving
discretion, but not to direct the exercise of judgment or discretion one way or the other.
Petitioners maintain that the MMDAs duty to take measures and maintain adequate
solid waste and liquid disposal systems necessarily involves policy evaluation and the exercise
of judgment on the part of the agency concerned. They argue that the MMDA, in carrying out
its mandate, has to make decisions, including choosing where a landfill should be located by
undertaking feasibility studies and cost estimates, all of which entail the exercise of discretion.
Respondents, on the other hand, counter that the statutory command is clear and that
petitioners duty to comply with and act according to the clear mandate of the law does not
require the exercise of discretion. According to respondents, petitioners, the MMDA in
particular, are without discretion, for example, to choose which bodies of water they are to
clean up, or which discharge or spill they are to contain. By the same token, respondents
maintain that petitioners are bereft of discretion on whether or not to alleviate the problem of
solid and liquid waste disposal; in other words, it is the MMDAs ministerial duty to attend to
such services.
We agree with respondents.
First off, we wish to state that petitioners obligation to perform their duties as defined by
law, on one hand, and how they are to carry out such duties, on the other, are two different
concepts. While the implementation of the MMDAs mandated tasks may entail a
decision-making process, the enforcement of the law or the very act of doing what the law
exacts to be done is ministerial in nature and may be compelled by mandamus. We said so
in Social Justice Society v. Atienza[11] in which the Court directed the City ofManila to
enforce, as a matter of ministerial duty, its Ordinance No. 8027 directing the three big local oil
players to cease and desist from operating their business in the so-called Pandacan Terminals
within six months from the effectivity of the ordinance. But to illustrate with respect to the
instant case, the MMDAs duty to put up an adequate and appropriate sanitary landfill and solid
waste and liquid disposal as well as other alternative garbage disposal systems is ministerial,
its duty being a statutory imposition. The MMDAs duty in this regard is spelled out in Sec.
3(c) of Republic Act No. (RA) 7924 creating the MMDA. This section defines and delineates
the scope of the MMDAs waste disposal services to include:
Solid waste disposal and management which include formulation and

implementation of policies, standards, programs and projects for proper and sanitary
waste disposal. It shall likewise include theestablishment and operation of
sanitary land fill and related facilities and the implementation of other alternative
programs intended to reduce, reuse and recycle solid waste. (Emphasis added.)
The MMDA is duty-bound to comply with Sec. 41 of the Ecological Solid Waste
Management Act (RA 9003) which prescribes the minimum criteria for the establishment of
sanitary landfills and Sec. 42 which provides the minimum operating requirements that each
site operator shall maintain in the operation of a sanitary landfill. Complementing Sec. 41 are
Secs. 36 and 37 of RA 9003,[12] enjoining the MMDA and local government units, among
others, after the effectivity of the law on February 15, 2001, from using and operating open
dumps for solid waste and disallowing, five years after such effectivity, the use of controlled
dumps.
The MMDAs duty in the area of solid waste disposal, as may be noted, is set forth not
only in the Environment Code (PD 1152) and RA 9003, but in its charter as well. This duty of
putting up a proper waste disposal system cannot be characterized as discretionary, for, as
earlier stated, discretion presupposes the power or right given by law to public functionaries to
act officially according to their judgment or conscience.[13] A discretionary duty is one that
allows a person to exercise judgment and choose to perform or not to perform.[14] Any
suggestion that the MMDA has the option whether or not to perform its solid waste
disposal-related duties ought to be dismissed for want of legal basis.

A perusal of other petitioners respective charters or like enabling statutes and pertinent laws
would yield this conclusion: these government agencies are enjoined, as a matter of statutory
obligation, to perform certain functions relating directly or indirectly to the cleanup,
rehabilitation, protection, and preservation of the Manila Bay. They are precluded from
choosing not to perform these duties. Consider:
(1) The DENR, under Executive Order No. (EO) 192,[15] is the primary agency responsible for
the conservation, management, development, and proper use of the countrys environment and
natural resources. Sec. 19 of the Philippine Clean Water Act of 2004 (RA 9275), on the other
hand, designates the DENR as the primary government agency responsible for its enforcement
and implementation, more particularly over all aspects of water quality management. On
water pollution, the DENR, under the Acts Sec. 19(k), exercises jurisdiction over all aspects of
water pollution, determine[s] its location, magnitude, extent, severity, causes and effects and
other pertinent information on pollution, and [takes] measures, using available methods and
technologies, to prevent and abate such pollution.

The DENR, under RA 9275, is also tasked to prepare a National Water Quality Status Report,
an Integrated Water Quality Management Framework, and a 10-year Water Quality
Management Area Action Plan which is nationwide in scope covering the Manila Bay and
adjoining areas. Sec. 19 of RA 9275 provides:
Sec. 19 Lead Agency.The [DENR] shall be the primary government agency

responsible for the implementation and enforcement of this Act x x x unless
otherwise provided herein. As such, it shall have the following functions, powers
and responsibilities:
a) Prepare a National Water Quality Status report within twenty-four (24) months
from the effectivity of this Act: Provided, That the Department shall thereafter
review or revise and publish annually, or as the need arises, said report;
b) Prepare an Integrated Water Quality Management Framework within twelve

(12) months following the completion of the status report;
c) Prepare a ten (10) year Water Quality Management Area Action Plan within 12
months following the completion of the framework for each designated water
management area. Such action plan shall be reviewed by the water quality
management area governing board every five (5) years or as need arises.
The DENR has prepared the status report for the period 2001 to 2005 and is in the process of
completing the preparation of the Integrated Water Quality Management
Framework.[16] Within twelve (12) months thereafter, it has to submit a final Water Quality
Management Area Action Plan.[17] Again, like the MMDA, the DENR should be made to
accomplish the tasks assigned to it under RA 9275.

Parenthetically, during the oral arguments, the DENR Secretary manifested that the DENR,
with the assistance of and in partnership with various government agencies and
non-government organizations, has completed, as of December 2005, the final draft of a
comprehensive action plan with estimated budget and time frame, denominated as Operation
Plan for the Manila Bay Coastal Strategy, for the rehabilitation, restoration, and rehabilitation
of the Manila Bay.
The completion of the said action plan and even the implementation of some of its phases
should more than ever prod the concerned agencies to fast track what are assigned them under
existing laws.
(2) The MWSS, under Sec. 3 of RA 6234,[18] is vested with jurisdiction, supervision,
and control over all waterworks and sewerage systems in the territory comprising what is now
the cities of Metro Manila and several towns of the provinces of Rizal and Cavite, and charged
with the duty:

(g) To construct, maintain, and operate such sanitary sewerages as may be necessary
for the proper sanitation and other uses of the cities and towns comprising the
System; x x x
(3) The LWUA under PD 198 has the power of supervision and control over local water
districts. It can prescribe the minimum standards and regulations for the operations of these
districts and shall monitor and evaluate local water standards. The LWUA can direct these
districts to construct, operate, and furnish facilities and services for the collection, treatment,
and disposal of sewerage, waste, and storm water. Additionally, under RA 9275, the LWUA,
as attached agency of the DPWH, is tasked with providing sewerage and sanitation facilities,
inclusive of the setting up of efficient and safe collection, treatment, and sewage disposal
system in the different parts of the country.[19] In relation to the instant petition, the LWUA is
mandated to provide sewerage and sanitation facilities in Laguna, Cavite, Bulacan, Pampanga,
and Bataan to prevent pollution in theManila Bay.
(4) The Department of Agriculture (DA), pursuant to the Administrative Code of 1987 (EO
292),[20] is designated as the agency tasked to promulgate and enforce all laws and issuances
respecting the conservation and proper utilization of agricultural and fishery resources.
Furthermore, the DA, under the Philippine Fisheries Code of 1998 (RA 8550), is, in
coordination with local government units (LGUs) and other concerned sectors, in charge of
establishing a monitoring, control, and surveillance system to ensure that fisheries and aquatic
resources in Philippine waters are judiciously utilized and managed on a sustainable
basis.[21] Likewise under RA 9275, the DA is charged with coordinating with the PCG and
DENR for the enforcement of water quality standards in marine waters.[22] More specifically,
its Bureau of Fisheries and Aquatic Resources (BFAR) under Sec. 22(c) of RA 9275 shall
primarily be responsible for the prevention and control of water pollution for the development,
management, and conservation of the fisheries and aquatic resources.
(5) The DPWH, as the engineering and construction arm of the national government, is tasked
under EO 292[23] to provide integrated planning, design, and construction services for, among
others, flood control and water resource development systems in accordance with national
development objectives and approved government plans and specifications.

In Metro Manila, however, the MMDA is authorized by Sec. 3(d), RA 7924 to perform
metro-wide services relating to flood control and sewerage management which include the
formulation and implementation of policies, standards, programs and projects for an integrated
flood control, drainage and sewerage system.
On July 9, 2002, a Memorandum of Agreement was entered into between the DPWH and
MMDA, whereby MMDA was made the agency primarily responsible for flood control in
Metro Manila. For the rest of the country, DPWH shall remain as the implementing agency for
flood control services. The mandate of the MMDA and DPWH on flood control and drainage
services shall include the removal of structures, constructions, and encroachments built along
rivers, waterways, and esteros (drainages) in violation of RA 7279, PD 1067, and other
pertinent laws.
(6) The PCG, in accordance with Sec. 5(p) of PD 601, or the Revised Coast Guard Law
of 1974, and Sec. 6 of PD 979,[24] or the Marine Pollution Decree of 1976, shall have the
primary responsibility of enforcing laws, rules, and regulations governing marine pollution
within the territorial waters of the Philippines. It shall promulgate its own rules and
regulations in accordance with the national rules and policies set by the National Pollution
Control Commission upon consultation with the latter for the effective implementation and
enforcement of PD 979. It shall, under Sec. 4 of the law, apprehend violators who:
a. discharge, dump x x x harmful substances from or out of any ship, vessel, barge,
or any other floating craft, or other man-made structures at sea, by any method,
means or manner, into or upon the territorial and inland navigable waters of the
Philippines;
b. throw, discharge or deposit, dump, or cause, suffer or procure to be thrown,

discharged, or deposited either from or out of any ship, barge, or other floating craft
or vessel of any kind, or from the shore, wharf, manufacturing establishment, or mill
of any kind, any refuse matter of any kind or description whatever other than that
flowing from streets and sewers and passing therefrom in a liquid state into tributary
of any navigable water from which the same shall float or be washed into such
navigable water; and
c. deposit x x x material of any kind in any place on the bank of any navigable water
or on the bank of any tributary of any navigable water, where the same shall be liable
to be washed into such navigable water, either by ordinary or high tides, or by storms
or floods, or otherwise, whereby navigation shall or may be impeded or obstructed
or increase the level of pollution of such water.
(7) When RA 6975 or the Department of the Interior and Local Government (DILG)
Act of 1990 was signed into law on December 13, 1990, the PNP Maritime Group was tasked
to perform all police functions over the Philippine territorial waters and rivers. Under Sec. 86,
RA 6975, the police functions of the PCG shall be taken over by the PNP when the latter
acquires the capability to perform such functions. Since the PNP Maritime Group has not yet
attained the capability to assume and perform the police functions of PCG over marine
pollution, the PCG and PNP Maritime Group shall coordinate with regard to the enforcement
of laws, rules, and regulations governing marine pollution within the territorial waters of
the Philippines. This was made clear in Sec. 124, RA 8550 or the Philippine Fisheries Code of
1998, in which both the PCG and PNP Maritime Group were authorized to enforce said law
and other fishery laws, rules, and regulations.[25]
(8) In accordance with Sec. 2 of EO 513, the PPA is mandated to establish, develop,
regulate, manage and operate a rationalized national port system in support of trade and
national development.[26] Moreover, Sec. 6-c of EO 513 states that the PPA has police
authority within the
ports administered by it as may be necessary to carry out its powers and functions
and attain its purposes and objectives, without prejudice to the exercise of the
functions of the Bureau of Customs and other law enforcement bodies within the
area. Such police authority shall include the following:
xxxx
b) To regulate the entry to, exit from, and movement within the port, of persons and
vehicles, as well as movement within the port of watercraft.[27]
Lastly, as a member of the International Marine Organization and a signatory to the
International Convention for the Prevention of Pollution from Ships, as amended by
MARPOL 73/78,[28] the Philippines, through the PPA, must ensure the provision of adequate
reception facilities at ports and terminals for the reception of sewage from the ships docking in
Philippine ports. Thus, the PPA is tasked to adopt such measures as are necessary to prevent
the discharge and dumping of solid and liquid wastes and other ship-generated wastes into
the Manila Bay waters from vessels docked at ports and apprehend the violators. When the
vessels are not docked at ports but within Philippine territorial waters, it is the PCG and PNP
Maritime Group that have jurisdiction over said vessels.
(9) The MMDA, as earlier indicated, is duty-bound to put up and maintain adequate sanitary
landfill and solid waste and liquid disposal system as well as other alternative garbage disposal
systems. It is primarily responsible for the implementation and enforcement of the provisions
of RA 9003, which would necessary include its penal provisions, within its area of
jurisdiction.[29]
Among the prohibited acts under Sec. 48, Chapter VI of RA 9003 that are frequently violated
are dumping of waste matters in public places, such as roads, canals or esteros, open burning
of solid waste, squatting in open dumps and landfills, open dumping, burying of biodegradable
or non- biodegradable materials in flood-prone areas, establishment or operation of open
dumps as enjoined in RA 9003, and operation of waste management facilities without an
environmental compliance certificate.
Under Sec. 28 of the Urban Development and Housing Act of 1992 (RA 7279), eviction or
demolition may be allowed when persons or entities occupy danger areas such asesteros,
railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places
such as sidewalks, roads, parks and playgrounds. The MMDA, as lead agency, in coordination
with the DPWH, LGUs, and concerned agencies, can dismantle and remove all structures,
constructions, and other encroachments built in breach of RA 7279 and other pertinent laws
along the rivers, waterways, and esteros in Metro Manila. With respect to rivers, waterways,
and esteros in Bulacan, Bataan, Pampanga, Cavite, and Laguna that discharge wastewater
directly or eventually into the Manila Bay, the DILG shall direct the concerned LGUs to
implement the demolition and removal of such structures, constructions, and other
encroachments built in violation of RA 7279 and other applicable laws in coordination with
the DPWH and concerned agencies.
(10) The Department of Health (DOH), under Article 76 of PD 1067 (the Water Code),
is tasked to promulgate rules and regulations for the establishment of waste disposal areas that
affect the source of a water supply or a reservoir for domestic or municipal use. And under
Sec. 8 of RA 9275, the DOH, in coordination with the DENR, DPWH, and other concerned
agencies, shall formulate guidelines and standards for the collection, treatment, and disposal of
sewage and the establishment and operation of a centralized sewage treatment system. In areas
not considered as highly urbanized cities, septage or a mix sewerage-septage management
system shall be employed.
In accordance with Sec. 72[30] of PD 856, the Code of Sanitation of the Philippines, and
Sec. 5.1.1[31] of Chapter XVII of its implementing rules, the DOH is also ordered to ensure the
regulation and monitoring of the proper disposal of wastes by private sludge companies
through the strict enforcement of the requirement to obtain an environmental sanitation
clearance of sludge collection treatment and disposal before these companies are issued their
environmental sanitation permit.
(11) The Department of Education (DepEd), under the Philippine Environment Code
(PD 1152), is mandated to integrate subjects on environmental education in its school
curricula at all levels.[32] Under Sec. 118 of RA 8550, the DepEd, in collaboration with the DA,
Commission on Higher Education, and Philippine Information Agency, shall launch and
pursue a nationwide educational campaign to promote the development, management,

conservation, and proper use of the environment. Under the Ecological Solid Waste
Management Act (RA 9003), on the other hand, it is directed to strengthen the integration of
environmental concerns in school curricula at all levels, with an emphasis on waste
management principles.[33]
(12) The Department of Budget and Management (DBM) is tasked under Sec. 2, Title XVII of
the Administrative Code of 1987 to ensure the efficient and sound utilization of government
funds and revenues so as to effectively achieve the countrys development objectives.[34]
One of the countrys development objectives is enshrined in RA 9275 or the Philippine Clean
Water Act of 2004. This law stresses that the State shall pursue a policy of economic growth in
a manner consistent with the protection, preservation, and revival of the quality of our fresh,
brackish, and marine waters. It also provides that it is the policy of the government, among
others, to streamline processes and procedures in the prevention, control, and abatement of
pollution mechanisms for the protection of water resources; to promote environmental
strategies and use of appropriate economic instruments and of control mechanisms for the
protection of water resources; to formulate a holistic national program of water quality
management that recognizes that issues related to this management cannot be separated from
concerns about water sources and ecological protection, water supply, public health, and
quality of life; and to provide a comprehensive management program for water pollution
focusing on pollution prevention.
Thus, the DBM shall then endeavor to provide an adequate budget to attain the noble
objectives of RA 9275 in line with the countrys development objectives.
All told, the aforementioned enabling laws and issuances are in themselves clear,
categorical, and complete as to what are the obligations and mandate of each agency/petitioner
under the law. We need not belabor the issue that their tasks include the cleanup of
the Manila Bay.

Now, as to the crux of the petition. Do Secs. 17 and 20 of the Environment Code
encompass the cleanup of water pollution in general, not just specific pollution incidents?
Secs. 17 and 20 of the Environment Code
Include Cleaning in General
The disputed sections are quoted as follows:

Section 17. Upgrading of Water Quality.Where the quality of water has deteriorated to a degree where its state
will adversely affect its best usage, the government agencies concerned shall take such measures as may be
necessary to upgrade the quality of such water to meet the prescribed water quality standards.
Section 20. Clean-up Operations.It shall be the responsibility of the polluter to contain, remove and clean-up
water pollution incidents at his own expense. In case of his failure to do so, the government agencies concerned
shall undertake containment, removal and clean-up operations and expenses incurred in said operations shall be
charged against the persons and/or entities responsible for such pollution.
When the Clean Water Act (RA 9275) took effect, its Sec. 16 on the subject, Cleanup
Operations, amended the counterpart provision (Sec. 20) of the Environment Code (PD 1152).
Sec. 17 of PD 1152 continues, however, to be operational.
The amendatory Sec. 16 of RA 9275 reads:

SEC. 16. Cleanup Operations.Notwithstanding the provisions of Sections 15

and 26 hereof, any person who causes pollution in or pollutes water bodies in excess
of the applicable and prevailing standards shall be responsible to contain, remove
and clean up any pollution incident at his own expense to the extent that the same
water bodies have been rendered unfit for utilization and beneficial use: Provided,
That in the event emergency cleanup operations are necessary and the polluter fails
to immediately undertake the same, the [DENR] in coordination with other
government agencies concerned, shall undertake containment, removal and cleanup
operations. Expenses incurred in said operations shall be reimbursed by the persons
found to have caused such pollution under proper administrative determination x x
x. Reimbursements of the cost incurred shall be made to the Water Quality
Management Fund or to such other funds where said disbursements were sourced.
As may be noted, the amendment to Sec. 20 of the Environment Code is more apparent than
real since the amendment, insofar as it is relevant to this case, merely consists in the
designation of the DENR as lead agency in the cleanup operations.
Petitioners contend at every turn that Secs. 17 and 20 of the Environment Code concern
themselves only with the matter of cleaning up in specific pollution incidents, as opposed to
cleanup in general. They aver that the twin provisions would have to be read alongside the
succeeding Sec. 62(g) and (h), which defines the terms cleanup operations and accidental
spills, as follows:
g. Clean-up Operations [refer] to activities conducted in removing the pollutants discharged or spilled in water to
restore it to pre-spill condition.
h. Accidental Spills [refer] to spills of oil or other hazardous substances in water that result from accidents
such as collisions and groundings.
Petitioners proffer the argument that Secs. 17 and 20 of PD 1152 merely direct the
government agencies concerned to undertake containment, removal, and cleaning operations
of a specific polluted portion or portions of the body of water concerned. They maintain that
the application of said Sec. 20 is limited only to water pollution incidents, which are situations
that presuppose the occurrence of specific, isolated pollution events requiring the
corresponding containment, removal, and cleaning operations. Pushing the point further, they
argue that the aforequoted Sec. 62(g) requires cleanup operations to restore the body of water
to pre-spill condition, which means that there must have been a specific incident of either
intentional or accidental spillage of oil or other hazardous substances, as mentioned in Sec.
62(h).
As a counterpoint, respondents argue that petitioners erroneously read Sec. 62(g) as delimiting
the application of Sec. 20 to the containment, removal, and cleanup operations for accidental
spills only. Contrary to petitioners posture, respondents assert that Sec. 62(g), in fact, even
expanded the coverage of Sec. 20. Respondents explain that without its Sec. 62(g), PD 1152
may have indeed covered only pollution accumulating from the day-to-day operations of
businesses around the Manila Bay and other sources of pollution that slowly accumulated in
the bay. Respondents, however, emphasize that Sec. 62(g), far from being a delimiting
provision, in fact even enlarged the operational scope of Sec. 20, by including accidental spills
as among the water pollution incidents contemplated in Sec. 17 in relation to Sec. 20 of PD
1152.
To respondents, petitioners parochial view on environmental issues, coupled with their
narrow reading of their respective mandated roles, has contributed to the worsening water
quality of the Manila Bay. Assuming, respondents assert, that petitioners are correct in saying
that the cleanup coverage of Sec. 20 of PD 1152 is constricted by the definition of the phrase
cleanup operations embodied in Sec. 62(g), Sec. 17 is not hobbled by such limiting definition.
As pointed out, the phrases cleanup operations and accidental spills do not appear in said Sec.
17, not even in the chapter where said section is found.

Respondents are correct. For one thing, said Sec. 17 does not in any way state that the
government agencies concerned ought to confine themselves to the containment, removal, and
cleaning operations when a specific pollution incident occurs. On the contrary, Sec. 17
requires them to act even in the absence of a specific pollution incident, as long as water
quality has deteriorated to a degree where its state will adversely affect its best usage. This
section, to stress, commands concerned government agencies, when appropriate, to take such
measures as may be necessary to meet the prescribed water quality standards. In fine, the
underlying duty to upgrade the quality of water is not conditional on the occurrence of any
pollution incident.
For another, a perusal of Sec. 20 of the Environment Code, as couched, indicates that it
is properly applicable to a specific situation in which the pollution is caused by polluters who
fail to clean up the mess they left behind. In such instance, the concerned government agencies
shall undertake the cleanup work for the polluters account. Petitioners assertion, that they have
to perform cleanup operations in the Manila Bay only when there is a water pollution incident
and the erring polluters do not undertake the containment, removal, and cleanup operations, is
quite off mark. As earlier discussed, the complementary Sec. 17 of the Environment Code
comes into play and the specific duties of the agencies to clean up come in even if there are no
pollution incidents staring at them. Petitioners, thus, cannot plausibly invoke and hide behind
Sec. 20 of PD 1152 or Sec. 16 of RA 9275 on the pretext that their cleanup mandate depends
on the happening of a specific pollution incident. In this regard, what the CA said with respect
to the impasse over Secs. 17 and 20 of PD 1152 is at once valid as it is practical. The appellate
court wrote: PD 1152 aims to introduce a comprehensive program of environmental protection
and management. This is better served by making Secs. 17 & 20 of general application rather
than limiting them to specific pollution incidents.[35]
Granting arguendo that petitioners position thus described vis--vis the implementation
of Sec. 20 is correct, they seem to have overlooked the fact that the pollution of
theManila Bay is of such magnitude and scope that it is well-nigh impossible to draw the line
between a specific and a general pollution incident. And such impossibility extends to
pinpointing with reasonable certainty who the polluters are. We note that Sec. 20 of PD 1152
mentions water pollution incidents which may be caused by polluters in the waters of
the Manila Bay itself or by polluters in adjoining lands and in water bodies or waterways that
empty into the bay. Sec. 16 of RA 9275, on the other hand, specifically adverts to any person
who causes pollution in or pollutes water bodies, which may refer to an individual or an
establishment that pollutes the land mass near the Manila Bay or the waterways, such that the
contaminants eventually end up in the bay. In this situation, the water pollution incidents are
so numerous and involve nameless and faceless polluters that they can validly be categorized
as beyond the specific pollution incident level.
Not to be ignored of course is the reality that the government agencies concerned are so
undermanned that it would be almost impossible to apprehend the numerous polluters of
the Manila Bay. It may perhaps not be amiss to say that the apprehension, if any, of
the Manila Bay polluters has been few and far between. Hence, practically nobody has been
required to contain, remove, or clean up a given water pollution incident. In this kind of
setting, it behooves the Government to step in and undertake cleanup operations. Thus, Sec. 16
of RA 9275, previously Sec. 20 of PD 1152, covers for all intents and purposes a general
cleanup situation.
The cleanup and/or restoration of the Manila Bay is only an aspect and the initial stage of the
long-term solution. The preservation of the water quality of the bay after the rehabilitation
process is as important as the cleaning phase. It is imperative then that the wastes and
contaminants found in the rivers, inland bays, and other bodies of water be stopped from
reaching the Manila Bay. Otherwise, any cleanup effort would just be a futile, cosmetic
exercise, for, in no time at all, the Manila Bay water quality would again deteriorate below the
ideal minimum standards set by PD 1152, RA 9275, and other relevant laws. It thus behooves
the Court to put the heads of the petitioner-department-agencies and the bureaus and offices
under them on continuing notice about, and to enjoin them to perform, their mandates and
duties towards cleaning up the Manila Bay and preserving the quality of its water to the ideal
level. Under what other judicial discipline describes as continuing mandamus, [36] the Court
may, under extraordinary circumstances, issue directives with the end in view of ensuring that
its decision would not be set to naught by administrative inaction or indifference. In India, the
doctrine of continuing mandamus was used to enforce directives of the court to clean up the
length of the Ganges River from industrial and municipal pollution.[37]
The Court can take judicial notice of the presence of shanties and other unauthorized structures
which do not have septic tanks along the Pasig-Marikina-San Juan Rivers, the National Capital
Region (NCR) (Paraaque-Zapote, Las Pias) Rivers, the Navotas-Malabon-Tullahan-Tenejeros
Rivers, the Meycuayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the
Imus (Cavite) River, the Laguna De Bay, and other minor rivers and connecting waterways,
river banks, and esteros which discharge their waters, with all the accompanying filth, dirt,
and garbage, into the major rivers and eventually the Manila Bay. If there is one factor
responsible for the pollution of the major river systems and the Manila Bay, these
unauthorized structures would be on top of the list. And if the issue of illegal or unauthorized
structures is not seriously addressed with sustained resolve, then practically all efforts to
cleanse these important bodies of water would be for naught. The DENR Secretary said as
much.[38]
Giving urgent dimension to the necessity of removing these illegal structures is Art. 51 of PD
1067 or the Water Code,[39] which prohibits the building of structures within a given length
along banks of rivers and other waterways. Art. 51 reads:
The banks of rivers and streams and the shores of the seas and
lakes throughout their entire length and within a zone of three (3) meters in
urban areas, twenty (20) meters in agricultural areas and forty (40) meters in forest
areas, along their margins, are subject to the easement of public use in the
interest of recreation, navigation, floatage, fishing and salvage. No person shall
be allowed to stay in this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build structures of any
kind. (Emphasis added.)
Judicial notice may likewise be taken of factories and other industrial establishments standing
along or near the banks of the Pasig River, other major rivers, and connecting waterways. But
while they may not be treated as unauthorized constructions, some of these establishments
undoubtedly contribute to the pollution of the Pasig River and waterways. The DILG and the
concerned LGUs, have, accordingly, the duty to see to it that non-complying industrial
establishments set up, within a reasonable period, the necessary waste water treatment
facilities and infrastructure to prevent their industrial discharge, including their sewage waters,
from flowing into the Pasig River, other major rivers, and connecting waterways. After such
period, non-complying establishments shall be shut down or asked to transfer their operations.
At this juncture, and if only to dramatize the urgency of the need for petitioners-agencies to
comply with their statutory tasks, we cite the Asian Development Bank-commissioned study
on the garbage problem in Metro Manila, the results of which are embodied in the The
Garbage Book. As there reported, the garbage crisis in the metropolitan area is as alarming as
it is shocking. Some highlights of the report:
1. As early as 2003, three land-filled dumpsites in Metro Manila - the Payatas,

Catmon and Rodriquez dumpsites - generate an alarming quantity of lead and
leachate or liquid run-off. Leachate are toxic liquids that flow along the surface and
seep into the earth and poison the surface and groundwater that are used for
drinking, aquatic life, and the environment.
2. The high level of fecal coliform confirms the presence of a large amount of
human waste in the dump sites and surrounding areas, which is presumably
generated by households that lack alternatives to sanitation. To say
that Manila Bay needs rehabilitation is an understatement.
3. Most of the deadly leachate, lead and other dangerous contaminants and
possibly strains of pathogens seeps untreated into ground water and runs into
the Marikina and Pasig River systems andManila Bay.[40]
Given the above perspective, sufficient sanitary landfills should now more than ever be
established as prescribed by the Ecological Solid Waste Management Act (RA 9003).
Particular note should be taken of the blatant violations by some LGUs and possibly the
MMDA of Sec. 37, reproduced below:

Sec. 37. Prohibition against the Use of Open Dumps for Solid Waste.No open
dumps shall be established and operated, nor any practice or disposal of solid waste
by any person, including LGUs which [constitute] the use of open dumps for solid
waste, be allowed after the effectivity of this Act: Provided, further that no
controlled dumps shall be allowed (5) years following the effectivity of this Act.
(Emphasis added.)
RA 9003 took effect on February 15, 2001 and the adverted grace period of five (5)
years which ended on February 21, 2006 has come and gone, but no single sanitary landfill
which strictly complies with the prescribed standards under RA 9003 has yet been set up.
In addition, there are rampant and repeated violations of Sec. 48 of RA 9003, like
littering, dumping of waste matters in roads, canals, esteros, and other public places, operation
of open dumps, open burning of solid waste, and the like. Some sludge companies which do
not have proper disposal facilities simply discharge sludge into the Metro Manila sewerage
system that ends up in the Manila Bay. Equally unabated are violations of Sec. 27 of RA 9275,
which enjoins the pollution of water bodies, groundwater pollution, disposal of infectious
wastes from vessels, and unauthorized transport or dumping into sea waters of sewage or solid
waste and of Secs. 4 and 102 of RA 8550 which proscribes the introduction by human or
machine of substances to the aquatic environment including dumping/disposal of waste and
other marine litters, discharge of petroleum or residual products of petroleum of carbonaceous
materials/substances [and other] radioactive, noxious or harmful liquid, gaseous or solid
substances, from any water, land or air transport or other human-made structure.
In the light of the ongoing environmental degradation, the Court wishes to emphasize
the extreme necessity for all concerned executive departments and agencies to immediately act
and discharge their respective official duties and obligations. Indeed, time is of the essence;
hence, there is a need to set timetables for the performance and completion of the tasks, some
of them as defined for them by law and the nature of their respective offices and mandates.
The importance of the Manila Bay as a sea resource, playground, and as a historical
landmark cannot be over-emphasized. It is not yet too late in the day to restore
theManila Bay to its former splendor and bring back the plants and sea life that once thrived in
its blue waters. But the tasks ahead, daunting as they may be, could only be accomplished if
those mandated, with the help and cooperation of all civic-minded individuals, would put their
minds to these tasks and take responsibility. This means that the State, through petitioners, has
to take the lead in the preservation and protection of the Manila Bay.
The era of delays, procrastination, and ad hoc measures is over. Petitioners must
transcend their limitations, real or imaginary, and buckle down to work before the problem at
hand becomes unmanageable. Thus, we must reiterate that different government agencies and
instrumentalities cannot shirk from their mandates; they must perform their basic functions in
cleaning up and rehabilitating the Manila Bay. We are disturbed by petitioners hiding behind
two untenable claims: (1) that there ought to be a specific pollution incident before they are
required to act; and (2) that the cleanup of the bay is a discretionary duty.
RA 9003 is a sweeping piece of legislation enacted to radically transform and improve
waste management. It implements Sec. 16, Art. II of the 1987 Constitution, which explicitly
provides that the State shall protect and advance the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature.
So it was that in Oposa v. Factoran, Jr. the Court stated that the right to a balanced and
healthful ecology need not even be written in the Constitution for it is assumed, like other civil
and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind and
it is an issue of transcendental importance with intergenerational implications. [41] Even
assuming the absence of a categorical legal provision specifically prodding petitioners to clean
up the bay, they and the men and women representing them cannot escape their obligation to
future generations of Filipinos to keep the waters of the Manila Bay clean and clear as
humanly as possible. Anything less would be a betrayal of the trust reposed in them.
WHEREFORE, the petition is DENIED. The September 28, 2005 Decision of the CA in
CA-G.R. CV No. 76528 and SP No. 74944 and the September 13, 2002 Decision of the RTC
in Civil Case No. 1851-99 are AFFIRMED but with MODIFICATIONS in view of
subsequent developments or supervening events in the case. The fallo of the RTC Decision
shall now read:

WHEREFORE, judgment is hereby rendered ordering the abovenamed
defendant-government agencies to clean up, rehabilitate, and preserve Manila Bay,
and restore and maintain its waters to SB level (Class B sea waters per Water
Classification Tables under DENR Administrative Order No. 34 [1990]) to make
them fit for swimming, skin-diving, and other forms of contact recreation.
In particular:
(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as the primary agency responsible for
the conservation, management, development, and proper use of the countrys environment and
natural resources, and Sec. 19 of RA 9275, designating the DENR as the primary government
agency responsible for its enforcement and implementation, the DENR is directed to fully
implement its Operational Plan for the Manila Bay Coastal Strategy for the rehabilitation,
restoration, and conservation of the Manila Bay at the earliest possible time. It is ordered to
call regular coordination meetings with concerned government departments and agencies to
ensure the successful implementation of the aforesaid plan of action in accordance with its
indicated completion schedules.
(2) Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and Sec. 25
of the Local Government Code of 1991,[42] the DILG, in exercising the Presidents power of
general supervision and its duty to promulgate guidelines in establishing waste management
programs under Sec. 43 of the Philippine Environment Code (PD 1152), shall direct all LGUs
in Metro Manila, Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to inspect all
factories, commercial establishments, and private homes along the banks of the major river
systems in their respective areas of jurisdiction, such as but not limited to the
Pasig-Marikina-San Juan Rivers, the NCR (Paraaque-Zapote, Las Pias) Rivers, the
Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan)
Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other
minor rivers and waterways that eventually discharge water into the Manila Bay; and the lands
abutting the bay, to determine whether they have wastewater treatment facilities or hygienic
septic tanks as prescribed by existing laws, ordinances, and rules and regulations. If none be
found, these LGUs shall be ordered to require non-complying establishments and homes to set
up said facilities or septic tanks within a reasonable time to prevent industrial wastes, sewage
water, and human wastes from flowing into these rivers, waterways, esteros, and the Manila
Bay, under pain of closure or imposition of fines and other sanctions.
(3) As mandated by Sec. 8 of RA 9275,[43] the MWSS is directed to provide, install, operate,
and maintain the necessary adequate waste water treatment facilities in Metro Manila, Rizal,
and Cavite where needed at the earliest possible time.
(4) Pursuant to RA 9275,[44] the LWUA, through the local water districts and in
coordination with the DENR, is ordered to provide, install, operate, and maintain sewerage
and sanitation facilities and the efficient and safe collection, treatment, and disposal of sewage
in the provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan where needed at the
earliest possible time.
(5) Pursuant to Sec. 65 of RA 8550,[45] the DA, through the BFAR, is ordered to improve and
restore the marine life of the Manila Bay. It is also directed to assist the LGUs in Metro
Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, and Bataan in developing, using
recognized methods, the fisheries and aquatic resources in the Manila Bay.
(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP Maritime Group, in
accordance with Sec. 124 of RA 8550, in coordination with each other, shall apprehend
violators of PD 979, RA 8550, and other existing laws and regulations designed to prevent
marine pollution in the Manila Bay.
(7) Pursuant to Secs. 2 and 6-c of EO 513[46] and the International Convention for the
Prevention of Pollution from Ships, the PPA is ordered to immediately adopt such measures to
prevent the discharge and dumping of solid and liquid wastes and other ship-generated wastes
into the Manila Bay waters from vessels docked at ports and apprehend the violators.
(8) The MMDA, as the lead agency and implementor of programs and projects for flood
control projects and drainage services in Metro Manila, in coordination with the DPWH,
DILG, affected LGUs, PNP Maritime Group, Housing and Urban Development Coordinating
Council (HUDCC), and other agencies, shall dismantle and remove allstructures,
constructions, and other encroachments established or built in violation of RA 7279, and other
applicable laws along the Pasig-Marikina-San Juan Rivers, the NCR (Paraaque-Zapote, Las
Pias) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways
and esteros in Metro Manila. The DPWH, as the principal implementor of programs and
projects for flood control services in the rest of the country more particularly in Bulacan,
Bataan, Pampanga, Cavite, and Laguna, in coordination with the DILG, affected LGUs, PNP
Maritime Group, HUDCC, and other concerned government agencies, shall remove and
demolish all structures, constructions, and other encroachments built in breach of RA 7279
and other applicable laws along the Meycauayan-Marilao-Obando (Bulacan) Rivers, the
Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other rivers,
connecting waterways, and esteros that discharge wastewater into the Manila Bay.
In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill, as
prescribed by RA 9003, within a period of one (1) year from finality of this Decision. On
matters within its territorial jurisdiction and in connection with the discharge of its duties on
the maintenance of sanitary landfills and like undertakings, it is also ordered to cause the
apprehension and filing of the appropriate criminal cases against violators of the respective
penal provisions of RA 9003,[47] Sec. 27 of RA 9275 (the Clean Water Act), and other existing
laws on pollution.
(9) The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of RA 9275, within one (1)
year from finality of this Decision, determine if all licensed septic and sludge companies have
the proper facilities for the treatment and disposal of fecal sludge and sewage coming from
septic tanks. The DOH shall give the companies, if found to be non-complying, a reasonable
time within which to set up the necessary facilities under pain of cancellation of its
environmental sanitation clearance.
(10) Pursuant to Sec. 53 of PD 1152,[48] Sec. 118 of RA 8550, and Sec. 56 of RA 9003,[49] the
DepEd shall integrate lessons on pollution prevention, waste management, environmental
protection, and like subjects in the school curricula of all levels to inculcate in the minds and
hearts of students and, through them, their parents and friends, the importance of their duty
toward achieving and maintaining a balanced and healthful ecosystem in the Manila Bay and
the entire Philippine archipelago.
(11) The DBM shall consider incorporating an adequate budget in the General Appropriations
Act of 2010 and succeeding years to cover the expenses relating to the cleanup, restoration,
and preservation of the water quality of the Manila Bay, in line with the countrys development
objective to attain economic growth in a manner consistent with the protection, preservation,
and revival of our marine waters.

(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH, DA, DPWH, DBM,
PCG, PNP Maritime Group, DILG, and also of MWSS, LWUA, and PPA, in line with the
principle of continuing mandamus, shall, from finality of this Decision, each submit to the
Court a quarterly progressive report of the activities undertaken in accordance with this
Decision.
No costs.
SO ORDERED.
G.R. No. 70203 December 18, 1987
SALVIO B. FORTUNO and CAMARINES SUR II ELECTRIC COOPERATIVE (CASURECO II),

petitioners,
vs.
HONORABLE MERICIA B. PALMA, in her capacity as Presiding Judge of Branch XXI, Regional
Trial Court, Fifth Judicial Region, and JOEL DAVID S. ABANTE, respondents.
Case Nature : PETITION for certiorari and prohibition with preliminary

injunction to review the decision of the Regional Trial Court, Fifth Judicial
Region, Br. XXI. Palma, J.
Syllabi Class : Remedial Law|
Syllabi:
1. Remedial Law; Quo Warranto, proper action where the dispute is on
the eligibility by the person sought to be ousted.-
Under Section 1, Rule 66 of the Rules of Court a quo warranto proceeding
maybe instituted to determine the right to the use or exercise of a
franchise or office and to oust the holder from its enjoyment, if his claim
is not well-founded, or if he has forfeited his right to enjoy the privilege.
Where the dispute is on the eligibility to perform the duties by the person
sought to be ousted or disqualified a quo warranto is the proper action.
2. Remedial Law; An office in a private corporation is an office of a
public character to render the remedy available to a person having an
injuriously affected interest.-
ln this connection this Court held that an office in a private corporation is
an office of public character in such a sense and to such an extent as to
render the remedy available to a person having an interest which is
injuriously affected. The action may also be brought by a public utility
whose rights are invaded by another.
3. Remedial Law; Jurisdiction over Quo Warranto Cases.-
The Supreme Court has concurrent jurisdiction over quo warranto
proceedings with the Regional Trial Court in the province in which the
defendant or one of the defendants reside, or when defendant is a
corporation, in the province in which it is domiciled or has a place of
business; but when the Solicitor General of the Philippines commences
the action, it may be brought in a Court of First Instance in the City of
Manila or the Supreme Court.
4. Remedial Law; Respondent Abante has the right to file the quo
warranto suit before RTC of Naga City when it is shown that DEC
committed grave abuse of discretion or acted without or in excess of
jurisdiction in the resolution of the qualification of Fortuno.-
From the foregoing provision of the rules and rulings of this Court, the
conclusion is inescapable that the quo warranto proceeding filed in the
RTC of Naga City questioning the qualification of petitioner Fortuno is
within the jurisdiction of said Court. Nowhere in the law can We find any
provision that excepts the electric cooperatives from its coverage. True it
is that the NEA has supervision and control over the directors of
CASURECO II and that under its election code respondent Abante has the
remedy of appeal to the NEA within 72 hours which he did not avail of. Be
that as it may, it does not deprive said respondent of the right to avail of
the right to file the quo warranto suit when it is shown that the DEC
committed a grave abuse of discretion or otherwise acted without
jurisdiction or in excess of its jurisdiction in the resolution of the
qualification of Fortuno.
5. Remedial Law; Rulings in Lions Club International that the courts
will not interfere with the internal affairs of the unincorporated
association cannot apply in the case at bar since CASURECO II is a duly
organized private corporation in the Philippines.-
The ruling of this Court in Lions Club International that the "courts will
not interfere with the internal affairs of an unincorporated association"
cannot apply to the present case as CASURECO II is clearly a duly
organized private corporation in the Philippines. Nevertheless, in said
case this Court held that its proceedings (Lions Clubs International) are
nevertheless subject to judicial review "where law and justice so
requires, and x x x" where there is fraud, oppression, bad faith, or where
the action complained of is capricious, arbitrary or unjust discriminatory.
In the present case, Abante alleged in the quo warranto petition that the
DEC "arbitrarily denied petitioner's complaint for disqualification of
respondent Fortuno'' warranting the intervention of the courts.
GANCAYCO, J.:
The issue posed in this petition for certiorari and prohibition with prayer for preliminary
injunction and temporary restraining order is whether the Regional Trial Court (RTC) has
jurisdiction over quo warranto proceedings involving the qualification for membership of the
Board of Directors of an electric cooperative.
Petitioner Salvio B. Fortuno and respondent Joel David S. Abante were candidates for the position
of director to represent District V of the Camarines Sur II Electric Cooperative, Inc. (CASURECO II)
at the elections of February 9, 1985. On January 30, 1985, Abante filed with the National
Electrification Administration (NEA) a petition to disqualify Fortuno as candidate alleging that he
is not a resident of the area coverage of District V as required by the By-laws of the corporation.
The NEA directed the CASURECO Board of Directors to take appropriate action on the petition in
accordance with the By-laws and Election Code. The Board indorsed the petition to the District
Election Committee (DEC) which is the body charged with the duty of deciding all election
matters, including protests, quarries, referrals, postponements and nullification. 1 In another
letter of February 4, 1985 addressed to DEC, Abante likewise sought the disqualification of
Fortuno on the same ground of non-residence.
The DEC directed Fortuno to submit his comment thereto within 48 hours which was duly
complied with. After a hearing on February 9, 1985, the DEC denied Abante's petition to disqualify
Fortuno finding that he is a resident of the area coverage of District V.
On February 9, 1985, the election was held as a result of which Fortuno obtained 1,429 votes
while Abante received 637 votes. Accordingly, the DEC proclaimed Fortuno as the duly elected
director for District V.
On February 10, 1985, a quo warranto petition with prayer for preliminary injunction and
temporary restraining order was filed by Abante in the Regional Trial Court of Naga City docketed
as No. RTC-05-607 entitled "Joel David S. Abante vs. Salvio B. Fortuno, and CASURECO II." On the
day of the hearing of the preliminary injunction the issue of jurisdiction of the trial court over the
case was raised by said defendants. On March 13, 1985, an order was issued by the trial court
upholding its jurisdiction over the subject matter. A motion for reconsideration of said order was
filed by defendants but this was denied in an order of March 16, 1985.
On March 18, 1985, the trial court issued an order resetting the hearing for preliminary injunction
on March 25, 1985 to enable defendants to elevate the matter to the appellate court and issued
the restraining order enjoining Fortuno from assuming or otherwise performing the functions of a
member of the Board of Directors of CASURECO II until further orders of the Court and the
respondent CASURECO II to observe and implement the said restraining order.
Hence, the herein petition for certiorari and prohibition with prayer for preliminary injunction or
temporary restraining order filed on March 18, 1985 with this Court wherein petitioners seek to
set aside said orders of March 16 and 18, both of 1985 of the trial court and that a restraining
order be issued against the trial court taking further action on the case until further orders.
On March 19, 1985, a supplemental petition was filed by petitioners informing the Court of the
restraining order the respondent court issued on March 18, 1985 which in effect restrains the
continuance in the performance of the duties of Fortuno as an incumbent member of the Board of
Directors who was elected in 1981 whose term of office will end on March 30, 1985 and that
assuming that he was not a resident of the area of coverage he represents he cannot be arbitrarily
suspended or removed from office so that petitioners pray for a restraining order against the
enforcement of said order and for the respondent Judge from taking further proceedings in the
case.
On March 25, 1985, without giving due course to the petition the respondents were required to
comment thereon.
The comment thereon having been filed by the respondents, on October 9, 1985 the Court gave
due course to the petition and required the parties to submit their simultaneous memoranda.
Only petitioners submitted their memoranda. The case is now submitted for deliberation.
The main thrust of the petition is that the respondent court has no jurisdiction over the case
citing Section 24 of P.D. 269 as amended, which vests in the National Electrification
Administration (NEA) the power of supervision and control over all electric cooperatives as
follows:
Section 24. Board of Directors. — (a) The Management of a Cooperative shall be vested in its
Board, subject to the supervision and control of NEA which shall have the right to be represented
and to participate in all Board meetings and deliberations and to approve all policies and
resolutions.
The composition, qualifications, the manner of elections and filling of vacancies, the procedures
for holding meetings and other similar provisions shall be defined in the By-laws of the
Cooperative subject to NEA policies, rules and regulations... 2
Thus petitioners argue that:
Pursuant to the authority granted it by law, the NEA promulgated a standard Electric Cooperative
Election Code which the CASURECO II Board of Directors adopted under its Board Resolution No.
108, s. 1982, as amended by Board Resolution No. 84-141 (Exh. 2). This Election Cooperative
Election Code provides for the creation of a District Election Committee (DEC) which shall, among
other things, 'decide on all election matters including protests, queries, referrals, postponement
and nullification' (par. f, Sec. 26, Electric Cooperative Election Code), 'act as Board of Canvassers'
(Sec. 26-g, Ibid), and 'proclaim the winning candidate' (Sec. 50, Ibid). lt is likewise vested with
the 'sole jurisdiction' over all protests relating to the election of the members of the Board of
Directors, although its decision is appealable to the NEA (Secs. 51, 52, Ibid).
As already adverted to above, respondent Abante filed two formal complaints questioning the
residence qualification of petitioner Fortuno. These two complaints were duly heard and resolved
by the DEC in its Resolution No. 04 dated 8 February 1985 (Exh. 4). Abante did not appeal from
this Resolution which upheld the residence qualification of Fortuno.
In other words, the District Election Committee which is vested with authority to decide questions
of this nature has already ruled that petitioner Fortuno possesses the necessary residence
qualification, a decision which has long become final, no appeal having been taken therefrom.
The question, therefore, of Fortuno's alleged non-residence within the area coverage of District V
had finally been resolved by the duly constituted and authorized administrative body in
accordance with the internal rules and regulations of both CASURECO II and the National Electric
Administration.
Moreover, we earnestly underline the fact that immediately after the elections on the afternoon
of February 9, 1985, the DEC proclaimed Fortuno as the duly elected Director for District V. No
protest against petitioner's proclamation was filed with the DEC, which has the sole jurisdiction to
entertain the same, within the reglementary 72-hour period provided for in Section 51 of the
Electric Cooperative Election Code. Therefore, said proclamation may no longer be questioned.
These facts assume greater significance when it is remembered that private respondent Abante
himself, in his Certificate of Candidacy (Exh. 3), expressly agreed to abide by the Electric
Cooperative Election Code, thereby placing himself squarely within the jurisdiction of the
provisions thereof.
We respectfully submit, therefore, that inasmuch as the power to determine and decide the
residence qualification of petitioner Fortuno is vested in, and falls within the peculiar function
and competence of the NEA, acting through its duly created District Election Committee, that the
decision rendered by the latter had already become final, said resolution may no longer be
questioned elsewhere. The respondent Court thus is without jurisdiction and authority to review
and reverse the aforesaid decision of the District Election Committee. 3
In support of petitioners' theory the cases of Lions Clubs International vs. Judge Amores 4 and of
Bataan Electric Cooperative vs. Judge Pedro T. Santiago are cited. 5
In the questioned order of March 13, 1985 of the respondent court it made the following
disquisition:
The pleadings and motions filed by counsels disclose the following: 1) Petitioner Joel David S.
Abante and respondent Salvio S. Fortuno were the only candidates in the election for District
Director, District V, CASURECO II, Inc. for the towns of Canaman, Magarao and Bombon held on
February 9, 1985. 2) Few days before the election, or on January 30, 1985 Abante in a petition to
the National Electrification Administration (NEA) sought the disqualification of respondent Salvio
Fortuno on the ground that the latter was not a resident within the area coverage of District V,
CASURECO II. The NEA endorsed the petition to the District Election Committee which in
resolution No. 04 dated February 8, 1985 denied Abante's petition. 3) A petition for mandamus
with preliminary injunction to disqualify Fortuno on grounds of non-residence and to enjoin the
CASURECO II from proceedings with the election scheduled on February 9, 1985 was filed before
the RTC, which was docketed as Civil Case No. RTC'85-599. After due hearing the Court denied the
prayer for postponement of the election and dismissed the petition. 4) The DEC proclaimed
Fortuno elected having garnered 1,429 votes as against Abante's votes of 637. No protest was filed
by Abante within the 72-hour reglementary period as allegedly provided for in Section 51 of the
Electric Cooperative Election Code.
The elected board of CASURECO II will assume their position for a term of 3 years on March 30,
1985. Abante, convinced that Fortuno is disqualified because of non-residence in the area, filed
this present Special Civil Action for Quo Warranto Respondent Fortuno in raising the issue of
jurisdiction contends that judicial intervention is not proper; that petitioner failed to exhaust
administrative remedies; that this Court has no jurisdiction over the nature of subject matter of
the action; that it is the DEC who is vested with the "sole jurisdiction over all protests of directors,
although its decision is appealable to the NEA." It is claimed that Courts may not intervene in the
purely internal affairs of the cooperative and in this regard, respondent cited the case of the
Lions Club International vs. Judge Amores, et al. (121 SCRA 628) where the Supreme Court opined
that: "in accordance with the general rules as to the judicial interference, the decision of an
unincorporated association on the question of an election to office is a matter peculiarly and
exclusively to be determined by the association and, in the absence of fraud, is final and binding
on the courts." But in the same case the Supreme Court also said "The general rule on
non-interference in the internal affairs of associations is, however, subject to exceptions, but the
power of review is extremely limited. Accordingly, the courts have and will exercise power to
interfere in the internal affairs of associations where law and justice so require, and the
proceedings of the association are subject to judicial review where there is fraud, oppression or
bad faith, or where the action complained of is capricious, arbitrary, or unjustly discriminatory
(underlining supplied, p. 628, Vol. 121, SCRA). Paragraph 4 of the verified petition, last sentence
thereof, alleges "that the DEC with wanton disregard of the elementary rules of fair play-due
process-arbitrarily denied petitioners complaint for the disqualification of respondent Fortuno."
This Court finds that hearing of the petition for preliminary injunction would not constitute undue
interference in the internal affairs of the CASURECO II.
Respondent CASURECO II in support of its objection to the grant of preliminary injunction has
cited the case of Silon vs. Vera (64, Philippine 868) to wit:
In quo warranto proceedings instituted for the sole purpose of questioning the legality of the
election of the directors of a corporation ... preliminary injunction does not he to prevent said
directors and officers from discharging their offices and to restore the former directors, and the
issuance thereof constitute an excess of jurisdiction and abuse of discretion.
The Court has read the case and found that the facts of the case has no parallel to the case at bar.
The doctrine laid down in said case cannot apply even by analogy to the present case. The 'Reply
to the objection' filed by petitioner's counsel has clearly pointed out the striking difference
between the two cases and the inapplicability of said case to the case at bar.
The rule regarding exhaustion of administrative remedies is not absolute except when there is an
express legal provision requiring such administrative step as a condition precedent to taking
action in court. This specially in point taking the fact raised by the respondent that the position is
not a public office which would be strictly subject to the hierarchy of higher administrative
offices. Failure to exhaust administrative remedies may possibly affect the cause of action but
not the jurisdiction of the Court. Another factor, in this particular case, is that the petitioner, has
no other immediate and adequate remedy than to go to court in view of the forthcoming
assumption of office of the new Board of Directors which would not afford sufficient time to raise
the matter to the higher NEA authorities in Manila.
It is to be noted that this case does not involve the validity of the election proceedings, or the
number of votes cast but, simply the question of whether the respondent is qualified or not under
the residence requirement of the position for which he was a candidate. it is therefore a
justiciable controversy.
We agree.
Under Section 1, Rule 66 of the Rules of Court a quo warranto proceeding maybe instituted to
determine the right to the use or exercise of a franchise or office and to oust the holder from its
enjoyment, if his claim is not well- founded, or if he has forfeited his right to enjoy the privilege.
6 Where the dispute is on the eligibility to perform the duties by the person sought to be ousted or
disqualified a quo warranto is the proper action. 7
Under Section 6, Rule 66 of the Rules of Court it is provided:
SEC. 6. When an individual may commence such an action. — A person claiming to be entitled to a
public office or position usurped or unlawfully held or exercised by another may bring an action
therefore in his own name.
In this connection this Court held that an office in a private corporation is an office of public
character in such a sense and to such an extent as to render the remedy available to a person
having an interest which is injuriously affected. 8 The action may also be brought by a public
utility whose rights are invaded by another. 9
The Supreme Court has concurrent jurisdiction over quo warranto proceedings with the Regional
Trial Court in the province in which the defendant or one of the defendants reside, or when
defendant is a corporation, in the province in which it is domiciled or has a place of business; but
when the Solicitor General of the Philippines commences the action, it may be brought in a Court
of First Instance in the City of Manila or the Supreme Court. 10
From the foregoing provision of the rules and rulings of this Court, the conclusion is inescapable
that the quo warranto proceeding filed in the RTC of Naga City questioning the qualification of
petitioner Fortuno is within the jurisdiction of said Court. Nowhere in the law can We find any
provision that excepts the electric cooperatives from its coverage.
True it is that the NEA has supervision and control over the directors of CASURECO II and that
under its election code respondent Abante has the remedy of appeal to the NEA within 72 hours
which he did not avail of. Be that as it may, it does not deprive said respondent of the right to
avail of the right to file the quo warranto suit when it is shown that the DEC committed a grave
abuse of discretion or otherwise acted without jurisdiction or in excess of its jurisdiction in the
resolution of the qualification of Fortuno. 11
The ruling of this Court in Lions Club International that the "courts will not interfere with the
internal affairs of an unincorporated association" cannot apply to the present case as CASURECO II
is clearly a duly organized private corporation in the Philippines. Nevertheless, in said case this
Court held that its proceedings (Lions Clubs International) are nevertheless subject to judicial
review "where law and justice so requires, and ..." where there is fraud, oppression, bad faith, or
where the action complained of is capricious, arbitrary or unjust discriminatory. 12 In the present
case, Abante alleged in the quo warranto petition that the DEC "arbitrarily denied petitioner's
complaint for disqualification of respondent Fortuno" warranting the intervention of the courts.
13
By the same token the case of Bataan Electric Cooperative is predicated on different
environmental facts. In said case, what is questioned is the qualification of the voters who voted
for the member of the board of directors and not of the one voted for and further the elections
sought to be prevented had already been held, so that the petition was considered moot and
academic. 14
WHEREFORE, the petition is DISMISSED without pronouncement as to costs.
SO ORDERED.
G.R. No. 195191 March 20, 2012
CONGRESSWOMAN LUCY MARIE TORRES-GOMEZ, petitioner,
vs.
EUFROCINO C. CODILLA, JR. AND HON. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL,

respondents.

Syllabi Class : Election Law|Election Protests
Syllabi:
1. Remedial Law; Civil Procedure; Verification; The verification of a
pleading is only a formal, not a jurisdictional, requirement. The purpose
of requiring a verification is to secure an assurance that the allegations in
the petition are true and correct, not merely speculative.-
—It has been consistently held that the verification of a pleading is only
a formal, not a jurisdictional, requirement. The purpose of requiring a
verification is to secure an assurance that the allegations in the petition
are true and correct, not merely speculative. This requirement is simply
a condition affecting the form of pleadings, and noncompliance therewith
does not necessarily render the pleading fatally defective.
2. Election Law; Election Protests; An election protest proposes to
oust the winning candidate from office. It is strictly a contest between
the defeated and the winning candidates, based on the grounds of
electoral frauds and irregularities.-
—An election protest proposes to oust the winning candidate from office.
It is strictly a contest between the defeated and the winning candidates,
based on the grounds of electoral frauds and irregularities. Its purpose is
to determine who between them has actually obtained the majority of
the legal votes cast and is entitled to hold the office. The foregoing
considered, the issues raised in Codilla‟s Election Protest are proper for
such a petition, and is within the jurisdiction of the HRET.
3. Congress; House of Representatives Electoral Tribunal
(HRET); The House of Representatives Electoral Tribunal (HRET) is the
sole judge of all contests relating to the election, returns, and
qualifications of the members of the House of Representatives.-
—It bears stressing that the HRET is the sole judge of all contests relating
to the election, returns, and qualifications of the members of the House
of Representatives. This exclusive jurisdiction includes the power to
determine whether it has the authority to hear and determine the
controversy presented; and the right to decide whether there exists that
state of facts that confers jurisdiction, as well as all other matters arising
from the case legitimately before it. Accordingly, the HRET has the power
to hear and determine, or inquire into, the question of its own
jurisdiction—both as to parties and as to subject matter; and to decide all
questions, whether of law or of fact, the decision of which is necessary to
determine the question of jurisdiction. Thus, the HRET had the exclusive
jurisdiction to determine its authority and to take cognizance of the
Election Protest filed before it.
4. Election Law; Election Controversies; An election controversy, by
its very nature, touches upon the ascertainment of the people‟s choice as
gleaned from the medium of the ballot. For this reason, an election
protest should be resolved with utmost dispatch, precedence and regard
for due process.-
—This Court has emphasized that in this species of controversy involving
the determination of the true will of the electorate, time is indeed of
paramount importance. An election controversy, by its very nature,
touches upon the ascertainment of the people‟s choice as gleaned from

the medium of the ballot. For this reason, an election protest should jbe
resolved with utmost dispatch, precedence and regard for due process.
Obstacles and technicalities that fetter the people‟s will should not stand
in the way of a prompt termination of election contests. Thus, rules on
the verification of protests should be liberally construed.
Division: EN BANC
DECISION
SERENO, J.:
This is a Petition for Certiorari under Rule 65 of the Rules of Court, with application for
Temporary Restraining Order and/or Writ of Preliminary Prohibitory Injunction. The Petition
seeks to annul and set aside Resolution No. 10-482 of the Mouse of Representatives Electoral
Tribunal (HRET) in HRET Case No. 10-009 (EP) entitled "Eufrocino C. Codilla, Jr. v. Lucy Marie
Torres-Gomez (Fourth District, Leyte)," which denied the Motion for Reconsideration filed by
petitioner.
Statement of the Facts and the Case
On 30 November 2009, Richard I. Gomez (Gomez) filed his Certificate of Candidacy for
representative of the Fourth Legislative District of Leyte under the Liberal Party of the
Philippines. On even date, private respondent Codilla Jr. filed his Certificate of Candidacy for the
same position under Lakas Kampi CMD.
On 6 December 2009, Buenaventura O. Juntilla (Juntilla), a registered voter of Leyte, filed a

Verified Petition for Gomez's disqualification with the Commission on Elections (COMELEC) First
Division on the ground that Gomez lacked the residency requirement for a Member of the Fiouse
of Representatives.
In a Resolution dated 17 February 2010, the COMELEC First Division granted Juntilla's Petition and
disqualified Gomez. On 20 February 2010, the latter filed a Motion for Reconsideration with the
COMELEC En Banc, which dismissed it on 4 May 2010, six days before the May 2010 national, and
local elections. The dispositive portion of the COMELEC's Resolution1 is worded as follows:
WHEREFORE, premises considered, the motion for reconsideration filed by the Respondent is
DISMISSED for lack of merit. The Resolution of the Commission (First Division) is hereby AFFIRMED.
SO ORDERED.2
On the same date, Gomez filed a Manifestation with the COMELEC En Bane, alleging that, without
necessarily admitting the allegations raised by Juntilla, he was accepting the aforementioned
Resolution with finality, in order to enable his substitute to facilitate the filing of the necessary
documents for substitution.
On 5 May 2010, petitioner Lucy Marie Torres-Gomez filed her Certificate of Candidacy as
substitute for the position of representative of the Fourth Congressional District for the Province
of Leyte vice Gomez, her husband.
On 6 May 2010, Juntilla filed a Counter-Manifestation with the COMELEC En Banc. At the same
time, he wrote a letter to Atty. Ferdinand T. Rafanan, Director of the Law Department of the
COMELEC, alleging the invalidity of the proposed substitution of Gomez by petitioner.
On 8 May 2010, the COMELEC En Banc issued Resolution No. 8890, which approved and adopted
the recommendation of its Law Department to allow petitioner as a substitute candidate for
Gomez for representative of the Fourth Legislative District of Leyte.
On 9 May 2010, Juntilla filed an Extremely Urgent Motion for Reconsideration of the above
COMELEC Resolution No. 8890. Pending resolution of his motion, the national and local elections
were conducted as scheduled.
After the casting, counting and canvassing of votes in the said elections, petitioner emerged as
the winner with 101,250 votes or a margin of 24,701 votes over private respondent Codilla, who
obtained 76,549 votes.
On 11 May 2010, Codilla filed an Urgent Ex-Parte Motion to Suspend the Proclamation of
Substitute Candidate Lucy Marie T. Gomez (vice Richard I. Gomez) as the Winning Candidate of
the May 10, 2010 Elections for the Fourth Congressional District of Leyte.
On the same date, Juntilla filed an Extremely Urgent Motion to resolve the pending Motion for
Reconsideration filed on 9 May 2010 relative to Resolution No. 8890 and to immediately order the
Provincial Board of Canvassers of the Province of Leyte to suspend the proclamation of petitioner
as a Member of the House of Representatives, Fourth District, Province of Leyte.
On 12 May 2010, petitioner was proclaimed the winning candidate for the congressional seat of
the Fourth District of Leyte.
Accordingly, on 21 May 2010, private respondent Codilla filed a Petition with public respondent
HRET against petitioner docketed as HRET Case No. 10-009 (Election Protest).
On 2 July 2010, petitioner filed her Verified Answer to Codilla's Election Protest questioning the
alleged lack of the required Verification and praying for its dismissal.
On 8 July 2010, Codilla filed a Reply to petitioner's Verified Answer.
In an Order issued by public respondent HRET, the instant case was set for preliminary conference
on 2 September 2010.
On 1 September 2010, unsatisfied with the Order of the HRET, petitioner filed an Urgent
Manifestation and Motion, persistent in her position that Codilla's Election Protest should be
dismissed based on the grounds raised in her Verified Answer. She also prayed for the deferment
of the preliminary conference until after the resolution of the said motion.1âwphi1
On 9 September 2010, the HRET issued the assailed Resolution No. 10-2823 resolving the Urgent
Manifestation and Motion filed by petitioner, the dispositive portion of which provides:
The Tribunal NOTES the Urgent Manifestation and Motion filed on September 1, 2010 by the
protestee; REITERATES its ruling in Resolution No. 10-160 dated July 29, 2010 that the protest
cannot be considered insufficient in form, considering that the examination of the original copy
of the protest filed before the Tribunal had revealed the existence of the required verification;
and DENIES the respondent's motion for deferment of the preliminary conference scheduled on
September 2, 2010.4
Accordingly, on 30 September 2010, petitioner filed with public respondent HRET a Motion for
Reconsideration of the above Resolution No. 10-282.
On 22 November 2010, public respondent HRET issued Resolution No. 10-4825 denying petitioner's
Motion for Reconsideration, ruling as follows:
WHEREFORE, the Tribunal DENIES the instant motion for reconsideration as regards the issues
pertaining to absence/defect of the verification and propriety of the election protest; and
DIRECTS the protestant to have his verification properly notarized.6
Thereafter, petitioner filed the instant Petition for Certiorari7 dated 7 February 2011. The
Petition raises the following grounds:
A.
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT REFUSED TO DISMISS THE ELECTION PROTEST DESPITE AN
ADMITTEDLY DEFECTIVE VERIFICATION.
B.
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
AND/OR EXCESS OF JURISDICTION WHEN Y ALLOWED THE PROTESTANT TO RAISE ISSUES ON
QUALIFICATION OF CANDIDATES IN AN ELECTION PROTEST.8
Petitioner claims that there was a material defect in the Verification of the Election Protest, a
requirement explicitly provided for in Rule 16 of the 2004 Rules of the House of Representatives
Electoral Tribunal (HREF Rules).9 The verification being a mandatory requirement, the failure to
comply therewith is a fatal defect that affects the very jurisdiction of the HRET.
On the second issue, petitioner claims that what is in question in the Election Protest is her
qualification as a Member of the House of Representatives, and not the number of votes cast. Her
qualification is allegedly not a proper ground for an election protest, in which the issues should be
the appreciation of ballots and the correctness and number of votes of each candidate.
On 15 February 2011 this Court required respondents to file their comment on the Petition.
Thereafter, Codilla filed his Comment/Opposition dated 28 April 2011. In his Comment, he argues
that there was no grave abuse of discretion on the part of the HREF in issuing the assailed
Resolutions. He clarifies that the Ejection Protest that he filed contained a validly executed
Verification and Certification of Non-Forum Shopping (Verification).10 However, the defect that
petitioner points to is the portion of the jurat of the Verification, which states:
Subscribed and sworn to before me this__ day of May 2010 at _____. Affiant personally and
exhibited to me his (1) License ID Card with Card No. 1103-80-002135 issued by LTO on January 16,
2009 (2) Philippine Passport No. XX4793730 issued on "October 20, 2009 valid until October 19,
2014, he, being the same person herein who executed the foregoing document thereof.11
The date "May 21 2009" was stamped on the first blank in "__ day of May 2010.""May 21 2010" was
written with a pen over the stamped date "May 21 2009" and countersigned by the notary public.
Codilla claims that the date of the Verification was a mere innocuous mistake or oversight, which
did not warrant a finding that the Verification was defective; much less, fatally defective. He
claims he should not be faulted for any alleged oversight that may have been committed by the
notary public. Further, the same argument holds true with respect to the absence of the
Mandatory Continuing Legal Education (MCLE) Compliance Number of the notary public, as well as
the overdue Professional Tax Receipt (PTR) indicated in the notarial stamp. In any case, the
insufficiency of the Verification was not fatal to the jurisdiction of the HRET.
With respect to the second issue, Codilla argues that the issues in the Election Protest do not
pertain to petitioner's qualification, but to the casting and counting of votes. He claims that his
Election Protest contests the declaration by the Board of Canvassers that the 101,250 votes
should be counted in favor of petitioner and be credited to him as these should have instead been
declared as stray votes.
Thereafter, public respondent HRET filed its Comment12 on the Petition dated 5 May 2011. In its
Comment, the HRET claims that it did not commit grave abuse of discretion when it took
cognizance of Codilla's Election Protest despite an alleged absence/defect in the verification.
After all, an unverified petition differs from one which contains a defective verification, such as
in this case. A defective verification is merely a formal defect which does not affect the
jurisdiction of the tribunal. In any case, the summary dismissal of an Election Protest, as well as
the allowance of its amendments in matters of form, is sanctioned by the HRET Rules.
The HRET further argues that it did not commit grave abuse of discretion when it took cognizance
of the Election Protest. The issue raised in the Election Protest was the validity of petitioner's
proclamation, in view of her alleged invalid substitution. This is a matter that is addressed to the
sound judgment of the HRET.
On 7 June 2011, this Court, among others, required petitioner to file a reply to Codilla's Comment.
Petitioner later filed her Reply dated 15 August 2011, citing an additional ground for considering
the Verification as defective. She claimed that Codilla, a resident of Ormoc City, could not have
possibly appeared before a notary public in Quezon City; and that he failed to prove that he was
indeed in Quezon City when he supposedly verified the Election Protest.
The Court's Ruling
The Petition is dismissed for failure to show any grave abuse of discretion on the part of the HRET.
On the Allegedly Defective Verification
While the existence of the Verification is not disputed, petitioner notes three alleged defects.
First, the Election Protest was filed on 21 May 2010, but the Verification was allegedly subscribed
and sworn to on 21 May 2009.13 Second, Codilla, a resident of Ormoc City, could not have possibly
appeared personally before the notary public in Quezon City.14 Third, in the notarial stamp, the
date of expiration of the notarial commission was handwritten while all other details were
stamped; the PTR indicated was issued in 2005; there was no MCLE Compliance Number as
required by Bar Matter No. 1922.15 Petitioner claims that due to the lack of a proper verification,
the Election Protest should have been treated as an unsigned pleading and must be dismissed.
The alleged defects of the Verification are more apparent than real.
With respect to the date of the notarization, it is clear that the stamped date "2009" was a mere
mechanical error. In fact, the notary public had superimposed in writing the numbers "10" and
countersigned the alteration. Thus, this error need not be overly magnified as to constitute a
defect in the Verification.
With respect to the second alleged defect, there is a presumption that official duty has been
regularly performed with respect to the jurat of the Verification, wherein the notary public
attests that it was subscribed and sworn to before him or her, on the date mentioned thereon.16
Official duties are disputably presumed to have been regularly performed. Thus, contrary to
petitioner's allegation, there was no need for Codilla to "attach his plane ticket to prove he flew
from Ormoc City to Manila."17
Further, to overcome the presumption of regularity, clear and convincing evidence must be
presented.18 Absent such evidence, the presumption must be upheld. The burden of proof to
overcome the presumption of due execution of a notarized document lies on the party contesting
the execution.19 Thus, petitioner's contention that she "had reliable information that [Codilla]
was in Ormoc City on the date indicated in the Verification" cannot be considered as clear and
convincing evidence to rebut the presumption that the document was duly executed and
notarized.
With respect to the third alleged defect, the fact that some portions of the stamp of the notary
public were handwritten and some were stamped does not, in itself, indicate any defect. Further,
Bar Matter No. 1922 merely requires lawyers to indicate in all pleadings filed before the courts or
quasi-judicial bodies, the number and date of issue of their MCLE Certificate of Compliance or
Certificate of Exemption, whichever is applicable - for the immediately preceding compliance
period. Clearly, the regulation does not apply to notarial acts. With respect to the PTR number
which was dated 5 years prior to the date of notarization, the deficiency merely entails the
potential administrative liability of the notary public.20
In any case, there was no grave abuse of discretion on the part of the HRET in denying petitioner's
Motion to Dismiss the Election Protest and directing Codilla to have his Verification properly
notarized.
It has been consistently held that the verification of a pleading is only a formal, not a
jurisdictional, requirement. The purpose of requiring a verification is to secure an assurance that
the allegations in the petition are true and correct, not merely speculative. This requirement is
simply a condition affecting the form of pleadings, and noncompliance therewith does not
necessarily render the pleading fatally defective.21
This Court has emphasized that in this species of controversy involving the determination of the
true will of the electorate, time is indeed of paramount importance. An election controversy, by
its very nature, touches upon the ascertainment of the people's choice as gleaned from the
medium of the ballot. For this reason, an election protest should be resolved with utmost
dispatch, precedence and regard for due process. Obstacles and technicalities that fetter the
people's will should not stand in the way of a prompt termination of election contests.22 Thus,
rules on the verification of protests should be liberally construed.
At this point, it is pertinent to note that such liberalization of the rules was also extended to
petitioner.1âwphi1 A perusal of the Verification and Certification attached to this Petition shows
she attests that the contents of the Petition "are true and correct of [her] own personal
knowledge, belief and based on the records in [her] possession.23 Section 4, Rule 7 of the Rules of
Court provides that a pleading required to be verified which contains a verification based on
"information and belief or "knowledge, information and belief," shall be treated as an unsigned
pleading. A pleading, therefore, wherein the verification is based merely on the party's
knowledge and belief— such as in the instant Petition — produces no legal effect, subject to the
discretion of the court to allow the deficiency to be remedied.24
On the Propriety of the Election Protest
Codilla's Election Protest contests the counting of 101,250 votes in favor of petitioner. He claims
that the denial of the Certificate of Candidacy of Gomez rendered the latter a non-candidate,
who therefore could not have been validly substituted, as there was no candidacy to speak of.
It bears stressing that the HRET is the sole judge of all contests relating to the election, returns,
and qualifications of the members of the House of Representatives. This exclusive jurisdiction
includes the power to determine whether it has the authority to hear and determine the
controversy presented; and the right to decide whether there exists that state of facts that
confers jurisdiction, as well as all other matters arising from the case legitimately before it.25
Accordingly, the HRET has the power to hear and determine, or inquire into, the question of its
own jurisdiction - both as to parties and as to subject matter; and to decide all questions,
whether of law or of fact, the decision of which is necessary to determine the question of
jurisdiction.26 Thus, the HRET had the exclusive jurisdiction to determine its authority and to
take cognizance of the Election Protest filed before it.
Further, no grave abuse of discretion could be attributed to the HRET on this score. An election
protest proposes to oust the winning candidate from office. It is strictly a contest between the
defeated and the winning candidates, based on the grounds of electoral frauds and irregularities.
Its purpose is to determine who between them has actually obtained the majority of the legal
votes cast and is entitled to hold the office.27 The foregoing considered, the issues raised hi
Codilla's Election Protest are proper for such a petition, and is within the jurisdiction of the HRET.
WHEREFORE, the instant Petition for Certiorari is DISMISSED.
The Application for a Temporary Restraining Order and/or Writ of Preliminary Prohibitory
Injunction is likewise DENIED. Resolution Nos. 10-282 and 10-482 of the House of Representatives
Electoral Tribunal are hereby AFFIRMED.
SO ORDERED.
G.R. No. 69260 December 22, 1989
MUNICIPALITY OF BIÑAN, petitioner,
vs.
HON. JOSE MAR GARCIA, Judge of the Regional Trial Court at Biñan, Laguna (BRANCH XXXIV,
Region IV), and ERLINDA FRANCISCO, respondents.
The Provincial Fiscal for petitioner.
Roman M. Alonte for private respondent.
Case Nature : PETITION for certiorari to review the order of the

Regional Trial Court of Laguna and San Pablo City, Br. 24, Garcia, J.
Syllabi Class : Eminent Domain|Two stages of|Co-ownership|Appeals
Syllabi:
1. Eminent Domain; Two stages of; Procedure of.-

