Neypes vs.

Court of Appeals 469 SCRA 633 , September 14, 2005

FACTS

Petitioners Neypes, et al filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion with
preliminary injunction before the RTC of Roxas, Oriental Mindoro, against the Bureau of Forest Development, Bureau of Lands, LBP and the
heirs of Bernardo del Mundo.

Both petitioners and respondents filed various motions with the RTC. Among these were:
(1) the motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development in default
and
(2) the motions to dismiss filed by the respondent heirs and the Land Bank of the Philippines.

The RTC resolved the foregoing motions as follows:

(1) the petitioners motion to declare respondents Bureau of Lands and Bureau of Forest Development in default was granted, but denied
as against the respondent heirs of del Mundo because the substituted service of summons on them was improper;
(2) the Land Banks MOD for lack of cause of action was denied because there were hypothetical admissions and matters that could be
determined only after trial, and
(3) the MOD filed by respondent heirs of del Mundo, based on prescription, was also denied because there were factual matters that could
be determined only after trial.

The respondent heirs filed a MOR of the order denying their MOD on the ground that the RTC could very well resolve the issue of
prescription from the bare allegations of the complaint itself without waiting for the trial proper.

RTC dismissed petitioners complaint on the ground that the action had already prescribed. Petitioners allegedly received a copy of the
order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March 18, 1998, filed a MOR.

On July 1, 1998, the RTC issued another order dismissing the MOR which petitioners received on July 22, 1998. Five days later, on July 27,
1998, petitioners filed a notice of appeal

RTC denied the notice of appeal, holding that it was filed eight days late.

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners assailed the dismissal of the
notice of appeal before the Court of Appeals. Petitioners claimed that they had timely filed their notice of appeal and that the 15-day
reglementary period to appeal started to run only on July 22, 1998 since this was the day they received the final order of the RTC denying
their MOR. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they were well within the reglementary
period for appeal.

CA dismissed the petition. It ruled that the 15-day period to appeal should have been reckoned from March 3, 1998 or the day they
received the February 12, 1998 order dismissing their complaint. According to the appellate court, the order was the final order appealable
under the Rules.

Petitioner appealed to the SC.

ISSUES

WON petitioners failed to file their appeal on time

RULING

In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan, however, we declared that appeal is an
essential part of our judicial system and the rules of procedure should not be applied rigidly. This Court has on occasion advised the lower
courts to be cautious about not depriving a party of the right to appeal and that every party litigant should be afforded the amplest
opportunity for the proper and just disposition of his cause, free from the constraint of technicalities.

In de la Rosa v. Court of Appeals, we stated that, as a rule, periods which require litigants to do certain acts must be followed unless, under
exceptional circumstances, a delay in the filing of an appeal may be excused on grounds of substantial justice. There, we condoned the
delay incurred by the appealing party due to strong considerations of fairness and justice.

In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or unmindful of the
extraordinary situations that merit liberal application of the Rules. In those situations where technicalities were dispensed with, our
decisions were not meant to undermine the force and effectivity of the periods set by law. But we hasten to add that in those rare cases
where procedural rules were not stringently applied, there always existed a clear need to prevent the commission of a grave injustice. Our
judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the
guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause.
To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it
practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the
order dismissing a motion for a new trial or motion for reconsideration.

Petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from July 22, 1998 (the date of receipt of
notice denying their motion for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3 of the Rules which states
that the appeal shall be taken within 15 days from notice of judgment or final order appealed from. The use of the disjunctive word “or”
signifies disassociation and independence of one thing from another. It should, as a rule, be construed in the sense in which it ordinarily
implies.

Hence, the use of or in the above provision supposes that the notice of appeal may be filed within 15 days from the notice of judgment or
within 15 days from notice of the final order, which we already determined to refer to the July 1, 1998 order denying the motion for a new
trial or reconsideration.

Makati Insurance Co., Inc. vs. Reyes 561 SCRA 234 , August 06, 2008

FACTS

Petitioner filed before the RTC a Complaint against private respondents Rubills International, Inc., Tong Woon Shipping (shipping company
engaged in ocean carriage to and from Philippine ports in foreign trade. One of which is the vessel M/V Cherry a common carrier, bound to
observe extraordinary diligence in the care and custody of goods) and Asian Terminals, Inc. (arrastre operator at the port of Manila and as
such was charged and obligated with the duty of receiving cargoes discharged from the vessels docking at the port of Manila) for damages
arising from breach of contract of carriage

Respondents Rubills and Tong Woon vessel M/V CHERRY arrived in Manila a completely unloaded a shipment of 120MT Red Beans and
153.00MT Cattle Meat Colloid

It was found out after the inspection of the subject shipment that eighty four (84) ton bags of the shipment were in apparent damaged
condition, partly to badly wet and loose/torn on sides and/or ends with spillages/wettages

The aforesaid losses and damages sustained by the subject shipment were directly caused and brought about by the wanton fault,
mishandling and breach of contractual obligations of all or either of the [private respondents] as common carrier and arrastre operator
respectively, and as a result of which the owner Silver Allies Trading International sustained damages and losses in the total sum of
(P412,253.91) for which petitioner-insurer paid the consignee-assured.