1. There are two (2) stages in every action of expropriation. The first is
concerned with a determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in
the context of the facts involved in the suit. It ends with an order, if not
of dismissal of the action, “of condemnation declaring that the plaintiff
has lawful right to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon the payment of
just compensation to be determined as of the date of the filing of the
complaint.” An order of dismissal, if this be ordained, would be a final one,
of course, since it finally disposes of the action and leaves nothing more
to be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state,
in the proceedings before the Trial Court, “no objection to the exercise of
the right of condemnation (or the propriety thereof) shall be filed or
heard.” The second phase of the eminent domain action is concerned
with the determination by the Court of “the just compensation for the
property sought to be taken.” This is done by the Court with the
assistance of not more than three (3) commissioners. The order fixing
the just compensation on the basis of the evidence before, and finding of,
the commissioners would be final, too. It would finally dispose of the
second stage of the suit, and leave nothing more to be done by the Court
regarding the issue. Obviously, one or another of the parties may believe
the order to be erroneous in its appreciation of the evidence or findings of
fact or otherwise. Obviously, too, such a dissatisfied party may seek
reversal of the order by taking an appeal therefrom.
2. Eminent Domain; Two stages of; Co-ownership; First phase of
partition and / or accounting suit-
The first phase of a partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a
partition is proper (i.e., not otherwise legally proscribed) and may be
made by voluntary agreement of all the parties interested in the property.
This phase may end with a declaration that plaintiff is not entitled to have
a partition either because a co-ownership does not exist, or partition is
legally prohibited. It may end, on the other hand, with an adjudgment
that a co-ownership does in truth exist, partition is proper in the
premises and an accounting of rents and profits received by the
defendant from the real estate in question is in order. In the latter case,
“the parties may, if they are able to agree, make partition among
themselves by proper instruments of conveyance, and the court shall
confirm the partition so agreed upon. In either case—i.e., either the
action is dismissed or partition and/or accounting is decreed—the order
is a final one, and may be appealed by any party aggrieved thereby.
3. Eminent Domain; Two stages of; Second phase commences when
it appears that the parties are unable to agree upon the partition directed
by the court.-
The second phase commences when it appears that “the parties are
unable to agree upon the partition” directed by the court. In that event
partition shall be done for the parties by the Court with the assistance of
not more than three (3) commissioners. This second stage may well also
deal with the rendition of the accounting itself and its approval by the
Court after the parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties thereto
entitled of their just share in the rents and profits of the real estate in
question.” Such an order is, to be sure, final and appealable.
4. Eminent Domain; Two stages of; Appeals; Reglementary period
of 30 days to appeal in expropriation proceedings; Reason; Case at bar.-
The Court therefore holds that in actions of eminent domain, as in actions
for partition, since no less than two (2) appeals are allowed by law, the
period for appeal from an order of condemnation is thirty (30) days
counted from notice of said order and not the ordinary period of fiteen
(15) days prescribed for actions in general, conformably with the
provision of Section 39 of Batas Pambansa Bilang 129, in relation to
paragraph 19 (b) of the Implementing Rules to the effect that in “appeals
in special proceedings in accordance with Rule 109 of the Rules of Court
and other cases wherein multiple appeals are allowed, the period of
appeal shall be thirty (30) days, a record of appeal being required. In the
case at bar, where a single complaint was filed against several
defendants having individual, separate interest, and a separate trial was
held relative to one of said defendants after which a final order or
judgment was rendered on the merits of the plaintiffs claim against that
particular defendant, it is obvious that in the event of an appeal from that
separate judgment, the original record cannot and should not be sent up
to the appellate tribunal. The record will have to stay with the trial court
because it will still try the case as regards the other defendants. As the
rule above quoted states, “In an action against several defendants, the
court may, when a several judgment is proper, render judgment against
one or more of them, leaving the action to proceed against the others.w
In lieu of the original record, a record on appeal will perforce have to be
prepared and transmitted to the appellate court. More than one appeal
being permitted in this case, therefore, “the period of appeal shall be
thirty (30) days, a record of appeal being required,” as provided by the
Implementing Rules in relation to Section 39 of B.P. Blg. 129, supra.
Division: FIRST DIVISION
NARVASA, J.:
Three (3) questions are resolved in the action of certiorari at bar. The first is whether the special
civil action of eminent domain under Rule 67 of the Rules of Court is a case "wherein multiple
appeals are allowed, 1 as regards which 'the period of appeal shall be thirty [30] days,2 instead of
fifteen (15) days. 3 The second is whether or not the Trial Court may treat the motion to dismiss"
filed by one of the defendants in the action of eminent domain as a "motion to dismiss" under Rule
16 of the Rules of Court, reverse the sequence of trial in order and hear and determine said
motion to dismiss, and thereafter dismiss the expropriation suit as against the movant. And the
third is whether or not a "locational clearance issued by the Human Settlements Regulatory
Commission relative to use of land is a bar to an expropriation suit involving that land.
The expropriation suit involved in this certiorari proceeding was commenced by complaint of the
Municipality of Biñan, Laguna 4 filed in the Regional Trial Court of Laguna and City of San Pablo,
presided over by respondent Judge Jose Mar Garcia. The complaint named as defendants the
owners of eleven (11) adjacent parcels of land in Biñan with an aggregate area of about eleven
and a half (11-1/2) hectares. The land sought to be expropriated was intended for use as the new
site of a modern public market and the acquisition was authorized by a resolution of the
Sangguniang Bayan of Biñan approved on April 11, 1983.
One of the defendants was Erlinda Francisco. She filed a "Motion to Dismiss" dated August 26, 1983,
on the following grounds; (a) the allegations of the complaint are vague and conjectural; (b) the
complaint violates the constitutional limitations of law and jurisprudence on eminent domain; (c)
it is oppressive; (d) it is barred by prior decision and disposition on the subject matter; and (e) it
states no cause of action. 5 Now, her motion to dismiss" was filed pursuant to Section 3, Rule 67 of
the Rules of Court:
Sec. 3. Defenses and objections within the time specified in the summons, each defendant, in lieu
of an answer, shall present in a single motion to dismiss or for other apppropriate relief, all of his
objections and defenses to the right of the plaintiff to take his property for the use or purpose
specified in the complaint. All such objections and defenses not so presented are waived. A copy
of the motion shall be served on the plaintiffs attorney of record and filed with the court with the
proof of service.
Her "motion to dismiss" was thus actually a pleading, taking the place of an answer in an ordinary
civil action; 6 it was not an ordinary motion governed by Rule 15, or a "motion to dismiss" within
the contemplation of Rule 16 of the Rules of Court.
On October 23, 1983, respondent Judge issued a writ of possession in favor of the plaintiff
Municipality.
On February 3, 1984, Erlinda Francisco filed a "Motion for Separate Trial," invoking Section 2, Rule
31. 7 She alleged that there had already been no little delay in bringing all the defendants within
the court's jurisdiction, and some of the defendants seemed "nonchalant or without special
interest in the case" if not mere "free riders;" and "while the cause of action and defenses are
basically the same;" she had, among other defenses, "a constitutional defense of vested right via a
pre-existing approved Locational Clearance from the H.S.R.C." 8 Until this clearance was revoked,
Francisco contended, or the Municipality had submitted and obtained approval of a "rezoning of
the lots in question," it was premature for it to "file a case for expropriation. 9 The Court granted
the motion. By Order dated March 2, 1984, it directed that a separate trial be held for defendant
Erlinda Francisco regarding her special defenses mentioned in her .. Motion for Separate Trial and
in her Motion to Dismiss, distinct from and separate from the defenses commonly raised by all the
defendants in their respective motions to dismiss."
At the separate trial, the Fiscal, in representation of the Municipality called the Trial Court's
attention to the irregularity of allowing Francisco to present her evidence ahead of the plaintiff,
"putting the cart before the horse, as it were." He argued that the motion to dismiss was in truth
an answer, citing Rural Progress Administration v. Judge de Guzman, and its filing did "not mean
that the order of presentation of evidence will be reversed," but the usual procedure should be
followed; and the evidence adduced should be deemed "evidence only for the motion for
reconsideration of the writ of possession." 10
Nevertheless, at the hearing of March 5, and March 26, 1984, the Court directed Francisco to
commence the presentation of evidence. Francisco presented the testimony of Atty. Josue L.
Jorvina, Jr. and certain exhibits the Land Use Map of the Municipality of Biñan, the Locational
Clearance and Development Permit issued by the H.S.R.C. in favor of "Erlinda Francisco c/o
Ferlins Realty & Development Corporation, and Executive Order No. 648 and Letter of Instruction
No. 729, etc. Thereafter, the respondent Judge issued an Order dated July 24, 1984 dismissing
the complaint "as against defendant ERLINDA FRANCISCO," and amending the Writ of Possession
dated October 18, 1983 so as to "exclude therefrom and from its force and effects said
defendant .. and her property ..." His Honor found that-
1) a Locational Clearance had been issued on May 4,1983 by the Human Settlements Regulatory
Commission to the "Ferlin's Realty .. owned by defendant Erlinda Francisco to convert .. (her) lot
to a commercial complex;"
2) according to the testimony of Atty. Jorvina of the H.S.R.C., a grantee of a locational

clearance acquires a vested right over the subject property in the sense that .. said property may
not be subject of an application for locational clearance by another applicant while said
locational clearance is subsisting;"
3) such a clearance should be "considered as a decision and disposition of private property

co-equal with or in parity with a disposition of private property through eminent domain;
4) the clearance was therefore "a legal bar against the right of plaintiff Municipality .. to
expropriate the said property."
The Municipality filed on August 17, 1984 a Motion for Reconsideration. Therein it (a) reiterated
its contention respecting the irregularity of the reversal of the order of trial, supra. 11 (b) decried
the act of the Court in considering the case submitted for decision after the presentation of
evidence by Francisco without setting the case for further hearing for the reception of the
plaintiffs own proofs, (c) pointed out that as admitted by Atty. Jorvina, the locational clearance
did not "mean that other persons are already prevented from filing locational clearance for the
same project, and so could not be considered a bar to expropriation, (d) argued that the
locational clearance issued on May 4, 1983, became a "worthless sheet of paper" one year later,
on May 4, 1984 in accordance with the explicit condition in the clearance that it "shall be
considered automatically revoked if not used within a period of one (1) year from date of issue,"
the required municipal permits to put up the commercial complex never having been obtained by
Francisco; and (e) alleged that all legal requirements for the expropriation of the property had
been duly complied with by the Municipality. 12
The Municipality set its motion for reconsideration for hearing on August 28, 1984 after furnishing
Francisco's counsel with copy thereof The Court however re-scheduled the hearing more than two
(2) months later, on November 20, 1984. 13 Why the hearing was reset to such a remote date is
not explained.
On September 13, 1984, Francisco filed an "Ex-Parte Motion for Execution and/or Finality of
Order," contending that the Order of July 27, 1984 had become "final and executory on August 12,
1984" for failure of the Municipality to file a motion for reconsideration and/or appeal within the
reglementary period," 14 i.e "fifteen (15) days counted from the notice of the final order ..
appealed from. 15
On October 10, 1984, the Court issued an Order declaring the Municipality's motion for
reconsideration dated August 15, 1984 to have been "filed out of time," on account of which the
Court 49 could not give due course to and/or act x x (thereon) except to dismiss (as it did thereby
dismiss) the same." 16 It drew attention to the fact that notice of its Order of July 24, 1984
(dismissing the complaint as against Francisco) was served on plaintiff Municipality on July 27,
1984, but its motion for reconsideration was not presented until August 17, 1984, beyond the
fifteen-day period for appeal prescribed by law. And on October 15, 1985, His Honor promulgated
another Order directing the issuance of (1) a writ of execution of the Order of July 24, 1984, and
(2) a "certificate of finality" of said order. 17
The Municipality attempted to have the respondent Court reconsider both and Orders of October
10, and October 15, 1984. To this end it submitted a motion contending that: 18
1) "multiple appeals are allowed by law" in actions of eminent domain, and hence the period of
appeal is thirty (30), not fifteen (15) days;
2) moreover, the grant of a separate trial at Francisco's instance had given rise "ipso facto to a
situation where multiple appeals became available (Sections 4 and 5, Rule 36, .. Santos v. Pecson,
79 Phil. 261);"
3) it was wrong for the Trial Court to have acted exparte on the motion for execution, the
motion being "litigable in character;" and
4) it (the Municipality) was denied due process when the Court, after receiving Francisco's
evidence and admitting her exhibits, immediately resolved the case on the merits as regards
Francisco, without setting the case "for further hearing for reception of evidence for the
plaintiff."
The motion was denied, by Order dated October 18, 1984; hence, the special civil action of
certiorari at bar.
1. There are two (2) stages in every action of expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the suit. 19 It ends with an order, if
not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to
take the property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date of the filing
of the complaint." 20 An order of dismissal, if this be ordained, would be a final one, of course,
since it finally disposes of the action and leaves nothing more to be done by the Court on the
Merits. 21 So, too, would an order of condemnation be a final one, for thereafter, as the Rules
expressly state, in the proceedings before the Trial Court, "no objection to the exercise of the
right of condemnation (or the propriety thereof) shall be flied or heard. 22
The second phase of the eminent domain action is concerned with the determination by the Court
of "the just compensation for the property sought to be taken." This is done by the Court with the
assistance of not more than three (3) commissioners. 23 The order fixing the just compensation
on the basis of the evidence before, and findings of, the commissioners would be final, too. It
would finally dispose of the second stage of the suit, and leave nothing more to be done by the
Court regarding the issue. Obviously, one or another of the parties may believe the order to be
erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too, such
a dissatisfied party may seek reversal of the order by taking an appeal therefrom.
A similar two-phase feature is found in the special civil action of partition and accounting under
Rule 69 of the Rules of Court. 24
The first phase of a partition and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally
prescribed) and may be made by voluntary agreement of all the parties interested in the property.
25 This phase may end with a declaration that plaintiff is not entitled to have a partition either
because a co-ownership does not exist, or partition is legally prohibited.26 It may end, on the
other hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in the
premises and an accounting of rents and profits received by the defendant from the real estate in
question is in order. 27 In the latter case, "the parties may, ff they are able to agree, make
partition among themselves by proper instruments of conveyance, and the court shall confirm the
partition so agreed upon. 28, In either case i.e. either the action is dismissed or partition and/or
accounting is decreed the order is a final one, and may be appealed by any party aggrieved
thereby. 29
The second phase commences when it appears that "the parties are unable to agree upon the
partition" directed by the court. In that event partition shall be done for the parties by the Court
with the assistance of not more than three (3) commissioners. 30 This second stage may well also
deal with the rendition of the accounting itself and its approval by the Court after the parties
have been accorded opportunity to be heard thereon, and an award for the recovery by the party
or parties thereto entitled of their just share in the rents and profits of the real estate in
question." 31 Such an order is, to be sure, final and appealable.
Now, this Court has settled the question of the finality and appealability of a decision or order
decreeing partition or recovery of property and/or accounting. In Miranda v. Court of Appeals,
decided on June 18, 1986,32 the Court resolved the question affirmatively, and expressly revoked
the ruling in Zaldarriaga v. Enriquez 33 -that a decision or order of partition is not final because it
leaves something more to be done in the trial court for the complete disposition of the case, i.e,
the appointment of commissioners, the proceedings for the determination by said commissioners
of just compensation, the submission of their reports, and hearing thereon, and the approval of
the partition-and in Fuentebella vs. Carrascoso 34 -that a judgement for recovery of property
with account is not final, but merely interlocutory and hence not appealable until the accounting
is made and passed upon. As pointed out in Miranda, imperative considerations of public policy, of
sound practice and adherence to the constitutional mandate of simplified, just, speedy and
inexpensive determination of every action require that judgments for recovery (or partition) of
property with accounting be considered as final judgments, duly appealable. This,
notwithstanding that further proceedings will still have to be rendered by the party required to
do so, it will be ventilated and discussed by the parties, and will eventually be passed upon by the
Court. It is of course entirely possible that the Court disposition may not sit well with either the
party in whose favor the accounting is made, or the party rendering it. In either case, the Court's
adjudication on the accounting is without doubt a final one, for it would finally terminate the
proceedings thereon and leave nothing more to be done by the Court on the merits of the issue.
And it goes without saying that any party feeling aggrieved by that ultimate action of the Court on
the accounting may seek reversal or modification thereof by the Court of Appeals or the Supreme
Court. 35
The Miranda doctrine was reiterated in de Guzman v. C.A.- 36 Valdez v. Bagaso; 37 Lagunzad v.
Gonzales; 38 Cease v. C.A., 39 Macadangdang v. C.A. 40 and Hernandez v. C.A., 41 Gabor v. C.A.
42 Fabrica v. C.A . 43
No reason presents itself for different disposition as regards cases of eminent domain. On the
contrary, the close analogy between the special actions of eminent domain and partition already
pointed out, argues for the application of the same rule to both proceedings.
The Court therefore holds that in actions of eminent domain, as in actions for partition, since no
less than two (2) appeals are allowed by law, the period for appeal from an order of
condemnation 44 is thirty (30) days counted from notice of order and not the ordinary period of
fifteen (15) days prescribed for actions in general, conformably with the provision of Section 39 of
Batas Pambansa Bilang 129, in relation to paragraph 19 (b) of the Implementing Rules to the
effect that in "appeals in special proceedings in accordance with Rule 109 of the Rules of Court
and other cases wherein multiple appeals are allowed, the period of appeal shall be thirty (30)
days, a record of appeal being required. 45
The municipality's motion for reconsideration filed on August 17, 1984 was therefore timely
presented, well within the thirty-day period laid down by law therefor; and it was error for the
Trial Court to have ruled otherwise and to have declared that the order sought to be considered
had become final and executory.
2. As already observed, the Municipality's complaint for expropriation impleaded eleven (11)
defendants. A separate trial was held on motion of one of them, Erlinda Francisco, 46 it appearing
that she had asserted a defense personal and peculiar to her, and inapplicable to the other
defendants, supra. Subsequently, and on the basis of the evidence presented by her, the Trial
Court promulgated a separate Order dismissing the action as to her, in accordance with Section 4,
Rule 36 of the Rules of Court reading as follows:
Sec. 4. Several judgments in an action against several defendants, the court may, when a several
judgment is proper, render judgment against one or more of them, leaving the action to proceed
against the others.
It is now claimed by the Municipality that the issuance of such a separate, final order or judgment
had given rise "ipso facto to a situation where multiple appeals became available." The
Municipality is right.
In the case at bar, where a single complaint was filed against several defendants having individual,
separate interests, and a separate trial was held relative to one of said defendants after which a
final order or judgment was rendered on the merits of the plaintiff s claim against that particular
defendant, it is obvious that in the event of an appeal from that separate judgment, the original
record cannot and should not be sent up to the appellate tribunal. The record will have to stay
with the trial court because it will still try the case as regards the other defendants. As the rule
above quoted settles, "In an action against several defendants, the court may, when a several
judgment is proper, render judgment against one or more of them, leaving the action to proceed
against the others. " 47 In lieu of the original record, a record on appeal will perforce have to be
prepared and transmitted to the appellate court. More than one appeal being permitted in this
case, therefore, "the period of appeal shall be thirty (30) days, a record of appeal being required
as provided by the Implementing Rules in relation to Section 39 of B.P. Blg. 129, supra. 48
3. Erlinda Francisco filed a "motion to dismiss" intraverse of the averments of the Municipality's
complaint for expropriation. That "motion to dismiss" was in fact the indicated responsive
pleading to the complaint, "in lieu of an answer." 49
Now, the Trial Court conducted a separate trial to determine whether or not, as alleged by
Francisco in her "motion to dismiss," she had a "vested right via a pre-existing approved Locational
Clearance from the HRSC.," making the expropriation suit premature. 50 While such a separate
trial was not improper in the premises, 51 and was not put at issue by the Municipality, the latter
did protest against the Trial Court's (a) reversing the order of trial and receiving first, the
evidence of defendant Francisco, and (b) subsequently rendering its order sustaining Francisco's
defense and dismissing the action as to her, solely on the basis of said Francisco's evidence and
without giving the plaintiff an opportunity to present its own evidence on the issue. The Trial
Court was clearly wrong on both counts. The Court will have to sustain the Municipality on these
points.
Nothing in the record reveals any valid cause to reverse the order of trial. What the Trial Court
might have had in mind was the provision of Section 5, Rule 16 of the Rules of Court allowing "any
of the grounds for dismissal" in Rule 16 to "be pleaded as an affirmative defense and authorizing
the holding of a "preliminary hearing .. thereon as if a motion to dismiss had been filed." Assuming
this to be the fact, the reception of Francisco's evidence first was wrong, because obviously, her
asserted objection or defense that the locational clearance issued in her favor by the HSRC was a
legal bar to the expropriation suit was not a ground for dismissal under Rule 16. She evidently
meant to prove the Municipality's lack of cause of action; but lack of cause of action is not a
ground for dismissal of an action under Rule 16; the ground is the failure of the complaint to state
a cause of action, which is obviously not the same as plaintiff's not having a cause of action.
Nothing in the record, moreover, discloses any circumstances from which a waiver by the
Municipality of the right to present contrary proofs may be inferred. So, in deciding the issue
without according the Municipality that right to present contrary evidence, the Trial Court had
effectively denied the Municipality due process and thus incurred in another reversible error.
4. Turning now to the locational clearance issued by the HSRC in Francisco's favor on May 4, 1983,
it seems evident that said clearance did become a "worthless sheet of paper," as averred by the
Municipality, upon the lapse of one (1) year from said date in light of the explicit condition in the
clearance that it 44 shall be considered automatically revoked if not used within a period of one
(1) year from date of issue," and the unrebutted fact that Francisco had not really made use of it
within that period. The failure of the Court to consider these facts, despite its attention having
been drawn to them, is yet another error which must be corrected.
WHEREFORE, the challenged Order issued by His Honor on July 24,1984 in Civil Case No. 8-1960 is
ANNULLED AND SET ASIDE, and the case is remanded to the Trial Court for the reception of the
evidence of the plaintiff Municipality of Biñan as against defendant Erlinda Francisco, and for
subsequent proceedings and judgment in accordance with the Rules of Court and the law. Costs
against private respondent.
SO ORDERED.
G.R. No. 166429 December 19, 2005
REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA
INTERNATIONAL AIRPORT AUTHORITY (MIAA), Petitioners,
vs.
HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the Regional Trial Court,
Branch 117, Pasay City and PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
Respondents.
Case Nature : PETITION for review on certiorari of

a decision of the Regional Trial Court of Pasay City,
Br. 117.
Syllabi Class : Eminent Domain|Courts|Separation
of Powers|Judgments|R.A. No. 8974|Just
Compensation|Standards of Just
Compensation|Separation of Powers|National
Government Infrastructure Projects|Words and
Phrases|“Right-of-Way|” “Site|” and “Location|”
Explained|Equal Protection Clause|Statutory
Construction|Possession|Commissioners|Judges|Di
squalification and Inhibition of
Judges|Courts|Procedural Rules|Law of the
Case|Obiter Dictum|Procedural and Substantive
Law|National Infrastructure Projects|Grave Abuse of
Discretion|“Proffered Value|” Explained|“Taking|”
Construed|Inhibition and Disqualification of
Judges|Parties|Police Power
Syllabi:
1. Eminent Domain; Judgments; The Court in the
2004 Resolution in the case of Agan v. Philippine
International Air Terminals Co., Inc. (PIATCO), 420
SCRA 575 (2004), prescribed mandatory guidelines
which the Government must observe before it could
acquire the Ninoy Aquino International Airport
Passenger Terminal III (NAIA 3) facilities.-
The pronouncement in the 2004 Resolution is

especially significant to this case in two aspects,
namely: (i) that PIATCO must receive payment of
just compensation determined in accordance with
law and equity; and (ii) that the government is
barred from taking over NAIA 3 until such just
compensation is paid. The parties cannot be allowed
to evade the directives laid down by this Court
through any mode of judicial action, such as the
complaint for eminent domain. It cannot be denied
though that the Court in the 2004 Resolution
prescribed mandatory guidelines which the
Government must observe before it could acquire
the NAIA 3 facilities. Thus, the actions of respondent
judge under review, as well as the arguments of the
parties must, to merit affirmation, pass the
threshold test of whether such propositions are in
accord with the 2004 Resolution.
2. Eminent Domain; Judgments; The case at bar
is a highly unusual case, whereby the Government
seeks to expropriate a building complex constructed
on land which the State already owns—there is an
inherent illogic in the resort to eminent domain on
property already owned by the State.-
The Government has chosen to resort to
expropriation, a remedy available under the law,
which has the added benefit of an integrated process
for the determination of just compensation and the
payment thereof to PIATCO. We appreciate that the

case at bar is a highly unusual case, whereby the
Government seeks to expropriate a building complex
constructed on land which the State already owns.
There is an inherent illogic in the resort to eminent
domain on property already owned by the State. At
first blush, since the State already owns the property
on which NAIA 3 stands, the proper remedy should
be akin to an action for ejectment.
3. Eminent Domain; Judgments; Admittedly,
eminent domain is not the sole judicial recourse by
which the Government may have acquired the NAIA
3 facilities while satisfying the requisites in the 2004
Resolution though eminent domain may be the most
effective, as well as the speediest means by which
such goals may be accomplished.-
The right of eminent domain extends to personal and
real property, and the NAIA 3 structures, adhered as
they are to the soil, are considered as real property.
The public purpose for the expropriation is also
beyond dispute. It should also be noted that Section
1 of Rule 67 (on Expropriation) recognizes the
possibility that the property sought to be
expropriated may be titled in the name of the
Republic of the Philippines, although occupied by
private individuals, and in such case an averment to
that effect should be made in the complaint. The
instant expropriation complaint did aver that the
NAIA 3 complex “stands on a parcel of land owned by

the Bases Conversion Development Authority,
another agency of [the Republic of the Philippines].”
Admittedly, eminent domain is not the sole judicial
recourse by which the Government may have
acquired the NAIA 3 facilities while satisfying the
requisites in the 2004 Resolution. Eminent domain
though may be the most effective, as well as the
speediest means by which such goals may be
accomplished. Not only does it enable immediate
possession after satisfaction of the requisites under
the law, it also has a built-in procedure through
which just compensation may be ascertained. Thus,
there should be no question as to the propriety of
eminent domain proceedings in this case.
4. Eminent Domain; Judgments; Rule 67 merely
requires the Government to deposit with an
authorized government depositary the assessed
value of the property for expropriation for it to be
entitled to a writ of possession; The staging of
expropriation proceedings in this case with the
exclusive use of Rule 67 would allow for the
Government to take over the NAIA 3 facilities in a
fashion that directly rebukes our 2004 Resolu-tion in
Agan.-
As can be gleaned from the above-quoted texts, Rule
67 merely requires the Government to deposit with
an authorized government depositary the assessed
value of the property for expropriation for it to be

entitled to a writ of possession. On the other hand,
Republic Act No. 8974 requires that the Government
make a direct payment to the property owner before
the writ may issue. Moreover, such payment is based
on the zonal valuation of the BIR in the case of land,
the value of the improvements or structures under
the replacement cost method, or if no such valuation
is available and in cases of utmost urgency, the
proffered value of the property to be seized. It is
quite apparent why the Government would prefer to
apply Rule 67 in lieu of Republic Act No. 8974. Under
Rule 67, it would not be obliged to immediately pay
any amount to PIATCO before it can obtain the writ
of possession since all it need do is deposit the
amount equivalent to the assessed value with an
authorized government depositary. Hence, it
devotes considerable effort to point out that Republic
Act No. 8974 does not apply in this case,
notwithstanding the undeniable reality that NAIA 3 is
a national government project. Yet, these efforts fail,
especially considering the controlling effect of the
2004 Resolution in Agan on the adjudication of this
case. It is the finding of this Court that the staging of
Government to take over the NAIA 3 facilities in a
fashion that directly rebukes our 2004 Resolution in
Agan. This Court cannot sanction deviation from its

own final and executory orders.
5. Eminent Domain; R.A. No. 8974; It is the plain
intent of Republic Act No. 8974 to supersede the
system of deposit under Rule 67 with the scheme of
“immediate payment” in cases involving national
government infrastructure projects.-
If Section 2 of Rule 67 were to apply, PIATCO would
be enjoined from receiving a single centavo as just
compensation before the Government takes over the
NAIA 3 facility by virtue of a writ of possession. Such
an injunction squarely contradicts the letter and
intent of the 2004 Resolution. Hence, the position of
the Government sanctions its own disregard or
violation the prescription laid down by this Court that
there must first be just compensation paid to PIATCO
before the Government may take over the NAIA 3
facilities. Thus, at the very least, Rule 67 cannot
apply in this case without violating the 2004
Resolution. Even assuming that Rep. Act No. 8974
does not govern in this case, it does not necessarily
follow that Rule 67 should then apply. After all,
adherence to the letter of Section 2, Rule 67 would in
turn violate the Court‟s requirement in the 2004
Resolution that there must first be payment of just
compensation to PIATCO before the Government
may take over the property. It is the plain intent of
Republic Act No. 8974 to supersede the system of
deposit under Rule 67 with the scheme of

“immediate payment” in cases involving national
government infrastructure projects.
6. Eminent Domain; R.A. No. 8974; Just
Compensation; Standards of Just
Compensation; Separation of Powers; The
appropriate standard of just compensation is a
substantive matter, and it is well within the province
of the legislature to fix the standard.-
It likewise bears noting that the appropriate
standard of just compensation is a substantive
matter. It is well within the province of the
legislature to fix the standard, which it did through
the enactment of Republic Act No. 8974. Specifically,
this prescribes the new standard in determining the
amount of just compensation in expropriation cases
relating to national government infrastructure
project, as well as the payment of the provisional
value as a prerequisite to the issuance of a writ of
possession. Of course, rules of procedure, as
distinguished from substantive matters, remain the
exclusive preserve of the Supreme Court by virtue of
Section 5(5), Article VIII of the Constitution. Indeed,
Section 14 of the Implementing Rules recognizes the
continued applicability of Rule 67 on procedural
aspects when it provides “all matters regarding
defenses and objections to the complaint, issues on
uncertain ownership and conflicting claims, effects of
appeal on the rights of the parties, and such other

incidents affecting the complaint shall be resolved
under the provisions on expropriation of Rule 67 of
the Rules of Court.”
7. Eminent Domain; R.A. No. 8974; National
Government Infrastructure Projects; Words
and Phrases;R.A. No. 8974 is intended to cover
expropriation proceedings intended for national
government infrastructure projects. Section 2 of
Republic Act No. 8974 explains what are considered
as “national government projects.”-
Republic Act No. 8974 is entitled “An Act To Facilitate
The Acquisition Of Right-Of-Way, Site Or Location
For National Government Infrastructure Projects And
For Other Purposes.” Obviously, the law is intended
to cover expropriation proceedings intended for
national government infrastructure projects. Section
2 of Republic Act No. 8974 explains what are
considered as “national government projects.” “Sec.
2. National Gov-ernment Projects.—The term
“national government projects” shall refer to all
national government infrastructure, engineering
works and service contracts, including projects
undertaken by governmentowned and controlled
corporations, all projects covered by Republic Act No.
6957, as amended by Republic Act No. 7718,
otherwise known as the Build-Operate-and-Transfer
Law, and other related and necessary activities, such
as site acquisition, supply and/or installation of

equipment and materials, implementation,
construction, completion, operation, maintenance,
improvement, repair and rehabilitation, regardless
of the source offending.”
8. Eminent Domain; R.A. No. 8974; There can be
no doubt that PIATCO has ownership rights over the
facilities which it had financed and constructed.-
As acknowledged in the 2003 Decision, the
development of NAIA 3 was made pursuant to a
build-operate-and-transfer arrangement pursuant to
Republic Act No. 6957, as amended, which pertains
to infrastructure or development projects normally
financed by the public sector but which are now
wholly or partly implemented by the private sector.
Under the build-operate-and-transfer scheme, it is
the project proponent which undertakes the
construction, including the financing, of a given
infrastructure facility. In Tatad v. Garcia, the Court
acknowledged that the operator of the EDSA Light
Rail Transit project under a BOT scheme was the
owner of the facilities such as “the rail tracks, rolling
stocks like the coaches, rail stations, terminals and
the power plant.” There can be no doubt that PIATCO
has ownership rights over the facilities which it had
financed and constructed. The 2004 Resolution
squarely recognized that right when it mandated the
payment of just compensation to PIATCO prior to the
takeover by the Government of NAIA 3. The fact that

the Government resorted to eminent domain
proceedings in the first place is a concession on its
part of PIATCO‟s ownership. Indeed, if no such right
is recognized, then there should be no impediment
for the Government to seize control of NAIA 3
through ordinary ejectment proceedings.
9. Eminent Domain; R.A. No. 8974; Words and
Phrases; “Right-of-Way,” “Site,” and
“Location,” Explained; The Court cannot accept
the Government‟s proposition that the only
properties that may be expropriated under Rep. Act
No. 8974 are parcels of land—R.A. No. 8974
contemplates within its coverage such real property
constituting land, buildings, roads and constructions
of all kinds adhered to the soil.-
There is no doubt that the NAIA 3 is not, under any
sensible contemplation, a “right-of-way.” Yet we
cannot agree with the Government‟s insistence that
neither could NAIA 3 be a “site” or “location.” The
petition quotes the definitions provided in Black‟s
Law Dictionary of “location” as the specific place or
position of a person or thing and „site‟ as pertaining
to a place or location or a piece of property set aside
for specific use.‟ ” Yet even Black‟s Law Dictionary
provides that “[t]he term [site] does not of itself
necessarily mean a place or tract of land fixed by
definite boundaries.” One would assume that the
Government, to back up its contention, would be

able to point to a clear-cut rule that a “site” or
“location” exclusively refers to soil, grass, pebbles
and weeds. There is none. Indeed, we cannot accept
the Government‟s proposition that the only
properties that may be expropriated under Republic
Act No. 8974 are parcels of land.] Republic Act No.
8974 contemplates within its coverage such real
property constituting land, buildings, roads and
constructions of all kinds adhered to the soil. Section
1 of Republic Act No. 8974, which sets the
declaration of the law‟s policy, refers to “real
property acquired for national government
infrastructure projects are promptly paid just
compensation.” Section 4 is quite explicit in stating
that the scope of the law relates to the acquisition of
“real property,” which under civil law includes
buildings, roads and constructions adhered to the
soil.
10. Eminent Domain; R.A. No. 8974; Equal
Protection Clause; Any sub-classifications of real
property and divergent treatment based thereupon
for purposes of expropriation must be based on
substantial distinctions, otherwise the equal
protection clause of the Constitution is
violated—there may be perhaps a molecular
distinction between soil and the inorganic
improvements adhered thereto, yet there are no
purposive distinctions that would justify a variant

treatment for purposes of expropriation.-
The law classifies the NAIA 3 facilities as real
properties just like the soil to which they are adhered.
Any subclassifications of real property and divergent
treatment based thereupon for purposes of
expropriation must be based on substantial
distinctions, otherwise the equal protection clause of
the Constitution is violated. There may be perhaps a
molecular distinction between soil and the inorganic
improvements adhered thereto, yet there are no
purposive distinctions that would justify a variant
treatment for purposes of expropriation. Both the
land itself and the improvements thereupon are
susceptible to private ownership independent of
each other, capable of pecuniary estimation, and if
taken from the owner, considered as a deprivation of
property. The owner of improvements seized
through expropriation suffers the same degree of
loss as the owner of land seized through similar
means. Equal protection demands that all persons or
things similarly situated should be treated alike, both
as to rights conferred and responsibilities imposed.
For purposes of expropriation, parcels of land are
similarly situated as the buildings or improvements
constructed thereon, and a disparate treatment
between those two classes of real property infringes
the equal protection clause.

Compensation; Unlike in the case of Rule 67, the
application of Republic Act No. 8974 will not
contravene the 2004 Resolution, which requires the
payment of just compensation before any takeover
of the NAIA 3 facilities by the Government.-
Even as the provisions of Rep. Act No. 8974 call for
that law‟s application in this case, the threshold test
must still be met whether its implementation would
conform to the dictates of the Court in the 2004
Resolution. Unlike in the case of Rule 67, the
application of Republic Act No. 8974 will not
contravene the 2004 Resolution, which requires the
payment of just compensation before any takeover
of the NAIA 3 facilities by the Government. The 2004
Resolution does not particularize the extent such
payment must be effected before the takeover, but it
unquestionably requires at least some degree of
payment to the private property owner before a writ
of possession may issue. The utilization of Republic
Act No. 8974 guarantees compliance with this bare
minimum requirement, as it assures the private
property owner the payment of, at the very least,
the proffered value of the property to be seized.
Such payment of the proffered value to the owner,
followed by the issuance of the writ of possession in
favor of the Government, is precisely the schematic
under Republic Act No. 8974, one which facially
complies with the prescription laid down in the 2004

Resolution. Clearly then, we see no error on the part
of the RTC when it ruled that Republic Act No. 8974
governs the instant expropriation proceedings.
Compensation; R.A. No. 8974 permits an
expedited means by which the Government can
immediately take possession of the property without
having to await precise determination of the
valuation. Section 4(c) of Rep. Act No. 8974 states
that in case the completion of a government
infrastructure project is of utmost urgency and
importance, and there is no existing valuation of the
area concerned, the implementing agency shall
immediately pay the owner of the property its
proffered value.-
Admittedly, there is no way, at least for the present,
to immediately ascertain the value of the
improvements and structures since such valuation is
a matter for factual determination. Yet Republic Act
No. 8974 permits an expedited means by which the
Government can immediately take possession of the
property without having to await precise
determination of the valuation. Section 4(c) of
Republic Act No. 8974 states that “in case the
completion of a government infrastructure project is
of utmost urgency and importance, and there is no
existing valuation of the area concerned, the
implementing agency shall immediately pay the

owner of the property its proffered value, taking into
consideration the standards prescribed in Section 5
[of the law].” The “proffered value” may strike as a
highly subjective standard based solely on the
intuition of the government, but Republic Act No.
8974 does provide relevant standards by which
“proffered value” should be based, as well as the
certainty of judicial determination of the propriety of
the proffered value.
Compensation; In ascertaining the proffered value
adduced by the Government, the amount of P3
Billion as the amount deposited characterized in the
complaint as “to be held by [Land Bank] subject to
the [RTC‟s] orders,” should be deemed as
controlling.-
Still, such intention the Government may have had
as to the entire US$62.3 Million is only inferentially
established. In ascertaining the proffered value
adduced by the Government, the amount of P3
Billion as the amount deposited characterized in the
complaint as “to be held by [Land Bank] subject to
the [RTC‟s] orders,” should be deemed as controlling.
There is no clear evidence that the Government
intended to offer US$62.3 Million as the initial
payment of just compensation, the wording of the
Land Bank Certification notwithstanding, and
credence should be given to the consistent position

of the Government on that aspect. In any event, for
the RTC to be able to justify the payment of US$62.3
Million to PIATCO and not P3 Billion Pesos, he would
have to establish that the higher amount represents
the valuation of the structures/improvements, and
not the BIR zonal valuation on the land wherein NAIA
3 is built. The Order dated 5 January 2005 fails to
establish such integral fact, and in the absence of
contravening proof, the proffered value of P3 Billion,
as presented by the Government, should prevail.
Compensation; R.A. No. 8974 plainly requires
direct payment to the property owner, and not a
mere deposit with the authorized government
depositary—without such direct payment, no writ of
possession may be obtained.-
The Government submits that assuming that
Republic Act No. 8974 is applicable, the deposited
amount of P3 Billion should be considered as the
proffered value, since the amount was based on
comparative values made by the City Assessor.
Accordingly, it should be deemed as having faithfully
complied with the requirements of the statute. While
the Court agrees that P3 Billion should be considered
as the correct proffered value, still we cannot deem
the Government as having faithfully complied with
Republic Act No. 8974. For the law plainly requires
direct payment to the property owner, and not a

mere deposit with the authorized government
depositary. Without such direct payment, no writ of
possession may be obtained.
Compensation; While the RTC did direct the
LBPBaclaran to immediately release the amount of
US$62 Million to PIATCO, it should have likewise
suspended the writ of possession, nay, withdrawn it
altogether, until the Government shall have actually
paid PIATCO, which is the inevitable consequence of
the clear command of R.A. No. 8974.-
The Court thus finds another error on the part of the
RTC. The RTC authorized the issuance of the writ of
possession to the Government notwithstanding the
fact that no payment of any amount had yet been
made to PIATCO, despite the clear command of
Republic Act No. 8974 that there must first be
payment before the writ of possession can issue.
While the RTC did direct the LBP-Baclaran to
immediately release the amount of US$62 Million to
PIATCO, it should have likewise suspended the writ
of possession, nay, withdrawn it altogether, until the
Government shall have actually paid PIATCO. This is
the inevitable consequence of the clear command of
Republic Act No. 8974 that requires immediate
payment of the initially determined amount of just
compensation should be effected. Otherwise, the
overpowering intention of Republic Act No. 8974 of

ensuring payment first before transfer of
repossession would be eviscerated.
Compensation; Statutory Construction; R.A. No.
8974 is plainly clear in imposing the requirement of
immediate prepayment, and no amount of statutory
deconstruction can evade such requisite—R.A. No.
8974 enshrines a new approach towards eminent
domain that reconciles the inherent unease
attending expropriation proceedings with a position
of fundamental equity; Under the new modality
prescribed by Republic Act No. 8974, the private
owner sees immedi-ate monetary recompense with
the same degree of speed as the taking of his/her
property.-
Republic Act No. 8974 represents a significant
change from previous expropriation laws such as
Rule 67, or even Section 19 of the Local Government
Code. Rule 67 and the Local Government Code
merely provided that the Government deposit the
initial amounts antecedent to acquiring possession of
the property with, respectively, an authorized
Government depositary or the proper court. In both
cases, the private owner does not receive
compensation prior to the deprivation of property.
On the other hand, Republic Act No. 8974 mandates
immediate payment of the initial just compensation
prior to the issuance of the writ of possession in favor

of the Government. Republic Act No. 8974 is plainly
clear in imposing the requirement of immediate
prepayment, and no amount of statutory
deconstruction can evade such requisite. It
enshrines a new approach towards eminent domain
that reconciles the inherent unease attending
expropriation proceedings with a position of
fundamental equity. While expropriation
proceedings have always demanded just
compensation in exchange for private property, the
previous deposit requirement impeded immediate
compensation to the private owner, especially in
cases wherein the determination of the final amount
of compensation would prove highly disputed. Under
the new modality prescribed by Republic Act No.
8974, the private owner sees immediate monetary
recompense with the same degree of speed as the
taking of his/her property.
Compensation; The expedited procedure of
payment, as highlighted under R.A. No. 8974, is
inherently more fair, especially to the layperson who
would be hard-pressed to fully comprehend the
social value of expropriation in the first place.-
While eminent domain lies as one of the inherent
powers of the State, there is no requirement that it
undertake a prolonged procedure, or that the
payment of the private owner be protracted as far as

practicable. In fact, the expedited procedure of
payment, as highlighted under Republic Act No.
8974, is inherently more fair, especially to the
layperson who would be hard-pressed to fully
comprehend the social value of expropriation in the
first place. Immediate payment placates to some
degree whatever ill-will that arises from
expropriation, as well as satisfies the demand of
basic fairness. The Court has the duty to implement
Republic Act No. 8974 and to direct compliance with
the requirement of immediate payment in this case.
Accordingly, the Writ of Possession dated 21
December 2004 should be held in abeyance,
pending proof of actual payment by the Government
to PIATCO of the proffered value of the NAIA 3
facilities, which totals P3,002,125,000.00.
18. Eminent Domain; Possession; There are
critical reasons for the Court to view the 2004
Resolution less stringently, and thus allow the
operation by the Government of NAIA 3 upon the
effectivity of the Writ of Possession.-
The RTC, in its 10 January 2005 Omnibus Order,
expressly stated that it was not affirming “the
superfluous part of the Order [of 4 January 2005]
prohibiting the plaintiffs from awarding concessions
or leasing any part of NAIA [3] to other parties.” Still,
such statement was predicated on the notion that
since the Government was not yet the owner of NAIA

3 until final payment of just compensation, it was
obviously incapacitated to perform such acts of
ownership. In deciding this question, the 2004
Resolution in Agan cannot be ignored, particularly
the declaration that “[f]or the government to take
over the said facility, it has to compensate
respondent PIATCO as builder of the said structures.”
The obvious import of this holding is that unless
PIATCO is paid just compensation, the Government
is barred from “taking over,” a phrase which in the
strictest sense could encompass even a bar of
physical possession of NAIA 3, much less operation
of the facilities. There are critical reasons for the
Court to view the 2004 Resolution less stringently,
and thus allow the operation by the Government of
NAIA 3 upon the effectivity of the Writ of Possession.
For one, the national prestige is diminished every
day that passes with the NAIA 3 remaining
mothballed. For another, the continued non-use of
the facilities contributes to its physical deterioration,
if it has not already. And still for another, the
economic benefits to the Government and the
country at large are beyond dispute once the NAIA 3
is put in operation.
19. Eminent Domain; Possession; Once the Writ
of Possession is effective, the Government itself is
authorized to perform the acts that are essential to
the operation of the NAIA 3 as an international

airport terminal, and these would include the repair,
reconditioning and improvement of the complex,
maintenance of the existing facilities and equipment,
installation of new facilities and equipment,
provision of services and facilities pertaining to the
facilitation of air traffic and transport, and other
services that are integral to a modern-day
international airport.-
Republic Act No. 8974 provides the appropriate
answer for the standard that governs the extent of
the acts the Government may be authorized to
perform upon the issuance of the writ of possession.
Section 4 states that “the court shall immediately
issue to the implementing agency an order to take
possession of the property and start the
implementation of the project.” We hold that
accordingly, once the Writ of Possession is effective,
the Government itself is authorized to perform the
acts that are essential to the operation of the NAIA 3
as an international airport terminal upon the
effectivity of the Writ of Possession. These would
include the repair, reconditioning and improvement
of the complex, maintenance of the existing facilities
and equipment, installation of new facilities and
equipment, provision of services and facilities
pertaining to the facilitation of air traffic and
transport, and other services that are integral to a

modern-day international airport.
20. Eminent Domain; Possession; Republic v.
Tagle, 299 SCRA 549 (1998), may concede that the
Government is entitled to exercise more than just
the right of possession by virtue of the writ of
possession, yet it cannot be construed to grant the
Government the entire panoply of rights that are
available to the owner.-
The Government‟s position is more expansive than
that adopted by the Court. It argues that with the
writ of possession, it is enabled to perform acts de
jure on the expropriated property. It cites Republic v.
Tagle, as well as the statement therein that “the
expropriation of real property does not include mere
physical entry or occupation of land,” and from them
concludes that “its mere physical entry and
occupation of the property fall short of the taking of
title, which includes all the rights that may be
exercised by an owner over the subject property.”
This conclusion is indeed lifted directly from
statements in Tagle, but not from the ratio decidendi
of that case. Tagle concerned whether a writ of
possession in favor of the Government was still
necessary in light of the fact that it was already in
actual possession of the property. In ruling that the
Government was entitled to the writ of possession,
the Court in Tagle explains that such writ vested not
only physical possession, but also the legal right to

possess the property. Continues the Court, such
legal right to possess was particularly important in
the case, as there was a pending suit against the
Republic for unlawful detainer, and the writ of
possession would serve to safeguard the
Government from eviction. At the same time, Tagle
conforms to the obvious, that there is no transfer of
ownership as of yet by virtue of the writ of
possession. Tagle may concede that the Gov-
ernment is entitled to exercise more than just the
right of possession by virtue of the writ of possession,
yet it cannot be construed to grant the Government
the entire panoply of rights that are available to the
owner. Certainly, neither Tagle nor any other case or
law, lends support to the Government‟s proposition
that it acquires beneficial or equitable ownership of
the expropriated property merely through the writ of
possession.
21. Eminent Domain; Just Compensation; The
proper judicial attitude is to guarantee compliance
with the primordial right to just compensation.-
Lim serves fair warning to the Government and its
agencies who consistently refuse to pay just
compensation due to the private property owner
whose property had been expropriated. At the same
time, Lim emphasizes the fragility of the rights of the
Government, as possessor pending the final
payment of just compensation, without diminishing

the potency of such rights. Indeed, the public policy,
enshrined foremost in the Constitution, mandates
that the Government must pay for the private
property it expropriates. Consequently, the proper
judicial attitude is to guarantee compliance with this
primordial right to just compensation.
22. Eminent Domain; Just Compensation; The
sixty (60)-day period prescribed in Republic Act No.
8974 gives teeth to the law‟s avowed policy “to
ensure that owners of real property acquired for
national government infrastructure projects are
promptly paid just compensation.”-
R.A. No. 8974 mandates a speedy method by which
the final determination of just compensation may be
had. Section 4 provides: “In the event that the
owner of the property contests the implementing
agency‟s proffered value, the court shall determine
the just compensation to be paid the owner within
sixty (60) days from the date of filing of the
expropriation case. When the decision of the court
becomes final and executory, the implementing
agency shall pay the owner the difference between
the amount already paid and the just compensation
as determined by the court.” We hold that this
provision should apply in this case. The sixty
(60)-day period prescribed in Republic Act No. 8974
gives teeth to the law‟s avowed policy “to ensure
that owners of real property acquired for national

government infrastructure projects are promptly
paid just compensation.” In this case, there already
has been irreversible delay in the prompt payment of
PIATCO of just compensation, and it is no longer
possible for the RTC to determine the just
compensation due PIATCO within sixty (60) days
from the filing of the complaint last 21 December
2004, as contemplated by the law. Still, it is feasible
to effectuate the spirit of the law by requiring the
trial court to make such determination within sixty
(60) days from finality of this decision, in accordance
with the guidelines laid down in Rep. Act No. 8974
and its Implementing Rules.
23. Eminent Domain; Just
Compensation; Commissioners; The
appointment of commissioners under Rule 67 may
be resorted to, even in expropriation proceedings
under Republic Act No. 8974, since the application of
the provisions of Rule 67 in that regard do not
conflict with the statute, but the standards to be
observed for the determination of just compensation
are provided not in Rule 67 but in the statute.-
It must be noted that Republic Act No. 8974 is silent
on the appointment of commissioners tasked with
the ascertainment of just compensation. This
protocol though is sanctioned under Rule 67. We rule
that the appointment of commissioners under Rule
67 may be resorted to, even in expropriation

proceedings under Republic Act No. 8974, since the
application of the provisions of Rule 67 in that regard
do not conflict with the statute. As earlier stated,
Section 14 of the Implementing Rules does allow
such other incidents affecting the complaint to be
resolved under the provisions on expropriation of
Rule 67 of the Rules of Court. Even without Rule 67,
reference during trial to a commissioner of the
examination of an issue of fact is sanctioned under
Rule 32 of the Rules of Court. But while the
appointment of commissioners under the aegis of
Rule 67 may be sanctioned in expropriation
proceedings under Republic Act No. 8974, the
standards to be observed for the determination of
just compensation are provided not in Rule 67 but in
the statute. In particular, the governing standards
for the determination of just compensation for the
NAIA 3 facilities are found in Section 10 of the
Implementing Rules for Republic Act No. 8974,
which provides for the replacement cost method in
the valuation of improvements and structures.
Compensation; Commissioners; Nothing in Rule
67 or Republic Act No. 8974 requires that the RTC
consult with the parties in the expropriation case on
who should be appointed as commissioners—what
Rule 67 does allow though is for the parties to
protest the appointment of any of these

commissioners, as provided under Section 5 of the
Rule.-
Nothing in Rule 67 or Republic Act No. 8974 requires
that the RTC consult with the parties in the
expropriation case on who should be appointed as
commissioners. Neither does the Court feel that such
a requirement should be imposed in this case. We
did rule in Municipality of Talisay v. Ramirez that
“there is nothing to prevent [the trial court] from
seeking the recommendations of the parties on [the]
matter [of appointment of commissioners], the
better to ensure their fair representation.” At the
same time, such solicitation of recommendations is
not obligatory on the part of the court, hence we
cannot impute error on the part of the RTC in its
exercise of solitary discretion in the appointment of
the commissioners. What Rule 67 does allow though
is for the parties to protest the appointment of any of
these commissioners, as provided under Section 5 of
the Rule. These objections though must be made
filed within ten (10) days from service of the order of
appointment of the commissioners. In this case, the
proper recourse of the Government to challenge the
choice of the commissioners is to file an objection
with the trial court, conformably with Section 5, Rule
67, and not as it has done, assail the same through a
special civil action for certiorari. Considering that the
expropriation proceedings in this case were

effectively halted seven (7) days after the Order
appointing the commissioners, it is permissible to
allow the parties to file their objections with the RTC
within five (5) days from finality of this decision.
25. Courts; Judges; Disqualification and
Inhibition of Judges; The disqualification of a
judge is a deprivation of his/her judicial power and
should not be allowed on the basis of mere
speculations and surmises—to be disqualifying, the
bias and prejudice must be shown to have stemmed
from an extrajudicial source and result in an opinion
on the merits on some basis other than what the
judge learned from his participation in the case.-
The disqualification of a judge is a deprivation of
his/her judicial power and should not be allowed on
the basis of mere speculations and surmises. It
certainly cannot be predicated on the adverse nature
of the judge‟s rulings towards the movant for
inhibition, especially if these rulings are in accord
with law. Neither could inhibition be justified merely
on the erroneous nature of the rulings of the judge.
We emphasized in Webb v. People: “To prove bias
and prejudice on the part of respondent judge,
petitioners harp on the alleged adverse and
erroneous rulings of respondent judge on their
various motions. By themselves, however, they do
not sufficiently prove bias and prejudice to disqualify
respondent judge. To be disqualifying, the bias and

prejudice must be shown to have stemmed from an
ex-trajudicial source and result in an opinion on the
merits on some basis other than what the judge
learned from his participation in the case. Opinions
formed in the course of judicial proceedings,
although erroneous, as long as they are based on the
evidence presented and conduct observed by the
judge, do not prove personal bias or prejudice on the
part of the judge. As a general rule, repeated rulings
against a litigant, no matter how erroneous and
vigorously and consistently expressed, are not a
basis for disqualification of a judge on grounds of
bias and prejudice. Extrinsic evidence is required to
establish bias, bad faith, malice or corrupt purpose,
in addition to the palpable error which may be
inferred from the decision or order itself. Although
the decision may seem so erroneous as to raise
doubts concerning a judge‟s integrity, absent
extrinsic evidence, the decision itself would be
insufficient to establish a case against the judge. The
only exception to the rule is when the error is so
gross and patent as to produce an ineluctable
inference of bad faith or malice.”
Inhibition of Judges; The motu proprio
amendment by a court of an erroneous order
previously issued may be sanctioned depending on
the circumstances, in line with the long-recognized

principle that every court has inherent power to do
all things reasonably necessary for the
administration of justice within the scope of its
jurisdiction, an inherent power that includes the
right of the court to reverse itself especially when in
its honest opinion it has committed an error or
mistake in judgment, and that to adhere to its
decision will cause injustice to a party litigant.-
Neither are we convinced that the motu proprio
issuance of the 4 January 2005 Order, without the
benefit of notice or hearing, sufficiently evinces bias
on the part of Hon. Gingoyon. The motu proprio
amendment by a court of an erroneous order
previously issued may be sanctioned depending on
the circumstances, in line with the long-recognized
principle that every court has inherent power to do
all things reasonably necessary for the
administration of justice within the scope of its
jurisdiction. Section 5(g), Rule 135 of the Rules of
Court further recognizes the inherent power of
courts “to amend and control its process and orders
so as to make them conformable to law and justice,”
a power which Hon. Gingoyon noted in his 10
January 2005 Omnibus Order. This inherent power
includes the right of the court to reverse itself,
especially when in its honest opinion it has
committed an error or mistake in judgment, and that
to adhere to its decision will cause injustice to a party

litigant. Certainly, the 4 January 2005 Order was
designed to make the RTC‟s previous order
conformable to law and justice, particularly to apply
the correct law of the case. Of course, as earlier
established, this effort proved incomplete, as the 4
January 2005 Order did not correctly apply Republic
Act No. 8974 in several respects. Still, at least, the 4
January 2005 Order correctly reformed the most
basic premise of the case that Republic Act No. 8974
governs the expropriation proceedings.
Inhibition of Judges; Every losing litigant in any
case can resort to claiming that the judge was biased,
and he/she will gain a sympathetic ear from friends,
family, and people who do not understand the
judicial process but the test in believing such a
proposition should not be the vehemence of the
litigant‟s claim of bias, but the Court‟s judicious
estimation, as people who know better than to
believe any old cry of “wolf!,” whether such bias has
been irrefutably exhibited.-
The Court should necessarily guard against adopting
a standard that a judge should be inhibited from
hearing the case if one litigant loses trust in the
judge. Such loss of trust on the part of the
Government may be palpable, yet inhibition cannot
be grounded merely on the feelings of the
party-litigants. Indeed, every losing litigant in any

case can resort to claiming that the judge was biased,
and he/she will gain a sympathetic ear from friends,
family, and people who do not understand the
judicial process. The test in believing such a
proposition should not be the vehemence of the
litigant‟s claim of bias, but the Court‟s judicious
estimation, as people who know better than to
believe any old cry of “wolf!,” whether such bias has
been irrefutably exhibited. The Court acknowledges
that it had been previously held that “at the very first
sign of lack of faith and trust in his actions, whether
well-grounded or not, the judge has no other
alternative but to inhibit himself from the case.” But
this doctrine is qualified by the entrenched rule that
“a judge may not be legally prohibited from sitting in
a litigation, but when circumstances appear that will
induce doubt to his honest actuations and probity in
favor of either party, or incite such state of mind, he
should conduct a careful selfexamination. He should
exercise his discretion in a way that the people‟s
faith in the Courts of Justice is not impaired.” And a
selfassessment by the judge that he/she is not
impaired to hear the case will be respected by the
Court absent any evidence to the contrary.
28. Separation of Powers; Courts; Procedural
Rules; Congress has no power to amend or repeal
rules of procedure.-
Congress has no power to amend or repeal rules of

procedure adopted by the Supreme Court. However,
Congress can enact laws on substantive matters
which are the subject of court procedures. Thus,
Congress can prescribe the initial or minimum
amount for just compensation in expropriation cases,
and require immediate payment of such initial or
minimum amount as condition for the immediate
takeover of the property by the government. The
rules of procedure, like Rule 67 of the Rules of Court,
must adjust automatically to such new laws on
substantive matters. Section 4 of Republic Act No.
8974, mandating immediate payment to the
property owner of the foil zonal or proffered value
prior to takeover by the government, is a
substantive requirement in expropriation cases.
Thus, Section 4 must apply to all expropriation cases
under RA No. 8974 involving the acquisition of real
property, like the NAIA Terminal III, for “national
government projects.”
29. Eminent Domain; Courts; Judgments; With
due respect, the majority‟s effort to reconcile Agan v.
PIATCO and the inherent power of the State to
expropriate private property is strained and
unnecessary for there is nothing in Agan where it can
be deduced that the right of the State to expropriate
the subject property has been impaired or
diminished.-
The majority opinion took excruciating pains to

reconcile our Decision in Agan and the inherent right
of the State to expropriate private property. With
due respect, the effort is strained and unnecessary
for there is nothing in Agan where it can be deduced
that the right of the State to expropriate the subject
property has been impaired or diminished. In Agan,
we simply held: “x x x This Court, however, is not
unmindful of the reality that the structures
comprising the NAIA IPT III facility are almost
complete and that funds have been spent by PIATCO
in their construction. For the government to take
over the said facility, it has to compensate
respondent PIATCO as builder of the said structures.
The compensation must be just and in accordance
with law and equity for the government cannot
unjustly enrich itself at the expense of PIATCO and
its investors.
30. Eminent Domain; Courts; Separation of
Powers; Procedural Rules; Following Article VIII,
section 5(5) of the 1987 Constitution and the
Echegaray v. Secretary of Justice, 301 SCRA 96
(1999), Rule 67 cannot be repealed or amended by
Congress.-
Rule 67 is the rule this Court promulgated to govern
the proceedings in expropriation cases filed in court.
It has been the undeviating rule for quite a length of
time. Following Article VIII, section 5(5) of the 1987
Constitution and the Echegaray jurisprudence, Rule

67 cannot be repealed or amended by Congress. This
prohibition against non-repeal or non-amendment
refers to any part of Rule 67 for Rule 67 is pure
procedural law. Consequently, the Court should not
chop Rule 67 into pieces and hold that some can be
changed by Congress but others can be changed.
The stance will dilute the rule making power of this
Court which can not be allowed for it will weaken its
institutional independence.
31. Eminent Domain; Courts; It is of judicial
notice that despite Agan,the subject case has
reached the international arbitral tribunals where the
government and the private respondent have filed
charges and countercharges—there is evident need
to avoid the issues pestering the parties from further
multiplying and for new proceedings to be started in
other courts, lest public interest suffer further
irretrievable prejudice.-
On December 12, 2005, the Solicitor General filed a
Supplemental Manifestation and Motion. The
Solicitor General informed the Court about an Order
dated December 2, 2005 of the High Court of Justice,
Queen‟s Bench Division, London * * * To be sure, the
said Order is not yet final. Be that as it may, the
Court cannot turn a blind eye to this new wrinkle of
the case at bar. It is of judicial notice that despite
Agan, the subject case has reached the international
arbitral tribunals where the government and the

private respondent have filed charges and
countercharges. There is evident need to avoid the
issues pestering the parties from further multiplying
and for new proceedings to be started in other courts,
lest public interest suffer further irretrievable
prejudice. Towards this end, it is respectfully
submitted that the Court should exercise its power to
compel the parties to interplead pursuant to Rule 62
and invoke the need for orderly administration of
justice. The parties may be given reasonable time to
amend their pleadings in the trial court.
32. Eminent Domain; Separation of
Powers; The Court erroneously allowed for the
expropriation of Ninoy Aquino International Airport
Passenger Terminal III (NAIA IPT 3) through a
procedure set forth in an unconstitutional law.-
The majority ruled that RA 8974 should apply. It
ordered the national government and its
co-petitioners to immediately pay the just
compensation for NAIA IPT3 before taking over the
facility. In so doing, the majority may have
unwittingly further delayed, if not virtually
foreclosed, the expropriation of NAIA IPT3. I submit
it erroneously allowed the procedure set forth in an
unconstitutional law. The majority allowed Congress
to encroach upon the rule-making power which the
Constitution has reserved exclusively to this Court.
And it may have created another white elephant as a

result.
33. Eminent Domain; The majority opinion
effectively disregarded necessity for the
expropriation of Ninoy Aquino International Airport
Passenger Terminal III (NAIA IPT 3).-
There is no denying that a project like NAIA IPT3 is
long overdue, such that the prestige of the entire
country before the international community is at
stake. Politics and narrow vested interests have a
peculiar way of extirpating the most salutary and
beneficial ventures in this country. The undertaking
appears headed for the same fate unless this Court
intervenes and exercises its judicial discretion to
settle the destructive impasse. Shall this Court
watch in silence while the parties claw at each other
before international arbitration bodies? The majority
opinion effectively disregarded this necessity.
34. Eminent Domain; Judgments; Law of the
Case; The majority opinion ruled that RA 8974
applies in this case. It premised its conclusion on the
argument that the application of Rule 67 will violate
this Court‟s 2004 resolution in Agan, the alleged
governing law of the case; It is incorrect to say that
Agan constitutes the law of the case—the law of the
case finds application only in the same case between
the parties but this case (which refers to the
expropriation of NAIA IPT3) is irrefutably not the

same as Agan (which was about the validity of the
so-called “PIATCO contracts”).-
The ruling is basically flawed as it is grounded on a
wrong premise. It is incorrect to say that Agan
constitutes the law of the case. The “law of the case”
doctrine is defined as a term applied to an
established rule that, when an appellate court
passes on a question and remands the case to the
lower court for further proceedings, the question
there settled becomes the law of the case on
subsequent appeal. Unlike the doctrine of stare
decisis, the doctrine of the law of the case operates
only in the particular case. The law of the case finds
application only in the same case between the
parties. This case (which refers to the expropriation
of NAIA IPT3) is irrefutably not the same as Agan
(which was about the validity of the so-called
“PIATCO contracts”). Hence, the pronouncements in
Agan cannot constitute the law of the case here.
35. Eminent Domain; Judgments; Just
Compensation; There is something seriously
wrong with the argument that R.A. 8974 is the only
legal and equitable way to compensate PIATCO in
accordance with our 2004 resolution—the
application of Rule 67 in the expropriation
proceedings of NAIA IPT3 is in consonance with
Agan.-
The majority opinion claims that “the staging of

government to take over the NAIA 3 facilities in a
fashion that directly rebukes our 2004 resolution in
Agan (which) mandated that there must be first
payment of just compensation before the
Government could take over the NAIA IPT3 facilities.”
This is very misleading. The full text of the relevant
statement of the Court in its 2004 resolution in Agan
is as follows: “This Court, however, is not unmindful
of the reality that the structures comprising the NAIA
[IPT3] facility are almost complete and that funds
have been spent by PIATCO in their construction. For
the government to take over the facility, it has to
compensate respondent PIATCO as builder of the
said structures. The compensation must be just and
in accordance with law and equity for the
government can not unjustly enrich itself at the
expense of PIATCO and its investors.” (emphasis
supplied) Clearly, the resolution only requires that
PIATCO be given just compensation as a condition
for any government take-over of NAIA IPT3. The just
compensation should be in accordance with law and
equity. There is something seriously wrong with the
argument that RA 8974 is the only legal and
equitable way to compensate PIATCO in accordance
with our 2004 resolution. The application of Rule 67
in the expropriation proceedings of NAIA IPT3 is in
consonance with Agan. The determination and

payment of just compensation pursuant to Rule 67
are in accordance with law. Under Rule 67, PIATCO
will be given FULL JUST COMPENSATION by the
government for the taking of NAIA IPT3. That is
mandatory. The Constitution itself ordains it. Under
Rule 67, there is no way the government can
unjustly enrich itself at the expense of PIATCO.
Section 9 of Rule 67 ensures this by requiring the
payment of interest from the time government takes
possession of the property.
Compensation; If the majority opinion were to
pursue its argument to its logical conclusion, no
takeover can be had without payment of the just
compensation itself not merely of a value
corresponding to what it vaguely referred to as
“some degree of payment”—payment of the
proffered value is not enough since the proffered
value is definitely not equivalent to just
compensation.-
I dare say the majority opinion actually got caught
up in a self-contradiction. At first, it claimed that the
2004 resolution in Agan laid down the following
directives: (1) PIATCO must receive payment of just
compensation determined in accordance with law
and equity, and (2) the government is barred from
taking over NAIA IPT3 until such just compensation
is paid. It continued to argue that the 2004

resolution requires the payment of just
compensation before the takeover of NAIA IPT3
facilities. Subsequently, however, it backtracked and
stated that “the 2004 resolution does not
particularize the extent such payment must be
effected before the takeover, but it actually requires
at least some degree of payment to the private
owner before a writ of possession may issue.”
However, neither the proffered value nor the zonal
valuation under RA 8974 is equivalent to just
compensation. If the majority opinion were to
pursue its argument to its logical conclusion, no
takeover can be had without payment of the just
compensation itself, not merely of a value
corresponding to what it vaguely referred to as
“some degree of payment.”
Compensation; Obiter Dictum; Words and
Phrases; The footnote in City of Iloilo v. Legaspi,
444 SCRA 269 (2004)—on the alleged repeal by RA
No. 8974—was not in any way necessary to resolve
any of the issues in that case, thus merely part of an
obiter dictum.-
Respondent judge‟s theory about Rule 67‟s supposed
repeal by RA 8974 was totally devoid of factual and
legal basis. RA 8974 did not repeal Rule 67 at all. The
Constitution will not allow it. In fact, neither its
repealing clause nor any of its provisions even

mentioned or referred to the Rules of Court, whether
on expropriation or anything else. But even
assuming (but not conceding) that respondent
judge‟s theory had been based on an implied repeal,
still there would have been no legal justification for it.
The footnote in City of Iloilo was not in any way
necessary to resolve any of the issues in that case.
Respondent judge should be reminded of our
pronouncement in City of Manila v. Entote that a
remark made or opinion expressed by a judge in a
decision upon a cause, incidentally or collaterally,
and not directly upon the question before the court,
or upon a point not necessarily involved in the
determination of the cause, is obiter dictum lacking
the force of an adjudication. An obiter dictum is an
opinion entirely unnecessary for the decision of the
case and is not binding as precedent. Not only was
there no pronouncement from us in City of Iloilo
about Rule 67‟s repeal by RA 8974, we in fact applied
Rule 67 in that case. The Court invoked Section 1 of
Rule 67 in resolving the issue of the sufficiency in
form and substance of the amended complaint for
expropriation and Section 2 of the same Rule in
holding that the City of Iloilo was not in estoppel
since it simply followed the procedure that a prior
hearing was not required before a writ of possession
could be issued. Indeed, the Court could not even
have applied RA 8974 in City of Iloilo because it did
not involve a project of the national government but

that of a local government unit, thus requiring the
application of RA 7160 (the Local Government
Code).
Compensation; Separation of Powers; The
legislature now has no power to annul modify or
augment the Rules of Court.-
Any talk of repeal (whether express or implied) by
legislative enactment of the rules of procedure duly
promulgated by this Court goes against the
Constitution itself. The power to promulgate rules of
pleading, practice and procedure was granted by the
Constitution to this Court to enhance its
independence. It is no longer shared by this Court
with Congress. The legislature now has no power to
annul, modify or augment the Rules of Court. We
expressly declared in Echegaray v. Secretary of
Justice that the 1987 Constitution took away the
power of Congress to repeal, alter or supplement
rules concerning pleading, practice and procedure.
Compensation; Separation of
Powers; Procedural and Substantive
Law;Words and Phrases; There is no question
that the appropriate standard of just compensation
is a substantive matter, not procedural but the
manner of determining just compensation (including

how it shall be paid and under what conditions a writ
of possession may be issued) is a matter of
procedure, not of substantive law; If a rule or statute
creates a right or takes away a vested right, it is
substantive, but if it operates as a means of
implementing an existing right, then it is
procedural.-
A perusal of the so-called “Guidelines for
Expropriation Proceedings” provided for under
Section 4 of RA 8974 shows that the “guidelines”
radically alter the rules for expropriation under Rule
67. The majority even declared that “RA 8974
represents a significant change from previous
expropriation laws such as Rule 67. . . .” The
majority however failed to realize that such change
brought about by a legislative enactment subverts
the fundamental law and defeats the constitutional
intent to strengthen the independence of this Court.
There is no question that the appropriate standard of
just compensation is a substantive matter, not
procedural. However, the manner of determining
just compensation (including how it shall be paid and
under what conditions a writ of possession may be
issued) is a matter of procedure, not of substantive
law. If a rule or statute creates a right or takes away
a vested right, it is substantive. If it operates as a
means of implementing an existing right, then it is
procedural. The provisions of Rule 67 neither vest a

new power on the State nor create a new right in
favor of the property owner. Rule 67 merely provides
the procedure for the State‟s exercise of eminent
domain and, at the same time, ensures the
enforcement of the right of the private owner to
receive just compensation for the taking of his
property. It is purely a matter of procedure. It is
therefore exclusively the domain of this Court. The
Constitution prohibits Congress from transgressing
this sphere. Congress cannot legislate the manner of
payment of just compensation. Neither can Congress
impose a condition on the issuance of a writ of
possession. Yet that is what RA 8974 precisely does.
Compensation; Separation of Powers; I am
disheartened that the majority opinion is in effect
sanctioning the arrogation of judicial power by
Congress.-
The records of the 11th Congress which enacted RA
8974 reveal that Congress intended to revise and
amend Rule 67. The Senate deliberations quoted at
the beginning of this dissenting opinion show this
legislative intent. I am therefore disheartened that
the majority opinion is in effect sanctioning the
arrogation of judicial power by Congress. In denying
the petition, the majority effectively sustained
respondent judge‟s repeal theory. Thus, they
allowed Congress to infringe on the Court‟s

rule-making power, a power vested by the
Constitution exclusively on this Court.
Compensation; National Infrastructure
Projects; Obviously, the NAIA IPT3 is not a right of
way, site or location for any national government
infrastructure project but the infrastructure itself
albeit still under construction; R.A. 8974 does not
apply to the expropriation of NAIA IPT3, and there
being no special law on the matter, Rule 67 of the
Rules of Court governs the procedure for its
expropriation.-
Here, the expropriation of NAIA IPT3 falls under the
second category since petitioners seek to take
private property for a purpose other than for a
right-of-way, site or location for a national
government project. Unfortunately, the majority
sided with respondent judge and completely
disregarded the fact that NAIA IPT3 was the national
government infrastructure project itself and ruled
instead that it was the right-of-way, site or location
of a national government project. That was wrong
and the reasoning was even more difficult to
understand. True, under Section 2(d) of the IRR of
RA 8974 defining “national government projects,” an
airport (which NAIA IPT3 essentially is) is specifically
listed among the national government projects for
which expropriation proceedings may be initiated

under the law. However, the law and its IRR also
provide that the expropriation should be for the
purpose of providing for a right of way, site or
location for the intended national government
project. A national government project is separate
and distinct from the purpose of expropriation.
Otherwise, there would have been no need to define
them separately. Thus, respondent judge erred
when he equated one with the other and obliterated
the clear distinction made by the law. Moreover,
under Section 2(e) of the IRR, the specific objects or
purposes of expropriation were lumped as „ROW
which is defined as the “right-of-way, site or location,
with defined physical boundaries, used for a national
government project.” Obviously, the NAIA IPT3 is
not a right of way, site or location for any national
government infrastructure project but the
infrastructure itself albeit still under construction.
The construction (and now the completion) of NAIA
IPT3 never required the acquisition of private
property for a right of way, site or location since the
terminal, including all its access roads, stands
completely on government land. Conformably, RA
8974 does not apply to the expropriation of NAIA
IPT3. And there being no special law on the matter,
Rule 67 of the Rules of Court governs the procedure
for its expropriation.

Compensation; Grave Abuse of
Discretion; Respondent judge‟s orders which were
issued with grave abuse of discretion.-
I refuse to join the majority who turned a blind eye
on respondent judge‟s orders which were issued with
grave abuse of discretion. Respondent judge should
not have issued his disputed orders without any
motion by PIATCO. There were very compelling
reasons why. Considering that respondent judge
knew or should have known how extremely
controversial NAIA IPT3 had become, he should have
granted the parties unimpeded opportunity to
confront each other on the propriety of releasing
such a huge amount to the owner of the property
under expropriation. There were in fact still so many
pending contentious issues on which the parties had
taken radically opposite positions, such as whether it
was respondent PIATCO alone that was entitled to
payment or whether there were other parties like
Takenaka Corporation (to be discussed later in this
decision) that had valid claims thereon and, if so,
how much each was entitled to. Furthermore,
inasmuch as petitioners had been vigorously
complaining that they were never really able to
inspect and evaluate the structural integrity and real
worth of NAIA IPT3, respondent judge should have
at least tried to determine the reasonableness of
petitioners‟ provisional deposit and therefore, he

ought not to have been in such a hurry to order the
release of petitioners‟ funds to PIATCO which was
not even asking for it. In other words, all the
foregoing warning signs considered, he should have
been more circumspect, deliberate and careful in
handling the case.
Compensation; Grave Abuse of
Discretion; Respondent judge committed grave
abuse of discretion when he ordered the release not
only of the provisional deposit (as computed under
Rule 67) but also of the entire bank balance of
petitioner MIAA—he exercised discretion in a matter
where no discretion was allowed.-
Section 2 of Rule 67 categorically prescribes the
amount to be deposited with the authorized
government depositary as the pre-condition for the
issuance of a writ of possession. This is the assessed
value of the property for purposes of taxation. The
figure is exact and permits the court no discretion in
determining what the provisional value should be.
Respondent judge committed grave abuse of
discretion when he ordered the release not only of
the provisional deposit (as computed under Rule 67)
but also of the entire bank balance of petitioner MIAA.
He exercised discretion in a matter where no
discretion was allowed. Respondent judge thus
disregarded established rules by unilaterally

increasing the amount of the provisional deposit
required for the issuance of the writ of possession.
This Court has had occasions in the past where we
de- nounced the acts of trial courts in unilaterally
increasing such provisional deposits. After issuing
the writ of possession, the provisional deposit is
fixed and the court can no longer change it.
Compensation; Words and Phrases; “Proffered
Value,” Explained; The majority opinion unduly
enlarged the concept of proffered value when it
extended the same to improvements or structures.-
Even the reference to the proffered value by the
majority opinion is inappropriate. The law is clear
that such proffered value applies only “[i]n case the
completion of a national government project is of
utmost urgency and importance, and there is no
existing valuation of the area concerned.” The
majority opinion recognizes the correctness of the
position of the Solicitor General that zonal valuations
are only for parcels of land and, hence, there can be
no zonal valuation for improvements or structures
such as an airport terminal like NAIA IPT3. Since it is
impossible for improvements or structures to have
an existing valuation, then there can be no proffered
value for NAIA IPT3 to speak of. The fact that the
proffered value does not apply to improvements is
buttressed by the provisions of RA 8974. The law

provides that in the determination of the proffered
value, the standards prescribed in Section 5 of RA
8974 shall be taken into consideration. Section 5
expressly refers to “Standards for the Assessment of
the Value of the Land Subject of Expropriation
Proceedings or Negotiated Sale.” On the other hand,
the valuation of improvements and/or structures is
separately governed by Section 7 of the law. To
reiterate, the determination of the proffered value
categorically refers to Section 5 on the valuation of
the land, not to valuation of improvements or
structures under Section 7. Thus, the majority
opinion unduly enlarged the concept of proffered
value when it extended the same to improvements
or structures.
Compensation; Words and Phrases; “Taking,”
Construed; Full payment of just compensation,
though a condition precedent for the transfer of title
or ownership, is not a condition precedent for the
taking of the property.-
Title remains with the owner until just compensation
is fully paid. This is only proper to protect the rights
of the property owner. But that is not the point here.
The issue is whether or not the expropriating
authority has the right to enter and use the property
even prior to full payment. In other words, can the
property be taken and used even before full payment

of just compensation? Yes. Full payment of just
compensation, though a condition precedent for the
transfer of title or ownership, is not a condition
precedent for the taking of the property. As
discussed earlier, an important element of taking is
that the owner‟s right to possess and exploit the land
(in other words, his beneficial ownership of it) is
transferred to and thenceforth exercised by the
expropriator.
46. Courts; Judges; Inhibition and
Disqualification of Judges; Where a case has
generated a strained personal relationship,
animosity and hostility between the party or his
counsel and the judge that the former has lost
confidence in the judge‟s impartiality or the latter is
unable to display the cold neutrality of an impartial
judge, it is a violation of due process for the judge
not to recuse himself from hearing the case.-
A judge, like Caesar‟s wife, must be above suspicion.
He must hold himself above reproach and suspicion.
At the very first sign of lack of faith and trust in his
actions, whether well-grounded or not, the judge
has no other alternative but to inhibit himself from
the case. That way, he avoids being misunderstood.
His reputation for probity and objectivity is
maintained. Even more important, the ideal of an
impartial administration of justice is preserved.
Justice must not merely be done but must also be

seen and perceived to be done. Besides, where a
case has generated a strained personal relationship,
animosity and hostility between the party or his
counsel and the judge that the former has lost
confidence in the judge‟s impartiality or the latter is
unable to display the cold neutrality of an impartial
judge, it is a violation of due process for the judge
not to recuse himself from hearing the case. Due
process cannot be satisfied in the absence of that
objectivity on the part of a judge sufficient to
reassure litigants of his being fair and just.
Compensation; Parties; The defendants in an
expropriation case are not limited to the owners of
the property condemned. They include all other
persons owning, occupying, or claiming to own the
property; Petitioners should be ordered to amend
their complaint for expropriation to include as
defendants Takenaka Corporation and all other
parties who occupy, own or claim to own any part of
or interest in NAIA IPT3.-
Just compensation is not due to the owner alone:
“The defendants in an expropriation case are not
limited to the owners of the property condemned.
They include all other persons owning, occupying, or
claiming to own the property. When [property] is
taken by eminent domain, the owner . . . is not
necessarily the only person who is entitled to

compensation. In American jurisdiction, the term
„owner‟ when employed in statutes relating to
eminent domain to designate the persons who are to
be made parties to the proceeding, refer, as is the
rule in respect of those entitled to compensation, to
all those who have lawful interest in the property to
be condemned, including a mortgagee, a lessee and
a vendee in possession under an executory contract.
Every person having an estate or interest at law or in
equity in the land taken is entitled to share in the
award. If a person claiming an interest in the land is
not made a party, he is given the right to intervene
and lay claim to the compensation.” In accordance
with the foregoing rule, petitioners should be
ordered to amend their complaint for expropriation
to include as defendants Takenaka Corporation and
all other parties who occupy, own or claim to own
any part of or interest in NAIA IPT3.
Compensation; Police Power; The government
could have pursued the options available to it under
the 2004 resolution in Agan, which included the filing
in this Court of a motion for the determination of just
compensation, as well as the take over of NAIA IPT3
in the exercise of its police power.-
The government got entangled in the present legal
controversy as a result of its decision to resort to
expropriation proceedings for the take-over of NAIA

IPT3. It could have avoided this imbroglio had it
pursued the options available to it under the 2004
resolution in Agan. Among these options was the
filing in this Court of a motion for the determination
of just compensation. Immediately after the 2004
resolution was promulgated, the right, purpose and
propriety of expropriation could not have been
seriously contested. The sole issue that remained
was the amount of just compensation to be paid.
Thus, a motion could have easily been filed to
determine the just compensation for the facility. The
Court could have then appointed a panel of
commissioners in accordance with Section 5 of Rule
67 and the problem could have been completely
resolved. Another option the government could have
taken at that time was to take over NAIA IPT3 in the
exercise of its police power. Thereafter, it could have
bidded out the facility‟s operations. PIATCO could
have then been paid from the revenues from the
winning bidder.
49. Eminent Domain; Just Compensation; It is
disturbing that the majority opinion allows PIATCO
to take hold of the money without giving the
government the opportunity to first inspect the
facility thoroughly to ascertain its structural integrity
and to make a preliminary valuation.-
RA 8974 provides that there should be immediate

payment direct to the property owner prior to the
take over of the property. Pursuant thereto, the
majority opinion ordered the payment of the
proffered value to PIATCO as a condition for the
implementation of the writ of possession earlier
issued by respondent judge. On the other hand, Rule
67 requires only the making of a down payment in
the form of a provisional deposit. It cannot be
withdrawn without further orders from the court, i.e.,
until just compensation is finally determined. It is
disturbing that the majority opinion allows PIATCO
to take hold of the money without giving the
government the opportunity to first inspect the
facility thoroughly to ascertain its structural integrity
and to make a preliminary valuation. With the
money already in its possession, PIATCO may make
use of the same in whatever way it may see fit. I
dread to think what will happen if the government
later on decides to back out after finding either
irremediable structural defects or an excessively
bloated valuation, such that it will cost more to put
NAIA IPT3 in operational readiness than to build (or
develop) and operate another airport. What happens
then? Will not the government be left holding an
empty bag—losing no less than US$ 53 million for an
inoperable facility?

Compensation; Rather than striking the desired
balance between legitimate State interests and
private rights, the majority opinion sacrifices public
interest in favor of individual benefit.-
While the procedure under RA 8974 is (as the
majority opinion describes it) “eminently more
favorable to the property owner than Rule 67,” it is
clearly onerous to the government. In contrast, Rule
67 will be advantageous to the government without
being cumbersome to the private owner. It provides
a procedure that is sensitive to the government‟s
financial condition and, at the same time, fair and
just to the owner of the property. In ordering the
application of RA 8974, the majority opinion favors
the interests of PIATCO over that of the government.
Rather than striking the desired balance between
legitimate State interests and private rights, it
sacrifices public interest in favor of individual benefit.
The majority opinion constantly and unabashedly
proclaims the objectives of RA 8974—to benefit the
property owner and to expedite expropriation
proceedings for national government projects. The
majority opinion tilted the balance in favor of private
interest to the prejudice of the common good.
Moreover, besides being erroneous, resort to RA
8974 will be counter-productive and self-defeating.
Division: EN BANC
Counsel: The Solicitor General, Joaquin V. Sayoc,

Lee Benjamin Z. Lerma, Benjamin R. Carale
DECISION
TINGA, J.:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived, designed
and constructed to serve as the country’s show window to the world. Regrettably, it has spawned
controversies. Regrettably too, despite the apparent completion of the terminal complex way
back it has not yet been operated. This has caused immeasurable economic damage to the
country, not to mention its deplorable discredit in the international community.
In the first case that reached this Court, Agan v. PIATCO,1 the contracts which the Government
had with the contractor were voided for being contrary to law and public policy. The second case
now before the Court involves the matter of just compensation due the contractor for the
terminal complex it built. We decide the case on the basis of fairness, the same norm that
pervades both the Court’s 2004 Resolution in the first case and the latest expropriation law.
The present controversy has its roots with the promulgation of the Court’s decision in Agan v.
PIATCO,2 promulgated in 2003 (2003 Decision). This decision nullified the "Concession Agreement
for the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport
Passenger Terminal III" entered into between the Philippine Government (Government) and the
Philippine International Air Terminals Co., Inc. (PIATCO), as well as the amendments and
supplements thereto. The agreement had authorized PIATCO to build a new international airport
terminal (NAIA 3), as well as a franchise to operate and maintain the said terminal during the
concession period of 25 years. The contracts were nullified, among others, that Paircargo
Consortium, predecessor of PIATCO, did not possess the requisite financial capacity when it was
awarded the NAIA 3 contract and that the agreement was contrary to public policy.3
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already been built
by PIATCO and were nearing completion.4 However, the ponencia was silent as to the legal status
of the NAIA 3 facilities following the nullification of the contracts, as well as whatever rights of
PIATCO for reimbursement for its expenses in the construction of the facilities. Still, in his
Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared as follows:
Should government pay at all for reasonable expenses incurred in the construction of the
Terminal? Indeed it should, otherwise it will be unjustly enriching itself at the expense of Piatco
and, in particular, its funders, contractors and investors — both local and foreign. After all, there
is no question that the State needs and will make use of Terminal III, it being part and parcel of
the critical infrastructure and transportation-related programs of government.5
PIATCO and several respondents-intervenors filed their respective motions for the
reconsideration of the 2003 Decision. These motions were denied by the Court in its Resolution
dated 21 January 2004 (2004 Resolution).6 However, the Court this time squarely addressed the
issue of the rights of PIATCO to refund, compensation or reimbursement for its expenses in the
construction of the NAIA 3 facilities. The holding of the Court on this crucial point follows:
This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III
facility are almost complete and that funds have been spent by PIATCO in their construction. For
the government to take over the said facility, it has to compensate respondent PIATCO as builder
of the said structures. The compensation must be just and in accordance with law and equity for
the government can not unjustly enrich itself at the expense of PIATCO and its investors.7
After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the
possession of PIATCO, despite the avowed intent of the Government to put the airport terminal
into immediate operation. The Government and PIATCO conducted several rounds of negotiation
regarding the NAIA 3 facilities.8 It also appears that arbitral proceedings were commenced before
the International Chamber of Commerce International Court of Arbitration and the International
Centre for the Settlement of Investment Disputes,9 although the Government has raised
jurisdictional questions before those two bodies.10
Then, on 21 December 2004, the Government11 filed a Complaint for expropriation with the
Pasay City Regional Trial Court (RTC), together with an Application for Special Raffle seeking the
immediate holding of a special raffle. The Government sought upon the filing of the complaint
the issuance of a writ of possession authorizing it to take immediate possession and control over
the NAIA 3 facilities.
The Government also declared that it had deposited the amount of ₱3,002,125,000.0012 (3
Billion)13 in Cash with the Land Bank of the Philippines, representing the NAIA 3 terminal’s
assessed value for taxation purposes.14
The case15 was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon.
Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC
issued an Order16 directing the issuance of a writ of possession to the Government, authorizing it
to "take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila v.
Serrano,17 the RTC noted that it had the ministerial duty to issue the writ of possession upon the
filing of a complaint for expropriation sufficient in form and substance, and upon deposit made by
the government of the amount equivalent to the assessed value of the property subject to
expropriation. The RTC found these requisites present, particularly noting that "[t]he case record
shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities] in the
Land Bank of the Philippines, an authorized depositary, as shown by the certification attached to
their complaint." Also on the same day, the RTC issued a Writ of Possession. According to PIATCO,
the Government was able to take possession over the NAIA 3 facilities immediately after the Writ
of Possession was issued.18
However, on 4 January 2005, the RTC issued another Order designed to supplement its 21
December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in the
present petition, the RTC noted that its earlier issuance of its writ of possession was pursuant to
Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed that Republic
Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the Acquisition of
Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other
Purposes" and its Implementing Rules and Regulations (Implementing Rules) had amended Rule 67
in many respects.
There are at least two crucial differences between the respective procedures under Rep. Act No.
8974 and Rule 67. Under the statute, the Government is required to make immediate payment to
the property owner upon the filing of the complaint to be entitled to a writ of possession,
whereas in Rule 67, the Government is required only to make an initial deposit with an authorized
government depositary. Moreover, Rule 67 prescribes that the initial deposit be equivalent to the
assessed value of the property for purposes of taxation, unlike Rep. Act No. 8974 which provides,
as the relevant standard for initial compensation, the market value of the property as stated in
the tax declaration or the current relevant zonal valuation of the Bureau of Internal Revenue
(BIR), whichever is higher, and the value of the improvements and/or structures using the
replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the
Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed the
Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the amount
of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that which the
Government "specifically made available for the purpose of this expropriation;" and such amount
to be deducted from the amount of just compensation due PIATCO as eventually determined by
the RTC. Second, the Government was directed to submit to the RTC a Certificate of Availability
of Funds signed by authorized officials to cover the payment of just compensation. Third, the
Government was directed "to maintain, preserve and safeguard" the NAIA 3 facilities or "perform
such as acts or activities in preparation for their direct operation" of the airport terminal, pending
expropriation proceedings and full payment of just compensation. However, the Government was
prohibited "from performing acts of ownership like awarding concessions or leasing any part of
[NAIA 3] to other parties."19
The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed
an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7 January
2005, the RTC issued another Order, the second now assailed before this Court, which appointed
three (3) Commissioners to ascertain the amount of just compensation for the NAIA 3 Complex.
That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January
2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005. This
is the third Order now assailed before this Court. Nonetheless, while the Omnibus Order affirmed
the earlier dispositions in the 4 January 2005 Order, it excepted from affirmance "the superfluous
part of the Order prohibiting the plaintiffs from awarding concessions or leasing any part of [NAIA
3] to other parties."20
Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January
2005. The petition prayed for the nullification of the RTC orders dated 4 January 2005, 7 January
2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking further action on
the expropriation case. A concurrent prayer for the issuance of a temporary restraining order and
preliminary injunction was granted by this Court in a Resolution dated 14 January 2005.21
The Government, in imputing grave abuse of discretion to the acts of Hon. Gingoyon, raises five
general arguments, to wit:
(i) that Rule 67, not Rep. Act No. 8974, governs the present expropriation proceedings;
(ii) that Hon. Gingoyon erred when he ordered the immediate release of the amount of US$62.3
Million to PIATCO considering that the assessed value as alleged in the complaint was only ₱3
Billion;
(iii) that the RTC could not have prohibited the Government from enjoining the performance of
acts of ownership;
(iv) that the appointment of the three commissioners was erroneous; and
(v) that Hon. Gingoyon should be compelled to inhibit himself from the expropriation case.22
Before we delve into the merits of the issues raised by the Government, it is essential to consider
the crucial holding of the Court in its 2004 Resolution in Agan, which we repeat below:
This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III
facility are almost complete and that funds have been spent by PIATCO in their construction. For
the government to take over the said facility, it has to compensate respondent PIATCO as builder
of the said structures. The compensation must be just and in accordance with law and equity for
the government can not unjustly enrich itself at the expense of PIATCO and its investors.23
This pronouncement contains the fundamental premises which permeate this decision of the
Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any
disposition of the present petition must conform to the conditions laid down by the Court in its
2004 Resolution.
The 2004 Resolution Which Is
Law of This Case Generally

Permits Expropriation
The pronouncement in the 2004 Resolution is especially significant to this case in two aspects,
namely: (i) that PIATCO must receive payment of just compensation determined in accordance
with law and equity; and (ii) that the government is barred from taking over NAIA 3 until such just
compensation is paid. The parties cannot be allowed to evade the directives laid down by this
Court through any mode of judicial action, such as the complaint for eminent domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines
which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the
actions of respondent judge under review, as well as the arguments of the parties must, to merit
affirmation, pass the threshold test of whether such propositions are in accord with the 2004
Resolution.
The Government does not contest the efficacy of this pronouncement in the 2004 Resolution,24
thus its application
to the case at bar is not a matter of controversy. Of course, questions such as what is the standard
of "just compensation" and which particular laws and equitable principles are applicable, remain
in dispute and shall be resolved forthwith.
The Government has chosen to resort to expropriation, a remedy available under the law, which
has the added benefit of an integrated process for the determination of just compensation and
the payment thereof to PIATCO. We appreciate that the case at bar is a highly unusual case,
whereby the Government seeks to expropriate a building complex constructed on land which the
State already owns.25 There is an inherent illogic in the resort to eminent domain on property
already owned by the State. At first blush, since the State already owns the property on which
NAIA 3 stands, the proper remedy should be akin to an action for ejectment.
However, the reason for the resort by the Government to expropriation proceedings is
understandable in this case. The 2004 Resolution, in requiring the payment of just compensation
prior to the takeover by the Government of
NAIA 3, effectively precluded it from acquiring possession or ownership of the NAIA 3 through the
unilateral exercise of its rights as the owner of the ground on which the facilities stood. Thus, as
things stood after the 2004 Resolution, the right of the Government to take over the NAIA 3
terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as
builder of the structures.
The determination of just compensation could very well be agreed upon by the parties without
judicial intervention, and it appears that steps towards that direction had been engaged in. Still,
ultimately, the Government resorted to its inherent power of eminent domain through
expropriation proceedings. Is eminent domain appropriate in the first place, with due regard not
only to the law on expropriation but also to the Court’s 2004 Resolution in Agan?
The right of eminent domain extends to personal and real property, and the NAIA 3 structures,
adhered as they are to the soil, are considered as real property.26 The public purpose for the
expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on
Expropriation) recognizes the possibility that the property sought to be expropriated may be
titled in the name of the
Republic of the Philippines, although occupied by private individuals, and in such case an
averment to that effect should be made in the complaint. The instant expropriation complaint did
aver that the NAIA 3 complex "stands on a parcel of land owned by the Bases Conversion
Development Authority, another agency of [the Republic of the Philippines]."27
Admittedly, eminent domain is not the sole judicial recourse by which the Government may have
acquired the NAIA 3 facilities while satisfying the requisites in the 2004 Resolution. Eminent
domain though may be the most effective, as well as the speediest means by which such goals
may be accomplished. Not only does it enable immediate possession after satisfaction of the
requisites under the law, it also has a built-in procedure through which just compensation may be
ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings
in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply
or construe these rules in accordance with the Court’s prescriptions in the 2004 Resolution to
achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as
this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the
source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of
this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely
diminished.
It is from these premises that we resolve the first question, whether Rule 67 of the Rules of Court
or Rep. Act No. 8974 governs the expropriation proceedings in this case.
Application of Rule 67 Violates
the 2004 Agan Resolution
The Government insists that Rule 67 of the Rules of Court governs the expropriation proceedings
in this case to the exclusion of all other laws. On the other hand, PIATCO claims that it is Rep. Act
No. 8974 which does apply. Earlier, we had adverted to the basic differences between the statute
and the procedural rule. Further elaboration is in order.
Rule 67 outlines the procedure under which eminent domain may be exercised by the Government.
Yet by no means does it serve at present as the solitary guideline through which the State may
expropriate private property. For example, Section 19 of the Local Government Code governs as
to the exercise by local government units of the power of eminent domain through an enabling
ordinance. And then there is Rep. Act No. 8974, which covers expropriation proceedings intended
for national government infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more favorable to the property
owner than Rule 67, inescapably applies in instances when the national government expropriates
property "for national government infrastructure projects."28 Thus, if expropriation is engaged in
by the national government for purposes other than national infrastructure projects, the assessed
value standard and the deposit mode prescribed in Rule 67 continues to apply.
Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation
proceedings through the filing of a complaint. Unlike in the case of local governments which
necessitate an authorizing ordinance before expropriation may be accomplished, there is no need
under Rule 67 or Rep. Act No. 8974 for legislative authorization before the Government may
proceed with a particular exercise of eminent domain. The most crucial difference between Rule
67 and Rep. Act No. 8974 concerns the particular essential step the Government has to undertake
to be entitled to a writ of possession.
The first paragraph of Section 2 of Rule 67 provides:

SEC. 2. Entry of plaintiff upon depositing value with authorized government depository. — Upon
the filing of the complaint or at any time thereafter and after due notice to the defendant, the
plaintiff shall have the right to take or enter upon the possession of the real property involved if
he deposits with the authorized government depositary an amount equivalent to the assessed
value of the property for purposes of taxation to be held by such bank subject to the orders of the
court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a
certificate of deposit of a government bank of the Republic of the Philippines payable on demand
to the authorized government depositary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4. Guidelines for Expropriation Proceedings.— Whenever it is necessary to acquire real

property for the right-of-way, site or location for any national government infrastructure project
through expropriation, the appropriate proceedings before the proper court under the following
guidelines:
a) Upon the filing of the complaint, and after due notice to the defendant, the implementing
agency shall immediately pay the owner of the property the amount equivalent to the sum of (1)
one hundred percent (100%) of the value of the property based on the current relevant zonal
valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or
structures as determined under Section 7 hereof;
...
c) In case the completion of a government infrastructure project is of utmost urgency and

importance, and there is no existing valuation of the area concerned, the implementing agency
shall immediately pay the owner of the property its proffered value taking into consideration the
standards prescribed in Section 5 hereof.
Upon completion with the guidelines abovementioned, the court shall immediately issue to the
implementing agency an order to take possession of the property and start the implementation of
the project.
Before the court can issue a Writ of Possession, the implementing agency shall present to the
court a certificate of availability of funds from the proper official concerned.
...
As can be gleaned from the above-quoted texts, Rule 67 merely requires the Government to
deposit with an authorized government depositary the assessed value of the property for
expropriation for it to be entitled to a writ of possession. On the other hand, Rep. Act No. 8974
requires that the Government make a direct payment to the property owner before the writ may
issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the
value of the improvements or structures under the replacement cost method,29 or if no such
valuation is available and in cases of utmost urgency, the proffered value of the property to be
seized.
It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep. Act No.
8974. Under Rule 67, it would not be obliged to immediately pay any amount to PIATCO before it
can obtain the writ of possession since all it need do is deposit the amount equivalent to the
assessed value with an authorized government depositary. Hence, it devotes considerable effort
to point out that Rep. Act No. 8974 does not apply in this case, notwithstanding the undeniable
reality that NAIA 3 is a national government project. Yet, these efforts fail, especially considering
the controlling effect of the 2004 Resolution in Agan on the adjudication of this case.
It is the finding of this Court that the staging of expropriation proceedings in this case with the
exclusive use of Rule 67 would allow for the Government to take over the NAIA 3 facilities in a
fashion that directly rebukes our 2004 Resolution in Agan. This Court cannot sanction deviation
from its own final and executory orders.
Section 2 of Rule 67 provides that the State "shall have the right to take or enter upon the
possession of the real property involved if [the plaintiff] deposits with the authorized government
depositary an amount equivalent to the assessed value of the property for purposes of taxation to
be held by such bank subject to the orders of the court."30 It is thus apparent that under the
provision, all the Government need do to obtain a writ of possession is to deposit the amount
equivalent to the assessed value with an authorized government depositary.
Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the 2004
Resolution that "[f]or the government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures"? Evidently not.
If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single centavo as
just compensation before the Government takes over the NAIA 3 facility by virtue of a writ of
possession. Such an injunction squarely contradicts the letter and intent of the 2004 Resolution.
Hence, the position of the Government sanctions its own disregard or violation the prescription
laid down by this Court that there must first be just compensation paid to PIATCO before the
Government may take over the NAIA 3 facilities.
Thus, at the very least, Rule 67 cannot apply in this case without violating the 2004 Resolution.
Even assuming that Rep. Act No. 8974 does not govern in this case, it does not necessarily follow
that Rule 67 should then apply. After all, adherence to the letter of Section 2, Rule 67 would in
turn violate the Court’s requirement in the 2004 Resolution that there must first be payment of
just compensation to PIATCO before the Government may take over the property.
It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with
the scheme of "immediate payment" in cases involving national government infrastructure
projects. The following portion of the Senate deliberations, cited by PIATCO in its Memorandum,
is worth quoting to cogitate on the purpose behind the plain meaning of the law:
THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes that, you know, we have to
pay the landowners immediately not by treasury bills but by cash.
Since we are depriving them, you know, upon payment, ‘no, of possession, we might as well pay
them as much, ‘no, hindi lang 50 percent.
xxx
THE CHAIRMAN (REP. VERGARA). Accepted.
xxx
THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the landowners, e.
THE CHAIRMAN (REP. VERGARA). That’s why we need to really secure the availability of funds.
xxx
THE CHAIRMAN (SEN. CAYETANO). No, no. It’s the same. It says here: iyong first paragraph, diba?
Iyong zonal – talagang magbabayad muna. In other words, you know, there must be a payment
kaagad. (TSN, Bicameral Conference on the Disagreeing Provisions of House Bill 1422 and Senate
Bill 2117, August 29, 2000, pp. 14-20)
xxx
THE CHAIRMAN (SEN. CAYETANO). Okay, okay, ‘no. Unang-una, it is not deposit, ‘no. It’s
payment."
REP. BATERINA. It’s payment, ho, payment." (Id., p. 63)31
It likewise bears noting that the appropriate standard of just compensation is a substantive
matter. It is well within the province of the legislature to fix the standard, which it did through
the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in
determining the amount of just compensation in expropriation cases relating to national
government infrastructure projects, as well as the manner of payment thereof. At the same time,
Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67 on
procedural aspects when it provides "all matters regarding defenses and objections to the
complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the rights of
the parties, and such other incidents affecting the complaint shall be resolved under the
provisions on expropriation of Rule 67 of the Rules of Court."32
Given that the 2004 Resolution militates against the continued use of the norm under Section 2,
Rule 67, is it then possible to apply Rep. Act No. 8974? We find that it is, and moreover, its
application in this case complements rather than contravenes the prescriptions laid down in the
2004 Resolution.
Rep. Act No. 8974 Fits
to the Situation at Bar

and Complements the
2004 Agan Resolution
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site Or
Location For National Government Infrastructure Projects And For Other Purposes." Obviously,
the law is intended to cover expropriation proceedings intended for national government
infrastructure projects. Section 2 of Rep. Act No. 8974 explains what are considered as "national
government projects."
Sec. 2. National Government Projects. – The term "national government projects" shall refer to all
national government infrastructure, engineering works and service contracts, including projects
undertaken by government-owned and controlled corporations, all projects covered by Republic
Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the
Build-Operate-and-Transfer Law, and other related and necessary activities, such as site
acquisition, supply and/or installation of equipment and materials, implementation, construction,
completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the
source of funding.
As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a
build-operate-and-transfer arrangement pursuant to Republic Act No. 6957, as amended,33 which
pertains to infrastructure or development projects normally financed by the public sector but
which are now wholly or partly implemented by the private sector.34 Under the
build-operate-and-transfer scheme, it is the project proponent which undertakes the
construction, including the financing, of a given infrastructure facility.35 In Tatad v. Garcia,36
the Court acknowledged that the operator of the EDSA Light Rail Transit project under a BOT
scheme was the owner of the facilities such as "the rail tracks, rolling stocks like the coaches, rail
stations, terminals and the power plant."37
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed
and constructed. The 2004 Resolution squarely recognized that right when it mandated the
payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3. The
fact that the Government resorted to eminent domain proceedings in the first place is a
concession on its part of PIATCO’s ownership. Indeed, if no such right is recognized, then there
should be no impediment for the Government to seize control of NAIA 3 through ordinary
ejectment proceedings.
Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these facilities
should now be determined. Under Section 415(1) of the Civil Code, these facilities are ineluctably
immovable or real property, as they constitute buildings, roads and constructions of all kinds
adhered to the soil.38 Certainly, the NAIA 3 facilities are of such nature that they cannot just be
packed up and transported by PIATCO like a traveling circus caravan.
Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by
PIATCO. This point is critical, considering the Government’s insistence that the NAIA 3 facilities
cannot be deemed as the "right-of-way", "site" or "location" of a national government
infrastructure project, within the coverage of Rep. Act No. 8974.
There is no doubt that the NAIA 3 is not, under any sensible contemplation, a "right-of-way." Yet
we cannot agree with the Government’s insistence that neither could NAIA 3 be a "site" or
"location". The petition quotes the definitions provided in Black’s Law Dictionary of "location’" as
the specific place or position of a person or thing and ‘site’ as pertaining to a place or location or
a piece of property set aside for specific use.’"39 Yet even Black’s Law Dictionary provides that
"[t]he term [site] does not of itself necessarily mean a place or tract of land fixed by definite
boundaries."40 One would assume that the Government, to back up its contention, would be able
to point to a clear-cut rule that a "site" or "location" exclusively refers to soil, grass, pebbles and
weeds. There is none.
Indeed, we cannot accept the Government’s proposition that the only properties that may be
expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act No. 8974 contemplates within
its coverage such real property constituting land, buildings, roads and constructions of all kinds
adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the declaration of the law’s policy,
refers to "real property acquired for national government infrastructure projects are promptly
paid just compensation."41 Section 4 is quite explicit in stating that the scope of the law relates
to the acquisition of "real property," which under civil law includes buildings, roads and
constructions adhered to the soil.
It is moreover apparent that the law and its implementing rules commonly provide for a rule for
the valuation of improvements and/or structures thereupon separate from that of the land on
which such are constructed. Section 2 of Rep. Act No. 8974 itself recognizes that the
improvements or structures on the land may very well be the subject of expropriation
proceedings. Section 4(a), in relation to Section 7 of the law provides for the guidelines for the
valuation of the improvements or structures to be expropriated. Indeed, nothing in the law would
prohibit the application of Section 7, which provides for the valuation method of the
improvements and or structures in the instances wherein it is necessary for the Government to
expropriate only the improvements or structures, as in this case.
The law classifies the NAIA 3 facilities as real properties just like the soil to which they are
adhered. Any sub-classifications of real property and divergent treatment based thereupon for
purposes of expropriation must be based on substantial distinctions, otherwise the equal
protection clause of the Constitution is violated. There may be perhaps a molecular distinction
between soil and the inorganic improvements adhered thereto, yet there are no purposive
distinctions that would justify a variant treatment for purposes of expropriation. Both the land
itself and the improvements thereupon are susceptible to private ownership independent of each
other, capable of pecuniary estimation, and if taken from the owner, considered as a deprivation
of property. The owner of improvements seized through expropriation suffers the same degree of
loss as the owner of land seized through similar means. Equal protection demands that all persons
or things similarly situated should be treated alike, both as to rights conferred and responsibilities
imposed. For purposes of expropriation, parcels of land are similarly situated as the buildings or
improvements constructed thereon, and a disparate treatment between those two classes of real
property infringes the equal protection clause.
Even as the provisions of Rep. Act No. 8974 call for that law’s application in this case, the
threshold test must still be met whether its implementation would conform to the dictates of the
Court in the 2004 Resolution. Unlike in the case of Rule 67, the application of Rep. Act No. 8974
will not contravene the 2004 Resolution, which requires the payment of just compensation before
any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not
particularize the extent such payment must be effected before the takeover, but it
unquestionably requires at least some degree of payment to the private property owner before a
writ of possession may issue. The utilization of Rep. Act No. 8974 guarantees compliance with this
bare minimum requirement, as it assures the private property owner the payment of, at the very
least, the proffered value of the property to be seized. Such payment of the proffered value to
the owner, followed by the issuance of the writ of possession in favor of the Government, is
precisely the schematic under Rep. Act No. 8974, one which facially complies with the
prescription laid down in the 2004 Resolution.
Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No. 8974 governs
the instant expropriation proceedings.
The Proper Amount to be Paid
under Rep. Act No. 8974

Then, there is the matter of the proper amount which should be paid to PIATCO by the
Government before the writ of possession may issue, consonant to Rep. Act No. 8974.
At this juncture, we must address the observation made by the Office of the Solicitor General in
behalf of the Government that there could be no "BIR zonal valuations" on the NAIA 3 facility, as
provided in Rep. Act No. 8974, since zonal valuations are only for parcels of land, not for airport
terminals. The Court agrees with this point, yet does not see it as an impediment for the
application of Rep. Act No. 8974.
It must be clarified that PIATCO cannot be reimbursed or justly compensated for the value of the
parcel of land on which NAIA 3 stands. PIATCO is not the owner of the land on which the NAIA 3
facility is constructed, and it should not be entitled to just compensation that is inclusive of the
value of the land itself. It would be highly disingenuous to compensate PIATCO for the value of
land it does not own. Its entitlement to just compensation should be limited to the value of the
improvements and/or structures themselves. Thus, the determination of just compensation
cannot include the BIR zonal valuation under Section 4 of Rep. Act No. 8974.
Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the
property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the
property based on the current relevant zonal valuation of the [BIR]; and (2) the value of the
improvements and/or structures as determined under Section 7. As stated above, the BIR zonal
valuation cannot apply in this case, thus the amount subject to immediate payment should be
limited to "the value of the improvements and/or structures as determined under Section 7," with
Section 7 referring to the "implementing rules and regulations for the equitable valuation of the
improvements and/or structures on the land." Under the present implementing rules in place, the
valuation of the improvements/structures are to be based using "the replacement cost
method."42 However, the replacement cost is only one of the factors to be considered in
determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the payment of
just compensation should be in accordance with equity as well. Thus, in ascertaining the ultimate
amount of just compensation, the duty of the trial court is to ensure that such amount conforms
not only to the law, such as Rep. Act No. 8974, but to principles of equity as well.
Admittedly, there is no way, at least for the present, to immediately ascertain the value of the
improvements and structures since such valuation is a matter for factual determination.43 Yet
Rep. Act No. 8974 permits an expedited means by which the Government can immediately take
possession of the property without having to await precise determination of the valuation.
Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a government
infrastructure project is of utmost urgency and importance, and there is no existing valuation of
the area concerned, the implementing agency shall immediately pay the owner of the property its
proferred value, taking into consideration the standards prescribed in Section 5 [of the law]."44
The "proffered value" may strike as a highly subjective standard based solely on the intuition of
the government, but Rep. Act No. 8974 does provide relevant standards by which "proffered
value" should be based,45 as well as the certainty
of judicial determination of the propriety of the proffered value.46
In filing the complaint for expropriation, the Government alleged to have deposited the amount
of ₱3 Billion earmarked for expropriation, representing the assessed value of the property. The
making of the deposit, including the determination of the amount of the deposit, was undertaken
under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still, as
regards the amount, the Court sees no impediment to recognize this sum of ₱3 Billion as the
proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination of
the proffered value, the Government is not strictly required to adhere to any predetermined
standards, although its proffered value may later be subjected to judicial review using the
standards enumerated under Section 5 of Rep. Act No. 8974.
How should we appreciate the questioned order of Hon. Gingoyon, which pegged the amount to
be immediately paid to PIATCO at around $62.3 Million? The Order dated 4 January 2005, which
mandated such amount, proves problematic in that regard. While the initial sum of ₱3 Billion may
have been based on the assessed value, a standard which should not however apply in this case,
the RTC cites without qualification Section 4(a) of Rep. Act No. 8974 as the basis for the amount
of $62.3 Million, thus leaving the impression that the BIR zonal valuation may form part of the
basis for just compensation, which should not be the case. Moreover, respondent judge made no
attempt to apply the enumerated guidelines for determination of just compensation under
Section 5 of Rep. Act No. 8974, as required for judicial review of the proffered value.
The Court notes that in the 10 January 2005 Omnibus Order, the RTC noted that the concessions
agreement entered into between the Government and PIATCO stated that the actual cost of
building NAIA 3 was "not less than" US$350 Million.47 The RTC then proceeded to observe that
while Rep. Act No. 8974 required the immediate payment to PIATCO the amount equivalent to
100% of the value of NAIA 3, the amount deposited by the Government constituted only 18% of this
value. At this point, no binding import should be given to this observation that the actual cost of
building NAIA 3 was "not less than" US$350 Million, as the final conclusions on the amount of just
compensation can come only after due ascertainment in accordance with the standards set under
Rep. Act No. 8974, not the declarations of the parties. At the same time, the expressed linkage
between the BIR zonal valuation and the amount of just compensation in this case, is revelatory
of erroneous thought on the part of the RTC.
We have already pointed out the irrelevance of the BIR zonal valuation as an appropriate basis for
valuation in this case, PIATCO not being the owner of the land on which the NAIA 3 facilities stand.
The subject order is flawed insofar as it fails to qualify that such standard is inappropriate.
It does appear that the amount of US$62.3 Million was based on the certification issued by the
LBP-Baclaran that the Republic of the Philippines maintained a total balance in that branch
amounting to such amount. Yet the actual representation of the $62.3 Million is not clear. The
Land Bank Certification expressing such amount does state that it was issued upon request of the
Manila International Airport Authority "purportedly as guaranty deposit for the expropriation
complaint."48 The Government claims in its Memorandum that the entire amount was made
available as a guaranty fund for the final and executory judgment of the trial court, and not
merely for the issuance of the writ of possession.49 One could readily conclude that the entire
amount of US$62.3 Million was intended by the Government to answer for whatever guaranties
may be required for the purpose of the expropriation complaint.
Still, such intention the Government may have had as to the entire US$62.3 Million is only
inferentially established. In ascertaining the proffered value adduced by the Government, the
amount of ₱3 Billion as the amount deposited characterized in the complaint as "to be held by
[Land Bank] subject to the [RTC’s] orders,"50 should be deemed as controlling. There is no clear
evidence that the Government intended to offer US$62.3 Million as the initial payment of just
compensation, the wording of the Land Bank Certification notwithstanding, and credence should
be given to the consistent position of the Government on that aspect.
In any event, for the RTC to be able to justify the payment of US$62.3 Million to PIATCO and not
₱3 Billion Pesos, he would have to establish that the higher amount represents the valuation of
the structures/improvements, and not the BIR zonal valuation on the land wherein NAIA 3 is built.
The Order dated 5 January 2005 fails to establish such integral fact, and in the absence of
contravening proof, the proffered value of ₱3 Billion, as presented by the Government, should
prevail.
Strikingly, the Government submits that assuming that Rep. Act No. 8974 is applicable, the
deposited amount of ₱3 Billion should be considered as the proffered value, since the amount was
based on comparative values made by the City Assessor.51 Accordingly, it should be deemed as
having faithfully complied with the requirements of the statute.52 While the Court agrees that ₱3
Billion should be considered as the correct proffered value, still we cannot deem the Government
as having faithfully complied with Rep. Act No. 8974. For the law plainly requires direct payment
to the property owner, and not a mere deposit with the authorized government depositary.
Without such direct payment, no writ of possession may be obtained.
Writ of Possession May Not
Be Implemented Until Actual
Receipt by PIATCO of Proferred
Value
The Court thus finds another error on the part of the RTC. The RTC authorized the issuance of the
writ of possession to the Government notwithstanding the fact that no payment of any amount
had yet been made to PIATCO, despite the clear command of Rep. Act No. 8974 that there must
first be payment before the writ of possession can issue. While the RTC did direct the
LBP-Baclaran to immediately release the amount of US$62 Million to PIATCO, it should have
likewise suspended the writ of possession, nay, withdrawn it altogether, until the Government
shall have actually paid PIATCO. This is the inevitable consequence of the clear command of Rep.
Act No. 8974 that requires immediate payment of the initially determined amount of just
compensation should be effected. Otherwise, the overpowering intention of Rep. Act No. 8974 of
ensuring payment first before transfer of repossession would be eviscerated.
Rep. Act No. 8974 represents a significant change from previous expropriation laws such as Rule
67, or even Section 19 of the Local Government Code. Rule 67 and the Local Government Code
merely provided that the Government deposit the initial amounts53 antecedent to acquiring
possession of the property with, respectively, an authorized
Government depositary54 or the proper court.55 In both cases, the private owner does not
receive compensation prior to the deprivation of property. On the other hand, Rep. Act No. 8974
mandates immediate payment of the initial just compensation prior to the issuance of the writ of
possession in favor of the Government.
Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate prepayment, and no
amount of statutory deconstruction can evade such requisite. It enshrines a new approach
towards eminent domain that reconciles the inherent unease attending expropriation proceedings
with a position of fundamental equity. While expropriation proceedings have always demanded
just compensation in exchange for private property, the previous deposit requirement impeded
immediate compensation to the private owner, especially in cases wherein the determination
of the final amount of compensation would prove highly disputed. Under the new modality
prescribed by Rep. Act No. 8974, the private owner sees immediate monetary recompense with
the same degree of speed as the taking of his/her property.
While eminent domain lies as one of the inherent powers of the State, there is no requirement
that it undertake a prolonged procedure, or that the payment of the private owner be protracted
as far as practicable. In fact, the expedited procedure of payment, as highlighted under Rep. Act
No. 8974, is inherently more fair, especially to the layperson who would be hard-pressed to fully
comprehend the social value of expropriation in the first place. Immediate payment placates to
some degree whatever ill-will that arises from expropriation, as well as satisfies the demand of
basic fairness.
The Court has the duty to implement Rep. Act No. 8974 and to direct compliance with the
requirement of immediate payment in this case. Accordingly, the Writ of Possession dated 21
December 2004 should be held in abeyance, pending proof of actual payment by the Government
to PIATCO of the proffered value of the NAIA 3 facilities, which totals ₱3,002,125,000.00.
Rights of the Government
upon Issuance of the Writ
of Possession
Once the Government pays PIATCO the amount of the proffered value of ₱3 Billion, it will be
entitled to the Writ of Possession. However, the Government questions the qualification imposed
by the RTC in its 4 January 2005 Order consisting of the prohibition on the Government from
performing acts of ownership such as awarding concessions or leasing any part of NAIA 3 to other
parties. To be certain, the RTC, in its 10 January 2005 Omnibus Order, expressly stated that it
was not affirming "the superfluous part of the Order [of 4 January 2005] prohibiting the plaintiffs
from awarding concessions or leasing any part of NAIA [3] to other parties."56 Still, such
statement was predicated on the notion that since the Government was not yet the owner of NAIA
3 until final payment of just compensation, it was obviously incapacitated to perform such acts of
ownership.
In deciding this question, the 2004 Resolution in Agan cannot be ignored, particularly the
declaration that "[f]or the government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures." The obvious import of this holding is that
unless PIATCO is paid just compensation, the Government is barred from "taking over," a phrase
which in the strictest sense could encompass even a bar of physical possession of NAIA 3, much
less operation of the facilities.
There are critical reasons for the Court to view the 2004 Resolution less stringently, and thus
allow the operation by the Government of NAIA 3 upon the effectivity of the Writ of Possession.
For one, the national prestige is diminished every day that passes with the NAIA 3 remaining
mothballed. For another, the continued non-use of the facilities contributes to its physical
deterioration, if it has not already. And still for another, the economic benefits to the
Government and the country at large are beyond dispute once the NAIA 3 is put in operation.
Rep. Act No. 8974 provides the appropriate answer for the standard that governs the extent of
the acts the Government may be authorized to perform upon the issuance of the writ of
possession. Section 4 states that "the court shall immediately issue to the implementing agency
an order to take possession of the property and start the implementation of the project." We hold
that accordingly, once the Writ of Possession is effective, the Government itself is authorized to
perform the acts that are essential to the operation of the NAIA 3 as an international airport
terminal upon the effectivity of the Writ of Possession. These would include the repair,
reconditioning and improvement of the complex, maintenance of the existing facilities and
equipment, installation of new facilities and equipment, provision of services and facilities
pertaining to the facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport.
The Government’s position is more expansive than that adopted by the Court. It argues that with
the writ of possession, it is enabled to perform acts de jure on the expropriated property. It cites
Republic v. Tagle,57 as well as the statement therein that "the expropriation of real property
does not include mere physical entry or occupation of land," and from them concludes that "its
mere physical entry and occupation of the property fall short of the taking of title, which includes
all the rights that may be exercised by an owner over the subject property."
This conclusion is indeed lifted directly from statements in Tagle,58 but not from the ratio
decidendi of that case. Tagle concerned whether a writ of possession in favor of the Government
was still necessary in light of the fact that it was already in actual possession of the property. In
ruling that the Government was entitled to the writ of possession, the Court in Tagle explains that
such writ vested not only physical possession, but also the legal right to possess the property.
Continues the Court, such legal right to possess was particularly important in the case, as there
was a pending suit against the Republic for unlawful detainer, and the writ of possession would
serve to safeguard the Government from eviction.59
At the same time, Tagle conforms to the obvious, that there is no transfer of ownership as of yet
by virtue of the writ of possession. Tagle may concede that the Government is entitled to exercise
more than just the right of possession by virtue of the writ of possession, yet it cannot be
construed to grant the Government the entire panoply of rights that are available to the owner.
Certainly, neither Tagle nor any other case or law, lends support to the Government’s proposition
that it acquires beneficial or equitable ownership of the expropriated property merely through
the writ of possession.
Indeed, this Court has been vigilant in defense of the rights of the property owner who has been
validly deprived of possession, yet retains legal title over the expropriated property pending
payment of just compensation. We reiterated the various doctrines of such import in our recent
holding in Republic v. Lim:60
The recognized rule is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled
principle is consistent both here and in other democratic jurisdictions. In Association of Small
Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform[61 ], thus:
"Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor’s title
relates back to the date on which the petition under the Eminent Domain Act, or the
commissioner’s report under the Local Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually made. (Emphasis
supplied.)
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In fact,
the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was
held that ‘actual payment to the owner of the condemned property was a condition precedent to
the investment of the title to the property in the State’ albeit ‘not to the appropriation of it to
public use.’ In Rexford v. Knight, the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land was complete prior
to the payment. Kennedy further said that ‘both on principle and authority the rule is . . . that
the right to enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title does not pass from the
owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:
‘If the laws which we have exhibited or cited in the preceding discussion are attentively examined
it will be apparent that the method of expropriation adopted in this jurisdiction is such as to
afford absolute reassurance that no piece of land can be finally and irrevocably taken from an
unwilling owner until compensation is paid....’"(Emphasis supplied.)
Clearly, without full payment of just compensation, there can be no transfer of title from the
landowner to the expropriator. Otherwise stated, the Republic’s acquisition of ownership is
conditioned upon the full payment of just compensation within a reasonable time.
Significantly, in Municipality of Biñan v. Garcia[62 ] this Court ruled that the expropriation of
lands consists of two stages, to wit:
"x x x The first is concerned with the determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its exercise in the context of the facts involved
in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that
the plaintiff has a lawful right to take the property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment of just compensation to be determined as
of the date of the filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with the determination by the court
of "the just compensation for the property sought to be taken." This is done by the court with the
assistance of not more than three (3) commissioners. x x x.
It is only upon the completion of these two stages that expropriation is said to have been
completed. In Republic v. Salem Investment Corporation[63 ] , we ruled that, "the process is not
completed until payment of just compensation." Thus, here, the failure of the Republic to pay
respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation
process incomplete.
Lim serves fair warning to the Government and its agencies who consistently refuse to pay just
compensation due to the private property owner whose property had been
expropriated. At the same time, Lim emphasizes the fragility of the rights of the Government as
possessor pending the final payment of just compensation, without diminishing the potency of
such rights. Indeed, the public policy, enshrined foremost in the Constitution, mandates that the
Government must pay for the private property it expropriates. Consequently, the proper judicial
attitude is to guarantee compliance with this primordial right to just compensation.
Final Determination of Just
Compensation Within 60 Days
The issuance of the writ of possession does not write finis to the expropriation proceedings. As
earlier pointed out, expropriation is not completed until payment to the property owner of just
compensation. The proffered value stands as merely a provisional determination of the amount of
just compensation, the payment of which is sufficient to transfer possession of the property to
the Government. However, to effectuate the transfer of ownership, it is necessary for the
Government to pay the property owner the final just compensation.
In Lim, the Court went as far as to countenance, given the exceptional circumstances of that case,
the reversion of the validly expropriated property to private ownership due to the failure of the
Government to pay just compensation in that case.64 It was noted in that case that the
Government deliberately refused to pay just compensation. The Court went on to rule that "in
cases where the government failed to pay just compensation within five (5) years from the
finality of the judgment in the expropriation proceedings, the owners concerned shall have the
right to recover possession of their property."65
Rep. Act No. 8974 mandates a speedy method by which the final determination of just
compensation may be had. Section 4 provides:
In the event that the owner of the property contests the implementing agency’s proffered value,
the court shall determine the just compensation to be paid the owner within sixty (60) days from
the date of filing of the expropriation case. When the decision of the court becomes final and
executory, the implementing agency shall pay the owner the difference between the amount
already paid and the just compensation as determined by the court.
We hold that this provision should apply in this case. The sixty (60)-day period prescribed in Rep.
Act No. 8974 gives teeth to the law’s avowed policy "to ensure that owners of real property
acquired for national government infrastructure projects are promptly paid just
compensation."66 In this case, there already has been irreversible delay in the prompt payment of
PIATCO of just compensation, and it is no longer possible for the RTC to determine the just
compensation due PIATCO within sixty (60) days from the filing of the complaint last 21 December
2004, as contemplated by the law. Still, it is feasible to effectuate the spirit of the law by
requiring the trial court to make such determination within sixty (60) days from finality of this
decision, in accordance with the guidelines laid down in Rep. Act No. 8974 and its Implementing
Rules.
Of course, once the amount of just compensation has been finally determined, the Government is
obliged to pay PIATCO the said amount. As shown in Lim and other like-minded cases, the
Government’s refusal to make such payment is indubitably actionable in court.
Appointment of Commissioners
The next argument for consideration is the claim of the Government that the RTC erred in
appointing the three commissioners in its 7 January 2005 Order without prior consultation with
either the Government or PIATCO, or without affording the Government the opportunity to object
to the appointment of these commissioners. We can dispose of this argument without
complication.
It must be noted that Rep. Act No. 8974 is silent on the appointment of commissioners tasked with
the ascertainment of just compensation.67 This protocol though is sanctioned under Rule 67. We
rule that the appointment of commissioners under Rule 67 may be resorted to, even in
expropriation proceedings under Rep. Act No. 8974, since the application of the provisions of Rule
67 in that regard do not conflict with the statute. As earlier stated, Section 14 of the
Implementing Rules does allow such other incidents affecting the complaint to be resolved under
the provisions on expropriation of Rule 67 of the Rules of Court. Even without Rule 67, reference
during trial to a commissioner of the examination of an issue of fact is sanctioned under Rule 32 of
the Rules of Court.
But while the appointment of commissioners under the aegis of Rule 67 may be sanctioned in
expropriation proceedings under Rep. Act No. 8974, the standards to be observed for the
determination of just compensation are provided not in Rule 67 but in the statute. In particular,
the governing standards for the determination of just compensation for the NAIA 3 facilities are
found in Section 10 of the Implementing Rules for Rep. Act No. 8974, which provides for the
replacement cost method in the valuation of improvements and structures.68
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the parties in the
expropriation case on who should be appointed as commissioners. Neither does the Court feel
that such a requirement should be imposed in this case. We did rule in Municipality of Talisay v.
Ramirez69 that "there is nothing to prevent [the trial court] from seeking the recommendations of
the parties on [the] matter [of appointment of commissioners], the better to ensure their fair
representation."70 At the same time, such solicitation of recommendations is not obligatory on
the part of the court, hence we cannot impute error on the part of the RTC in its exercise of
solitary discretion in the appointment of the commissioners.
What Rule 67 does allow though is for the parties to protest the appointment of any of these
commissioners, as provided under Section 5 of the Rule. These objections though must be made
filed within ten (10) days from service of the order of appointment of the commissioners.71 In this
case, the proper recourse of the Government to challenge the choice of the commissioners is to
file an objection with the trial court, conformably with Section 5, Rule 67, and not as it has done,
assail the same through a special civil action for certiorari. Considering that the expropriation
proceedings in this case were effectively halted seven (7) days after the Order appointing the
commissioners,72 it is permissible to allow the parties to file their objections with the RTC within
five (5) days from finality of this decision.
Insufficient Ground for Inhibition
of Respondent Judge
The final argument for disposition is the claim of the Government is that Hon. Gingoyon has
prejudged the expropriation case against the Government’s cause and, thus, should be required
to inhibit himself. This grave charge is predicated on facts which the Government characterizes
as "undeniable." In particular, the Government notes that the 4 January 2005 Order was issued
motu proprio, without any preceding motion, notice or hearing. Further, such order, which
directed the payment of US$62 Million to PIATCO, was attended with error in the computation of
just compensation. The Government also notes that the said Order was issued even before
summons had been served on PIATCO.
The disqualification of a judge is a deprivation of his/her judicial power73 and should not be
allowed on the basis of mere speculations and surmises. It certainly cannot be predicated on the
adverse nature of the judge’s rulings towards the movant for inhibition, especially if these rulings
are in accord with law. Neither could inhibition be justified merely on the erroneous nature of the
rulings of the judge. We emphasized in Webb v. People:74
To prove bias and prejudice on the part of respondent judge, petitioners harp on the alleged
adverse and erroneous rulings of respondent judge on their various motions. By themselves,
however, they do not sufficiently prove bias and prejudice to disqualify respondent judge. To be
disqualifying, the bias and prejudice must be shown to have stemmed from an extrajudicial
source and result in an opinion on the merits on some basis other than what the judge learned
from his participation in the case. Opinions formed in the course of judicial proceedings, although
erroneous, as long as they are based on the evidence presented and conduct observed by the
judge, do not prove personal bias or prejudice on the part of the judge. As a general rule,
repeated rulings against a litigant, no matter how erroneous and vigorously and consistently
expressed, are not a basis for disqualification of a judge on grounds of bias and prejudice.
Extrinsic evidence is required to establish bias, bad faith, malice or corrupt purpose, in addition
to the palpable error which may be inferred from the decision or order itself. Although the
decision may seem so erroneous as to raise doubts concerning a judge's integrity, absent extrinsic
evidence, the decision itself would be insufficient to establish a case against the judge. The only
exception to the rule is when the error is so gross and patent as to produce an ineluctable
inference of bad faith or malice.75
The Government’s contentions against Hon. Gingoyon are severely undercut by the fact that the
21 December 2004 Order, which the 4 January 2005 Order sought to rectify, was indeed severely
flawed as it erroneously applied the provisions of Rule 67 of the Rules of Court, instead of Rep.
Act No. 8974, in ascertaining compliance with the requisites for the issuance of the writ of
possession. The 4 January
2005 Order, which according to the Government establishes Hon. Gingoyon’s bias, was
promulgated precisely to correct the previous error by applying the correct provisions of law. It
would not speak well of the Court if it sanctions a judge for wanting or even attempting to correct
a previous erroneous order which precisely is the right move to take.
Neither are we convinced that the motu proprio issuance of the 4 January 2005 Order, without
the benefit of notice or hearing, sufficiently evinces bias on the part of Hon. Gingoyon. The motu
proprio amendment by a court of an erroneous order previously issued may be sanctioned

depending on the circumstances, in line with the long-recognized principle that every court has
inherent power to do all things reasonably necessary for the administration of justice within the
scope of its jurisdiction.76 Section 5(g), Rule 135 of the Rules of Court further recognizes the
inherent power of courts "to amend and control its process and orders so as to make them
conformable to law and justice,"77 a power which Hon. Gingoyon noted in his 10 January 2005
Omnibus Order.78 This inherent power includes the right of the court to reverse itself, especially
when in its honest opinion it has committed an error or mistake in judgment, and that to adhere
to its decision will cause injustice to a party litigant.79
Certainly, the 4 January 2005 Order was designed to make the RTC’s previous order conformable
to law and justice, particularly to apply the correct law of the case. Of course, as earlier
established, this effort proved incomplete, as the 4 January 2005 Order did not correctly apply
Rep. Act No. 8974 in several respects. Still, at least, the 4 January 2005 Order correctly reformed
the most basic premise of the case that Rep. Act No. 8974 governs the expropriation proceedings.
Nonetheless, the Government belittles Hon. Gingoyon’s invocation of Section 5(g), Rule 135 as
"patently without merit". Certainly merit can be seen by the fact that the 4 January 2005 Order
reoriented the expropriation proceedings towards the correct governing law. Still, the
Government claims that the unilateral act of the RTC did not conform to law or justice, as it was
not afforded the right to be heard.
The Court would be more charitably disposed towards this argument if not for the fact that the
earlier order with the 4 January 2005 Order sought to correct was itself issued without the benefit
of any hearing. In fact, nothing either in Rule 67 or Rep. Act No. 8975 requires the conduct of a
hearing prior to the issuance of the writ of possession, which by design is available immediately
upon the filing of the complaint provided that the requisites attaching thereto are present.
Indeed, this expedited process for the obtention of a writ of possession in expropriation cases
comes at the expense of the rights of the property owner to be heard or to be deprived of
possession. Considering these predicates, it would be highly awry to demand that an order
modifying the earlier issuance of a writ of possession in an expropriation case be barred until the
staging of a hearing, when the issuance of the writ of possession itself is not subject to hearing.
Perhaps the conduct of a hearing under these circumstances would be prudent. However, hearing
is not mandatory, and the failure to conduct one does not establish the manifest bias required for
the inhibition of the judge.
The Government likewise faults Hon. Gingoyon for using the amount of US$350 Million as the basis
for the 100% deposit under Rep. Act No. 8974. The Court has noted that this statement was
predicated on the erroneous belief that the BIR zonal valuation applies as a standard for
determination of just compensation in this case. Yet this is manifest not of bias, but merely of
error on the part of the judge. Indeed, the Government was not the only victim of the errors of
the RTC in the assailed orders. PIATCO itself was injured by the issuance by the RTC of the writ of
possession, even though the former had yet to be paid any amount of just compensation. At the
same time, the Government was also prejudiced by the erroneous ruling of the RTC that the
amount of US$62.3 Million, and not ₱3 Billion, should be released to PIATCO.
The Court has not been remiss in pointing out the multiple errors committed by the RTC in its
assailed orders, to the prejudice of both parties. This attitude of error towards all does not ipso
facto negate the charge of bias. Still, great care should be had in requiring the inhibition of
judges simply because the magistrate did err. Incompetence may be a ground for administrative
sanction, but not for inhibition, which requires lack of objectivity or impartiality to sit on a case.
The Court should necessarily guard against adopting a standard that a judge should be inhibited
from hearing the case if one litigant loses trust in the judge. Such loss of trust on the part of the
Government may be palpable, yet inhibition cannot be grounded merely on the feelings of the
party-litigants. Indeed, every losing litigant in any case can resort to claiming that the judge was
biased, and he/she will gain a sympathetic ear from friends, family, and people who do not
understand the judicial process. The test in believing such a proposition should not be the
vehemence of the litigant’s claim of bias, but the Court’s judicious estimation, as people who
know better than to believe any old cry of "wolf!", whether such bias has been irrefutably
exhibited.
The Court acknowledges that it had been previously held that "at the very first sign of lack of faith
and trust in his actions, whether well-grounded or not, the judge has no other alternative but to
inhibit himself from the case."80 But this doctrine is qualified by the entrenched rule that "a
judge may not be legally prohibited from sitting in a litigation, but when circumstances appear
that will induce doubt to his honest actuations and probity in favor of either party, or incite such
state of mind, he should conduct a careful self-
examination. He should exercise his discretion in a way that the people's faith in the Courts of
Justice is not impaired."81 And a self-assessment by the judge that he/she is not impaired to hear
the case will be respected by the Court absent any evidence to the contrary. As held in Chin v.
Court of Appeals:
An allegation of prejudgment, without more, constitutes mere conjecture and is not one of the
"just and valid reasons" contemplated in the second paragraph of Rule 137 of the Rules of Court
for which a judge may inhibit himself from hearing the case. We have repeatedly held that mere
suspicion that a judge is partial to a party is not enough. Bare allegations of partiality and
prejudgment will not suffice in the absence of clear and convincing evidence to overcome the
presumption that the judge will undertake his noble role to dispense justice according to law and
evidence and without fear or favor. There should be adequate evidence to prove the allegations,
and there must be showing that the judge had an interest, personal or otherwise, in the
prosecution of the case. To be a disqualifying circumstance, the bias and prejudice must be
shown to have stemmed from an extrajudicial source and result in an opinion on the merits on
some basis other than what the judge learned from his participation in the case.82
The mere vehemence of the Government’s claim of bias does not translate to clear and
convincing evidence of impairing bias. There is no sufficient ground to direct the inhibition of Hon.
Gingoyon from hearing the expropriation case.
In conclusion, the Court summarizes its rulings as follows:
(1) The 2004 Resolution in Agan sets the base requirement that has to be observed before the
Government may take over the NAIA 3, that there must be payment to PIATCO of just
compensation in accordance with law and equity. Any ruling in the present expropriation case
must be conformable to the dictates of the Court as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate
payment by the Government of at least the proffered value of the NAIA 3 facilities to PIATCO and
provides certain valuation standards or methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the
Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount of ₱3 Billion,
representing the proffered value of NAIA 3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start the implementation of the
NAIA 3 Airport terminal project by performing the acts that are essential to the operation of the
NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession, subject
to the conditions above-stated. As prescribed by the Court, such authority encompasses "the
repair, reconditioning and improvement of the complex, maintenance of the existing facilities
and equipment, installation of new facilities and equipment, provision of services and facilities
pertaining to the facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport."83
(5) The RTC is mandated to complete its determination of the just compensation within sixty (60)
days from finality of this Decision. In doing so, the RTC is obliged to comply with "law and equity"
as ordained in Again and the standard set under Implementing Rules of Rep. Act No. 8974 which is
the "replacement cost method" as the standard of valuation of structures and improvements.
(6) There was no grave abuse of discretion attending the RTC Order appointing the commissioners
for the purpose of determining just compensation. The provisions on commissioners under Rule 67
shall apply insofar as they are not inconsistent with Rep. Act No. 8974, its Implementing Rules, or
the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decision of the trial court to
PIATCO immediately upon the finality of the said decision.
(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.
All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the
nullification of the questioned orders. Nonetheless, portions of these orders should be modified
to conform with law and the pronouncements made by the Court herein.
WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4 January 2005
and 10 January 2005 of the lower court. Said orders are AFFIRMED with the following
MODIFICATIONS:
1) The implementation of the Writ of Possession dated 21 December 2005 is HELD IN ABEYANCE,
pending payment by petitioners to PIATCO of the amount of Three Billion Two Million One
Hundred Twenty Five Thousand Pesos (₱3,002,125,000.00), representing the proffered value of
the NAIA 3 facilities;
2) Petitioners, upon the effectivity of the Writ of Possession, are authorized start the
implementation of the Ninoy Aquino International Airport Pasenger Terminal III project by
performing the acts that are essential to the operation of the said International Airport Passenger
Terminal project;
3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this Decision, to
determine the just compensation to be paid to PIATCO by the Government.
The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that the
parties are given ten (10) days from finality of this Decision to file, if they so choose, objections
to the appointment of the commissioners decreed therein.
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
SO ORDERED.
G.R. No. 164282 October 12, 2005
TERESITA M. YUJUICO, Petitioner
vs.
HON. JOSE L. ATIENZA, Chairman, City School, Board of Manila, DR. MA. LUISA S. QUIÑONES,
Co-Chairman, City School Board, and Schools Division Superintendent, ROGER GERNALE,
Member, City School Board of Manila, HON. MANUEL M. ZARCAL, (in substitution of ARLENE
ORTIZ), Member, City School Board of Manila, BENJAMIN VALBUENA (In substitution of MILES
ROCES), Member, City School Board of Manila, LIBERTY TOLEDO, Member, City School Board
of Manila, HON. FRANCESCA GERNALE (In substitution of PERCIVAL FLORIENDO), Member, City
School Board of Manila, ISABELITA SANTOS, Secretary, City School Board of Manila, VICENTE
MACARUBBO (In substitution of Isabelita Ching), Assistant Secretary, City School Board of
Manila, CITY SCHOOL BOARD OF MANILA and JUDGE MERCEDES POSADA-LACAP, in her
capacity as PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MANILA, BRANCH 15,
Respondents.

a decision of the Regional Trial Court of Manila, Br.
15.
Syllabi Class : Civil Procedure|Civil
Law|Mandamus|Constitutional
Law|Judgments|Appeals|Pleadings and
Practice|Petition for Relief|Estoppel|Words and
Phrases|Municipal Corporations|Eminent
Domain|Expropriation|Just Compensation
Syllabi:
1. Civil Procedure; Judgments; Appeals; An
interlocutory order cannot be made subject to an
appeal.-
Respondents have correctly pointed out that an
interlocutory order cannot be made subject to an
appeal. However, when viewed in context, the
recitals of the petition clearly disclose and the Court
is convinced that the lower court committed grave
abuse of discretion amounting to lack or excess of
jurisdiction when it granted respondents‟ petition for
relief from judgment. While this case should have
been elevated to this Court not by way of a petition
for review under Rule 45 but through a special civil
action for certiorari under Rule 65, in the exercise of
our sound discretion and in order to write finis to this
case which has needlessly dragged on for so long, we
shall treat the petition as a special civil action for
certiorari. After all, it was filed within the
reglementary period for the filing of a Rule 65
petition. As we held in Salinas v. NLRC, in the
interest of justice, this Court has often judiciously
treated petitions erroneously captioned as petitions
for review on certiorari as special civil actions for
certiorari. This is in line with the principle that the
strict application of procedural technicalities should

not hinder the speedy disposition of the case on the
merits.
2. Civil Procedure; Judgments; Anent the alleged
breach of the rule on hierarchy of courts, the
doctrine is not an iron-clad dictum—the rule may be
relaxed when exceptional and compelling
circumstances warrant the exercise of this Court‟s
primary jurisdiction.-
Anent the alleged breach of the rule on hierarchy of
courts, the doctrine is not an iron-clad dictum. The
rule may be relaxed when exceptional and
compelling circumstances warrant the exercise of
this Court‟s primary jurisdiction. In this case, the
judgment sought to be satisfied has long attained
finality and the expropriated property has been
utilized as a school site for five (5) years now; yet,
the awarded just compensation has not been fully
paid. These circumstances, in the Court‟s estimation,
merit the relaxation of the technical rules of
procedure to ensure that substantial justice will be
served.
3. Civil Procedure; Pleadings and Practice; The
purpose of requiring verification is to secure an
assurance that the allegations of the petition have
been made in good faith; or are true and correct, not
merely speculative.-
The purpose of requiring a verification is to secure an

assurance that the allegations of the petition have
been made in good faith; or are true and correct, not
merely speculative. This requirement is simply a
condition affecting the form of pleadings and
non-compliance therewith does not necessarily
render it fatally defective. Perusal of the verification
in question shows that there was sufficient
compliance with the requirements of the Rules and
the alleged defects are not so material as to justify
the dismissal of the petition.
4. Civil Procedure; Petition for Relief; Sections 2
and 3, Rule 38 of the 1997 Rules of Civil Procedure
provide that a petition for relief may be granted upon
a showing that (1) through fraud, accident, mistake
or excusable negligence, a party has been prevented
from taking an appeal, and (2) the party has a good
and substantial cause of action or defense.-
Sections 2 and 3, Rule 38 of the 1997 Rules of Civil
Procedure provide that a petition for relief may be
granted upon a showing that (1) through fraud,
accident, mistake or excusable negligence, a party
has been prevented from taking an appeal, and (2)
the party has a good and substantial cause of action
or defense. The above requisites notwithstanding, it
bears stressing that relief from judgment is
premised on equity. It is an act of grace which is
allowed only in exceptional cases.
5. Civil Procedure; Appeals; Time and again, the

Supreme Court has ruled that the inability to perfect
an appeal in due time by reason of failure of a
counsel‟s clerk to notify the handling lawyer is not a
pardonable oversight.-
Time and again, this Court has ruled that the inability
to perfect an appeal in due time by reason of failure
of a counsel‟s clerk to notify the handling lawyer is
not a pardonable oversight. x x x Reiterated in
numerous cases is the rule that the clerks‟ faults are
attributable to the handling lawyers. Thus, excuses
offered based on the former‟s negligence are not
deemed excusable. That the admonitions issued out
by this Court were mostly directed against lawyers in
law firms does not exempt respondents herein from
the same treatment. For all intents and purposes,
the set-up at the OCLO is akin to that of a law firm,
the only difference being that the former serves a
public entity while the latter caters to private clients.
6. Civil Procedure; Appeals; Without doubt, it
was grave abuse of discretion for the lower court to
have given due course to respondents‟ appeal
through the grant of their petition for relief from
judgment based on the flimsy ground they
proffered.-
Without doubt, it was grave abuse of discretion for
the lower court to have given due course to
respondents‟ appeal through the grant of their

petition for relief from judgment based on the flimsy
ground they proffered. Even assuming that the
negligence invoked by respondents could be
considered excusable, still the petition should not
have been granted. It must be borne in mind that
two requisites must be satisfied before a petition
under Rule 38 may be granted, the other being the
existence of a good and substantial cause of action
or defense.
7. Civil Law; Estoppel; Words and Phrases; An
act performed by counsel within the scope of a
“general or implied authority” is regarded as an act
of the client, render the City and, through it,
respondents in estoppel. By estoppel is meant that
an admission or representation is rendered
conclusive upon the person making it and cannot be
denied or disproved as against the person relying
thereon.-
An act performed by counsel within the scope of a
“general or implied authority” is regarded as an act
of the client, render the City and, through it,
respondents in estoppel. By estoppel is meant that
an admission or representation is rendered
conclusive upon the person making it and cannot be
denied or disproved as against the person relying
thereon. Petitioner and the courts acted in
accordance with the City‟s own manifestations by
running after the CSB. At this point, respondents and

the OCLO can no longer turn around and toss the
obligation back to the City. After all, it was the legal
counsel of both the City and respondents who made
a big production out of showing that the liability
incurred by the City will be borne by the CSB.
8. Mandamus; Municipal
Corporations; Mandamus is a remedy available to a
property owner when a money judgment is rendered
in its favor and against a municipality or city.-
The question of whether the enactment of an
ordinance to satisfy the appropriation of a final
money judgment rendered against an LGU may be
compelled by mandamus has already been settled in
Municipality of Makati v. Court of Appeals. x x x
Clearly, mandamus is a remedy available to a
property owner when a money judgment is rendered
in its favor and against a municipality or city, as in
this case. Moreover, the very ordinance authorizing
the expropriation of petitioner‟s property
categorically states that the payment of the
expropriated property will be defrayed from the SEF.
9. Constitutional Law; Municipal
Corporations; Eminent
Domain; Expropriation; Just
Compensation;While the Supreme Court
recognizes the power of Local Government Unit (LGU)
to expropriate private property for public use, it will

not stand idly by while the expropriating authority
maneuvers to evade the payment of just
compensation of property already in its possession.-
While this Court recognizes the power of LGU to
expropriate private property for public use, it will not
stand idly by while the expropriating authority
maneuvers to evade the payment of just
compensation of property already in its possession.
The notion of expropriation is hard enough to take
for a private owner. He is compelled to give up his
property for the common weal. But to give it up and
wait in vain for the just compensation decreed by the
courts is too much to bear. In cases like these, courts
will not hesitate to step in to ensure that justice and
fair play are served.
10. Constitutional Law; Municipal
Corporations; Eminent
Domain; Expropriation; Nonpayment of just
compensation does not entitle the private landowner
to recover possession of the expropriated lots,
however, in cases where the government failed to
pay just compensation within five (5) years from the
finality of judgment in the expropriation proceedings,
the owners concerned shall have the right to recover
possession of their property.-
The decision rendering just compensation in

petitioner‟s favor was promulgated way back in the
year 2000. Five years have passed, yet the award
still has not been fully satisfied. Recently, in Republic
v. Lim, this Court made the following
pronouncement: . . . while the prevailing doctrine is
that the non-payment of just compensation does not
entitle the private landowner to recover possession
of the expropriated lots, however, in cases where the
government failed to pay just compensation within
five (5) years from the finality of judgment in the
expropriation proceedings, the owners concerned
shall have the right to recover possession of their
property. This is in consonance with the principle
that „the government cannot keep the property and
dishonor the judgment.‟ To be sure, the five-year
period limitation will encourage the government to
pay just compensation punctually. This is in keeping
with justice and equity. After all, it is the duty of the
government, whenever it takes property from
private persons against their will, to facilitate the
payment of just compensation.
DECISION
Tinga, J.:
This is a Petition for Review on Certiorari instituted by Teresita M. Yujuico, petitioner in the case
for mandamus docketed as Civil Case No. 02-103748 before the Regional Trial Court (RTC) of
Manila, Branch 15. Petitioner is questioning the propriety of the Order1 dated 25 June 2004,
granting respondents’ Petition for Relief from Judgment under Section 2, Rule 38 of the 1997
Rules of Civil Procedure.
The operative facts are not disputed.
On 8 December 1995, the City Council of Manila enacted an Ordinance2 authorizing the City Mayor
to acquire by negotiation or expropriation certain parcels of land for utilization as a site for the
Francisco Benitez Elementary School.3 The property chosen is located along Solis St. near Juan
Luna St. in the Second District of Manila and contains an approximate area of 3,979.10 square
meters. It is covered by Transfer Certificates of Title Nos. 71541, 71548, 24423, 71544 and 71546,
all in the name of petitioner. The Ordinance provides that an amount not to exceed the fair
market value of the land then prevailing in the area will be allocated out of the Special Education
Fund (SEF) of the City of Manila (City) to defray the cost of the property’s acquisition.4
Failing to acquire the land by negotiation, the City filed a case for eminent domain against
petitioner as owner of the property. Filed on 22 August 1996, the case was raffled to Branch 15,
RTC of Manila and docketed as Civil Case No. 96-79699.5
On 30 June 2000, the RTC rendered a Decision6 in the expropriation case in favor of the City. The
WHEREFORE, judgment is hereby rendered as follows:
1.) The lots including the improvements therein of defendant Teresita M. Yujuico, as described in
the complaint, are declared expropriated for public use;
2.) The fair market value of the lots of defendant is fixed at ₱18,164.80 per square meter. The
fair market value of the improvements of lots subject of this action is fixed at ₱ 978,000.00;
3.) The plaintiff must pay defendant the sum of ₱72,279,555.68 (3,979.10 sq. m. x ₱18,164.80)
representing the value of the subject lots plus ₱978,000.00 representing the value of the
improvements or the total amount of ₱73,257,555.00 as just compensation for the whole property
(including the improvements) minus the sum of ₱5,363,289.00 that plaintiff deposited in Court
per Order dated April 30, 1997, hence the balance of ₱67,894,266.00 with interest at the rate of 6%
per annum from July 15, 1997 (date of possession of subject property for the purpose of this
proceedings) until the day full payment is made to defendant or deposited in Court.7
The judgment became final and executory, no appeal having been interposed by either party.8
On 6 April 2001, petitioner filed a Motion for Execution of Judgment9 which the trial court
granted. Pursuant to a Writ of Execution10 dated 28 June 2001, the branch sheriff served a Notice
of Garnishment on the funds of the City deposited with the Land Bank of the Philippines, YMCA
Branch, Manila (Land Bank) to satisfy the judgment amount of ₱67,894,226.00, with interest at 6%
per annum.11
Invoking jurisprudence holding that public funds cannot be made subject to garnishment, the City
filed a motion to quash the Notice of Garnishment.12 Acting on the motion, the trial court issued
an Order dated 2 August 2001.
In the Order, the lower court recalled that during the hearing on the motion, the counsel for the
City manifested that the amount of ₱36,403,170.00 had been appropriated by the City School
Board (CSB) under CSB Resolutions Nos. 613 and 623, of which ₱31,039,881.00 was available for
release. The amount of ₱5,363,269.00, representing fifteen percent (15%) of the assessed value of
the property, had been deposited in court at the start of the expropriation proceedings and
subsequently received by petitioner. In line with the manifestation made by the counsel for the
City, the trial court ordered the release to petitioner of the amount of ₱31,039,881.00 deposited
with the Land Bank, in partial payment of the just compensation adjudged in favor of
petitioner.13
The trial court further stated in the Order:
Considering that this case is on all fours with the case of the Municipality of Makati vs. Court of
Appeals (190 SCRA 206), wherein it was ruled that "x x x Public funds are not subject to levy and
execution," the Court therefore grants plaintiff’s Motion to Quash the Notice of Garnishment and
the Notice of Garnishment to the Landbank of the Philippines issued by the Branch Sheriff of this
Court is hereby ordered lifted.
There being no opposition for the release of the Thirty One Million Thirty Nine Thousand Eight
Hundred Eighty One Pesos (₱31,039,881.00) deposited with the Land Bank, YMCA Branch as
Special Education Fund, the Manager of the Landbank of the Philippines, YMCA, Manila is hereby
directed to release the said amount to defendant Teresita M. Yujuico in partial payment of the
just compensation adjudged by this Court in its Decision dated June 30, 2000.
Upon manifestation of the counsel for the plaintiff that it is the City School Board which has the
authority to pass a resolution allocating funds for the full satisfaction of the just compensation
fixed, the said body is hereby given thirty (30) days from receipt of this Order to pass the
necessary resolution for the payments of the remaining balance due to defendant Teresita M.
Yujuico.14
A copy of the Order dated 2 August 2001 was served on the CSB on 3 August 2001.15
On 30 August 2001, petitioner submitted a manifestation before the trial court requesting that
she be informed by both the City and the CSB if a resolution had already been passed by the latter
in compliance with the Order.16 Earlier, petitioner sent a letter to the Superintendent of City
Schools of Manila to verify the CSB’s compliance with the Order.17
Not having been favored with a reply to her queries even after the lapse of the thirty (30)-day
compliance period, petitioner sent a letter to the CSB dated 10 September 2001, demanding
compliance with the Order.18
As there was no action from the CSB, on 1 February 2002, petitioner filed a petition for contempt
of court against respondents Hon. Jose L. Atienza, Jr., Dr. Ma. Luisa S. Quiñoňes, Roger Gernale,
Arlene Ortiz, Miles Roces, Percival Floriendo, Liberty Toledo, Isabelita Santos and Isabelita Ching
in their capacities as officers and members of the CSB.19 The case was docketed as Civil Case No.
02-102837 of the Manila RTC.20
Countering the petition for contempt, respondents filed a Motion to Dismiss,21 wherein they
alleged inter alia that they never disregarded the Order as the matter had in fact been
calendared and deliberated upon during the meetings of the CSB.22 In their subsequent Omnibus
Reply,23 respondents argued that petitioner’s failure to avail of the proper recourse to enforce
the final and executory judgment24 should not be a ground to hold them in contempt of court.
Citing the case of Municipality of Makati v. Court of Appeals,25 respondents asserted that
petitioner should have filed a petition for mandamus to force the CSB to pass the necessary
resolution for immediate payment of the balance of the just compensation awarded in her
favor.26
According to respondents, petitioner took the Order as a writ of mandamus when in fact it was a
mere order in furtherance of the Writ of Execution.27 This interpretation, respondents insisted,
should never be allowed since petitioner merely wanted to escape the payment of docket fees in
the filing of the petition for mandamus.28
In an Order29 dated 17 May 2002, the trial court denied the petition for contempt of court.
On 6 June 2002, petitioner filed a Petition for Mandamus30 against the members of the CSB, the
same respondents in the petition for contempt of court, seeking to compel them to pass a
resolution appropriating the amount necessary to pay the balance of the just compensation
awarded to petitioner in the expropriation case, Civil Case No. 96-79699. The petition was
docketed as Spl. Civil Action No. 02-103748 and raffled to Branch 51 of the RTC of Manila. 31
Upon petitioner’s motion,32 Branch 51 of the Manila RTC before which the mandamus case was
pending, in an Order33 dated 23 August 2002, directed its consolidation with the expropriation
case before Branch 15.34
In a Decision35 dated 9 October 2002, the lower court (Branch 15) granted the petition for
mandamus. Specifically, it ordered respondents to immediately pass a resolution appropriating
the necessary amount and the corresponding disbursement thereof for the full and complete
payment of the balance of the court-adjudged compensation still due petitioner, ratiocinating as
follows:36
This case is on all fours with the case of Municipality of Makati v. Court of Appeals (190 SCRA 206).
....
The State’s power of eminent domain should be exercised within the bounds of fair play and
justice. In the case at bar, considering that valuable property has been taken, the compensation
to be paid fixed and the municipality is in full possession and utilizing the property for the public
purpose, for three (3) years, the Court finds that the municipality has had more than reasonable
time to pay full compensation.
The arguments of the herein respondents that passing the ordinance or the act of appropriating
special educational fund is a discretionary act that could not be compelled by mandamus should
be thrown overboard. It must be stressed that what we have here is a final and executory
judgment, establishing a legal right for the petitioner to demand fulfillment which on the other
hand became an imperative duty on the part of the respondent to perform the act required.
WHEREFORE, premises considered, the petition is GRANTED, and the respondents are hereby
ordered to immediately pass a resolution appropriating the necessary amount; and the
corresponding disbursement thereof, for the full and complete payment of the remaining balance
of the court-adjudged compensation due and owing to petitioner Teresita M. Yujuico.
SO ORDERED.37
Respondents filed a motion for reconsideration, which the trial court denied in an Order38 dated
13 December 2002.
With respondents not interposing an appeal, the Decision became final and executory on 2
January 200339 and eventually, the corresponding Entry of Judgment was issued on 15 January
2003.40 The court granted petitioner’s Motion for Execution41 in an Order42 dated 12 March
2003.
However, on 14 March 2003, respondents filed a Petition for Relief from Judgment,43 wherein
they also prayed for a temporary restraining order (TRO) and a writ of preliminary injunction.
Respondents invoked excusable negligence as a ground for their failure to seasonably file an
appeal.44 While it denied the application for TRO in view of its prior order granting petitioner’s
Motion for Execution, the court granted the Petition for Relief from Judgment in an Order45
dated 25 June 2004. This had the effect of giving due course to respondents’ appeal despite the
fact that the decision of the trial court had already attained finality.
Finding the Order unacceptable, petitioner elevated it to this Court by way of a petition for
certiorari under Rule 45. In her petition, petitioner asks that the order of the lower court giving
due course to respondents’ appeal be reversed and set aside on a pure question of law.46
Before resolving the substantive issues raised by the parties, the Court will first address the
procedural infirmities ascribed by respondents to the petition at bar.
Respondents assail the correctness and propriety of the mode of appeal resorted to by
petitioner.47 According to them, the order granting the petition for relief from judgment is an
interlocutory order which cannot be made the subject of an appeal.48 Respondents likewise
argue that petitioner failed to respect the rule on hierarchy of courts. This Court, they aver, had
consistently held that its original jurisdiction to issue a writ of certiorari is not exclusive but is
concurrent with that of the RTC and the Court of Appeals in certain cases.49
Respondents have correctly pointed out that an interlocutory order cannot be made subject to an
appeal. However, when viewed in context, the recitals of the petition clearly disclose and the
Court is convinced that the lower court committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it granted respondents’ petition for relief from judgment. While this
case should have been elevated to this Court not by way of a petition for review under Rule 45 but
through a special civil action for certiorari under Rule 65, in the exercise of our sound discretion
and in order to write finis to this case which has needlessly dragged on for so long, we shall treat
the petition as a special civil action for certiorari. After all, it was filed within the reglementary
period for the filing of a Rule 65 petition. As we held in Salinas v. NLRC,50 in the interest of
justice, this Court has often judiciously treated petitions erroneously captioned as petitions for
review on certiorari as special civil actions for certiorari. This is in line with the principle that the
strict application of procedural technicalities should not hinder the speedy disposition of the case
on the merits.51
Accordingly, facial allegations of reversible error in the petition will be treated, as they should be,
as contextual averments of grave abuse of discretion on the part of the court a quo. Appropriately,
petitioner impleaded the RTC Presiding Judge as party-respondent in the instant petition.
Anent the alleged breach of the rule on hierarchy of courts, the doctrine is not an iron-clad
dictum.52 The rule may be relaxed when exceptional and compelling circumstances warrant the
exercise of this Court’s primary jurisdiction.53 In this case, the judgment sought to be satisfied
has long attained finality and the expropriated property has been utilized as a school site for five
(5) years now; yet, the awarded just compensation has not been fully paid. These circumstances,
in the Court’s estimation, merit the relaxation of the technical rules of procedure to ensure that
substantial justice will be served.
Concerning petitioner’s alleged failure to implead the CSB or its new members before the trial
court,54 respondents argue that since there are five (5) new members in the CSB any decision in
the case requiring the CSB to act as a body would prove to be legally impossible. The former
members of the CSB could no longer be compelled to act according to the orders of the Court
since they no longer have the capacity to do so. On the other hand, respondents continue, the
new members cannot be directed to comply with the Court’s judgment either; they have never
been impleaded in the case; thus, the Court never acquired jurisdiction over their persons.55
The arguments were effectively neutered in our Resolution dated 8 August 2005. There, we
declared:
Considering the arguments posited by both parties, this Court is of the view that a substitution of
the original respondents by the members of the CSB who replaced them is warranted. The phrase
"or such time as may be granted by the Court" in Sec. 17, Rule 3 of the 1997 Rules of Civil
Procedure denotes that the Court before whom the motion for substitution is filed may grant a
period longer than thirty (30) days for the purpose. In any event, technical rules on substitution of
a party should not be so narrowly construed as to prevent this Court from taking cognizance of a
case and deciding it on the merits. Moreover, petitioner did make an attempt to implead the new
members of the CSB by making the CSB itself a respondent before this Court. There is also no
showing that the new members of the CSB have deviated from the stand of their
predecessors-in-interest; hence, there is a substantial need for continuing or maintaining
petitioner’s action against them.56
In the same Resolution, the Court ordered the impleading of the new CSB members Roger Gernale,
Manuel M. Zarcal, Benjamin Valbuena and Francesca Gernale as party respondents—the last three
in substitution of Arlene Ortiz, Percival Floriendo, Miles Roces—and the new CSB Assistant
Secretary Vicente Macarubbo in substitution of Isabelita Ching.57 Only Manuel Zarcal filed a
Comment58 dated 30 August 2005 through a new counsel, adopting in toto the comment of his
co-respondents. Hence, the other four newly impleaded party respondents are deemed to have
retained the Office of the City Legal Officer (OCLO) as their counsel and to have adopted the
Comment already filed by the OCLO in behalf of their co-respondents.
Thus, the proper substitutions of some party respondents have already taken place in this case.
The last procedural hurdle thrown petitioner’s way by respondents refers to the supposed failure
of the petition to comply with the requirements of Section 4, Rule 7 and Section 4, Rule 45 of the
1997 Rules of Civil Procedure59 as amended by Supreme Court Circular A.M. No. 00-2-10-SC.60
Respondents claim that there was failure to include a verified statement indicating the material
dates relative to the receipt of the judgments and the filing of the pleadings. The verification,
moreover, allegedly failed to state that petitioner has read the petition61 and that the copies
attached thereto are based on authentic records.62 The defects of the verification allegedly
render the petition without legal effect and constitute grounds for its dismissal.
The purpose of requiring a verification is to secure an assurance that the allegations of the
petition have been made in good faith; or are true and correct, not merely speculative.63 This
requirement is simply a condition affecting the form of pleadings and non-compliance therewith
does not necessarily render it fatally defective.64 Perusal of the verification in question shows
that there was sufficient compliance with the requirements of the Rules and the alleged defects
are not so material as to justify the dismissal of the petition.
Now, the substantial issues.
Up for determination is the tenability of the RTC’s favorable action on respondents’ petition for
relief from judgment. This engenders a look at the grounds and defenses relied upon by
respondents in support of their petition. Sections 2 and 3, Rule 38 of the 1997 Rules of Civil
Procedure provide that a petition for relief may be granted upon a showing that (1) through fraud,
accident, mistake or excusable negligence, a party has been prevented from taking an appeal,
and (2) the party has a good and substantial cause of action or defense.
The above requisites notwithstanding, it bears stressing that relief from judgment is premised on
equity. It is an act of grace which is allowed only in exceptional cases.65
In this case, according to respondents they were unable to seasonably file a notice of appeal due
to "excusable negligence."66 One Ronald Silva (Silva), an employee of the OCLO, allegedly failed
to forward the Order denying respondents’ motion for reconsideration in Civil Case No. 02-103748
to the handling lawyers. When the order was delivered to the OCLO on 17 December 2002,67 Silva
was the one who received it because the employee designated to do so was out on official
business.68 Since the employees were busy preparing for the office Christmas party that day,69
Silva forgot all about the order. He only remembered it when the order for entry of judgment in
the case was received on 29 January 2003. By that time, however, the order dated 17 December
2002 had already been misplaced.70
Clearly, the situation does not present a case of excusable negligence which would warrant relief
under Rule 38. Time and again, this Court has ruled that the inability to perfect an appeal in due
time by reason of failure of a counsel’s clerk to notify the handling lawyer is not a pardonable
oversight.71 As held in one case:
. . . The excuse offered by respondent . . . as reason for his failure to perfect in due time his
appeal from the judgment of the Municipal Court, that counsel’s clerk forgot to hand him the
court notice, is the most hackneyed and habitual subterfuge employed by litigants who fail to
observe the procedural requirements prescribed by the Rules of Court. The uncritical acceptance
of this kind of common-place excuses, in the face of the Supreme Court’s repeated rulings that
they are neither credible nor constitutive of excusable negligence (Gaerlan v. Bernal, L-4039, 29
January 1952; Mercado v. Judge Domingo, L-19457, 17 December 1966) is certainly such
whimsical exercise of judgment as to be a grave abuse of discretion.
....
In the face of all these facts and circumstances, . . . the respondent judge revealed a
simple-minded willingness to swallow a story patently concocted to delay as much as possible the
satisfaction of a judgment against respondent . . . .This indiscriminating credulity does not
conform to what is to be expected of a judicial mind.72
Reiterated in numerous cases is the rule that the clerks’ faults are attributable to the handling
lawyers.73 Thus, excuses offered based on the former’s negligence are not deemed excusable.
That the admonitions issued out by this Court were mostly directed against lawyers in law firms
does not exempt respondents herein from the same treatment. For all intents and purposes, the
set-up at the OCLO is akin to that of a law firm, the only difference being that the former serves
a public entity while the latter caters to private clients. The following pronouncement in Negros
Stevedoring Co., Inc. v. Court of Appeals74 is apropos:
The negligence committed in the case at bar cannot be considered excusable, nor is it
unavoidable. Time and again, the Court has admonished law firms to adopt a system of
distributing pleadings and notices, whereby lawyers working therein receive promptly notices and
pleadings intended for them, so that they will always be informed of the status of their cases. The
Court has also often repeated that the negligence of clerks which adversely affect the cases
handled by lawyers is binding upon the latter.75
Without doubt, it was grave abuse of discretion for the lower court to have given due course to
respondents’ appeal through the grant of their petition for relief from judgment based on the
flimsy ground they proferred.
Even assuming that the negligence invoked by respondents could be considered excusable, still
the petition should not have been granted. It must be borne in mind that two requisites must be
satisfied before a petition under Rule 38 may be granted, the other being the existence of a good
and substantial cause of action or defense.
Respondents’ defense consisted of their claim that the CSB has a personality separate and distinct
from the City such that it should not be made to pay for the City’s obligations.76 However, the
argument is undercut by the particular circumstances of this case.
It is worthy of note that the records of this case clearly show that the same counsel, the OCLO,
represented the City in the expropriation case and now, all except one of the individual
respondents in the case at bar. Worthy of note are the following manifestations relied upon by
the lower court in issuing the order on the motion to quash the Notice of Garnishment over the
funds of the City, to wit:
The Motion to Quash Notice of Garnishment was heard by this court this morning and Atty. Joseph
Aquino appeared for the plaintiff (City of Manila) and Atty. Federico Alday, for the defendant.
Atty. Aquino manifested that the amount of Thirty Six Million Four Hundred Three Thousand One
Hundred Seventy Pesos (₱36,403,170.00) had been appropriated by the City School Board (CSB)
under CSB Resolution Nos. 613 and 623 for this purpose.
....
Upon manifestation of the counsel for the plaintiff that it is the City School Board which has the
authority to pass a resolution allocating funds for the full satisfaction of the just compensation
fixed, the said body is hereby given thirty (30) days from receipt of this Order to pass the
necessary resolution for the payments of the remaining balance due to defendant Teresita M.
Yujuico. (Emphasis supplied.)77
The manifestation was made by the same counsel now claiming that it is actually the City which
should be made liable for the payment of its own obligations. This, after it trotted out the CSB as
the entity with authority to pass a resolution that would satisfy the obligation it had vigorously
pursued.
The above circumstances, coupled with the rule that an act performed by counsel within the
scope of a "general or implied authority" is regarded as an act of the client,78 render the City and,
through it, respondents in estoppel. By estoppel is meant that an admission or representation is
rendered conclusive upon the person making it and cannot be denied or disproved as against the
person relying thereon.79 Petitioner and the courts acted in accordance with the City’s own
manifestations by running after the CSB. At this point, respondents and the OCLO can no longer
turn around and toss the obligation back to the City. After all, it was the legal counsel of both the
City and respondents who made a big production out of showing that the liability incurred by the
City will be borne by the CSB.
Contrary to respondents’ claim, the law does not make the CSB an entity independent from the
City of Manila. This is evident from the provisions of the Local Government Code of 1991, the law
providing for the creation of school boards. It states:
TITLE IV.- LOCAL SCHOOL BOARDS
Section 98. Creation, Composition and Compensation.-
(a) There shall be established in every province, city or municipality a provincial, city, or
municipal school board, respectively.
(b) The composition of local school boards shall be as follows:
...
(2) The city school board shall be composed of the city mayor and the city superintendent of
schools as co-chairmen; the chairman of the education committee of the sangguniang panlungsod,
the city treasurer, the representative of the "pederasyon ng mga sangguniang kabataan" in the
sangguniang panlungsod, the duly elected president of the city federation of parents-teachers
associations, the duly elected representative of the non-academic personnel of public schools in
the city, as members;
...
Section 101. Compensation and Remuneration.-
The co-chairmen and members of the provincial, city or municipal school board shall perform
their duties as such without compensation or remuneration. Members thereof who are not
government officials or employees shall be entitled to traveling expenses and allowances
chargeable against the funds of the local school board concerned, subject to existing accounting
and auditing rules and regulations.80
The fact that the highest ranking official of a local government unit (LGU) is designated as
co-chairman of the school board negates the claim in this case that the CSB has a personality
separate and distinct from the City. The other fact that government officials in the school board
do not receive any compensation or remuneration while NGO representatives merely receive
allowances underscores the absurdity of respondents’ argument all the more. Indeed, such would
not be the situation if the school board has a personality separate and distinct from the LGU.
Respondents also argue that the members of the CSB cannot be directed to decide a discretionary
function in the specific manner the court desires.81 The question of whether the enactment of an
ordinance to satisfy the appropriation of a final money judgment rendered against an LGU may be
compelled by mandamus has already been settled in Municipality of Makati v. Court of Appeals.82
Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse.
Where a municipality fails or refuses, without justifiable reason, to effect payment of a final
money judgment rendered against it, the claimant may avail of the remedy of mandamus in order
to compel the enactment and approval of the necessary appropriation ordinance, and the
corresponding disbursement of municipal funds therefore [See Viuda De Tan Toco v. The
Municipal Council of Iloilo, supra, Baldivia v. Lota, 107 Phil 1099 (1960); Yuviengco v. Gonzales,
108 Phil 247 (1960)].83
Clearly, mandamus is a remedy available to a property owner when a money judgment is

rendered in its favor and against a municipality or city, as in this case.
Moreover, the very ordinance authorizing the expropriation of petitioner’s property categorically
states that the payment of the expropriated property will be defrayed from the SEF. To quote:
An amount not to exceed the current fair market value, prevailing in the area appraised in
accordance with the requirements of existing laws, rules and regulations, of the property to be
acquired or so much thereof as may be necessary for the purpose shall be allocated out of the
Special Education Fund of the City to defray the cost of acquisition of the above-mentioned
parcels of land.84
The legality of the above-quoted provision is presumed. The source of the amount necessary to
acquire petitioner’s property having in fact been specified by the City Council of Manila, the
passage of the resolution for the allocation and disbursement thereof is indeed a ministerial duty
of the CSB.
Furthermore, respondents had argued in the petition for contempt filed against them by
petitioner that the latter’s failure to invoke the proper remedy of mandamus should not be a
ground to penalize them with contempt. In their haste to have the contempt petition dismissed,
respondents consistently contended that what petitioner should have filed was a case for
mandamus to compel passage of the corresponding resolution of the CSB if she wanted immediate
payment.85 Having relied on these representations of respondents and having filed the action
they adverted to, petitioner cannot now be sent by respondents on another wild goose chase to
obtain ultimate recovery of what she is legally entitled to.
While this Court recognizes the power of LGU to expropriate private property for public use, it
will not stand idly by while the expropriating authority maneuvers to evade the payment of just
compensation of property already in its possession.
The notion of expropriation is hard enough to take for a private owner. He is compelled to give up
his property for the common weal. But to give it up and wait in vain for the just compensation
decreed by the courts is too much to bear. In cases like these, courts will not hesitate to step in to
ensure that justice and fair play are served. As we have already ruled:
. . . This Court will not condone petitioner’s blatant refusal to settle its legal obligation arising
from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that within
the context of the State’s inherent power of eminent domain,
. . . (j)ust compensation means not only the correct determination of the amount to be paid to
the owner of the land but also the payment of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered ‘just’ for the property owner is
made to suffer the consequence of being immediately deprived of his land while being made to
wait for a decade or more before actually receiving the amount necessary to cope with his loss
(Consculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15, 1988, 164 SCRA 393,
400. See also Provincial Government of Sorsogon v. Vda. De Villaroya, G.R. No. 64037, August 27,
1987, 153 SCRA 291).86
The decision rendering just compensation in petitioner’s favor was promulgated way back in the
year 2000.87 Five years have passed, yet the award still has not been fully satisfied. Recently, in
Republic v. Lim,88 this Court made the following pronouncement:
. . . while the prevailing doctrine is that the non-payment of just compensation does not entitle
the private landowner to recover possession of the expropriated lots, however, in cases where
the government failed to pay just compensation within five (5) years from the finality of
judgment in the expropriation proceedings, the owners concerned shall have the right to recover
possession of their property. This is in consonance with the principle that ‘the government cannot
keep the property and dishonor the judgment.’ To be sure, the five-year period limitation will
encourage the government to pay just compensation punctually. This is in keeping with justice
and equity. After all, it is the duty of the government, whenever it takes property from private
persons against their will, to facilitate the payment of just compensation.89 (Citations omitted)
Given the above ruling, the reversion of the expropriated property to the petitioner would prove
not to be a remote prospect should respondents and the City they represent insist on trudging on
their intransigent course.
One final note. Respondents’ appeal from the Decision dated 9 October 2002 of the lower court,
made possible by its grant of their petition for relief, is before the Court of Appeals where it is
docketed as CA-G.R. No. 86692.90 The court’s Decision in this case would have obvious
consequences on said appeal; hence, referral of this Decision to the Court of Appeals is in order.
WHEREFORE, the petition is GRANTED. The Order of the trial court dated 25 June 2004, granting
respondents’ Petition for Relief from Judgment is REVERSED and set aside and its Decision dated 9
October 2002, ordering respondents to immediately pass a resolution for the payment of the
balance of the court-adjudged compensation due petitioner, is reinstated.
Let a copy of this Decision be furnished the Court of Appeals for its information and guidance in
relation to CA-G.R. No. 86692 entitled "Teresita M. Yujuico v. Hon. Jose L. Atienza, Jr., et al."
SO ORDERED.
G.R. No. 133876 December 29, 1999