Thus, petitioner was subrogated into the rights and interests of the consignee-assured relative to the said losses and damages sustained by
the subject shipment;

Demands were made for compensation of the amount paid by the petitioner to the consignee-assured, but the the latter faile to pay

Petitioner prayed in its Complaint for damages and other costs

After the issues were joined, the case was set for pre-trial conference and petitioner’s counsel to appear prompting the RTC judge to
dismiss the case without prejudice.
On 29 November 2001, Petitioner received the Order dismissing its case. On 4 December 2001, petitioner filed its Verified
MR alleging that sickness of counsel as cause. VMR was denied. Petitioner received notice of the afore-mentioned Order on 3 July
2002.

On 17 July 2002, petitioner filed a Notice of Appeal,[12] which was promptly opposed by private respondents for having been filed out of
time. Petitioner countered that its failure to file the Notice of Appeal on time was due to its counsels inadvertence in computing the appeal
period.

On 23 September 2002, petitioner filed a Motion to Admit Notice of Appeal, [15] alleging it had no intention to delay the resolution of the
case; it had a meritorious case; and its Notice of Appeal should be granted pursuant to the dictum that courts should not place undue
importance on technicalities, when by so doing, substantial justice is sacrificed.

On 2 October 2002, Judge Reyes issued his Order[16] dismissing petitioners Notice of Appeal for being filed three days beyond the 15-day
reglementary period. Petitioner received the Order of 17 June 2002 denying its Verified Motion for Reconsideration on 3 July
2002. Accordingly, it had only until 14 July 2002 to file a Notice of Appeal. Petitioner, however, filed its Notice of Appeal on 17 July
2002.[17] Judge Reyes, therefore, held:

Petitioner then filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Revised Rules of Court questioning the 2
October 2002 RTC Order dismissing its Notice of Appeal.

The Petition, however, was denied by the Court of Appeals based on the ground that an order dismissing an action without prejudice, the
remedy of the aggrieved party is to file a petition for certiorari under Rule 65, or to re-file the case. On this score, therefore, petitioners
Notice of Appeal is clearly dismissible. Even assuming arguendo that appeal is petitioners proper remedy, it should still be denied for
having been filed out of time.

Petitioner insists before the SC that EXTRAORDINARY CIRCUMSTANCES ATTENDANT TO THE CASE AT BAR WARRANT THE LIBERAL
APPLICATION OF THE RULES.

ISSUES

Whether the Notice of Appeal filed by petitioner was filed out of time.

RULING: While it is true that the petitioners Notice of Appeal was timely filed based on our ruling in Neypes, said Notice of Appeal was the
wrong remedy.Even if considered as a Petition for Certiorari under Rule 65 of the Rules of Court, the same has no merit

An appeal should be taken within 15 days from the notice of judgment or final order appealed from. [22] A final judgment or order is one
that finally disposes of a case, leaving nothing more for the court to do with respect to it. It is an adjudication on the merits which,
considering the evidence presented at the trial, declares categorically what the rights and obligations of the parties are; or it may be an
order or judgment that dismisses an action.[23]

Rules of Procedure are mere tools designed to facilitate the attainment of justice; their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial justice must always be eschewed. [25]

In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or unmindful of the
extraordinary situations that merit liberal application of the Rules. In those situations where technicalities were dispensed with, our
decisions were not meant to undermine the force and effectivity of the periods set by law. But we hasten to add that in those rare cases
where procedural rules were not stringently applied, there always existed a clear need to prevent the commission of a grave injustice. Our
judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the
guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause.
The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to amend, repeal or even establish new rules
for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing appeals to it and to the Court of
Appeals, particularly Rules 42, 43 and 45, the Court allows extensions of time, based on justifiable and compelling reasons, for parties to
file their appeals. These extensions may consist of 15 days or more.[26]

Hence, in the interest of substantial justice, procedural rules of the most mandatory character in terms of compliance may be
relaxed.[27]

In De los Santos v. Vda de Mangubat,[35] we applied the same principle of fresh period rule, expostulating that procedural law refers to the
adjective law which prescribes rules and forms of procedure in order that courts may be able to administer justice. Procedural laws do not
come within the legal conception of a retroactive law, or the general rule against the retroactive operation of statutes. The "fresh period
rule" is irrefragably procedural, prescribing the manner in which the appropriate period for appeal is to be computed or determined and,
therefore, can be made applicable to actions pending upon its effectivity, such as the present case, without danger of violating anyone
elses rights.

We thus hold that when herein petitioner filed its notice of appeal on 17 July 2002, the same was seasonably filed within the fresh
period of 15 days, counted from 3 July 2002, the date it received the denial of its Verified Motion for Reconsideration.

Even if in the interest of substantial justice, we consider the Notice of Appeal as a Petition for Certiorari under Rule 65 of the Rules of
Court, still no grave abuse of discretion may be attributed to the RTC in dismissing Civil Case No. 97-84952.