BANK OF AMERICA, NT and SA, petitioner,
vs.
AMERICAN REALTY CORPORATION and COURT OF APPEALS, respondents.
ase Nature : PETITION for review on certiorari of a

decision of the Court of Appeals.
Syllabi Class : Civil
Law|Contracts|Mortgages|Conflict of Laws
Syllabi:
1. Civil Law; Contracts; Mortgages; Remedies
available to the mortgage creditor are deemed
alternative and not cumulative.-
In our jurisdiction, the remedies available to the
mortgage creditor are deemed alternative and not
cumulative. Notably, an election of one remedy
operates as a waiver of the other. For this purpose, a
remedy is deemed chosen upon the filing of the suit
for collection or upon the filing of the complaint in an
action for foreclosure of mortgage, pursuant to the
provision of Rule 68 of the 1997 Rules of Civil
Procedure. As to extrajudicial foreclosure, such
remedy is deemed elected by the mortgage creditor
upon filing of the petition not with any court of
justice but with the Office of the Sheriff of the
province where the sale is to be made, in accordance
with the provisions of Act No. 3135, as amended by
Act No. 4118.
2. Civil Law; Contracts; Mortgages; Third person

who are not parties to a loan may secure the latter
by pledging or mortgaging their own property; There
is no legal provision nor jurisprudence in our
jurisdiction which makes a third person who secures
the fulfillment of another‟s obligation by mortgaging
his own property, to be solidarily bound with the
principal obligor.-
Private respondent ARC constituted real estate
mortgages over its properties as security for the
debt of the principal debtors. By doing so, private
respondent subjected itself to the liabilities of a third
party mortgagor. Under the law, third persons who
are not parties to a loan may secure the latter by
pledging or mortgaging their own property.
Notwithstanding, there is no legal provision nor
jurisprudence in our jurisdiction which makes a third
person who secures the fulfillment of another‟s
obligation by mortgaging his own property, to be
solidarily bound with the principal obligor. The
signatory to the principal contract—loan—remains to
be primarily bound. It is only upon default of the
latter that the creditor may have recourse on the
mortgagors by foreclosing the mortgaged properties
in lieu of an action for the recovery of the amount of
the loan.
3. Civil Law; Contracts; Mortgages; Filing of a

collection suit barred the foreclosure of the
mortgage.-
Petitioner‟s contention that the requisites of filing the
action for collection and rendition of final judgment
therein should concur, is untenable. Thus, in Cerna
vs. Court of Appeals, we agreed with the petitioner in
said case, that the filing of a collection suit barred
the foreclosure of the mortgage: “A mortgagee who
files a suit for collection abandons the remedy of
foreclosure of the chattel mortgage constituted over
the personal property as security for the debt or
value of the promissory note which he seeks to
recover in the said collection suit.” “x x x When the
mortgagee elects to file a suit for collection, not
foreclosure, thereby abandoning the chattel
mortgage as basis for relief, he clearly manifests his
lack of desire and interest to go after the mortgaged
property as security for the promissory note x x x.”
4. Civil Law; Contracts; Mortgages; The mere
act of filing of an ordinary action for collection
operates as a waiver of the mortgage-creditor‟s
remedy to foreclose the mortgage; No final
judgment in the collection is required for the rule on
waiver to apply.-
Contrary to petitioner‟s arguments, we therefore
reiterate the rule, for clarity and emphasis, that the
mere act of filing of an ordinary action for collection

operates as a waiver of the mortgage-creditor‟s
remedy to foreclose the mortgage. By the mere filing
of the ordinary action for collection against the
principal debtors, the petitioner in the present case
is deemed to have elected a remedy, as a result of
which a waiver of the other necessarily must arise.
Corollarily, no final judgment in the collection suit is
required for the rule on waiver to apply.
5. Civil Law; Conflict of Laws; In a long line of
decisions, the Court adopted the well-imbedded
principle in our jurisdiction that there is no judicial
notice of any foreign law; A foreign law must be
properly pleaded and proved as a fact.-
BANTSA alleges that under English Law, which
according to petitioner is the governing law with
regard to the principal agreements, the mortgagee
does not lose its security interest by simply filing civil
actions for sums of money. We rule in the negative.
This argument shows desperation on the part of
petitioner to rivet its crumbling cause. In the case at
bench, Philippine law shall apply notwithstanding the
evidence presented by petitioner to prove the
English law on the matter. In a long line of decisions,
this Court adopted the well-imbedded principle in
our jurisdiction that there is no judicial notice of any
foreign law. A foreign law must be properly pleaded
and proved as a fact. Thus, if the foreign law
involved is not properly pleaded and proved, our

courts will presume that the foreign law is the same
as our local or domestic or internal law. This is what
we refer to as the doctrine of processual
presumption.
6. Civil Law; Conflict of Laws; When the foreign
law, judgment or contract is contrary to a sound and
established public policy of the forum, the said
foreign law, judgment or order shall not be applied.-
In the instant case, assuming arguendo that the
English Law on the matter were properly pleaded
and proved in accordance with Section 24, Rule 132
of the Rules of Court and the jurisprudence laid down
in Yao Kee, et al. vs. Sy-Gonzales, said foreign law
would still not find applicability. Thus, when the
foreign law, judgment or contract is contrary to a
sound and established public policy of the forum, the
said foreign law, judgment or order shall not be
applied. Additionally, prohibitive laws concerning
persons, their acts or property, and those which
have for their object public order, public policy and
good customs shall not be rendered ineffective by
laws or judgments promulgated, or by
determinations or conventions agreed upon in a
foreign country. The public policy sought to be
protected in the instant case is the principle
imbedded in our jurisdiction proscribing the splitting
up of a single cause of action.
BUENA, J.:
Does a mortgage-creditor waive its remedy to foreclose the real estate mortgage constituted over
a third party mortgagor's property situated in the Philippines by filing an action for the collection
of the principal loan before foreign courts?
Sought to be reversed in the instant petition for review on certiorari under Rule 45 of the Rules of
Court are the decision 1 of public respondent Court of Appeals in CA G.R. CV No. 51094,
promulgated on 30 September 1997 and its resolution, 2 dated 22 May 1998, denying petitioner's
motion for reconsideration.
Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing institution
duly licensed to do business in the Philippines, organized and existing under and by virtue of the
laws of the State of California, United States of America while private respondent American
Realty Corporation (ARC) is a domestic corporation.
Bank of America International Limited (BAIL), on the other hand, is a limited liability company
organized and existing under the laws of England.
As borne by the records, BANTSA and BAIL on several occasions granted three major multi-million
United States (US) Dollar loans to the following corporate borrowers: (1) Liberian Transport
Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania Naviera S.A. (hereinafter
collectively referred to as "borrowers"), all of which are existing under and by virtue of the laws
of the Republic of Panama and are foreign affiliates of private
respondent. 3
Due to the default in the payment of the loan amortizations, BANTSA and the corporate borrowers
signed and entered into restructuring agreements. As additional security for the restructured
loans, private respondent ARC as third party mortgagor executed two real estate mortgages, 4
dated 17 February 1983 and 20 July 1984, over its parcels of land including improvements thereon,
located at Barrio Sto. Cristo, San Jose Del Monte, Bulacan, and which are covered by Transfer
Certificate of Title Nos. T-78759, T-78760, T-78761, T-78762 and T-78763.
Eventually, the corporate borrowers defaulted in the payment of the restructured loans
prompting petitioner BANTSA to file civil actions 5 before foreign courts for the collection of the
principal loan, to wit:
a) In England, in its High Court of Justice, Queen's Bench Division, Commercial Court (1992-Folio
No 2098) against Liberian Transport Navigation S.A., Eshley Compania Naviera S.A., El Challenger
S.A., Espriona Shipping Company S.A., Eddie Navigation Corp., S.A., Eduardo Katipunan Litonjua
and Aurelio Katipunan Litonjua on June 17, 1992.
b) In England, in its High Court of Justice, Queen's Bench Division, Commercial Court (1992-Folio
No. 2245) against El Challenger S.A., Espriona Shipping Company S.A., Eduardo Katipuan Litonjua
& Aurelio Katipunan Litonjua on July 2, 1992;
c) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4039 of 1992) against
Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company S.A. Pacific
Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co.,
Inc., Aurelio Katipunan Litonjua, Jr. and Eduardo Katipunan Litonjua on November 19, 1992; and
d) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4040 of 1992) against
Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company, S.A., Pacific
Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co., Jr.
and Eduardo Katipunan Litonjua on November 21, 1992.
In the civil suits instituted before the foreign courts, private respondent ARC, being a third party
mortgagor, was private not impleaded as party-defendant.
On 16 December 1992, petitioner BANTSA filed before the Office of the Provincial Sheriff of
Bulacan, Philippines an application for extrajudicial foreclosure 6 of real estate mortgage.
On 22 January 1993, after due publication and notice, the mortgaged real properties were sold at
public auction in an extrajudicial foreclosure sale, with Integrated Credit and Corporation
Services Co (ICCS) as the highest bidder for the sum of Twenty four Million Pesos (P24,000.000.00).
7
On 12 February 1993, private respondent filed before the Pasig Regional Trial Court, Branch 159,
an action for damages 8 against the petitioner, for the latter's act of foreclosing extrajudicially
the real estate mortgages despite the pendency of civil suits before foreign courts for the
collection of the principal loan.
In its answer 9 petitioner alleged that the rule prohibiting the mortgagee from foreclosing the
mortgage after an ordinary suit for collection has been filed, is not applicable in the present case,
claiming that:
a) The plaintiff, being a mere third party mortgagor and not a party to the principal
restructuring agreements, was never made a party defendant in the civil cases filed in Hongkong
and England;
b) There is actually no civil suit for sum of money filed in the Philippines since the civil actions
were filed in Hongkong and England. As such, any decisions (sic) which may be rendered in the
abovementioned courts are not (sic) enforceable in the Philippines unless a separate action to
enforce the foreign judgments is first filed in the Philippines, pursuant to Rule 39, Section 50 of
the Revised Rules of Court.
c) Under English Law, which is the governing law under the principal agreements, the mortgagee
does not lose its security interest by filing civil actions for sums of money.
On 14 December 1993, private respondent filed a motion for
suspension 10 of the redemption period on the ground that "it cannot exercise said right of
redemption without at the same time waiving or contradicting its contentions in the case that the
foreclosure of the mortgage on its properties is legally improper and therefore invalid."
In an order 11 dated 28 January 1994, the trial court granted the private respondent's motion for
suspension after which a copy of said order was duly received by the Register of Deeds of
Meycauayan, Bulacan.
On 07 February 1994, ICCS, the purchaser of the mortgaged properties at the foreclosure sale,
consolidated its ownership over the real properties, resulting to the issuance of Transfer
Certificate of Title Nos. T-18627, T-186272, T-186273, T-16471 and T-16472 in its name.
On 18 March 1994, after the consolidation of ownership in its favor, ICCS sold the real properties
to Stateland Investment Corporation for the amount of Thirty Nine Million Pesos (P39,000,000.00).
12 Accordingly, Transfer Certificate of Title Nos. T-187781(m), T-187782(m), T-187783(m),
T-16653P(m) and T-16652P(m) were issued in the latter's name.
After trial, the lower court rendered a decision 13 in favor of private respondent ARC dated 12
May 1993, the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered declaring that the filing in foreign courts by the
defendant of collection suits against the principal debtors operated as a waiver of the security of
the mortgages. Consequently, the plaintiff's rights as owner and possessor of the properties then
covered by Transfer Certificates of Title Nos. T-78759, T-78762, T-78763, T-78760 and T-78761,
all of the Register of Deeds of Meycauayan, Bulacan, Philippines, were violated when the
defendant caused the extrajudicial foreclosure of the mortgages constituted thereon.
Accordingly, the defendant is hereby ordered to pay the plaintiff the following sums, all with
legal interest thereon from the date of the filing of the complaint up to the date of actual
payment:
1) Actual or compensatory damages in the amount of Ninety Nine Million Pesos (P99,000,000.00);
2) Exemplary damages in the amount of Five Million Pesos (P5,000,000.00); and
3) Costs of suit.
SO ORDERED.
On appeal, the Court of Appeals affirmed the assailed decision of the lower court prompting
petitioner to file a motion for reconsideration which the appellate court denied.
Hence, the instant petition for review 14 on certiorari where herein petitioner BANTSA ascribes to
the Court of Appeals the following assignment of errors:
1. The Honorable Court of Appeals disregarded the doctrines laid down by this Hon. Supreme
Court in the cases of Caltex Philippines, Inc. vs. Intermediate Appellate Court docketed as G.R.
No. 74730 promulgated on August 25, 1989 and Philippine Commercial International Bank vs. IAC,
196 SCRA 29 (1991 case), although said cases were duly cited, extensively discussed and
specifically mentioned, as one of the issues in the assignment of errors found on page 5 of the
decision dated September 30, 1997.
2. The Hon. Court of Appeals acted with grave abuse of discretion when it awarded the private
respondent actual and exemplary damages totalling P171,600,000.00, as of July 12, 1998
although such huge amount was not asked nor prayed for in private respondent's complaint, is
contrary to law and is totally unsupported by evidence (sic).
In fine, this Court is called upon to resolve two main issues:
1. Whether or not the petitioner's act of filing a collection suit against the principal debtors for
the recovery of the loan before foreign courts constituted a waiver of the remedy of foreclosure.
2. Whether or not the award by the lower court of actual and exemplary damages in favor of
private respondent ARC, as third-party mortgagor, is proper.
The petition is bereft of merit.
First, as to the issue of availability of remedies, petitioner submits that a waiver of the remedy of
foreclosure requires the concurrence of two requisites: an ordinary civil action for collection
should be filed and subsequently a final judgment be correspondingly rendered therein.
According to petitioner, the mere filing of a personal action to collect the principal loan does not
suffice; a final judgment must be secured and obtained in the personal action so that waiver of
the remedy of foreclosure may be appreciated. To put it differently, absent any of the two
requisites, the mortgagee-creditor is deemed not to have waived the remedy of foreclosure.
We do not agree.
Certainly, this Court finds petitioner's arguments untenable and upholds the jurisprudence laid
down in Bachrach 15 and similar cases adjudicated thereafter, thus:
In the absence of express statutory provisions, a mortgage creditor may institute against the
mortgage debtor either a personal action or debt or a real action to foreclose the mortgage. In
other words, he may he may pursue either of the two remedies, but not both. By such election,
his cause of action can by no means be impaired, for each of the two remedies is complete in
itself. Thus, an election to bring a personal action will leave open to him all the properties of the
debtor for attachment and execution, even including the mortgaged property itself. And, if he
waives such personal action and pursues his remedy against the mortgaged property, an
unsatisfied judgment thereon would still give him the right to sue for a deficiency judgment, in
which case, all the properties of the defendant, other than the mortgaged property, are again
open to him for the satisfaction of the deficiency. In either case, his remedy is complete, his
cause of action undiminished, and any advantages attendant to the pursuit of one or the other
remedy are purely accidental and are all under his right of election. On the other hand, a rule
that would authorize the plaintiff to bring a personal action against the debtor and
simultaneously or successively another action against the mortgaged property, would result not
only in multiplicity of suits so offensive to justice (Soriano vs. Enriques, 24 Phil. 584) and
obnoxious to law and equity (Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting the
defendant to the vexation of being sued in the place of his residence or of the residence of the
plaintiff, and then again in the place where the property lies.
In Danao vs. Court of Appeals, 16 this Court, reiterating jurisprudence enunciated in Manila
Trading and Supply Co vs. Co Kim 17 and Movido vs.
RFC, 18 invariably held:
. . . The rule is now settled that a mortgage creditor may elect to waive his security and bring,
instead, an ordinary action to recover the indebtedness with the right to execute a judgment
thereon on all the properties of the debtor, including the subject matter of the mortgage . . . ,
subject to the qualification that if he fails in the remedy by him elected, he cannot pursue further
the remedy he has waived. (Emphasis Ours)
Anent real properties in particular, the Court has laid down the rule that a mortgage creditor may
institute against the mortgage debtor either a personal action for debt or a real action to
foreclose the mortgage. 19
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and
not cumulative. Notably, an election of one remedy operates as a waiver of the other. For this
purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon the filing of
the complaint in an action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the
of the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such remedy is deemed
elected by the mortgage creditor upon filing of the petition not with any court of justice but with
the Office of the Sheriff of the province where the sale is to be made, in accordance with the
provisions of Act No. 3135, as amended by Act No. 4118.
In the case at bench, private respondent ARC constituted real estate mortgages over its
properties as security for the debt of the principal debtors. By doing so, private respondent
subjected itself to the liabilities of a third party mortgagor. Under the law, third persons who are
not parties to a loan may secure the latter by pledging or mortgaging their own property. 20
Notwithstanding, there is no legal provision nor jurisprudence in our jurisdiction which makes a
third person who secures the fulfillment of another's obligation by mortgaging his own property,
to be solidarily bound with the principal obligor. The signatory to the principal
contract—loan—remains to be primarily bound. It is only upon default of the latter that the
creditor may have recourse on the mortgagors by foreclosing the mortgaged properties in lieu of
an action for the recovery of the amount of the loan. 21
In the instant case, petitioner's contention that the requisites of filing the action for collection
and rendition of final judgment therein should concur, is untenable.
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner in said case, that the filing
of a collection suit barred the foreclosure of the mortgage:
A mortgagee who files a suit for collection abandons the remedy of foreclosure of the chattel
mortgage constituted over the personal property as security for the debt or value of the
promissory note when he seeks to recover in the said collection suit.
. . . When the mortgagee elects to file a suit for collection, not foreclosure, thereby abandoning
the chattel mortgage as basis for relief, he clearly manifests his lack of desire and interest to go
after the mortgaged property as security for the promissory note . . . .
Contrary to petitioner's arguments, we therefore reiterate the rule, for clarity and emphasis, that
the mere act of filing of an ordinary action for collection operates as a waiver of the
mortgage-creditor's remedy to foreclose the mortgage. By the mere filing of the ordinary action
for collection against the principal debtors, the petitioner in the present case is deemed to have
elected a remedy, as a result of which a waiver of the other necessarily must arise. Corollarily, no
final judgment in the collection suit is required for the rule on waiver to apply.
Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate Court, 23 a case relied upon by
petitioner, supposedly to buttress its contention, this Court had occasion to rule that the mere
act of filing a collection suit for the recovery of a debt secured by a mortgage constitutes waiver
of the other remedy of foreclosure.
In the case at bar, petitioner BANTSA only has one cause of action which is non-payment of the
debt. Nevertheless, alternative remedies are available for its enjoyment and exercise. Petitioner
then may opt to exercise only one of two remedies so as not to violate the rule against splitting a
cause of action.
As elucidated by this Court in the landmark case of Bachrach Motor Co., Inc, vs. Icarangal. 24
For non-payment of a note secured by mortgage, the creditor has a single cause of action against
the debtor. This single cause of action consists in the recovery of the credit with execution of the
security. In other words, the creditor in his action may make two demands, the payment of the
debt and the foreclosure of his mortgage. But both demands arise from the same cause, the
non-payment of the debt, and for that reason, they constitute a single cause of action. Though
the debt and the mortgage constitute separate agreements, the latter is subsidiary to the former,
and both refer to one and the same obligation. Consequently, there exists only one cause of
action for a single breach of that obligation. Plaintiff, then, by applying the rules above stated,
cannot split up his single cause of action by filing a complaint for payment of the debt, and
thereafter another complaint for foreclosure of the mortgage. If he does so, the filing of the first
complaint will bar the subsequent complaint. By allowing the creditor to file two separate
complaints simultaneously or successively, one to recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at
so much cost to the courts and with so much vexation and oppression to the debtor.
Petitioner further faults the Court of Appeals for allegedly disregarding the doctrine enunciated
in Caltex wherein this High Court relaxed the application of the general rules to wit:
In the present case, however, we shall not follow this rule to the letter but declare that it is the
collection suit which was waived and/or abandoned. This ruling is more in harmony with the
principles underlying our judicial system. It is of no moment that the collection suit was filed
ahead, what is determinative is the fact that the foreclosure proceedings ended even before the
decision in the collection suit was rendered. . . .
Notably, though, petitioner took the Caltex ruling out of context. We must stress that the Caltex
case was never intended to overrule the well-entrenched doctrine enunciated Bachrach, which to
our mind still finds applicability in cases of this sort. To reiterate, Bachrach is still good law.
We then quote the decision 25 of the trial court, in the present case, thus:
The aforequoted ruling in Caltex is the exception rather than the rule, dictated by the peculiar
circumstances obtaining therein. In the said case, the Supreme Court chastised Caltex for making
". . . a mockery of our judicial system when it initially filed a collection suit then, during the
pendency thereof, foreclosed extrajudicially the mortgaged property which secured the
indebtedness, and still pursued the collection suit to the end." Thus, to prevent a mockery of our
judicial system", the collection suit had to be nullified because the foreclosure proceedings have
already been pursued to their end and can no longer be undone.
xxx xxx xxx
In the case at bar, it has not been shown whether the defendant pursued to the end or are still
pursuing the collection suits filed in foreign courts. There is no occasion, therefore, for this court
to apply the exception laid down by the Supreme Court in Caltex by nullifying the collection suits.
Quite obviously, too, the aforesaid collection suits are beyond the reach of this Court. Thus the
only way the court may prevent the spector of a creditor having "plural redress for a single breach
of contract" is by holding, as the Court hereby holds, that the defendant has waived the right to
foreclose the mortgages constituted by the plaintiff on its properties originally covered by
Transfer Certificates of Title Nos. T-78759, T-78762, T-78760 and T-78761. (RTC Decision pp.,
10-11)
In this light, the actuations of Caltex are deserving of severe criticism, to say the least. 26
Moreover, petitioner attempts to mislead this Court by citing the case of PCIB vs. IAC. 27 Again,
petitioner tried to fit a square peg in a round hole. It must be stressed that far from overturning
the doctrine laid down in Bachrach, this Court in PCIB buttressed its firm stand on this issue by
declaring:
While the law allows a mortgage creditor to either institute a personal action for the debt or a
real action to foreclosure the mortgage, he cannot pursue both remedies simultaneously or
successively as was done by PCIB in this case.
xxx xxx xxx
Thus, when the PCIB filed Civil Case No. 29392 to enforce payment of the 1.3 million promissory
note secured by real estate mortgages and subsequently filed a petition for extrajudicial
foreclosure, it violates the rule against splitting a cause of action.
Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of filing
four civil suits before foreign courts, necessarily abandoned the remedy to foreclose the real
estate mortgages constituted over the properties of third-party mortgagor and herein private
respondent ARC. Moreover, by filing the four civil actions and by eventually foreclosing
extrajudicially the mortgages, petitioner in effect transgressed the rules against splitting a cause
of action well-enshrined in jurisprudence and our statute books.
In Bachrach, this Court resolved to deny the creditor the remedy of foreclosure after the
collection suit was filed, considering that the creditor should not be afforded "plural redress for a
single breach of contract." For cause of action should not be confused with the remedy created
for its enforcement. 28
Notably, it is not the nature of the redress which is crucial but the efficacy of the remedy chosen
in addressing the creditor's cause. Hence, a suit brought before a foreign court having
competence and jurisdiction to entertain the action is deemed, for this purpose, to be within the
contemplation of the remedy available to the mortgagee-creditor. This pronouncement would
best serve the interest of justice and fair play and further discourage the noxious practice of
splitting up a lone cause of action.
Incidentally, BANTSA alleges that under English Law, which according to petitioner is the
governing law with regard to the principal agreements, the mortgagee does not lose its security
interest by simply filing civil actions for sums of money. 29
We rule in the negative.

This argument shows desperation on the part of petitioner to rivet its crumbling cause. In the case
at bench, Philippine law shall apply notwithstanding the evidence presented by petitioner to
prove the English law on the matter.
In a long line of decisions, this Court adopted the well-imbedded principle in our jurisdiction that
there is no judicial notice of any foreign law. A foreign law must be properly pleaded and proved
as a fact. 30 Thus, if the foreign law involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or domestic or internal
law. 31 This is what we refer to as the doctrine of processual presumption.
In the instant case, assuming arguendo that the English Law on the matter were properly pleaded
and proved in accordance with Section 24, Rule 132 of the Rules of Court and the jurisprudence
laid down in Yao Kee, et al. vs.
Sy-Gonzales, 32 said foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to a sound and established public
policy of the forum, the said foreign law, judgment or order shall not be applied. 33
Additionally, prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign
country. 34
The public policy sought to be protected in the instant case is the principle imbedded in our
jurisdiction proscribing the splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent —
If two or more suits are instituted on the basis of the same cause of action, the filing of one or a
judgment upon the merits in any one is available as a ground for the dismissal of the others.
Moreover, foreign law should not be applied when its application would work undeniable injustice
to the citizens or residents of the forum. To give justice is the most important function of law;
hence, a law, or judgment or contract that is obviously unjust negates the fundamental principles
of Conflict of Laws. 35
Clearly then, English Law is not applicable.
As to the second pivotal issue, we hold that the private respondent is entitled to the award of
actual or compensatory damages inasmuch as the act of petitioner BANTSA in extrajudicially
foreclosing the real estate mortgages constituted a clear violation of the rights of herein private
respondent ARC, as third-party mortgagor.
Actual or compensatory damages are those recoverable because of pecuniary loss in business,
trade, property, profession, job or occupation and the same must be proved, otherwise if the
proof is flimsy and non-substantial, no damages will be given. 36 Indeed, the question of the
value of property is always a difficult one to settle as valuation of real property is an imprecise
process since real estate has no inherent value readily ascertainable by an appraiser or by the
court. 37 The opinions of men vary so much concerning the real value of property that the best
the courts can do is hear all of the witnesses which the respective parties desire to present, and
then, by carefully weighing that testimony, arrive at a conclusion which is just and equitable. 38
In the instant case, petitioner assails the Court of Appeals for relying heavily on the valuation
made by Philippine Appraisal Company. In effect, BANTSA questions the act of the appellate court
in giving due weight to the appraisal report composed of twenty three pages, signed by Mr. Lauro
Marquez and submitted as evidence by private respondent. The appraisal report, as the records
would readily show, was corroborated by the testimony of Mr. Reynaldo Flores, witness for
private respondent.
On this matter, the trial court observed:
The record herein reveals that plaintiff-appellee formally offered as evidence the appraisal
report dated March 29, 1993 (Exhibit J, Records, p. 409), consisting of twenty three (23) pages
which set out in detail the valuation of the property to determine its fair market value (TSN, April
22, 1994, p. 4), in the amount of P99,986,592.00 (TSN, ibid., p. 5), together with the
corroborative testimony of one Mr. Reynaldo F. Flores, an appraiser and director of Philippine
Appraisal Company, Inc. (TSN, ibid., p. 3). The latter's testimony was subjected to extensive
cross-examination by counsel for defendant-appellant (TSN, April 22, 1994, pp. 6-22). 39
In the matter of credibility of witnesses, the Court reiterates the familiar and well-entrenched
rule that the factual findings of the trial court should be respected. 40 The time-tested
jurisprudence is that the findings and conclusions of the trial court on the credibility of witnesses
enjoy a badge of respect for the reason that trial courts have the advantage of observing the
demeanor of witnesses as they testify. 41
This Court will not alter the findings of the trial court on the credibility of witnesses, principally
because they are in a better position to assess the same than the appellate court. 42 Besides, trial
courts are in a better position to examine real evidence as well as observe the demeanor of
witnesses. 43
Similarly, the appreciation of evidence and the assessment of the credibility of witnesses rest
primarily with the trial court. 44 In the case at bar, we see no reason that would justify this Court
to disturb the factual findings of the trial court, as affirmed by the Court of Appeals, with regard
to the award of actual damages.
In arriving at the amount of actual damages, the trial court justified the award by presenting the
following ratiocination in its assailed decision 45, to wit:
Indeed, the Court has its own mind in the matter of valuation. The size of the subject real
properties are (sic) set forth in their individuals titles, and the Court itself has seen the character
and nature of said properties during the ocular inspection it conducted. Based principally on the
foregoing, the Court makes the following observations:
1. The properties consist of about 39 hectares in Bo. Sto. Cristo, San Jose del Monte, Bulacan,
which is (sic) not distant from Metro Manila — the biggest urban center in the Philippines — and
are easily accessible through well-paved roads;
2. The properties are suitable for development into a subdivision for low cost housing, as
admitted by defendant's own appraiser (TSN, May 30, 1994, p. 31);
3. The pigpens which used to exist in the property have already been demolished. Houses of
strong materials are found in the vicinity of the property (Exhs. 2, 2-1 to 2-7), and the vicinity is a
growing community. It has even been shown that the house of the Barangay Chairman is located
adjacent to the property in question (Exh. 27), and the only remaining piggery (named Cherry
Farm) in the vicinity is about 2 kilometers away from the western boundary of the property in
question (TSN, November 19, p. 3);
4. It will not be hard to find interested buyers of the property, as indubitably shown by the fact
that on March 18, 1994, ICCS (the buyer during the foreclosure sale) sold the consolidated real
estate properties to Stateland Investment Corporation, in whose favor new titles were issued, i.e.,
TCT Nos. T-187781(m); T-187782(m), T-187783(m); T-16653P(m) and T-166521(m) by the Register
of Deeds of Meycauayan (sic), Bulacan;
5. The fact that ICCS was able to sell the subject properties to Stateland Investment Corporation
for Thirty Nine Million (P39,000,000.00) Pesos, which is more than triple defendant's appraisal
(Exh. 2) clearly shows that the Court cannot rely on defendant's aforesaid estimate (Decision,
Records, p. 603).
It is a fundamental legal aphorism that the conclusions of the trial judge on the credibility of
witnesses command great respect and consideration especially when the conclusions are
supported by the evidence on record. 46 Applying the foregoing principle, we therefore hold that
the trial court committed no palpable error in giving credence to the testimony of Reynaldo
Flores, who according to the records, is a licensed real estate broker, appraiser and director of
Philippine Appraisal Company, Inc. since 1990. 47 As the records show, Flores had been with the
company for 26 years at the time of his testimony.
Of equal importance is the fact that the trial court did not confine itself to the appraisal report
dated 29 March 1993, and the testimony given by Mr. Reynaldo Flores, in determining the fair
market value of the real property. Above all these, the record would likewise show that the trial
judge in order to appraise himself of the characteristics and condition of the property, conducted
an ocular inspection where the opposing parties appeared and were duly represented.
Based on these considerations and the evidence submitted, we affirm the ruling of the trial court
as regards the valuation of the property —
. . . a valuation of Ninety Nine Million Pesos (P99,000,000.00) for the 39-hectare properties (sic)
translates to just about Two Hundred Fifty Four Pesos (P254.00) per square meter. This appears
to be, as the court so holds, a better approximation of the fair market value of the subject
properties. This is the amount which should be restituted by the defendant to the plaintiff by way
of actual or compensatory damages . . . . 48
Further, petitioner ascribes error to the lower court awarding an amount allegedly not asked nor
prayed for in private respondent's complaint.
Notwithstanding the fact that the award of actual and compensatory damages by the lower court
exceeded that prayed for in the complaint, the same is nonetheless valid, subject to certain
qualifications.
On this issue, Rule 10, Section 5 of the Rules of Court is pertinent:
Sec. 5. Amendment to conform to or authorize presentation of evidence. — When issues not

raised by the pleadings are tried with the express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the evidence and to raise these issues
may be made upon motion of any party at any time, even after judgement; but failure to amend
does not affect the result of the trial of these issues. If evidence is objected to at the trial on the
ground that it is not within the issues made by the pleadings, the court may allow the pleadings to
be amended and shall do so with liberality if the presentation of the merits of the action and the
ends of substantial justice will be subserved thereby. The court may grant a continuance to
enable the amendment to be made.
The jurisprudence enunciated in Talisay-Silay Milling Co., Inc. vs. Asociacion de Agricultures de
Talisay-Silay, Inc. 49 citing Northern Cement Corporation vs. Intermediate Appellate Court 50 is
enlightening:
There have been instances where the Court has held that even without the necessary amendment,
the amount proved at the trial may be validly awarded, as in Tuazon v. Bolanos (95 Phil. 106),
where we said that if the facts shown entitled plaintiff to relief other than that asked for, no
amendment to the complaint was necessary, especially where defendant had himself raised the
point on which recovery was based. The appellate court could treat the pleading as amended to
conform to the evidence although the pleadings were actually not amended. Amendment is also
unnecessary when only clerical error or non substantial matters are involved, as we held in Bank
of the Philippine Islands vs. Laguna (48 Phil. 5). In Co Tiamco vs. Diaz (75 Phil. 672), we stressed
that the rule on amendment need not be applied rigidly, particularly where no surprise or
prejudice is caused the objecting party. And in the recent case of National Power Corporation vs.
Court of Appeals (113 SCRA 556), we held that where there is a variance in the defendant's
pleadings and the evidence adduced by it at the trial, the Court may treat the pleading as
amended to conform with the evidence.
It is the view of the Court that pursuant to the above-mentioned rule and in light of the decisions
cited, the trial court should not be precluded from awarding an amount higher than that claimed
in the pleading notwithstanding the absence of the required amendment. But it is upon the
condition that the evidence of such higher amount has been presented properly, with full
opportunity on the part of the opposing parties to support their respective contentions and to
refute each other's evidence.
The failure of a party to amend a pleading to conform to the evidence adduced during trial does
not preclude an adjudication by the court on the basis of such evidence which may embody new
issues not raised in the pleadings, or serve as a basis for a higher award of damages. Although the
pleading may not have been amended to conform to the evidence submitted during trial,
judgment may nonetheless be rendered, not simply on the basis of the issues alleged but also the
basis of issues discussed and the assertions of fact proved in the course of trial. The court may
treat the pleading as if it had been amended to conform to the evidence, although it had not been
actually so amended. Former Chief Justice Moran put the matter in this way:
When evidence is presented by one party, with the expressed or implied consent of the adverse
party, as to issues not alleged in the pleadings, judgment may be rendered validly as regards
those issues, which shall be considered as if they have been raised in the pleadings. There is
implied consent to the evidence thus presented when the adverse party fails to object thereto.
Clearly, a court may rule and render judgment on the basis of the evidence before it even though
the relevant pleading had not been previously amended, so long as no surprise or prejudice is
thereby caused to the adverse party. Put a little differently, so long as the basis requirements of
fair play had been met, as where litigants were given full opportunity to support their respective
contentions and to object to or refute each other's evidence, the court may validly treat the
pleadings as if they had been amended to conform to the evidence and proceed to adjudicate on
the basis of all the evidence before it.
In the instant case, inasmuch as the petitioner was afforded the opportunity to refute and object
to the evidence, both documentary and testimonial, formally offered by private respondent, the
rudiments of fair play are deemed satisfied. In fact, the testimony of Reynaldo Flores was put
under scrutiny during the course of the cross-examination. Under these circumstances, the court
acted within the bounds of its jurisdiction and committed no reversible error in awarding actual
damages the amount of which is higher than that prayed for. Verily, the lower court's actuations
are sanctioned by the Rules and supported by jurisprudence.
Similarly, we affirm the grant of exemplary damages although the amount of Five Million Pesos
(P5,000,000.00) awarded, being excessive, is subject to reduction. Exemplary or corrective
damages are imposed, by way of example or correction for the public good, in addition to the
moral, temperate, liquidated or compensatory damages. 51 Considering its purpose, it must be
fair and reasonable in every case and should not be awarded to unjustly enrich a prevailing party.
52 In our view, an award of P50,000.00 as exemplary damages in the present case qualifies the
test of reasonableness.
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The decision
of the Court of Appeals is hereby AFFIRMED with MODIFICATION of the amount awarded as
exemplary damages. According, petitioner is hereby ordered to pay private respondent the sum
of P99,000,000.00 as actual or compensatory damages; P50,000.00 as exemplary damage and the
costs of suit.
SO ORDERED.
G.R. No. 176492 October 20, 2014

MARIETTA N. BARRIDO, Petitioner,
vs.
LEONARDO V. NONATO, Respondent.

the decision and resolution of the Court of Appeals.
Syllabi Class : Remedial Law ; Evidence ;
Documentary Evidence ; Private Documents ;
Syllabi:
1. Remedial Law; Evidence; Documentary
Evidence; Private Documents; Without the
notarial seal, a document remains to be private and
cannot be converted into a public document, making
it inadmissible in evidence unless properly
authenticated.-
—It must be noted that without the notarial seal, a
document remains to be private and cannot be
converted into a public document, making it
inadmissible in evidence unless properly
authenticated. Unfortunately, Barrido failed to prove
its due execution and authenticity. In fact, she
merely annexed said Deed of Sale to her position
paper. Therefore, the subject property remains to be
owned in common by Nonato and Barrido, which
should be divided in accordance with the rules on
co-ownership.
2. Civil Law; Property Regimes of Void

Marriages; Under this property regime, property
acquired by both spouses through their work and
industry shall be governed by the rules on equal
co-ownership. Any property acquired during the
union is prima facie presumed to have been obtained
through their joint efforts. A party who did not
participate in the acquisition of the property shall be
considered as having contributed to the same jointly
if said party‟s efforts consisted in the care and
maintenance of the family household.-
—The records reveal that Nonato and Barrido‟s
marriage had been declared void for psychological
incapacity under Article 36 of the Family Code.
During their marriage, however, the conjugal
partnership regime governed their property relations.
Although Article 129 provides for the procedure in
case of dissolution of the conjugal partnership
regime, Article 147 specifically covers the effects of
void marriages on the spouses‟ property relations. x
x x This particular kind of co-ownership applies when
a man and a woman, suffering no illegal impediment
to marry each other, exclusively live together as
husband and wife under a void marriage or without
the benefit of marriage. It is clear, therefore, that for
Article 147 to operate, the man and the woman: (1)
must be capacitated to marry each other; (2) live
exclusively with each other as husband and wife;
and (3) their union is without the benefit of marriage

or their marriage is void. Here, all these elements
are present. The term “capacitated” in the first
paragraph of the provision pertains to the legal
capacity of a party to contract marriage. Any
impediment to marry has not been shown to have
existed on the part of either Nonato or Barrido. They
lived exclusively with each other as husband and
wife. However, their marriage was found to be void
under Article 36 of the Family Code on the ground of
psychological incapacity. Under this property regime,
property acquired by both spouses through their
work and industry shall be governed by the rules on
equal co-ownership. Any property acquired during
the union is prima facie presumed to have been
obtained through their joint efforts. A party who did
not participate in the acquisition of the property shall
be considered as having contributed to the same
jointly if said party‟s efforts consisted in the care and
maintenance of the family household. Efforts in the
care and maintenance of the family and household
are regarded as contributions to the acquisition of
common property by one who has no salary or
income or work or industry.
Division: THIRD DIVISION.
DECISION
PERALTA, J.:
For the Court's resolution is a Petition for Review filed by petitioner Marietta N. Barrido
questioning the Decision1 of the Court of Appeals (CA), dated November 16, 2006, and its
Resolution2 dated January 24, 2007 in CA-G.R. SP No. 00235. The CA affirmed the Decision3 of the
Regional Trial Court (RTC) ofBacolod City, Branch 53, dated July 21, 2004, in Civil Case No.
03-12123, which ordered the partition of the subject property.
The facts, as culled from the records, are as follows: In the course of the marriage of respondent
Leonardo V. Nonato and petitioner Marietta N. Barrido,they were able to acquire a property
situated in Eroreco, Bacolod City, consisting ofa house and lot, covered by Transfer Certificate of
Title (TCT) No. T-140361. On March 15, 1996, their marriage was declared void on the ground of
psychological incapacity. Since there was no more reason to maintain their co-ownership over the
property, Nonato asked Barrido for partition, but the latter refused. Thus, on January 29, 2003,
Nonato filed a Complaint for partition before the Municipal Trial Court in Cities (MTCC) of Bacolod
City, Branch 3.
Barrido claimed, by way of affirmative defense, that the subject property had already been sold
to their children, Joseph Raymund and Joseph Leo. She likewise moved for the dismissal of the
complaint because the MTCC lacked jurisdiction, the partition case being an action incapable of
pecuniary estimation.
The Bacolod MTCC rendered a Decision dated September 17, 2003, applying Article 129 of the
Family Code. It ruled in this wise:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered, ordering the conjugal

property of the former Spouses Leonardo and Marietta Nonato, a house and lot covered by TCT No.
T-140361 located at Eroreco, Bacolod City, which was their conjugal dwelling, adjudicated to the
defendant Marietta Nonato, the spouse with whom the majority of the common children choose
to remain.
Furthermore, defendant’s counterclaim is hereby granted, ordering plaintiff to pay defendant

₱10,000.00 as moral damages for the mental anguish and unnecessary inconvenience brought
about by this suit; and an additional ₱10,000.00 as exemplary damages to deter others from
following suit; and attorney’s fees of ₱2,000.00 and litigation expenses of ₱575.00.
SO ORDERED.4
Nonato appealed the MTCC Decision before the RTC. On July 21, 2004, the Bacolod RTC reversed
the ruling of the MTCC. It found that even though the MTCC aptly applied Article 129 of the Family
Code, it nevertheless made a reversible error in adjudicating the subject property to Barrido. Its
WHEREFORE, premises considered, the decision dated September 17, 2003 is hereby REVERSED
and SET ASIDE and a new judgment is hereby rendered ordering the parties:
(1) to equitably partition the house and lot covered by TCT No. T-140361;
(2) to reimburse Joseph Raymund and Joseph Leo Nonato of the amount advanced by them in
payment of the debts and obligation of TCT No. T-140361 with Philippine National Bank;
(3) to deliver the presumptive legitimes of Joseph Raymund and Joseph Leo Nonato pursuant to
Article 51 of the Family Code.
SO ORDERED.5
Upon appeal, the CA affirmed the RTC Decision on November 16, 2006. It held that since the
property’s assessed value was only ₱8,080.00, it clearly fell within the MTCC’s jurisdiction. Also,
although the RTC erred in relying on Article 129 of the FamilyCode, instead of Article 147, the
dispositive portion of its decision still correctly ordered the equitable partition of the property.
Barrido filed a Motion for Reconsideration, which was, however, denied for lack of merit.
Hence, Barrido brought the case to the Court via a Petition for Review. She assigned the following
errors in the CA Decision:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE MTCC HAD JURISDICTION TO
TRY THE PRESENT CASE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE LOT COVERED BY TCT NO.
T-140361 IS CONJUGAL AFTER BEING SOLD TO THE CHILDREN, JOSEPH LEO NONATO AND JOSEPH
RAYMUND NONATO.
III.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT ARTICLE 129 OF THE FAMILY CODE
HAS NO APPLICATION IN THE PRESENT CASE, ON THE ASSUMPTION
THAT THE TRIAL COURT HAD JURISDICTION OVER THE CASE.6
The petition lacks merit.
Contrary to Barrido’s contention, the MTCC has jurisdiction to take cognizance of real actions or
those affecting title to real property, or for the recovery of possession, or for the partition or
condemnation of, or foreclosure of a mortgage on real property.7 Section 33 of Batas Pambansa
Bilang 1298 provides:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in civil cases.– Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts shall exercise:
xxxx
(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 propertyor interest therein does
not exceed Twenty thousand pesos (₱20,000.00)or, in civil actions in Metro Manila, where such
assessed value does not exceed Fifty thousand pesos (₱50,000.00) exclusive of interest, damages
of whatever kind, attorney's fees, litigation expenses and costs: Provided, That value of such
property shall be determined by the assessed value of the adjacent lots. (as amended by R.A. No.
7691)9
Here, the subject property’s assessed value was merely ₱8,080.00, an amount which certainly
does not exceed the required limit of ₱20,000.00 for civil actions outside Metro Manila tofall
within the jurisdiction of the MTCC. Therefore, the lower court correctly took cognizance of the
instant case.
The records reveal that Nonatoand Barrido’s marriage had been declared void for psychological
incapacity under Article 3610 of the Family Code. During their marriage, however, the conjugal
partnership regime governed their property relations. Although Article 12911 provides for the
procedure in case of dissolution of the conjugal partnership regime, Article 147 specifically covers
the effects of void marriages on the spouses’ property relations. Article 147 reads:
Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively
with each other as husband and wife without the benefit of marriage or under a void marriage,
their wages and salaries shall be owned by them in equal shares and the property acquired by
both of them through their work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be
presumed tohave been obtained by their joint efforts, work or industry, and shall beowned by
them in equal shares. For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have contributed jointly in the
acquisition thereof if the former's efforts consisted in the care and maintenance of the family and
of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property
acquired during cohabitation and owned in common, without the consent of the other, until after
the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the party in bad faith
in the co-ownership shall be forfeited in favor of their common children. In case of default of or
waiver by any or all of the common children or their descendants, each vacant share shall belong
to the respective surviving descendants. In the absence of descendants, such share shall belong to
the innocent party.1âwphi1 In all cases, the forfeiture shall take place upon termination of the
cohabitation.
This particular kind of co-ownership applies when a man and a woman, suffering no illegal
impedimentto marry each other, exclusively live together as husband and wife under a void
marriage or without the benefit of marriage.12 It is clear, therefore, that for Article 147 to
operate, the man and the woman: (1) must be capacitated to marry each other; (2) live
exclusively with each other as husband and wife; and (3) their union is without the benefit of
marriage or their marriage is void. Here, all these elements are present.13 The term
"capacitated" inthe first paragraph of the provision pertains to the legal capacity of a party to
contract marriage.14 Any impediment to marry has not been shown to have existed on the part of
either Nonato or Barrido. They lived exclusively with each other as husband and wife. However,
their marriage was found to be void under Article 36 of the Family Code on the ground of
psychological incapacity.15
Under this property regime, property acquired by both spouses through their work and industry
shall be governed by the rules on equal coownership. Any property acquired during the union is
prima faciepresumed to have been obtained through their joint efforts. A party who did not
participate in the acquisition of the property shall be considered as having contributed to the
same jointly if said party's efforts consisted in the care and maintenance of the family
household.16 Efforts in the care and maintenance of the family and household are regarded as
contributions to the acquisition of common property by one who has no salary or income or work
or industry.17
In the analogous case of Valdez,18 it was likewise averred that the trial court failed to apply the
correct law that should govern the disposition of a family dwelling in a situation where a marriage
is declared void ab initiobecause of psychological incapacity on the part of either or both parties
in the contract of marriage.The Court held that the court a quodid not commit a reversible error
in utilizing Article 147 of the Family Code and in ruling that the former spouses own the family
home and all their common property in equal shares, as well as in concluding that, in the
liquidation and partition of the property that they owned in common, the provisions on
coownership under the Civil Code should aptly prevail.19 The rules which are set up to govern the
liquidation of either the absolute community or the conjugal partnership of gains, the property
regimes recognized for valid and voidable marriages, are irrelevant to the liquidation of the
co-ownership that exists between common-law spousesor spouses of void marriages.20
Here, the former spouses both agree that they acquired the subject property during the
subsistence of their marriage. Thus, it shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be jointly owned by them in equal shares. Barrido, however,
claims that the ownership over the property in question is already vested on their children, by
virtue of a Deed of Sale. But aside from the title to the property still being registered in the
names of the former spouses, said document of safe does not bear a notarization of a notary
public. It must be noted that without the notarial seal, a document remains to be private and
cannot be converted into a public document,21 making it inadmissible in evidence unless properly
authenticated.22 Unfortunately, Barrido failed to prove its due execution and authenticity. In
fact, she merely annexed said Deed of Sale to her position paper. Therefore, the subject property
remains to be owned in common by Nonato and Barrido, which should be divided in accordance
with the rules on co-ownership.
WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals,
dated November 16, 2006, as well as its Resolution dated January 24, 2007 in CA-G.R. SP No.
00235, are hereby AFFIRMED.
SO ORDERED.
G.R. No. 165427 March 21, 2011
BETTY B. LACBAYAN, Petitioner,
vs.
BAYANI S. SAMOY, JR., Respondent.

a decision of the Court of Appeals.
Syllabi Class : Courts|Judgments
Syllabi:
1. Ownership; Co-Ownership; Partition; The
determination as to the existence of co-ownership is
necessary in the resolution of an action for
partition.-
—Our disquisition in Municipality of Biñan v. Garcia,
180 SCRA 576 (1989), is definitive. There, we
explained that the determination as to the existence

of co-ownership is necessary in the resolution of an
action for partition. Thus: The first phase of a
partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in
fact exists, and a partition is proper (i.e., not
otherwise legally proscribed) and may be made by
voluntary agreement of all the parties interested in
the property. This phase may end with a declaration
that plaintiff is not entitled to have a partition either
because a co-ownership does not exist, or partition
is legally prohibited. It may end, on the other hand,
with an adjudgment that a co-ownership does in
truth exist, partition is proper in the premises and an
accounting of rents and profits received by the
defendant from the real estate in question is in order.
x x x The second phase commences when it appears
that “the parties are unable to agree upon the
partition” directed by the court. In that event[,]
partition shall be done for the parties by the [c]ourt
with the assistance of not more than three (3)
commissioners. This second stage may well also deal
with the rendition of the accounting itself and its
approval by the [c]ourt after the parties have been
accorded opportunity to be heard thereon, and an
award for the recovery by the party or parties
thereto entitled of their just share in the rents and
profits of the real estate in question. x x x (Emphasis
supplied.)
2. Courts; Judgments; The phrase, “without

prejudice to any claim his legal wife may have filed
or may file against him” in the last part of the
dispositive portion of the Decision, is objectionable-
—for one, no issue exists in this case between the
legitimate spouses regarding the nature of the
properties they commonly or individually hold, and,
additionally, the phrase creates the impression that
the Court is giving legal advice to the wife of the
respondent on what course of action to take against
her husband.—The phrase, “without prejudice to any
claim his legal wife may have filed or may file against
him” in the last part of the dispositive portion of the
Decision, is similarly objectionable. For one, no issue
exists in this case between the legitimate spouses
regarding the nature of the properties they
commonly or individually hold. Additionally, the
phrase creates the impression that the Court is
giving legal advice to the wife of the respondent on
what course of action to take against her husband.
This statement is beyond what this Court should
properly state in its Decision given the facts and
issues posed, and is plainly uncalled for.
3. Same; Same; Unless there is a clear showing to
the contrary, income from a business cannot
automatically be considered as personal earnings,
especially in this case where the income referred to
is corporate income.-
—Unless there is a clear showing to the contrary,

income from a business cannot automatically be
considered as personal earnings, especially in this
case where the income the petitioner referred to is
corporate income. The petitioner should have
presented evidence showing that the income she
referred to actually accrued to her in the form of
salaries, bonuses, commissions and/or dividends
from the manpower business. Otherwise, the rule
regarding the corporation‟s distinct legal personality
from its officers, stockholders and members applies.
Unless otherwise shown, the source of the earnings
would be the corporation‟s, not the petitioner‟s.
4. Same; Same; Mere cohabitation under Article
148 of the Family Code, without proof of contribution,
will not result in a co-ownership-
—proof of actual contribution must be established by
clear evidence showing that the party either used his
or her own money or that he or she actually
contributed his or her own money to purchase the
property.—On the contribution aspect of these
elements, mere cohabitation under Article 148 of the
Family Code, without proof of contribution, will not
result in a co-ownership; proof of actual contribution
must be established by clear evidence showing that
the party either used his or her own money or that he
or she actually contributed his or her own money to
purchase the property. Jurisprudence holds that this
fact may be proven by evidence in the form of bank

account statements and bank transactions as well as
testimonial evidence proving the financial capacity of
the party to purchase the property or contribute to
the purchase of a property.
5. Family Code; Co-Ownership; Co-ownership
only arises when there is clear proof showing the
acquisition of the property during the cohabitation of
the parties, and the actual joint contribution of the
parties to acquire the same.-
—Any property acquired during the cohabitation can
only be considered common property if two (2)
conditions are met: first, there must be evidence
showing that the properties were acquired by the
parties during their cohabitation; and second, there
must be evidence that the properties were acquired
through the parties‟ actual joint contribution of
money, property, or industry. Stated plainly,
co-ownership only arises when there is clear proof
showing the acquisition of the property during the
cohabitation of the parties, and the actual joint
contribution of the parties to acquire the same.
These two (2) conditions must concur.
6. Estoppel; A party does not have any right to
insist on the contents of an agreement she
intentionally refused to sign.-
—Petitioner herself admitted that she did not assent

to the Partition Agreement after seeing the need to
amend the same to include other matters. Petitioner
does not have any right to insist on the contents of
an agreement she intentionally refused to sign.
7. Waiver; Basic is the rule that rights may be
waived, unless the waiver is contrary to law, public
order, public policy, morals, good customs or
prejudicial to a third person with a right recognized
by law.-
—A careful perusal of the contents of the so-called
Partition Agreement indicates that the document
involves matters which necessitate prior settlement
of questions of law, basic of which is a determination
as to whether the parties have the right to freely
divide among themselves the subject properties.
Moreover, to follow petitioner‟s argument would be
to allow respondent not only to admit against his
own interest but that of his legal spouse as well, who
may also be lawfully entitled co-ownership over the
said properties. Respondent is not allowed by law to
waive whatever share his lawful spouse may have on
the disputed properties. Basic is the rule that rights
may be waived, unless the waiver is contrary to law,
public order, public policy, morals, good customs or
prejudicial to a third person with a right recognized
by law.
8. Co-Ownership; Partition; Evidence; Admissi

ons; Requisites; Words and Phrases; An
admission is any statement of fact made by a party
against his interest or unfavorable to the conclusion
for which he contends or is inconsistent with the
facts alleged by him.-
—As to whether respondent‟s assent to the initial
partition agreement serves as an admission against
interest, in that the respondent is deemed to have
admitted the existence of co-ownership between him
and petitioner, we rule in the negative. An admission
is any statement of fact made by a party against his
interest or unfavorable to the conclusion for which he
contends or is inconsistent with the facts alleged by
him. Admission against interest is governed by
Section 26 of Rule 130 of the Rules of Court, which
provides: Sec. 26. Admissions of a party.—The act,
declaration or omission of a party as to a relevant
fact may be given in evidence against him. To be
admissible, an admission must (a) involve matters of
fact, and not of law; (b) be categorical and definite;
(c) be knowingly and voluntarily made; and (d) be
adverse to the admitter‟s interests, otherwise it
would be self-serving and inadmissible.
9. Same; Same; Placing a parcel of land under the
mantle of the Torrens system does not mean that
ownership thereof can no longer be disputed-
—the certificate cannot always be considered as

conclusive evidence of ownership.—Placing a parcel
of land under the mantle of the Torrens system does
not mean that ownership thereof can no longer be
disputed. Ownership is different from a certificate of
title, the latter only serving as the best proof of
ownership over a piece of land. The certificate
cannot always be considered as conclusive evidence
of ownership. In fact, mere issuance of the certificate
of title in the name of any person does not foreclose
the possibility that the real property may be under
co-ownership with persons not named in the
certificate, or that the registrant may only be a
trustee, or that other parties may have acquired
interest over the property subsequent to the
issuance of the certificate of title. Needless to say,
registration does not vest ownership over a property,
but may be the best evidence thereof.
10. Same; Land Titles; Words and
Phrases; What cannot be collaterally attacked
is the certificate of title and not the title
itself; Title as a concept of ownership should not be
confused with the certificate of title as evidence of
such ownership although both are interchangeably
used.-
—Would a resolution on the issue of ownership
subject the Torrens title issued over the disputed
realties to a collateral attack? Most definitely, it
would not. There is no dispute that a Torrens

certificate of title cannot be collaterally attacked, but
that rule is not material to the case at bar. What
cannot be collaterally attacked is the certificate of
title and not the title itself. The certificate referred to
is that document issued by the Register of Deeds
known as the TCT. In contrast, the title referred to by
law means ownership which is, more often than not,
represented by that document. Petitioner apparently
confuses title with the certificate of title. Title as a
concept of ownership should not be confused with
the certificate of title as evidence of such ownership
although both are interchangeably used.
DECISION
VILLARAMA, JR., J.:
This settles the petition for review on certiorari filed by petitioner Betty B. Lacbayan against
respondent Bayani S. Samoy, Jr. assailing the September 14, 2004 Decision1 of the Court of
Appeals (CA) in CA-G.R. CV No. 67596. The CA had affirmed the February 10, 2000 Decision2 of
the Regional Trial Court (RTC), Branch 224, of Quezon City declaring respondent as the sole owner
of the properties involved in this suit and awarding to him ₱100,000.00 as attorney’s fees.
This suit stemmed from the following facts.
Petitioner and respondent met each other through a common friend sometime in 1978. Despite
respondent being already married, their relationship developed until petitioner gave birth to
respondent’s son on October 12, 1979.3
During their illicit relationship, petitioner and respondent, together with three more
incorporators, were able to establish a manpower services company.4 Five parcels of land were
also acquired during the said period and were registered in petitioner and respondent’s names,
ostensibly as husband and wife. The lands are briefly described as follows:
1. A 255-square meter real estate property located at Malvar St., Quezon City covered by TCT No.
303224 and registered in the name of Bayani S. Samoy, Jr. "married to Betty Lacbayan."5
2. A 296-square meter real estate property located at Main Ave., Quezon City covered by TCT No.
23301 and registered in the name of "Spouses Bayani S. Samoy and Betty Lacbayan."6
3. A 300-square meter real estate property located at Matatag St., Quezon City covered by TCT
No. RT-38264 and registered in the name of Bayani S. Samoy, Jr. "married to Betty Lacbayan
Samoy."7
4. A 183.20-square meter real estate property located at Zobel St., Quezon City covered by TCT
No. 335193 and registered in the name of Bayani S. Samoy, Jr. "married to Betty L. Samoy."8
5. A 400-square meter real estate property located at Don Enrique Heights, Quezon City covered
by TCT No. 90232 and registered in the name of Bayani S. Samoy, Jr. "married to Betty L.
Samoy."9
Initially, petitioner lived with her parents in Mapagbigay St., V. Luna, Quezon City. In 1983,
petitioner left her parents and decided to reside in the property located in Malvar St. in Project 4,
Quezon City. Later, she and their son transferred to Zobel St., also in Project 4, and finally to the
400-square meter property in Don Enrique Heights.10
Eventually, however, their relationship turned sour and they decided to part ways sometime in
1991. In 1998, both parties agreed to divide the said properties and terminate their business
partnership by executing a Partition Agreement.11 Initially, respondent agreed to petitioner’s
proposal that the properties in Malvar St. and Don Enrique Heights be assigned to the latter, while
the ownership over the three other properties will go to respondent.12 However, when petitioner
wanted additional demands to be included in the partition agreement, respondent refused.13
Feeling aggrieved, petitioner filed a complaint for judicial partition14 of the said properties
before the RTC in Quezon City on May 31, 1999.
In her complaint, petitioner averred that she and respondent started to live together as husband
and wife in 1979 without the benefit of marriage and worked together as business partners,
acquiring real properties amounting to ₱15,500,000.00.15 Respondent, in his Answer,16 however,
denied petitioner’s claim of cohabitation and said that the properties were acquired out of his
own personal funds without any contribution from petitioner.17
During the trial, petitioner admitted that although they were together for almost 24 hours a day
in 1983 until 1991, respondent would still go home to his wife usually in the wee hours of the
morning.18 Petitioner likewise claimed that they acquired the said real estate properties from
the income of the company which she and respondent established.19
Respondent, meanwhile, testified that the properties were purchased from his personal funds,
salaries, dividends, allowances and commissions.20 He countered that the said properties were
registered in his name together with petitioner to exclude the same from the property regime of
respondent and his legal wife, and to prevent the possible dissipation of the said properties since
his legal wife was then a heavy gambler.21 Respondent added that he also purchased the said
properties as investment, with the intention to sell them later on for the purchase or construction
of a new building.22
On February 10, 2000, the trial court rendered a decision dismissing the complaint for lack of
merit.23 In resolving the issue on ownership, the RTC decided to give considerable weight to
petitioner’s own admission that the properties were acquired not from her own personal funds
but from the income of the manpower services company over which she owns a measly 3.33%
share.24
Aggrieved, petitioner elevated the matter to the CA asserting that she is the pro indiviso owner of
one-half of the properties in dispute. Petitioner argued that the trial court’s decision subjected
the certificates of title over the said properties to collateral attack contrary to law and
jurisprudence. Petitioner also contended that it is improper to thresh out the issue on ownership
in an action for partition.25
Unimpressed with petitioner’s arguments, the appellate court denied the appeal, explaining in
the following manner:
Appellant’s harping on the indefeasibility of the certificates of title covering the subject realties
is, to say the least, misplaced. Rather than the validity of said certificates which was nowhere
dealt with in the appealed decision, the record shows that what the trial court determined
therein was the ownership of the subject realties – itself an issue correlative to and a necessary
adjunct of the claim of co-ownership upon which appellant anchored her cause of action for
partition. It bears emphasizing, moreover, that the rule on the indefeasibility of a Torrens title
applies only to original and not to subsequent registration as that availed of by the parties in
respect to the properties in litigation. To our mind, the inapplicability of said principle to the
case at bench is even more underscored by the admitted falsity of the registration of the selfsame
realties in the parties’ name as husband and wife.
The same dearth of merit permeates appellant’s imputation of reversible error against the trial
court for supposedly failing to make the proper delineation between an action for partition and
an action involving ownership. Typically brought by a person claiming to be co-owner of a
specified property against a defendant or defendants whom the plaintiff recognizes to be
co-owners, an action for partition may be seen to present simultaneously two principal issues, i.e.,
first, the issue of whether the plaintiff is indeed a co-owner of the property sought to be
partitioned and, second – assuming that the plaintiff successfully hurdles the first – the issue of
how the property is to be divided between plaintiff and defendant(s). Otherwise stated, the court
must initially settle the issue of ownership for the simple reason that it cannot properly issue an
order to divide the property without first making a determination as to the existence of
co-ownership. Until and unless the issue of ownership is definitely resolved, it would be
premature to effect a partition of the properties. This is precisely what the trial court did when it
discounted the merit in appellant’s claim of co-ownership.26
Hence, this petition premised on the following arguments:
I. Ownership cannot be passed upon in a partition case.
II. The partition agreement duly signed by respondent contains an admission against respondent’s
interest as to the existence of co-ownership between the parties.
III. An action for partition cannot be defeated by the mere expedience of repudiating
co-ownership based on self-serving claims of exclusive ownership of the properties in dispute.
IV. A Torrens title is the best evidence of ownership which cannot be outweighed by respondent’s
self-serving assertion to the contrary.
V. The properties involved were acquired by both parties through their actual joint contribution
of money, property, or industry.27
Noticeably, the last argument is essentially a question of fact, which we feel has been squarely
threshed out in the decisions of both the trial and appellate courts. We deem it wise not to
disturb the findings of the lower courts on the said matter absent any showing that the instant
case falls under the exceptions to the general rule that questions of fact are beyond the ambit of
the Court’s jurisdiction in petitions under Rule 45 of the 1997 Rules of Civil Procedure, as
amended. The issues may be summarized into only three:
I. Whether an action for partition precludes a settlement on the issue of ownership;
II. Whether the Torrens title over the disputed properties was collaterally attacked in the action
for partition; and
III. Whether respondent is estopped from repudiating co-ownership over the subject realties.
We find the petition bereft of merit.
Our disquisition in Municipality of Biñan v. Garcia28 is definitive. There, we explained that the
determination as to the existence of co-ownership is necessary in the resolution of an action for
partition. Thus:
The first phase of a partition and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally
proscribed) and may be made by voluntary agreement of all the parties interested in the property.
This phase may end with a declaration that plaintiff is not entitled to have a partition either
because a co-ownership does not exist, or partition is legally prohibited. It may end, on the other
hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in the
premises and an accounting of rents and profits received by the defendant from the real estate in
question is in order. x x x
The second phase commences when it appears that "the parties are unable to agree upon the
partition" directed by the court. In that event[,] partition shall be done for the parties by the
[c]ourt with the assistance of not more than three (3) commissioners. This second stage may well
also deal with the rendition of the accounting itself and its approval by the [c]ourt after the
parties have been accorded opportunity to be heard thereon, and an award for the recovery by
the party or parties thereto entitled of their just share in the rents and profits of the real estate
in question. x x x29 (Emphasis supplied.)
While it is true that the complaint involved here is one for partition, the same is premised on the
existence or non-existence of co-ownership between the parties. Petitioner insists she is a
co-owner pro indiviso of the five real estate properties based on the transfer certificates of title
(TCTs) covering the subject properties. Respondent maintains otherwise. Indubitably, therefore,
until and unless this issue of co-ownership is definitely and finally resolved, it would be
premature to effect a partition of the disputed properties.30 More importantly, the complaint
will not even lie if the claimant, or petitioner in this case, does not even have any rightful
interest over the subject properties.31
Would a resolution on the issue of ownership subject the Torrens title issued over the disputed
realties to a collateral attack? Most definitely, it would not.
There is no dispute that a Torrens certificate of title cannot be collaterally attacked,32 but that
rule is not material to the case at bar. What cannot be collaterally attacked is the certificate of
title and not the title itself.33 The certificate referred to is that document issued by the Register
of Deeds known as the TCT. In contrast, the title referred to by law means ownership which is,
more often than not, represented by that document.34 Petitioner apparently confuses title with
the certificate of title. Title as a concept of ownership should not be confused with the
certificate of title as evidence of such ownership although both are interchangeably used.35
Moreover, placing a parcel of land under the mantle of the Torrens system does not mean that
ownership thereof can no longer be disputed. Ownership is different from a certificate of title,
the latter only serving as the best proof of ownership over a piece of land. The certificate cannot
always be considered as conclusive evidence of ownership.36 In fact, mere issuance of the
certificate of title in the name of any person does not foreclose the possibility that the real
property may be under co-ownership with persons not named in the certificate, or that the
registrant may only be a trustee, or that other parties may have acquired interest over the
property subsequent to the issuance of the certificate of title.37 Needless to say, registration
does not vest ownership over a property, but may be the best evidence thereof.1avvphi1
Finally, as to whether respondent’s assent to the initial partition agreement serves as an

admission against interest, in that the respondent is deemed to have admitted the existence of
co-ownership between him and petitioner, we rule in the negative.
An admission is any statement of fact made by a party against his interest or unfavorable to the
conclusion for which he contends or is inconsistent with the facts alleged by him.38 Admission
against interest is governed by Section 26 of Rule 130 of the Rules of Court, which provides:
Sec. 26. Admissions of a party. – The act, declaration or omission of a party as to a relevant fact
may be given in evidence against him.
To be admissible, an admission must (a) involve matters of fact, and not of law; (b) be categorical
and definite; (c) be knowingly and voluntarily made; and (d) be adverse to the admitter’s
interests, otherwise it would be self-serving and inadmissible.39
A careful perusal of the contents of the so-called Partition Agreement indicates that the
document involves matters which necessitate prior settlement of questions of law, basic of which
is a determination as to whether the parties have the right to freely divide among themselves the
subject properties. Moreover, to follow petitioner’s argument would be to allow respondent not
only to admit against his own interest but that of his legal spouse as well, who may also be
lawfully entitled co-ownership over the said properties. Respondent is not allowed by law to
waive whatever share his lawful spouse may have on the disputed properties. Basic is the rule
that rights may be waived, unless the waiver is contrary to law, public order, public policy,
morals, good customs or prejudicial to a third person with a right recognized by law.40
Curiously, petitioner herself admitted that she did not assent to the Partition Agreement after
seeing the need to amend the same to include other matters. Petitioner does not have any right
to insist on the contents of an agreement she intentionally refused to sign.
As to the award of damages to respondent, we do not subscribe to the trial court’s view that
respondent is entitled to attorney’s fees. Unlike the trial court, we do not commiserate with
respondent’s predicament. The trial court ruled that respondent was forced to litigate and
engaged the services of his counsel to defend his interest as to entitle him an award of
₱100,000.00 as attorney’s fees. But we note that in the first place, it was respondent himself who
impressed upon petitioner that she has a right over the involved properties. Secondly,
respondent’s act of representing himself and petitioner as husband and wife was a deliberate
attempt to skirt the law and escape his legal obligation to his lawful wife. Respondent, therefore,
has no one but himself to blame the consequences of his deceitful act which resulted in the filing
of the complaint against him.
WHEREFORE, the petition is DENIED. The September 14, 2004 Decision of the Court of Appeals in
CA-G.R. CV No. 67596 is AFFIRMED with MODIFICATION. Respondent Bayani S. Samoy, Jr. is hereby
declared the sole owner of the disputed properties, without prejudice to any claim his legal wife
may have filed or may file against him. The award of ₱100,000.00 as attorney’s fees in
respondent’s favor is DELETED.
No costs.
SO ORDERED.
G.R. No. 183589 June 25, 2014
CHARLIE LIM (represented by his heirs) and LILIA SALANGUIT,1 Petitioners,
vs.
SPOUSES DANILO LIGON and GENEROSA VITUG-LIGON, Respondents.

DECISION
VILLARAMA, JR., J.:

At bar is a petition for review on certiorari of the Decision2 and Resolution3 of the Court of
Appeals (CA) in CA-G.R. CV No. 84284 dated December 28, 2007 and July 3, 2008, respectively,
affirming with modification the Decision4 of the Regional Trial Court (RTC) of Nasugbu, Batangas.
The case arose from an action5 for Quieting of Title, Recovery of Possession and Damages with
Prayer for a Temporary Restraining Order and Preliminary Injunction, filed by herein respondents
before the court a quo involving the subject land located at Sitio Kuala, Barangay Wawa, Nasugbu,
Batangas, with an area of 9,478 square meters and covered by Transfer Certificate of Title (TCT)
No. TP-1792.6
The following undisputed findings of facts, as found by the trial court, are stated in the opinion of
the CA:
As synthesized from the admissions made by the parties in their respective pleadings, the
documentary and testimonial evidence adduced during the proceedings[,] it appears that
sometime in 1970, one Tomas Fernandez filed a Free Patent Application over a parcel of land
situated in Sitio Kuala, Barangay Wawa, Nasugbu, Batangas with an area 9,[478] sq. meters. After
the death of Tomas Fernandez, his son Felicisimo pursued the application and on 25 April 1984,
the survey plan under Psu No. 04-008565 was approved by the Bureau of Lands.
In 1985, the spouses Isaac and Concepcion Ronulo asked the assistance of the Office of the
President and requested investigation of their claim that a parcel of land containing 1,000 square
meters which they have been occupying since the 1950s was included in the approved survey plan
PSU-04-008565 in the name of Tomas Fernandez.
The Office of the President referred the matter to the Bureau of Lands which in turn referred the
same to the DENR-Region IVB for appropriate action.
On October 9, 1995, Regional Director Antonio Prinsipe of DENR Provisional Region IV-A issued an
Order in DENR Case No. IV-5516, the dispositive portion of which reads:
"WHEREFORE, premises considered and finding the protest of Spouses Isaac and Concepcion
Ronulo to be meritorious, the plan PSU-04-008565 approved in the name of Tomas Fernandez is
hereby, as it is, ordered CANCELLED and whatever amount paid on account thereof forfeited in
favor of the Government. Consequently, the aforementioned spouses Ronulo are hereby advised
to cause the survey and to file the appropriate public land application over the land actually
possessed and occupied by them. (Exh. A-2)."
The above order was appealed by Felicisimo Fernandez to the Office of the DENR Secretary and
was docketed therein as DENR Case No. 5101.
On 20 October 1995, the already widowed Concepcion Ronulo executed an Affidavit of Waiver of
Rights over the parcel of land subject of DENR Case No. IV-5516 in favor of herein defendant Lim
who will "file the appropriate public land application (Exh. A-3)." On the same date, the children
of Concepcion Ronulo executed an affidavit of conformity to the waiver, conveyance and transfer
of the property subject of DENR Case No. IV-5516 in favor of Charlie Lim (Exh. A-4).
In the meantime, herein plaintiffs Spouses Danilo Ligon and Generosa Vitug-Ligon purchased the
subject property from Felicisimo Fernandez and introduced improvements thereon, including a
beach house. On 31 October 1995, TCT No. TP-1792 (Exh. A-1) of the Registry of Deeds of Nasugbu,
Batangas was issued in the name of the spouses Ligon based on Free Patent No. (IV03A) issued on
11 December 1986 and an analogous Original Certificate of Title No. OP-1808 (Exh. B) dated 16
December 1993, both in the name of Felicisimo Fernandez.
On 09 September 1996, defendant Lim filed a complaint for forcible entry against the petitioners
with the Municipal Trial Court of Nasugbu, Batangas involving the subject property. The case was
docketed as Civil Case No. 1275. On May 26, 1997, the trial court rendered judgment (Exh. A-5) in
favor of private respondent and ordered petitioners to vacate the subject land. The trial court
based its decision on the alleged finality of the Order dated 09 October 1995 issued by Regional
Director Prinsipe in DENR Case No. IV-5516.
Plaintiffs appealed the adverse decision to the Regional Trial Court of Nasugbu, Batangas but the
same was affirmed in a decision dated 12 January 1998 (Exh. A-6).
On 20 July 1998, plaintiffs appealed the RTC decision to the Court of Appeals by way of a petition
for review. In a decision (Exh. A-7) dated 20 January 1999, the Court of Appeals dismissed the
petition for review.
On 28 May 1999, the DENR Secretary rendered a decision (Exh. A-8) in DENR Case No. 5102
reversing the order of Regional Director Prinsipe in DENR Case No. IV-5516 dated 09 October 1995,
dismissing the protest of the Ronulos, and ordering that TCT No. TP-1792 in the name of plaintiffs
"shall remain undisturbed."
On 14 July 1999, the Ronulos filed a motion for reconsideration of the above decision.1âwphi1 In
an order (Exh. A-9) dated 21 December 1999, the DENR Secretary denied the motion for
reconsideration.
On 16 January 2000, the Ronulos filed a second motion for reconsideration of the decision of the
DENR Secretary in DENR Case No. 5102.
Meanwhile, as a result of the finality of the judgment in the ejectment case, plaintiffs were
evicted from the subject property. On 01 March 2000, they filed the instant suit before this Court,
a complaint against defendant Lim and his representative, Lilia Salanguit, for Quieting of Title,
Recovery of Possession and Damages with prayer for a TRO and Preliminary Injunction, to restore
them to their possession of the subject property and to enjoin herein defendant Lim from
demolishing their beach house.
On 10 April 2000, this Court denied plaintiffs’ application for injunctive relief as a result of which
plaintiffs’ beach house was demolished by the Branch Sheriff on the motion of defendants.
On 16 April 2000, plaintiffs filed a supplemental complaint for additional damages as a result of
the demolition of their beach house worth about ₱7 million. Defendants did not answer the
supplemental complaint despite being ordered to do so.
During the pre-trial on 08 August 2000, the parties agreed to hold hearings on 25 September, 06
October and 20 October 2000. However, the first two hearing dates were cancelled at the
instance of the defendants. During the scheduled hearing on 20 October 2000, defendant and
counsel did not appear. Instead, Judge Antonio de Sagun, then the Honorable Presiding Judge
informed plaintiffs that herein defendant Lim filed a Motion to Suspend Proceedings on the
ground that the denial of the second motion for reconsideration in DENR Case No. 5102 was
appealed to the Office of the President. In his motion, defendant alleged that trial should be
suspended pending "final adjudication of the case (DENR Case No. 5102) before the Office of the
President where the issue of validity of plaintiff’s title is squarely involved.
In an Order dated 13 November 2000, this Court granted the motion to suspend proceedings.
Petitioners filed a motion for reconsideration but the same was denied by then Presiding Judge
Antonio de Sagun in an order dated 10 January 2001.
On February 19, 2001, plaintiffs filed a Petition for Certiorari before the Court of Appeals in
CA-G.R. SP No. 63441, assailing the suspension of proceedings ordered by this Honorable Court
which, after due proceedings, was granted and the Order dated November 13, 2000 issued by this
Court suspending the proceedings of this case reversed and set aside in a Decision of the said
appellate court dated March 6, 2002.
No motion for reconsideration or any appellate recourse to the Supreme Court having been
interposed by defendants, plaintiffs on June 7, 2002, moved to set this case for further
proceedings. This Court granted the motion and this case was set for trial on August 30, 2002 at
8:30 a.m.
On August 30, 2002, in view of the absence of the defendants and their counsel despite due notice,
evidence for plaintiffs was presented ex-parte with plaintiff Danilo Ligon taking the witness stand.
After plaintiff’s direct examination, this Court ordered a resetting of the case for
cross-examination by defendants on November 18, 2002 at 8:30 a.m. Counsel and his witness
plaintiff Danilo Ligon were present during the November 18, 2002 scheduled trial in which
defendants were properly notified. Defendants and counsel were absent prompting this
Honorable Court, upon plaintiff’s motion to consider the cross-examination of plaintiff Danilo
Ligon by defendants as waived; the continued absence of the defendants as indicative of lack of
interest to further defend this case; Grant plaintiff’s motion for ten (10) days within which to file
Formal Offer of Evidence and thirty (30) days from November 18, 2002, within which to file their
Memorandum. After which, this case will be deemed submitted for decision.7
In its decision dated February 3, 2004, the RTC ruled, viz.:
WHEREFORE, PREMISES CONSIDERED, judgment is rendered for the plaintiffs as follows:
1. Confirming the ownership of the plaintiffs and right of possession over the property;
2. Ordering the defendants to indemnify the plaintiffs the sum of ₱6,000,000.00 for indecent
haste in causing the demolition of plaintiffs’ house;
3. Ordering the defendants to pay plaintiffs the sum of ₱50,000.00 a month as monthly rental for
the duration of the period they are deprived thereof commencing the month of November 1999;
4. Ordering the defendants to pay plaintiffs the sum of ₱1,000,000.00 as moral damages; and
5. Ordering the defendants to pay plaintiffs the sum of ₱500,000.00 as attorney’s fees and the
costs.
SO ORDERED.8
Petitioners appealed the RTC decision with the CA alleging that the lower court erred in deciding
the case based on the ex-parte evidence presented by respondents, in ruling that Felicisimo was
the original owner of the questioned property, in ruling that the Order of the Department of
Environment and Natural Resources (DENR) Regional Executive Director was a collateral attack
against TCT No. TP-1792 of the Spouses Ligon, in ruling that the Spouses acquired the subject
property in good faith, in not giving weight and credit to the Resolution of the Office of the
President (OP) dated March 24, 2004, in ordering Lim and Salanguit to pay a monthly rental of
₱50,000.00 for the duration of the period that the Spouses Ligon have been deprived of their
property, and in ordering Lim and Salanguit to pay the Spouses Ligon attorney’s fees.
In its assailed Decision dated December 28, 2007, the appellate court dismissed the appeal, viz.:
WHEREFORE, in the light of the foregoing, the appeal is DISMISSED for utter lack of merit. The
challenged decision of the Regional Trial Court of Nasugbu, Batangas, Branch 14 is AFFIRMED with
the MODIFICATION that the awards of ₱6,000,000.00 as indemnity and ₱50,000.00 representing
the monthly rental for the subject property to the plaintiffs-appellees are DELETED for lack of
factual basis. Costs against the defendants-appellants.
SO ORDERED.9
Petitioners moved for reconsideration10 while respondents filed their Opposition To Motion For
Reconsideration11 in compliance with the directive of the appellate court. In a Resolution dated
July 3, 2008, the CA denied reconsideration for lack of merit. Hence, this appeal raising the
following issues:
WHETHER OR NOT THE PRINCIPLE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES IS APPLICABLE IN

THIS CASE IN LINE WITH [THE] PRINCIPLE OF RES JUDICATA OF A DECISION OF A QUASI-JUDICIAL
AGENCY SUCH AS THE OFFICE OF THE PRESIDENT? WHETHER OR NOT THE LOWER COURT AND THE
COURT OF APPEALS RENDERED AN UNJUST JUDGMENT IN DEPRIVING THE PETITIONERS OF THEIR
OWNERSHIP OVER THE SUBJECT PROPERTY BASED ON TECHNICALITY?
WHETHER OR NOT THE FINALITY OF THE JUDGMENT IN THE EJECTMENT CASE SERVED AS RES
JUDICATA WITH RESPECT TO THE ISSUE OF PRIOR POSSESSION OF THE SPOUSES RONULOS (THE
PREDECESSORS-IN-INTEREST OF THE PETITIONERS)? WHETHER OR NOT THE COURT OF APPEALS
ERRED IN AFFIRMING THE OWNERSHIP OFTHE RESPONDENTS AND THE AWARD OF MORAL DAMAGES
AS WELL AS ATTORNEYS FEES?12
We deny the petition.
On the first issue, petitioner Lim contends that when the OP reinstated the October 9, 1995 Order
of DENR Regional Director Antonio G. Principe in its Resolution13 dated March 24, 2004, such
disposition served to put an end to the administrative proceedings. The petition thus states:
In a nutshell, the proceedings in the administrative case which went on to become a judicial case
is the proper forum to determine the issue of ownership over the parcel of land subject matter of
this case. Basically, this case lodged before the DENR Provincial Region IV-A is an initiatory move
by the government for the reversion/cancellation of the title of the respondents herein, which
title was derived from the fraudulent and irregular survey of the lot in question and the grant of
the land patent application of Felicisimo Fernandez. In other words, if this case before the Court
of Appeals where this issue was raised affirms with finality the Resolution of the Office of the
President (Annex "C"), this will have the effect of cancelling the title of the respondents and shall
pave the way to the institution of the application by the Ronulos (or the herein petitioners as
their successors-in-interest) of a public land patent in their favor.14
Petitioner Lim further argues that the subject Resolution of the OP should have operated as a bar
to the furtherance of these proceedings as to "the issue" judicially determined by the OP.
According to petitioner Lim, had the CA taken into account the administrative proceedings before
the DENR and the Resolution of the OP, it would have come up with a determination that fraud
was perpetrated by the respondents. The findings of the DENR Regional Executive Director, as
affirmed in the subject resolution of the OP, should operate as res judicata that will have the
effect of cancelling the title of respondents.
We do not agree.
For a judgment to constitute res judicata, the following requisites must concur:
x x x (a) the former judgment was final; (b) the court that rendered it had jurisdiction over the
subject matter and the parties; (c) the judgment was based on the merits; and (d) between the
first and the second actions, there was an identity of parties, subject matters, and causes of
action.
Res judicata embraces two concepts: (1) bar by prior judgment and (2) conclusiveness of
judgment.
Bar by prior judgment exists "when, as between the first case where the judgment was rendered
and the second case that is sought to be barred, there is identity of parties, subject matter, and
causes of action."
On the other hand, the concept of conclusiveness of judgment finds application "when a fact or
question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a
court of competent jurisdiction." This principle only needs identity of parties and issues to
apply.15
Neither bar by prior judgment nor conclusiveness of judgment applies to the case at bar. While
there is identity of parties and subject matter between the instant case and the matter before
the DENR and later the OP, the causes of action are not the same. The present case arose from a
case for quieting of title16 where the plaintiff must show or prove legal or equitable title to or
interest in the property which is the subject-matter of the action. Legal title denotes registered
ownership, while equitable title means beneficial ownership. Without proof of such legal or
equitable title, or interest, there is no cloud to be prevented or removed.17 The administrative
proceedings before the DENR and now the OP, on the other hand, were instituted on behalf of the
Director of Lands, in order to investigate any allegation of irregularity in securing a patent and
the corresponding title to a public land under Section 91 of the Public Land Act, viz.:
SEC. 91. The statements made in the application shall be considered as essential conditions and
parts of any concession, title, or permit issued on the basis of such application, and any false
statement therein or omission of facts altering, changing, or modifying the consideration of the
facts set forth in such statements, and any subsequent modification, alteration or change of the
material facts set forth in the application shall ipso facto produce the cancellation of the
concession, title, or permit granted. It shall be the duty of the Director of Lands, from time to
time and whenever he may deem it advisable, to make the necessary investigations for the
purpose of ascertaining whether the material facts set out in the application are true, or whether
they continue to exist and are maintained and preserved in good faith, and for the purposes of
such investigation, the Director of Lands is hereby empowered to issue subpoenas and subpoenas
duces tecum and, if necessary, to obtain compulsory process from the courts. In every
investigation made in accordance with this section, the existence of bad faith, fraud,
concealment, or fraudulent and illegal modification of essential facts shall be presumed if the
grantee or possessor of the land shall refuse or fail to obey a subpoena or subpoena duces tecum
lawfully issued by the Director of Lands or his authorized delegates or agents, or shall refuse or
fail to give direct and specific answers to pertinent questions, and on the basis of such
presumption, an order of cancellation may issue without further proceedings.
Given the lack of identity of the issue involved in the instant case vis-à-vis the issue in the
administrative proceedings before the DENR and the OP, there can also be no bar by
conclusiveness of judgment.
To be sure, even if there was an identity of the issues involved, there still would have been no bar
by prior judgment or conclusiveness of judgment since the March 24, 2004 Resolution of the OP
has not reached finality – it being the subject of an appeal by respondents Spouses Ligon under
CA-G.R. SP No. 85011. Furthermore, in terms of subject matter, the property involved in the
administrative proceedings is a 1,000-square meter tract of land over which petitioners’ alleged
right of possession could ripen into ownership. On the other hand, the instant case involves the
issue of the ownership or the validity of the title of respondents over the entire 9,478-square
meter tract of land where petitioners claim to have enjoyed open, continuous exclusive and
notorious possession for more than thirty years over a 1,000-square meter portion thereof.
On the second issue that the lower court and the CA rendered an unjust judgment depriving
petitioners of their ownership over the subject property on the basis of technicality, we cannot as
well agree.
Petitioner Lim proffers the following excuses for his failure to comply with the resolutions and
other directives of the court a quo: that his counsel withdrew his appearance while the case was
pending before the RTC; that his representative, Salanguit, had a sudden death, causing him to
lose track and control of the proceedings; that he was not aware of the ex-parte presentation of
evidence by respondent Danilo Ligon; and, that the court a quo waived for him his right to present
evidence due to lack of interest. It is central to petitioner Lim’s argument that he was deprived of
his right to due process and lost his right to property without being fully afforded an opportunity
to interpose his defense – part of which is the March 24, 2004 Resolution of the OP which would
have been highly persuasive in determining the issues of ownership and possession in this case.
Petitioner Lim therefore pleads that this Court afford him the amplest opportunity to present
evidence and disregard technicalities in the broader interest of justice.
We hold that the RTC did not err when it ruled and based its decision on the ex-parte evidence of
respondents spouses. Petitioners were absent, despite due notice, during the ex-parte
presentation of evidence of respondents. Petitioners were likewise absent during

cross-examination despite proper notice. When respondents filed their Formal Offer of Evidence
and Memorandum, petitioners did not file any opposition or comment despite receipt of the
documents.
To be sure, petitioner Lim cannot attribute all blame on the gross negligence of his previous
counsels. He cannot bank on such negligence, including the sudden death of his representative
Salanguit who used to coordinate with his counsels, with impunity. Petitioner Lim’s own equally
gross and contributory negligence in this case is glaring and inexcusable that it constrains us from
re-opening the case. This was aptly described by the RTC in its Resolution18 dated December 10,
2003 denying petitioners’ motion for reconsideration to the Order considering the case submitted
for decision, viz.:
The reasons advanced by the defendants are flimsy and bereft of merit. x x x.
x x x defendants’ counsel was duly notified beforehand of the scheduled hearing on August 30,
2002, but for unknown reasons, defendants and counsel failed to appear. Suffice it to say that this
Court even became lenient to them when it set another hearing on November 18, 2002, for them
to exercise their so-called right to cross-examine plaintiffs’ witness. But then again, records will
show that despite receipt of Order dated August 30, 2002, wherein the Court directed plaintiff
Ligon to be present on November 18, 2002 for cross-examination, both defendants and counsel
did not show up without giving any reason for their absence.
Defendants cannot rightfully claim of losing track and control of the proceedings had in this case
since they can easily verify the records regarding the status of the case, especially that they
admitted that they have differences with their counsel. They should have taken account of the
length of time that already elapsed since the August 30, 2002 hearing. They could have done so
with facility. The fact that they did not is clear that they slept unreasonably on their right.
Stress should be made that plaintiff even furnished them with a copy of the Formal Offer of
Evidence and Memorandum filed to this Court as early as November 26, 2002 and December 18,
2002, respectively, yet not even a comment or opposition evinced reply from the defendants.
This matter is too important to be completely disregarded.
If the defendants were, using their own terms, not allowed to cross-examine would be denied due
process, then, they have nobody but themselves to blame. They failed to comply with the basic
rudiments of the Rules of Civil Procedure. Defendants cannot take advantage of their own faux
pas and invoke the principle of liberality. If they come to Court for leniency, they must do so with
clean hands. Since they sought relief with "dirty hands", their plea must be denied. x x x.19
Likewise, the CA properly concluded that:
x x x there is no truth to the defendants-appellants’ claim that they were denied due process
when the trial court allowed the plaintiffs-appellees to present their evidence ex-parte. The trial
court gave them all the opportunity to cross-examine the plaintiff-appellee Danilo Ligon but they
failed to appear on the scheduled hearing. Hence, they have nobody to blame but themselves.20
As to the third issue, petitioner Lim argues that the finality of the judgment in the ejectment case
serves as res judicata with respect to the issue of prior possession of the Spouses Ronulos – the
predecessors-in-interest of the petitioners. In the ejectment case filed by petitioner Lim against
the same respondents in the Municipal Trial Court (MTC) of Nasugbu, Batangas in Civil Case No.
1275, the MTC ruled on May 26, 1997 that prior possession was established in favor of the Ronulo
spouses. When the respondents Ligon Spouses appealed, the RTC affirmed the decision of the MTC.
The CA also dismissed the appeal of respondent spouses. On appeal to this Court docketed as G.R.
No. 139856, a Resolution dated October 13, 1999 was issued denying the appeal with finality.
Hence, petitioner Lim now contends that the finality of the ejectment case "determining the
issues of possession and prior possession serves as [res judicata] between the parties x x x in as
much as the case herein involves the same parties, same issues and same property therein."21
An ejectment suit is brought before the proper court to recover physical possession or possession
de facto and not possession de jure. The use of summary procedure in ejectment cases is
intended to provide an expeditious means of protecting actual possession or right to possession of
the property and not to determine the actual title to an estate.22 If at all, inferior courts are
empowered to rule on the question of ownership raised by the defendant in such suits, only to
resolve the issue of possession. Its determination on the ownership issue is, however, not
conclusive.23
The following discussion in the case of Spouses Diu v. Ibajan24 is instructive:
Detainer, being a mere quieting process, questions raised on real property are incidentally
discussed. (Peñalosa v. Tuason, 22 Phil. 303.) In fact, any evidence of ownership is expressly
banned by Sec. 4 of Rule 70 (Sec. 4, Rule 70 provides: "Evidence of title, when admissible. -
Evidence of title to the land or building may be received solely for the purpose of determining the
character and extent of possession and damages for detention.") except to resolve the question of
possession. (Tiu v. CA, 37 SCRA 99; Calupitan v. Aglahi, 65 Phil. 575; Pitargue v. Sorilla, 92 Phil. 5.)
Thus, all that the court may do, is to make an initial determination of who is the owner of the
property so that it can resolve who is entitled to its possession absent other evidence to resolve
the latter. But such determination of ownership is not clothed with finality. Neither will it affect
ownership of the property nor constitute a binding and conclusive adjudication on the merits with
respect to the issue of ownership. x x x.25
Thus, under Section 18, Rule 70 of the Rules on Civil Procedure:
SEC. 18. Judgment conclusive only on possession; not conclusive in actions involving title or
ownership.– The judgment rendered in an action for forcible entry or detainer shall be conclusive
with respect to the possession only and shall in no wise bind the title or affect the ownership of
the land or building. Such judgment shall not bar an action between the same parties respecting
title to the land or building.
xxxx
The legal limitation, despite the finality of the ruling in the ejectment case, however, is that the
concept of possession or prior possession which was established in favor of petitioners’
predecessors-in-interest in the ejectment case pertained merely to possession de facto, and not
possession de jure. The favorable judgment in favor of petitioners’ predecessors-in-interest
cannot therefore bar an action between the same parties with respect to who has title to the land
in question. The final judgment shall not also be held conclusive of the facts therein found in a
case between the same parties upon a different cause of action not involving possession.26 As
what took place in the case at bar, the final judgment was not bar to this subsequent action to
quiet respondents’ title in order to settle ownership over the 9,478-square meter property.
Finally, on the fourth assignment of error, petitioner Lim raises the issue as to whether the CA
erred in affirming the ownership of the respondents. This part of the petition, however, discusses
no other additional ground for assailing the validity of the decision of the CA in affirming
respondents’ title to the property. Failing to adduce evidence to overturn the ruling of both the
court a quo and the appellate court, we affirm the indefeasibility of respondents’ title over the
9,478-squaremeter property.
We do not agree, however, with the ruling of the appellate court that a certificate of title issued
pursuant to a public land patent becomes indefeasible and incontrovertible upon the expiration
of one year from the date of issuance of the order for the issuance of the patent.27 A free patent
obtained through fraud or misrepresentation is void. Hence, the one-year prescriptive period
provided in the Public Land Act does not bar the State from asking for the reversion of property
acquired through such means.28
On the issue of moral damages, we agree with petitioner Lim that there is no basis for the award
of moral damages of ₱1,000,000.00. Lim caused the demolition of the beach house of respondents
pursuant to a writ of execution issued by the MTC of Nasugbu, Batangas in the ejectment case –
the same judgment which was affirmed by the RTC, the CA and this Court. As Lim states in this
petition, it will become an absurdity if he will be penalized and required to pay moral damages
over a property the rightful possession of which has been awarded to them29 in the ejectment
case.
Lastly, we sustain the award of attorney’s fees in the amount of ₱50,000.00 which the appellate
court found to be reasonable considering the factual circumstances surrounding the case.30
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 84284 dated December 28, 2007 and July 3, 2008, respectively, are AFFIRMED
with the MODIFICATION that the award of ₱1,000,000.00 as moral damages is deleted for lack of
factual basis. However, the award by the Court of Appeals of the amount of ₱50,000.00 as and for
attorney's fees in favor of the herein respondents is hereby REITERATED and UPHELD.
SO ORDERED.
G.R. No. 118328 October 8, 1998
MARCIANA SERDONCILLO, petitioner,
vs.
SPOUSES FIDEL and EVELYN BENOLIRAO, MELITON CARISIMA, and COURT OF APPEALS,
respondents.
MARTINEZ, J.:
This petition for review assails the decision of the Court of Appeals dated July 14, 1994 in CA G.R.
CV No. 392511 which affirmed the decision of the Regional Trial Court of Pasay City, (Branch 108)
in Civil Case No. 7785, dated June 30, 1992 directing herein petitioner to demolish and remove all
illegal structures which she constructed in front of the subject lot, to vacate the said property
and right of way, and return possession thereof to the respondents.
The antecedent facts:
The subject premises was formerly part of the estate of H. V. Ongsiako, comprising of 1,806
square meters, more or less, located at the corner of Pilapil and N. Domingo Streets, Pasay City.
The legal heirs of H.V. Ongsiako organized the United Complex Realty and Trading Corporation
(UCRTC) which subdivided the property into fourteen (14) lots, Lots 555-A to 666-N. The
subdivided lots were then offered for sale with first priority to each of the tenants, including the
private respondents and petitioner.2 Lot 666-H has an area of 248 square meters, consisting of
two (2) parts. One part is the residential portion with an area of 112 square meters purchased by
private respondents-spouses Benolirao3 while the second part is the right of way for Lot 666-I and
the aforesaid residential portion.4 Private respondent Carisima purchased Lot 666-I. Petitioner,
who was occupying the western end and front portions of the aforesaid lots declined the offer to
purchase any of the lots offered for sale by UCRTC.7
Petitioner continued paying rentals to H.V. Ongsiako's wife, Mrs. Rosario de Jesus. Thereafter,
the collection of rentals was stopped prompting petitioner to file on June 30, 1987, Civil Case No.
5456 before the Metropolitan Trial Court of Pasay City for consignation of rentals against UCRTC,
Rosario de Jesus and the spouses Carisima. The consignation was granted by the trial court and
was eventually affirmed on appeal by the Regional Trial Court of Pasay City, Branch 109 on
October 25, 1989.6
On May 5, 1989, UCRTC executed a deed of absolute sale in favor of private respondents-spouses
Benolirao for Lot 666-H.7 This sale was annotated at the back of UCRTC's title on Lot 666-H.8
On June 2, 1989, after unsuccessful oral and written demands were made upon petitioner, UCRTC
instituted an action against her for recovery of possession of the subject premises before the
Regional Trial Court of Pasay City, Branch 114 docketed as Civil Case No 6652.9 On July 15, 1990,
the trial court rendered its decision dismissing the complaint of UCRTC, stating in part, to wit:
It is clear, therefore, that plaintiff, not having been authorized in writing for the purpose, may
not validly bring an action to enforce a perceived easement of right of way pertaining to the
owners of Lots 666-H and 666-I or the Benolirao and Carisima families, while Benjamin Ongsiako
possessed the authority to institute the case (Exhibit "G"), plaintiff is not the real party in interest.
Furthermore, the situation obtaining does not call for the enforcement of an easement of right of
way. Defendant Seldoncillo is not the owner of and has never claimed ownership over the portion
of Lot 666-H on which her house is erected. A servitude is an encumbrance imposed upon an
immovable for the benefit of another immovable belonging to a different owner (Article 613, New
Civil Code). In the present case the ejectment of defendant Serdoncillo from the portion of Lot
666-H occupied by the house at the instance of the proper party (Renato Bolinarao's family )
would remove the obstruction.
xxx xxx xxx
WHEREFORE, in view of all the foregoing consideration, the complaint against the defendant
Marciana Serdonillo, as well as defendant's counterclaim, is dismissed for lack of merit. Without
pronouncement as to costs.
SO ORDERED.10
UCRTC did not appeal the aforesaid decision of the Regional Trial Court, hence, the same became
final.
On November 20, 1989, Serdoncillo instituted Civil Case No. 7749 for the Exercise of Preferential
Rights of First Refusal against UCRTC and private respondents-spouses a Fidel and Evelyn
Benolirao praying for the annulment of sale of a portion of lot 666-H sold to the Benolirao spouses
on the ground that said transfer or conveyance is illegal. She claimed that she has the preferred
right to buy the said property and that the same was not offered to her under the same terms and
conditions, hence, it is null and void. UCRTC and private respondents prevailed and this case was
dismissed. On appeal to the Court of Appeals, the same was dismissed on July 9, 1992.11
On November 20, 1990, private respondents made their final demand on petitioner reiterating
their previous demands to vacate the property.12 On December 13, 1990, private respdndents
filed their complaint for recovery of possession of the subject premises against petitioner before
the Regional Trial Court of Pasay City, Branch 108, docketed as Civil Case No. 7735, which
compiaint alleges these material facts:
5. That plaintiffs, being then registered owners of the properties designated as lot 666-H and
666-I, are likewise the owners/grantees of the right of way granted by United Complex Realty and
Trading Corporation which was correspondingly annotated in its title (Annex "B-3" ) under Entry
No. 205154/T-172291 of the Register of Deeds of Pasay City;
6. That since 1982 the defendant has built and constructed a residence and pig pen on the
plaintiffs' right of way as well as on the front portions of the latter's properties leaving them
virtually obstructed with no ingress or egress from the main road;
7. That verbal and written demands made upon the defendant by the plaintiffs to remove and
demolish her structures had been ignored, the last of which was on November 20, 1990, xerox
copy of which is hereto attached as Annex "C" and taken as an integral part hereof, but despite
such demands, the defendant failed and refused and still fails and refuses to remove and vacate
her illegal structures on the portion of the properties as well as on the right of way of plaintiffs.
8. That plaintiffs in compliance with the Katarungang Pambarangay Law lodged a complaint
before the Barangay Captain, Barangay 84, Zone 10 of Pasay City, which certified filing of the
same in court, xerox copy of said certification is hereto attached as Annex "D" and taken as
integral part hereof;
9. That due to the unjustified refusal of the defendant, the plaintiffs are suffering the
unnecessary inconvinience of the absence of decent and sufficient ingress and egress on their
properties, and will continue to suffer the same unless the illegal structures are finally
demolished and/or removed by the defendants;13
Petitioner, in her Answer, put up the defense that she is the legitimate tenant of said lots in
question since 1956, pertinent portions of which are quoted hereunder, thus:
13. That Lot 666-H and Lot 666-I mentioned in the complaint are formerly portions of a big
track(sic) of land consisting of 1,806 square meters then owned by H.V. Ongsiako;
14. That since 1956 and before the 1,806 square meters of lot owned by H.V. Ongsiako was
subdivided into fourteen (14) lots in 1982, defendant is (sic) already a legitimate tenant and
occupant family of around 400 square meters of the 1,806 square meters of the said land then
owned by H.V. Ongsiako by erecting her residential house thereon at the agreed monthly rental of
P15.00 and increased to P 100.00;
15. That upon the death of H.V. Ongsiako his heirs continued collecting the monthly rental of the
premises from the defendants;
16. That the heirs of H.V. Ongsiako formed a corporation known as UNITED COMPLEX REALTY AND
TRADING CORPORATION and the big parcel of land consisting of 1,806 square meters was
transferred to the said corporation and subdivided in 1982 into fourteen (14) lots, two (2) of
which lots are the very same lots leased by the defendant from H.V. Ongsiako and later from his
heirs and then from United Complex Realty and Trading Corporation as alleged in the preceding
pars. l3, 14, and 15;14
The issues having been joined, trial on the merits ensued. On June 30, 1992, the trial court
rendered its decision in favor of private respondent, the dispositive portion of which reads:
WHEREFORE, IN VIEW of the foregoing, and finding preponderance of evidence in plaintiffs' favor,
judgment is hereby rendered as follows:
1) Ordering the defendant to demolish and remove all illegal structures she constructed on the
front portions of the subject lots and on the right of way of the plaintiff;
2.) Ordering the defendant to vacate the property and right of way and return possession thereof
to the plaintiffs,
3) Ordering the defendant to pay the cost of suit.
As to the damages (actual and moral) no award is given. In the absence of proof of fraud and bad
faith by the defendants, the latter are (sic) not liable for damages (Escritor Jr. vs. IAC, 155 SCRA
577).
Actual and compensatory damages require substantial proof. In the absence of malice and bad
faith, moral damages cannot be awarded (Capco vs. Macasaet, 189 SCRA SCRA 561).
As to the attorney's fees, each party should shoulder his/her expenses.
SO ORDERED.15
Aggrieved by the trial court's decision, petitioner appealed to the Court of Appeals alleging that:
1) the lower court should have dismissed the complaint of private respondents considering that
based on the letter of demand dated November 20, 1990, the action filed should have been
unlawful detainer and not an action for recovery of possession; 2) the action filed by private
respondents is barred by res judicata considering that the present action is identical with that of
Civil Case No. 6652; 3) the lower court erred in not dismissing the complaint for lack of cause of
action with respect to enforcement of right of way vis a vis defendant; and 4) the lower court
erred in ordering that defendants vacate the properties in question since the lease of defendants
thereon was still in existence and had not yet been terminated.16
On July 14, 1994, the respondent Court of Appeals rendered its decision sustaining the findings of
the trial court and dismissed the appeal of petitioner, stating in part as follows:
The issue as to the proper action has been resolved by the respondent court, to wit:
The defense that what should have been filed is an ejectment case and not recovery of possession,
is not also correct. The filing of this case for recovery of possession, instead of an ejectment case,
is not altogether unjustified. The Benoliraos and Carisima became the owners as early as May,
1989. Verbal and written demands had been ignored. There is an immediate need for plaintiffs to
use the right of way, which up to the present time is obstructed. At most, what surfaced is a
technicality which should be abandoned.
A plain reading of the complaint shows that plaintiff-appellees cause of action is for recovery of
possession of their property which was encroached upon by defendant-appellant.17
A motion for reconsideration of the aforesaid decision filed by petitioner on August 8, 199418 was
denied by the respondent on September 23, 1994.19
Hence, this petition.
Petitioner ascribes one single error committed by the respondent court, to wit:
THE RESPONDENT REGIONAL TRIAL COURT AND THE COURT OF APPEALS (Sp. Fifteenth Division)
COMMITTED GRAVE ABUSE OF JURISDICTION IN DECIDING AS AN ACCION PUBLICIANA AN
EJECTMENT OR UNLAWFUL DETAINER CASE (THE JURISDICTION OF WHICH CLEARLY PERTAINS TO
THE INFERIOR COURT), A CASE BASICALLY INVOLVING AN EASEMENT OF RIGHT OF WAY.
Petitioner asserts that the respondent court erred in sustaining the trial court's finding that the
complaint filed by private respondents for recovery of possession of the subject premises is an
accion publiciana notwithstanding the fact that the action was filed within one (1) year from
demand. Petitioner contends that private respondents should have filed an action for unlawful
detainer and not an action for recovery of possession against petitioner. Consequently, the trial
court is without jurisdiction to hear and determine Civil Case No. 7785. In support of her
contention, petitioner cited the cases of Bernabe vs. Luna20 and Medina vs. Court of Appeals,21
which she states is strikingly similar to the facts of this case. Consequently, the rulings of this
Court in these two cases are squarely applicable and controlling in the case at bar.
Private respondents, however, aver that they were merely successors-in-interest of UCRTC and
therefore step into the shoes of the latter. They claim that the demand to vacate required by law
should at the very least be reckoned from June 2, 1989, the date of the filing of the complaint in
Civil Case No. 6652 considering that their demands are simply a reiteration of UCRTC's demands
against petitioner. Private respondents further contend that the allegations in the complaint
determine the jurisdiction of the court. Thus, the complaint in Civil Case No. 7785 specifically
alleged that private respondents are the owners of lots 666-I and 666-H as evidenced by transfer
certificates of title and prayed for recovery of possession of a portion thereof including its right of
way illegally and unlawfully possessed by petitioner.
Petitioner's position is without merit.
It is an elementary rule of procedural law that jurisdiction of the court over the subject matter is
determined by the allegations of the complaint irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein. As a necessary consequence,
the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or
upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely
depend upon the defendant.22 What determines the jurisdiction of the court is the nature of the
action pleaded as appearing from the allegations in the complaint. The averments therein and the
character of the relief sought are the ones to be consulted.23 Accordingly, the issues in the
instant case can only be properly resolved by an examination and evaluation of the allegations in
the complaint in Civil Case No. 7785.24
In this regard, to give the court jurisdiction to effect the ejectment of an occupant or deforciant
on the land, it is necessary that the complaint must sufficiently show such a statement of facts as
to bring the party clearly within the class of cases for which the statutes provide a remedy,
without resort to parol testimony, as these proceedings are summary in nature.25 In short, the
jurisdictional facts must appear on the face of the complaint. When the complaint fails to aver
facts constitutive of forcible entry or unlawful detainer, as where it does not state how entry was
effected or how and when dispossession started, the remedy should either be an accion
publiciana or an accion reivindicatoria.26
In the case of Javier vs. Veridiano II 27 this Court held that the doctrine in Emilia v. Bado,28
decided more than twenty-five years ago, is still good law. It preserved the age-old remedies
available under existing laws and jurisprudence to recover possession of real property, namely: (1)
accion interdictal, which is the summary action for either forcible entry or detentacion, where
the defendant's possession of the property is illegal ab initio; or for unlawful detainer or
desahucio, where the defendant's possession was originally lawful but ceased to be must be so by
the expiration of his right to possess, both of which must be brought within one year from the
date of actual entry on the land, in case of forcible entry; and from the date of last demand, in
case of unlawful detainer, in the proper municipal trial court or metropolitan court; (2) accion
publiciana which is a plenary action for recovery of the right to possess and which should be
brought in the proper regional trial court when the dispossession has lasted for more than one
year; and, (3) accion reivindicatoria or accion de reivindicacion which seeks the recovery of
ownership and includes the jus possidendi brought in the proper regional trial court.
Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff alleges

ownership over a parcel of land and seeks recovery of its full possession. It is different from
accion interdictal or accion publiciana where plaintiff merely alleges proof of a better right to
possess without claim of title. In Banayos vs. Susana Realty, Inc.,29 this Court held that:
We have consistently held that a complaint for forcible entry, as distinguished from that of
unlawful detainer, in order to vest jurisdiction upon the inferior court, must allege plaintiff's
prior physical possession of the property, as well as the fact that he was deprived of such
possession by any of the means provided in Section 1, Rule 70 of the Rules of Court, namely: force,
intimidation, threats, strategy and stealth, "for if the dispossession did not take place by any of
these means, the courts of first instance, not the municipal courts, have jurisdiction.
xxx xxx xxx
The aforesaid Rule 70 does not, however, cover all of the cases of dispossession of lands. Thus,
"whenever the owner is dispossessed by any other means than those mentioned he may maintain
his action in the Court of First Instance, and it is not necessary for him to wait until the expiration
of twelve months before commencing an action to be repossessed or declared to be owner of the
land." Courts of First Instance have jurisdiction over actions to recover possession of real property
illegally detained, together with rents due and damages, even though one (1) year has not
expired from the beginning of such illegal detention, provided the question of ownership of such
property is also involved. In other words, if the party illegally dispossessed desires to raise the
question of illegal dispossession as well as that of the ownership over the property he may
commence such action in the Court of First Instance immediately or at any time after such illegal
dispossession. If he decides to raise the question of illegal dispossession only, and the action is
filed more than one (1) year after such deprivation or withholding of possession, then the Court of
First Instance will have original jurisdiction over the case. The former is an accion de
reivindicacion which seeks the recovery of ownership as well as possession, while the latter refers
to an accion publiciana, which is the recovery of the right to possess and is a plenary action in an
ordinary proceeding in the Court of First Instance.
A reading of the averments of the complaint in Civil Case No. 7785 undisputably show that
plaintiffs (private respondents herein) clearly set up title to themselves as being the absolute
owner of the disputed premises by virtue of their transfer certificates of title and pray that
petitioner Serdoncillo be ejected therefrom. There is nothing in the complaint in Civil Case No.
7785 alleging any of the means of dispossession that would constitute forcible entry under Section
(1) Rule 70 of the Rules of Court, nor is there any assertion of defendant's possession which was
originally lawful but ceased to be so upon the expiration of the right to possess. It does not
characterize petitioner's alleged entry into the land, that is, whether the same was legal or illegal
nor the manner in which petitioner was able to construct the house and the pig pens thereon. The
complaint merely avers that a portion of the lot owned by private respondents and its right of way
have been occupied by petitioner and that she should vacate. The action therefore is neither one
of forcible nor of unlawful detainer but essentially involves a dispute relative to the ownership of
4.1 square meters of land allegedly encroached upon by petitioner and its adjoining right of way.
Indeed, the Ocular Inspection Report of the Branch Clerk of Court, states that:
. . . (T)he right of way hit directly the defendant Serdoncillo's property consisting of a two-storey
residential house made of wood and GI sheets and occupying the entire width of the rear portion
of the right of way. A coconut tree stands on the middle of the road, at the back of which is a
shanty made of rotten G.I. sheets around it which is used as pigpens and place of washing clothes
extended from defendant's house. To gain access to plaintiff's property, the group turned right
and passed between an "aratiris" tree and cemented firewall owned by Mr. Belarmino making only
one person at a time to pass. This passageway has only a width of 0.5 meter which is being used
by the defendant and her members of the family aside from the plaintiffs.
. . . Two (2) monuments of the lot boundary of the plaintiff's property are existing, but the rest
are nowhere to be found. According to Mrs. Benolirao, they are located within the premises of the
defendant's house. At the back of Benolirao is a private property gutted by fire.
. . . Upon request, the group wass granted permission by the relatives of the defendant to inspect
the place. The group further noticed that defendant's improvements were even encroaching on
the plaintiff's lot by approximately 4.1 meters, more or less. The house of the defendant is facing
the plaintiff's property; there is a small chicken house and there is also a dog house standing near
it.30
It is noted that at the time of the filing of said complaint, Civil Case No. 7749, an action for
annulment of the sale between UCRTC and private respondents Benolirao of Lot 666-H initiated
by petitioner was likewise pending in another court. This case puts in issue the validity of private
respondents' acquisition of the subject lots and ultimately their ownership of Lot 666-H.
Thus, what is noticeable in the complaint is that private respondents definitely gave petitioner
notice of their claim of exclusive and absolute ownership, including their right to possess which is
an elemental attribute of ownership.31 It is immaterial whether or not private respondents
instituted their complaint one month from date of last demand or a year thereafter. What is of
paramount importance is that the allegations in complaint are of the nature of either an accion
publiciana or an accion reivindicatoria.
Petitioner's reliance on the Bernabe and Medina cases, which she claims to be squarely applicable
under the circumstances herein, is entirely misplaced. While it is true that in these two cases the
complaints were filed before the one-year period had expired from date of last demand, the
allegations in the complaint failed to state material facts which are indicative of a case of either
an accion publiciana or accion reivindicatoria. Thus, the Court in Bernabe stated that:
In their complaint, plaintiffs (petitioners herein) allege that they are the owners of a parcel of
land with an area of 199.4 square meters more or less, located in Tondo, Manila, that defendant
(private respondent herein) constructed a house on said lot without plaintiff's permission; that on
November 14, 1980, plaintiffs thru counsel made a written demand for the removal of said house
as well as for the recovery of damages for the reasonable use and occupation thereof; and that
defendant refused and failed to comply despite repeated demands.
xxx xxx xxx

We have noted that while petitioners allege in their complaint that they are the owners of the lot
on which the house of the private respondent is constructed, their attached TCT shows that the
lot is still in the name of Fejosera Investment Incorporated, Private respondent and said company
entered into a contract of lease in 1950 for the use and occupation of said lot. Petitioners
allegedly bought the lot in question in 1973, and they must have been fully aware of the
occupancy of the private respondent of the premises in question. Yet, they did not take any
action to remove the house of the private respondent or to inform the respondent that they had
become the new owners of the lot in question. It is clear therefore that the lease was allowed to
continue.
xxx xxx xxx
Consequently, the possession of private respondent over the lot in question became illegal only
on November 14, 1980, when the formal demand to pay and vacate the premises was sent to
him.32
The allegations in the complaint clearly show that plaintiffs were already the owners of the
property when defendant constructed a house on the disputed lot without their permission. That
despite formal demand defendant failed to vacate and surrender possession of the property to
them. Indeed, the averments in plaintiffs' complaint present jurisdictional facts which do not
illustrate plaintiffs' action as either an action publiciana or accion reivindicatoria but that of
forcible entry or unlawful detainer. Thus, the trial court correctly dismissed plaintiffs' complaint,
pertinent portion of which is quoted hereunder:
It is clear on the face of the complaint that at the time of the filing of this case on February 19,
1981, the defendant was in possession, as a tenant, of the premises. When plaintiff's counsel,
therefore sent a written notice on November 4, 1980 requiring defendant to vacate the premises
when this action was brought, the one (1) year period after the unlawful deprivation or
withholding of possession has not yet set in. It is clear that this is an ejectment case within the
exclusive jurisdiction of the City Court of Manila.
SO ORDERED.33
We likewise find the Medina case, relied upon by petitioner, to be inappropriate. The facts
distinctly show that the complaint filed by the owners of the property before the Metropolitan
Trial Court of Manila, Branch 47, was for unlawful detainer. It was the action resorted to by the
plaintiffs after advising the defendant (the lessee of the premises in question) that a member of
the family, Dr. Igama, urgently needed the house and after repeated demands to vacate made on
the lessee proved to be unsuccessful. All these incidents, from notification to the filing of the
complaint dated May 16, 1985, transpired within a period of six (6) months. Indeed, the factual
background of this case is a classic illustration of an action for unlawful detainer. Verily, the facts
are therefore diametrically opposite to the facts or case at bar.
Petitioner has therefore no legal basis to insist that the present case is similar to the Bernabe and
Medina cases and from which this Court should base its findings and conclusions. The doctrine laid
down in Tenorio vs. Gomba is still controlling. In that case the Court ruled that courts of first
instance have jurisdiction over all actions involving possession of land except forcible entry and
illegal datainer, and therefore the lower court has jurisdiction over the action alleged in the
appellant's complaint because it is neither of illegal detainer nor of forcible entry.34
Petitioner maintains that her leasehold right as a tenant of the subject premises had been settled
in Civil Case No. 5456, an action for consignation, which she won before the Metropolitan Trial
Court and affirmed on appeal by the Regional Trial Court of Pasay City, Branch 109. Said court
ruled that the latter is a tenant of the site or premises in question and that she cannot be ejected
therefrom, even on the assumption that her house and pig pen are allegedly standing on a right of
way. She claims that pursuant to Section 49 (b) (now Section 47) Rule 39, Rules of Court, the issue
of tenancy in said case is now conclusive between her and private respondent with respect to the
subject premises in question.
Petitioner's contention is devoid of merit.
Sec. 49 (now Section 47), provides that:
Sec. 49. Effects of Judgments. — the effect of a judgment or final order rendered by a court or
judge of the Philippines having jurisdiction to pronounce the judgment or order, may be as
follows:
(a) xxx xxx xxx
(b) In other cases the judgment or order is, with respect to the matter directly adjudged or as to
any other matter that could have been raised in relation thereto, conclusive between the parties
and their successors-in-interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same capacity;
The fundamental principle upon which the doctrine of res judicata rests is that parties ought not
be permitted to litigate the same issue more than once, that when the right or fact has been
judicially determined, the judgment of the court, so long as it remains unreversed, should be
conclusive upon the parties and those in privity with them in law or estate.35
Thus, for res judicata to bar the institution of a subsequent action the following requisites must
concur: (1) the former judgment must be final; (2) it must have been rendered by a court having
jurisdiction of the subject matter and the parties; (3) it must be a judgment on the merits; and,
(4) there must be between the first and second actions; (a) identity of parties; (b) identity of
subject matter; and (c) identity of cause of action.36
There is no dispute as to the presence of the first three (3) requirements and the identity of the
subject matter. The only issues remaining are whether as between Civil Case No. 5456 and Civil
Case No. 7785, there is identity of parties and of causes of action in Civil Case No. 5456 to bar the
institution of Civil Case No. 7785.
There is identity of parties. The record shows that the parties in Civil Case No. 5456 are petitioner
as plaintiff while the defendants were UCRTC, the spouses Meliton and Efremia Carisima and
Rosario de Jesus. Private respondents-spouses Fidel and Evelyn Benolirao acquired lot 666-H from
UCRTC and are therefore the successors-in-interest of UCRTC by title subsequent to the
commencement and termination of the first action. As such, private respondents merely stepped
into the shoes of UCRTC and acquired whatever capacity and title the former had over the same
property or subject matter of the action. Indeed, there is actual, if not substantial, identity of
parties between the two actions.37
There is however, no identity of causes of action in both cases. In the case of Garcia vs. Court of
Appeals,38 this Court held that the test of identity of causes of action lies not in the form of an
action but on whether the same evidence would support and establish the former and the present
causes of action. Petitioner's complaint in Civil Case No. 5456 is an action for consignation of
rentals while Civil Case No. 7785 is an action for recovery of possession.
In other words, the issue in Civil Case No. 5456 is whether or not consignation of rentals is proper
under the circumstances obtaining in that case. Private respondents action for recovery of
possession requires them to present evidence of their claim or title to the subject premises and
their right to possess the same from petitioner. Stated conversely, the evidence in Civil Case No.
5456 is entirely different to that in Civil Case No. 7785. Thus, the decision in Civil Case No. 5456
does not in any way affect nor bar Civil Case No. 7785.
Indeed, the Court noted that the parties had been at odds since 1987 when petitioner initiated
Civil Case No. 5456, and then Civil Case No. 7749. Private respondents' predecessor UCRTC
likewise initiated Civil Case No. 6652 and the present case under appeal, Civil Case No. 7785, all
because of the use of a right of way and an encroachment of only 4.1 meters of the subject
premises. At some point in time, all these squabbles must end. Thus, the respondent court stated
that:
It is true that it is the purpose and intention of the law that courts should decide all questions
submitted to them "as truth and justice require", and that it is greatly to be desired that all
judgments should be so decided; but controlling and irresistible reasons of public policy and of
sound practice in the courts demand that at the risk of occasional errors, judgment of the courts
determining controversies submitted to them should become final at some definite time fixed by
law.39
In passing, We reiterate the time-honored doctrine that findings of facts of the Court of Appeals
are binding and conclusive upon the Supreme Court, and the Court, will not normally disturb such
factual findings unless the findings of the court are palpably unsupported by the evidence or
unless the judgment itself is based on misapprehension of facts.40 In this case, We find the said
decision to be totally supported by the evidence on record.
Based on the foregoing premises, it is unnecessary to pass upon the other issues raised in the
petition.
WHEREFORE, the petition for review is hereby DISMISSED and the decision of the Court of Appeals
in CA-G.R. CV NO. 39251 is AFFIRMED. No pronouncements as to costs.
SO ORDERED.
G.R. No. 142308 November 15, 2005
SPS. REV. ELMER J. BAÑES & ANGELA BAÑES, SPS. REV. MANUEL DEL ROSARIO & GUIA DEL
ROSARIO, and SPS. PEDRO SAN RAMON & NENITA SAN RAMON, Petitioners,
vs.
LUTHERAN CHURCH IN THE PHILIPPINES, OSCAR ALMAZAN, JAMES CERDENOLA, LUIS AO-AS,
EDWINO MERCADO, ANTONIO REYES and THE HON. COURT OF APPEALS, Respondents.

Syllabi Class :
Judgments|Actions|Appeals|Motions for
Reconsideration; Pleadings and Practice|Law of the
Case|Words and Phrases|Ejectment|Forcible Entry
Syllabi:
1. Judgments; Appeals; Motions for

Reconsideration; Pleadings and Practice; While
it is true that a pro forma motion for reconsideration
does not suspend the running of the period to appeal,
it is also axiomatic that Rules on the perfection of
appeals must occasionally yield to the loftier ends of
substantial justice and equity.-
True, a pro forma motion for reconsideration does
not suspend the running of the period to appeal.
However, it is also axiomatic that Rules on the
perfection of appeals must occasionally yield to the
loftier ends of substantial justice and equity. In the
present case, petitioners filed their motion for
extension of time to file a petition for review within
15 days from receipt of the denial of their motion for
reconsideration of the decision in CA-G.R. SP No.
44333, which was granted. Then they filed their
petition for review with this Court within the
extended period. Under the premises and
considering the merits of the case which ultimately
negate the finding of the CA that the motion for
reconsideration was pro forma, justice would be
better served if we consider the present petition for
review as duly filed.
2. Judgments; Appeals; Law of the
Case; Words and Phrases; Law of the case is the
opinion delivered by the court on a former appeal—it
applies to an established rule that when an appellate
court passes on a question and remands the case of

the lower court for further proceedings, the question
there settled becomes the law of the case upon
subsequent appeal.-
Law of the case is the opinion delivered on a former
appeal. It applies to an established rule that when an
appellate court passes on a question and remands
the case to the lower court for further proceedings,
the question there settled becomes the law of the
case upon subsequent appeal. It further means that
whatever is once irrevocably established as the
controlling legal rule or decision between the same
parties in the same case continues to be the law of
the case, whether correct on general principles or
not, so long as the facts on which such decision was
predicated continue to be the facts of the case before
the court. As a rule, a decision on a prior appeal of
the same case is held to be the law of the case
whether that question is right or wrong, the remedy
of the party deeming himself aggrieved being to seek
a rehearing. Indeed, courts must adhere thereto,
whether the legal principles laid down were “correct
on general principles or not,” or “whether the
question is right or wrong” because public policy,
judicial orderliness and economy require such
stability in the final judgments of courts or tribunals
of competent jurisdiction.
3. Actions; Ejectment; Forcible Entry; In filing

forcible entry cases, two allegations are mandatory
for the municipal court to acquire jurisdiction—first,
the plaintiff must allege prior physical possession of
the property, and, second, he must allege that he
has been deprived of his possession by any of the
means provided for in Section 1, Rule 70 of the Rules
of Court, i.e., by force, intimidation, threat, strategy
or stealth; Any of the parties who can prove prior
possession de facto may recover such possession
even from the owner himself.-
There is forcible entry or desahucio when one is
deprived of physical possession of land or building by
means of force, intimidation, threat, strategy or
stealth. In such cases, the possession is illegal from
the beginning and the basic inquiry centers on who
has the prior possession de facto. In filing forcible
entry cases, the law tells us that two allegations are
mandatory for the municipal court to acquire
jurisdiction: first, the plaintiff must allege prior
physical possession of the property, and second, he
must also allege that he was deprived of his
possession by any of the means provided for in
Section 1, Rule 70 of the Rules of Court i.e., by force,
intimidation, threat, strategy or stealth. It is also
settled that in the resolution thereof, what is
important is determining who is entitled to the
physical possession of the property. Indeed, any of
the parties who can prove prior possession de facto

may recover such possession even from the owner
himself since such cases proceed independently of
any claim of ownership and the plaintiff needs
merely to prove prior possession de facto and undue
deprivation thereof.
4. Actions; Ejectment; Forcible Entry; Words
and Phrases; In order to constitute force that
would justify a forcible entry case, the trespasser
does not have to institute a state of war—the act of
going to the property and excluding the lawful
possessor therefrom necessarily implies exertion of
force over the property; The words “by force,
intimidation, threat, strategy or stealth” include
every situation or condition under which one person
can wrongfully enter upon real property to exclude
another, who has prior possession therefrom.-
In order to constitute force that would justify a
forcible entry case, the trespasser does not have to
institute a state of war. The act of going to the
property and excluding the lawful possessor
therefrom necessarily implies the exertion of force
over the property which is all that is necessary and
sufficient to show that the action is based on the
provisions of Section 1, Rule 70 of the Rules of Court.
As expressly stated in David vs. Cordova …The words
“by force, intimidation, threat, strategy or stealth”
include every situation or condition under which one
person can wrongfully enter upon real property and

exclude another, who has had prior possession
therefrom. If a trespasser enters upon land in open
daylight, under the very eyes of the person already
clothed with lawful possession, but without the
consent of the latter, and there plants himself and
excludes such prior possessor from the property, the
action of forcible entry and detainer can
unquestionably be maintained, even though no force
is used by the trespasser other than such as is
necessarily implied from the mere acts of planting
himself on the ground and excluding the other party.
5. Actions; Ejectment; Forcible Entry; The
presence of men in the subject property restricting a
person‟s mobility constitutes force contemplated by
Section 1, Rule 70 of the Rules of Court.-
The presence of such men in the subject property
restricting petitioners‟ mobility constitutes force
contemplated by Section 1, Rule 70 of the Rules of
Court.
6. Actions; Ejectment; Forcible
Entry; Regardless of the actual condition of the ti-tle
of the property, the party in peaceable quiet
possession shall not be thrown out by a strong hand,
violence or terror.-
It is true that petitioners Bañes and Del Rosario
wrote LCP expressing their willingness to voluntarily
vacate the premises upon finding another place to

live in, but this is after respondents had padlocked
the premises and used armed men to prevent their
coming to and from the premises. Otherwise stated,
said letters do not negate the initial use of force by
respondents which constituted forcible entry. It is
undisputed that respondents owned the property
occupied by petitioners, still their use of force in
evicting petitioners therefrom was not justified.
Indeed, regardless of the actual condition of the title
to the property, the party in peaceable quiet
possession shall not be thrown out by a strong hand,
violence or terror. The owner who has title over the
property cannot take the law into his own hands to
regain possession of said property. He must go to
court.
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the petition for review on certiorari under Rule 45 of the Rules of Court assailing the
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 44333 dated November 12, 1999 and its
Resolution2 dated February 15, 2000 denying petitioners’ motion for reconsideration.
The facts are as follows:

On August 16, 1990, certain members of the Lutheran Church in the Philippines (LCP) filed an
action against its President, Thomas Batong, and six other members of the Board of Directors,3
before the Securities and Exchange Commission (SEC), for accounting and damages with prayer
for preliminary injunction and appointment of a management committee. This resulted in the
division of the LCP into two factions, namely: the Batong/ Saguilayan group which includes herein
petitioners and the Ladlad/Almazan group which includes herein respondents Almazan, et al.
On October 16, 1992, the SEC issued a writ of preliminary injunction, which reads as follows:
…It is hereby ordered that you, the above-named respondents,4 your agents, representative or
any person acting for or under your instruction refrain from representing yourselves or from
acting as board of directors or officers of the Lutheran Church in the Philippines, Inc. (LCP) and
from holding any convention or general or special membership meeting as well as election of the
members of the LCP Board of Directors, until further order from this Hearing Officer.5
By virtue of said injunction, on August 13, 1993,6 herein respondents, with the aid of certain
members of the Department of Interior and Local Government, the Philippine National Police,
and Sheriff Primo Alimurong of the Regional Trial Court (RTC), Manila, tried to dispossess
petitioners, as previous clergymen and occupants of the residential houses located at 4443 Old
Sta. Mesa Street, Manila, owned by LCP and form part of the compound where the principal office
of LCP is located. Petitioners however refused to leave the same. Thus, the main gate of the
subject property was padlocked by respondents, preventing the petitioners and their families
from going in and out of said place. Security guards were also stationed at the premises with an
instruction not to allow petitioners entry and exit.7
Almost a month thereafter, or on September 9, 1993, petitioners Manuel G. Del Rosario and Elmer
J. Bañes wrote letters addressed to Rev. Eduardo Ladlad, as LCP President.
Del Rosario’s letter reads:
Dear Rev. Ladlad:
Greetings in Christ’s love and peace.

This is to request for an extension of my family’s stay at the residence we are presently staying
and which I was told to leave on or before September 10, 1993. If it is all possible, please let us
stay up to the Schools’ semestral break so as to give us sufficient time to look for a place where
we could settle in and which will not so much affect the travel time of my girls to go to and come
home from school.
We hope that your Board will favorably grant this request for the sake of Christian charity with
which we are making the appeal. And, thank you so much for the benign audience you accorded
us last night.
In Christ,
(sgd.)
Manuel G. del Rosario
(In his own handwriting)
P.S.
Ed,
I assure you that we will leave the place even before the semestral break as soon as we get a
place to move into. Hope you take much considerations on the difficulty of looking for a place we
can afford to stay.
Ditto 8
Bañes’s letter reads as follows:
Dear Rev. Ladlad,

Grace, Mercy and Peace from God our Father and Lord!
The house where we live in for some two years now, meant so many things to us…
Now we don’t have a place to go. I’m sure Eddie, you know my situation. We can’t hardly afford
to rent a decent house. Please do extend your helping hand to me and my family.
May I propose that we stay in the Caloocan Property – the lower portion of the house. The Upper
portion is for Rev. Saquilayang’s office and Chapel of Immanuel Lutheran Church.
We will definitely leave the Yellow house once we find a place to live.
Thank you very much.
May we expect a favorable response soonest.
In Christ,
(sgd)
Rev. Elmer J. Bañes9

Petitioners Bañes and Del Rosario eventually left the premises.10 Petitioners-spouses San Ramon
did not write any letter but they were able to leave the premises by befriending the guards
posted at the gate.11
On December 3, 1993, petitioners filed an action for forcible entry with prayer for issuance of
temporary restraining order and preliminary mandatory injunction against the respondents herein.
Metropolitan Trial Court (MeTC), Branch 13, Manila granted petitioners’ prayer for the issuance of
temporary restraining order.12 The case, docketed as Civil Case No. 142991-CV, was subsequently
raffled to MeTC, Branch 7 and on March 2, 1994, the court, through Judge Emelita
Habacon-Garayblas, issued an order granting petitioners’ prayer for injunctive relief, pertinent
portions of which read:
…it appearing that plaintiffs are suffering and will continue to suffer great and irreparable
damage and injury unless restored in the physical possession of the premises in dispute; and it
further appearing that at present defendants threaten to continue demolishing the houses of the
plaintiffs on the basis of these considerations, the Court finds that the issuance of a writ of
preliminary mandatory injunction pending final determination of the principal issues is proper
and in order. The Court therefore resolves to grant the application for writ of preliminary
mandatory injunction.13
On March 5, 1994, respondents filed a (belated) motion to suspend resolution of the prayer for
issuance of preliminary mandatory injunction and for inhibition. On March 16, 1994, Judge
Habacon-Garayblas inhibited herself from further hearing the case and ordered its record to be
returned to the office of the Executive Judge for re-raffle. The case was re-raffled to Branch 18
on March 18, 1994.14
Respondents then went to the RTC by way of prohibition with prayer for the issuance of
temporary restraining order and preliminary mandatory injunction, docketed as Civil Case No.
94-69789, questioning the correctness of the issuance of preliminary mandatory injunction in
favor of the petitioners. On March 21, 1994, RTC, Branch 42, Manila, issued a temporary
restraining order in favor of herein respondents.15 On April 8, 1994, the RTC Branch 42, Manila
issued an Order stating that inasmuch as the case emanated from a case before the SEC,
respondents are entitled to the injunctive relief prayed for.16 Pertinent portions of said Order
read:
On the petitioners’ (herein respondents) application for a writ of preliminary injunction,

admittedly the parties in the case before the lower court are members of the Lutheran Church of
the Philippines. And the evidence submitted by the petitioners, as well as the transcript of the
proceedings in the lower court which were attached to the respondents’ opposition to the
application for preliminary injunction established that the case in the lower court is an off-shoot
of a case that emanated from a case before the Securities and Exchange Commission, whose
orders were elevated to the Court of Appeals.
From the admitted facts, as well as evidence adduced, this Court finds that the petitioners are
entitled to the injunctive relief prayed for.
WHEREFORE, upon the filing of a bond in the amount of Fifty Thousand Pesos (₱50,000.00) let a
writ of preliminary injunction be issued enjoining the respondents, particularly the Presiding
Judge of the Metropolitan Trial Court from further conducting proceedings in Civil Case No.
142991 until further orders from this Court.17
Petitioners elevated said Order to the CA, docketed as CA-G.R. SP No. 34504 via a petition for
certiorari, which rendered a decision on October 13, 1995, annulling and setting aside the
injunction issued by the RTC, the fallo of which reads:
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The assailed orders are
hereby ANNULLED and SET ASIDE and the writ of preliminary injunction issued by respondent
court is DISSOLVED.
SO ORDERED.18
Respondents’ motion for reconsideration was denied.
The case was thereafter remanded to the MeTC, Branch 18, presided by Judge Thelma Ponferrada
who rendered her decision dated May 2, 1996, thus:
The fact of dispossession of the subject property is not disputed. The sole issue as defined in the
preliminary conference order of January 16, 1996… is whether or not such dispossession
constitutes forcible entry under Section 1, Rule 70 of the Rules of Court.
From the evidence on record, the Court believes and so finds that the dispossession of the subject
property was effected without the required attendant circumstances of force, intimidation,
threat, strategy or stealth.
WHEREFORE, judgment is hereby rendered dismissing this case without pronouncements as to

costs.19 (Emphasis supplied)
In ruling that there was no force, intimidation, threat, strategy and stealth, Judge Ponferrada
gave weight to: the letter of petitioner Rev. Elmer Bañes to the LCP President asking that they be
allowed to live in the LCP’s Caloocan property and signifying that they (Spouses Bañes) will leave
the "yellow house" once they find another place to live in; the testimony of petitioner Angela
Bañes that the sheriff did not approach her concerning the enforcement of the writ and that she is
not aware that the sheriff approached her husband; the testimony of petitioner Nenita San Ramon
that she and her husband were able to leave the premises by befriending the guard posted in their
compound; and the joint affidavit of the petitioners which stated that the guards and the counsel
of LCP, Atty. Almazan, stopped Nenita San Ramon from leaving the premises to prevent her from
appearing in the criminal complaint she filed against them.20
Petitioners appealed the MeTC decision to the RTC, docketed as Civil Case No. 96-79078. The RTC,
on April 15, 1997, reversed and set aside the MeTC decision.21 The decretal portion of the RTC
decision reads:
WHEREFORE, on the basis of the foregoing considerations, the decision of the lower court is
hereby set aside and a new one is hereby entered:
1. Ordering the defendants and those who derived possession from them to vacate, surrender and
restore possession of the questioned premises to the plaintiffs;
2. Ordering defendants to jointly and solidarily pay each of the plaintiffs’ spouses the sum of
₱5,000.00 a month, starting from October 15, 1993 until defendants vacate and surrender the
questioned premises to the plaintiffs, as and for reasonable compensation for the use and
occupation of the premises;
3. Ordering defendants to jointly and solidarily pay each plaintiff spouses the sum of ₱20,000.00
as and for attorney’s fee; and
4. The cost of suit.22
Respondents thereafter went to the CA on a petition for review, docketed as CA-G.R. SP. No.
44333. On November 12, 1999, the CA rendered herein assailed judgment wherein it found that
while herein respondents (petitioners in the CA) committed acts contrary to what is sanctioned by
the laws, still, herein petitioners (respondents in the CA) are not entitled to favorable judgment
in their forcible entry case as evidence show that they were willing to vacate the premises, thus:
Petitioner in utilizing the preliminary injunction order of SEC in evicting the respondents from the
subject premises, indeed committed an act contrary to what is sanctioned by the laws…
Respondent court erred in failing to consider the above-quoted letters to the president of LCP.
For indeed, the letter shows the willingness of the private respondents to voluntarily vacate the
subject premises, only they were requesting for an extension of their stay there. Which was
obviously allowed by the petitioners, since the respondents were able to stay there until October
1993, and respondents spouses were allowed, as requested, to stay at the Caloocan property of
LCP without paying rental. Such expression of willingness to voluntarily vacate the subject
premises clearly negates the elements of force and intimidation in a forcible entry case.
Further, the letter of Rev. Del Rosario to the president of LCP convinced this Court that there is
lack of force and intimidation in the present case to constitute a forcible entry. . . .
...
Respondent court also erred in failing to consider the testimony of private respondent Angela
Banes on February 17, 1994, proving that their request to allow them to transfer to the Caloocan
property of LCP was given due course by the petitioners. . . .
The above-quoted testimony of Angela Banes (sic) renders the award of damages, in the amount
of ₱5,000.00 monthly as reasonable rent in favor of the respondents by the respondent court,
improper, as the respondents were allowed by LCP to stay in the said property without payment
of rental. Therefore, since private respondents were allowed to stay at the petitioner’s place for
free, they could not possibly spend for rental. Clearly, respondent court erred in awarding
payment of reasonable rent in favor of the respondents.
WHEREFORE, foregoing premises considered, finding cogent reasons to reverse the decision of the
Regional Trial Court, Branch 34, Manila, dated April 15, 1997 in the Civil Case No. 96-79078,
entitled "Sps. Rev. Elmer J. Banes, et al. vs. Oscar Almazan, et al., the same is hereby SET ASIDE,
adopting the decision of Metropolitan Trial Court of Manila, Branch 18, and present petition for
review is hereby DISMISSED for lack of merit.
No pronouncement as to cost.
SO ORDERED.23
Their motion for reconsideration having been denied,24 petitioners now come before this Court
alleging that the CA erred:
…IN IGNORING THE LAW OF THE CASE WITH RESPECT TO THE ISSUE OF DISPOSSESSION OF THE
PRIVATE RESPONDENTS WHICH WAS ALREADY LITIGATED BY THE PARTIES AND ESTABLISHED IN
CA-G.R. NO. 34504-Sp. Proc. No. (sic)
II
…IN OVERTURNING THE FACTUAL FINDINGS OF THE TRIAL COURT ON THE PRESENCE OF FORCE AND
INTIMIDATION IN THE DISPOSSESSION OF PETITIONERS BECAUSE SAID FINDINGS ARE ENTITLED TO
GREAT WEIGHT AND RESPECT AS THE TRIAL JUDGE PERSONALLY HEARD THE EVIDENCE
III
…IN ALLOWING PRIVATE RESPONDENTS TO RAISE THE ABSENCE OF FORCE OR INTIMIDATION AS A

DEFENSE CONSIDERING THAT (1) THIS DEFENSE WAS NOT TIMELY RAISE (SIC) BY PRIVATE
RESPONDENTS IN THEIR ANSWER; AND (2) RESPONDENTS JUDICIALLY ADMITTED IN THEIR

PLEADINGS THE USE OF FORCE OR INTIMIDATION TO DISPOSSESS PETITIONERS
IV
…IN RULING THAT NO FORCE OR INTIMIDATION WAS EMPLOYED IN DISPOSSESSING PETITIONERS AS

THIS IS NOT IN ACCORD WITH THE EVIDENCE AND INCONSISTENT WITH THE FINDINGS OF THE TRIAL
JUDGE WHO HEARD THE EVIDENCE AND THE RTC
…IN RULING THAT PETITIONERS ARE NOT ENTITLED TO ATTORNEY’S FEES AND REASONABLE
COMPENSATION FOR THE PREMISES AS THIS IS NOT IN ACCORD WITH SECTION 17, RULE 70 AND THE
RULE LAID DOWN IN VAZQUEZ VS. GARCIA25
Petitioners argue that: it is settled in the October 13, 1995 Decision of the CA, in CA-G.R. SP No.
34504, that the acts of respondents in forcibly evicting the petitioners under the guise of a writ of
injunction issued by the SEC is not sanctioned by law;26 an entry of judgment of the said decision
was made on June 7, 1996, thus said issue is barred by the rule on conclusiveness of judgment as
provided in Section 49, Rule 39 of the Rules of Court;27 the parties already litigated the issue of
dispossession and the CA declared that petitioners had been in possession of the subject premises
long before the SEC case was filed and it was only because petitioners refused to recognize the
duly constituted board of directors that they were made to suffer by being taken out of the house
they had long been occupying; the findings of Judge Habacon-Garayblas of MeTC Branch 7, Manila,
that respondents, together with several armed security guards, forcibly took possession of the
residential houses, occupied by petitioners, and evicted petitioners therefrom are also entitled to
great weight; the CA erred in allowing the respondents to belatedly raise the defense that
petitioners voluntarily vacated the subject premises because an appellant can only include in his
assignment of errors those questions of law or fact that have been raised in the court below and
which are within the issues framed by the parties; the CA’s findings that there was an absence of
force and intimidation to dispossess petitioners directly conflict with the findings of the RTC; the
RTC’s conclusions are consistent and find basis in the original findings of Judge
Habacon-Garayblas who actually heard and received the evidence; the CA, in CA-G.R. SP No.
44333, held that petitioners offered no resistance to their illegal eviction hence no force or
intimidation was employed, but, there is no necessity that the force offered or intended to be
offered be resisted if the failure to resist is due to intimidation or a well founded belief that
resistance will be useless; the CA, in CA-G.R. SP No. 44333, erred in ruling that petitioners are not
entitled to attorney’s fees and reasonable compensation for the premises; the award of
reasonable compensation is warranted under Section 17, Rule 70 in forcible entry cases and
irrespective of whether the plaintiff is paying rents thereon or not; as ruled in Vazquez vs. Garcia
which was cited in the RTC decision, the plaintiff steps into the shoes of the lessor and as such
cannot recover damages other than the reasonable value of the use and enjoyment of the
property.28
Petitioners then prayed that the decision dated November 12, 1999 of the CA be reversed and set
aside, the writ of preliminary injunction issued by the same be dissolved and the decision dated
May 2, 199629 of the RTC of Manila in Civil Case No. 96-79078 be affirmed in toto.30
Respondents in their Comment contend that: petitioners were former clergymen of the LCP, who,
during their tour of duty, were given the privilege to use and occupy the subject properties not in
their own right but as mere agents/representatives of respondent LCP; petitioners admitted this,
as manifested by their letters to the officers of LCP asking for an extension of time to stay at the
subject premises and look for a new place to live in; eventually, petitioners transferred to
another property also owned by respondent LCP without paying any rents thereon; petitioners
filed a complaint for forcible entry against respondent LCP and its officers a few months after
they were recalled by respondents and despite being allowed to stay in the subject premises in
accordance with their letters requesting for extension to stay therein; the case for forcible entry
has no basis in fact and in law; and the November 12, 1999 decision of the CA in CA-G.R. SP No.
44333 has become final and executory and can no longer be reviewed by this Court since the
motion for reconsideration earlier filed by petitioners with the CA was denied for being pro forma
as "it has not raised any new issue or substantial argument so as to merit its grant," and therefore,
it has not interrupted the time to appeal.31
On the issues raised by petitioners, respondents counter that: the ruling in CA-G.R. SP No. 34504
cannot be considered as the law of the case in the present case since the two cases involved
different issues; CA-G.R. SP No. 34504 dwelt on the writ of injunction issued by the trial court and
reached the CA by certiorari while the present case involves the alleged forcible entry committed
by respondents and reached the CA by way of petition for review; petitioners who participated in
the proceedings before the MeTC of Manila, Branch 18 and the appeal proceedings before the RTC
of Manila, Branch 34 are also estopped from raising this issue; petitioners did not possess the
subject properties in their own right but as mere agents and/or representatives of the respondent
LCP, thus, they never had any cause of action to file a case for forcible entry; it was Branch 18 of
the MeTC of Manila which was tasked to rule on the main issue of alleged forcible entry and said
court held in its May 2, 199632 decision that the dispossession of the petitioners was effected
without force, intimidation, threat, strategy or stealth; petitioners were willing to voluntarily
leave the subject premises and merely requested for an extension of their stay therein, showing
there was no force, intimidation or stealth; furthermore, such request was allowed as petitioners
were able to stay thereat until October 1993; the absence of force, intimidation, stealth and
strategy was also confirmed by the CA; and there being no forcible entry in this case, there can be
no justification for the award of damages and/or attorney’s fees and it will be absurd for the
respondent LCP to pay rentals for the use of its own properties unto its own former employee
acting as an agent of the former.33
Before going to the merits, the Court shall first address a matter raised by respondents, i.e.,
considering that the motion for reconsideration filed by petitioners in CA-G.R. SP No. 44333 was
denied for being pro forma, said motion did not toll the period of filing an appeal thus the
decision of the CA on November 12, 1999 has become final.
True, a pro forma motion for reconsideration does not suspend the running of the period to
appeal.34 However, it is also axiomatic that Rules on the perfection of appeals must occasionally
yield to the loftier ends of substantial justice and equity.35 In the present case, petitioners filed
their motion for extension of time to file a petition for review within 15 days from receipt of the
denial of their motion for reconsideration of the decision in CA-G.R. SP No. 44333, which was
granted. Then they filed their petition for review with this Court within the extended period.
Under the premises and considering the merits of the case which ultimately negate the finding of
the CA that the motion for reconsideration was pro forma, justice would be better served if we
consider the present petition for review as duly filed.
The crux of the present petition is: Whether petitioners were removed from the premises by force,
intimidation, threat, strategy or stealth.
Petitioners argue that the CA, in CA-G.R. SP No. 34504, already ruled that the act of respondent
LCP in dispossessing petitioners of the subject property is not sanctioned by law and that it was
only because petitioners refused to recognize the new set of directors that they were made to
suffer by taking them out of the house they have been occupying. Such findings, petitioners claim,
should be considered as the law of the case.
We are not persuaded.
Law of the case is the opinion delivered on a former appeal.36 It applies to an established rule
that when an appellate court passes on a
question and remands the case to the lower court for further proceedings, the question there
settled becomes the law of the case upon subsequent appeal.37 It further means that whatever is
once irrevocably established as the controlling legal rule or decision between the same parties in
the same case continues to be the law of the case, whether correct on general principles or not,
so long as the facts on which such decision was predicated continue to be the facts of the case
before the court.38
As a rule, a decision on a prior appeal of the same case is held to be the law of the case whether
that question is right or wrong, the remedy of the party deeming himself aggrieved being to seek
a rehearing.39 Indeed, courts must adhere thereto, whether the legal principles laid down were
"correct on general principles or not," or "whether the question is right or wrong"40 because
public policy, judicial orderliness and economy require such stability in the final judgments of
courts or tribunals of competent
jurisdiction.41
In this case however, a review of the decision of the CA in CA-G.R. SP No. 34504, which
petitioners claim should be considered as the law of the case with respect to the matter of
dispossession made by the respondents, reveals that what the CA resolved in said case was not the
fact of dispossession of petitioners but whether the controversy falls under the jurisdiction of
regular courts or with the SEC which would justify an injunction to stop the proceedings before
the MeTC. It said:
. . . We…deem it necessary to settle the issue of whether or not the action for forcible entry in
this particular case arose out of an intra-corporate controversy such that it is the Securities and
Exchange Commission (SEC) and not the ordinary court which has jurisdiction over the same.42
Although the controversy is between a religious corporation and its members regarding the
possession of corporate property, We are of the opinion that the primary concern of the
petitioners is to be relieved of the unlawful and violent acts employed by the private respondents
which amounted to the disturbance of the former’s quiet and peaceful possession thereof.43
Said decision made it plain that it has not made any factual findings yet but resolved the matter
based only on the pleadings submitted by the parties. We quote:
From the allegations of the complaint in the forcible entry case (Civil Case No. 142991) with the
MTC (sic) of Manila, Branch 18, the existence of an intra-corporate relationship between the
parties is not clearly evident notwithstanding the fact that the Lutheran Church in the Philippines
(LCP) was a named defendant. A perusal of the complaint reveals that the petitioners, plaintiffs
therein were in actual and peaceful possession of the subject premises since 1980 by virtue of
their position as clergymen of the LCP who were entitled to housing privileges and that sometime
in August 1993, they were forced to vacate the same by people "purporting to act in behalf of
LCP"… supposedly sanctioned by a writ of injunction issued by the SEC.
With respect to petitioners Pedro and Nenita San Ramon, they allegedly executed an agreement
with the LCP wherein she was to undertake the repairs of the house and pay ₱6,000.00 a month as
rent.
It is clear therefrom that petitioners had been in possession of the property in question from 1980
and even at the time the SEC case was instituted by the LCP. It was in 1993 when the private
respondents ousted petitioners from the property allegedly with the use of force, threat and
intimidation.
All the elements necessary to establish a case for forcible entry were sufficiently alleged by the
petitioners. For the private respondents to enforce their legal right to possession, they should
have resorted to the proper action in law.
The acts of the private respondents as alleged by the petitioners in forcibly evicting them under
the guise of a writ of injunction issued by the SEC is not sanctioned by law. While among the acts
sought to be enjoined by the writ against the illegally constituted board and their representatives
is the holding of LCP properties, the said writ cannot be validly utilized herein.44 (Emphasis
supplied)
Petitioners capitalize on the statement of the CA that:
Suffice it to state that petitioners had been in possession of the subject premises long before the
SEC case was filed. However, because of the fact that petitioners refused to recognize the duly
constituted board of directors, they are now made to suffer the consequences of their acts by
being taken out of the possession of the house they had long been occupying.45 (Emphasis
supplied)
Nonetheless, such statement should be qualified by the fact that the CA merely relied on the
allegations made by the petitioners in their complaint in reaching its conclusion that the regular
courts have jurisdiction on the case. As pronounced by the CA near the end of its decision:
Hence, in the light of the foregoing, We find that the respondent judge acted with grave abuse of
discretion amounting to lack of jurisdiction when it issued the assailed orders. Considering that
the issue in forcible entry cases is one of prior possession, such issue may be properly resolved in
the ordinary courts by applying civil law principles. The authority of the SEC to settle this issue
cannot be conceded.46
Since a reading in its entirety of the decision of the CA in CA-G.R. SP No. 34504 reveals that no
factual conclusions were made yet, particularly on the matter of dispossession, the doctrine of
the law of the case cannot apply in this case.
Now on the matter of whether there was force, intimidation, threat, strategy or stealth in this
case.
There is forcible entry or desahucio when one is deprived of physical possession of land or building
by means of force, intimidation, threat, strategy or stealth. In such cases, the possession is illegal
from the beginning and the basic inquiry centers on who has the prior possession de facto.47 In
filing forcible entry cases, the law tells us that two allegations are mandatory for the municipal
court to acquire jurisdiction: first, the plaintiff must allege prior physical possession of the
property, and second, he must also allege that he was deprived of his possession by any of the
means provided for in Section 1, Rule 70 of the Rules of Court i.e., by force, intimidation, threat,
strategy or stealth.48 It is also settled that in the resolution thereof, what is important is
determining who is entitled to the physical possession of the property.49 Indeed, any of the
parties who can prove prior possession de facto may recover such possession even from the owner
himself50 since such cases proceed independently of any claim of ownership and the plaintiff
needs merely to prove prior possession de facto and undue deprivation thereof.51
In order to constitute force that would justify a forcible entry case, the trespasser does not have
to institute a state of war. The act of going to the property and excluding the lawful possessor
therefrom necessarily implies the exertion of force over the property which is all that is necessary
and sufficient to show that the action is based on the provisions of Section 1, Rule 70 of the Rules
of Court.52
As expressly stated in David vs. Cordova53
…The words "by force, intimidation, threat, strategy or stealth" include every situation or
condition under which one person can wrongfully enter upon real property and exclude another,
who has had prior possession therefrom. If a trespasser enters upon land in open daylight, under
the very eyes of the person already clothed with lawful possession, but without the consent of the
latter, and there plants himself and excludes such prior possessor from the property, the action of
forcible entry and detainer can unquestionably be maintained, even though no force is used by
the trespasser other than such as is necessarily implied from the mere acts of planting himself on
the ground and excluding the other party.54
In this case, the very testimony which was quoted by Judge Ponferrada in concluding that there
was no force mentions the presence of guards at the premises which prevented the ingress and
egress of petitioners from the premises. Said portion reads:
…Nenita San Ramon testified in this wise:
Q. When did you leave the premises Madam witness?
A. I left on August 27, sir.
Q. Why did you leave the premises?
A. Actually, according to the guard, upon order of Atty. Almazan, the people inside cannot come
out of the compound, sir.
Q. And so what happened next?
A. I tried to befriendly (sic) with the guard and they looked for Atty. Almazan. And then when
they found out that Atty. Almazan was not in the vicinity, they told me that I can go out of the
compound sir.
Q. Who was with you if any, when you left the premises?
A. My husband sir.
Q. Who else?
A. None, sir, except my husband sir.
Q. Were you allowed to return to the compound, after you left on August 27, madam witness?
A. No more sir.
Q. Who prohibited you from entering?
A. The guard sir.
Q. Were you able to bring out with you any items from your house?
A. Our dresses only.55
Clearly, the presence of such men in the subject property restricting petitioners’ mobility
constitutes force contemplated by Section 1, Rule 70 of the Rules of Court.
The MeTC, through Judge Ponferrada, and the CA in the herein assailed decision ratiocinated that
since petitioners Bañes and Del Rosario wrote the LCP through its president, on September 9,
1993, months after respondents sought the ouster of petitioners from the property, expressing
that they are willing to vacate the premises upon finding another place to live in, no force was
employed by the respondents, thus there was no forcible entry.
We do not agree.
It is true that petitioners Bañes and Del Rosario wrote LCP expressing their willingness to
voluntarily vacate the premises upon finding another place to live in, but this is after respondents
had padlocked the premises and used armed men to prevent their coming to and from the
premises. Otherwise stated, said letters do not negate the initial use of force by respondents
which constituted forcible entry. It is undisputed that respondents owned the property occupied
by petitioners, still their use of force in evicting petitioners therefrom was not justified.
Indeed, regardless of the actual condition of the title to the property, the party in peaceable
quiet possession shall not be thrown out by a strong hand, violence or terror.56 The owner who
has title over the property cannot take the law into his own hands to regain possession of said
property.57 He must go to court.58
Sec. 17, Rule 70 of the Rules of Court provides that:
Sec. 17. Judgment. – If, after trial, the court finds that the allegations of the complaint are true,
it shall render judgment in favor of the plaintiff for the restitution of the premises, the sum justly
due as arrears of rent or as reasonable compensation for the use and occupation of the premises,
attorney’s fees and costs. If it finds that said allegations are not true, it shall render judgment for
the defendant to recover his costs. If a counterclaim is established, the court shall render
judgment for the sum found in arrears from either party and award costs as justice requires.
However, while we find that there was forcible entry in this case, we cannot grant the prayer of
petitioners-spouses Bañes that they be restored to the subject premises. It is established that
they stayed on the property for free as privilege of petitioner Elmer Bañes as a clergyman of LCP
and that after the initial forcible entry of respondents, petitioner Elmer Bañes expressed, through
his letter, his willingness to vacate the property upon finding a new place to live in and proposed
that he stay in the Caloocan property of respondent LCP. It is on record that the spouses Bañes
are now staying in another property owned by the LCP in Caloocan City without paying rent.59 It
can be said, therefore, that they have lost their cause of action to ask for restitution having
transferred, as they have requested, to another property of LCP without paying any rentals.
The situation is different insofar as petitioners spouses Del Rosario and spouses San Ramon are
concerned. Evidence do not disclose that they asked for or were given by LCP another place to
stay in.
We are therefore left with no recourse but to affirm the RTC in Civil Case No. 96-79078 ordering
the respondents and those who derived possession from them to vacate, surrender and restore
possession of the questioned premises to petitioners Del Rosario and San Ramon. This,
notwithstanding the reality that the stay of petitioners Del Rosario is dependent on whether the
latter still has the privilege to stay in the premises as a clergyman of respondent LCP. Said issue is
best resolved in an action for unlawful detainer which respondents should have filed against
petitioners in the first place.
Likewise, the claim that petitioners-spouses San Ramon had no valid lease contract with
respondent LCP is not a proper defense in the forcible entry case filed by herein petitioners
inasmuch as petitioners-spouses San Ramon, just like petitioners-spouses Del Rosario, ought not
to have been forcibly driven out of the premises without due process of law which is the filing of
the proper unlawful detainer case against them in the proper court by respondent LCP instead of
it making use of the writ of preliminary injunction issued by the SEC in forcing them to leave the
premises.
Respondents cannot justify their forcible entry in the premises occupied by petitioners by
claiming that the latter have no valid right to the continued possession of the property.
Respondents should have filed the appropriate unlawful detainer case against them instead of
forcing them out of the premises.
Furthermore, although we are affirming the RTC Decision dated April 15, 1997 in Civil Case No.
96-79078 that there is forcible entry committed by respondents against petitioners, we find it not
equitable and not within the contemplation of the above-quoted provisions of Section 17, Rule 70
that petitioners be awarded by the RTC the amount of ₱5,000.00 a month as reasonable
compensation for the use and occupation of the premises. Evidently, that portion of Section 17,
Rule 70 which awards reasonable compensation for the use and occupancy of the premises refers
to unlawful detainer cases and not to forcible entry suits like the present case.
If at all, the rentals that petitioners could have been entitled to would be those rentals which
petitioners had to pay for the use of the houses where they eventually transferred. However, it is
undisputed that petitioners-spouses Bañes transferred to another property of respondent LCP at
Caloocan City, without being charged any rentals. Thus, they are not entitled to the amount of
₱5,000.00 a month awarded by the RTC.
With regard to petitioners-spouses Del Rosario and spouses San Ramon, they failed to present
evidence showing that they were paying rentals for the places they are now occupying. Hence,
the RTC award of ₱5,000.00 has no valid basis.
We sustain the award for attorney’s fee in accordance with Rule 70,
Sec. 17 of the Rules of Court60 and Art. 2208 of the Civil Code.61
WHEREFORE, the petition is GRANTED. The CA Decision in CA-G.R. SP No. 44333 dated November
12, 1999 is annulled and set aside. The Decision of the Regional Trial Court, Manila, Branch 34 in
Civil Case No. 96-79078 dated April 15, 1997 is AFFIRMED with MODIFICATIONS that: (a)
petitioners-spouses Rev. Elmer J. Bañes and Angela Bañes are not entitled to restitution of the
subject property; and (b) the award of ₱5,000.00 a month to each of petitioners-spouses as and
for reasonable compensation for the use and occupation of subject premises is DELETED.
SO ORDERED.
G.R. No. 180542 April 12, 2010
HUBERT NUÑEZ, Petitioner,
vs.
SLTEAS PHOENIX SOLUTIONS, INC., through its representative, CESAR SYLIANTENG

Respondent,

a decision of the Court of Appeals
Syllabi Class : Civil Procedure|Appeals
Syllabi:
1. Courts; Jurisdiction; Ejectment; Ejectment

cases fall within the original and exclusive
jurisdiction of first level courts.-
—Designed to provide an expeditious means of
protecting actual possession or the right to
possession of the property involved, there can be no
gainsaying the fact that ejectment cases fall within
the original and exclusive jurisdiction of first level
courts by express provision of Section 33 of Batas
Pambansa Blg. 129, in relation to Sec. 1, Rule 70 of
the 1997 Rules of Civil Procedure. In addition to
being conferred by law, however, a court‟s
jurisdiction over the subject matter is determined by
the allegations of the complaint and the character of
the relief sought, irrespective of whether or not the
plaintiff is entitled to recover all or some of the
claims asserted therein. In much the same way that
it cannot be made to depend on the exclusive
characterization of the case by one of the parties,
jurisdiction cannot be made to depend upon the
defenses set up in the answer, in a motion to dismiss
or in a motion for reconsideration.
2. Civil Procedure; Appeals; Points of law,
theories, issues and arguments not brought to the
attention of the trial court will not be and ought not
to be considered by a reviewing court, as these
cannot be raised for the first time on appeal.-
—The rule is settled, however, that points of law,

theories, issues and arguments not brought to the
attention of the trial court will not be and ought not
to be considered by a reviewing court, as these
cannot be raised for the first time on appeal. Basic
consideration of due process impels this rule.
3. Same; Same; Same; The one year period is
counted from the time the plaintiff acquired
knowledge of the dispossession when the same had
been effected by means of stealth.-
—Ordinarily reckoned from the date of actual entry
on the land, the one year period is counted from the
time the plaintiff acquired knowledge of the
dispossession when, as here, the same had been
effected by means of stealth.
4. Ejectment; Forcible Entry; Possession; One
need not have actual or physical occupation of every
square inch of the property at all times to be
considered in possession.-
—While prior physical possession is,admittedly, an
indispensable requirement in forcible entry cases,
the dearth of merit in petitioner‟s position is,
however, evident from the principle that possession
can be acquired not only by material occupation, but
also by the fact that a thing is subject to the action of
one‟s will or by the proper acts and legal formalities
established for acquiring such right. Because
possession can also be acquired by juridical acts to

which the law gives the force of acts of possession,
e.g., donations, succession, execution and
registration of public instruments, inscription of
possessory information titles and the like, it has
been held that one need not have actual or physical
occupation of every square inch of the property at all
times to be considered in possession.
5. Same; Same; Same; Forcible Entry; Essential
requisites for Metropolitan Trial Court‟s (MeTC‟s)
acquisition of jurisdiction over forcible entry cases.-
—The rule is no different in actions for forcible entry
where the following requisites are essential for the
MeTC‟s acquisition of jurisdiction over the case, viz.:
(a) the plaintiffs must allege their prior physical
possession of the property; (b) they must assert that
they were deprived of possession either by force,
intimidation, threat, strategy or stealth; and, (c) the
action must be filed within one (1) year from the
time the owners or legal possessors learned of their
deprivation of the physical possession of the
property.
DECISION
PEREZ, J.:
The determination of the jurisdiction of first level courts over ejectment cases is at the heart of
this Petition for Review on Certiorari filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure,
which seeks the nullification and setting aside of the 31 July 2007 Decision rendered by the
Special Twelfth Division of the Court of Appeals in CA-G.R. SP No. 91771.1
The Facts
The subject matter of the instant suit is a 635.50 square meter parcel of land situated at Calle
Solana, Intramuros, Manila and registered in the name of respondent SLTEAS Phoenix Solutions,
Inc. under Transfer Certificate of Title (TCT) No. 87556 of the Manila City Registry of Deeds.
Despite having acquired the same thru the 4 June 1999 Deed of Assignment executed in its favor
by the Spouses Ong Tiko and Emerenciana Sylianteng,2 it appears that respondent was
constrained to leave the subject parcel idle and unguarded for some time due to important
business concerns. In October 2003, an ocular inspection conducted by respondent’s
representatives revealed that the property was already occupied by petitioner Hubert Nuñez and
21 other individuals.3 Initially faulting one Vivencia Fidel with unjustified refusal to heed its
verbal demands to vacate the subject parcel, respondent filed its 5 December 2003 complaint for
forcible entry which was docketed as Civil Case No. 177060 before Branch 4 of the Metropolitan
Trial Court (MeTC) of Manila.4
Additionally impleading petitioner and the rest of the occupants of the property, respondent filed
its 9 January 2004 amended complaint, alleging, among other matters, that thru its
representatives and predecessors-in-interest, it had continuously possessed the subject realty,
over which it exercised all attributes of ownership, including payment of real property taxes and
other sundry expenses; that without the benefit of any lease agreement or possessory right,
however, petitioners and his co-defendants have succeeded in occupying the property by means
of strategy and stealth; and, that according to reliable sources, the latter had been in occupancy
of the same parcel since 1999. Together with the ejectment of the occupants of the subject
premises, respondent prayed for the grant of its claims for reasonable rentals, attorney’s fees,
litigation expenses and the costs.5
Specifically denying the material allegations of the foregoing amended complaint in his 14
February 2004 Answer, petitioner averred that the property occupied by him is owned by one
Maria Ysabel Potenciano Padilla Sylianteng, with whom he had concluded a subsisting lease
agreement over the same, and that, in addition to respondent’s lack of cause of action against
him, the MeTC had no jurisdiction over the case for lack of prior demand to vacate and referral of
the controversy to the barangay authorities for a possible amicable settlement.6 Likewise
questioning the MeTC’s jurisdiction over the case, the rest of the defendants filed a Motion to
Dismiss7 which they adopted as their answer subsequent to its 27 February 2004 denial upon the
finding that a sufficient cause of action can be gleaned from the allegations of the complaint.8
After an ocular inspection conducted on 9 June 2004, it appears that the MeTC concluded that the
crowding of the residential units on the subject parcel rendered the determination of its exact
metes and bounds impossible.9 Unable to present his lessor’s title, petitioner also appears to
have agreed to the use of TCT No. 87556 as basis for determining the exact measurement of
respondent’s property.10 With the parties’ further failure to abide by their agreement to cause a
survey of the property thru an impartial surveyor from the Office of the City Assessor or City
Engineer, the record shows that respondent submitted a survey plan prepared by Geodetic
Engineer Joseph Padilla who determined that petitioner was, indeed, occupying a portion of the
subject parcel.11 Relying on said report, the MeTC went on to render a Decision dated 23
November 2004,12 resolving the complaint in the following wise:
Wherefore, premises considered, judgment is hereby rendered in favor of the plaintiff and
against all the defendants and ordering the latter to:
1. vacate the subject premises located at Lot 11, Block 45, Solana St., Intramuros, Manila;
2. for each [defendant], to pay Php5,000.00 a month counted from October 2003 until defendants
vacate the subject property;
3. to pay Php15,000.00 as and for attorney’s fees; and
4. to pay the costs of suit.13
On appeal, the foregoing decision was affirmed in toto in the 14 July 2005 Order issued by the
Regional Trial Court (RTC) of Manila in Civil Case No. 05-112490.14 Dissatisfied with said Order,
petitioner elevated the case to the Court of Appeals by way of a petition for review filed pursuant
to Section 1, Rule 42 of the 1997 Rules of Civil Procedure.15 Finding that the allegations in
respondent’s amended complaint sufficiently made out a cause of action for forcible entry
against petitioner, the Court of Appeals rendered the herein assailed decision, dismissing said
petition for review upon the following findings and conclusions:
Parenthetically, although the dispossession took place more than one year from the illegal entry
of petitioner and his co-defendants, knowledge of the same was only acquired by petitioner in
2003 when the ocular inspection was made. While ordinarily, the one-year prescriptive period
should be reckoned from the date of the actual entry on the land, the same however, does not
hold true when entry was made through stealth, in which case, the one year period is counted
from the time the plaintiff learned thereof.
Neither may petitioner seek refuge in the alleged demand letter dated 31 July 1996 sent by
respondent’s counsel which sought his ouster from the subject premises. Not only was the
existence of this letter immaterial to the issue of illegal entry into the subject premises but the
same cannot bind respondent who has no participation therein. Moreover, it also bears stressing
that not once did petitioner refute the lack of knowledge on the part of respondent of the alleged
lease contract and their usurpation of the disputed property. Verily, granting that a lease
contract truly existed, respondent’s lack of knowledge of the lease contract and the failure to
register the same in the Register of Deeds cannot bind third parties like respondent and therefore,
withhold respondent’s right to institute the action for ejectment.
As to the identity of the premises occupied by petitioner Nuñez, We find that the RTC committed
no reversible error in admitting the evidence of respondent which consists of the plan prepared
by Geodetic Engineer Padilla. Suffice it to state that petitioner, during the proceedings below,
agreed to secure an impartial survey from the Assessor’s Office or the Office of the City Engineer.
However, when he took no action after failing to obtain the survey from said offices, his
consequent failure to secure, on his own, the services of an impartial surveyor to determine and
rebut respondent’s allegation, he did so on his own accord and had no other person but himself to
blame.16
The Issues
Upon receipt of the Court of Appeals’ 4 November 2007 Resolution denying his motion for
reconsideration of the aforequoted decision,17 petitioner filed the petition at bench on the
following grounds:
THE COURTS HAVE NO JURISDICTION TO TRY THE INSTANT CASE CONSIDERING THAT THE
ELEMENTS OF FORCIBLE ENTRY ARE NOT PRESENT AND ADDITIONALLY THERE IS A QUESTION OF
OWNERSHIP.
II
THE PETITIONER SHOULD NOT VACATE THE LEASED PREMISES CONSIDERING THAT THERE IS AN
EXISTING LEASE CONTRACT WITH THE OWNER WHICH IS IN VIOLATION OF THE PROVISION OF
ARTICLE 1671 OF THE NEW CIVIL CODE.18
We find the petition bereft of merit.
Designed to provide an expeditious means of protecting actual possession or the right to

possession of the property involved,19 there can be no gainsaying the fact that ejectment cases
fall within the original and exclusive jurisdiction of first level courts20 by express provision of
Section 33 of Batas Pambansa Blg. 129, in relation to Sec. 1, Rule 70 of the 1997 Rules of Civil
Procedure.21 In addition to being conferred by law,22 however, a court’s jurisdiction over the
subject matter is determined by the allegations of the complaint23 and the character of the relief
sought,24 irrespective of whether or not the plaintiff is entitled to recover all or some of the
claims asserted therein.25 In much the same way that it cannot be made to depend on the
exclusive characterization of the case by one of the parties,26 jurisdiction cannot be made to
depend upon the defenses set up in the answer, in a motion to dismiss or in a motion for
reconsideration.27
The rule is no different in actions for forcible entry where the following requisites are essential
for the MeTC’s acquisition of jurisdiction over the case, viz.: (a) the plaintiffs must allege their
prior physical possession of the property; (b) they must assert that they were deprived of
possession either by force, intimidation, threat, strategy or stealth; and, (c) the action must be
filed within one (1) year from the time the owners or legal possessors learned of their deprivation
of the physical possession of the property.28 As it is not essential that the complaint should
expressly employ the language of the law, it is considered a sufficient compliance of the
requirement where the facts are set up showing that dispossession took place under said
conditions.29 The one-year period within which to bring an action for forcible entry is generally
counted from the date of actual entry on the land, except that when the entry is through stealth,
the one-year period is counted from the time the plaintiff learned thereof.30
Even prescinding from the fact that the parties had admitted the MeTC’s jurisdiction,31 our
perusal of the record shows that respondent’s 9 January 2004 amended complaint was able to
make out a cause of action for forcible entry against petitioner. As the registered owner of the
subject parcel, respondent distinctly alleged that, by its representatives and thru its
predecessors-in-interest, it had been in possession of the subject parcel and had exercised over
the same all attributes of ownership, including the payment of realty taxes and other expenses;
that an ocular inspection conducted in October 2003 revealed that petitioner and his
co-defendants have succeeded in occupying the property by means of stealth and strategy; and,
that its subsequent demands to vacate had been unheeded by said interlopers.32 Considering that
the test for determining the sufficiency of the allegations in the complaint is whether, admitting
the facts alleged, the court can render a valid judgment in accordance with the prayer of the
plaintiff,33 we find that the Court of Appeals correctly ruled that the MeTC had jurisdiction over
the case.
Then as now, petitioner argues that, aside from the admission in the complaint that the subject
parcel was left idle and unguarded, respondent’s claim of prior possession is clearly negated by
the fact that he had been in occupancy thereof since 1999. While prior physical possession is,
admittedly, an indispensable requirement in forcible entry cases, the dearth of merit in
petitioner’s position is, however, evident from the principle that possession can be acquired not
only by material occupation, but also by the fact that a thing is subject to the action of one's will
or by the proper acts and legal formalities established for acquiring such right.34 Because
possession can also be acquired by juridical acts to which the law gives the force of acts of
possession, e.g., donations, succession, execution and registration of public instruments,
inscription of possessory information titles and the like, it has been held that one need not have
actual or physical occupation of every square inch of the property at all times to be considered in
possession.351avvphi1
In this case, the subject parcel was acquired by respondent by virtue of the 4 June 1999 Deed of
Assignment executed in its favor by the Spouses Ong Tiko and Emerenciana Sylianteng. Although it
did not immediately put the same to active use, respondent appears to have additionally caused
the property to be registered in its name as of 27 February 200236 and to have paid the real
property taxes due thereon37 alongside the sundry expenses incidental thereto. Viewed in the
light of the foregoing juridical acts, it consequently did not matter that, by the time respondent
conducted its ocular inspection in October 2003, petitioner had already been occupying the land
since 1999. Ordinarily reckoned from the date of actual entry on the land, the one year period is
counted from the time the plaintiff acquired knowledge of the dispossession when, as here, the
same had been effected by means of stealth.38
Petitioner had, of course, endeavored to establish that respondent’s predecessors-in-interest had

served him a demand to vacate the subject parcel as early as 31 July 1996.39 Correctly brushed
aside by the Court of Appeals on the ground, among others, that respondent had no participation
in its preparation, we find said demand letter of little or no use to petitioner’s cause in view of its
non-presentation before the MeTC. However, much as it may now be expedient for petitioner to
anchor his cause thereon, said demand letter was first introduced in the record only as an
attachment to his reply to respondent’s comment to the motion for reconsideration of the 14 July
2005 order issued by the RTC.40 The rule is settled, however, that points of law, theories, issues
and arguments not brought to the attention of the trial court will not be and ought not to be
considered by a reviewing court, as these cannot be raised for the first time on appeal.41 Basic
consideration of due process impels this rule.42
A similar dearth of merit may be said of the exceptions petitioner continues to take against the
MeTC’s reliance on the survey plan prepared by Geodetic Engineer Joseph Padilla to the effect
that that the premises occupied by petitioner lies within the metes and bounds of respondent’s
property. As mere allegation is not evidence,43 the rule is settled that plaintiff has the burden of
proving the material allegations of the complaint which are denied by the defendant, and the
defendant has the burden of proving the material allegations in his case where he sets up a new
matter.44 Given the parties’ failure to make good on their agreement to cause a survey of the
property thru an impartial surveyor from the Office of the City Assessor or City Engineer,
respondent’s submission of said report was evidently for the purpose discharging the onus of
proving petitioner’s encroachment on the subject parcel, as alleged in the complaint. As the
party asserting the contrary proposition, petitioner cannot expediently disparage the
admissibility and probative value of said survey plan to compensate for his failure to prove his
own assertions.
Petitioner is, finally, out on a limb in faulting the Court of Appeals with failure to apply the first
paragraph of Article 1676 of the Civil Code of the Philippines45 in relation to the lease he claims
to have concluded with one Maria Ysabel Potenciano Padilla Sylianteng. In the absence of proof of
his lessor’s title or respondent’s prior knowledge of said contract of lease, petitioner’s harping
over the same provision simply amounts to an implied admission that the premises occupied by
him lie within the metes and bounds of the subject parcel. Even then, the resolution of said issue
is clearly inappropriate since ejectment cases are summary actions intended to provide an
expeditious manner for protecting possession or right to possession without involvement of
title.46 Moreover, if a defendant’s mere assertion of ownership in an ejectment case will not oust
the MeTC of its summary jurisdiction,47 we fail to see why it should be any different in this case
where petitioner merely alleged his lessor’s supposed title over the subject parcel.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
G.R. No. 158407 January 17, 2005
FILOMENA DOMAGAS, petitioner,
vs.
VIVIAN LAYNO JENSEN, respondent.
Case Title : FILOMENA DOMAGAS, petitioner, vs.

VIVIAN LAYNO JENSEN, respondent.Case Nature :
PETITION for review on certiorari of a decision of the
Court of Appeals.
Syllabi Class : Remedial Law|Actions|Summons
Syllabi:
1. Remedial Law; Actions; Whether a
proceeding is in rem or in personam or quasi in
rem for that matter, is determined by its nature
and purpose and by these only; Actions for
recovery of real property are in personam.-
—The settled rule is that the aim and object of an

action determine its character. Whether a
proceeding is in rem, or in personam, or quasi in rem
for that matter, is determined by its nature and
purpose, and by these only. A proceeding in
personam is a proceeding to enforce personal rights
and obligations brought against the person and is
based on the jurisdiction of the person, although it
may involve his right to, or the exercise of ownership
of, specific property, or seek to compel him to
control or dispose of it in accordance with the
mandate of the court. The purpose of a proceeding in
personam is to impose, through the judgment of a
court, some responsibility or liability directly upon
the person of the defendant.Of this character are
suits to compel a defendant to specifically perform
some act or actions to fasten a pecuniary liability on
him. An action in personam is said to be one which
has for its object a judgment against the person, as
distinguished from a judgment against the propriety
to determine its state. It has been held that an action
in personam is a proceeding to enforce personal
rights or obligations; such action is brought against
the person. As far as suits for injunctive relief are
concerned, it is well-settled that it is an injunctive
act in personam. In Combs v. Combs, the appellate
court held that proceedings to enforce personal
rights and obligations and in which personal
judgments are rendered adjusting the rights and
obligations between the affected parties is in

personam. Actions for recovery of real property are
in personam. On the other hand, a proceeding quasi
in rem is one brought against persons seeking to
subject the property of such persons to the
discharge of the claims assailed. In an action quasi in
rem, an individual is named as defendant and the
purpose of the proceeding is to subject his interests
therein to the obligation or loan burdening the
property. Actions quasi in rem deal with the status,
ownership or liability of a particular property but
which are intended to operate on these questions
only as between the particular parties to the
proceedings and not to ascertain or cut off the rights
or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined
in the action.
2. Same; Same; Same; The service of the
summons on a person at a place where he was a
visitor is not considered to have been left at the
residence or place or abode, where he has another
place at which he ordinarily stays and to which he
intends to return.-
—As gleaned from the said return, there is no
showing that as of April 5, 1999, the house where
the Sheriff found Oscar Layno was the latter‟s
resi-dence or that of the respondent herein. Neither
is there any showing that the Sheriff tried to
ascertain where the residence of the respondent was

on the said date. It turned out that the occupant of
the house was a lessor, Eduardo Gonzales, and that
Oscar Layno was in the premises only to collect the
rentals from him. The service of the summons on a
person at a place where he was a visitor is not
considered to have been left at the residence or
place or abode, where he has another place at which
he ordinarily stays and to which he intends to return.
3. Same; Same; Same; The term “dwelling house”
or “residence” are generally held to refer to the time
of service, hence it is not sufficient to leave the
summons at the former‟s dwelling house, residence
or place of abode, as the case may be.-
—In Keister v. Navarro, the Court held that the term
“dwelling house” or “residence” are generally held to
refer to the time of service; hence, it is not sufficient
to leave the summons at the former‟s dwelling house,
residence or place of abode, as the case may be.
Dwelling house or residence refers to the place
where the person named in the summons is living at
the time when the service is made, even though he
may be temporarily out of the country at the time. It
is, thus, the service of the summons intended for the
defendant that must be left with the person of
suitable age and discretion residing in the house of
the defendant. Compliance with the rules regarding
the service of summons is as much important as the

issue of due process as of jurisdiction.
4. Same; Same; Same; The statutory requirement
of substituted service must be followed faithfully and
strictly and any substituted service other than that
authorized by the statute is rendered ineffective.-
—Strict compliance with the mode of service is
required in order that the court may acquire
jurisdiction over the person of the defendant. The
statutory requirement of substituted service must be
followed faithfully and strictly and any substituted
service other than that authorized by the statute is
rendered ineffective.
5. Same; Same; Summons; Manner of Service of
Summons in an Action in Personam.-
—In Asiavest Limited v. Court of Appeals, the Court
had the occasion to state: In an action in personam,
jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the
case. Jurisdiction over the person of aresident
defendant who does not voluntarily appear in court
can be acquired by personal service of summons as
provided under Section 7, Rule 14 of the Rules of
Court. If he cannot be personally served with
summons within a reasonable time, substituted
service may be made in accordance with Section 8 of
said Rule. If he is temporarily out of the country, any
of the following modes of service may be resorted to:

(a) substituted service set forth in Section 8; (2)
personal service outside the country, with leave of
court; (3) service by publication, also with leave of
court; or (4) any other manner the court may deem
sufficient.
6. Same; Same; An action for unlawful detainer or
forcible entry is a real action and in personam.-
—From the aforementioned provisions of the Rules
of Court and by its very nature and purpose, an
action for unlawful detainer or forcible entry is a real
action and in personam because the plaintiff seeks to
enforce a personal obligation or liability on the
defendant under Article 539 of the New Civil Code,
for the latter to vacate the property subject of the
action, restore physical possession thereof to the
plaintiff, and pay actual damages by way of
reasonable compensation for his use or occupation
of the property.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the Decision1 of
the Court of Appeals (CA) in CA-G.R. CV No. 73995, which affirmed the Decision2 of the Regional
Trial Court (RTC) of Dagupan City, Branch 44, in Civil Case No. 2000-0244-D, which declared null
and void the decision of the Municipal Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No.
879.3
The antecedent facts follow.
On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible entry against
respondent Vivian Jensen before the MTC of Calasiao, Pangasinan. The petitioner alleged in her
complaint that she was the registered owner of a parcel of land covered by Original Certificate of
Title (OCT) No. P-30980, situated in Barangay Buenlag, Calasiao, Pangasinan, and with an area of
827 square meters. On January 9, 1999 the respondent, by means of force, strategy and stealth,
gained entry into the petitioner’s property by excavating a portion thereof and thereafter
constructing a fence thereon. As such, the petitioner was deprived of a 68-square meter portion
of her property along the boundary line. The petitioner prayed that, after due proceedings,
judgment be rendered in her favor, thus:
3. And, after trial, judgment be rendered:
a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of Preliminary Injunction
permanent;
b) ORDERING defendant, his representatives, agents and persons acting under her, to vacate the
portion of the property of the plaintiff occupied by them and to desist from entering, excavating
and constructing in the said property of the plaintiff described in paragraph 2 hereof and/or from
disturbing the peaceful ownership and possession of the plaintiff over the said land, pending the
final resolution of the instant action;
c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND (₱5,000.00) PESOS per month
from January 9, 1999 up to the time she finally vacates and removes all constructions made by her
in the property of the plaintiff and up to the time she finally restores the said property in the
condition before her illegal entry, excavation and construction in the property of the plaintiff;
d) ORDERING defendant to pay actual damages in the amount of TWENTY THOUSAND (₱20,000.00)
PESOS; moral damages in the amount of TWENTY THOUSAND (₱20,000.00) PESOS; attorney’s fees
of THIRTY THOUSAND (₱30,000.00) PESOS in retainer’s fee and ONE THOUSAND FIVE HUNDRED
(₱1,500.00) PESOS per court appearance fee; exemplary damages in the amount of TWENTY
THOUSAND (₱20,000.00) PESOS, and, costs.
Plaintiff further prays for other reliefs and remedies just and equitable in the premises.4
The case was docketed as Civil Case No. 879. The summons and the complaint were not served on
the respondent because the latter was apparently out of the country. This was relayed to the
Sheriff by her (the respondent’s) brother, Oscar Layno, who was then in the respondent’s house
at No. 572 Barangay Buenlag, Calasiao, Pangasinan. The Sheriff left the summons and complaint
with Oscar Layno, who received the same.5
Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent and all
persons occupying the property for and in the latter’s behalf to vacate the disputed area and to
pay monthly rentals therefor, including actual damages, attorney’s fees, and exemplary damages.
The fallo of the decision reads:
1) Ordering the defendant, her representatives, agents and persons acting under her, to vacate
the 68-square meters which she encroached upon;
2) Ordering the defendant to pay a monthly rental of ₱1,000.00 to the plaintiff;
3) To pay plaintiff actual damages of ₱20,000.00; attorney’s fees of ₱15,000.00 and exemplary
damages in the amount of ₱20,000.00 plus the costs.
SO ORDERED.6
The respondent failed to appeal the decision. Consequently, a writ of execution was issued on
September 27, 1999.
On August 16, 2000, the respondent filed a complaint against the petitioner before the RTC of
Dagupan City for the annulment of the decision of the MTC in Civil Case No. 879, on the ground
that due to the Sheriff’s failure to serve the complaint and summons on her because she was in
Oslo, Norway, the MTC never acquired jurisdiction over her person. The respondent alleged
therein that the service of the complaint and summons through substituted service on her brother,
Oscar Layno, was improper because of the following: (a) when the complaint in Civil Case No. 879
was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan, but of Oslo, Norway,
and although she owned the house where Oscar Layno received the summons and the complaint,
she had then leased it to Eduardo Gonzales; (b) she was in Oslo, Norway, at the time the summons
and the complaint were served; (c) her brother, Oscar Layno, was merely visiting her house in
Barangay Buenlag and was not a resident nor an occupant thereof when he received the complaint
and summons; and (d) Oscar Layno was never authorized to receive the summons and the
complaint for and in her behalf.7
The respondent further alleged that the MTC had no jurisdiction over the subject matter of the
complaint in Civil Case No. 879 because the petitioner, the plaintiff therein, failed to show prior
possession of the property. She further claimed that the alleged forcible entry was simply based
on the result of the survey conducted by Geodetic Engineer Leonardo de Vera showing that the
property of the respondent encroached on that of the petitioner.
The respondent filed a Manifestation dated August 31, 2000, and appended thereto the following:
(a) a copy8 of her passport showing that she left the country on February 17, 1999; (b) a copy9 of
the Contract of Lease dated November 24, 1997, executed by her and Eduardo D. Gonzales over
her house for a period of three (3) years or until November 24, 2000; (c) her affidavit10 stating,
inter alia, that she owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she leased
to Eduardo Gonzales; that she was married to Jarl Jensen, a citizen of Norway, on August 23, 1987
and had resided in Norway with her husband since 1993; that she arrived in the Philippines on
December 31, 1998, but left on February 17, 1999; she returned to the Philippines on July 30,
2000 and learned, only then, of the complaint against her and the decision of the MTC in Civil
Case No. 879; her brother Oscar Layno was not a resident of the house at Barangay Buenlag; and
that she never received the complaint and summons in said case; (d) the affidavit11 of Oscar
Layno declaring that sometime in April 1999, he was in the respondent’s house to collect rentals
from Eduardo Gonzales; that the Sheriff arrived and served him with a copy of the summons and
the complaint in Civil Case No. 879; and that he never informed the respondent of his receipt of
the said summons and complaint; (e) an affidavit12 of Eduardo Gonzales stating that he leased
the house of the respondent and resided thereat; the respondent was not a resident of the said
house although he (Gonzales) allowed the respondent to occupy a room therein whenever she
returned to the Philippines as a balikbayan; and that Oscar Layno was not residing therein but
only collected the rentals.
In her answer to the complaint, the petitioner alleged that the respondent was a resident of
Barangay Buenlag, Calasiao, Pangasinan and was the owner of the subject premises where Oscar
Layno was when the Sheriff served the summons and complaint; that the service of the complaint
and summons by substituted service on the respondent, the defendant in Civil Case No. 879, was
proper since her brother Oscar Layno, a resident and registered voter of Barangay. Buenlag,
Calasiao, Pangasinan, received the complaint and summons for and in her behalf.
The petitioner appended the following to her answer: (a) a copy13 of the Deed of Absolute Sale
executed by Jose Layno in her favor, dated August 26, 1992, showing that the respondent was a
resident of Barangay Buenlag, Calasiao, Pangasinan; (b) a Real Estate Mortgage14 executed by the
respondent, dated February 9, 1999 showing that she was a resident of Barangay Buenlag,
Calasiao, Pangasinan; (c) the Joint Affidavit15 of Vicenta Peralta and Orlando Macalanda, both
residents of Barangay Buenlag, Calasiao, Pangasinan, declaring that the respondent and her
brother Oscar Layno were their neighbors; that the respondent and her brother had been
residents of Barangay Buenlag since their childhood; that although the respondent left the
country on several occasions, she returned to the Philippines and resided in her house at No. 572
located in the said barangay; and (d) the Voter’s Registration Record16 of Oscar Layno, approved
on June 15, 1997.
After due proceedings, the trial court rendered a decision in favor of the respondent. The
WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and against
defendant Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case No. 879, entitled
Filomena Domagas versus Vivian Layno Jensen is declared null and void, for lack of jurisdiction
over the person of the plaintiff and the subject matter.
2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:
a.) Actual damages, representing litigation expenses in the amount of ₱50,000.00;
b.) Attorney’s fees in the amount of ₱50,000.00;
c.) Moral Damages in the amount of ₱50,000.00;
d.) Exemplary Damages in the amount of ₱50,000.00; and
e.) Costs of suit.