The Writ of Certiorari is an extraordinary remedy to correct errors of jurisdiction. An act of a court or tribunal may only be considered as
committed in grave abuse of discretion when the same 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 positive duty or to a
virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law, as where the power is exercised in an arbitrary
and despotic manner by reason of passion or personal hostility. Be that as it may, it must be emphasized that this practice is applied only
under certain exceptional circumstances to prevent unnecessary delay in the administration of justice and so as not to unduly burden the
courts.[38]

In the present case, Civil Case No. 97-84952 was initially scheduled for pre-trial conference on 17 April 2000.[39] By agreement of the
parties, the pre-trial conference was re-set to 8 June 2000.[40] Again, by agreement of the parties, the pre-trial conference was re-set to 6
July 2000,[41] only to be re-set once more to 3 August 2000.[42] On 3 August 2000, petitioner filed a motion to re-set pre-trial conference
to 11 September 2000.[43] On 11 September 2000, petitioners counsel was not present; thus, the pre-trial conference was cancelled and re-
set to 17 October 2000.[44] On 17 October 2000, the parties manifested that they might settle the case amicably so the pre-trial conference
on said date was cancelled.[45] The pre-trial conference was re-set to 28 November 2000[46] and again to 17 January 2001 upon motion of
private respondent Asian Terminals, Inc.[47] Cancellation and re-setting of the pre-trial conference also occurred to 28 March 2001,[48] 19
April 2001,[49] 20 June 2001,[50] 31 July 2001.[51] Then again on 5 September 2001,[52] on the ground that petitioners counsel/representative
did not have the requisite authority, and on 15 October 2001 because petitioners counsel failed to arrive at the proper time.[53] When
petitioners counsel again failed to attend the pre-trial conference on 19 November 2001, the RTC finally ordered the dismissal of the case
without prejudice.

All these postponements truly manifest a lack of interest to prosecute on the part of the petitioner as found by the RTC.

Pinga vs. Heirs of German Santiago 494 SCRA 393 , June 30, 2006

FACTS

Petitioner Eduardo Pinga was named as one of two defendants in a complaint for injunction [4] filed with RTC of San Miguel, Zamboanga del
Sur, by respondent Heirs of German Santiago.

The Complaint alleged in essence that petitioner a had been unlawfully entering the coco lands of the respondent, cutting wood and
bamboos and harvesting the fruits of the coconut trees therein. Respondents prayed that petitioner and Saavedra be enjoined from
committing acts of depredation on their properties, and ordered to pay damages.

Petitioner in their Amended Answer with Counterclaim disputed respondents ownership of the properties in question, asserting that
petitioners father, Edmundo Pinga had been in possession thereof since the 1930s. They alleged that as far back as 1968, respondents had
already been ordered ejected from the properties after a complaint for forcible entry was filed by the heirs of Edmundo Pinga. It was also
claimed that respondents application for free patent was rejected by the Office of the President in 1971.

By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs, had failed to present their
evidence.

RTC already ordered the dismissal of the complaint after respondents counsel had sought the postponement of the hearing scheduled
then. However, the order of dismissal was subsequently reconsidered by the RTC which took into account the assurance of respondents
counsel that he would give priority to that case.

At the hearing , plaintiffs counsel on record failed to appear, sending in his stead a representative who sought the postponement of the
hearing. Counsel for defendants (who include herein petitioner) opposed the move for postponement and moved instead for the dismissal
of the case.

The RTC noted that it was obvious that respondents had failed to prosecute the case for an unreasonable length of time, in fact not having
presented their evidence yet. On that ground, the complaint was dismissed. At the same time, the RTC allowed defendants to present their
evidence ex-parte.[12]

Respondents filed a Motion for Reconsideration opting however not to seek that their complaint be reinstated, but praying instead that
the entire action be dismissed and petitioner be disallowed from presenting evidence ex-parte. Respondents claimed that the order of the
RTC allowing petitioner to present evidence ex-parte was not in accord with established jurisprudence which noted those instances in
which a counterclaim could not remain pending for independent adjudication which RTC granted citing as the only ground therefor that
there is no opposition to the Motion for Reconsideration of the respondents.

Petitioner filed a Motion for Reconsideration, but the same was denied by the RTC. Respondents opposed arguing that the prevailing
jurisprudential rule is that compulsory counterclaims cannot be adjudicated independently of plaintiffs cause of action, and a conversu, the
dismissal of the complaint carries with it the dismissal of the compulsory counterclaims.[19]

Case was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure question of law, the most relevant being
whether the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim.

ISSUES

Whether the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim.

RULING: NO

The constitutional faculty of the Court to promulgate rules of practice and procedure [1] necessarily carries the power to overturn judicial
precedents on points of remedial law through the amendment of the Rules of Court. One of the notable changes introduced in the 1997
Rules of Civil Procedure is the explicit proviso that if a complaint is dismissed due to fault of the plaintiff, such dismissal is without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. [2] The innovation was instituted in
spite of previous jurisprudence holding that the fact of the dismissal of the complaint was sufficient to justify the dismissal as well of the
compulsory counterclaim.[3]

We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the fault of plaintiff does
not necessarily carry with it the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is without
prejudice to the right of defendants to prosecute the counterclaim.

The express qualification in the provision that the dismissal of the complaint due to the plaintiffs fault, as in the case for failure to
prosecute, is without prejudice to the right of the defendant to prosecute his counterclaim in the same or separate action. This stands in
marked contrast to the provisions under Rule 17 of the 1964 Rules of Court which were superseded by the 1997 amendments.