SO ORDERED.17
The trial court declared that there was no valid service of the complaint and summons on the
respondent, the defendant in Civil Case No. 879, considering that she left the Philippines on
February 17, 1999 for Oslo, Norway, and her brother Oscar Layno was never authorized to receive
the said complaint and summons for and in her behalf.
The petitioner appealed the decision to the CA which, on May 6, 2003, rendered judgment
affirming the appealed decision with modifications. The CA ruled that the complaint in Civil Case
No. 879 was one for ejectment, which is an action quasi in rem. The appellate court ruled that
since the defendant therein was temporarily out of the country, the summons and the complaint
should have been served via extraterritorial service under Section 15 in relation to Section 16,
Rule 14 of the Rules of Court, which likewise requires prior leave of court. Considering that there
was no prior leave of court and none of the modes of service prescribed by the Rules of Court was
followed by the petitioner, the CA concluded that there was really no valid service of summons
and complaint upon the respondent, the defendant in Civil Case No. 879.
Hence, the present petition.
The petitioner assails the decision of the CA, alleging that the appellate court erred in holding
that the respondent’s complaint for ejectment is an action quasi in rem. The petitioner insists
that the complaint for forcible entry is an action in personam; therefore, substituted service of
the summons and complaint on the respondent, in accordance with Section 7, Rule 14 of the Rules
of Court, is valid. The petitioner, likewise, asserts that Oscar Layno is a resident and a registered
voter of Barangay Buenlag, Calasiao, Pangasinan; hence, the service of the complaint and
summons on the respondent through him is valid.
The respondent, on the other hand, asserts that the action for forcible entry filed against her was
an action quasi in rem, and that the applicable provision of the Rules of Court is Section 15 of Rule
14, which calls for extraterritorial service of summons.
The sole issue is whether or not there was a valid service of the summons and complaint in Civil
Case No. 879 on the respondent herein who was the defendant in the said case. The resolution of
the matter is anchored on the issue of whether or not the action of the petitioner in the MTC
against the respondent herein is an action in personam or quasi in rem.
The ruling of the CA that the petitioner’s complaint for forcible entry of the petitioner against the
respondent in Civil Case No. 879 is an action quasi in rem, is erroneous. The action of the
petitioner for forcible entry is a real action and one in personam.
The settled rule is that the aim and object of an action determine its character.18 Whether a
proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature
and purpose, and by these only.19 A proceeding in personam is a proceeding to enforce personal
rights and obligations brought against the person and is based on the jurisdiction of the person,
although it may involve his right to, or the exercise of ownership of, specific property, or seek to
compel him to control or dispose of it in accordance with the mandate of the court.20 The
purpose of a proceeding in personam is to impose, through the judgment of a court, some
responsibility or liability directly upon the person of the defendant.21 Of this character are suits
to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability
on him.22 An action in personam is said to be one which has for its object a judgment against the
person, as distinguished from a judgment against the propriety to determine its state. It has been
held that an action in personam is a proceeding to enforce personal rights or obligations; such
action is brought against the person. As far as suits for injunctive relief are concerned, it is
well-settled that it is an injunctive act in personam.23 In Combs v. Combs,24 the appellate court
held that proceedings to enforce personal rights and obligations and in which personal judgments
are rendered adjusting the rights and obligations between the affected parties is in personam.
Actions for recovery of real property are in personam.25
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject
the property of such persons to the discharge of the claims assailed.26 In an action quasi in rem,
an individual is named as defendant and the purpose of the proceeding is to subject his interests
therein to the obligation or loan burdening the property.27 Actions quasi in rem deal with the
status, ownership or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to ascertain or cut off
the rights or interests of all possible claimants. The judgments therein are binding only upon the
parties who joined in the action.28
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when. - Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building in force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against
whom the possession of any land or building is unlawfully withheld after the 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 such lessor, vendor, vendee, or other person, may, at any
time within one (1) year after such unlawful deprivation or withholding of possession, bring an
action in the proper Municipal Trial Court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for the restitution of such
possession, together with damages and costs.
Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of preliminary
prohibition or mandatory injunction:
Sec. 15. Preliminary Injunction. – The court may grant preliminary injunction, in accordance with
the provisions of Rule 58 hereof, to prevent the defendant from committing further acts of
dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry or unlawful detainer may, within five
(5) days from the filing of the complaint, present a motion in the action for forcible entry or
unlawful detainer for the issuance of a writ of preliminary mandatory injunction to restore him in
his possession. The court shall decide the motion within thirty (30) days from the filing thereof.
If, after due proceedings, the trial court finds for the plaintiff, it shall then render judgment in
his or her favor, thus:
Sec. 17. Judgment. – If, after trial, the court finds that the allegations of the complaint are true,
it shall render judgment in favor of the plaintiff for the restitution of the premises, the sum justly
due as arrears of rent or as reasonable compensation for the use and occupation of the premises,
attorney’s fees and costs. If it finds that said allegations are not true, it shall render judgment for
the defendant to recover his costs. If a counterclaim is established, the court shall render
judgment for the sum found in arrears from either party and award costs as justice requires.
From the aforementioned provisions of the Rules of Court and by its very nature and purpose, an
action for unlawful detainer or forcible entry is a real action and in personam because the
plaintiff seeks to enforce a personal obligation or liability on the defendant under Article 539 of
the New Civil Code,29 for the latter to vacate the property subject of the action, restore physical
possession thereof to the plaintiff, and pay actual damages by way of reasonable compensation
for his use or occupation of the property.30
As gleaned from the averments of the petitioner’s complaint in the MTC, she sought a writ of a
preliminary injunction from the MTC and prayed that the said writ be made permanent. Under its
decision, the MTC ordered the defendant therein (the respondent in this case), to vacate the
property and pay a "monthly rental" of ₱1,000.00 to the plaintiff therein (the petitioner in this
case).
On the issue of whether the respondent was validly served with the summons and complaint by
the Sheriff on April 5, 1999, the petitioner asserts that since her action of forcible entry against
the respondent in Civil Case No. 879 was in personam, summons may be served on the respondent,
by substituted service, through her brother, Oscar Layno, in accordance with Section 7, Rule 14 of
the Rules of Court. The petitioner avers that Oscar Layno, a person of suitable age and discretion,
was residing in the house of the respondent on April 5, 1999. She avers that the fact that the
house was leased to and occupied by Eduardo Gonzales was of no moment. Moreover, the Sheriff
is presumed to have performed his duty of properly serving the summons on the respondent by
substituted service.
The contention of the petitioner has no merit.
In Asiavest Limited v. Court of Appeals ,31 the Court had the occasion to state:
In an action in personam, jurisdiction over the person of the defendant is necessary for the court
to validly try and decide the case. Jurisdiction over the person of a resident defendant who does
not voluntarily appear in court can be acquired by personal service of summons as provided under
Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he
is temporarily out of the country, any of the following modes of service may be resorted to: (a)
substituted service set forth in Section 8; (2) personal service outside the country, with leave of
court; (3) service by publication, also with leave of court; or (4) any other manner the court may
deem sufficient.32
Thus, any judgment of the court which has no jurisdiction over the person of the defendant is null
and void.33
In the present case, the records show that the respondent, before and after his marriage to Jarl
Jensen on August 23, 1987, remained a resident of Barangay Buenlag, Calasiao, Pangasinan. This
can be gleaned from the Deed of Absolute Sale dated August 26, 1992 in which she declared that
she was a resident of said barangay. Moreover, in the Real Estate Mortgage Contract dated
February 9, 1999, ten days before the complaint in Civil Case No. 879 was filed, the petitioner
categorically stated that she was a Filipino and a resident of Barangay Buenlag, Calasiao,
Pangasinan. Considering that the respondent was in Oslo, Norway, having left the Philippines on
February 17, 1999, the summons and complaint in Civil Case No. 879 may only be validly served on
her through substituted service under Section 7, Rule 14 of the Rules of Court, which reads:
SEC. 7. Substituted service. — If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving
copies of the summons at the defendant’s residence with some person of suitable age and
discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place
of business with some competent person in charge thereof.
Strict compliance with the mode of service is required in order that the court may acquire
jurisdiction over the person of the defendant.34 The statutory requirement of substituted service
must be followed faithfully and strictly and any substituted service other than that authorized by
the statute is rendered ineffective.35 As the Court held in Hamilton v. Levy :36
… The pertinent facts and circumstances attendant to the service of summons must be stated in
the proof of service or Officer’s Return; otherwise, any substituted service made in lieu of
personal service cannot be upheld. This is necessary because substituted service is in derogation
of the usual method of service. It is a method extraordinary in character and hence may be used
only as prescribed and in the circumstances authorized by statute. Here, no such explanation was
made. Failure to faithfully, strictly, and fully comply with the requirements of substituted service
renders said service ineffective.37
In Keister v. Narcereo,38 the Court held that the term "dwelling house" or "residence" are
generally held to refer to the time of service; hence, it is not sufficient to leave the summons at
the former’s dwelling house, residence or place of abode, as the case may be. Dwelling house or
residence refers to the place where the person named in the summons is living at the time when
the service is made, even though he may be temporarily out of the country at the time. It is, thus,
the service of the summons intended for the defendant that must be left with the person of
suitable age and discretion residing in the house of the defendant. Compliance with the rules
regarding the service of summons is as much important as the issue of due process as of
jurisdiction.39
The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of summons reads:
Respectfully returned to the court of origin the herein summons and enclosures in the
above-entitled case, the undersigned caused the service on April 5, 1999.
Defendant Vivian Layno Jensen is out of the country as per information from her brother Oscar
Layno, however, copy of summons and enclosures was received by her brother Oscar Layno on
April 5, 1999 as evidenced by his signature appearing in the original summons.
Calasiao, Pangasinan, April 6, 1999.
(Sgd.)
EDUARDO J. ABULENCIA
Junior Process Server40
As gleaned from the said return, there is no showing that as of April 5, 1999, the house where the
Sheriff found Oscar Layno was the latter’s residence or that of the respondent herein. Neither is
there any showing that the Sheriff tried to ascertain where the residence of the respondent was
on the said date. It turned out that the occupant of the house was a lessor, Eduardo Gonzales, and
that Oscar Layno was in the premises only to collect the rentals from him. The service of the
summons on a person at a place where he was a visitor is not considered to have been left at the
residence or place or abode, where he has another place at which he ordinarily stays and to which
he intends to return.41
The Voter’s Registration Record of Oscar Layno dated June 15, 1997 wherein he declared that he
was a resident of No. 572 Barangay Buenlag, Calasiao, Pangasinan, as well as the Joint Affidavit of
Vicenta Peralta and Orlando Macasalda cannot prevail over the Contract of Lease the respondent
had executed in favor of Eduardo Gonzales showing that the latter had resided and occupied the
house of the respondent as lessee since November 24, 1997, and the affidavit of Eduardo Gonzales
that Oscar Layno was not residing in the said house on April 5, 1999.
In sum, then, the respondent was not validly served with summons and the complaint in Civil Case
No. 879 on April 5, 1999, by substituted service. Hence, the MTC failed to acquire jurisdiction
over the person of the respondent; as such, the decision of the MTC in Civil Case No. 879 is null
and void.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No costs.
SO ORDERED.
G.R. No. 89307 May 8, 1992
DR. MA. WENDELYN V. YAP, EVELIA H. BADIAGAN, TERESITA A. BALADAD and FLORENCIA C. DE
VERA, petitioners,
vs.
DR. VERGEL G. CRUZ, THE HON. MARCELO R. OBIEN, as Presiding Judge of the Regional Trial
Court of Manila, Br. 44, and THE HON. COURT OF APPEALS, respondents.
Sangco, Anastacio, Duran and Parulan for petitioners.
Wilfredo E. Dizon for private respondent.
Case Nature : PETITION for review of the decision

of the Court of Appeals.
Syllabi Class : Contracts|Lease|Ejectment
Syllabi:
1. Contracts; Lease; Ejectment; In the absence
of notice or demand to vacate, the lease of private
respondent continues to be in force and cannot be
deemed to have expired as of the end of the month
automatically.-
True, the lease of private respondent is on a

month-to-month basis and may be terminated at the
end of any month after proper notice or demand to
vacate has been given (Rivera v. Florendo, G.R. No.
60066, July 31, 1986, 143 SCRA 278; Zablan v. CA,
G.R. No. 57844, September 30, 1987, 154 SCRA 487;
Uy Hoo and Sons Realty Development Corp. v. CA,
G.R. No. 83263, June 14, 1989, 174 SCRA 100;
Palanca v. IAC, G.R. No. 71566, December 15, 1989,
180 SCRA 119). In the case at bar, however, the lack
of proper notice or demand to vacate upon the
private respondent is clearly evident. In the absence
of such notice, the lease of private respondent
continues to be in force and can not be deemed to
have expired as of the end of the month
automatically.
MEDIALDEA, J.:
This petition seeks the reversal of the decision of respondent Court of Appeals in CA-G.R. Sp. No.
15790 dismissing the petition for review and affirming the decision of the Regional Trial Court of
Manila, Branch 44 in Civil Case No. 86-38296 which in turn affirmed the decision of the
Metropolitan Trial Court of Manila, Branch 27 in Civil Case No. 113298.
The facts of the case are as follows:
Dr. Vergel G. Cruz, the private respondent in this case was the bonafide tenant of Amado Q.
Bugayon, Jr. for almost five years in the premises in question just before this controversy started.
He religiously paid the monthly rentals of P1,400.00, introduced several improvements and
operated a veterinary clinic known as Malate Veterinary Clinic. Sometime in the latter part of
July, 1985, he offered for sale the goodwill of the veterinary clinic and some of its equipment to
Dr. Wendelyn V. Yap, Evelia H. Badiagan, Teresita A. Baladad and Florencia C. de Vera, the
petitioners herein. During the period of negotiations, private respondent Cruz introduced to the
landlord Dr. Wendelyn V. Yap at the person interested in taking over the clinic. However, the
negotiations did not materialize but the petitioners managed to enter into a contract of lease for
the said premises at a monthly rental of P1,800.00 with the landlord. As a result, private
respondent Cruz brought an action for "Forcible Entry with Damages" with the Metropolitan Trial
Court of Manila, Branch 27 against petitioners herein and the landlord.
On June 26, 1986, the Metropolitan Trial Court of Manila, Branch 27, rendered its decision in favor
of private respondent Cruz, the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and all the defendants are
ordered to vacate the premises in question and surrender peaceful possession of the premises to
plaintiff; defendants Amado Bugayon, Jr. and Dr. Wendelyn Yap only are ordered to pay jointly
and severally the plaintiff the amount of P3,000.00 as moral damages; the amount of P2,000.00 as
exemplary damages and the sum of P2,000.00 as attorney's fees. (Rollo, p. 22-A)
On May 11, 1988, the Regional Trial Court of Manila, Branch 44 affirmed the aforesaid decision of
the Metropolitan Trial Court and on April 21, 1989, the Court of Appeals dismissed the petition for
review of petitioners and affirmed the decision of the Regional Trial Court, Branch 44. Hence, this
petition was filed raising the following assignment of errors:
2.1. The Hon. Court of Appeals erred in ruling that the lower courts were correct in their
decision that the petitioners must vacate the premises and turn over the possession thereof to the
private respondent despite the fact that the private respondent had already failed and refused to
pay for the rentals thereof, thus, did not have any right thereto, and the petitioners had a valid
lease agreement thereof with the owner of the premises;
2.2. The Hon. Court of Appeals erred in ruling that the owner of the premises must be forced
to release the premises to the private respondent even if there is already a valid and existing
contract with the petitioners and the refusal of the owner to lease the same to the private
respondent due to the latter's failure to pay the rentals therefor;
2.3. The Hon. Court of Appeals erred in ruling that the possession by the petitioners of the
premises located at 1118 Pres. Quirino Avenue was dependent upon the sale of the goodwill of the
Malate Veterinary Clinic by the private respondent to the petitioners. (pp. 74-75, Rollo)
There is no dispute that the petitioners gained access to the leased premises in question by virtue
of the offer of the private respondent to sell the goodwill over his veterinary clinic to them. By
one reason or another, i.e., the alleged increase in the asking price for the goodwill from
P12,000.00 to P15,000.00 and the alleged failure of private respondent to secure the necessary
permits and licenses from the government authorities, the negotiations bagged down. What then
happens to the leasehold rights of private respondent over the premises in question which he had
already transferred to petitioners? Private respondent claims that in view of the failure of
negotiations, the petitioners should have returned the leased premises to him but instead of so
doing, they entered into a lease contract with the landlord thereby ousting him therefrom
through strategy or stealth.
On the other hand, the bone of contention of petitioners is that the lease between private
respondent and the landlord was automatically terminated because while the negotiations for the
sale of the goodwill was still on-going, the private respondent stopped paying the rentals for the
leased premises which was already on a month-to-month basis as the formal lease had long
expired. They claim that they were informed of the same and given the option by the landlord to
either vacate the premises or enter into a new lease agreement with him and to pay an increased
rental of P1,800.00 for the premises beginning the month of August, 1985. As such, their
possession of the premises has absolutely nothing to do with the proposed sale of the goodwill by
private respondent. Thus, they claim that the decision of the lower courts is contrary to law
inasmuch as it had equated the sale of the goodwill with the possession of the premises occupied
by the petitioners.
Correctly, the petitioners claim a right to the premises in question apart from the proposed sale
of the goodwill. Precisely, private respondent's action for forcible entry and damages recognizes
such fact because he predicates his cause of action on the deprivation of his possession by virtue
of the new lease contract executed by the petitioners with the landlord. Whether this contract is
valid is the question to be resolved here.
We rule in favor of private respondent. When the petitioners and the landlord executed a new
contract of lease, the lease of private respondent was still valid and subsisting. There is no
question that private respondent has not effectively relinquished his leasehold rights over the
premises in question in view of the failure of negotiations for the sale of the goodwill. Clearly, the
transfer of the leasehold rights is conditional in nature and has no force and effect if the
condition is not complied with.
True, the lease of private respondent is on a month-to-month basis and may be terminated at the
end of any month after proper notice or demand to vacate has been given (Rivera v. Florendo,
G.R. No. 60066, July 31, 1986, 143 SCRA 278; Zablan v. CA, G.R. No. 57844, September 30, 1987,
154 SCRA 487; Uy Hoo and Sons Realty Development Corp. v. CA, G.R. No. 83263, June 14, 1989,
174 SCRA 100; Palanca v. IAC, G.R. No. 71566, December 15, 1989, 180 SCRA 119). In the case at
bar, however, the lack of proper notice or demand to vacate upon the private respondent is
clearly evident. In the absence of such notice, the lease of private respondent continues to be in
force and can not be deemed to have expired as of the end of the month automatically. Neither
can the non-payment of the rent for the month of August, 1985 be a ground for termination of the
lease without a demand to pay and to vacate. The instant case can easily be differentiated from
the case of Vda. de Kraut v. Lontok, G.R. No. L-18374, February 27, 1963, 7 SCRA 281, which was
cited by petitioners in support of their contention that a lease on a month-to-month basis may be
terminated at the end of any month and shall be deemed terminated upon the lessee's refusal to
pay the increased rental because here there was neither demand on the part of the landlord to
pay the rental nor refusal on the part of the private respondent to pay the same as in fact he
made a tender of his rental payment in the latter part of August, 1985. Thus, when the landlord
and the petitioners entered into a new contract of lease effectively depriving the private
respondent of his lease, they were clearly guilty of forcible entry in view of the subsisting lease of
private respondent.
ACCORDINGLY, the petition is hereby DENIED and the questioned decision of the Court of Appeals
is AFFIRMED.
SO ORDERED.
[A.M. MTJ-96-1085. October 8, 1998]
SALVACION P. ONQUIT, complainant, vs. JUDGE AURORA BINAMIRA-PARCIA, and SHERIFF IV

DANILO O. MATIAS, respondents.
RESOLUTION
QUISUMBING, J.:
This is an administrative complaint charging respondents, namely: Judge Aurora Binamira-Parcia,

Municipal Circuit Trial Court (5th Judicial Region), Ligao-Oas, Albay, with grave abuse of
authority, bias and grave misconduct; and, Sheriff IV Danilo O. Matias, with grave misconduct,
misbehavior in the performance of his official duties, and collusion.[1]
The charge against respondent Judge stems from a forcible entry case[2] with prayer for
temporary restraining order and preliminary injunction with damages. Said case was assigned to
her sala. The complainant and her two brothers were therein co-defendants. Complainant raised
the issue of jurisdiction stating that said case falls within the original and exclusive jurisdiction of
the Department of Agrarian Reform (DAR) because it involves tenancy over an agricultural land.
Thereafter, complainant and her co-defendants filed with respondent Judge, an Ex-Parte Motion
for Disqualification, Request for Disqualification and Request for Resolution. Basically, these
motions were founded on the trial courts alleged lack of jurisdiction. In a single Order,[3]
respondent Judge denied all three motions ruling that jurisdiction is determined by the
allegations in the complaint and not those raised by defendants. Moreover, according to
respondent Judge , the claim regarding the nature of the case at bar would not automatically
divest the court of its jurisdiction.
Subsequently, plaintiff in the lower court filed an injunction bond which was approved by
respondent Judge and a writ of preliminary injunction was issued against the defendants,
including herein complainant. A seizure order followed which directed respondent Sheriff to seize
the palay from the land in question.[4]
In the complaint now before this Court, complainant details several allegations as follows:
(1) That the land subject of the forcible entry case is an agricultural riceland, thus, it is the
Department of Agrarian Reform which has original and exclusive jurisdiction, and not the
respondent Judge's court;
(2) That the plaintiffs injunction bond was approved by respondent Judge without first serving a
copy to the complainant resulting in a violation of due process. Complainant avers that it left her
no opportunity to object to the sufficiency of the bond. Further, a copy of the writ of injunction
was not served on complainants counsel;
(3) That a notice regarding the Motion for Issuance of Seizure Order was not served on the
complainant thereby depriving her of a chance to oppose it;
(4) That respondent Judge has been heard saying that complainant and his co-defendants ought to
leave the land because it is certain that they will lose their case;
(5) And that, with regard to respondent Sheriff, upon the issuance of the seizure order, he seized
all the palay harvested without issuing a receipt, despite demand therefor, and delivered the
palay to the plaintiff.[5]
In her Comment, respondent Judge asserts principally that the complaint was maliciously filed to
harass her. She recounts that ejectment cases were earlier filed before her sala against some of
complainants family members involving different areas of the disputed lot. In these separate
cases, respondent Judge ordered their ejectment,[6] which she claims is the reason for
complainants vindictiveness. She claims moreover, that in a Special Civil Case (No. 1852) filed
against her before the Albay Regional Trial Court, to restrain her from taking cognizance of Civil
Case No. 1048-L, she nevertheless proceeded Civil Case No. 1048-L, after the special civil case
was dismissed. She then ordered the issuance of a writ of preliminary injunction, and required an
injunction bond from complainants opponents.[7] All these were resented, according to the
respondent Judge, by the complainant.
With regard to the averment by complainant that she and her co-defendants were not furnished a
copy of the bond before its approval, respondent Judge replies that the records of the case would
show that complainants counsel was furnished with a copy of the Motion to Admit Bond.
Furthermore, even granting that the complainant and co-defendants were not furnished with a
copy of the bond, the failure to serve a copy would be merely a formal defect. She states that
complainant should have asked the court to furnish the parties with a copy, but complainant
failed to do so.[8]
In response to the accusation regarding her order denying the Motion to Fix Defendants Bond and
to Dissolve the Writ of Preliminary Injunction, she states that the injunction bond posted by
plaintiff was sufficient to cover damages to which complainant and her co-defendants might be
entitled, in case a judgment would be rendered in their favor.[9]
As for the questioned seizure order, respondent Judge maintains that the reason for this order
was that even after the issuance of an injunction, complainant and co-defendants re-entered the
land in question and harvested the palay thereon. It was an ex-parte motion which she had to
grant considering the urgency of the matter, keeping in mind that there was an injunction bond
for the benefit of complainant and co-defendants.[10]
Respondent Judge denies ever talking to complainant in her chambers. According to her, it was
Merle Porte, a sister of complainant and not a party to the case, who approached respondent
Judge in the afternoon of April 10, 1996. Porte pleaded that her brothers and sisters be allowed to
harvest the palay and that they would settle the matter with the plaintiff in said case.
Respondent Judge states that her reply was for Porte to discuss the matter with their lawyer
instead of personally speaking with her. Further, respondent Judge denies for being totally untrue
the incident alleged by complainant wherein she was allegedly confronted concerning a
purported payment to her of P20,000 by plaintiff. According to respondent Judge, it was actually
complainants counsel, a former professor of respondent Judge, who went inside her chambers to
ask that she should deny the plaintiffs request for an injunction.[11] For the satisfaction of
complainant and her co-defendants, respondent Judge inhibited herself from rendering judgment
in Civil Case No. 1048-L and from further hearing the Petition for Contempt filed by plaintiff
against complainant.[12]
In sum, respondent Judge avers to this Court that from the outset complainant and her
co-defendants were already doing all that they could do to disqualify her from taking cognizance
of Civil Case No. 1048-L. As a matter of fact, when the Presiding Judge of the Regional Trial Court
of Ligao, Albay, denied the plaintiff's petition seeking respondent Judge to be disqualified from
hearing said case, complainant filed a similar administrative case against the Presiding Judge.[13]
Concerning the charges of Grave Misconduct, Misbehavior in the Performance of Official Duties
and Collusion against respondent Sheriff, he states in his Comment that when the Clerk of Court
received the Seizure Order, he was ordered to implement it immediately. Police assistance was
requested from the station commander to accompany respondent Sheriff in entering the ricefield.
He stated that despite the heavy rain in the area he found complainant and her co-defendants
harvesting the palay. Said palay was seized as ordered and placed inside sacks, and then brought
by him to the Hall of Justice. Early the following morning, he went to the Hall of Justice, and had
the palay, although wet, threshed and cleaned. He decided that it was best to turn over the palay
to the wife of the plaintiff due to the fact that the grains were dripping wet from the previous
days rains and if not dried immediately would deteriorate as, in fact, there were already grains
showing signs of germination. A copy of the receipt of the Sheriffs Return of Service was signed by
the wife of plaintiff. He admits though that the vehicle used in transporting the seized palay was
provided for by plaintiff, which he concluded was the reason behind the alleged collusion
between him and plaintiff.
On the charge by complainant that he refused to issue a receipt upon seizure, respondent Sheriff
replied that he could not do so immediately upon seizure as the palay was not yet threshed and he
would only know the number of cavans seized after such was threshed and cleaned. He claims
that he did this the next day after the palay was threshed and cleaned. Only then was it
quantifiable as to the number of cans in which they were stored. Respondent Sheriff then
furnished the receipt to complainants counsel of record, together with the Sheriffs Return of
Service.[14]
Complainant subsequently filed a Reply to each of the Comments submitted by respondent Judge
and respondent Sheriff. The Reply to the Comment of respondent Judge centered on the fact that
there was personal bias involved, which accounted for the way respondent Judge conducted
herself towards the hearing of complainants case.[15] As to her Reply to the respondent Sheriffs
Comment, complainant denied the allegation that they reacted defiantly to the writ of
preliminary injunction. According to complainant, the land was owned by another family who,
together with her co-defendants, were the actual occupants thereof. Further, complainant
maintains that aside from the illegality of the seizure order, the respondent Sheriff made an error
in his Sheriffs Return, when he reported his estimate of the seized palay way below the actual
volume of the palay.[16]
Considering the Complaint, the Comments, and the Reply as well as the pleadings and exhibits
submitted, we find no grave abuse of authority, grave misconduct and bias on the part of
respondent Judge.
The fact that respondent Judge took cognizance of the forcible entry case did not taint her action
with grave abuse of authority, even if defendant had alleged that the land in question was under
agricultural tenancy, and that there was an issue of jurisdiction. Well-settled is the principle that
the courts shall not be divested of jurisdiction over a case merely by what is raised in the answer.
What determines the nature of an action and a court's jurisdiction over it are the allegations set
up by the plaintiff.[17] Basic is the rule that the material averments in the complaint, which in
this case is for ejectment, determine the jurisdiction of the court. And, jurisprudence dictates
that the court does not lose its jurisdiction over an ejectment case by the simple expedient of a
party raising as a defense therein the alleged existence of a tenancy relationship between the
parties.[18] It is the duty of the court to receive evidence to determine the veracity of allegations
of tenancy. In an Order of respondent Judge dated 09 February 1996, it was ruled that,
considering the evidence presented, the land in question is an irrigated riceland, but not
tenanted.[19] This matter was even brought up on a petition for certiorari with prohibition to the
Regional Trial Court of Ligao, Albay, but said petition was denied.[20] These antecedents are
sufficient to convince us that the respondent Judge did not act with grave abuse of authority in
assuming jurisdiction over the case filed in her sala.
With regard to the allegation of having failed to furnish to the defendants a copy of the bond and
the writ of preliminary injunction, we give credence to the findings made by the Office of the
Court Administrator, as follows:
However, Section 8, Rule 58 of the Revised Rules of Court in conjunction with Section 3, Rule 70
thereof provides that the [p]arty filing the bond shall forthwith served (sic) a copy of such bond
on the other party, who may except to the sufficiency of the bond, or of the surety or sureties
thereon. This means that the plaintiff and not the Court or the respondent Judge for that matter,
who (sic) is duty bound to serve a copy of the injunction bond to the defendants. x x x
Nevertheless, the failure of the plaintiff to serve a copy of the injunction bond to the defendant is
merely a formal defect and not a reversible error. For in this case the defendant may ask the
[c]ourt to order the plaintiff to serve upon him the copy of the bond.
xxxxxxxxx
On the other hand, the records belie the claim of complainant that the Writ of Preliminary
Injunction was not served to (sic) the defendants. Records show that said writ was served to (sic)
the defendants on February 16, 1996 at their residence but all refused to acknowledge receipt
therefor, nevertheless the executing Sheriff left each a copy to (sic) the defendants (Annex H,
rollo, p.41).[21]
We also find that there was no impropriety on the part of respondent Judge when she issued the
seizure order. It was apparent that the complainant and her co-defendants showed defiance of
the writ of preliminary injunction. This was all the more demonstrated when they re-entered the
land and harvested the palay, in direct and open violation of the writ. The order to seize the
harvested palay was issued to preserve the status quo, and in no way done with grave abuse of
authority.
The charges of bias imputed on respondent Judge, specifically, that she received money from the
plaintiffs and that she told complainant that they will surely lose the case, are only allegations
which are not supported by evidence apart from the self-serving statements made by complainant.
Given no support on the record, we are not persuaded by said accusations hurled by complainant
simply because there is no evidence thereon to implicate the respondent Judge.
With regard to the charges against respondent Sheriff, we find that his actuation of immediately
implementing the seizure order did not constitute grave misconduct nor was it an act of collusion
with the adverse party. He did what was expected of any sheriff given charge of enforcing a court
order. When a writ is placed in the hands of a sheriff, it is his ministerial duty to proceed with
reasonable celerity and promptness to execute it in accordance with its mandates.[22]
Neither are we convinced that respondent Sheriff was remiss in his duty to issue a receipt for the
palay he seized. Admittedly, he did not issue the receipt on the spot, but we accept the reason
stated earlier for issuing it when the palay was already cleaned and measured, next day. From the
record, complainant made no averment that respondent Sheriff derived pecuniary benefit in not
immediately giving complainant a receipt. It was reasonable to briefly wait until measurement
could be made as to the volume of the palay after being cleaned and threshed before issuance of
the receipt. In the absence of contrary evidence, the presumption prevails that the sheriff has
regularly performed his official duty.[23]
On the matter of where to deposit the seized palay, however, it was incumbent on respondent
Sheriff to deliver the palay to the court considering it was still considered property in custodia
legis. Deposit of seized items in litigation is not a discretionary matter. Until the court had made
its decision as to the disposal of the palay, the presumption was that the seized palay should
remain in the court's custody, hence to be deposited in court. Respondent Sheriff should not have
handed them over to the plaintiff in the absence of a directive to that effect in the seizure order.
However, this Court takes note of the circumstances surrounding respondent Sheriffs delivery to
the plaintiff of what was seized. Although the palay was already threshed and cleaned, it was still
dripping wet from the previous days heavy rains and respondent Sheriff felt that if not dried
immediately the grains would deteriorate and might just eventually be rendered useless. This
leads us to conclude that there was no bad faith in his acts. Furthermore, he documented his
turnover of the seized grains in the presence of witnesses from the barangay. His actuation was
without malice and could be deemed not unreasonable under the circumstances obtaining,
although not in strict compliance with official duty concerning a matter in custodia legis.
WHEREFORE, the Court hereby resolves to DISMISS the administrative charges against respondent
Judge Aurora Binamira-Parcia for lack of merit. The charges against respondent Sheriff Danilo
Matias are also DISMISSED, but he is hereby ADMONISHED to strictly observe always the rules and
regulations governing the performance of his duties in regard to the enforcement of seizure
orders of the court.
SO ORDERED.
G.R. No. 157985 December 2, 2005
ZENAIDA BUGARIN, VIOLETA ABANO, LIZA ABAYATA, ANTONIO ALEGRE, REMEDIOS ALEGRE,
CHRIS ANASCO, JEFFREY ARQUILLOS, LOURDES BAGARESE, EUGENIA BARAQUIL, PRECIOS
BASOY, RANNY BASOY, FELY BERMEJO, CARLOS BO, JUN BO, ALEX BORRES, ANNA MARIE
CORDOVA, ESPERANZE CORDOVA, EDWIN DEPETILLO, ROMULO FERRY, LEONISA GABRIEL, MA.
FE GABRIEL, SALOME CORDOVA, ELEN JACOB, JEREMIAS JACOB, OLIVIA LERIN, CRISELDA
MADEJA, JOMARI MANONG, NESTOR MANONG, VALENTIN MANONG, EDMUNDO/FELY MINA,
TEDDY PARUAN, SALVACION PASCUA, ROMMEL POLISTICO, DANIEL/NANCY PRADO, ARMANDO
ROMERO, SANCHO VILLAFUERTE, and FERNANDO YAMID, Petitioners,
vs.
CECILIA B. PALISOC, MARINA B. MATA and REYNALDO T. NEPOMUCENO, Respondents.

the order and special order of demolition of the
Metropolitan Trial Court of Parañaque City, Br. 77.
Syllabi Class : Remedial
Law|Judgments|Appeals|Execution|Certiorari
Syllabi:
1. Remedial
Law; Judgments; Appeals; Execution; A
judgment on a forcible entry and detainer action is
immediately executory to avoid further injustice to a
lawful possessor, and the court‟s duty to order the
execution is practically ministerial; Instances Where
a Defendant May Stay Execution.-
Under Section 19, Rule 70 of the Revised Rules on
Civil Procedure, a judgment on a forcible entry and
detainer action is immediately executory to avoid
further injustice to a lawful possessor, and the
court‟s duty to order the execution is practically
ministerial. The defendant may stay it only by (a)
perfecting an appeal; (b) filing a supersedeas bond;
and (c) making a periodic deposit of the rental or
reasonable compensation for the use and occupancy
of the property during the pendency of the appeal.
Once the Regional Trial Court decides on the appeal,
such decision is immediately executory under
Section 21, Rule 70, without prejudice to an appeal,
via a petition for review, before the Court of Appeals
or Supreme Court.
2. Remedial
Law; Judgments; Appeals; Certiorari; The
existence and availability of the right of appeal
prohibits the resort to certiorari because one of the
requirements for the latter remedy is that “there
should be no appeal.”-
The remedy to obtain reversal or modification of the

judgment on the merits in the instant case is appeal.
This holds true even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over
the subject matter, or the exercise of power in
excess thereof, or grave abuse of discretion in the
findings of fact or of law set out in the decision. The
existence and availability of the right of appeal
prohibits the resort to certiorari because one of the
requirements for the latter remedy is that “there
should be no appeal.”
3. Remedial
Law; Judgments; Appeals; Certiorari; Certiorari
is not and cannot be made a substitute for an appeal
where the latter remedy is available but was lost
through fault or negligence.-
Petitioners‟ petition for certiorari before the Court of
Appeals was filed as a substitute for the lost remedy
of appeal. Certiorari is not and cannot be made a
substitute for an appeal where the latter remedy is
available but was lost through fault or negligence.
Thus, the filing of the petition for certiorari did not
prevent the RTC decision from becoming final and
executory. The RTC acted correctly when it
remanded the case to the court of origin in the order
dated April 11, 2003.
RESOLUTION
QUISUMBING, J.:
Before us is a petition for review on certiorari assailing the Order1 dated April 30, 2003 and the
Special Order of Demolition2 dated May 9, 2003 of the Metropolitan Trial Court (MeTC) of
Parañaque City, Branch 77. Petitioners had applied for the issuance of a temporary restraining
order (TRO) but the Court in a resolution3 dated May 15, 2003 denied the application.
The facts in this case, culled from the record, are as follows.
The present controversy arose from a complaint for ejectment, docketed as Civil Case No. 11799,
filed before the MeTC by private respondents Cecilia B. Palisoc and Marina B. Mata. In a decision4
dated February 27, 2002, the court declared respondents as the rightful possessors of the
properties in dispute. It also ordered the petitioners to vacate the premises and pay to private
respondents the rentals.
Petitioners appealed to the Regional Trial Court (RTC) of Parañaque City, Branch 274 while
private respondents moved for execution pending appeal. On January 8, 2003, the RTC affirmed
the MeTC decision with the modification that petitioners must start paying rentals from the date
of the appealed decision.
On January 28, 2003, petitioners filed a Motion for Reconsideration with Opposition to the
Issuance of a Writ of Execution. In an order dated March 3, 2003, the RTC denied the motion and
granted private respondents’ motion for execution for failure of petitioners to post a supersedeas
bond or to pay the back rentals. Thus, a writ of execution pending appeal was issued. On March 7,
2003, petitioners were served with the writ and notice to vacate.
On March 11, 2003, petitioners filed a Motion to Defer Implementation of the Writ of Execution.
On March 14, 2003, private respondents filed a Motion to Issue a Special Order of Demolition since
petitioners refused to vacate the premises. The RTC deferred action on the motions to allow
petitioners to exhaust legal remedies available to them.
Petitioners thereafter filed a Supplement to the Motion to Defer Implementation of Writ of

Execution and Opposition to Motion to Issue Special Order of Demolition, contending that Section
28 of Republic Act No. 72795 was not complied with.
On April 4, 2003, private respondents filed a Motion Reiterating the Motion for Issuance of Special
Order of Demolition. In an order dated April 11, 2003, the RTC declared the decision denying
petitioners’ appeal final and executory, and remanded the records of the case to the MeTC
without acting on the motions.
However, on April 10, 2003, petitioners filed a Petition for Certiorari and Prohibition with Prayer
for Preliminary Prohibitory Injunction before the Court of Appeals. They also filed an Urgent
Vigorous Opposition and Motion to Suspend Proceedings on respondents’ Motion Reiterating the
Motion for Issuance of Special Order of Demolition before the MeTC.
The MeTC set the Motion for the Issuance of Special Order of Demolition for hearing. The court
granted said motion on April 30, 2003, but gave petitioners five (5) days from receipt of its order
to voluntarily vacate the premises and remove all structures and improvements made thereon.
On May 6, 2003, MeTC Branch Sheriff Reynaldo T. Nepomuceno reported that petitioners refused
to vacate the premises. Petitioners instead filed a Motion to Quash and Recall the Order dated
April 30, 2003 and/or Special Order of Demolition. The MeTC denied the motion and issued the
Special Order of Demolition on May 9, 2003.
Hence, this petition where petitioners raise the lone error that
THE COURT A QUO, IN BRUSHING ASIDE REPUBLIC ACT [NO.] 7279 IN THE RESOLUTION OF THE
CASE AGAINST THESE UNDERPRIVILEGED PETITIONERS, HAS DECIDED A QUESTION OF SUBSTANCE,
NOT THERETOFORE DETERMINED BY THE SUPREME COURT, AND/OR HAS DECIDED IT IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE
SUPREME COURT.6
Simply, the issue is, are the Orders of the MeTC proper?
Petitioners contend that the Orders of the MeTC violated the mandatory requirements of Section
287 of Rep. Act No. 7279 since there was no 30-day notice prior to the date of eviction or
demolition and there had been no consultation on the matter of resettlement. They also claim
that there was neither relocation nor financial assistance given. They insist that the MeTC orders
are patently unreasonable, impossible and in violation of the law.8
Private respondents for their part argue that Rep. Act No. 7279 is not applicable. They aver that
there was no proof that petitioners are registered as eligible socialized housing program
beneficiaries in accordance with procedure set forth in the Implementing Rules and Regulations
Governing the Registration of Socialized Housing Beneficiaries issued by the Department of
Interior and Local Government and the Housing and Urban Development Coordinating Council.
They aver that even if Rep. Act No. 7279 was applicable, the required notices under the law had
already been complied with. According to them, petitioners were already notified on March 7,
2003 of an impending demolition, when the writ of execution was served.9
We find for respondents.
Under Section 19,10 Rule 70 of the Revised Rules on Civil Procedure, a judgment on a forcible
entry and detainer action is immediately executory to avoid further injustice to a lawful possessor,
and the court’s duty to order the execution is practically ministerial.11 The defendant may stay it
only by (a) perfecting an appeal; (b) filing a supersedeas bond; and (c) making a periodic deposit
of the rental or reasonable compensation for the use and occupancy of the property during the
pendency of the appeal.12 Once the Regional Trial Court decides on the appeal, such decision is
immediately executory under Section 21,13 Rule 70, without prejudice to an appeal, via a
petition for review, before the Court of Appeals or Supreme Court.14
However, petitioners failed to file a petition for review. Records show that petitioners received
on March 12, 2003 the RTC decision denying their motion for reconsideration. They had until
March 27, 2003 to file a petition for review before the Court of Appeals. Instead, they filed a
petition for certiorari and prohibition on April 10, 2003. In said petition, which is still pending,
petitioners contended that the RTC committed grave abuse of discretion in affirming the MeTC
decision and insisted that the latter court had no jurisdiction over the complaint.
The remedy to obtain reversal or modification of the judgment on the merits in the instant case is
appeal. This holds true even if the error ascribed to the court rendering the judgment is its lack of
jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of
discretion in the findings of fact or of law set out in the decision. The existence and availability of
the right of appeal prohibits the resort to certiorari because one of the requirements for the
latter remedy is that "there should be no appeal."15
Clearly, petitioners’ petition for certiorari before the Court of Appeals was filed as a substitute
for the lost remedy of appeal. Certiorari is not and cannot be made a substitute for an appeal
where the latter remedy is available but was lost through fault or negligence.16 Thus, the filing of
the petition for certiorari did not prevent the RTC decision from becoming final and executory.17
The RTC acted correctly when it remanded the case to the court of origin in the order dated April
11, 2003.18
Thus, we find that the MeTC cannot be faulted for issuing the assailed orders to enforce the RTC
judgment. Both orders were issued after the requisite notice and hearing. Moreover, the Court of
Appeals did not issue any writ of preliminary injunction to stay the execution of the judgment.
Petitioners tried to stay the execution of the order of demolition by filing a petition for review
with prayer for TRO before us. We earlier denied said prayer for TRO. We also find petitioners’
contention that the said orders violated Rep. Act No. 7279, particularly Section 28(c),19 totally
without merit. Under the provision, eviction or demolition may be allowed when there is a court
order for eviction and demolition, as in the case at bar. Moreover, nothing is shown on record that
petitioners are underprivileged and homeless citizens as defined in Section 3(t) of Rep. Act No.
7279.20 The procedure for the execution of the eviction or demolition order under Section 28(c)
is, in our view, not applicable.
It also appears that the order of demolition had already been executed. Petitioners had already
vacated the area and private respondents now possess the properties free from all occupants, as
evidenced by the sheriff’s turn-over of possession dated May 19, 2003. Thus, the instant case
before us has indeed become moot and academic.
WHEREFORE, the petition for review assailing the Order dated April 30, 2003 and the Special
Order of Demolition dated May 9, 2003 of the Metropolitan Trial Court of Parañaque City, Branch
77, is DENIED for mootness and lack of merit.
SO ORDERED.
G.R. No. 136274 September 3, 2003
SUNFLOWER NEIGHBORHOOD ASSOCIATION, represented by FLORO ARAGAN, petitioners,
vs.
COURT OF APPEALS, HON. ACTING PRESIDING JUDGE LORIFEL LACAP PHIMNA, MeTC, Branch
77, Parañaque City and ELISA MAGLAQUI-CAPARAS, respondents.

a decision of the Court of Appeals.
Syllabi Class : Remedial Law|Ejectment
Syllabi:
1. Remedial Law; Ejectment; An ejectment suit is
an action in personam wherein the judgment is
binding only upon the parties properly impleaded
and given an opportunity to be heard; Judgment
becomes binding on anyone who has not been
impleaded in the following instances.-
It is well-settled that, although an ejectment suit is
an action in personam wherein the judgment is
binding only upon the parties properly impleaded
and given an opportunity to be heard, the judgment
becomes binding on anyone who has not been
impleaded if he or she is: (a) a trespasser, squatter
or agent of the defendant fraudulently occupying the
property to frustrate the judgment; (b) a guest or
occupant of the premises with the permission of the
defendant; (c) a transferee pendente lite; (d) a
sublessee; (e) a co-lessee or (f) a member of the

family, relative or privy of the defendant.
CORONA, J.:
This is a petition for review of the July 16, 1998 decision of the Court of Appeals1 in CA-G.R. SP
No. 46861 (a) declaring null and void the injunction orders respectively issued by Judge Amelita
Tolentino2 in Civil Case No. 96-0253, for Expropriation, and Judge Rolando G. How in Civil Case
No. 96-0480, for Prohibition with Preliminary Injunction; and (b) ordering the Metropolitan Trial
Court (MeTC) of Parañaque City, Branch 78, to enforce its July 8, 1996 Writ of Demolition. The
dispositive portion read:
WHEREFORE, foregoing considered, the injunction orders subject of the instant petition are
hereby DECLARED NULL AND VOID. Corollary thereto, the Court of origin, Metropolitan Trial Court,
Branch 78, Parañaque, is hereby directed to ENFORCE its Writ of Demolition dated July 8, 1996.3
The antecedent facts follow.
Private respondent Elisa Maglaqui-Caparas, in her capacity as executrix of the testate estate of
Macaria Maglaqui, filed on March 16, 1993 a complaint for unlawful detainer (Civil Case No. 8550)
against Alfredo Mogar and 46 other persons4 who were occupying several parcels of land (Lots 1-A,
B, C, E, F and G) in Yellow Ville, United Parañaque Subdivision IV, Metro Manila. These parcels of
land are covered by individual transfer certificates of title5 registered in the name of Macaria
Maglaqui, private respondent’s mother.
The MeTC of Parañaque City, Branch 78, eventually decided in favor of private respondent. On
appeal, the decision of the MeTC was affirmed by the Regional Trial Court (RTC) of Makati City,
Branch 66. Mogar et al. elevated the case to the Court of Appeals but their petition was dismissed
by the appellate court on December 12, 1994. After the dismissal became final, a writ of
demolition was issued by the MeTC of Parañaque City, Branch 78. The writ, however, was not
immediately implemented because the case was transferred to Branch 77 of the same court. On
February 6, 1997, Mogar et al. filed a petition with the RTC of Parañaque City, Branch 257,
presided over by Judge Rolando G. How, to enjoin the implementation of the writ of demolition.
However, this petition was denied and subsequently, an alias writ of demolition was issued by
Judge Vivencio G. Lirio of MeTC Branch 77, the court of origin.
The alias writ of demolition was, again, not executed, this time due to the ex parte issuance of a
writ of preliminary injunction by Judge Amelita Tolentino, in connection with the expropriation
case (Civil Case No. 96-0253) filed by the Municipality of Parañaque against the Testate Estate of
Macaria Maglaqui.
Meanwhile, another group of persons occupying portions of the parcels of land (Lots I-F and I-G)
subject of the unlawful detainer case, organized themselves into the Sunflower Neighborhood
Association (Sunflower), the petitioner herein. On November 18, 1996, Sunflower, represented by
one Floro Aragan, filed a complaint for prohibition/injunction with preliminary injunction against
private respondent also with the RTC of Parañaque City, Branch 257. Sunflower argued that its
members should be excluded from the demolition order as they were not parties to the original
unlawful detainer case. To include their houses in the demolition would be to deprive them of
due process. This time, Judge How granted the injunction and ordered the exclusion of the houses
belonging to petitioner from demolition.
Thus, private respondent filed a petition for certiorari, prohibition and mandamus with the Court
of Appeals (CA GR SP No. 46861) assailing both the injunction orders issued by Judge Tolentino in
the expropriation case and by Judge How in the prohibition case.
The Court of Appeals ruled in favor of private respondent holding that, as the judgment in the
unlawful detainer case had already become final, the execution could not be enjoined.
Consequently, the MeTC of Parañaque City, Branch 77 issued another alias writ of demolition on
September 14, 1998.
In order to stay the execution of the writ of demolition, Sunflower filed on January 7, 1999 an
urgent motion in this Court for the issuance of a status quo order. This we granted in a resolution
dated January 20, 1999. Prior to the issuance of our resolution, however, the writ of demolition
was implemented on January 14, 1999. Petitioner thus filed a motion to allow its members to
return to the premises, which we granted in another resolution dated April 28, 1999. Thereafter,
we required both parties to submit their memoranda.
Sometime in November 1998, the group of Mogar et al. filed in this Court a petition for review of
the decision of the Court of Appeals in CA GR SP No. 46861. However, we dismissed the same on
January 18, 1999 for failure of said petitioners to comply with certain procedural requirements,
including their failure to submit a certification of non-forum shopping.6
For its part, petitioner Sunflower likewise assailed the same decision of the Court of Appeals in
this petition for review on certiorari under Rule 45 of the Revised Rules of Court.
Before we proceed, it should be pointed out that any issue relating to the expropriation case
(Civil Case No. 96-0253) filed by the Municipality of Parañaque has been rendered moot by the
dismissal of that case. This Court, in a Resolution dated January 29, 2003,7 ordered the presiding
judge of the RTC of Parañaque City, Branch 274 to report on the status of the expropriation case
filed by the Municipality of Parañaque against herein private respondent. The presiding judge
reported that the case was already dismissed on June 1, 1999 in an order issued by then Presiding
Judge Amelita Tolentino who granted the motion to dismiss filed by herein private respondent.
Said dismissal was not challenged by the Municipality of Parañaque.8
The basic issue before us is whether petitioner’s members, who were not parties to the unlawful
detainer case, may be ejected from the land subject of this case.
We rule in the affirmative. It is well-settled that, although an ejectment suit is an action in

personam wherein the judgment is binding only upon the parties properly impleaded and given an
opportunity to be heard, the judgment becomes binding on anyone who has not been impleaded if
he or she is: (a) a trespasser, squatter or agent of the defendant fraudulently occupying the
property to frustrate the judgment; (b) a guest or occupant of the premises with the permission
of the defendant; (c) a transferee pendente lite; (d) a sublessee; (e) a co-lessee or (f) a member
of the family, relative or privy of the defendant.9
In the case at bar, the records show that petitioner’s members are trespassers or squatters who
do not have any right to occupy the property of respondent. Petitioner does not dispute the
ownership of the parcels of land in question. In fact, it even admitted that the subject property is
owned by Macaria Maglaqui, mother of private respondent.10 Petitioner failed to establish any
right which would entitle its members to occupy the land in any capacity, whether as lessees,
tenants and the like. Petitioner’s only defense against the eviction and demolition orders is their
supposed non-inclusion in the original detainer case. This defense, however, has no legal support
since its members are trespassers or squatters who are bound by the judgment.
Petitioner’s argument that the parcels of land occupied by its members (Lots I-F and I-G) were not
included in the original ejectment complaint has no basis. The complaint private respondent filed
with the MeTC of Parañaque City, Branch 78, clearly included Lots I-F and I-G as part of the
subject matter under litigation in the unlawful detainer case.11 Thus, petitioner’s members,
together with all the parties in the unlawful detainer case, must vacate the disputed land.
The Court commiserates with respondent, already in her twilight years, who has been unlawfully
deprived of her land for a good number of years. Thus, we exhort the court of origin to execute
this decision with reasonable dispatch, consistent with the requirements of Section 28 of RA 7279
and EO 152,12 on eviction and demolition.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-GR SP
No. 46861 is AFFIRMED.
SO ORDERED.
G.R. No. 160270 April 23, 2010
SUBIC BAY METROPOLITAN AUTHORITY, Petitioner,
vs.
MERLINO E. RODRIGUEZ and WIRA INTERNATIONAL TRADING CORP., both represented herein
by HILDA M. BACANI, as their authorized representative, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Court of Appeals’ (CA) Decision2 dated 20 June 2003 and
Resolution dated 8 October 2003 in CA-G.R. SP No. 74989. The CA dismissed the petition for
certiorari and prohibition3 with prayer for temporary restraining order, preliminary or permanent
injunction filed by Subic Bay Metropolitan Authority (SBMA) against Judge Ramon S. Caguioa of
the Regional Trial Court (RTC) of Olongapo City, Branch 74, and Merlino E. Rodriguez and Wira
International Trading Corporation (WIRA), both represented by Hilda Bacani. The CA also affirmed
the Orders dated 21 November 2002 and 27 November 2002 issued by the RTC.
The Antecedent Facts
The factual and procedural antecedents of this case, as culled from the records, are as follows:
On 29 September 2001, a cargo shipment described as "agricultural product" and valued at

US$6,000 arrived at the Port of Subic, Subic Bay Freeport Zone.4 On the basis of its declared value,
the shipment was assessed customs duties and taxes totaling ₱57,101 which were paid by
respondent WIRA, the shipment’s consignee.5
On 23 October 2001, Raval Manalas, Acting COO III of the Bureau of Customs, Port of Subic (BOC
Subic Port), issued a Memorandum addressed to the BOC Subic Port District Collector, stating that
upon examination, the subject shipment was found to contain rice. The Memorandum further
stated as follows: that the importer claimed there was a misshipment since it also had a pending
order for rice; that the "warehousing entry" was amended to reflect the change in description
from "agricultural product" to rice; that the shipment, as a warehoused cargo inside the freeport
zone, was duty and tax free, and was not recommended for any imposition of penalty and
surcharge; that the consumption entry was changed to reflect a shipment of rice; and that the
consumption entry, together with supporting documents belatedly received by the importer, was
submitted to the bank although not yet filed with the BOC.6
On 24 October 2001, Hilda Bacani (respondents’ authorized representative) wrote BOC Subic Port
District Collector Billy Bibit, claiming that she was the representative of Metro Star Rice Mill
(Metro Star), the importer of the subject cargo. She stated that there was a "misshipment" of
cargo which actually contained rice, and that Metro Star is an authorized importer of rice as
provided in the permits issued by the National Food Authority (NFA). Bacani requested that the
"misshipment" be upgraded from "agricultural product" to a shipment of rice, and at the same
time manifested willingness to pay the appropriate duties and taxes.7 The following day, or on 25
October 2001, the BOC issued Hold Order No. 14/C1/2001 1025-101, directing BOC Subic Port
officers to (1) hold the delivery of the shipment, and (2) to cause its transfer to the security
warehouse.8
On 26 October 2001, respondent WIRA, as the consignee of the shipment, paid the amount of
₱259,874 to the BOC representing additional duties and taxes for the upgraded shipment.9
On 30 October 2001, BOC Commissioner Titus Villanueva issued a directive stating as follows:10
2nd Indorsement
30 October 2001
Returned to the District Collector of Customs, Port of Subic, the within (sic) Import Entry No. C
2550-01 covering the shipment of 2,000 bags Thai Rice 25% broken consigned to WIRA INT’L
TRADING CORPORATION (METRO STAR RICE MILL) ex MV Resolution V0139 with NFA Import Permit
IP SN 000032 and IP SN 000033 both dated on 13 September 2001 duly issued by the Administrator,
National Food Authority.
Accordingly, the same may be released subject to payment of duties and taxes based on an
upgraded value as provided for by the National Food Authority at $153.00/MT and compliance
with all existing rules and regulations.
Further, ensure cancellation of NFA Import Permit IP SN 000032 and IP SN 000033, to prevent the
same from being recycled.
Report to this office your compliance of herein directives.

Be guided accordingly.
(Sgd.) Titus Villanueva, CESO 1
Commissioner
In accordance with the shipment upgrade, respondent WIRA paid on 28 November 2001 a further
amount of ₱206,212 as customs duties and taxes.11 On 4 December 2001, Fertony G. Marcelo,
Officer-in-Charge of the Cash Division of BOC Subic Port issued a certification/letter addressed to
Mr. Augusto Canlas, General Manager of the Seaport Department, stating thus:12
This is to certify that the undersigned Collecting Officer validate[d] a revenue of Php 523,187.00
from above-mentioned importation13 covered by O.R. Numbers 8083840 dated October 23, 2001,
8084068 dated October 26, 2001 and 8165208 dated November 28, 2001, respectively. And a Gate
Pass was issued on December 3, 2001 with signature of Mr. Percito V. Lozada, Chief Assessment in
behalf of the District Collector Billy C. Bibit.
(Sgd.) Fertoni G. Marcelo
Officer-in-charge, Cash Division
(Collecting Officer)
Noted:
(Sgd. For) Coll. Billy C. Bibit
Despite the above certification/letter, petitioner SBMA, through Seaport Department General
Manager Augusto Canlas, refused to allow the release of the rice shipment. Hence, on 11 June
2002, respondents filed with the RTC of Olongapo City, a complaint for Injunction and Damages
with prayer for issuance of Writ of Preliminary Prohibitory and Mandatory Injunction and/or
Temporary Restraining Order against petitioner SBMA and Augusto L. Canlas, and the case was
docketed as Civil Case No. 261-0-2002.
The succeeding events were summarized by the trial court and reproduced by the Court of
Appeals, as follows:14
1. On June 11, 2002, a complaint for Injunction and Damages with prayer for issuance of Writ of
Preliminary Prohibitory and Mandatory Injunction and/or Temporary Restraining Order was filed
by the plaintiff/petitioners Mernilo E. Rodriguez, doing business under the name and style "Metro
Star Rice Mill," represented by Attorney-in-fact Hilda M. Bacani, and WIRA International Trading,
Inc. likewise represented by Hilda M. Bacani as authorized representative, against Subic Bay
Metropolitan Authority (SBMA) and Augusto L. Canlas, in his personal and official capacity as
General Manager of the Seaport Department of said SBMA. The complaint was docketed as Civil
Case No. 261-0-[2002].
2. On June 13, 2002, an Order was issued by the Executive Judge of the Regional Trial Court of
Olongapo City, Branch 72, where plaintiffs/petitioners’ application for injunctive relief was
granted. Said order restrained the defendants/respondents for seventy-two (72) hours, from
interfering with plaintiffs/petitioners’ right to enter the premises of the CCA compound located
within the Bureau of Customs territory and authority within the Subic Bay Freeport Zone (SBFZ),
Olongapo City, and to withdraw and release from said CCA warehouse the rice importation of
plaintiffs and to take and possess the said imported rice consisting of 2,000 bags; and from
interfering in any manner whatsoever with plaintiffs/petitioners’ rights and possession over the
aforesaid imported rice. On the same day also, June 13, 2002, the raffle of the case was set on
June 18, 2002 at 8:30 in the morning.
3. Copy of the complaint with summons together with aforesaid Temporary Restraining Order
(TRO) was served by Sheriff Leopoldo Rabanes and Leandro Madarang of the Office of the Clerk of
Court of the Regional Trial Court, Olongapo City, upon the defendants/respondents on the same
day, June 13, 2002, at around 3:40 in the afternoon as shown by the Sheriff's return of service
(Exh. "A-3" and Exh. "B-1") typed and found in the same pleadings.
4. The following day, on June 14, 2002, the same Sheriffs went back to defendants/respondents'
office to determine whether or not the TRO issued by Branch 72 and served by them was followed.
They were however, met by defendants/respondents Attys. Abella and Katalbas, in the office of
defendant/respondent Canlas, who after much discussion, refused to honor the TRO issued by
Branch 72 alleging among other[s], that said Order was illegal and therefore, will not be followed
by the defendants/respondents.
5. Unsuccessful in their efforts, the Sheriffs of this Court prepared and filed their report dated
June 17, 2002 outlining therein what transpired on June 14, 2002 and the circumstances
surrounding the refusal by defendants/respondents to honor the TRO issued by Branch 72-RTC,
Olongapo City (Exh. "C"). On the same day also, June 17, 2002, plaintiffs/petitioners-movants
filed in the instant case a verified indirect contempt charge alleging therein that because of the
defiance exhibited by the defendants/respondents[,] specifically Augusto L. Canlas, Attys.
Francisco A. Abella, Jr. and Rizal V. Katalbas. Jr.[,] in not honoring the court's TRO, they prayed
that said defendants/respondents, after due notice and hearing, be declared and adjudged guilty
of indirect contempt committed against the court for having directly failed and refused to comply
with the TRO dated June 13, 2002, and that they be punished with imprisonment and/or fine in
accordance with Rule 71 of the 1997 Rules of Civil Procedure.
6. On June 18, 2002, the case was raffled to Branch 74 of herein court.15
7. On June 24, 2002, a comment and/or opposition to the verified indirect contempt charge was
filed by the defendants/respondents alleging therein that they cannot be cited for contempt of
court because they had legal basis to refuse to honor the TRO.1avvphi1
8. Trial was conducted by the court in the indirect contempt charge on July 12, 2002 as per the
court’s Order of even date. Plaintiffs/petitioners presented Sheriff Leopoldo Rabanes who
testified on direct examination. During the August 20, 2002 hearing, Sheriff Rabanes was
cross-examined. Thereafter, the testimony of his co-Sheriff Leandro Madarang was stipulated
upon the parties considering that his testimony would only corroborate in all principal points the
testimony of Sheriff Rabanes.
9. On that same hearing also[,] plaintiffs/petitioners formally offered their evidence and rested.
Defendants/respondents[,] however, in the meantime had earlier filed a motion on August 1,
2002[,] asking leave of court to file a motion to dismiss with attached "Motion to Dismiss" and in
the said August 20, 2002 hearing, defendants/respondents further manifested that they were
adopting their legal arguments marshalled in the said motion to dismiss insofar as the indirect
contempt charge was concerned.
10. Thereafter, on August 29, 2002, defendants/respondents filed a manifestation with formal
offer of evidence in the indirect contempt case essentially alleging that it is the Bureau of
Customs that has jurisdiction over this case in view of a Warrant of Seizure and Detention case
filed against the plaintiff/petitioners and denominated as Seizure Identification No. 200[2]-10.
Therefore, since it is the Bureau of Customs that has jurisdiction, the indirect contempt case has
no legal leg to stand on and as such, defendants/respondents had the right to refuse to comply
with the subject TRO in this case.
11. With the said formal offer of exhibits filed by the defendants/respondents, the indirect
contempt case was considered submitted for decision by this court.
In addition to the foregoing, on 19 July 2002, petitioner SBMA and Augusto Canlas filed their
Answer to the Complaint for Injunction and Damages with Counterclaim.16 On 1 August 2002,
petitioner SBMA, Augusto Canlas, Francisco A. Abella, Jr. and Rizal V. Katalbas, Jr. filed a
Consolidated Motion to Dismiss which sought the dismissal of (1) Civil Case No. 261-0-2002
(Complaint for Injunction and Damages) and (2) Civil Case No. 262-0-2002 (Petition for Indirect
Contempt), alleging the existence of a Warrant of Seizure and Detention, dated 22 May 2002,
issued against the subject rice shipment.17
On 21 November 2002, the RTC issued an Order on the indirect contempt case, stating thus:
WHEREFORE, foregoing considered, judgment is hereby rendered finding all of the

defendants/respondents guilty of indirect contempt of court. Atty. Francisco A. Abella, Jr. is
sentenced to suffer the penalty of imprisonment of ten (10) days and fined the amount of
₱10,000.00 Atty. Rizal V. Katalbas, Jr. is sentenced to pay a fine of ₱10,000.00. Augusto L. Canlas
is sentenced to pay a fine of ₱5,000.00. Subsidiary imprisonment in case of insolvency for all.
Let a warrant of arrest issue against Atty. Francisco A. Abella, Jr. The Clerk of Court, Atty. John V.
Aquino, of the Regional Trial Court, Olongapo City is directed to collect the corresponding fine
from each of the respondents immediately upon receipt of this order and to report the same to
the court.
SO ORDERED.18
On 27 November 2002, the RTC issued another Order considering the pending incidents in the
injunction case. The RTC held that there should be prior determination by the BOC on whether
the 2,000 bags of imported rice were smuggled, and thus issued the following order:
WHEREFORE, the Bureau of Customs, Customs District XIII, Port of Subic, Olongapo City through
Atty. Titus A. Sangil, Chief, Law Division and Deputy Collector for Administration is hereby
directed to resolve Seizure Identification Case No. 2002-10 and submit to the court its resolution
therewith, within fifteen (15) days from receipt of this order. Meantime, the proceedings in this
case are suspended until the court is in receipt of the resolution of the Bureau of Customs.
Furnish a copy of this order to Atty. Titus A. Sangil at his abovecited office address.
SO ORDERED.19
The Court of Appeals’ Ruling
Petitioner filed with the CA a Petition for Certiorari and Prohibition with prayer for Temporary
Restraining Order and Preliminary or Permanent Injunction seeking to nullify and set aside the
RTC Orders dated 21 November 2002 and 27 November 2002. On 20 June 2003, the CA rendered a
Decision dismissing the petition for lack of merit and affirming the Orders issued by the RTC. We
quote the dispositive portion of the CA decision below.
WHEREFORE, premises considered, the assailed Orders dated November 21, 2002 and November
27, 2002 are hereby AFFIRMED in toto and the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit.
SO ORDERED.20
Petitioner’s Motion for Reconsideration was denied by the CA in its Resolution of 8 October
2003.21
Hence, this appeal.
The Issue
The issue for resolution in this case is whether the CA erred in affirming the RTC Orders dated 21
November 2002 and 27 November 2002.

We find the appeal meritorious.
As a rule, actions for injunction and damages lie within the jurisdiction of the RTC pursuant to
Section 19 of Batas Pambansa Blg. 129 (BP 129), otherwise known as the "Judiciary Reorganization
Act of 1980," as amended by Republic Act (RA) No. 7691.22
An action for injunction is a suit which has for its purpose the enjoinment of the defendant,
perpetually or for a particular time, from the commission or continuance of a specific act, or his
compulsion to continue performance of a particular act.23 It has an independent existence, and is
distinct from the ancillary remedy of preliminary injunction which cannot exist except only as a
part or an incident of an independent action or proceeding.24 In an action for injunction, the
auxiliary remedy of preliminary injunction, prohibitory or mandatory, may issue.25
Until the propriety of granting an injunction, temporary or perpetual, is determined, the court
(i.e., the RTC in this case) may issue a temporary restraining order. 26A TRO is an interlocutory
order or writ issued by the court as a restraint on the defendant until the propriety of granting an
injunction can be determined, thus going no further in its operation than to preserve the status
quo until that determination.27 A TRO is not intended to operate as an injunction pendente lite,
and should not in effect determine the issues involved before the parties can have their day in
court.28
Petitioner alleges that the RTC of Olongapo City has no jurisdiction over the action for injunction
and damages filed by respondents on 11 June 2002 as said action is within the exclusive original
jurisdiction of the BOC pursuant to Section 602 of Republic Act No. 1937, otherwise known as the
"Tariff and Customs Code of the Philippines," as amended. Section 602 provides, thus:
Sec. 602. Functions of the Bureau.- The general duties, powers and jurisdiction of the bureau
shall include:
xxx
g. Exercise exclusive original jurisdiction over seizure and forfeiture cases under the tariff and
customs laws.
Petitioner contends that the imported 2,000 bags of rice were in the actual physical control and
possession of the BOC as early as 25 October 2001, by virtue of the BOC Subic Port Hold Order of
even date, and of the BOC Warrant of Seizure and Detention dated 22 May 2002. As such, the BOC
had acquired exclusive original jurisdiction over the subject shipment, to the exclusion of the
RTC.
We agree with petitioner.
It is well settled that the Collector of Customs has exclusive jurisdiction over seizure and
forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or
put it at naught.29 The Collector of Customs sitting in seizure and forfeiture proceedings has
exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture
of dutiable goods.30 Regional trial courts are devoid of any competence to pass upon the validity
or regularity of seizure and forfeiture proceedings conducted by the BOC and to enjoin or
otherwise interfere with these proceedings.31 Regional trial courts are precluded from assuming
cognizance over such matters even through petitions for certiorari, prohibition or mandamus.32
Verily, the rule is that from the moment imported goods are actually in the possession or control
of the Customs authorities, even if no warrant for seizure or detention had previously been issued
by the Collector of Customs in connection with the seizure and forfeiture proceedings, the BOC
acquires exclusive jurisdiction over such imported goods for the purpose of enforcing the customs
laws, subject to appeal to the Court of Tax Appeals whose decisions are appealable to this
Court.33 As we have clarified in Commissioner of Customs v. Makasiar, 34 the rule that RTCs have
no review powers over such proceedings is anchored upon the policy of placing no unnecessary
hindrance on the government's drive, not only to prevent smuggling and other frauds upon
Customs, but more importantly, to render effective and efficient the collection of import and
export duties due the State, which enables the government to carry out the functions it has been
instituted to perform.
Based on the records of this case, the BOC Subic Port issued a Hold Order against the subject rice
shipment on 25 October 2001. However, on 30 October 2001, BOC Commissioner Titus Villanueva
issued a directive to the BOC District Collector stating that the shipment "may be released subject
to payment of duties and taxes based on an upgraded value x x x and compliance with all existing
rules and regulations." Accordingly, respondents made additional payments of customs duties and
taxes for the upgraded shipment. Consequently, on 4 December 2001, the Officer-in-Charge of
the BOC Subic Port Cash Division issued a certification/letter addressed to Augusto Canlas, the
General Manager of the Subic Seaport Department, stating that respondents have already paid
the customs taxes and duties due on the shipment, and "a Gate Pass was issued on December 3,
2001 with signature of Mr. Percito V. Lozada, Chief Assessment (sic) in behalf of the District
Collector Billy C. Bibit."35 Thus, the Hold Order previously issued by the BOC36 had been
superseded, and made ineffective, by the succeeding BOC issuances.1avvphi1
However, BOC Subic Port District Collector Felipe A. Bartolome subsequently issued a Warrant of
Seizure and Detention dated 22 May 2002 against the subject rice shipment. The warrant was
issued upon recommendation made by Atty. Baltazar Morales of the Customs Intelligence and
Investigation Service (CIIS) on 29 April 2002.37 With the issuance of the warrant of seizure and
detention, exclusive jurisdiction over the subject shipment was regained by the BOC.
We note that the appellate court found suspicious the existence of the warrant of seizure and
detention at the time of filing of the injunction and damages case with the RTC by respondents.
The CA pointed out that petitioner did not mention the existence of the warrant in its Answer to
the Complaint for Injunction and Damages, filed on 19 July 2002, and only mentioned the warrant
in its Consolidated Motion to Dismiss [the Complaint for Injunction and Damages, and the Petition
for Indirect Contempt], filed on 1 August 2002.38 We do not agree with the appellate court.
Petitioner's apparent neglect to mention the warrant of seizure and detention in its Answer is
insufficient to cast doubt on the existence of said warrant.
Respondents filed a case for indirect contempt against Augusto L. Canlas, Atty. Francisco A.
Abella, Jr., and Atty. Rizal V. Katalbas, Jr. for allegedly defying the TRO issued by the RTC in
connection with the complaint for injunction and damages previously filed by respondents.
Contempt constitutes disobedience to the court by setting up an opposition to its authority,

justice and dignity.39 It signifies not only a willful disregard or disobedience of the court's orders
but such conduct as tends to bring the authority of the court and the administration of law into
disrepute or in some manner to impede the due administration of justice.40 There are two kinds
of contempt punishable by law: direct contempt and indirect contempt. Direct contempt is
committed when a person is guilty of misbehavior in the presence of or so near a court as to
obstruct or interrupt the proceedings before the same, including disrespect toward the court,
offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to
subscribe an affidavit or deposition when lawfully required to do so.41 Indirect contempt or
constructive contempt is that which is committed out of the presence of the court.42
Section 3 of Rule 71 of the Revised Rules of Civil Procedure includes, among the grounds for filing
a case for indirect contempt, the following:
Section 3. Indirect contempt to be punished after charge and hearing. –

After charge in writing has been filed, and an opportunity given to the accused to be heard by
himself or counsel, a person guilty of any of the following acts may be punished for contempt:
xxx
(b) Disobedience of or resistance to a lawful writ, process, order, judgment or command of a

court, or injunction granted by a court or judge, x x x
(c) Any abuse of or any unlawful interference with the process or proceedings of a court not
constituting direct contempt under Section 1 of this rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct or degrade the
administration of justice;
xxx
When the TRO issued by the RTC was served upon the SBMA officers on 13 June 2002, there was
already an existing warrant of seizure and detention (dated 22 May 2002) issued by the BOC
against the subject rice shipment. Thus, as far as the SBMA officers were concerned, exclusive
jurisdiction over the subject shipment remained with the BOC, and the RTC had no jurisdiction
over cases involving said shipment. Consequently, the SBMA officers refused to comply with the
TRO issued by the RTC.
Considering the foregoing circumstances, we believe that the SBMA officers may be considered to
have acted in good faith when they refused to follow the TRO issued by the RTC. The SBMA
officers' refusal to follow the court order was not contumacious but due to the honest belief that
jurisdiction over the subject shipment remained with the BOC because of the existing warrant of
seizure and detention against said shipment. Accordingly, these SBMA officers should not be held
accountable for their acts which were done in good faith and not without legal basis. Thus, we
hold that the RTC Order dated 21 November 2002 which found the SBMA officers guilty of indirect
contempt for not complying with the RTC's TRO should be invalidated.
Finally, the RTC stated in its Order dated 27 November 2002 that based on the records, "there is a
pending case with the Bureau of Customs District XIII, Port of Subic, Olongapo City, identified and
docketed as Seizure Identification No. 2002-10 and involving the same 2,000 bags of imported rice
that is also the subject matter of the case herein. The existence and pendency of said case before
the Bureau of Customs have in fact been admitted by the parties."43
The RTC then proceeded to order the suspension of court proceedings, and directed the BOC
Subic Port Chief of the Law Division and Deputy Collector for Administration, Atty. Titus Sangil, to
resolve the seizure case and submit to the RTC its resolution within fifteen (15) days from receipt
of the court order. We quote the dispositive portion of the RTC Order dated 27 November 2002, to
wit:
WHEREFORE, the Bureau of Customs, Customs District XIII, Port of Subic, Olongapo City through
Atty. Titus A. Sangil, Chief, Law Division and Deputy Collector for Administration is hereby
directed to resolve Seizure Identification Case No. 2002-10 and submit to the court its resolution
therewith, within fifteen (15) days from receipt of this order. Meantime, the proceedings in this
case are suspended until the court is in receipt of the resolution of the Bureau of Customs.
Furnish a copy of this order to Atty. Titus A. Sangil at his abovecited office address.44
We find the issuance of the RTC Order dated 27 November 2002 improper. The pendency of the
BOC seizure proceedings which was made known to the RTC through petitioner's consolidated
motion to dismiss should have prompted said court to dismiss the case before it. As previously
discussed, the BOC has exclusive original jurisdiction over seizure cases under Section 602 of the
Tariff and Customs Code. The rule that the RTC must defer to the exclusive original jurisdiction of
the BOC in cases involving seizure and forfeiture of goods is absolute. Thus, the RTC had no
jurisdiction to issue its Order dated 27 November 2002.
WHEREFORE, we GRANT the petition. We REVERSE the Court of Appeals’ Decision dated 20 June
2003 and Resolution dated 8 October 2003 in CA-G.R. SP No. 74989. We declare VOID the Regional
Trial Court Orders dated 21 November 2002 and 27 November 2002.
SO ORDERED.
G.R. No. 162704 July 28, 2005
MEMORIA G. ENCINAS and ADOLFO A. BALBOA, Petitioners,
vs.
NATIONAL BOOKSTORE, INC., Respondent.
Case Nature : SPECIAL CIVIL ACTION in the

Supreme Court. Contempt.
Syllabi Class : Administrative
Law|Attorneys|Contempt
Syllabi:
1. Administrative
Law; Attorneys; Contempt; Direct contempt, or
contempt in facie curiae, is misbehavior committed
in the presence of or so near a court or judge so as to
obstruct or interrupt the proceedings before the
same, including disrespect toward the court, and can
be punished summarily without hearing.-
Direct contempt, or contempt in facie curiae, is
misbehavior committed in the presence of or so near
a court or judge so as to obstruct or interrupt the
proceedings before the same, including disrespect
toward the court, and can be punished summarily
without hearing. It is conduct directed against or
assailing the authority and dignity of the court or a
judge, or in the doing of a forbidden act.
2. Administrative Law; Attorneys; Same It is
insulting to assert a claim before the Court based on
an obvious and incompetent forgery and conceived
by one with so primitive a sense of what normative
standards would pass judicial muster.-
As had been earlier observed, it is insulting to assert
a claim before this Supreme Court based on an
obvious and incompetent forgery and conceived by
one with so primitive a sense of what normative
standards would pass judicial muster. We cannot
accept counsel‟s declarations of good faith and
honest mistake since, as a member of the Bar and an
officer of the court, he is presumed to know better.

He is required to thoroughly prepare himself on the
law and facts of his case and the evidence he will
adduce. The minimum he could have done was to
verify with the appropriate authorities the
documents upon which his clients based their claims,
and not have relied on his clients‟ assertions.
3. Administrative Law; Attorneys; Counsel‟s
actuations may even constitute a violation of the
lawyer‟s oath.-
Counsel‟s actuations may even constitute a violation
of the lawyer‟s oath. As an officer of the court, he is
reminded of his basic duties to observe and maintain
the respect due to the courts of justice and judicial
officers, to do no falsehood nor consent to the doing
of any in court, nor mislead or allow the Court to be
misled by any artifice, and to assist in the speedy
and efficient administration of justice.
RESOLUTION
Tinga, J.:
In the Resolution dated 6 April 2005, the Court required Atty. Ricardo T. Calimag, counsel for
Roberto P. Madrigal-Acopiado and his attorney-in-fact Datu Mohaldin R.B. Sulaiman, to show
cause why he should not be cited for contempt of court for his participation in the submission of a
fake judicial decision to this Court. This concerns his compliance therewith entitled Motion to
Show Cause (Re: Compliance to Resolution Dated 6 April 2005).1
Counsel explains that he filed the Motion for Intervention with Leave of Court and
Petition-In-Intervention (to which was appended a copy of the fake decision) on behalf of his
clients to seek the truth in order that justice will prevail. He reasons that he was misled in the
appreciation of the evidence (referring to the forged judicial decision) made available to him at
the time of submission of the Motion and Petition-In-Intervention. At the same time, he asserts
that there was an honest mistake in the appreciation of the documents and that there was never
any malice intended in the submission of the questioned documents. In fact, he even welcomes
the referral of the incident to the National Bureau of Investigation so as to identify the
mastermind of the production of the fake decision.
Counsel’s explanation is insufficient and unsatisfactory. The Court cites counsel in direct
contempt of court.
Direct contempt, or contempt in facie curiae, is misbehavior committed in the presence of or so

near a court or judge so as to obstruct or interrupt the proceedings before the same, including
disrespect toward the court, and can be punished summarily without hearing.2 It is conduct
directed against or assailing the authority and dignity of the court or a judge, or in the doing of a
forbidden act.3
As had been earlier observed, it is insulting to assert a claim before this Supreme Court based on
an obvious and incompetent forgery and conceived by one with so primitive a sense of what
normative standards would pass judicial muster.4 We cannot accept counsel’s declarations of
good faith and honest mistake since, as a member of the Bar and an officer of the court, he is
presumed to know better. He is required to thoroughly prepare himself on the law and facts of his
case and the evidence he will adduce. The minimum he could have done was to verify with the
appropriate authorities the documents upon which his clients based their claims, and not have
relied on his clients’ assertions.
Counsel’s actuations may even constitute a violation of the lawyer’s oath. As an officer of the
court, he is reminded of his basic duties to observe and maintain the respect due to the courts of
justice and judicial officers,5 to do no falsehood nor consent to the doing of any in court, nor
mislead or allow the Court to be misled by any artifice,6 and to assist in the speedy and efficient
administration of justice.7
Counsel’s act of filing the Motion and Petition-In-Intervention based on a spurious judicial
decision constitutes direct contempt of court. A person found guilty of direct contempt may be
punished by a fine not exceeding two thousand pesos or imprisonment not exceeding ten (10) days,
or both, if it be a Regional Trial Court or a court of equivalent or higher rank.8 Under the
circumstances, a fine of Two Thousand Pesos (₱2,000.00) would be appropriate.
IN VIEW OF THE FOREGOING, Atty. Ricardo T. Camilag is CITED in DIRECT CONTEMPT OF COURT
and ordered to PAY a FINE of TWO THOUSAND PESOS (₱2,000.00) within ten (10) days form notice,
or to suffer imprisonment of ten (10) days in case he fails to pay the fine.
SO ORDERED.
G.R. No. 178622 November 12, 2012
LUCIANO LADANO,1 Petitioner,
vs.
FELINO NERI, EDWIN SOTO, ADAN ESPANOLA,2 and ERNESTO BLANCO, Respondents.

Syllabi Class : Remedial Law|Special Civil
Actions|Indirect Contempt|Agrarian
Reform|Tenancy Relationship|Department of
Agrarian Reform Adjudication Board (DARAB)
Syllabi:
1. Remedial Law; Jurisdiction; While neither of

the parties challenged the jurisdiction of the
Department of Agrarian Reform Adjudication Board
(DARAB), the Supreme Court can consider the issue
of jurisdiction motu proprio.-
—Petitioner never alleged that he had any
agreement with the landowner of the subject
property. Indeed Ladano‟s Complaint did not assert
any right that arises from agrarian laws. He asserted
his rights based on his prior physical possession of
the two-hectare property and on his cultivation of
the same in good faith. The issues that he wanted
resolved are who between himself and the
respondents have a better right to possess the
property, and whether he has a right to be
compensated for the improvements he introduced
on the property. Clearly, the nature of the case he
filed is one for forcible entry and for indemnification,
neither of which is cognizable by the DARAB, but by
the regular courts. While neither of the parties
challenged the jurisdiction of the DARAB, the Court
can consider the issue of jurisdiction motu proprio.
2. Remedial Law; Special Civil
Actions; Indirect Contempt; A charge for indirect
contempt, such as disobedience to a court‟s lawful
order, is initiated either motu proprio by order of or a
formal charge by the offended court, or by a verified
petition with supporting particulars and certified true
copies of documents or papers involved therein, and

upon full compliance with the requirements for filing
initiatory pleadings for civil actions in the court
concerned.-
—A charge for indirect contempt, such as
disobedience to a court‟s lawful order, is initiated
either motu proprio by order of or a formal charge by
the offended court, or by a verified petition with
supporting particulars and certified true copies of
documents or papers involved therein, and upon full
compliance with the requirements for filing initiatory
pleadings for civil actions in the court concerned. It
cannot be initiated by a mere motion, such as the
one that petitioner filed.
3. Agrarian Reform; Tenancy Relationship; A
tenancy relationship arises between a landholder
and a tenant once they agree, expressly or impliedly,
to undertake jointly the cultivation of a land
belonging to the landholder, as a result of which
relationship the tenant acquires the right to continue
working on and cultivating the land.-
—“A tenancy relationship arises between a
landholder and a tenant once they agree, expressly
or impliedly, to undertake jointly the cultivation of a
land belonging to the landholder, as a result of which
relationship the tenant acquires the right to continue
working on and cultivating the land.” For a tenancy
relationship, express or implied, to exist, the

following requisites must be present: (1) the parties
must be landowner and tenant or agricultural lessee;
(2) the subject matter is agricultural land; (3) there
is consent by the landowner; (4) the purpose is
agricultural production; (5) there is personal
cultivation by the tenant; and (6) there is sharing of
harvests between the landowner and the tenant.
Independent and concrete evidence of the foregoing
elements must be presented by the party asserting
the existence of such a relationship. They cannot be
arrived at by mere conjectures or by presumptions.
“Unless a person has established his status as a de
jure tenant, he is not entitled to security of tenure
[nor is he] covered by the Land Reform Program of
the Government under existing tenancy laws.”
4. Same; Same; Department of Agrarian
Reform Adjudication Board (DARAB); For the
Department of Agrarian Reform Adjudication Board
(DARAB) to acquire jurisdiction over the case, there
must exist a tenancy relationship between the
parties.-
—There is another ground for dismissing Ladano‟s
Complaint. The Department of Agrarian Reform and
its adjudication boards have no jurisdiction over
Ladano‟s Complaint. “For the DARAB to acquire
jurisdiction over the case, there must exist a tenancy
[relationship] between the parties.” But a careful
reading of Ladano‟s Complaint shows that Ladano

did not claim to be a leasehold tenant on the land.
DECISION
DEL CASTILLO, J.:
A person who is not agricultural tenant cannot claim the right to security of tenure under the
Code of Agrarian Reforms of the Philippines3 or Republic Act (RA) No. 3844, as amended.4
Moreover, he cannot pursue his complaint before the Department of Agrarian Reform
Adjudication Board (DARAB) whose jurisdiction lies over agrarian disputes between parties in a
tenancy relationship.5
Before the Court is a Petition for Review on Certiorari,6 assailing the February 14, 2007 Decision7
of the Court of Appeals (CA) in CA-G.R. SP No. 93819, as well as its May 9, 2007 Resolution,8 which
denied reconsideration of its Decision. The fallo of the assailed Decision reads:
WHEREFORE, premises considered, the July 6, 2005 Decision of the Department of Agrarian
Reform Adjudication Board, in DARAB Case No. 13172, is hereby REVERSED and SET ASIDE and a
new one entered DISMISSING the April 1, 2004 complaint filed by respondent Luciano Ladano.
SO ORDERED.9
Factual Antecedents
This case originated from a Complaint10 filed by petitioner Luciano Ladano (Ladano) before the
DARAB Provincial Adjudicator against respondents Felino Neri (Neri), Edwin Soto, Adan Espanola
and Ernesto Blanco. Ladano alleged that on May 7, 2003, the respondents forcibly entered the
two-hectare land, located in Manalite I, Barangay Sta. Cruz, Antipolo City, which he and his
family have been peaceably occupying and cultivating since 1970. The said respondents informed
him that the property belongs to Neri and that he should vacate the same immediately. Not too
long afterwards, the respondents fenced the property and destroyed some of the trees and
kawayan planted thereon. Ladano prayed that he be declared the rightful "occupant/tiller" of the
property, with the right to security of tenure thereon. In the alternative that the judgment is in
the respondents’ favor, he prayed that the respondents compensate him for the improvements
that he introduced in the property.
Respondents countered that Ladano’s Complaint should be dismissed for lack of merit.11 He is not
entitled to the reliefs he sought because he does not have, as he did not even allege having, a
leasehold arrangement with Neri, the supposed owner of the land he is occupying.12
Instead of arguing that he has a right to remain on the property as its bona fide tenant, Ladano
maintained that he has been its possessor in good faith for more than 30 years. He believed then
that the property was part of the "public land and was open to anybody."13 As a possessor and
builder in good faith, he cannot be removed from the subject property without being
compensated for the improvements that he had introduced.14 He prayed for an award of
P100,000.00 as disturbance compensation.15
Decision of the Provincial Adjudicator
On June 23, 2004, the Provincial Adjudicator dismissed Ladano’s Complaint.16 She determined
that the two-hectare property, while agricultural, is not covered by RA No. 6657, as amended,17
which only covers agricultural properties beyond five hectares.18 Presidential Decree No. 27, as
amended,19 does not apply either because the property was not planted with rice and corn.
Neither is it covered by other agrarian tenancy laws because Ladano had not presented any
evidence of his tenancy relationship with the landowner.20 The Provincial
Adjudicator disposed of the case as follows:
WHEREFORE, in view therefrom, JUDGMENT is hereby rendered DISMISSING the instant complaint
for lack of merit.
SO ORDERED.21
Ladano appealed to the DARAB Central Office (DARAB).22 He questioned Neri’s title to the
property and Neri’s right to eject him therefrom. He maintained that, for more than 30 years, he
believed that the land was part of the public domain because no one disturbed his possession
thereof. He continued cultivating and possessing the same in good faith. Under Article 1678 of the
Civil Code,23 Ladano averred that he is entitled to be compensated for the improvements that he
introduced.24
DARAB Decision
The DARAB determined that the only issue to be resolved is whether Ladano is a tenant on the
subject landholding.25 If he is a tenant, he is entitled to security of tenure and cannot be
removed from the property.26
The DARAB held that Ladano’s 30-year occupation and cultivation of the land could not have
possibly escaped the landowner’s notice. Since the landowner must have known about, and
acquiesced to, Ladano’s actions, an implied tenancy is deemed to exist between them.27 The
landowner, who denied the existence of a tenancy relationship, has the burden of proving that
the occupant of the land is a mere intruder thereon.28 In the instant case, respondents failed to
discharge such burden. The fallo of the DARAB Decision29 reads:
WHEREFORE, premises considered, the Decision dated June 23, 2004 rendered by the Honorable
Adjudicator a quo is hereby REVERSED and SET ASIDE. A NEW JUDGMENT is hereby rendered:
1. Declaring x x x Luciano Ladaño a bonafide tenant on the subject landholding;
2. Ordering respondents to respect Ladano’s peaceful possession of the subject landholding;
3. Directing the Municipal Agrarian Reform Officer (MARO) of Brg. Sta. Cruz, Antipolo City to assist
the parties in the execution of an Agricultural Leasehold Contract in accordance with the
provisions of Republic Act No. 3844, as amended.
SO ORDERED.30
Respondents filed a Motion for Reconsideration.31 They assailed the DARAB’s finding of a tenancy
relationship as having no factual basis. Ladano himself never claimed sharing his harvests with, or
paying rentals to, the landowner. Without such an arrangement, no tenancy relationship can exist
between them32 and Ladano cannot claim rights under the agrarian laws.33
The DARAB denied reconsideration on March 17, 2006.34
Respondents appealed to the appellate court.35
Ruling of the Court of Appeals
The appellate court reversed the DARAB Decision and dismissed Ladano’s Complaint.36
Contrary to the DARAB’s ruling, the CA held that the burden lies on the person who is asserting
the existence of a tenancy relationship to prove that all the elements necessary for its existence
are present. These requisites are: "(a) the parties [must be] landowner and tenant; (b) the
subject matter is agricultural land; (c) there is consent by the landowner; (d) the purpose is
agricultural production; (e) there is personal cultivation by the tenant; and (f) there is sharing of
harvests between the landowner and the tenant."37
The CA concluded that there is no evidence supporting the DARAB’s conclusion that a tenancy
relationship exists between Ladano and Neri.38 In fact, Ladano himself admitted that he entered
and tilled the subject property without the knowledge and consent of the landowner. Such
admission negates the requisites of consent and of an agreement to share harvests.39
The CA also faulted the DARAB for considering Ladano’s lengthy occupation of the land as an
indication of the existence of a leasehold relationship. A person’s tillage of another’s landholding,
without anything else, will not raise the presumption of an agricultural tenancy.40
In seeking a reconsideration41 of the CA Decision Ladano alleged, for the first time, that he
indeed shared a portion of his harvest with the landowner’s caretaker.42 He prayed that the CA
reverse itself and that the DARAB Decision be reinstated in toto.43
The CA denied44 Ladano’s motion, hence the latter filed this Petition.
Proceedings before this Court
Petitioner filed a Motion for Urgent Issuance of Temporary Restraining Order TRO45 before the
Court. He alleged that, despite the pendency of his appeal, respondents bulldozed the subject
land and destroyed petitioner’s trees.46 Since respondents did not deny petitioner’s factual
allegations,47 the Court granted petitioner’s motion and issued a TRO on February 18, 2009.48
The TRO enjoined the respondents from immediately implementing the appellate court’s Decision
and removing petitioner from the subject property until further orders from the Court.49
On July 20, 2009, petitioner filed an Urgent Motion To Cite Private Respondents Felino Neri and
Edwin Soto in Contempt of Court.50 He alleged that these respondents defied the Court’s TRO by
bulldozing the subject property on July 10, 2009. He had the incident blottered with the Office of
the Barangay Captain and with Precinct 2 of the Philippine National Police in Antipolo City.51 He
attached pictures of bulldozed earth to his motion.52
Respondents denied the allegations. They maintained that the pictures attached to petitioner’s
motion were taken way back in 2003 and were not truthful representations of the current state of
the subject property.53
Issues
(1) Whether respondents are guilty of indirect contempt;
(2) Whether the CA erred in giving due course to respondents’ appeal; and
(3) Whether petitioner is an agricultural tenant on the subject property.
Our Ruling
Anent the issue of citing respondents in
contempt of court
A charge for indirect contempt, such as disobedience to a court’s lawful order,54 is initiated
either motu proprio by order of or a formal charge by the offended court, or by a verified petition
with supporting particulars and certified true copies of documents or papers involved therein,
and upon full compliance with the requirements for filing initiatory pleadings for civil actions in
the court concerned.55 It cannot be initiated by a mere motion,56 such as the one that petitioner
filed.
Further, petitioner failed to substantiate his allegation that respondents violated the TRO. The
entries in the barangay and police blotters attached to his motion carry little weight or probative
value as they are not conclusive evidence of the truth thereof but merely of the fact that these
entries were made.57 The pictures depicting bulldozing activities likewise contained no
indication that they were taken after the Court’s issuance of the restraining order. Simply, the
Court has no way of gauging the veracity of petitioner’s factual allegations. On the basis of the
foregoing, the Court resolves to deny petitioner’s motion.
Procedural aspects; improper
verification and incomplete payment of
docket fees before the CA
Petitioner assails the CA for giving due course to respondents’ appeal despite the latter’s failure
to pay the complete docket fees when they filed their motion for extension of time to file a
petition for review and to properly verify their petition for review. These omissions were
allegedly sufficient grounds for the dismissal of the petition.58
The Court finds the allegations of procedural missteps unfounded. It appears from the CA rollo
that the respondents paid the complete docket fees on the day that they filed their motion for
extension of time to file a petition for review on March 28, 2006.59 There was also a proper
verification of the petition for review. Contrary to petitioner’s allegation that the verification
was based on "knowledge and belief,"60 which is violative of Section 4, Rule 7 of the Rules of
Court, the verification actually stated that it was based on "own personal knowledge,"61 which
complied with the requirements of the said provision.
The CA Decision correctly ruled that
there is no tenancy relationship between

the parties
Ladano faults the CA for ruling that there was no tenancy relationship between himself and
landowner Neri. He avers that they have an implied tenancy arrangement as shown by his delivery
of the landowner’s agricultural share to the latter’s caretaker. Such actual sharing of harvest
creates a tenancy relationship despite the absence of a written leasehold contract. The same has
been pronounced in Santos v. Vda. De Cerdenola,62 which states that an implied contract of
tenancy is created if the landowner, represented by his overseer, permits the tilling of the land
by another for a period of six (6) years.
The Court notes petitioner’s sudden change of thesis in the case. He insisted in his Complaint and
in the proceedings before the Provincial Adjudicator, as well as before the DARAB, that the
property is a public land and that no one has ever claimed ownership over the same. He
maintained that he was in good faith when he cultivated the land because he believed that the
land does not belong to anyone. This contention is in stark contrast with his new assertion, raised
for the first time in his Motion for Reconsideration before the CA, that he consistently paid rentals
to the landowner’s caretaker. The belatedness of the factual assertion raises doubts as to its
truthfulness. Moreover, his bare assertion is bereft of evidentiary support. He did not name the
alleged caretaker or the landowner for whom the caretaker was allegedly collecting rentals. He
did not state the quantity of harvests collected as rental or the terms of payment. Given the
belatedness63 and flimsiness of petitioner’s factual allegation, the CA cannot be faulted for not
accepting it in its assailed Decision and Resolution.
"A tenancy relationship arises between a landholder and a tenant once they agree, expressly or
impliedly, to undertake jointly the cultivation of a land belonging to the landholder, as a result of
which relationship the tenant acquires the right to continue working on and cultivating the
land."64 For a tenancy relationship, express or implied, to exist, the following requisites must be
present: (1) the parties must be landowner and tenant or agricultural lessee; (2) the subject
matter is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural
production; (5) there is personal cultivation by the tenant; and (6) there is sharing of harvests
between the landowner and the tenant.65 Independent and concrete evidence of the foregoing
elements must be presented by the party asserting the existence of such a relationship.66 They
cannot be arrived at by mere conjectures or by presumptions.67 "Unless a person has established
his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land
Reform Program of the Government under existing tenancy laws."68
In the case at bar, the DARAB held that there is an implied tenancy because Ladano had been
occupying and cultivating the subject property for more than 30 years. From such a lengthy
occupation, the DARAB concluded that the landowner must have consented to petitioner’s
occupation.
The CA rightfully reversed this conclusion. The DARAB failed to consider that one’s occupancy and
cultivation of an agricultural land, no matter how long, will not ipso facto make him a de jure
tenant.69 It should not have considered such occupation as a basis for assuming the landowner’s
consent, especially when the occupant himself never alleged that he obtained the landowner’s
consent. Petitioner did not even allege in his Complaint that he is a tenant of the landowner.
Neither did he allege that he shared his harvests with the landowner. Without such factual
assertions from Ladano, the DARAB arrived at a conclusion that is utterly bereft of factual bases.
Petitioner is not a tenant on the land and is not entitled to security of tenure nor to disturbance
compensation. His Complaint was properly dismissed for lack of merit.
There is another ground for dismissing Ladano’s Complaint. The Department of Agrarian Reform
and its adjudication boards have no jurisdiction over Ladano’s Complaint. "For the DARAB to
acquire jurisdiction over the case, there must exist a tenancy relationship between the
parties."70 But a careful reading of Ladano’s Complaint shows that Ladano did not claim to be a
leasehold tenant on the land. The Complaint reads:
COMES NOW, the Complainant, most respectfully avers and states:
1. That complainant is of legal age, a resident of Manalite I, Brgy. Sta. Cruz, Antipolo City; while
respondent, Felino Neri is also of legal age, with principal office address at Uni Rock, Bagong
Nayon I, Antipolo City; respondents Edwin Soto, Adan Española and Ernesto Blanco are likewise of
legal age, with principal office at Uni Rock, Bagong Nayon I, Antipolo City, where they may be
served with summons and other legal Board’s processes;
2. That complainant is an actual occupant/tiller in a parcel of land having an area of

approximately two (2) hectares, more or less, located at Manalite I, Brgy. Sta. Cruz, Antipolo City
since 1970 up to present, having introduced substantial improvements thereat;
3. That complainant and his family have been in peaceful possession and occupation, open,
exclusive and uninterrupted from any claimants or intruders for several years, HOWEVER, on the
7th day of May 2003, respondents (Edwin Soto and Adan Espanola) upon strength [sic] instruction
of respondent, Felino Neri, claiming ownership over the subject property, forcibly entered
thereon and strongly threatened herein complainant and his family to vacate immediately thereat,
otherwise, any members [sic] of the complainant [sic] might be killed;
4. That immediately thereafter, complainant sought the assistance of the DAR Municipal Office of
Antipolo City, HOWEVER, pending mediation-conference proceedings, purposely to exhaust
possible settlement, the RESPONDENTS on the 29th day of May 2003 at 9:00 in the morning, in a
total wanton disregard of the complainant’s rights, destroyed/cut down several guava trees and
kawayans [sic], with force and threat, respondents constructed a fence purposely to deprive
herein complainant from ingress and egress on the subject property;
5. That as a result, complainant and his family could hardly move freely, they are terribly and
seriously disturbed from their peaceful and enjoyment [sic] possession causing so much
irreparable damage and injury;
6. That for the protection of the complainant’s existing rights, there is an extreme urgency to
prevent herein respondents from further doing unlawful acts, hence compelled to file a case
against the respondents for Injunction, Damages and Payment of the improvements before this
Honorable Adjudicator;
7. That complainant is earnestly praying that he be exempted from paying the required docket
fees in filing of the instant case due to financial difficulties as his means of livelihood is
farming.1âwphi1
WHEREFORE, premises considered, it is most respectfully prayed unto this Honorable Adjudicator,
that judgment be rendered in favor of the complainant and against the respondents:
1. Declaring the complainant to be a bonafide occupant/tiller in the subject property and is

entitled to security of tenure;
2. Ordering the respondents to respect the rights and interest of the complainant as a legitimate
occupant/tiller thereat and to pay the improvements destroyed;
3. Or in the alternative, ordering the respondents to pay the complainant of all the improvements
he introduced in the subject property.
Other reliefs that are just and fair are likewise prayed for under the premises.
Bagumbayan, Teresa, Rizal.
LUCIANO LADANO
Complainant71
Petitioner never alleged that he had any agreement with the landowner of the subject
property.1ªvvph!1 Indeed Ladano’s Complaint did not assert any right that arises from agrarian
laws. He asserted his rights based on his prior physical possession of the two-hectare property and
on his cultivation of the same in good faith. The issues that he wanted resolved are who between
himself and the respondents have a better right to possess the property, and whether he has a
right to be compensated for the improvements he introduced on the property. Clearly, the nature
of the case be filed is one for forcible entry72 and for indemnification,73 neither of which is
cognizable by the DARAB, but by the regular courts. While neither of the parties challenged the
jurisdiction of the DARAB, the Court can consider the issue of jurisdiction motu proprio.74
WHEREFORE, premises considered, the Petition is DENIED. The Court AFFIRMS the dismissal of
petitioner’s Complaint in the assailed Decision of the Court of Appeals in CA-G.R. SP No. 93819.
The Court further DISSOLVES the temporary restraining order it issued on February 18, 2009
against the respondents, and DENIES petitioner’s Urgent Motion To Cite Private Respondents
Felino Neri and Edwin Soto in Contempt of Court for lack of merit.
SO ORDERED.
1. FIRST DIVISION
[G.R. No. 152611. August 5, 2003]
LAND BANK OF THE PHILIPPINES, petitioner, vs. SEVERINO LISTANA,

SR., respondent.
Land Bank of the Philippines vs. Listana, Sr. 408

SCRA 328 , August 05, 2003
Case Title : LAND BANK OF THE PHILIPPINES,
petitioner, vs. SEVERINO LISTANA, SR.,
respondent.Case Nature : PETITION for review on
certiorari of a decision of the Court of Appeals.
Syllabi Class : Civil Procedure|Actions|Provisional
Remedies|Injunction|Interlocutory
Order|Contempt|Indirect Contempt|Jurisdiction
Syllabi:
1. Civil Procedure; Actions; Provisional
Remedies; Injunction; Generally, injunction is a
preservative remedy for the protection of one‟s
substantive right or interest.-
Generally, injunction is a preservative remedy for
the protection of one‟s substantive right or interest.
It is not a cause of action in itself but merely a
provisional remedy, an adjunct to a main suit. Thus,
it has been held that an order granting a writ of
preliminary injunction is an interlocutory order. As
distinguished from a final order which disposes of the
subject matter in its entirety or terminates a

particular proceeding or action, leaving nothing else
to be done but to enforce by execution what has
been determined by the court, an interlocutory order
does not dispose of a case completely, but leaves
something more to be adjudicated upon.
2. Civil Procedure; Actions; Provisional
Remedies; Injunction; Interlocutory
Order; The order granting a writ of preliminary
injunction is an interlocutory order; As such, it
cannot by itself be subject of an appeal or a petition
for review on certiorari.-
The order granting a writ of preliminary injunction is
an interlocutory order; as such, it cannot by itself be
subject of an appeal or a petition for review on
certiorari. The proper remedy of a party aggrieved
by such an order is to bring an ordinary appeal from
an adverse judgment in the main case, citing therein
the grounds for assailing the interlocutory order.
However, the party concerned may file a petition for
certiorari where the assailed order is patently
erroneous and appeal would not afford adequate and
expeditious relief.
3. Civil Procedure; Actions; Contempt; Indirect
Contempt; There are only two ways a person can be
charged with indirect contempt.-
There are only two ways a person can be charged

with indirect contempt, namely, (1) through a
verified petition; and (2) by order or formal charge
initiated by the court motu proprio.
4. Civil Procedure; Actions; Contempt; Indirect
Contempt; Jurisdiction; Quasi-judicial agencies
that have the power to cite persons for indirect
contempt pursuant to Rule 71 of the Rules of Court
can only do so by initiating them in the proper
Regional Trial Court.-
Evidently, quasi-judicial agencies that have the
power to cite persons for indirect contempt pursuant
to Rule 71 of the Rules of Court can only do so by
initiating them in the proper Regional Trial Court. It
is not within their jurisdiction and competence to
decide the indirect contempt cases. These matters
are still within the province of the Regional Trial
Courts.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No.
65276 dated December 11, 2001, which annulled the Orders dated January 29, 2001
[1]
and April 2, 2001 of the Regional Trial Court of Sorsogon, Sorsogon, Branch 51. [2]
Respondent Severino Listana is the owner of a parcel of land containing an area of

246.0561 hectares, located in Inlagadian, Casiguran, Sorsogon, covered by Transfer
Certificate of Title No. T-20193. He voluntarily offered to sell the said land to the
government, through the Department of Agrarian Reform (DAR), under Section 20 of[3]
R.A. 6657, also known as the Comprehensive Agrarian Reform Law of 1988
(CARL). The DAR valued the property at P5,871,689.03, which was however rejected by
the respondent. Hence, the Department of Agrarian Reform Adjudication Board
(DARAB) of Sorsogon commenced summary administrative proceedings to determine
the just compensation of the land.
On October 14, 1998, the DARAB rendered a Decision, the dispositive portion of
which reads as follows:
WHEREFORE, taking into consideration the foregoing computation, the prior valuation made by
the Land Bank of the Philippines is hereby set aside and a new valuation in the amount of TEN
MILLION NINE HUNDRED FIFTY SIX THOUSAND NINE HUNDRED SIXTY THREE
PESOS AND 25 CENTAVOS (P10,956,963.25) for the acquired area of 240.9066 hectares. The
Land Bank of the Philippines is hereby ordered to pay the same to the landowner in the manner
provided for by law.
SO ORDERED. [4]
Thereafter, a Writ of Execution was issued by the PARAD directing the manager of
Land Bank to pay the respondent the aforesaid amount as just compensation in the
manner provided by law. [5]
On September 2, 1999, respondent filed a Motion for Contempt with the PARAD,
alleging that petitioner Land Bank failed to comply with the Writ of Execution issued on
June 18, 1999. He argued that such failure of the petitioner to comply with the writ of
execution constitutes contempt of the DARAB.
Meanwhile, on September 6, 1999, petitioner Land Bank filed a petition with the
Regional Trial Court of Sorsogon, Branch 52, sitting as a Special Agrarian Court (SAC),
for the determination of just compensation, as provided for in Section 16 (f) of the CARL. [6]
On August 20, 2000, the PARAD issued an Order granting the Motion for Contempt,
as follows:
WHEREFORE, premises considered, the motion for contempt is hereby GRANTED, thus ALEX
A. LORAYES, as Manager of respondent LAND BANK, is cited for indirect contempt and
hereby ordered to be imprisoned until he complies with the Decision of the case dated October 14,
1998.
SO ORDERED. [7]
Petitioner Land Bank filed a Motion for Reconsideration of the aforequoted

Order, which was however denied by the PARAD on September 20, 2000. Thus,
[8] [9]
petitioner filed a Notice of Appeal with the PARAD, manifesting its intention to appeal the
decision to the DARAB Central, pursuant to Rule XI, Section 3 of the 1994 DARAB New
Rules of Procedure. [10]
On the other hand, the Special Agrarian Court dismissed the petition for the
determination of just compensation filed by petitioner Land Bank in an Order dated
October 25, 2000. Petitioners Motion for Reconsideration of said dismissal was likewise
denied.
In a Resolution dated November 27, 2000, PARAD Capellan denied due course to
petitioners Notice of Appeal and ordered the issuance of an Alias Writ of Execution for
the payment of the adjudged amount of just compensation to respondent. On January [11]
3, 2001, he directed the issuance of an arrest order against Manager Alex A. Lorayes. [12]
Petitioner Land Bank filed a petition for injunction before the Regional Trial Court of
Sorsogon, Sorsogon, with application for the issuance of a writ of preliminary injunction
to restrain PARAD Capellan from issuing the order of arrest. The case was raffled to
[13]
Branch 51 of said court. On January 29, 2001, the trial court issued an Order, the
dispositive portion of which reads:
WHEREFORE, premises considered, the respondent Provincial Adjudicator of the DARAB or

anyone acting in its stead is enjoined as it is hereby enjoined from enforcing its order of arrest
against Mr. Alex A. Lorayes pending the final termination of the case before RTC Branch 52,
Sorsogon upon the posting of a cash bond by the Land Bank.
SO ORDERED. [14]
Respondent filed a Motion for Reconsideration of the trial courts order, which was
denied in an Order dated April 2, 2001. [15]
Thus, respondent filed a special civil action for certiorari with the Court of
Appeals, docketed as CA-G.R. SP No. 65276. On December 11, 2001, the Court of
[16]
Appeals rendered the assailed decision which nullified the Orders of the Regional Trial
Court of Sorsogon, Sorsogon, Branch 51.
Hence, the instant petition for review on the following issues:
I. WHETHER OR NOT THE CA DEPARTED FROM THE ACCEPTED COURSE OF JUDICIAL
PROCEEDINGS IN ENTERTAINING THE RESPONDENTS SPECIAL CIVIL ACTION FOR
CERTIORARI TO QUESTION THE FINAL ORDER OF THE RTC WHICH, HOWEVER, WAS
SUBJECT TO APPEAL UNDER THE 1997 RULES OF CIVIL PROCEDURE.
II. WHETHER OR NOT THE CA DECIDED IN A WAY NOT IN ACCORD WITH LAW AND
SUBSTANTIAL JUSTICE IN ANNULLING AND SETTING ASIDE THE RTC FINAL ORDER OF
INJUNCTION, CONSIDERING THAT:
A. THE PARAD DID NOT ACQUIRE COMPETENT JURISDICTION OVER THE

CONTEMPT PROCEEDINGS INASMUCH AS IT WAS INITIATED BY MERE MOTION
FOR CONTEMPT AND NOT BY VERIFIED PETITION, IN VIOLATION OF SECTION 2,
RULE XI OF THE NEW DARAB RULES OF PROCEDURE AND OF RULE 71 OF THE
REVISED RULES OF COURT.
B. THE PARAD CONTEMPT ORDER CANNOT BE CONSIDERED FINAL AND

EXECUTORY, BECAUSE THE PARAD ITSELF DISALLOWED THE PETITIONERS
APPEAL TO THE DARAB CENTRAL OFFICE, IN DISREGARD OF THE BASIC RULE
THAT THE APPELLATE TRIBUNAL DETERMINES THE MERITS OF THE APPEAL.
C. THE PARAD ORDER OF ARREST AGAINST LBP MANAGER ALEX LORAYES WAS
IN GROSS AND PATENT VIOLATION OF HIS PERSONAL, CONSTITUTIONAL AND
CIVIL RIGHTS AGAINST UNJUST ARREST AND IMPRISONMENT, INASMUCH AS,
UNDER THE 1987 CONSTITUTION, ONLY JUDGES CAN ISSUE WARRANTS OF
ARREST AGAINST CITIZENS, AND THE PROPER SUBJECT OF THE CONTEMPT
PROCEEDING WAS THE PETITIONER ITSELF AND NOT THE LBP MANAGER, AND
YET THE CONTEMPT ORDER WAS AGAINST THE LBP MANAGER.
D. THE PARAD ORDER OF CONTEMPT WAS PATENTLY NULL AND VOID, AS IT

ATTEMPTED TO ENFORCE COMPLIANCE WITH THE PARAD DECISION THAT WAS
ADMITTEDLY NOT FINAL AND EXECUTORY, AS THE MATTER OF JUST
COMPENSATION BEFORE THE SPECIAL AGRARIAN COURT WAS ON APPEAL WITH
THE COURT OF APPEALS. [17]
As regards the first issue, petitioner submits that the special civil action
for certiorari filed by respondent before the Court of Appeals to nullify the injunction
issued by the trial court was improper, considering that the preliminary injunction issued
by the trial court was a final order which is appealable to the Court of Appeals via a notice
of appeal. [18]
Petitioners submission is untenable. Generally, injunction is a preservative remedy

for the protection of ones substantive right or interest. It is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit. Thus, it has been held that an
order granting a writ of preliminary injunction is an interlocutory order. As distinguished
from a final order which disposes of the subject matter in its entirety or terminates a
particular proceeding or action, leaving nothing else to be done but to enforce by
execution what has been determined by the court, an interlocutory order does not
dispose of a case completely, but leaves something more to be adjudicated upon. [19]
Clearly, the grant of a writ of preliminary injunction is in the nature of an interlocutory

order, hence, unappealable. Therefore, respondents special civil action
for certiorari before the Court of Appeals was the correct remedy under the
circumstances. Certiorari is available where there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law. [20]
The order granting a writ of preliminary injunction is an interlocutory order; as such, it cannot by
itself be subject of an appeal or a petition for review on certiorari. The proper remedy of a party
aggrieved by such an order is to bring an ordinary appeal from an adverse judgment in the main
case, citing therein the grounds for assailing the interlocutory order. However, the party
concerned may file a petition for certiorari where the assailed order is patently erroneous and
appeal would not afford adequate and expeditious relief. [21]
On the substantive issue of whether the order for the arrest of petitioners manager,
Mr. Alex Lorayes by the PARAD, was valid, Rule XVIII of the 2003 DARAB Rules reads,
in pertinent part:
SECTION 2. Indirect Contempt. The Board or any of its members or its Adjudicator may also cite
and punish any person for indirect contempt on any of the grounds and in the manner prescribed
under Rule 71 of the Revised Rules of Court.
In this connection, Rule 71, Section 4 of the 1997 Rules of Civil Procedure, which
deals with the commencement of indirect contempt proceedings, provides:
Sec. 4. How proceedings commenced. Proceedings for indirect contempt may be initiated motu
proprio by the court against which the contempt was committed by an order or any other formal
charge requiring the respondent to show cause why he should not be punished for contempt.
In all other cases, charges for indirect contempt shall be commenced by a verified petition with
supporting particulars and certified true copies of documents or papers involved therein, and upon
full compliance with the requirements for filing initiatory pleadings for civil actions in the court
concerned. If the contempt charges arose out of or are related to a principal action pending in the
court, the petition for contempt shall allege that fact but said petition shall be docketed, heard and
decided separately, unless the court in its discretion orders the consolidation of the contempt
charge and the principal action for joint hearing and decision.
xxxxxxxxx
The requirement of a verified petition is mandatory. Justice Florenz D. Regalado,

Vice-Chairman of the Revision of the Rules of Court Committee that drafted the 1997
Rules of Civil Procedure explains this requirement:
1. This new provision clarifies with a regulatory norm the proper procedure for commencing
contempt proceedings. While such proceeding has been classified as a special civil action under
the former Rules, the heterogeneous practice, tolerated by the courts, has been for any party to file
a mere motion without paying any docket or lawful fees therefor and without complying with the
requirements for initiatory pleadings, which is now required in the second paragraph of this
amended section.
xxxxxxxxx
Henceforth, except for indirect contempt proceedings initiated motu proprio by order of or a
formal charge by the offended court, all charges shall be commenced by a verified petition with
full compliance with the requirements therefor and shall be disposed of in accordance with the
second paragraph of this section. [22]
Therefore, there are only two ways a person can be charged with indirect contempt,
namely, (1) through a verified petition; and (2) by order or formal charge initiated by the
court motu proprio.
In the case at bar, neither of these modes was adopted in charging Mr. Lorayes with
indirect contempt.
More specifically, Rule 71, Section 12 of the 1997 Rules of Civil Procedure, referring
to indirect contempt against quasi-judicial entities, provides:
Sec. 12. Contempt against quasi-judicial entities. Unless otherwise provided by law, this Rule
shall apply to contempt committed against persons, entities, bodies or agencies exercising
quasi-judicial functions, or shall have suppletory effect to such rules as they may have adopted
pursuant to authority granted to them by law to punish for contempt. The Regional Trial Court of
the place wherein the contempt has been committed shall have jurisdiction over such charges as
may be filed therefore. (emphasis supplied)
The foregoing amended provision puts to rest once and for all the questions
regarding the applicability of these rules to quasi-judicial bodies, to wit:
1. This new section was necessitated by the holdings that the former Rule 71 applied only to
superior and inferior courts and did not comprehend contempt committed against administrative
or quasi-judicial officials or bodies, unless said contempt is clearly considered and expressly
defined as contempt of court, as is done in the second paragraph of Sec. 580, Revised
Administrative Code. The provision referred to contemplates the situation where a person,
without lawful excuse, fails to appear, make oath, give testimony or produce documents when
required to do so by the official or body exercising such powers. For such violation, said person
shall be subject to discipline, as in the case of contempt of court, upon application of the official or
body with the Regional Trial Court for the corresponding sanctions. (emphasis in the original)
[23]
Evidently, quasi-judicial agencies that have the power to cite persons for indirect
contempt pursuant to Rule 71 of the Rules of Court can only do so by initiating them in
the proper Regional Trial Court. It is not within their jurisdiction and competence to
decide the indirect contempt cases. These matters are still within the province of the
Regional Trial Courts. In the present case, the indirect contempt charge was filed, not
with the Regional Trial Court, but with the PARAD, and it was the PARAD that cited Mr.
Lorayes with indirect contempt.
Hence, the contempt proceedings initiated through an unverified Motion for Contempt
filed by the respondent with the PARAD were invalid for the following reasons: First, the [24]
Rules of Court clearly require the filing of a verified petition with the Regional Trial Court,
which was not complied with in this case. The charge was not initiated by the
PARAD motu proprio; rather, it was by a motion filed by respondent. Second, neither the
PARAD nor the DARAB have jurisdiction to decide the contempt charge filed by the
respondent. The issuance of a warrant of arrest was beyond the power of the PARAD
and the DARAB. Consequently, all the proceedings that stemmed from respondents
Motion for Contempt, specifically the Orders of the PARAD dated August 20, 2000 and
January 3, 2001 for the arrest of Alex A. Lorayes, are null and void.
WHEREFORE, in view of the foregoing, the petition for review is GRANTED. The
Decision of the Court of Appeals in CA-G.R. SP No. 65276, dated December 11, 2001, is
REVERSED and SET ASIDE. The Order of the Regional Trial Court of Sorsogon,
Sorsogon, Branch 51, dated January 29, 2001, which enjoined the Provincial Adjudicator
of the DARAB or anyone acting in its stead from enforcing its order of arrest against Mr.
Alex A. Lorayes pending the final termination of the case before Regional Trial Court of
Sorsogon, Sorsogon, Branch 52, is REINSTATED.
SO ORDERED.
Davide, Jr., C.J., Vitug, Carpio and Azcuna, JJ., concur.
G.R. No. 176085 February 8, 2012
FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS, ALEXANDER ANGELES, VERONICA

GUTIERREZ, FERNANDO EMBAT, and NANETTE H. PINTO, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (First Division), CHEMO-TECHNISCHE

MANUFACTURING, INC. and its responsible officials led by FRANKLIN R. DE LUZURIAGA, and
PROCTER & GAMBLE PHILIPPINES, INC., Respondents.

the resolutions of the Court of Appeals.
Syllabi Class : Labor Law|Labor
Arbiters|Jurisdiction
Syllabi:
1. Labor Law; Contempt; Under Article 218 of the
Labor Code, the NLRC (and the labor arbiters) may
hold any offending party in contempt, directly or
indirectly, and impose appropriate penalties in

accordance with law.-
—Under Article 218 of the Labor Code, the NLRC
(and the labor arbiters) may hold any offending
party in contempt, directly or indirectly, and impose
appropriate penalties in accordance with law. The
penalty for direct contempt consists of either
imprisonment or fine, the degree or amount depends
on whether the contempt is against the Commission
or the labor arbiter. The Labor Code, however,
requires the labor arbiter or the Commission to deal
with indirect contempt in the manner prescribed
under Rule 71 of the Rules of Court. Rule 71 of the
Rules of Court does not require the labor arbiter or
the NLRC to initiate indirect contempt proceedings
before the trial court. This mode is to be observed
only when there is no law granting them contempt
powers. As is clear under Article 218(d) of the Labor
Code, the labor arbiter or the Commission is
empowered or has jurisdiction to hold the offending
party or parties in direct or indirect contempt. The
petitioners, therefore, have not improperly brought
the indirect contempt charges against the
respondents before the NLRC.
2. Same; Labor Arbiters; Jurisdiction; Whether
payroll reinstatement of some of the
petitioners is proper; whether the resignation
of some of them was compelled by dire
economic necessity; whether the petitioners

are entitled to their money claims; and whether
quitclaims are contrary to law or public policy are
issues that should be heard by the labor arbiter in
the first instance.-
—It rightly avoided delving into issues which would
clearly be in excess of its jurisdiction for they are
issues involving the merits of the case which are by
law within the original and exclusive jurisdiction of
the labor arbiter. To be sure, whether payroll
reinstatement of some of the petitioners is proper;
whether the resignation of some of them was
compelled by dire economic necessity; whether the
petitioners are entitled to their money claims; and
whether quitclaims are contrary to law or public
policy are issues that should be heard by the labor
arbiter in the first instance. The NLRC can inquire
into them only on appeal after the merits of the case
shall have been adjudicated by the labor arbiter. The
NLRC correctly dismissed the contempt charges
against the respondents. The CA likewise committed
no grave abuse of discretion in not disturbing the
NLRC resolution.
3. Same; Grave Abuse of Discretion; An act of a
court or tribunal may only be considered as
committed in grave abuse of discretion when it was
performed in a capricious or whimsical exercise of
judgment which is equivalent to lack of jurisdiction.-
—An act of a court or tribunal may only be

considered as committed in grave abuse of
discretion when it was performed in a capricious or
whimsical exercise of judgment which is equivalent
to lack of jurisdiction. The abuse of discretion must
be so patent and gross as to amount to an evasion of
a positive duty enjoined by law, or to act at all in
contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by
reason of passion or personal hostility.
4. Same; Same; Section 11, Rule 71 of the Rules of
Court states that the judgment or final order of a
court in a case of indirect contempt may be appealed
to the proper court as in a criminal case.-
—Section 11, Rule 71 of the Rules of Court states
that the judgment or final order of a court in a case of
indirect contempt may be appealed to the proper
court as in a criminal case. This is not the point at
issue, however, in this petition. It is rather the
question of whether the dismissal of a contempt
charge, as in the present case, is appealable. The CA
held that the NLRC‟s dismissal of the contempt
charges against the respondents amounts to an
acquittal in a criminal case and is not subject to
appeal. The CA ruling is grounded on prevailing
jurisprudence. In Yasay, Jr. v. Recto, 313 SCRA 739
(1999), the Court declared: A distinction is made
between a civil and [a] criminal contempt. Civil
contempt is the failure to do something ordered by a

court to be done for the benefit of a party. A criminal
contempt is any conduct directed against the
authority or dignity of the court.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 seeking the reversal of the resolutions of the
Court of Appeals (CA) rendered on February 24, 20062 and December 14, 20063 in CA-G.R. SP No.
80436.
Factual Background
Federico S. Robosa, Rolando E. Pandy, Noel D. Roxas, Alexander Angeles, Veronica Gutierrez,
Fernando Embat and Nanette H. Pinto (petitioners) were rank-and-file employees of respondent
Chemo-Technische Manufacturing, Inc. (CTMI), the manufacturer and distributor of "Wella"
products. They were officers and members of the CTMI Employees Union-DFA (union). Respondent
Procter and Gamble Philippines, Inc. (P & GPI) acquired all the interests, franchises and goodwill
of CTMI during the pendency of the dispute.
Sometime in the first semester of 1991, the union filed a petition for certification election at
CTMI. On June 10, 1991, Med-Arbiter Rasidali Abdullah of the Office of the Department of Labor
and Employment in the National Capital Region (DOLE-NCR) granted the petition. The DOLE-NCR
conducted a consent election on July 5, 1991, but the union failed to garner the votes required to
be certified as the exclusive bargaining agent of the company.
On July 15, 1991, CTMI, through its President and General Manager Franklin R. de Luzuriaga,
issued a memorandum4 announcing that effective that day: (1) all sales territories were
demobilized; (2) all vehicles assigned to sales representatives should be returned to the company
and would be sold; (3) sales representatives would continue to service their customers through
public transportation and would be given transportation allowance; (4) deliveries of customers’
orders would be undertaken by the warehouses; and (5) revolving funds for ex-truck selling held
by sales representatives should be surrendered to the cashier (for Metro Manila) or to the
supervisor (for Visayas and Mindanao), and truck stocks should immediately be surrendered to the
warehouse.
On the same day, CTMI issued another memorandum5 informing the company’s sales
representatives and sales drivers of the new system in the Salon Business Group’s selling
operations.
The union asked for the withdrawal and deferment of CTMI’s directives, branding them as union
busting acts constituting unfair labor practice. CTMI ignored the request. Instead, it issued on
July 23, 1991 a notice of termination of employment to the sales drivers, due to the abolition of
the sales driver positions.6
On August 1, 1991, the union and its affected members filed a complaint for illegal dismissal and
unfair labor practice, with a claim for damages, against CTMI, De Luzuriaga and other CTMI
officers. The union also moved for the issuance of a writ of preliminary injunction and/or
temporary restraining order (TRO).
The Compulsory Arbitration Proceedings
The labor arbiter handling the case denied the union’s motion for a stay order on the ground that
the issues raised by the petitioners can best be ventilated during the trial on the merits of the
case. This prompted the union to file on August 16, 1991 with the National Labor Relations
Commission (NLRC), a petition for the issuance of a preliminary mandatory injunction and/or
TRO.7
On August 23, 1991, the NLRC issued a TRO.8 It directed CTMI, De Luzuriaga and other company
executives to (1) cease and desist from dismissing any member of the union and from
implementing the July 23, 1991 memorandum terminating the services of the sales drivers, and to
immediately reinstate them if the dismissals have been effected; (2) cease and desist from
implementing the July 15, 1991 memorandum grounding the sales personnel; and (3) restore the
status quo ante prior to the formation of the union and the conduct of the consent election.
Allegedly, the respondents did not comply with the NLRC’s August 23, 1991 resolution. They
instead moved to dissolve the TRO and opposed the union’s petition for preliminary injunction.
On September 12, 1991, the NLRC upgraded the TRO to a writ of preliminary injunction.9 The
respondents moved for reconsideration. The union opposed the motion and urgently moved to
cite the responsible CTMI officers in contempt of court.
On August 25, 1993, the NLRC denied the respondents’ motion for reconsideration and directed
Labor Arbiter Cristeta Tamayo to hear the motion for contempt. In reaction, the respondents
questioned the NLRC orders before this Court through a petition for certiorari and prohibition
with preliminary injunction. The Court dismissed the petition for being premature. It also denied
the respondents’ motion for reconsideration, as well as a second motion for reconsideration, with
finality. This notwithstanding, the respondents allegedly refused to obey the NLRC directives. The
respondents’ defiance, according to the petitioners, resulted in the loss of their employment.
Meanwhile, the NLRC heard the contempt charge. On October 31, 2000, it issued a resolution10
dismissing the charge. It ordered the labor arbiter to proceed hearing the main case on the
merits.
The petitioners moved for, but failed to secure, a reconsideration from the NLRC on the dismissal
of the contempt charge. They then sought relief from the CA by way of a petition for certiorari
under Rule 65.
The CA Decision
The CA saw no need to dwell on the issues raised by the petitioners as the question it deemed
appropriate for resolution is whether the NLRC’s dismissal of the contempt charge against the
respondents may be the proper subject of an appeal. It opined that the dismissal is not subject to
review by an appellate court. Accordingly, the CA Special Sixth Division dismissed the petition in
its resolution of February 24, 2006.11
The CA considered the prayer of P & GPI to be dropped as party-respondent moot and academic.
The petitioners sought a reconsideration, but the CA denied the motion in its resolution of
December 14, 2006.12 Hence, the present Rule 45 petition.
The Petition
The petitioners charge the CA with grave abuse of discretion in upholding the NLRC resolutions,
despite the reversible errors the labor tribunal committed in dismissing the contempt charge
against the respondents. They contend that the respondents were guilty of contempt for their
failure (1) to observe strictly the NLRC status quo order; and (2) to reinstate the dismissed
petitioners and to pay them their lost wages, sales commissions, per diems, allowances and other
employee benefits. They also claim that the NLRC, in effect, overturned this Court’s affirmation
of the TRO and of the preliminary injunction.
The petitioners assail the CA’s reliance on the Court’s ruling that a contempt charge partakes of a
criminal proceeding where an acquittal is not subject to appeal. They argue that the facts
obtaining in the present case are different from the facts of the cases where the Court’s ruling
was made. They further argue that by the nature of this case, the Labor Code and its
implementing rules and regulations should apply, but in any event, the appellate court is not
prevented from reviewing the factual basis of the acquittal of the respondents from the contempt
charges.
The petitioners lament that the NLRC, in issuing the challenged resolutions, had
unconstitutionally applied the law. They maintain that not only did the NLRC unconscionably
delay the disposition of the case for more than twelve (12) years; it also rendered an unjust,
unkind and dubious judgment. They bewail that "[f]or some strange reason, the respondent NLRC
made a queer [somersault] from its earlier rulings which favor the petitioners."13
The Case for the Respondents
Franklin K. De Luzuriaga
De Luzuriaga filed a Comment14 on May 17, 2007 and a Memorandum on December 4, 2008,15
praying for a dismissal of the petition.
De Luzuriaga argues that the CA committed no error when it dismissed the petition for certiorari
since the dismissal of the contempt charge against the respondents amounted to an acquittal
where review by an appellate court will not lie. In any event, he submits, the respondents were
charged with indirect contempt which may be initiated only in the appropriate regional trial court,
pursuant to Section 12, Rule 71 of the Rules of Court. He posits that the NLRC has no jurisdiction
over an indirect contempt charge. He thus argues that the petitioners improperly brought the
contempt charge before the NLRC.
Additionally, De Luzuriaga points out that the petition raises only questions of facts which,
procedurally, is not allowed in a petition for review on certiorari. Be this as it may, he submits
that pursuant to Philippine Long Distance Telephone Company, Inc. v. Tiamson,16 factual findings
of labor officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. He stresses that the CA
committed no reversible error in not reviewing the NLRC’s factual findings.
Further, De Luzuriaga contends that the petitioners’ verification and certification against forum
shopping is defective because it was only Robosa and Pandy who executed the document. There
was no indication that they were authorized by Roxas, Angeles, Gutierrez, Embat and Pinto to
execute the required verification and certification.
Lastly, De Luzuriaga maintains that the petitioners are guilty of forum shopping as the reliefs
prayed for in the petition before the CA, as well as in the present petition, are the same reliefs
that the petitioners may be entitled to in the complaint before the labor arbiter.17
P & GPI
As it did with the CA when it was asked to comment on the petitioners’ motion for
reconsideration,18 P & GPI prays in its Comment19 and Memorandum20 that it be dropped as a
party-respondent, and that it be excused from further participating in the proceedings. It argues
that inasmuch as the NLRC resolved the contempt charge on the merits, an appeal from its
dismissal through a petition for certiorari is barred. Especially in its case, the dismissal of the
petition for certiorari is correct because it was never made a party to the contempt proceedings
and, thus, it was never afforded the opportunity to be heard. It adds that it is an entity separate
from CTMI. It submits that it cannot be made to assume any or all of CTMI’s liabilities, absent an
agreement to that effect but even if it may be liable, the present proceedings are not the proper
venue to determine its liability, if any.
On December 16, 2008, the petitioners filed a Memorandum21 raising essentially the same issues
and arguments laid down in the petition.

Issues
The parties’ submissions raise the following issues:
(1) whether the NLRC has contempt powers;
(2) whether the dismissal of a contempt charge is appealable; and
(3) whether the NLRC committed grave abuse of discretion in dismissing the contempt charge
against the respondents.
On the first issue, we stress that under Article 21822 of the Labor Code, the NLRC (and the labor
arbiters) may hold any offending party in contempt, directly or indirectly, and impose
appropriate penalties in accordance with law. The penalty for direct contempt consists of either
imprisonment or fine, the degree or amount depends on whether the contempt is against the
Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the
Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of
Court.23
Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect
contempt proceedings before the trial court. This mode is to be observed only when there is no
law granting them contempt powers.24 As is clear under Article 218(d) of the Labor Code, the
labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or
parties in direct or indirect contempt. The petitioners, therefore, have not improperly brought
the indirect contempt charges against the respondents before the NLRC.
The second issue pertains to the nature of contempt proceedings, especially with respect to the
remedy available to the party adjudged to have committed indirect contempt or has been
absolved of indirect contempt charges. In this regard, Section 11, Rule 71 of the Rules of Court
states that the judgment or final order of a court in a case of indirect contempt may be appealed
to the proper court as in a criminal case. This is not the point at issue, however, in this petition. It
is rather the question of whether the dismissal of a contempt charge, as in the present case, is
appealable. The CA held that the NLRC’s dismissal of the contempt charges against the
respondents amounts to an acquittal in a criminal case and is not subject to appeal.
The CA ruling is grounded on prevailing jurisprudence.
In Yasay, Jr. v. Recto,25 the Court declared:
A distinction is made between a civil and [a] criminal contempt. Civil contempt is the failure to do
something ordered by a court to be done for the benefit of a party. A criminal contempt is any
conduct directed against the authority or dignity of the court.26
The Court further explained in Remman Enterprises, Inc. v. Court of Appeals27 and People v.
Godoy28 the character of contempt proceedings, thus –
The real character of the proceedings in contempt cases is to be determined by the relief sought
or by the dominant purpose. The proceedings are to be regarded as criminal when the purpose is
primarily punishment and civil when the purpose is primarily compensatory or remedial.
Still further, the Court held in Santiago v. Anunciacion, Jr.29 that:
But whether the first or the second, contempt is still a criminal proceeding in which acquittal, for
instance, is a bar to a second prosecution. The distinction is for the purpose only of determining
the character of punishment to be administered.
In the earlier case of The Insurance Commissioner v. Globe Assurance Co., Inc.,30 the Court
dismissed the appeal from the ruling of the lower court denying a petition to punish the
respondent therein from contempt for lack of evidence. The Court said in that case:
It is not the sole reason for dismissing this appeal. In the leading case of In re Mison, Jr. v. Subido,
it was stressed by Justice J.B.L. Reyes as ponente, that the contempt proceeding far from being a
civil action is "of a criminal nature and of summary character in which the court exercises but
limited jurisdiction." It was then explicitly held: "Hence, as in criminal proceedings, an appeal
would not lie from the order of dismissal of, or an exoneration from, a charge of contempt of
court." [footnote omitted]
Is the NLRC’s dismissal of the contempt charges against the respondents beyond review by this
Court? On this important question, we note that the petitioners, in assailing the CA main decision,
claim that the appellate court committed grave abuse of discretion in not ruling on the dismissal
by the NLRC of the contempt charges.31 They also charge the NLRC of having gravely abused its
discretion and having committed reversible errors in:
(1) setting aside its earlier resolutions and orders, including the writ of preliminary injunction it
issued, with its dismissal of the petition to cite the respondents in contempt of court;
(2) overturning this Court’s resolutions upholding the TRO and the writ of preliminary injunction;
(3) failing to impose administrative fines upon the respondents for violation of the TRO and the
writ of preliminary injunction; and
(4) failing to order the reinstatement of the dismissed petitioners and the payment of their
accrued wages and other benefits.
In view of the grave abuse of discretion allegation in this case, we deem it necessary to look into
the NLRC’s dismissal of the contempt charges against the respondents. As the charges were
rooted into the respondents’ alleged non-compliance with the NLRC directives contained in the
TRO32 and the writ of preliminary injunction,33 we first inquire into what really happened to
these directives.
The assailed NLRC resolution of October 31, 200034 gave us the following account on the matter -
On the first directive, x x x We find that there was no violation of the said order. A perusal of the
records would show that in compliance with the temporary restraining order (TRO), respondents
reinstated back to work the sales drivers who complained of illegal dismissal (Memorandum of
Respondents, page 4).
Petitioners’ allegation that there was only payroll reinstatement does not make the respondents
guilty of contempt of court. Even if the drivers were just in the garage doing nothing, the same
does not make respondents guilty of contempt nor does it make them violators of the injunction
order. What is important is that they were reinstated and receiving their salaries.
As for petitioners Danilo Real, Roberto Sedano and Rolando Manalo, they have resigned from their
jobs and were paid their separation pay xxx (Exhibits "6,""6-A,""7,""7-A,""8,""8-A," Respondents’
Memorandum dated August 12, 1996). The issue of whether they were illegally dismissed should
be threshed out before the Labor Arbiter in whose sala the case of unfair labor practice and
illegal dismissal were (sic) filed. Records also show that petitioner Antonio Desquitado during the
pendency of the case executed an affidavit of desistance asking that he be dropped as party
complainant in as much as he has already accepted separation benefits totaling to ₱63,087.33.
With respect to the second directive ordering respondents to cease and desist from implementing
the memoranda dated July 15, 1991 designed to ground sales personnel who are members of the
union, respondents alleged that they can no longer be restrained or enjoined and that the status
quo can no longer be restored, for implementation of the memorandum was already
consummated or was a fait accompli. x x x
All sales vehicles were ordered to be turned over to management and the same were already
sold[.] xxx [I]t would be hard to undo the sales transactions, the same being valid and binding.
The memorandum of July 15, 1991 authorized still all sales representatives to continue servicing
their customers using public transportation and a transportation allowance would be issued.
xxxx
The third directive of the Commission is to preserve the "status quo ante" between the parties.
Records reveal that WELLA AG of Germany terminated its Licensing Agreement with respondent
company effective December 31, 1991 (Exhibit "11," Respondents’ Memorandum).
On January 31, 1992, individual petitioners together with the other employees were terminated
xxx. In fact, this event resulted to the closure of the respondent company. The manufacturing
and marketing operations ceased. This is evidenced by the testimony of Rosalito del Rosario and
her affidavit (Exh. "9," memorandum of Respondents) as well as Employer’s Monthly Report on
Employees Termination/dismissals/suspension xxx (Exhibits "12-A" to "12-F," ibid) as well as the
report that there is a permanent shutdown/total closure of all units of operations in the
establishment (Ibid). A letter was likewise sent to the Department of Labor and Employment (Exh.
"12," Ibid) in compliance with Article 283 of the Labor Code, serving notice that it will cease
business operations effective January 31, 1992.
The petitioners strongly dispute the above account. They maintain that the NLRC failed to
consider the following:
1. CTMI violated the status quo ante order when it did not restore to their former work
assignments the dismissed sales drivers. They lament that their being "garaged" deprived them of
benefits, and they were subjected to ridicule and psychological abuse. They assail the NLRC for
considering the payroll reinstatement of the drivers as compliance with its stay order.
They also bewail the NLRC’s recognition of the resignation of Danilo Real, Roberto Sedano,
Rolando Manalo and Antonio Desquitado as they were just compelled by economic necessity to
resign from their employment. The quitclaims they executed were contrary to public policy and
should not bar them from claiming the full measure of their rights, including their counsel who
was unduly deprived of his right to collect attorney’s fees.
2. It was error for the NLRC to rule that the memorandum, grounding the sales drivers, could no
longer be restrained or enjoined because all sales vehicles were already sold. No substantial
evidence was presented by the respondents to prove their allegation, but even if there was a
valid sale of the vehicles, it did not relieve the respondents of responsibility under the stay order.
3. The alleged termination of the licensing agreement between CTMI and WELLA AG of Germany,
which allegedly resulted in the closure of CTMI’s manufacturing and marketing operations,
occurred after the NLRC’s issuance of the injunctive reliefs. CTMI failed to present substantial
evidence to support its contention that it folded up its operations when the licensing agreement
was terminated. Even assuming that there was a valid closure of CTMI’s business operations, they
should have been paid their lost wages, allowances, incentives, sales commissions, per diems and
other employee benefits from August 23, 1991 up to the date of the alleged termination of CTMI’s
marketing operations.
Did the NLRC commit grave abuse of discretion in dismissing the contempt charges against the
respondents? An act of a court or tribunal may only be considered as committed in grave abuse of
discretion when it was performed in a capricious or whimsical exercise of judgment which is
equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty enjoined by law, or to act at all in contemplation of law,
as where the power is exercised in an arbitrary and despotic manner by reason of passion or
personal hostility.35
The petitioners insist that the respondents violated the NLRC directives, especially the status quo
ante order, for their failure to reinstate the dismissed petitioners and to pay them their benefits.
In light of the facts of the case as drawn above, we cannot see how the status quo ante or the
employer-employee situation before the formation of the union and the conduct of the consent
election can be maintained. As the NLRC explained, CTMI closed its manufacturing and marketing
operations after the termination of its licensing agreement with WELLA AG of Germany. In fact,
the closure resulted in the termination of CTMI’s remaining employees on January 31, 1992, aside
from the sales drivers who were earlier dismissed but reinstated in the payroll, in compliance
with the NLRC injunction. The petitioners’ termination of employment, as well as all of their
money claims, was the subject of the illegal dismissal and unfair labor practice complaint before
the labor arbiter. The latter was ordered by the NLRC on October 31, 2000 to proceed hearing the
case.36 The NLRC thus subsumed all other issues into the main illegal dismissal and unfair labor
practice case pending with the labor arbiter. On this point, the NLRC declared:
Note that when the injunction order was issued, WELLA AG of Germany was still under licensing
agreement with respondent company. However, the situation has changed when WELLA AG of
Germany terminated its licensing agreement with the respondent, causing the latter to close its
business.
Respondents could no longer be ordered to restore the status quo as far as the individual
petitioners are concerned as these matters regarding the termination of the employees are now
pending litigation with the Arbitration Branch of the Commission. To resolve the incident now
regarding the closure of the respondent company and the matters alleged by petitioners such as
the creations of three (3) new corporations xxx as successor-corporations are matters best left to
the Labor Arbiter hearing the merits of the unfair labor practice and illegal dismissal cases.37
We find no grave abuse of discretion in the assailed NLRC ruling. It rightly avoided delving into
issues which would clearly be in excess of its jurisdiction for they are issues involving the merits
of the case which are by law within the original and exclusive jurisdiction of the labor arbiter.38
To be sure, whether payroll reinstatement of some of the petitioners is proper; whether the
resignation of some of them was compelled by dire economic necessity; whether the petitioners
are entitled to their money claims; and whether quitclaims are contrary to law or public policy
are issues that should be heard by the labor arbiter in the first instance. The NLRC can inquire
into them only on appeal after the merits of the case shall have been adjudicated by the labor
arbiter.
The NLRC correctly dismissed the contempt charges against the respondents.1âwphi1 The CA
likewise committed no grave abuse of discretion in not disturbing the NLRC resolution.
In light of the above discussion, we find no need to dwell into the other issues the parties raised.
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit and AFFIRM the
assailed resolutions of the Court of Appeals.
SO ORDERED.

Supreme Court
Manila
EN BANC
EDITA T. BURGOS, G.R. No. 183711

Petitioner,
- versus -
PRESIDENT GLORIA
MACAPAGAL-ARROYO, GEN.
HERMOGENES ESPERON, JR.,
LT. GEN. ROMEO P.
TOLENTINO, MAJ. GEN.
JUANITO GOMEZ, MAJ. GEN.
DELFIN BANGIT, LT. COL.
NOEL CLEMENT, LT. COL.
MELQUIADES FELICIANO,
DIRECTOR GENERAL OSCAR
CALDERON,
Respondents.
x-----------------------------------------x G.R. No. 183712
EDITA T. BURGOS,
Petitioner,
- versus -
PRESIDENT GLORIA
MACAPAGAL ARROYO, GEN.
HERMOGENES ESPERON, JR.,
LT. GEN. ROMEO P.
TOLENTINO, MAJ. GEN.
JUANITO GOMEZ, LT. COL.
MELQUIADES FELICIANO, LT.
COL. NOEL CLEMENT,
Respondents.
x-----------------------------------------x G.R. No. 183713

EDITA T. BURGOS,
Petitioner, Present:
CORONA, C.J.,
- versus - CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
CHIEF OF STAFF OF THE BRION,
ARMED FORCES OF THE PERALTA,*
PHILIPPINES, GEN. BERSAMIN,
HERMOGENES ESPERON, JR., DEL CASTILLO,
Commanding General of the ABAD,
Philippine Army, LT. GEN. VILLARAMA, JR.,
ALEXANDER YANO; Chief of PEREZ,
the Philippine National Police, MENDOZA, and
DIRECTOR GENERAL SERENO, JJ.
AVELINO RAZON, JR.,
Respondents. Promulgated:
July 5, 2011
x-----------------------------------------------------------------------------------------x
RESOLUTION
BRION, J.:
1.
Burgos vs. Macapagal-Arroyo 653 SCRA 512 , July
05, 2011
Case Title : EDITA T. BURGOS, petitioner, vs.
PRESIDENT GLORIA MACAPAGAL-ARROYO, GEN.
HERMOGENES ESPERON, JR., LT. GEN. ROMEO P.
TOLENTINO, MAJ. GEN. JUANITO GOMEZ, MAJ. GEN.
DELFIN BANGIT, LT. COL. NOEL CLEMENT, LT. COL.
MELQUIADES FELICIANO, DIRECTOR GENERAL
OSCAR CALDERON, respondents.Case Nature :

PETITIONS for review on certiorari of a decision of
the Court of Appeals.
Syllabi Class : Writ of Amparo|Habeas
Corpus|Contempt|Types and Nature of Contempt
Syllabi:
1. Writ of Amparo; The Court resolved to hold in
abeyance our ruling on the merits in the Amparo
aspect of the present case and refer this case back to
the Court of Appeals (CA) in order to allow Lt.
Baliaga and the present Amparo respondents to file
their respective Comments on the Commission on
Human Rights (CHR) Report within a non-extendible
period of fifteen (15) days from receipt of this
Resolution.-
—After reviewing the evidence in the present case,
the CA findings and our findings in our June 22, 2010
Resolution heretofore mentioned, including the
recent CHR findings that Lt. Harry A. Baliaga, Jr., (Lt.
Baliaga) of the 56th Infantry Battalion, 7th Infantry
Division, Philippine Army is one of the abductors of
Jonas, we resolve to hold in abeyance our ruling on
the merits in the Amparo aspect of the present case
and refer this case back to the CA in order to allow Lt.
Baliaga and the present Amparo respondents to file
their respective Comments on the CHR Report within
a non-extendible period of fifteen (15) days from
receipt of this Resolution. The CA shall continue with

the hearing of the Amparo petition in light of the
evidence previously submitted, the proceedings it
already conducted and the subsequent
developments in this case, particularly the CHR
Report. Thereafter, the CA shall rule on the merits of
the Amparo petition. For this purpose, we order that
Lt. Baliaga be impleaded as a party to the Amparo
petition (CA-G.R. SP No. 00008-WA). This directive
to implead Lt. Baliaga is without prejudice to similar
directives we may issue with respect to others whose
identities and participation may be disclosed in
future investigations.
2. Same; Same; Same; Presumption of
Innocence; A criminal contempt proceeding has
been characterized as sui generis as it partakes
some of the elements of both a civil and criminal
proceeding, without completely falling under either
proceeding-
—its identification with a criminal proceeding is in
the use of the principles and rules applicable to
criminal cases, to the extent that criminal procedure
is consistent with the summary nature of a contempt
proceeding; In proceedings for criminal contempt,
the defendant is presumed innocent and the burden
is on the prosecution to prove the charges beyond
reasonable doubt.—A criminal contempt proceeding
has been characterized as sui generis as it partakes
some of the elements of both a civil and criminal

proceeding, without completely falling under either
proceeding. Its identification with a criminal
proceeding is in the use of the principles and rules
applicable to criminal cases, to the extent that
criminal procedure is consistent with the summary
nature of a contempt proceeding. We have
consistently held and established that the strict rules
that govern criminal prosecutions apply to a
prosecution for criminal contempt; that the accused
is afforded many of the protections provided in
regular criminal cases; and that proceedings under
statutes governing them are to be strictly construed.
Contempt, too, is not presumed. In proceedings for
criminal contempt, the defendant is presumed
innocent and the burden is on the prosecution to
prove the charges beyond reasonable doubt. The
presumption of innocence can be overcome only by
proof of guilt beyond reasonable doubt, which means
proof to the satisfaction of the court and keeping in
mind the presumption of innocence that precludes
every reasonable hypothesis except that for which it
is given. It is not sufficient for the proof to establish
a probability, even though strong, that the fact
charged is more likely true than the contrary. It must
establish the truth of the fact to a reasonable
certainty and moral certainty—a certainty that
convinces and satisfies the reason and conscience of
those who are to act upon it.
3. Same; Same; Contempt; Types and Nature

of Contempt; The charge of filing a false return
constitutes improper conduct that serves no other
purpose but to mislead, impede and obstruct the
administration of justice by the Court.-
—In Montenegro v. Montenegro, 431 SCRA 415
(2004), we explained the types and nature of
contempt, as follows: Contempt of court involves the
doing of an act, or the failure to do an act, in such a
manner as to create an affront to the court and the
sovereign dignity with which it is clothed. It is
defined as “disobedience to the court by acting in
opposition to its authority, justice and dignity.” The
power to punish contempt is inherent in all courts,
because it is essential to the preservation of order in
judicial proceedings, and to the enforcement of
judgments, orders and mandates of the courts; and,
consequently, to the due administration of justice. x
x x Contempt, whether direct or indirect, may be civil
or criminal depending on the nature and effect of the
contemptuous act. Criminal contempt is “conduct
directed against the authority and dignity of the
court or a judge acting judicially; it is an act
obstructing the administration of justice which tends
to bring the court into disrepute or disrespect.” On
the other hand, civil contempt is the failure to do
something ordered to be done by a court or a judge
for the benefit of
4. Same; Habeas Corpus; In light of the new

evidence obtained by the Commission on Human
Rights (CHR) that positively identified Lt. Baliaga as
one of the direct perpetrators in the abduction of
Jonas-
—In light of the new evidence obtained by the CHR,
particularly the Cabintoy evidence that positively
identified Lt. Baliaga as one of the direct
perpetrators in the abduction of Jonas and in the
interest of justice, we resolve to set aside the CA‟s
dismissal of the habeas corpus petition and issue
anew the writ of habeas corpus returnable to the
Presiding Justice of the CA who shall immediately
refer the writ to the same CA division that decided
the habeas corpus petition (CA-GR SP No. 99839).
For this purpose, we also order that Lt. Baliaga be
impleaded as a party to the habeas corpus petition
and require him—together with the incumbent Chief
of Staff, AFP; the incumbent Commanding General,
Philippine Army; and the Commanding Officer of the
56th IB at the time of the disappearance of Jonas, Lt.
Col. Feliciano—to produce the person of Jonas and to
show cause why he should not be released from
detention.
5. Same; The Court resolved to require General Roa
of The Judge Advocate General (TJAG), Armed
Forces of the Philippines (AFP), and the Deputy Chief
of Staff for Personnel, JI, AFP, at the time of our June
22, 2010 Resolution, and then incumbent Chief of

Staff, AFP, to show cause and explain, within a
non-extendible period of fifteen (15) days from
receipt of this Resolution, why they should not be
held in contempt of this Court for defying our June 22,
2010 Resolution.-
—Section 16 of the Rule on the Writ of Amparo
provides that any person who otherwise disobeys or
resists a lawful process or order of the court may be
punished for contempt, viz.: SEC. 16.
Contempt.—The court, justice or judge may order
the respondent who refuses to make a return, or who
makes a false return, or any person who otherwise
disobeys or resists a lawful process or order of the
court to be punished for contempt. The contemnor
may be imprisoned or imposed a fine. Acting on the
CHR‟s recommendation and based on the above
considerations, we resolve to require General Roa of
TJAG, AFP, and the Deputy Chief of Staff for
Personnel, JI, AFP, at the time of our June 22, 2010
Resolution, and then incumbent Chief of Staff, AFP,
to show cause and explain, within a non-extendible
period of fifteen (15) days from receipt of this
Resolution, why they should not be held in contempt
of this Court for defying our June 22, 2010
Resolution.
Division: EN BANC.
We review,[1] in light of the latest developments in this case, the decision[2] dated July
17, 2008 of the Court of Appeals (CA) in the consolidated petitions for Habeas
Corpus,[3] Contempt[4] and Writ of Amparo[5] filed by Edita T. Burgos (petitioner). The
assailed CA decision dismissed the petition for the issuance of the Writ of Habeas Corpus;
denied the petitioners motion to declare the respondents in Contempt; and partially granted the
privilege of the Writ of Amparo.[6]
On June 22, 2010, we issued a Resolution[7] referring the present case to the
Commission on Human Rights (CHR), as the Courts directly commissioned agency tasked
with the continuation of the investigation of Jonas Joseph T. Burgos abduction and the
gathering of evidence, with the obligation to report its factual findings and recommendations
to this Court. We found the referral necessary as the investigation by the PNP-CIDG, by the
AFP Provost Marshal, and even by the CHR had been less than complete; for one,there were
very significant lapses in the handling of the investigation. In particular, we highlighted the
PNP-CIDGs failure to identify the cartographic sketches of two (one male and one female) of
the five abductors of Jonas, based on their interview of eyewitnesses to the abduction.[8] We
held:
Considering the findings of the CA and our review of the records of the present case,
we conclude that the PNP and the AFP have so far failed to conduct an exhaustive and
meaningful investigation into the disappearance of Jonas Burgos, and to exercise the
extraordinary diligence (in the performance of their duties) that the Rule on the Writ
of Amparo requires. Because of these investigative shortcomings, we cannot rule on the case
until a more meaningful investigation, using extraordinary diligence, is undertaken.
From the records, we note that there are very significant lapses in the handling of
the investigation - among them the PNP-CIDGs failure to identify the cartographic sketches
of two (one male and one female) of the five abductors of Jonas based on their interview of
eyewitnesses to the abduction. This lapse is based on the information provided to the
petitioner by no less than State Prosecutor Emmanuel Velasco of the DOJ who identified the
persons who were possibly involved in the abduction, namely: T/Sgt. Jason Roxas (Philippine
Army), Cpl. Maria Joana Francisco (Philippine Air Force), M/Sgt. Aron Arroyo (Philippine
Air Force), and an alias T.L., all reportedly assigned with Military Intelligence Group 15 of
Intelligence Service of the AFP. No search and certification were ever made on whether these
persons were AFP personnel or in other branches of the service, such as the Philippine Air
Force. As testified to by the petitioner, no significant follow through was also made by the
PNP-CIDG in ascertaining the identities of the cartographic sketches of two of the abductors
despite the evidentiary leads provided by State Prosecutor Velasco of the DOJ. Notably, the
PNP-CIDG, as the lead investigating agency in the present case, did not appear to have lifted a
finger to pursue these aspects of the case.
We note, too, that no independent investigation appeared to have been made by the
PNP-CIDG to inquire into the veracity of Lipios and Manuels claims that Jonas was abducted
by a certain @KA DANTE and a certain @KA ENSO of the CPP/NPA guerilla unit
RYG. The records do not indicate whether the PNP-CIDG conducted a follow-up
investigation to determine the identities and whereabouts of @KA Dante and @KA
ENSO. These omissions were aggravated by the CA finding that the PNP has yet to refer any
case for preliminary investigation to the DOJ despite its representation before the CA that it
had forwarded all pertinent and relevant documents to the DOJ for the filing of appropriate
charges against @KA DANTE and @KA ENSO.
While significant leads have been provided to investigators, the investigations by the
PNP-CIDG, the AFP Provost Marshal, and even the Commission on Human Rights (CHR)
have been less than complete. The PNP-CIDGs investigation particularly leaves much to be
desired in terms of the extraordinary diligence that the Rule on the Writ of Amparo requires.
Following the CHRs legal mandate, we gave the Commission the following specific
directives:[9]
(a) ascertaining the identities of the persons appearing in the cartographic sketches of the
two alleged abductors as well as their whereabouts;
(b) determining based on records, past and present, the identities and locations of the
persons identified by State Prosecutor Velasco alleged to be involved in the abduction of
Jonas, namely: T/Sgt. Jason Roxas (Philippine Army); Cpl. Maria Joana Francisco (Philippine
Air Force), M/Sgt. Aron Arroyo (Philippine Air Force), and an alias T.L., all reportedly
assigned with Military Intelligence Group 15 of Intelligence Service of the AFP; further
proceedings and investigations, as may be necessary, should be made to pursue the lead
allegedly provided by State Prosecutor Velasco on the identities of the possible abductors;
(c) inquiring into the veracity of Lipios and Manuels claims that Jonas was abducted by a
certain @KA DANTE and @KA ENSO of the CPP/NPA guerilla unit RYG;
(d) determining based on records, past and present, as well as further investigation, the
identities and whereabouts of @KA DANTE and @KA ENSO; and
(e) undertaking all measures, in the investigation of the Burgos abduction, that may be
necessary to live up to the extraordinary measures we require in addressing an enforced
disappearance under the Rule on the Writ of Amparo.
In this same Resolution, we also affirmed the CAs dismissal of the petitions for
Contempt and for the issuance of a Writ of Amparo with respect to President
Macapagal-Arroyo, as she is entitled as President to immunity from suit.[10]
On March 15, 2011, the CHR submitted to the Court its Investigation Report on the
Enforced Disappearance of Jonas Burgos (CHR Report), in compliance with our June 22,
2010 Resolution.[11] In this Report, the CHR recounted the investigations undertaken, whose
pertinent details we quote below:
On June 26, 2010, the CHR issued Resolution CHR IV No. A2010-100 to intensify the
investigation of the case of the Burgos enforced disappearance; and for this purpose, created a
Special Investigation Teamheaded by Commissioner Jose Manuel S. Mamauag.
xxx
In compliance with the directive mentioned in the above-quoted En Banc Resolution

of the Supreme Court, the Team conducted field investigations by: (1) interviewing a) civilian
authorities involved in the first investigation of the instant case; b) military men under
detention for alleged violations of Articles of War; c) Security Officers of Ever Gotesco Mall,
Commonwealth Avenue, Quezon City; d) two (2) of the three (3) CIDG witnesses; e) two (2)
eyewitnesses who described to the police sketch artist two (2) faces of a male and female
abductors of Jonas Burgos; f) Rebel-Returnees (RRs); g) officers and men in the military and
police service; h) local officials and other government functionaries; and i) ordinary citizens;
(2) inquiring into the veracity of CIDG witnesses Lipios and Manuels claims that Jonas was
abducted by a certain @KA DANTE and @KA ENSO of the CPP/NPA guerilla unit RYG; (3)
securing case records from the prosecution service and courts of law; (4) visiting military and
police units. Offices, camps, detention centers, and jails and requesting copies of documents
and records in their possession that are relevant to the instant case; (5) searching for and
interviewing witnesses and informants; and (6) pursuing leads provided by them.
S. Emails Star-Struck
38. Pursuing the lead mentioned in the anonymous e-mail, which was attached to the
Burgos petition as Exhibit J, that the team leader (T.L.) in the Jonas Burgos abduction was a
certain Army Captain, (promotable to Major), a good looking guy (tisoy), and a potential
showbiz personality known otherwise as Captain Star-struck, the Team requested the CHR
Clearance Section, Legal Division for any information leading to T.L. or to all Philippine
Army applicants for CHR clearance whose ranks are Captains or Majors promoted during the
years 2007 to 2009.
39. Sometime in November 2010, the Team was able to track down one CHR
clearance-applicant who most likely possesses and/or matches the information provided in the
said lead. But when his photo/picture was presented to the eyewitnesses, they failed to
identify him.
40. Undaunted with the negative identification, the Team suspected that the team
leader might not have participated in the actual abduction inside Hapag Kainan
Restaurant, the scene of the crime, but most probably was in one of the three cars allegedly
used during the operation while giving orders or commanding the actual abductors.
41. In relation to the above suspicion, the Team has theorized that officers below the
rank of Captain might have perpetrated the actual abduction.
42. The Team explored this possibility and focused its attention on the officers of the
7th ID, PA, namely: Lt. Vicente O. Dagdag, Jr., the S-4 of 65 IB who executed an affidavit
relative to the alleged stolen Plate No. TAB-194; 2Lt. Rey B. Dequito of 56th IB, the witness
against Edmond Dag-Uamn for the alleged crime of murder; and 1Lt. Usmalik Tayaban, the
Team Leader with the 56th IB who issued a Custody Receipt in connection with the Petition
for Habeas Corpus filed in Angeles City relative to the 2006 Emerito Lipio abduction case
against the police and military personnel.
T. Face-book account
43. Google search of the names of the above mentioned individuals yielded negative
result except for 1Lt. Usmalik Tayaban, whose name was connected to a social networking
site, the Face-book account of PMA BATCH SANGHAYA 2000.
44. In the Facebook account Sanghaya, the contents of which is categorized as

PUBLIC or open to public viewing, it appears that Malik Tayaban is a graduate of the
Philippine Military Academy (PMA) Batch Sanghaya of 2000. Other leads were also
discovered, such as the following: vernacular description of tisoy which was mentioned by
one of the users in the comment portion of the account which incidentally was also mentioned
in the anonymous e-mail as the team leader (T.L.); the picture of a man sporting a back-pack,
which was also mentioned by witness Elsa. Per Elsas account, the person in the cartographic
sketch was wearing a back-pack.
45. Aware of the intricacies of the above-mentioned leads, the Team caused the
reproduction of all pictures in the Facebook account for future reference; and requested the
NBI (Burgos) Team for a copy of the PMA Sanghaya Batch 2000 Year Book, also for future
reference.
U. The PMA Year Book
46. Through the efforts of the NBI (Burgos) Team, the Team was able to get the PMA
Year Book of Sanghaya Batch 2000 and the location of one important eyewitness in the
abduction.
V. JEFFREY CABINTOY
47. On December 1, 2010, the Team together with the NBI Team were able to locate
Jeffrey Cabintoy (Jeffrey), one of the two (2) eyewitnesses who provided the police
cartographic artist with the description of two (2) principal abductors of Jonas Burgos. Jeffrey
narrated in details (sic) the circumstances that happened before and during the abduction.
48. On December 7, 2010, the Team and Jeffrey went to the place of incident at Ever
Gotesco Mall, Quezon City to refresh his memory and re-enact what transpired. In the
afternoon of the same date, the Team invited Jeffrey to the CHR Central Office in Quezon
City, where he was shown for identification twenty (20) copies of colored
photographs/pictures of men and the almost two hundred forty-four (244)
photographs/pictures stored in the computer and lifted from the profiles of the Philippine
Military Academy Year Book of Batch Sanghaya 2000.
49. Jeffrey pointed to a man in the two (2) colored group pictures/photographs, that he
identified as among the 8-man group who abducted Jonas Burgos. For record and
identification purposes, theTeam encircled the face that Jeffrey identified in the two pictures;
then he affixed his signature on each picture. Also, while leafing through the pictures of the
PMA graduates in the Year Book of Sanghaya 2000 Batch, the witness identified a picture,
with a bold and all-capitalized name HARRY AGAGEN BALIAGA JR and the words
Agawa, Besao, Mt. Province printed there under the capitalized words PHILIPPINE ARMY
written on the upper portion, as the same person he pointed out in the two group pictures just
mentioned above. Immediately thereafter, the Team caused the production of the photo
identified by Jeffrey and asked him to affix his signature, which he also did.
50. After examining each of these pictures, Jeffrey declared that it dawned on him that
based on his recollection of faces involved in the abduction of Jonas Burgos, he now
remembers the face of a man, other than the two (2) faces whose description he already
provided before to a police sketch artist, who was part of the 8-man group of abductors. And
he also confirms it now that the person he is referring to was indeed seen by him as one of
those who abducted Jonas Burgos at Hapag Kainan Restaurant of Ever Gotesco
Mall, Commonwealth Avenue, Quezon City.
51. When asked how certain he was of the person he identified, considering that the
printed copy of the photo lifted from the Face-book Sanghaya Account was taken sometime in
the year 2010; while the picture appearing in the computer was lifted from the PMA Sanghaya
2000 Batch Year Book, Jeffrey replied Ang taong ito ay aking natatandaan sa kadahilanan na
nuong una siya ay nakaupo na katabi sa bandang kaliwa nang taong dumukot at natapos silang
mag usap lumapit sa akin at pilit akong pinipigilan na wag daw makialam at ang sabi nya sa
akin ay WAG KA DITONG MAKIALAM KASI ANG TAONG ITO AY MATAGAL NA
NAMING SINUSUBAYBAYAN DAHIL SA DROGA kahit pa halos nagmamakaawa na
nang tulong ang taong dinukot; at matapos nuon ay sapilitan na nilang binitbit sa labas ang
biktima. ( I remember this man for the reason that at first he was seated at the left side of the
person abducted; and after they talked, he approached me and was preventing me forcefully
saying not to interfere and he said to me: DONT YOU INTERFERE HERE SINCE WE
HAVE BEEN DOING SOME SURVEILLANCE ON THIS MAN FOR SOME TIME
ALREADY BECAUSE OF DRUGS despite that the man was already pleading for help, and
after that, they forcibly dragged the victim outside.)
52. When asked if he could identify the picture of Jonas Burgos, Jeffrey affirmed that
the person in the picture is the person referred to by him as the victim of abduction and his
name is Jonas Burgos. He further stated that he learned of the victims name when he saw his
picture flashed on TV and hear his name. When asked if he is willing to execute an affidavit
on the facts that he has just provided, he answered yes and at that juncture the Team assisted
him in the preparation of his Sinumpaang Salaysay based on his personal knowledge and in a
language known to him. After which, theTeam asked Jeffrey to read, examine and determine
whether all the information he just provided are reflected in his Sinumpaang Salaysay and
Jeffrey answered yes. Thereafter, Jeffrey affixed his signature after being sworn to before a
lady CHR lawyer and a duly commissioned Notary Public for and in Quezon City.
W. Daguman confirmed Tayabans and Baliagas actual affiliation with the military and their
assignment at the 56th Infantry Battalion, 7th ID
53. On December 10, 2010, the Team went to the Bulacan Provincial Jail to visit
Edmond Dag-Uman and asked him to identify his former Company Commander at the
56th IB, 71 ID, Lt. Usmalik Tayaban and to identify the pictures.
54. Edmond Dag-uman identified the encircled in the picture as LT. HARRY A.
BALIAGA, JR., and the man with a receding hair as LT. USMALIK TAYABAN, his former
Company Commander.
55. When asked if he was willing to reduce in writing his precious statements and
those that just mentioned, he replied BAKA MAPAHAMAK AKO NYAN! (That might
endanger me!).Following a lengthy discussion on the pros and cons of executing a sworn
statement and the assurance of the Team to exclude his statements that are critical to the
military establishment, it dawned on Dag-uman that his statement would be of help to the
Commission in bringing his case to the proper authorities for review and appropriate action,
that he eventually expressed his willingness to do so.
56. After which the Team immediately went to a Computer Caf nearby to encode
the Salaysay, then the printed copy was presented to him for his determination whether he is in
full accord with the contents therein. Edmond spent about thirty (30) minutes reading it and
changed the word Charlie to Bravo and then affixed his initial on it. He also signed
the Sinumpaang Salaysay after being sworn to before a team member authorized to administer
oath.
X. Second visit to ELSA AGASANG and her Supplemental Sworn Statement