On the general effect of the dismissal of a complaint, regardless of cause, on the pending counterclaims, previous jurisprudence laid
emphasis on whether the counterclaim was compulsory or permissive in character. The necessity of such distinction was provided in the
1964 Rules itself, particularly Section 2, Rule 17, which stated that in instances wherein the plaintiff seeks the dismissal of the complaint, if
a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiffs motion to dismiss, the action shall not be
dismissed against the defendants objection unless the counterclaim can remain pending for independent adjudication by the court.[30] The
vaunted commentaries of Chief Justice Moran, remarking on Section 2, Rule 17, noted that [t]here are instances in which a counterclaim
cannot remain pending for independent adjudication, as, where it arises out of, or is necessarily connected with, the transaction or
occurrence which is the subject matter of the opposing partys claim.[31]

Notably, the qualification concerning compulsory counterclaims was provided in Section 2, Rule 17 of the 1964 Rules, the provision
governing dismissals by order of the court, and not Section 3, Rule 17. As stated earlier, Section 3, which covered dismissals for failure to
prosecute upon motion of the defendant or upon motu proprio action of the trial court, was silent on the effect on the counterclaim of
dismissals of such nature.

It is apparent from these minutes that the survival of the counterclaim despite the dismissal of the complaint under Section 3 stood
irrespective of whether the counterclaim was permissive or compulsory. Moreover, when the Court itself approved the revisions now
contained in the 1997 Rules of Civil Procedure, not only did Justice Regalados amendment to Section 3, Rule 17 remain intact, but the final
version likewise eliminated the qualification formerly offered under Section 2 on counterclaims that can remain pending for independent
adjudication by the court.[53] At present, even Section 2, concerning dismissals on motion of the plaintiff, now recognizes the right of the
defendant to prosecute the counterclaim either in the same or separate action notwithstanding the dismissal of the complaint, and
without regard as to the permissive or compulsory nature of the counterclaim.

To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule 17, those previous jural
doctrines that were inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned insofar as
incidents arising after the effectivity of the new procedural rules on 1 July 1997.

Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the dismissal
of the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC
were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a remand is
necessary for trial on the merits of the counterclaim.

Whatever the nature of the counterclaim, it bears the same integral characteristics as a complaint; namely a cause (or causes) of action
constituting an act or omission by which a party violates the right of another. The main difference lies in that the cause of action in the
counterclaim is maintained by the defendant against the plaintiff, while the converse holds true with the complaint. Yet, as with a
complaint, a counterclaim without a cause of action cannot survive.

It would then seemingly follow that if the dismissal of the complaint somehow eliminates the cause(s) of the counterclaim, then the
counterclaim cannot survive. Yet that hardly is the case, especially as a general rule. More often than not, the allegations that form the
counterclaim are rooted in an act or omission of the plaintiff other than the plaintiffs very act of filing the complaint. Moreover, such
acts or omissions imputed to the plaintiff are often claimed to have occurred prior to the filing of the complaint itself. The only apparent
exception to this circumstance is if it is alleged in the counterclaim that the very act of the plaintiff in filing the complaint precisely
causes the violation of the defendants rights. Yet even in such an instance, it remains debatable whether the dismissal or withdrawal of
the complaint is sufficient to obviate the pending cause of action maintained by the defendant against the plaintiff. [67]

Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial
court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is
premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such
counterclaim from peremptory dismissal by reason of the dismissal of the complaint.

Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) 504 SCRA 484 , October 16,
2006

FACTS

[MPC] is a domestic corporation duly organized and existing under and by virtue of the laws of the Philippines with principal
office address in Pagbilao Grande Island, Pagbilao, Quezon engaging in the business of power generation. It is registered with the
Bureau of Internal Revenue as a VAT registered entity

For the period April 1, 1996 to December 31, 1996, [MPC] seasonably filed its Quarterly VAT Returns reflecting an (sic)
accumulated input taxes in the amount of P39,330,500.85.

Pursuant to the procedures prescribed under Revenue Regulations No. 7-95, as amended, [MPC] filed on June 30, 1998, an
application for tax credit or refund of the aforementioned unutilized VAT paid on capital goods

Without waiting for an answer from the [BIR Commissioner], [MPC] filed the instant petition for review on July 10, 1998, in order
to toll the running of the two-year prescriptive period for claiming a refund under the law.

In answer to the Petition, [the BIR Commissioner] advanced as special and affirmative defenses that [MPC]s claim for refund is
still pending investigation and consideration before the office of [the BIR Commissioner] accordingly, the filing of the present
petition is premature; well-settled is the doctrine that provisions in tax refund and credit are construed strictly against the
taxpayer as they are in the nature of a tax exemption; in an action for refund or tax credit, the taxpayer has the burden to show
that the taxes paid were erroneously or illegally paid and failure to sustain the said burden is fatal to the action for refund

While the case was pending trial, Revenue Officer, Rosemarie M. Vitto, was assigned by Revenue District Officer,
Ma. Nimfa Penalosa-Asensi, of Revenue District No. 60 to investigate [MPC]s application for tax credit or refund of input taxes . As
a result, a memorandum report, dated August 27, 1998, was submitted recommending a favorable action but in a reduced
amount of P49,616.40 representing unapplied input taxes on capital goods.

[MPC], due to the voluminous nature of evidence to be presented, availed of the services of an independent Certified Public
Accountant pursuant to CTA Circular No. 1-95, as amended. As a consequence, Mr. Ruben R. Rubio, Partner of SGV & Company,
was commissioned to verify the accuracy of [MPC]s summary of input taxes who discovered that out of the total claimed input
taxes of P39,330,500.85, only the sum of P28,745,502.40 was properly supported by valid invoices and/or official receipts

The CTA ruled in favor of MPC, and declared that MPC had overwhelmingly proved, through the VAT invoices and official receipts it had
presented, that its purchases of goods and services were necessary in the construction of power plant facilities which it used in its business
of power generation and sale. The tax court, however, reduced the amount of refund to which MPC was entitled, in accordance with the
following computation from P39,330,500.85 to P28,744,626.95.

The CTA subsequently denied the BIR Commissioners MR.

BIR Commissioner filed with the CA a Petition for Review. Notably, the BIR Commissioner identified and discussed as grounds [10] for its
Petition arguments that were totally new and were never raised before the CTA:

1. RESPONDENT BEING AN ELECTRIC UTILITY, IT IS SUBJECT TO FRANCHISE TAX UNDER THEN SECTION 117 (NOW SECTION 119) OF THE TAX
CODE AND NOT TO VALUE ADDED TAX (VAT).

2. SINCE RESPONDENT IS EXEMPT FROM VAT, IT IS NOT ENTITLED TO THE REFUND OF INPUT VAT PURSUANT TO SECTION 4.103-1
OF REVENUE REGULATIONS NO. 7-95.

CA found no merit in the BIR Commissioners Petition and dismissed the case on the ff grounds:

(1) The BIR Commissioner cannot validly change his theory of the case on appeal;

(2) The MPC is not a public utility within the contemplation of law;

(3) The sale by MPC of its generated power to the National Power Corporation (NAPOCOR) is subject to VAT at zero percent rate; and

(4) The MPC, as a VAT-registered taxpayer, may apply for tax credit.

BIR Commissioner filed the present Petition before the SC on the ground that the Court of Appeals committed reversible error in affirming
the Decision of the CTA. It argues that:

(1) The observance of procedural rules may be relaxed considering that technicalities are not ends in themselves but exist to protect
and promote the substantive rights of the parties; and

(2) A tax refund is in the nature of a tax exemption which must be construed strictly against the taxpayer, that MPC, as a public utility, is
exempt from VAT, subject instead to franchise tax and, thus, not entitled to a refund of input VAT on its purchase of capital goods and
services.

ISSUES

WON the case warrants the relaxation of procedural rules.

RULING: SC finds no merit in the Petition at bar.

The general rule is that a party cannot change his theory of the case on
appeal.

There is a palpable shift in the BIR Commissioners defense against the claim for refund of MPC and an evident change of theory. Before the
CTA, the BIR Commissioner admitted that the MPC is a VAT-registered taxpayer, but charged it with the burden of proving its entitlement
to refund. However, before the Court of Appeals, the BIR Commissioner, in effect denied that the MPC is subject to VAT, making an
affirmative allegation that it is a public utility liable, instead, for franchise tax. Irrefragably, the BIR Commissioner raised for the first time
on appeal questions of both fact and law not taken up before the tax court, an actuality which the BIR Commissioner himself does not
deny, but he argues that he should be allowed to do so as an exception to the technical rules of procedure and in the interest of
substantial justice.

In the more recent case of Mon v. Court of Appeals,[15] this Court again pronounced that, in this jurisdiction, the settled rule is that a party
cannot change his theory of the case or his cause of action on appeal. It affirms that courts of justice have no jurisdiction or power to
decide a question not in issue. Thus, a judgment that goes beyond the issues and purports to adjudicate something on which the court did
not hear the parties, is not only irregular but also extrajudicial and invalid. The rule rests on the fundamental tenets of fair play.

The BIR Commissioner pleads with this Court not to apply the foregoing rule to the instant case, for a rule on technicality should not defeat
substantive justice. The BIR Commissioner apparently forgets that there are specific reasons why technical or procedural rules are imposed
upon the courts, and that compliance with these rules, should still be the general course of action.

Procedural rules, we must stress, should be treated with utmost respect and due regard since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the resolution of rival claims and in the administration of justice. The
requirement is in pursuance to the bill of rights inscribed in the Constitution which guarantees that all persons shall have a right to the
speedy disposition of their cases before all judicial, quasi-judicial and administrative bodies.

The adjudicatory bodies and the parties to a case are thus enjoined to abide strictly by the rules. While it is true that a litigation is not a
game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure an
orderly and speedy administration of justice. There have been some instances wherein this Court allowed a relaxation in the application
of the rules, but this flexibility was never intended to forge a bastion for erring litigants to violate the rules with impunity. A liberal
interpretation and application of the rules of procedure can be resorted to only in proper cases and under justifiable causes and
circumstances.[16]

The courts have the power to relax or suspend technical or procedural rules or to except a case from their operation when compelling
reasons so warrant or when the purpose of justice requires it. What constitutes good and sufficient cause that would merit suspension
of the rules is discretionary upon the courts.[17]

In his Petition and Memorandum before this Court, the BIR Commissioner made no attempt to provide reasonable explanation for his
failure to raise before the CTA the issue of MPC being a public utility subject to franchise tax rather than VAT. The BIR Commissioner
argues, in a singular paragraph in his Petition, [18] subsequently reproduced in his Memorandum,[19] that the Court of Appeals should have
taken cognizance of the said issue

It should be emphasized that the BIR Commissioner is invoking a suspension of the general rules of procedure or an exception thereto,
thus, it is incumbent upon him to present sufficient cause or justifiable circumstance that would qualify his case for such a suspension or
exception. That this Court had previously allowed in another case such suspension of or exception to technical or procedural rules does not
necessarily mean that the same shall also be allowed in the present case. The BIR Commissioner has the burden of persuading this Court
that the same causes or circumstances that justified the suspension of or exception to the technical or procedural rules in the other case
are also present in the case at bar.