57. On January 26, 2011, the Team along with witness Jeffrey went to Bicol to meet
witness Elsa. The aim was to help Elsa recall the faces of those she saw in the abduction by
showing to her recently-acquired pictures of suspects.
58. For the first time they would re-unite, after almost four years since that fateful day
of April 28, 2007, when both of them had the experience of witnessing an abduction incident,
which rendered them jobless and unsafe.
59. The Team told Jeffrey to sit in front of Elsa without introducing him to her. After
about half an hour into the conversation, she expressed disbelief when she realized that she
was facing in person he co-worker that she knew very well.
60. On January 29, 2011, Elsa executed her Karagdagang Sinumpaang Salaysay
affirming her Salaysay given before PCI Lino DL Banaag at the CIDU, Quezon City Police
District Office, Camp Karingal, Quezon City; and corroborating the material allegations
contained in the Sinumpaang Salaysay of Jeffrey.
On the basis of the evidence it had gathered, the CHR submitted the following
findings:[12]
Based on the facts developed by evidence obtaining in this case, the CHR finds that
the enforced disappearance of Jonas Joseph T. Burgos had transpired; and that his
constitutional rights to life liberty and security were violated by the Government have
been fully determined.
Jeffrey Cabintoy and Elsa Agasang have witnessed on that fateful day of April
28, 2007 the forcible abduction of Jonas Burgos by a group of about seven (7) men and a
womanfrom the extension portion of Hapag Kainan Restaurant, located at the ground floor of
Ever Gotesco Mall, Commonwealth Avenue, Quezon City.
xxxx
The eyewitnesses mentioned above were Jeffrey Cabintoy (Jeffrey) and Elsa
Agasang (Elsa), who at the time of the abduction were working as busboy and
Trainee-Supervisor, respectively, at Hapag Kainan Restaurant.
In his Sinumpaang Salaysay, Jeffrey had a clear recollection of the face of

HARRY AGAGEN BALIAGA, JR. as one of the principal abductors, apart from the
faces of the two abductors in the cartographic sketches that he described to the police, after he
was shown by the Team the pictures in the PMA Year Book of Batch Sanghaya 2000 and
group pictures of men taken some years thereafter.
The same group of pictures were shown to detained former 56th IB Army
trooper Edmond M. Dag-uman (Dag-uman), who also positively identified Lt. Harry
Baliaga, Jr.Dagumans Sinumpaang Salaysay states that he came to know Lt. Baliaga as
a Company Commander in the 56th IB while he was still in the military service (with
Serial No. 800693, from 1997 to 2002) also with the 56th IB but under 1Lt. Usmalik
Tayaban, the Commander of Bravo Company. When he was arrested and brought to the
56th IB Camp in April 2005, he did not see Lt. Baliaga anymore at the said camp. The similar
reaction that the pictures elicited from both Jeffrey and Daguman did not pass unnoticed by
the Team. Both men always look pensive, probably because of the pathetic plight they are in
right now. It came as a surprise therefore to the Team when they could hardly hide their smile
upon seeing the face of Baliaga, as if they know the man very well.
Moreover, when the Team asked how Jeffrey how certain was he that it was indeed
Baliaga that he saw as among those who actually participated in Jonas abduction, Jeffrey was
able to give a graphic description and spontaneously, to boot, the blow by blow account of the
incident, including the initial positioning of the actors, specially Baliaga, who even
approached, talked to, and prevented him from interfering in their criminal act.
A Rebel-returnee (RR) named Maria Vita Lozada y Villegas @KA MY, has identified
the face of the female in the cartographic sketch as a certain Lt. Fernando. While Lozada
refuses to include her identification of Lt. Fernando in her Sinumpaang Salaysay for fear of a
backlash, she told the Team that she was certain it was Lt. Fernando in the cartographic sketch
since both of them were involved in counter-insurgency operations at the 56th IB, while she
was under the care of the battalion from March 2006 until she left the 56th IB Headquarters in
October 2007. Lozadas involvement in counter-insurgency operations together with Lt.
Fernando was among the facts gathered by the CHR Regional Office 3 Investigators, whose
investigation into the enforced disappearance of Jonas Joseph Burgos was documented by
way of an After Mission Report dated August 13, 2008.
Most if not all the actual abductors would have been identified had it not been for
what is otherwise called as evidentiary difficulties shamelessly put up by some police and
military elites. The deliberate refusal of TJAG Roa to provide the CHR with the
requested documents does not only defy the Supreme Court directive to the AFP
but ipso facto created a disputable presumption that AFP personnel were responsible
for the abduction and that their superiors would be found accountable, if not
responsible, for the crime committed. This observation finds support in the disputable
presumption That evidence willfully suppressed would be adverse if produced. (Paragraph
(e), Section 3, Rule 131 on Burden of Proof and Presumptions, Revised Rules on Evidence of
the Rules of Court of the Philippines).
In saying that the requested document is irrelevant, the Team has deemed that
the requested documents and profiles would help ascertain the true identities of the
cartographic sketches of two abductors because a certain Virgilio Eustaquio has
claimed that one of the intelligence operatives involved in the 2007 ERAP 5 case fits the
description of his abductor.
As regards the PNP CIDG, the positive identification of former 56th IB officer Lt.
HARRY A. BALIAGA, JR. as one of the principal abductors has effectively crushed the
theory of the CIDG witnesses that the NPAs abducted Jonas. Baliagas true identity and
affiliation with the military have been established by overwhelming evidence
corroborated by detained former Army trooper Dag-uman.
For lack of material time, the Commission will continue to investigate the enforced
disappearance of Jonas Burgos as an independent body and pursuant to its mandate under the
1987 Constitution.Of particular importance are the identities and locations of the persons
appearing in the cartographic sketches; the allegations that CIDG Witnesses Emerito G. Lipio
and Meliza Concepcion-Reyes are AFP enlisted personnel and the alleged participation of
Delfin De Guzman @ Ka Baste in the abduction of Jonas Burgos whose case for Murder and
Attempted Murder was dismissed by the court for failure of the lone witness, an army man of
the 56th IB to testify against him.
Interview with Virgilio Eustaquio, Chairman of the Union Masses for Democracy and
Justice (UMDJ), revealed that the male abductor of Jonas Burgos appearing in the
cartographic sketch was among the raiders who abducted him and four others, identified as
Jim Cabauatan, Jose Curament, Ruben Dionisio and Dennis Ibona otherwise known as ERAP
FIVE.
Unfortunately, and as already pointed out above, The Judge Advocate General (TJAG)
turned down the request of the Team for a profile of the operatives in the so-called Erap
5 abduction on the ground of relevancy and branded the request as a fishing expedition per its
Disposition Form dated September 21, 2010.
Efforts to contact Virgilio Eustaquio to secure his affidavit proved futile, as his present
whereabouts cannot be determined. And due to lack of material time, the Commission decided
to pursue the same and determine the whereabouts of the other members of the Erap 5 on its
own time and authority as an independent body.
Based on the above-cited findings, the CHR submitted the following recommendations
for the Courts consideration, viz:[13]
i. To DIRECT the Department of Justice (DOJ), subject to certain requirements, to

immediately admit witnesses Jeffrey T. Cabintoy and Elsa B. Agasang to the Witness
Protection, Security and Benefit Program under Republic Act No. 6981;
ii. To DIRECT the Department of Justice (DOJ) to commence the filing of Criminal
Charges for Kidnapping/Enforced Disappearance and/or Arbitrary Detention against 1LT.
HARRY AGAGEN BALIAGA, JR. of the Philippine Army, as Principal by Direct
Participation in the abduction of Jonas Joseph T. Burgos on April 28, 2007 from Ever Gotesco
Mall, Commonwealth Avenue, Quezon City;
iii. To DIRECT the Department of Justice to cause the filing of Obstruction of

Justice against Emerito Lipio y Gonzales; Marlon Manuel y de Leon; and Meliza
Concepcion-Reyes for giving false or fabricated information to the CIDG and for their willful
refusal to cooperate with the CHR Team in the investigation of the herein enforced
disappearance;
iv. To DIRECT Cavite Provincial Prosecutor Emmanuel Velasco to appear before the
Supreme Court and to divulge his source/informant as the same does not fall under the
privilege communication rule;
v. To DIRECT the PNP-CIDG RC, NCRCIDU, Atty. Joel Napoleon M. Coronel, to

explain his Memorandum to the CIDG-CIDD stating that the witnesses were reportedly
turned over by the Bulacan PPO and Philippine Army to the CIDG for
investigation, considering that said witnesses were not under police or military custody at the
time of the supposed turn-over in the evening of August 22, 2007 and to identify the PNP
officer who directed the CIDG operatives to fetch Emerito G. Lipio in Bulacan and the two
other CIDG witnesses for tactical interrogation;
vi. To REQUIRE General Roa of the Judge Advocate General Office, AFP, and the
Deputy Chief of Staff for Personnel, JI, AFP, to explain their failure and/or refusal to provide
the CHR with copies of documents relevant to the case of Jonas T. Burgos, particularly the
following: (a) Profile and Summary of Information and pictures of T/Sgt. Jason
Roxas (Philippine Army) and three (3) other enlisted personnel mentioned in paragraph (1) of
the dispositive portion of the Supreme Court En Banc Resolution issued on 22 June 2010 in
the instant consolidated cases, including a certain 2Lt. Fernando, a lady officer involved in
the counter-insurgency operations of the 56th IB in 2006 to 2007; (b) copies of the records of
the 2007 ERAP 5 incident in Kamuning, Quezon City and the complete list of the intelligence
operatives involved in that said covert military operation, including their respective Summary
of Information and individual pictures; and (c) complete list of the officers,
women and menassigned at the 56th and 69th Infantry Battalion and the 7th Infantry Division
from January 1, 2004 to June 30, 2007 with their respective profiles, Summary of Information
and pictures; including the list of captured rebels and rebels who surrendered to the said camps
and their corresponding pictures and copies of their Tactical Interrogation Reports and the
cases filed against them, if any;
vii. To DIRECT the PNP-CIDG to comply with its mandate under paragraph (3) of the
dispositive portion of the Supreme Court En Banc Resolution promulgated on 22 June
2010 in the instant consolidated cases;
viii. To DIRECT Harry A. Baliaga, Jr., the Philippine Armys 56th Infantry Battalion in
Bulacan and 7th Infantry Division at Fort Magsaysay in Laur, Nueva Ecija to produce the
living body of the victim Jonas Joseph T. Burgos before this Court;
ix. To DIRECT the Department of Justice to review and determine the probable
liability/accountability of the officers and enlisted personnel concerned of the Philippine
Armys 56th IB and the 7th ID, relative to the torture and/or other forms of ill-treatment of
Edmond M. Dag-uman, while he was in detention at Fort Magsaysay sometime in October
2005, as part of the collateral discoveries in the conduct of this investigation;
x. To DIRECT the Department of Justice to review the case filed against Edmond
Dag-uman alias DELFIN DE GUZMAN with the Regional Trial Court Branch 10 in Malolos
City docketed as Criminal Case Nos. 1844-M-2005 and 186-M-2006; and the legal basis, if
any, for his continued detention at the Bulacan Provincial Jail in Malolos City; and
xi. To DIRECT the Department of Interior and Local Government (DILG) to study the
probable liability of Adelio A. Asuncion, former Jail Warden of Bulacan Provincial Jail for
his failure to account the records of the inmates more specifically the records of
turn-over Edmond Dag-uman from the 7th ID.
Pursuant to our June 22, 2010, the CHR furnished the petitioner with the copy of its
report, which the petitioner apparently relied upon in filing a criminal complaint againstLt.
Harry A. Baliaga, Jr. and other members of the military.[14]
OUR RULING
A. Amparo
After reviewing the evidence in the present case, the CA findings and our findings in our
June 22, 2010 Resolution heretofore mentioned, including the recent CHR findings that Lt.
Harry A. Baliaga, Jr., (Lt. Baliaga) of the 56th Infantry Battalion, 7th Infantry Division,
Philippine Army is one of the abductors of Jonas, we resolve to hold in abeyance our ruling on
the merits in the Amparo aspect of the present case and refer this case back to the CA in order
to allow Lt. Baliaga and the present Amparo respondents to file their respective Comments on
the CHR Report within a non-extendible period of fifteen (15) days from receipt of this
Resolution. The CA shall continue with the hearing of the Amparopetition in light of the
evidence previously submitted, the proceedings it already conducted and the subsequent
developments in this case, particularly the CHR Report. Thereafter, the CA shall rule on the
merits of the Amparo petition. For this purpose, we order that Lt. Baliaga be impleaded as a
party to the Amparo petition (CA-G.R. SP No. 00008-WA). This directive to implead Lt.
Baliaga is without prejudice to similar directives we may issue with respect to others whose
identities and participation may be disclosed in future investigations.
We also note that Office of the Judge Advocate General (TJAG) failed and/or refused to
provide the CHR with copies of documents relevant to the case of Jonas, and thereby
disobeyed our June 22, 2010 Resolution. To recall, we issued a Resolution declaring the CHR
as the Courts directly commissioned agency tasked with the continuation of the
investigation of Jonas abduction and the gathering of evidence, with the obligation to
report its factual findings and recommendations to this Court. In this same Resolution, we
required the then incumbent Chiefs of the AFP and the PNP to make available and to provide
copies to the CHR, of all documents and records in their possession and as the CHR may
require, relevant to the case of Jonas, subject to reasonable regulations consistent with the
Constitution and existing laws.
In its March 15, 2011 Report, the CHR recommended, for the Courts consideration:[15]
vi. To REQUIRE General Roa of the Judge Advocate General Office, AFP, and the
Deputy Chief of Staff for Personnel, JI, AFP, to explain their failure and/or refusal to
provide the CHR with copies of documents relevant to the case of Jonas T. Burgos,
particularly the following: (a) Profile and Summary of Information and pictures of
T/Sgt. Jason Roxas (Philippine Army) and three (3) other enlisted personnel
mentioned in paragraph (1) of the dispositive portion of the Supreme Court En Banc
Resolution issued on 22 June 2010 in the instant consolidated cases, including a
certain 2Lt.Fernando, a lady officer involved in the counter-insurgency operations of
the 56th IB in 2006 to 2007; (b) copies of the records of the 2007 ERAP 5 incident in
Kamuning, Quezon City and the complete list of the intelligence operatives involved
in that said covert military operation, including their respective Summary of
Information and individual pictures; and (c) complete list of theofficers,
women and men assigned at the 56th and 69th Infantry Battalion and the 7th Infantry
Division from January 1, 2004 to June 30, 2007 with their respective profiles,
Summary of Information and pictures; including the list of captured rebels and rebels
who surrendered to the said camps and their corresponding pictures and copies of their
Tactical Interrogation Reports and the cases filed against them, if any.
Section 16 of the Rule on the Writ of Amparo provides that any person who otherwise
disobeys or resists a lawful process or order of the court may be punished for contempt,viz:
SEC. 16. Contempt. The court, justice or judge may order the respondent who refuses to make
a return, or who makes a false return, or any person who otherwise disobeys or resists a lawful
process or order of the court to be punished for contempt. The contemnor may be imprisoned
or imposed a fine
Acting on the CHRs recommendation and based on the above considerations, we resolve to
require General Roa of TJAG, AFP, and the Deputy Chief of Staff for Personnel, JI, AFP, at
the time of our June 22, 2010 Resolution, and then incumbent Chief of Staff, AFP,[16] to show
cause and explain, within a non-extendible period of fifteen (15) days from receipt of this
Resolution, why they should not be held in contempt of this Court for defying our June 22,
2010 Resolution.
B. Habeas Corpus
In light of the new evidence obtained by the CHR, particularly the Cabintoy evidence that
positively identified Lt. Baliaga as one of the direct perpetrators in the abduction of Jonas and
in the interest of justice, we resolve to set aside the CAs dismissal of the habeas
corpus petition and issue anew the writ of habeas corpus returnable to the Presiding Justice of
the CA who shall immediately refer the writ to the same CA division that decided the habeas
corpus petition (CA-GR SP No. 99839).
For this purpose, we also order that Lt. Baliaga be impleaded as a party to the habeas
corpus petition and require him together with the incumbent Chief of Staff, AFP; the
incumbent Commanding General, Philippine Army; and the Commanding Officer of the
56th IB at the time of the disappearance of Jonas, Lt. Col. Feliciano to produce the person of
Jonas and to show cause why he should not be released from detention.
The CA shall rule on the merits of the habeas corpus petition in light of the evidence
previously submitted to it, the proceedings already conducted, and the subsequent
developments in this case (particularly the CHR report) as proven by evidence properly
adduced before it. The Court of Appeals and the parties may require Prosecutor Emmanuel
Velasco, Jeffrey Cabintoy, Edmund Dag-uman, Melissa Concepcion Reyes, Emerito Lipio
and Marlon Manuel to testify in this case.
C. Petition for Contempt
In dismissing the petition, the CA held:[17]

Undoubtedly, the accusation against respondents is criminal in nature. In view thereof,
the rules in criminal prosecution and corollary recognition of respondents constitutional rights
inevitably come into play. As held in People v. Godoy:
In proceedings for criminal contempt, the defendant is presumed innocent and

the burden is on the prosecution to prove the charges beyond reasonable doubt.
Hence, assuming that there is circumstantial evidence to support petitioners

allegations, said circumstantial evidence falls short of the quantum of evidence that is required
to establish the guilt of an accused in a criminal proceeding, which is proof beyond reasonable
doubt.
The pertinent provision of the Rules of Court on contempt, in relation to a Habeas
Corpus proceeding, is Section 16, Rule 102, which provides:
Sec. 16. Penalty for refusing to issue writ, or for disobeying the same. - A clerk of a court who
refuses to issue the writ after allowance thereof and demand therefor, or a person to whom a
writ is directed, who neglects or refuses to obey or make return of the same according to the
command thereof, or makes false return thereof, or who, upon demand made by or on behalf
of the prisoner, refuses to deliver to the person demanding, within six (6) hours after the
demand therefor, a true copy of the warrant or order of commitment, shall forfeit to the party
aggrieved the sum of one thousand pesos, to be recovered in a proper action, and may also be
punished by the court or judge as for contempt. [emphasis supplied]
In Montenegro v. Montenegro,[18] we explained the types and nature of contempt, as
follows:
Contempt of court involves the doing of an act, or the failure to do an act, in
such a manner as to create an affront to the court and the sovereign dignity with
which it is clothed. It is defined as "disobedience to the court by acting in
opposition to its authority, justice and dignity."7 The power to punish contempt is
inherent in all courts, because it is essential to the preservation of order in judicial
proceedings, and to the enforcement of judgments, orders and mandates of the
courts; and, consequently, to the due administration of justice.
xxx
Contempt, whether direct or indirect, may be civil or criminal depending on the
nature and effect of the contemptuous act. Criminal contempt is "conduct directed against
the authority and dignity of the court or a judge acting judicially; it is an act obstructing
the administration of justice which tends to bring the court into disrepute or
disrespect." On the other hand, civil contempt is the failure to do something ordered to be
done by a court or a judge for the benefit of the opposing party therein and is therefore, an
offense against the party in whose behalf the violated order was made. If the purpose is to
punish, then it is criminal in nature; but if to compensate, then it is civil. [emphasis
supplied]
We agree with the CA that indirect contempt is the appropriate characterization of the
charge filed by the petitioner against the respondents and that the charge is criminal in
nature. Evidently, the charge of filing a false return constitutes improper conduct that serves
no other purpose but to mislead, impede and obstruct the administration of justice by the
Court. In People v. Godoy,[19] which the CA cited, we specifically held that under paragraph
(d) of Section 3, Rule 71 of the Rules of Court, any improper conduct tending, directly or
indirectly, to impede, obstruct or degrade the administration of justice constitutes criminal
contempt.
A criminal contempt proceeding has been characterized as sui generis as it partakes
some of the elements of both a civil and criminal proceeding, without completely falling under
either proceeding. Its identification with a criminal proceeding is in the use of the principles
and rules applicable to criminal cases, to the extent that criminal procedure is consistent with
the summary nature of a contempt proceeding. We have consistently held and established that
the strict rules that govern criminal prosecutions apply to a prosecution for criminal contempt;
that the accused is afforded many of the protections provided in regular criminal cases; and
that proceedings under statutes governing them are to be strictly construed.[20]

Contempt, too, is not presumed. In proceedings for criminal contempt, the defendant is
presumed innocent and the burden is on the prosecution to prove the charges beyond
reasonable doubt.[21] The presumption of innocence can be overcome only by proof of guilt
beyond reasonable doubt, which means proof to the satisfaction of the court and keeping in
mind the presumption of innocence that precludes every reasonable hypothesis except that for
which it is given. It is not sufficient for the proof to establish a probability, even though strong,
that the fact charged is more likely true than the contrary. It must establish the truth of the fact
to a reasonable certainty and moral certainty a certainty that convinces and satisfies the
reason and conscience of those who are to act upon it.[22]
For the petitioner to succeed in her petition to declare the respondents in contempt for
filing false returns in the habeas corpus proceedings before the CA, she has the burden of
proving beyond reasonable doubt that the respondents had custody of Jonas. As the CA did,
we find that the pieces of evidence on record as of the time of the CA proceedings were merely
circumstantial and did not provide a direct link between the respondents and the abduction of
Jonas; the evidence did not prove beyond reasonable doubt that the respondents had a hand in
the abduction of Jonas, and consequently, had custody of him at the time they filed their
returns to the Writ of habeas corpus denying custody of Jonas.

However, the subsequent developments in this case, specifically, the investigative
findings presented to us by the CHR pointing to Lt. Baliaga as one of the abductors of Jonas,
have given a twist to our otherwise clear conclusion. Investigations will continue, consistent
with the nature of Amparo proceedings to be alive until a definitive result is achieved, and
these investigations may yet yield additional evidence affecting the conclusion the CA
made. For this reason, we can only conclude that the CAs dismissal of the contempt charge
should be provisional, i.e., without prejudice to the re-filing of the charge in the future should
the petitioner find this step warranted by the evidence in the proceedings related to Jonass
disappearance, including the criminal prosecutions that may transpire.
To adjust to the extraordinary nature of Amparo and habeas corpus proceedings and
to directly identify the parties bound by these proceedings who have the continuing obligation
to comply with our directives, the AFP Chief of Staff, the Commanding General of the
Philippine Army, the Director General of the PNP, the Chief of the PNP-CIDG and the TJAG
shall be named as parties to this case without need of naming their current incumbents,
separately from the then incumbent officials that the petitioner named in her
original Amparo and habeas corpus petitions, for possible responsibility and accountability.
In light of the dismissal of the petitions against President Gloria Macapagal-Arroyo who is no
the longer the President of the Republic of the Philippines, she should now be dropped as a
party-respondent in these petitions.
WHEREFORE, in the interest of justice and for the foregoing reasons,
we RESOLVE to:
I. IN G.R. NO. 183711 (HABEAS CORPUS PETITION, CA-G.R. SP No. 99839)
a. ISSUE a Writ of Habeas Corpus anew, returnable to the Presiding Justice of the
Court of Appeals who shall immediately refer the writ to the same Division that
decided the habeas corpus petition;
b. ORDER Lt. Harry A. Baliaga, Jr. impleaded in CA-G.R. SP No. 99839 and
G.R. No. 183711, and REQUIRE him, together with the incumbent Chief of
Staff, Armed Forces of the
Philippines; the incumbent Commanding General, Philippine Army; and the
Commanding Officer of the 56th IB, 7th Infantry Division, Philippine Army at the
time of the disappearance of Jonas Joseph T. Burgos, Lt. Col. Melquiades
Feliciano, to produce the person of Jonas Joseph T. Burgos under the terms the
Court of Appeals shall prescribe, and to show cause why Jonas Joseph T. Burgos
should not be released from detention;
c. REFER back the petition for habeas corpus to the same Division of the Court
of Appeals which shall continue to hear this case after the required Returns shall
have been filed and render a new decision within thirty (30) days after the case is
submitted for decision; and
d. ORDER the Chief of Staff of the Armed Forces of the Philippines and the
Commanding General of the Philippine Army to be impleaded as parties, separate
from the original respondents impleaded in the petition, and the dropping or
deletion of President Gloria Macapagal-Arroyo as party-respondent.
II. IN G.R. NO. 183712 (CONTEMPT OF COURT CHARGE, CA-G.R. SP No. 100230)
e. AFFIRM the dismissal of the petitioners petition for Contempt in CA-G.R. SP
No. 100230, without prejudice to the re-filing of the contempt charge as may be
warranted by the results of the subsequent CHR investigation this Court has
ordered; and
f. ORDER the dropping or deletion of former President Gloria Macapagal-Arroyo
as party-respondent, in light of the unconditional dismissal of the contempt
charge against her.
III. IN G.R. NO. 183713 (WRIT OF AMPARO PETITION, CA-G.R. SP No.

00008-WA)
g. ORDER Lt. Harry A. Baliaga, Jr., impleaded in CA-G.R. SP No. 00008-WA
and G.R. No. 183713, without prejudice to similar directives we may issue with
respect to others whose identities and participation may be disclosed in future
investigations and proceedings;
h. DIRECT Lt. Harry A. Baliaga, Jr., and the present Amparo respondents to file
their Comments on the CHR report with the Court of Appeals, within a
non-extendible period of fifteen (15) days from receipt of this Resolution.
i. REQUIRE General Roa of the Office of the Judge Advocate General, AFP; the
Deputy Chief of Staff for Personnel, JI, AFP, at the time of our June 22, 2010
Resolution; and then Chief of Staff, AFP, Gen. Ricardo David, (a) to show cause
and explain to this Court, within a non-extendible period of fifteen (15) days from
receipt of this Resolution, why they should not be held in contempt of this Court
for their defiance of our June 22, 2010 Resolution; and (b) to submit to this Court,
within a non-extendible period of fifteen (15) days from receipt of this
Resolution, a copy of the documents requested by the CHR, particularly:
1) The profile and Summary of Information and pictures of T/Sgt. Jason
Roxas (Philippine Army); Cpl. Maria Joana Francisco (Philippine Air
Force); M/Sgt. Aron Arroyo (Philippine Air Force); an alias T.L. - all
reportedly assigned with Military Intelligence Group 15 of Intelligence
Service of the Armed Forces of the Philippines - and 2Lt. Fernando, a lady
officer involved in the counter-insurgency operations of the 56th IB in
2006 to 2007;
2) Copies of the records of the 2007 ERAP 5 incident in Kamuning, Quezon
City and the complete list of the intelligence operatives involved in that
said covert military operation, including their respective Summary of
Information and individual pictures; and
3) Complete list of the officers, women and men assigned at the 56th and
69th Infantry Battalion and the 7th Infantry Division from January 1, 2004
to June 30, 2007 with their respective profiles, Summary of Information
and pictures; including the list of captured rebels and rebels who
surrendered to the said camps and their corresponding pictures and copies
of their Tactical Interrogation Reports and the cases filed against them, if
any.
These documents shall be released exclusively to this Court for our examination
to determine their relevance to the present case and the advisability of their public
disclosure.
j. ORDER the Chief of Staff of the Armed Forces of the Philippines and the
Commanding General of the Philippine Army to be impleaded as parties, in
representation of their respective organizations, separately from the original
respondents impleaded in the petition; and the dropping of President Gloria
Macapagal-Arroyo as party-respondent;
k. REFER witnesses Jeffrey T. Cabintoy and Elsa B. Agasang to the Department
of Justice for admission to the Witness Protection Security and Benefit Program,
subject to the requirements of Republic Act No. 6981; and
l. NOTE the criminal complaint filed by the petitioner with the DOJ which the
latter may investigate and act upon on its own pursuant to Section 21 of the Rule
on the Writ of Amparo.

SO ORDERED.
G.R. No. 137326 August 25, 2003
ROSARIO TEXTILE MILLS, INC., CORPORATE OFFICERS AND BOARD OF DIRECTORS OF ROSARIO
TEXTILE MILLS, INC., and EDILBERTO YUJUICO, Petitioners,
vs.
COURT OF APPEALS, HONORABLE LUIS R. TONGCO, Presiding Judge, Branch 155, Regional
Trial Court, Pasig City, PETER PAN CORP. and RMC GARMENTS, INC., Respondents.

Syllabi Class : Remedial Law|Criminal
Procedure|Certiorari|Injunctions|Contempt
Syllabi:
1. Remedial Law; Certiorari; In a petition for
review on certiorari, the Court‟s jurisdiction is limited
to reviewing errors of law that the lower courts may

have committed; Findings of fact of the trial court
particularly when affirmed by the Court of Appeals,
are generally binding on the Court.-
Whether petitioners‟ officers had notice or
knowledge of the injunction order is patently a
question of fact beyond the pale of Rule 45 of the
Rules of Court, which mandates that only questions
of law be raised in the petition. In a petition for
review on certiorari, the Court‟s jurisdiction is limited
to reviewing errors of law that the lower courts may
have committed. Moreover, prevailing jurisprudence
uniformly holds that findings of fact of the trial court,
particularly when affirmed by the Court of Appeals,
are generally binding on this Court. Hence, the trial
court‟s factual finding affirmed by the Court of
Appeals that petitioners had knowledge of the
injunction order is binding on us.
2. Remedial Law; Injunctions; An injunction duly
issued must be obeyed however erroneous the
action of the court may be until a higher court
overrules such decision.-
To comply with the procedural requirements of
indirect contempt under Rule 71 of the Rules of Court,
there must be (1) a complaint in writing which may
either be a motion for contempt filed by a party or an
order issued by the court requiring a person to
appear and explain his conduct, and (2) an

opportunity for the person charged to appear and
explain his conduct.
3. Remedial Law; Injunctions; Under the
amendment, the rule now provides that the court
may order complete restitution through the return of
the property or the payment of the amount alleged
and proved.-
In Cagayan Valley Enterprises, Inc. v. Court of
Appeals, the Court held: x x x True it is that generally,
contempt proceedings are characterized as criminal
in nature, but the more accurate juridical concept is
that contempt proceedings may actually be either
civil or criminal, even if the distinction between one
and the other may be so thin as to be almost
imperceptible. But it does exist in law. It is criminal
when the purpose is to vindicate the authority of the
court and protect its outraged dignity. It is civil when
there is failure to do something ordered by a court to
be done for the benefit of a party.
4. Criminal Procedure; Contempt; Procedural
requirements of indirect contempt under Rule 71 of
the Rules of Court.-
An injunction duly issued must be obeyed, however
erroneous the action of the court may be, until a
higher court overrules such decision. As affirmed by
the Court of Appeals and this Court, the trial court
properly issued the injunction order directing

petitioners to return the sewing machines.
5. Criminal Procedure; Contempt; The more
accurate juridical concept is that contempt
proceedings may actually be either civil or criminal.-
Under the amendment, in case of violation of writs of
injunction or restraining orders, the rule now
provides that the court may order complete
restitution through the return of the property or the
payment of the amount alleged and proved.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review on certiorari1 assailing the Decision2 of the Court of Appeals
dated 31 July 1998, as well as the Resolution dated 22 January 1999 denying the motion for
reconsideration in CA-G.R. SP No. 46825. The Court of Appeals dismissed the special civil action
for certiorari questioning the Orders3 dated 23 May 1997 and 4 December 1997 of the Regional
Trial Court of Pasig City, Branch 155 ("trial court") in Civil Case No. 54163.
The Antecedents
On 1 August 1984, RMC Garments, Inc. ("RMC") leased from Peter Pan Corporation ("Peter Pan") its
properties ("Leased Premises") located on Ortigas Avenue Extension, Pasig, Metro Manila. The
Leased Premises were covered by Transfer Certificates of Title Nos. 144376 (7060), 144377 (7061),
and 144460 (7062) issued in the name of Peter Pan by the Rizal Register of Deeds. RMC, a
garments manufacturing company, installed machinery on the Leased Premises and brought in
furniture, office equipment and supplies.
On 20 December 1986, Rosario Textile Mills Corp. ("Rosario Textile") advised RMC in a letter that
it had acquired the Leased Premises, including the chattels found inside, from GBC Corporation
("GBC") through a Deed of Assignment of Rights and Interests. GBC in turn, bought the Leased
Premises at a foreclosure sale by the Development Bank of the Philippines ("DBP") on 15 August
1983. Rosario Textile demanded that RMC vacate the Leased Premises within 10 days and warned
that it would avail of its "rights of ownership either judicially or extra-judicially" if RMC failed to
do so. RMC replied that it neither mortgaged to DBP nor sold to Rosario Textile the Leased
Premises. RMC explained that Rosario Textile may have mistaken it for Riverside Mills Corporation,
another garments corporation whose properties DBP had foreclosed.
Despite this letter, Rosario Textile proceeded to exercise its "right of self-help." Representatives
of Rosario Textile entered the Leased Premises in the evening of 2 January 1987 and cut off RMC’s
power supply and communication lines. They barricaded the road leading to the Leased Premises,
padlocked the entrances and posted guards to prevent entry. Subsequently, Rosario Textile
removed the machinery, equipment, garments and other chattels found inside the Leased
Premises.
RMC and Peter Pan filed an injunction suit in the trial court to remove all the obstructions and the
grant of a right of way to the Leased Premises. Rosario Textile, DBP and the Philippine National
Bank ("PNB") opposed the injunction on the ground that RMC had not shown a clear right in esse
that the court should protect.
On 20 January 1987, the trial court issued an Order4 granting RMC access to the Leased Premises
upon posting a ₱50,000 bond. Upon entry, RMC representatives discovered the removal of its
chattels from the Leased Premises. Consequently, RMC filed a motion for the issuance of a writ of
preliminary mandatory injunction for the return of the missing chattels. Rosario Textile opposed
the motion claiming ownership over the building and its contents.
The trial court granted RMC’s motion in the Order dated 23 February 1987, the dispositive portion
of which reads:
Wherefore, plaintiffs’ said "Very Urgent Motion to Return Plaintiffs’ Garment/Sewing Machines",
dated February 3, 1987 is hereby granted, and defendant Rosario Textile Mills Corporation, its
agents and all persons acting on its behalf are hereby directed to return forthwith all the sewing
machines taken and removed by it from plaintiffs’ premises, particularly those enumerated in
Annex "A" of plaintiffs’ said very urgent motion. (Emphasis supplied)
x x x.5
Rosario Textile assailed the Order in a special civil action for certiorari with the Court of Appeals.
The Court of Appeals upheld the validity of the Order in a Decision dated 30 June 1987. The
Supreme Court affirmed the Decision, which attained finality with the entry of judgment on 17
August 1988.
On 2 February 1989, the trial court issued an Order6 requiring Rosario Textile to comply with the
20 January 1987 and 23 February 1987 Orders. The trial court reiterated its orders directing
"defendants" to allow entry to the Leased Premises and to return the various machineries they
took. The Sheriff’s Report stated that copy of the Order was served on Rosario Textile’s counsel in
the presence of its Vice-President for Operations/Personnel, Mr. Antonio Angco. However,
Rosario Textile did not comply. In 1993 and 1994, RMC filed two motions to cite Rosario Textile’s
board of directors and officers in contempt of court for refusing to comply with the trial court’s
final order. Rosario Textile’s board of directors and officers opposed the motion claiming they
had no knowledge of the order requiring them to return the sewing machines since their counsel
did not inform them of the order. On 8 April 1996, the trial court issued another Order7 requiring
the responsible officers8 of Rosario Textile ("petitioners’ officers") to return the sewing machines
within 5 days from notice under pain of contempt. Petitioners’ officers moved for reconsideration,
which the trial court denied on 30 August 1996.
Petitioners filed a Manifestation and Compliance on 7 January 1997 stating that they could no
longer return the sewing machines since these were gutted by the fire that razed Rosario
Textile’s warehouse 6 years before on 22 August 1991. Petitioners attached the fire marshal’s
report stating that the fire was accidental.
On 23 May 1997, the trial court issued the Order ruling that the alleged destruction of the sewing
machines did not extinguish petitioners’ obligation to return these machines. The trial court held
that petitioners were already in default at the time the fire allegedly destroyed the machines.
The dispositive portion of the Order reads:
WHEREFORE, in view of the foregoing, and pursuant to Administrative Circular No. 22-95, Re:
Amendment of Sections 1 and 6, Rule 71 of the Rules of Court, the responsible officers of
defendant namely, Edilberto V. Yujuico, Chairman of the Board, Antonio E. Angco,
VP-Administration, Romualdo Dizon, Director, Ricardo S.D. Ledesma, Director, and Elpidio C.
Ocampo, Director, are hereby ordered to make complete restitution to the plaintiff of the value
of the sewing machines they failed to return, within ten (10) days from receipt of a copy of this
Order.9 (Emphasis supplied)
The trial court denied petitioners’ motion for reconsideration in the Order dated 4 December
1997.10
Petitioners assailed the Orders dated 23 May and 4 December 1997 in a petition for certiorari with
the Court of Appeals. Petitioners contended that the trial court gravely abused its discretion
when it ordered petitioners to make a complete restitution of the value of the sewing machines
pursuant to Supreme Court Administrative Circular No. 22-95. They also claimed that the trial
court gravely abused its discretion in denying the motion for reconsideration based on the
doctrine of piercing the veil of corporate fiction and on the theory of special capacities.
The Court of Appeals dismissed the petition for lack of merit in the assailed Decision dated 31 July
1998. The appellate court denied the motion to reconsider the same in the Resolution dated 22
January 1999.
Hence, the instant petition.
The Ruling of the Court of Appeals
The Court of Appeals held that a violation of a writ of injunction subjects a party to a citation for
civil or criminal contempt, punishable by a fine or imprisonment. Courts may punish for contempt
officers and agents of corporations for breach of an injunction regardless of whether the
injunction is directed against them or the corporation only. The trial court did not deny
petitioners’ officers due process even though they were not impleaded as parties in the main case.
The trial court gave petitioners sufficient opportunity to be heard and to present their side in the
contempt proceedings. The Court of Appeals explained that since petitioners violated the writ of
injunction issued for the benefit of a private party, a civil contempt arose, which only requires a
quantum of evidence higher than a mere preponderance. Simply put, the law does not require
proof beyond reasonable doubt in civil contempt.
The Court of Appeals also held that the trial court’s order of complete restitution of the value of
the sewing machines was not a prejudgment of the case on the issue of ownership. The Court of
Appeals explained that the trial court did not order restitution of the value of the sewing
machines as a declaration of ownership in RMC’s favor. Rather, the trial court used the value only
as a measure of the amount of penalty for the violation of the injunction when restitution of the
machines became impossible.
The Issues
Petitioners contend that:
a. THE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN LAW BY SUBSTITUTING ITS OWN
INTERPRETATION OF THE DECISION OF THE LOWER COURT THAT "THE VALUE OF THE SEWING
MACHINES WAS USED BY THE TRIAL COURT ONLY AS A MEASURE OF THE AMOUNT OF PENALTY FOR
THE VIOLATION OF THE INJUNCTION IN VIEW OF THE ALLEGATION OF PETITIONERS THAT
RESTITUTION IS NO LONGER POSSIBLE;"
b. THE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN LAW WHEN IT UPHELD AS VALID THE
ORDER OF THE LOWER COURT ORDERING THE CORPORATE OFFICERS OF PETITIONER ROSARIO
TEXTILE TO MAKE COMPLETE RESTITUTION TO RMC OF THE VALUE OF THE SEWING MACHINES;
c. THE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN LAW WHEN IT UPHELD THE DENIAL OF
THE MOTION FOR RECONSIDERATION OF ITS ORDER DATED 23 MAY 1997 FILED BY PETITIONERS
BASED ON THE DOCTRINE OF PIERCING THE CORPORATE VEIL AND ON THE THEORY OF SPECIAL
CAPACITIES;
d. THE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN LAW WHEN IT RULED THAT THE
CORPORATE OFFICERS OF ROSARIO TEXTILE WERE VALIDLY DECLARED IN CONTEMPT OF COURT.
Two principal issues arise from petitioners’ contentions: (1) whether the order finding petitioners
in contempt of court is valid; and (2) whether complete restitution of the value of the sewing
machines by petitioners in their personal capacities is proper.
The petition is bereft of merit.

Whether the Order Finding Petitioners Guilty
of Indirect Contempt is Valid
No Denial of Due Process
Petitioners’ officers lament their citation for indirect contempt on the ground that the trial court
did not give them notice of the injunction order they supposedly violated. Petitioners claim that
the trial court merely presumed their knowledge of the injunction order from its receipt by
Rosario Textile’s former counsel.
Whether petitioners’ officers had notice or knowledge of the injunction order is patently a
question of fact beyond the pale of Rule 45 of the Rules of Court, which mandates that only
questions of law be raised in the petition. In a petition for review on certiorari, the Court’s
jurisdiction is limited to reviewing errors of law that the lower courts may have committed.11
Moreover, prevailing jurisprudence uniformly holds that findings of fact of the trial court,
particularly when affirmed by the Court of Appeals, are generally binding on this Court. Hence,
the trial court’s factual finding affirmed by the Court of Appeals that petitioners had knowledge
of the injunction order is binding on us. Indeed, the Court of Appeals had sufficiently disposed of
this issue as follows:
We find that the officers of the petitioner corporation cannot credibly disclaim knowledge of the
order requiring the corporation to return the sewing machines. They claim that their lawyer never
informed them of the said order. The petitioners do not dispute the allegation made by the
private respondent that the president of the petitioner corporation and that of the respondent
corporation met in the presence of then Department of Trade and Industry Secretary, Jose
Concepcion, for the amicable settlement of the controversy and that the president of the private
respondent corporation asked for the return of the sewing machines but the president of the
petitioner corporation refused. The petitioners knew or should have known that their personnel
took possession of the chattels inside the private respondent’s factory and transferred them to
the petitioners’ warehouse and that the private respondent demanded the return of the subject
machines. The sheriff’s Report dated February 22, 1989 states that the legal counsel for the
petitioner corporation and the Vice-President for operations and personnel were present when he
tried to enforce the order of the court against the petitioner but he was prevented by its security
officers. It is not believable that the officers of the corporation were unaware of the sheriff’s
attempts to enforce the final order against the corporation ordering it to release, among others,
more than 120 units of sewing machines (pp. 172-174, Rollo, CA GR SP No. 11445) from its
warehouse. At the very least, the officers of the petitioner corporation had actual notice of the
order.
We likewise reject the claim of petitioners’ officers that the trial court did not afford them
sufficient notice and opportunity to be heard in the contempt proceedings. To comply with the
procedural requirements of indirect contempt under Rule 71 of the Rules of Court, there must be
(1) a complaint in writing which may either be a motion for contempt filed by a party or an order
issued by the court requiring a person to appear and explain his conduct, and (2) an opportunity
for the person charged to appear and explain his conduct.12
The trial court complied with these requirements in this case. When RMC filed motions for
contempt, the trial court gave petitioners’ officers an opportunity to explain their side.
Petitioners’ officers filed oppositions to the motions for contempt and even filed motions to
reconsider the orders of the trial court requiring them to return the sewing machines.
Distinction Between Civil and Criminal Contempt
Equally devoid of merit is petitioners’ argument that the Supreme Court treats contempt
proceedings regardless of whether these are civil or criminal as partaking of the nature of a
criminal proceeding. It is not correct to say that in contempt proceedings a court should observe
all the due process requirements attending a criminal proceeding and that proof beyond
reasonable doubt should support a finding of contempt of court.
In Cagayan Valley Enterprises, Inc. v. Court of Appeals,13 the Court held:
xxx True it is that generally, contempt proceedings are characterized as criminal in nature, but
the more accurate juridical concept is that contempt proceedings may actually be either civil or
criminal, even if the distinction between one and the other may be so thin as to be almost
imperceptible. But it does exist in law. It is criminal when the purpose is to vindicate the
authority of the court and protect its outraged dignity. It is civil when there is failure to do
something ordered by a court to be done for the benefit of a party (3 Moran Rules of Court, pp.
343-344, 1970 ed.; see also Perkins vs. Director of Prisons, 58 Phil. 272; Harden vs. Director of
Prisons, 81 Phil. 741.)
Thus, the Court held in Remman Enterprises, Inc. v. Court of Appeals14 that:
In general, criminal contempt proceedings should be conducted in accordance with the principles
and rules applicable to criminal cases, in so far as such procedure is consistent with the summary
nature of contempt proceedings. So it has been held that the strict rules that govern criminal
prosecutions apply to a prosecution for criminal contempt, that the accused is to be afforded
many of the protections provided in regular criminal cases, and that proceedings under statutes
governing them are to be strictly construed. However, criminal proceedings are not required to
take any particular form so long as the substantial rights of the accused are preserved.
Civil contempt proceedings, on the other hand, are generally held to be remedial and civil in
nature; that is, for the enforcement of some duty, and essentially a remedy resorted to, to
preserve and enforce the rights of a private party to an action and to compel obedience to a
judgment or decree intended to benefit such a party litigant. The rules of procedure governing
criminal contempt proceedings, or criminal prosecutions, ordinarily are inapplicable to civil
contempt proceedings. (Emphasis supplied)
The contempt involved in this case is civil since it arose from petitioners’ act of defying the trial
court’s writ of preliminary injunction, which clearly ordered petitioners’ officers to return all the
sewing machines taken from the Leased Premises.
Whether Restitution of the Value of the Sewing
Machines by Petitioners in their Personal
Capacities is Proper
Petitioners contend that the Court of Appeals went beyond the issues properly cognizable in a
special civil action for certiorari in substituting its own justification for the validity of the trial
court’s orders. This contention deserves scant consideration. Such a narrow interpretation will
deprive appellate courts of the power to sustain orders of trial courts that are correct in the
result even though the appellate courts may have different reasons for sustaining the orders. In
any event, in the present case the trial court correctly cited Supreme Court Administrative
Circular No. 22-95 in requiring restitution, which the appellate court amplified as the basis for
determining the amount of the restitution.
Rosario Textile also contends that the Court of Appeals failed to address directly the issue on
whether the trial court’s reliance on the doctrine of piercing the veil of corporate fiction is
proper. Rosario Textile also asserts that the appellate court failed to address the question
whether the orders constituted a partial judgment of the case. Petitioners’ officers argue that
there is no basis in piercing the veil of corporate fiction to make them personally liable for the
value of the sewing machines. They point out that no fraudulent scheme exists in this case and
the corporation is fully capable of satisfying the obligation. They further argue that the orders in
effect made a finding that RMC is the owner of the sewing machines which issue must still be
resolved in the main case.
These arguments do not persuade us.
RMC initiated this action way back in 1986 or more than 17 years ago today. The trial court issued
in 1987 the first of several orders to the "agents and persons acting in behalf of Rosario Textile" to
return the sewing machines in 1987. The Court of Appeals and the Supreme Court sustained this
order more than 15 years ago in 1988. Still, RMC’s efforts to recover possession of the sewing
machines proved futile. RMC then sought to cite petitioners in contempt of court in 1993 and 1994
since non-compliance with the trial court’s orders was in utter disregard of the court’s authority.
Petitioners continued to defy the trial court’s orders to return the sewing machines until they
manifested in 1997 that a fire destroyed the sewing machines in 1991. The trial court then
directed the petitioners to restitute the monetary value of the destroyed sewing machines in
their personal capacities on the ground that petitioners were in delay at the time of the
destruction of the machines. The trial court justified its order by correctly invoking Supreme
Court Administrative Circular No. 22-95. In denying petitioners’ motion for reconsideration, the
trial court in addition applied the doctrine of piercing the veil of corporate fiction and the theory
on personal capacities.
An injunction duly issued must be obeyed, however erroneous the action of the court may be,
until a higher court overrules such decision.15 As affirmed by the Court of Appeals and this Court,
the trial court properly issued the injunction order directing petitioners to return the sewing
machines.
Supreme Court Administrative Circular No. 22-95 which took effect on 16 November 1995
amended Sections 1 and 6, Rule 71 of the Rules of Court16 which provide the penalties for direct
and indirect contempt committed against superior and inferior courts. Section 6 of Rule 71 as
amended reads:
SECTION 6. – Punishment if found guilty. – If the accused is thereupon adjudged guilty of contempt
committed against a superior court or judge, he may be fined not exceeding thirty thousand pesos
or imprisoned not more than six (6) months, or both; if adjudged guilty of contempt committed
against an inferior court or judge, he may be fined not exceeding five thousand pesos or
imprisoned not more than one (1) month, or both, and if the contempt consists in the violation of
an injunction, he may also be ordered to make complete restitution to the party injured by such
violation. (Emphasis supplied)
Under the amendment, in case of violation of writs of injunction or restraining orders, the rule
now provides that the court may order complete restitution through the return of the property or
the payment of the amount alleged and proved.17 As aptly pointed out by RMC, restitution is
defined as the "act of making good or giving equivalent for any loss, damage or injury; and
indemnification."18 Petitioners are not excused from complying with the writ of injunction on the
ground a fire destroyed the machines, considering that the fire occured years after the court had
ordered petitioners to return the machines.1âwphi1
In Quinio v. Court of Appeals,19 Toyota Bel Air, Inc. similarly failed to comply repeatedly with a
final order of the trial court to return a vehicle to the adverse party. The trial court then directed
the corporation’s President and General Manager to comply. For their continued defiance, the
Court affirmed the citation for contempt and ordered Toyota Bel Air, Inc.’s president, general
manager and counsel incarcerated until they return the vehicle.
Unlike in the Quinio case, there is nothing more to return in this case because of the destruction
of the sewing machines. However, just like in Quinio, petitioners’ officers must be held
personally liable for the restitution of the money equivalent of the lost sewing machines.
Petitioners have only themselves to blame for refusing to return the sewing machines while still
able to do so. Verily, the trial court’s orders were merely an offshoot of the contempt
proceedings and not a judgment on the merits of the case. As correctly pointed out by the Court
of Appeals, the trial court ordered the restitution of the value of the sewing machines not as a
declaration of ownership in RMC’s favor but pursuant to Supreme Court Administrative Circular No.
22-95. Not only did Rosario Textile deprive RMC of the sewing machines. Petitioners blatantly
disregarded the trial court’s orders to return the same despite their ability to comply with the
orders. Petitioners have not shown any justifiable reason why they have repeatedly ignored the
trial court’s orders.
We affirm the complete restitution of the value of the sewing machines to RMC by petitioners
consistent with the remedial and preservative principles of citations for contempt, and as
demanded by the respect due the orders, writs and processes of the courts of justice.
WHEREFORE, we DENY the petition for lack of merit.
SO ORDERED.
G.R. No. L-47717 May 2, 1988
IGNACIO PASCUA, and URSULA DUGAY, in representation of her deceased husband CATALINO
DUGAY, petitioners,
vs.
HEIRS OF SEGUNDO SIMEON, HON. JUDGE ANACLETO ALZATE, Tarlac Court of First Instance,
PROVINCIAL SHERIFF OF TARLAC, and REGISTER OF DEEDS OF TARLAC, respondents.
CORTES, J.:
Judgement was rendered in a civil case in 1969. Real properties belonging to the judgment
debtors were levied upon and sold on execution to satisfy the judgment debt. To this day,
however, the highest bidders at the public auction have yet to enjoy the properties sold to them.
Petitioners were among the defendants in Civil Case No. 3606 before the Court of First Instance of
Tarlac, Branch II, Judge Anacleto B. Alzate, presiding, while private respondents are the heirs of
the plaintiff in said civil case. On June 28,1969, judgment was rendered in favor of respondents
and against the defendants therein ordering the latter to pay P19,720.00. The defendants
appealed to the Court of A appeals but for failure of their counsel to submit the brief within the
reglementary period, the appeal was dismissed and the case was remanded to the trial court for
execution of judgment.
To satisfy the judgment, twenty (20) parcels of land were levied upon and then sold at public
auction in which the highest bidders were the respondents. As the judgment debtors failed to
redeem the properties within the twelve-month period, the Provincial Sheriff of Tarlac issued a
Certificate of Absolute Sale on February 20, 1972. On motion, Judge Alzate ordered on January 21,
1973 the issuance of a writ of possession. However, the defendants/judgment debtors would not
vacate the premises. So, on May 23, 1973, respondents filed a motion before the trial court to
declare the defendants in contempt of court. Resolving the motion, Judge Alzate issued an order
dated January, 13,1978, which reads:
Resolving, therefore, the aforementioned motion to declare defendants in contempt of court,

this Court rules that for refusing to obey the writ of possession issued by this court on January 21,
1973, defendants Bruno Dugay, Pacifico Dugay, Maximo Dugay, Ignacio Pascua, and Ursula Dugay
are liable for contempt of court as defined and penalized under Section 3(b) and 7, Rule 71, New
Rules of Court. However, tempering justice with compassion and mercy, this Court is disposed to
give said defendants another chance to deliver to the plaintiffs the possession of that portion of
the properties embodied in the Certificate of Absolute Sale dated February 20, 1972 over which
said defendants had rights and interests when the same was sold to the Plaintiffs at public auction,
and for this purpose let an alias writ of Possession issue immediately to be served by the
Provincial Sheriff of Tarlac or his deputy to said defendants within fifteen (15) days from today
and make a return to the Court upon service thereof. And if said defendants refuse to obey said
alias writ of possession, this Court will be constrained, much to its regret, to declare them in
contempt of court and order them to be committed to the provincial jail of Tarlac and to remain
therein until they obey said alias writ of possession. Send a copy of this order to each of the
aforementioned defendants as well as their counsel by registered-special delivery mail for their
information and guidance.
SO ORDERED.
From the aforequoted order, petitioners come to this Court praying that:
a. Respondent Judge Anacleto Alzate and the Provincial Sheriff of Tarlac be ordered to desist
from executing the order of January 13, 1978;
b. Setting aside technicality, to order respondents heirs of Segundo Simeon to accept the
amount of P19,720.00 instead of their preference of being given possession and ownership over
the said 20 parcels of land;
c. To order the Register of Deeds of Tarlac to cancel the annotation of the auction sale in favor
of respondent heirs of Segundo Simeon upon payment of the assessed value and bid price of
P19,720.00 corresponding to the pro rata shares of herein petitioners annotated at the back of
their titles;
xxx xxx xxx
(Petition, pp. 3-4.)
On February 1, 1978, this tribunal issued a temporary restraining order enjoining the enforcement
of the questioned order of respondent judge.
1. Petitioners first ask this Court to enjoin Respondent Judge Alzate and the Provincial Sheriff of
Tarlac from enforcing the order of January 13, 1978.
A scrutiny of the dispositive portion of the order quoted above shows that it consists of essentially
three parts, to wit:
a. Declaring Bruno Dugay, Pacifico Dugay, Ignacio Pascua and Ursula Dugay in contempt of court.
b. Ordering the issuance of an alias writ of possession directed to the Provincial Sheriff.
c. If said defendants refuse to obey said alias writ of possession, the CFI would be constrained to
declare them in contempt of court and order them committed in jail.
Even as the court found petitioners guilty of contempt of court, no penalty was imposed for
reasons of "compassion and mercy." Obviously, petitioners do not question such order.
It may be stated, however, that the mere refusal or unwillingness on the part of petitioners to
relinquish the properties would not constitute contempt. The contumacious act punishable under
Rule 71, Section 3(b) is:
(b) Disobedience of or resistance to a lawful writ, process, order, judgment or command of a

court, or injunction granted by a court or judge, including the act of a person who after being
dispossessed or ejected from any real property by the judgment or process of any court of
competent jurisdiction, enters or attempts or induces another to enter into or upon such real
property, for the purpose of executing acts of ownership or possession, or in any manner disturbs
the possession given to the person adjudged to be entitled thereto;
Note that the writ of possession was directed not to petitioners, but to the sheriff for him to
deliver the properties to respondents. As the writ did not command the petitioners to do anything,
they cannot be held guilty of "disobedience of or resistance to a lawful writ, process, order,
judgment or command of a court."
The proper procedure if the petitioners refuse to deliver possession of the lands is not for the
court to cite them for contempt but for the sheriff to dispossess them of the premises and deliver
the possession thereof to the respondents. However, if subsequent to such dispossesion.,
petitioners enter into or upon the properties for the purpose of executing acts of ownership or
possession or in any manner disturb the possession of respondents, then and only then may they
be charged with and punished for contempt. [See Moslem v. Soriano, G.R. No. L-36837, August 17,
1983, 124 SCRA 190; Rom v. Cobadora, G.R. No. L-24764, July 17, 1969, 28 SCRA 758; Chinese
Commercial Co. v. Martinez, G.R. No. L-18565, November 30, 1962, 6 SCRA 848.]
The second part of the order directing the issuance of an alias writ of possession, is proper. Under
the Rules of Court, if no redemption is made within twelve months after the sale, the purchaser is
entitled not only to conveyance but possession of the property [Rule 39, Sec. 35.]. Petitioners
admit that they failed to redeem the properties sold on execution within the twelve-month
redemption period. Hence, respondents are entitled, as a matter of right, to possession of the
lands. The Court thus rules that the trial judge committed no error in ordering the issuance of an
alias writ of possession.
The third part of the order partakes of the nature of a "conditional judgment," the citation for
contempt being dependent upon the happening of a future event, namely, "petitioners' refusal to
obey (the) alias writ of possession." Being a conditional judgment, it is null and void. [Cu Unjieng
e Hijos v. Mabalacat Sugar Co., 70 Phil. 381 (1940).]
Moreover, as stated above, refusal to relinquish possession does not constitute contempt, as the
alia s writ is directed to the sheriff and not to petitioners.
2. Anent the second and third reliefs prayed for, it is certainly outside the power of this Court to
order private respondents to accept P19,720. 00, instead of recognizing their right to possess the
lands they bought at public auction. The Rules of Court are clear that "(i)f no redemption is made
within twelve (12) months after the sale, the purchaser, or his assignee, is entitled to conveyance
and possession of the property" [Rule 39, Sec. 35.].
By asking that respondents be ordered to accept payment of P 19,720. 00, the original judgment
debt, petitioners are in effect asking that the execution sale, which is the source of respondents'
right to possess the properties, be set aside, at least insofar as it may affect the properties
pertaining to petitioners. Petitioners buttress their position by alleging that the properties sold
for only P19,720.00 were actually worth P100,000.00 in 1978, the time when the case was called
for hearing before this Court. (The amount was later raised to P200,000.00.) [Rollo, p. 40.]
It has been held that a "judicial sale of real estate win not be set aside for gross inadequacy of
price unless the inadequacy be so great as to shock the conscience or unless there be additional
circumstances against its fairness. [Warner, Barnes and Co. v. Santos, 14 Phil. 446 (1909); Pingol,
et al. v. Tigno, Ft. al., 108 Phil. 623 (1960).<äre||anº•1àw> See also Art. 1470, Civil Code.]
Granting that the actual market value of the properties in 1978, or several years after the
execution sale, is the amount quoted by petitioners, the bid price was not so grossly inadequate
as to shock the minds of impartial men, especially considering the inflation rate during the
intervening period. Besides as the petitioners have continued to enjoy the properties and their
fruits to this date.
One last bid was made to encourage the parties to reach an amicable settlement when the Court
called the parties to a hearing on April 17, 1978. Unfortunately, no compromise was reached.
[Manifestation of petitioners dated May 16, 1978; Manifestation of respondents dated May 19,
1978.]
WHEREFORE, the questioned Order of January 13,1978 is AFFIRMED only insofar as it directed the
issuance of an alias writ of possession. The Temporary Restraining Order issued on February 1,
1978 is hereby LIFTED. Let the court of origin forthwith issue an alias writ of possession. No costs.
SO ORDERED.
G.R. No. 72492 November 5, 1987
NEGROS ORIENTAL II ELECTRIC COOPERATIVE, INC., PATERIO TORRES and ARTURO UMBAC,
petitioners,
vs.
SANGGUNIANG PANLUNGSOD OF DUMAGUETE, THE AD HOC COMMITTEE OF THE SANGGUNIANG

PANLUNGSOD OF DUMAGUETE and ANTONIO S. RAMAS UYPITCHING, respondents.
Case Nature : PETITION for certiorari and prohibition with preliminary injunction to
review the order of the Ad Hoc Committee of the Sangguniang Panlungsod of
Dumaguete.
Syllabi Class : Constitutional Law||Local Government
Syllabi:
1. Constitutional Law; Power of Congress to punish non-members for contempt; No

Constitutional grant to Congress to punish non-members for legislative contempt.-
A line should be drawn between the powers of Congress as the repository of the
legislative power under the Constitution, and those that may be exercised by the
legislative bodies of local government unit, e.g. the Sangguniang Panglungsod of
Dumaguete which, as mere creatures of law, possess delegated legislative power. While
the Constitution does not expressly vest Congress with the power to punish
non-members for legislative contempt, the power has nevertheless been invoked by the
legislative body as a means of preserving its authority and dignity (Arnault v. Nazareno,
87 Phil. 29 [19501); Arnault v. Balagtas, 97 Phil. 358 [1955]), in the same way that
courts wield an inherent power to “enforce their authority, preserve their integrity,
maintain their dignity, and ensure the effectiveness of the administration of justice.”
(Commissioner v. Cloribel, 127 Phil. 716, 723 [1967]; In re Kelly, 35 Phil. 944, 950
[19161, and other cases). The exercise by Congress of this awesome power was
questioned for the first time in the leading case of Arnault v. Nazareno, (87 Phil. 29
[1950J) where this Court held that the legislative body indeed possessed the contempt
power.
2. Constitutional Law; Essence of the contempt power of the Philippine Congress;

Power to punish recalcitrant witnesses founded on reason and policy; Power implied or
incidental to the exercise of legislative power.-
The Court proceeded to delve deeper into the essence of the contempt power of the
Philippine Congress in a subsequent decision (Arnault v. Balagtas, 97 Phil. 358 [1955])
arising from the same factual antecedents: The principle that Congress or any of its
bodies has the power to punish recalcitrant witnesses is founded upon reason and policy.
Said power must be considered implied or incidental to the exercise of legislative power.
How could a legislative body obtain the knowledge and information on which to base
intended legislation if it cannot require and compel the disclosure of such knowledge and
information, if it is impotent to punish a defiance of its power and authority? When the
framers of the Constitution adopted the principle of separation of powers, making each
branch supreme within the realm of its respective authority, it must have intended each
department‟s authority to be full and complete, independently of the other‟s authority or
power. And how could the authority and power become complete if for every act of
refusal, every act of defiance, every act of contumacy against it, the legislative body
must resort to the judicial department for the appropriate remedy, because it is
impotent by itself to punish or deal therewith, with the affronts committed against its
authority or dignity. . .
3. Constitutional Law; Local Government; Contempt power of the legislature sui

generis and local legislative bodies cannot correctly claim to possess it-
The exercise of the legislature of the contempt power is a matter of self-preservation as

that branch of the government vested with the legislative power, independently of the
judicial branch, asserts its authority and punishes contempts thereof. The contempt
power of the legislature is, therefore, sui generis, and local legislative bodies cannot
correctly claim to possess it for the same reasons that the national legislature does. The
power attaches not to the discharge of legislative functions per se but to the character
of the legislature as one of the three independent and coordinate branches of
government. The same thing cannot be said of local legislative bodies which are
creations of law.
4. Constitutional Law; Local Government; No express provision either in the 1973

Constitution or in the Local Government Code granting local legislative bodies the power
to subpoena witnesses and the power to punish non-members for contempt; Contempt
power and subpoena power partake of a judicial nature.-
To begin with, there is no express provision either in the 1973 Constitution or in the
Local Government Code (Batas Pambansa Blg. 337) granting local legislative bodies, the
power to subpoena witnesses and the power to punish non-members for contempt.
Absent a constitutional or legal provision for the exercise of these powers, the only
possible justification for the issuance of a subpoena and for the punishment of
non-members for contumacious behaviour would be for said power to be deemed
implied in the statutory grant of delegated legislative power. But, the contempt power
and the subpoena power partake of a judicial nature. They cannot be implied in the grant
of legislative power. Neither can they exist as mere incidents of the performance of
legislative functions. To allow local legislative bodies or administrative agencies to
exercise these powers without express statutory basis would run afoul of the doctrine of
separation of powers.
5. Constitutional Law; Local Government; Contempt power and subpoena power

cannot be deemed implied in the delegation of certain legislative functions to local
legislative bodies.-
Thus, the contempt power, as well as the subpoena power, which the framers of the
fundamental law did not expressly provide for but which the then Congress has asserted
essentially for self-preservation as one of three co-equal branches of the government
cannot be deemed implied in the delegation of certain legislative functions to local
legislative bodies. These cannot be presumed to exist in favor of the latter and must be
considered as an exception to Sec. 4 of B.P. 337 which provides for liberal rules of
interpretation in favor of local autonomy. Since the existence of the contempt power in
conjunction with the subpoena power in any government body inevitably poses a
potential derogation of individual rights, i.e. compulsion of testimony and punishment
for refusal to testify, the law cannot be liberally construed to have impliedly granted
such powers to local legislative bodies. It cannot be lightly presumed that the sovereign
people, the ultimate source of all government powers, have reposed these powers in all
government agencies. The intention of the sovereign people, through their
representatives in the legislature, to share these unique and awesome powers with the
local legislative bodies must therefore clearly appear in pertinent legislation.
6. Constitutional Law; Local Government; Sanggunian Panlungsod of Dumaguete

is devoid of power to punish petitioners for contempt.-
There being no provision in the Local Government Code explicitly granting local
legislative bodies, the power to issue compulsory process and the power to punish for
contempt, the Sanggunian Panlungsod of Dumaguete is devoid of power to punish the
petitioners Torres and Umbac for contempt. The Ad-Hoc Committee of said legislative
body has even less basis to claim that it can exercise these powers.
7. Constitutional Law; Local Government; Issuance of the subpoena and the order
complained of by respondents even if they had the power would still be void for being
ultra vires.-
Even assuming that the respondent Sangguniang Panlungsod and the respondent
Ad-Hoc Committee had the power to issue the subpoena and the order complained of,
such issuances would still be void for being ultra vires. The contempt power (and the
subpoena power) if actually possessed, may only be exercised where the subject matter
of the investigation is within the jurisdiction of the legislative body (Arnault v. Nazareno,
supra,, citing Kilbourn v. Thompson). As admitted by the respondents in their Comment,
the investigation to be conducted by the Ad-Hoc Committee was to look into the use by
NORECO II of inefficient power lines “of pre-war vintage” which the latter had acquired
from the Visayan Electric Company, and “to hear the side of the petitioners” (Comment,
Rollo, p. 50). It becomes evident that the inquiry would touch upon the efficiency of the
electric service of NORECO II and, necessarily, its compliance with the franchise. Such
inquiry is beyond the jurisdiction of the respondent Sangguniang Panlungsod and the
respondent committee.
8. Constitutional Law; Local Government; Sangguniang Panlungsod of Dumaguete

has ordinance-making power, may conduct investigation similar to but not the same as
the legislative investigations conducted by the national legislative.-
The Sangguniang Panlungsod of Dumaguete may, therefore, enact ordinances to

regulate the installation and maintenance of electric power lines, e.g. prohibit the use of
inefficient power lines, in order to protect the city residents from the hazards these may
pose. In aid of this ordinance-making power, said body or any of its committees may
conduct investigations similar to, but not the same as, the legislative investigations
conducted by the national legislature. As already discussed, the difference lies in the
lack of subpoena power and of the power to punish for contempt on the part of the local
legislative bodies. They may only invite resource persons who are willing to supply
information which may be relevant to the proposed ordinance. The type of investigation
which may be conducted by the Sangguniang Panlungsod does not include within its
ambit an inquiry into any suspected violation by an electric cooperative of the conditions
of its electric franchise.
9. Constitutional Law; Local Government; Subpoena dated October 25, 1985 and
contempt order of October 19, 1985, declared null and void for being ultra vires;
Temporary Restraining Order made permanent.-
WHEREFORE, the subpoena dated October 25, 1985 requiring the attendance and
testimony of the petitioners at an investigation by the respondent Ad-Hoc Committee,
and the Order issued by the latter on October 29,1985 directing herein petitioners to
show cause why they should not be punished for legislative contempt for their
disobedience of said subpoena, is declared null and void for being ultra vires. The
respondent Sangguniang Panlungsod and the respondent Ad-Hoc Committee are
without power to punish non-members for contempt. The Temporary Restraining Order
issued by this Court on November 7, 1985 enjoining said respondents, their agents and
representatives, and the police and other peace officers from enforcing the aforesaid
Order of the respondent committee is made permanent.
Division: EN BANC
CORTES, J.:
An attempt by the respondent Ad Hoc Committee of the respondent Sangguniang Panlungsod of

Dumaguete to punish non-members for legislative contempt was halted by this special civil action
of certiorari and Prohibition with Preliminary Injunction and/or Restraining Order questioning the
very existence of the power in that local legislative body or in any of its committees. On
November 7, 1985, this Court issued a Temporary Restraining Order:
. . . enjoining respondents, their agents, representatives, and police and other peace officers
acting in their behalf, to refrain from compelling the attendance and testimony of Petitioners
Paterio Torres and Arturo Umbac at any and all future investigations to be conducted by aforesaid
respondents, and from issuing any contempt order if one has not been issued yet or from
executing any such contempt order if one has already been issued.
Assailed is the validity of a subpoena dated October 25, 1985 (Annex "A", Petition) sent by the
respondent Committee to the petitioners Paterio Torres and Arturo Umbac, Chairman of the
Board of Directors and the General Manager, respectively, of petitioner Negros Oriental II Electric
Cooperative NORECO II), requiring their attendance and testimony at the Committee's
investigation on October 29, 1985. Similarly under fire is the Order issued by the same Committee
on the latter date, (Annex "D", Petition) directing said petitioners to show cause why they should
not be punished for legislative contempt due to their failure to appear at said investigation.
The investigation to be conducted by respondent Committee was "in connection with pending
legislation related to the operations of public utilities" (Id.) in the City of Dumaguete where
petitioner NORECO II, an electric cooperative, had its principal place of business. Specifically, the
inquiry was to focus on the alleged installation and use by the petitioner NORECO II of inefficient
power lines in that city (Comment, Rollo, p. 50). Respondent Antonio S. Ramas Uypitching, as
Chairman of the Committee on Public Utilities and Franchises and Co-Chairman of the respondent
Ad Hoc Committee, signed both the subpoena and the Order complained of. Petitioners moved to
quash the subpoena on the following grounds:
a. The power to investigate, and to order the improvement of, alleged inefficient power lines to
conform to standards is lodged exclusively with the National Electrification Administration; and
b. Neither the Charter of the City of Dumaguete nor the Local Government Code grants (the
Sangguniang Panlungsod) any specific power to investigate alleged inefficient power lines of
NORECO II. (Annex "C", Petition)
The motion to quash was denied in the assailed Order of October 29, 1985 directing the
petitioners Torres and Umbac to show cause why they should not be punished for contempt.
Hence this Petition for certiorari and Prohibition with Preliminary Injunction and/or Restraining
Order.
Petitioners contend that the respondent Sangguniang Panlungsod of Dumaguete is bereft of the
power to compel the attendance and testimony of witnesses, nor the power to order the arrest of
witnesses who fail to obey its subpoena. It is further argued that assuming the power to compel
the attendance and testimony of witnesses to be lodged in said body, it cannot be exercised in
the investigation of matters affecting the terms and conditions of the franchise granted to
NORECO II which are beyond the jurisdiction of the Sangguniang Panlungsod (Rollo pp. 7-8).
Respondents, for their part, claim that inherent in the legislative functions performed by the
respondent Sangguniang Panlungsod is the power to conduct investigations in aid of legislation
and with it, the power to punish for contempt in inquiries on matters within its jurisdiction (Rollo,
p. 46). It is also the position of the respondents that the contempt power, if not expressly granted,
is necessarily implied from the powers granted the Sangguniang Panlungsod (Rollo, pp. 48-49).
Furthermore, the respondents assert that an inquiry into the installation or use of inefficient
power lines and its effect on the power consumption cost on the part of Dumaguete residents is
well-within the jurisdiction of the Sangguniang Panlungsod and its committees.
1. A line should be drawn between the powers of Congress as the repository of the legislative
power under the Constitution, and those that may be exercised by the legislative bodies of local
government unit, e.g. the Sangguniang Panlungsod of Dumaguete which, as mere creatures of law,
possess delegated legislative power. While the Constitution does not expressly vest Congress with
the power to punish non-members for legislative contempt, the power has nevertheless been
invoked by the legislative body as a means of preserving its authority and dignity (Arnault v.
Nazareno, 87 Phil. 29 [1950]); Amault v. Balagtas, 97 Phil. 358 [1955]), in the same way that
courts wield an inherent power to "enforce their authority, preserve their integrity, maintain
their dignity, and ensure the effectiveness of the administration of justice." (Commissioner v.
Cloribel, 127 Phil. 716, 723 [1967]; In re Kelly 35 Phil. 944 950 [1916], and other cases). The
exercise by Congress of this awesome power was questioned for the first time in the leading case
of Arnault v. Nazareno, (87 Phil. 29 [1950]) where this Court held that the legislative body indeed
possessed the contempt power.
That case arose from the legislative inquiry into the acquisition by the Philippine Government of
the Buenavista and Tambobong estates sometime in 1949. Among the witnesses called and
examined by the special committee created by a Senate resolution was Jean L. Arnault, a lawyer
who delivered a portion of the purchase price to a representative of the vendor. During the
Senate, investigation, Amault refused to reveal the Identity of said representative, at the same
time invoking his constitutional right against self-incrimination. The Senate adopted a resolution
committing Arnault to the custody of the Sergeant at Arms and imprisoned "until he shall have
purged the contempt by revealing to the Senate . . . the name of the person to whom he gave the
P440,000, as wen as answer other pertinent questions in connection therewith." (Arnault v.

Nazareno, 87 Phil. 29, 43 [1950]). Arnault petitioned for a writ of Habeas Corpus.
In upholding the power of Congress to punish Arnault for contumacy the Court began with a
discussion of the distribution of the three powers of government under the 1935 Constitution.
Cognizant of the fact that the Philippines system of government under the 1935 Constitution was
patterned after the American system, the Court proceeded to resolve the issue presented, partly
by drawing from American precedents, and partly by acknowledging the broader legislative power
of the Philippine Congress as compared to the U.S. Federal Congress which shares legislative
power with the legislatures of the different states of the American union (Id., pp. 44-45). The
Court held:
xxx xxx xxx
... (T)he power of inquiry-with process to enforce it-is an essential and appropriate auxiliary to
the legislative function. A legislative body cannot legislate wisely or effectively in the absence of
information respecting the conditions which the legislation is intended to affect or change; and
where the legislative body does not itself possess the requisite information — which is not
infrequently true — recourse must be had to others who possess it. Experience has shown that
mere requests for such information are often unavailing, and also that information which is
volunteered is not always accurate or complete; so some means of compulsion is essential to
obtain what is needed. (McGrain vs. Daugherty 273 U.S., 135; 71 L. ed., 580; 50 ALR 1) The fact
that the Constitution expressly gives to Congress the power to punish its Members for disorderly
behaviour, does not by necessary implication exclude the power to punish for contempt by any
person. (Anderson vs. Dunn, 6 Wheaton 204; 5 L. ed., 242)
But no person can be punished for contumacy as a witness before either House, unless his
testimony is required in a matter into which that House has jurisdiction to inquire. (Kilbourn vs.
Thompson, 26, L.ed., 377.)
The Court proceeded to delve deeper into the essence of the contempt power of the Philippine
Congress in a subsequent decision (Arnault v. Balagtas, 97 Phil. 358 [1955]) arising from the same
factual antecedents:
The principle that Congress or any of its bodies has the power to punish recalcitrant witnesses is
founded upon reason and policy. Said power must be considered implied or incidental to the
exercise of legislative power. How could a legislative body obtain the knowledge and information
on which to base intended legislation if it cannot require and compel the disclosure of such
knowledge and information, if it is impotent to punish a defiance of its power and authority?
When the framers of the Constitution adopted the principle of separation of powers, making each
branch supreme within the real of its respective authority, it must have intended each
department's authority to be full and complete, independently of the other's authority or power.
And how could the authority and power become complete if for every act of refusal every act of
defiance, every act of contumacy against it, the legislative body must resort to the judicial
department for the appropriate remedy, because it is impotent by itself to punish or deal
therewith, with the affronts committed against its authority or dignity. . . (Arnault v. Balagtas,
L-6749, July 30, 1955; 97 Phil. 358, 370 [1955]).
The aforequoted pronouncements in the two Arnault cases, supra, broke ground in what was then
an unexplored area of jurisprudence, and succeeded in supplying the raison d' etre of this power
of Congress even in the absence of express constitutional grant. Whether or not the reasons for
upholding the existence of said power in Congress may be applied mutatis mutandis to a
questioned exercise of the power of contempt by the respondent committee of a city council is
the threshold issue in the present controversy.
3. The exercise by the legislature of the contempt power is a matter of self-preservation as that
branch of the government vested with the legislative power, independently of the judicial branch,
asserts its authority and punishes contempts thereof. The contempt power of the legislature is,
therefore, sui generis, and local legislative bodies cannot correctly claim to possess it for the
same reasons that the national legislature does. The power attaches not to the discharge of
legislative functions per se but to the character of the legislature as one of the three independent
and coordinate branches of government. The same thing cannot be said of local legislative bodies
which are creations of law.
4. To begin with, there is no express provision either in the 1973 Constitution or in the Local
Government Code (Batas Pambansa Blg. 337) granting local legislative bodies, the power to
subpoena witnesses and the power to punish non-members for contempt. Absent a constitutional
or legal provision for the exercise of these powers, the only possible justification for the issuance
of a subpoena and for the punishment of non-members for contumacious behaviour would be for
said power to be deemed implied in the statutory grant of delegated legislative power. But, the
contempt power and the subpoena power partake of a judicial nature. They cannot be implied in
the grant of legislative power. Neither can they exist as mere incidents of the performance of
legislative functions. To allow local legislative bodies or administrative agencies to exercise these
powers without express statutory basis would run afoul of the doctrine of separation of powers.
Thus, the contempt power, as well as the subpoena power, which the framers of the fundamental
law did not expressly provide for but which the then Congress has asserted essentially for
self-preservation as one of three co-equal branches of the government cannot be deemed implied
in the delegation of certain legislative functions to local legislative bodies. These cannot be
presumed to exist in favor of the latter and must be considered as an exception to Sec. 4 of B.P.
337 which provides for liberal rules of interpretation in favor of local autonomy. Since the
existence of the contempt power in conjunction with the subpoena power in any government
body inevitably poses a potential derogation of individual rights, i.e. compulsion of testimony and
punishment for refusal to testify, the law cannot be liberally construed to have impliedly granted
such powers to local legislative bodies. It cannot be lightly presumed that the sovereign people,
the ultimate source of all government powers, have reposed these powers in all government
agencies. The intention of the sovereign people, through their representatives in the legislature,
to share these unique and awesome powers with the local legislative bodies must therefore
clearly appear in pertinent legislation.
There being no provision in the Local Government Code explicitly granting local legislative bodies,
the power to issue compulsory process and the power to punish for contempt, the Sanggunian
Panlungsod of Dumaguete is devoid of power to punish the petitioners Torres and Umbac for
contempt. The Ad-Hoc Committee of said legislative body has even less basis to claim that it can
exercise these powers.
5. Even assuming that the respondent Sangguniang Panlungsod and the respondent Ad-Hoc
Committee had the power to issue the subpoena and the order complained of, such issuances
would still be void for being ultra vires. The contempt power (and the subpoena power) if actually
possessed, may only be exercised where the subject matter of the investigation is within the
jurisdiction of the legislative body (Arnault v. Nazareno, supra, citing Kilbourn v. Thompson). As
admitted by the respondents in their Comment, the investigation to be conducted by the Ad-Hoc
Committee was to look into the use by NORECO II of inefficient power lines "of pre-war vintage"
which the latter had acquired from the Visayan Electric Com. company, and "to hear the side of
the petitioners" (Comment, Rollo, p. 50). It comes evident that the inquiry would touch upon the
efficiency of the electric service of NORECO II and, necessarily, its compliance with the franchise.
Such inquiry is beyond the jurisdiction of the respondent Sangguniang Panlungsod and the
respondent committee.
There is no doubt that a city government has the power to enact ordinances regulating the
installation and maintenance of electric power lines or wires within its territorial jurisdiction.
The power subsists notwithstanding the creation of the National Electrification Administration
(NEA), to which body the franchise powers of local government units were transferred by
Presidential Decree No. 269. Section 42 of the Decree states:
SEC. 42. Repeal of Franchise Powers of Municipal City and Provincial Governments. — The
powers of municipal, city and provincial governments to grant franchises, as provided for in Title
34 of the Philippines Statutes or in any special law, are hereby repealed; Provided, That this
section shall not impair or invalidate any franchise heretofore lawfully granted by such a
government or repeal any other subsisting power of such governments to require that electric
facilities and related properties be so located, constructed and operated and maintained as to be
safe to the public and not to unduly interfere with the primary use of streets, roads, alleys and
other public ways, buildings and grounds over, upon or under which they may be built. (This
Section was not among those amended by Pres. Dec. Nos. 1370 [May 2, 1978] and 1645 [October 8,
1979]).
This particular power of the city government is included in the enumeration of powers and duties
of a Sangguniang Panlungsod in Section 177 of the Local Government Code (Batas Pambansa Blg.
337, February 10, 1983), to wit:
SEC. 177. Powers and Duties. — The Sangguniang Panlungsod shall:
xxx xxx xxx
(j) . . . regulate the digging and excavation for the laying of gas, water, power, and other
pipelines, the building and repair of tunnels, sewers and drains, and all structures thereunder;
the placing, stringing, attaching, installing, repair and construction of all gas mains, electric,
telegraph and telephone wires, conduits meters and other apparatus, and the correction,
condemnation of the same when dangerous or defective;
xxx xxx xxx
The Sangguniang Panlungsod of Dumaguete may, therefore, enact ordinances to regulate the
installation and maintenance of electric power lines, e.g. prohibit the use of inefficient power
lines, in order to protect the city residents from the hazards these may pose. In aid of this
ordinance making power, said body or any of its committees may conduct investigations similar to,
but not the same as, the legislative investigations conducted by the national legislature. As
already discussed, the difference lies in the lack of subpoena power and of the power to punish
for contempt on the part of the local legislative bodies. They may only invite resource persons
who are willing to supply information which may be relevant to the proposed ordinance. The type
of investigation which may be conducted by the Sangguniang PanLungsod does not include within
its ambit an inquiry into any suspected violation by an electric cooperative of the conditions of its
electric franchise.
The power to inquire into the efficiency of the service supplied by electric cooperatives is within
the franchising powers of the NEA under Sec. 43 of Pres. Dec. No. 269, i.e.:
(2) to repeal and cancel any franchise if the NEA finds that the holder thereof is not then
furnishing, and is unable to or unailling within reasonable time to furnish adequate and
dependable service on an area coverage within such area;
xxx xxx xxx
In the exercise of this power, the NEA may conduct hearings and investigations, issle subpoenas
and invoke the aid of the courts in case of disobedience to its subpoenas (Sec. 47 & Sec. 54, P.D.
269). Clearly, then, the Sangguniang Panlungsod of Dumaguete cannot look into an suspected
failure of NORECO II to comply with the standards of electric service prescribed by law and in its
franchise. The proper recourse is to file a complaint with the NEA against NORECO II if there be
sufficient basis therefor.
WHEREFORE, the subpoena dated October 25, 1985 requiring the attendance and testimony of the
petitioners at an investigation by the respondent Ad-Hoc Committee, and the Order issued by the
latter on October 29, 1985 directing herein petitioners to show cause why they should not be
punished for legislative contempt for their disobedience of said subpoena, is declared null and
void for being ultra vires. The respondent Sangguniang Panlungsod and the respondent Ad-Hoc
Committee are without power to punish non- members for contempt. The Temporary Restraining
Order issued by this Court on November 7, 1985 enjoining said respondents, their agents and
representatives, and the police and other peace officers from enforcing the aforesaid Order of
the respondent committee is made permanent. Petition is GRANTED. No costs.
SO ORDERED

Special Civil Actions Dispute Over Unpaid Rent

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Special Civil Actions Dispute Over Unpaid Rent

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Dean Oscar Bernardo

G.R. No. 136409 March 14, 2008

SUBHASH C. PASRICHA and JOSEPHINE A. PASRICHA, Petitioners,

DON LUIS DISON REALTY, INC., Respondent.

For Rooms 32/35:

From March 1, 1991 to August 31, 1991 – ₱5,000.00/₱10,000.00

From September 1, 1991 to February 29, 1992 – ₱5,500.00/₱11,000.00

From March 1, 1992 to February 28, 1993 – ₱6,050.00/₱12,100.00

From March 1, 1993 to February 28, 1994 – ₱6,655.00/₱13,310.00

From March 1, 1994 to February 28, 1995 – ₱7,320.50/₱14,641.00

From March 1, 1995 to February 28, 1996 – ₱8,052.55/₱16,105.10

From March 1, 1996 to February 29, 1997 – ₱8,857.81/₱17,715.61

From March 1, 1997 to February 28, 1998 – ₱9,743.59/₱19,487.17

From March 1, 1998 to February 28, 1999 – ₱10,717.95/₱21,435.89

From March 1, 1999 to February 28, 2000 – ₱11,789.75/₱23,579.484

For Rooms 22 and 24:

For Rooms 33 and 34:

For Rooms 36, 37 and 38:

respondent "corporation" constitute an unconstitutional deprivation of petitioners’ property

The petition lacks merit.

The evidence of petitioners’ non-payment of the stipulated rent is overwhelming. Petitioners,

Article 1256 of the Civil Code provides:

Moreover, Section 1, Rule 62 of the Rules of Court provides:

G.R. No.147812. April 6, 2005

LEONARDO R. OCAMPO, Petitioners, vs. LEONORA TIRONA, Respondents.

The MTC’s Ruling

The dispositive part of the MTC’s decision reads:

WHEREFORE, judgment is hereby rendered in favor of [Ocampo] and against [Tirona]:

4. Ordering [Tirona] to pay the cost of the suit.

The RTC’s Ruling

1. ORDERING THE EJECTMENT OF [TIRONA] IN VIOLATION OF SECTION 2 OF PD [NO.] 2016.17

3. RULING THAT THE SUCCESSOR-IN-INTEREST OF AN UNDIVIDED IDEAL ONE-HALF PORTION,

The Appellate Court’s Ruling

Hence, the instant petition.

The Ruling of the Court

The petition has merit.

G.R. No. L-26443 March 25, 1969

MAKATI DEVELOPMENT CORPORATION, plaintiff-appellant,

PEDRO C. TANJUATCO and CONCRETE AGGREGATES, INC., defendants-appellees.

Salvador J. Lorayes for plaintiff-appellant.

P. C. Tanjuatco and F. Garcia for defendants-appellees.

1. Courts; Jurisdiction; Governed by Rep. Act 296, as amended.-

sum of P5,198.75, representing the cost of transit-mixed concrete allegedly delivered to

G.R. No. 160031 December 18, 2008

SOCIAL JUSTICE SOCIETY (SJS), petitioner,vs.

SEC. 90. Practice of Profession.–

WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to costs.

G.R. No. 137794 August 11, 2010

ERLINDA REYES and ROSEMARIE MATIENZO, Petitioners,

G.R. No. 149664

1. Actions; Declaratory Relief; Section 1 of Rule 63 of the Rules of Court can be

LEONARDO-DE CASTRO, J.:

Then again in a recent ruling of this Court, it was emphasized:

This Court explained in Parco vs. Court of Appeals that:

G.R. No. 125233 March 9, 2000

Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs.

1. Co-Ownership; Redemption; Redemption by a co-owner does not terminate the

The facts that gave rise to the complaint:

The dispositive portion of the RTC's Decision reads:

WHEREFORE, in the light of all the foregoing, judgment is hereby rendered:

2. Declaring the property in litigation as conjugal property;

7. Dismissing defendant[s'] counterclaim; and