The Sy case, on which the BIR Commissioner fully anchored his claim for suspension of or exception to the technical or procedural rules, is
not even on all fours with his case. It involves a petition for declaration of nullity of marriage instituted by the therein petitioner
Filipina Sy before the Regional Trial Court (RTC) on the basis of the alleged psychological incapacity of her husband, Fernando Sy

Substantial justice, in such a case, requires not the allowance of issues raised for the first time on appeal, but that the issue of whether
MPC is a public utility, and the correlated issue of whether MPC is subject to VAT or franchise tax, be raised and threshed out in the first
opportunity before the CTA so that either party would have fully presented its evidence and legal arguments in support of its position and
to contravene or rebut those of the opposing party.

On this ground, this Court was of the opinion that under all the attendant circumstances of the case, substantial justice would be served
if the BIR Commissioner be held as precluded from attempting to raise the issue at this stage. Failure to assert a question within a
reasonable time warrants a presumption that the party entitled to assert it either has abandoned or declined to assert it.

Therefore, the Court of Appeals correctly refused to consider the issues raised by the BIR Commissioner for the first time on appeal. Its
discussion on whether the MPC is a public utility and whether it is subject to VAT or franchise tax is nothing more than obiter dictum. It is
best not at all to discuss these issues for they do not simply involve questions of law, but also closely-related questions of fact[23] which
neither the Court of Appeals nor this Court could presume or garner from the evidence on record.

Dela Cruz vs. Court of Appeals 510 SCRA 103 , December 06, 2006

FACTS

Reyes Family owned the lot located at Sampaloc, Manila.

Petitioner Lourdes Dela Cruz was one of their lessees, and she religiously paid rent over a portion of the lot for well over 40
years. Sometime in 1989, a fire struck the premises and destroyed her dwelling. After the fire, petitioner and some tenants returned to the
said lot and rebuilt their respective houses; simultaneously, the Reyes family made several verbal demands on the remaining lessees,
including petitioner, to vacate the lot but the latter did not comply.

Petitioner was served a written demand to vacate said lot but refused to leave. Despite the setback, the Reyes family did not initiate court
proceedings against any of the lessees.

The disputed lot was sold by the Reyeses to respondent Melba Tan Te who bought the lot in question for residential purposes. Despite the
sale, petitioner Dela Cruz did not give up the lot.

Petitioner was sent a written demand to relinquish the premises which she ignored, prompting respondent Tan Te to initiate conciliation
proceedings at the barangay level.

While respondent attempted to settle the dispute by offering financial assistance, petitioner countered by asking PhP 500,000.00 for her
house. Respondent rejected the counter offer which she considered unconscionable. As a result, a certificate to file action was issued to
Tan Te.

Respondent Tan Te filed an ejectment complaint with damages before the Manila MeTC

Petitioner filed her answer and alleged that:

(1) the MeTC had no jurisdiction over the case because it falls within the jurisdiction of the RTC as more than one year had elapsed from
petitioners forcible entry;
(2) she was a rent-paying tenant protected by PD 20;[2]
(3) her lease constituted a legal encumbrance upon the property; and (4) the lot was subject of expropriation.
MeTC rendered judgment in favor of the plaintiff.

Dela Cruz appealed the Decision of the MeTC in the RTC which judgment setting aside the decision of the MeTC and dismissed respondent
Tan Tes Complaint on the ground that it was the RTC and not the MeTC which had jurisdiction over the subject matter of the case. The RTC
believed that since Tan Tes predecessor-in-interest learned of petitioners intrusion into the lot as early as February 21, 1994, the
ejectment suit should have been filed within the one-year prescriptive period which expired on February 21, 1995. Since the Reyes
did not file the ejectment suit and respondent Tan Te filed the action only on September 8, 1997, then the suit had become an accion
publiciana cognizable by the RTC.

Respondent Tan Te appealed to the CA which rendered a decision in favor of respondent Tan Te

Petitioner tried to have the CA reconsider but was rebutted hence petitioner Dela Cruz sought legal remedy through a Petition for Review
on Certiorari before the Court.
ISSUES

Which court, the Manila RTC or the Manila MeTC, has jurisdiction over the Tan Te ejectment suit.

RULING: Petition is bereft of merit.

To determine whether a complaint for recovery of possession falls under the jurisdiction of the MeTC (first level court) or the RTC
(second level court), we are compelled to go over the allegations of the complaint. The general rule is that what determines the nature
of the action and the court that has jurisdiction over the case are the allegations in the complaint. These cannot be made to depend
upon the defenses set up in the answer or pleadings filed by the defendant. [8]

This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was held that while the allegations in the complaint make
out a case for forcible entry, where tenancy is averred by way of defense and is proved to be the real issue, the case should be
dismissed for lack of jurisdiction as the case should properly be filed with the then Court of Agrarian Relations.[9]

The cause of action in a complaint is not what the designation of the complaint states, but what the allegations in the body of the
complaint define and describe. The designation or caption is not controlling, more than the allegations in the complaint themselves are,
for it is not even an indispensable part of the complaint.[10]

The allegations in the complaint show that prior to the sale by Lino Reyes, representing the estate of his wife Emerlinda Reyes, he was in
possession and control of the subject lot but were deprived of said possession when petitioner, by means of stealth and strategy, entered
and occupied the same lot. These circumstances imply that he had prior physical possession of the subject lot and can make up a forcible
entry complaint.

On the other hand, the allegation that petitioner Dela Cruz was served several demands to leave the premises but refused to do so would
seem to indicate an action for unlawful detainer since a written demand is not necessary in an action for forcible entry. It is a fact that the
MeTC complaint was filed on September 8, 1997 within one (1) year from the date of the last written demand upon petitioner Dela Cruz
on January 14, 1997.

As previously discussed, the settled rule is jurisdiction is based on the allegations in the initiatory pleading and the defenses in the answer
are deemed irrelevant and immaterial in its determination. However, we relax the rule and consider the complaint at bar as an exception
in view of the special and unique circumstances present. First, as in Ignacio v. CFI of Bulacan,[13] the defense of lack of jurisdiction was
raised in the answer wherein there was an admission that petitioner Dela Cruz was a lessee of the former owners of the lot, the Reyeses,
prior to the sale to respondent Tan Te. The fact that petitioner was a tenant of the predecessors-in-interest of respondent Tan Te is
material to the determination of jurisdiction. Since this is a judicial admission against the interest of petitioner, such admission can be
considered in determining jurisdiction. Second, the ejectment suit was filed with the Manila MeTC on September 8, 1997 or more than
nine (9) years ago. To dismiss the complaint would be a serious blow to the effective dispensation of justice as the parties will start anew
and incur additional legal expenses after having litigated for a long time. Equitable justice dictates that allegations in the answer should be
considered to aid in arriving at the real nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly empowers the Court to
construe Rule 70 and other pertinent procedural issuances in a liberal manner to promote just, speedy, and inexpensive disposition of
every action and proceeding.

Based on the complaint and the answer, it is apparent that the Tan Te ejectment complaint is after all a complaint for unlawful detainer. It
was admitted that petitioner Dela Cruz was a lessee of the Reyeses for around four (4) decades. Thus, initially petitioner as lessee is the
legal possessor of the subject lot by virtue of a contract of lease. When fire destroyed her house, the Reyeses considered the lease
terminated; but petitioner Dela Cruz persisted in returning to the lot and occupied it by strategy and stealth without the consent of the
owners. The Reyeses however tolerated the continued occupancy of the lot by petitioner. Thus, when the lot was sold to respondent Tan
Te, the rights of the Reyeses, with respect to the lot, were transferred to their subrogee, respondent Tan Te, who for a time
also tolerated the stay of petitioner until she decided to eject the latter by sending several demands, the last being the January 14, 1997
letter of demand. Since the action was filed with the MeTC on September 8, 1997, the action was instituted well within the one (1) year
period reckoned from January 14, 1997. Hence, the nature of the complaint is one of unlawful detainer and the Manila MeTC had
jurisdiction over the complaint.

Thus, an ejectment complaint based on possession by tolerance of the owner, like the Tan Te complaint, is a specie of unlawful detainer
cases.

From the foregoing jurisprudence, it is unequivocal that petitioners possession after she intruded into the lot after the firewas by tolerance
or leniency of the Reyeses and hence, the action is properly an unlawful detainer case falling under the jurisdiction of the Manila MeTC.

Even if we concede that it is the RTC and not the MeTC that has jurisdiction over the Tan Te complaint, following the reasoning that neither
respondent nor her predecessor-in-interest filed an ejectment suit within one (1) year from February 21, 1994 when the Reyeses knew of
the unlawful entry of petitioner, and hence, the complaint is transformed into an accion publiciana, the Court deems it fair and just to
suspend its rules in order to render efficient, effective, and expeditious justice considering the nine (9) year pendency of the ejectment
suit. More importantly, if there was uncertainty on the issue of jurisdiction that arose from the averments of the complaint, the same
cannot be attributed to respondent Tan Te but to her counsel who could have been confused as to the actual nature of the ejectment
suit. The lawyers apparent imprecise language used in the preparation of the complaint without any participation on the part of Tan Te is
sufficient special or compelling reason for the grant of relief.

From the foregoing jurisprudence, it is unequivocal that petitioners possession after she intruded into the lot after the firewas by tolerance
or leniency of the Reyeses and hence, the action is properly an unlawful detainer case falling under the jurisdiction of the Manila MeTC.

Even if we concede that it is the RTC and not the MeTC that has jurisdiction over the Tan Te complaint, following the reasoning that
neither respondent nor her predecessor-in-interest filed an ejectment suit within one (1) year from February 21, 1994 when the Reyeses
knew of the unlawful entry of petitioner, and hence, the complaint is transformed into an accion publiciana, the Court deems it fair and
just to suspend its rules in order to render efficient, effective, and expeditious justice considering the nine (9) year pendency of the
ejectment suit. More importantly, if there was uncertainty on the issue of jurisdiction that arose from the averments of the complaint, the
same cannot be attributed to respondent Tan Te but to her counsel who could have been confused as to the actual nature of the
ejectment suit. The lawyers apparent imprecise language used in the preparation of the complaint without any participation on the part of
Tan Te is sufficient special or compelling reason for the grant of relief.

The case of Barnes v. Padilla[17] elucidates the rationale behind the exercise by this Court of the power to relax, or even suspend, the
application of the rules of procedure:

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict
and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be
eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling
as to alter even that which this Court itself has already declared to be final x x x.

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules must not
be applied rigidly so as not to override substantial justice.[18]

Moreover, Section 8, Rule 40 authorizes the RTC in case of affirmance of an order of the municipal trial court dismissing a case without trial
on the merits and the ground of dismissal is lack of jurisdiction over the subject matterto try the case on the merits as if the case was
originally filed with it if the RTC has jurisdiction over the case. In the same vein, this Court, in the exercise of its rule-making power, can
suspend its rules with respect to this particular case (pro hac vice), even if initially, the MeTC did not have jurisdiction over the ejectment
suit, and decide to assume jurisdiction over it in order to promptly resolve the dispute.

We rule in favor of respondent Tan Te for the following reasons:

1. Petitioner admitted in her Answer that she was a rent-paying tenant of the Reyeses, predecessors-in-interest of respondent Tan Te. As
such, she recognized the ownership of the lot by respondent, which includes the right of possession.

2. After the fire raged over the structures on the subject lot in late 1989 the contracts of lease expired, as a result of which Lino Reyes
demanded that all occupants, including petitioner, vacate the lot but the latter refused to abandon the premises. During the duration of
the lease, petitioners possession was legal but it became unlawful after the fire when the lease contracts were deemed terminated and
demands were made for the tenants to return possession of the lot.

3. Petitioners possession is one by the Reyeses tolerance and generosity and later by respondent Tan Tes.

Petitioner fully knows that her stay in the subject lot is at the leniency and magnanimity of Mr. Lino Reyes and later of respondent Tan Te;
and her acquiescence to such use of the lot carries with it an implicit and assumed commitment that she would leave the premises the
moment it is needed by the owner. When respondent Tan Te made a last, written demand on January 14, 1997 and petitioner breached
her promise to leave upon demand, she lost her right to the physical possession of the lot. Thus, respondent Tan Te should now be allowed
to occupy her lot for residential purposes, a dream that will finally be realized after nine (9) years of litigation.

Apo Fruits Corporation vs. Land Bank of the Philippines 632 SCRA 727 , October 12, 2010

FACTS

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) the petitioners, were registered owners of vast tracks of land; AFC owned
640.3483 hectares, while HPI owned 805.5308 hectares.

They voluntarily offered to sell these landholdings to the government via Voluntary Offer to Sell applications filed with the Department of
Agrarian Reform (DAR).

AFC and HPI received separate notices of land acquisition and valuation of their properties from the DAR at the assessed valuation
of P165,484.47 per hectare. Both rejected these valuations for being very low.
In its follow through action, the DAR requested the LBP to deposit P26,409,549.86 in AFCs bank account and P45,481,706.76 in HPIs bank
account, which amounts the petitioners then withdrew. The titles over AFC and HPIs properties were thereafter cancelled, and new ones
were issued on December 9, 1996 in the name of the Republic of the Philippines.

AFC and HPI filed separate petitions for determination of just compensation with the DAR Adjudication Board (DARAB). When the DARAB
failed to act on these petitions for more than three years, AFC and HPI filed separate complaints for determination and payment of just
compensation with the RTC of Tagum City, acting as a Special Agrarian Court.

RTC resolved the consolidated cases, fixing the just compensation at P1,383,179,000.00, with interest on this amount at the prevailing
market interest rates, computed from the taking of the properties on December 9, 1996 until fully paid, minus the amounts the petitioners
already received under the initial valuation.

LBP moved for the reconsideratiofor which the RTC modified its ruling and fixed the interest at the rate of 12% per annum from the time
the complaint was filed until finality of the decision.

On motion for reconsideration, the Third Division issued its Resolution of December 19, 2007, modifying its February 6, 2007 Decision
by deleting the 12% interest due on the balance of the awarded just compensation. The Third Division justified the deletion by the finding
that the LBP did not delay the payment of just compensation as it had deposited the pertinent amounts due to AFC and HPI within fourteen
months after they filed their complaints for just compensation with the RTC. The Court also considered that AFC had already collected
approximately P149.6 million, while HPI had already collected approximately P262 million from the LBP.

All parties moved for the reconsideration of the modified ruling.

The Court En Banc, by a majority vote, denied the petitioners second motion for reconsideration based on two considerations:

First, the grant of the second motion for reconsideration runs counter to the immutability of final decisions. Moreover, the Court saw no
reason to recognize the case as an exception to the immutability principle as the petitioners private claim for the payment of interest
does not qualify as either a substantial or transcendental matter or an issue of paramount public interest.

Second, on the merits, the petitioners are not entitled to recover interest on the just compensation and attorneys fees because they
caused the delay in the payment of the just compensation due them; they erroneously filed their complaints with the DARAB when they
should have directly filed these with the RTC acting as an agrarian court.

Justice Minita V. Chico-Nazario,[2] the ponente of the original December 19, 2007 Resolution (deleting the 12% interest), dissented from
the Court En Bancs December 4, 2009 Resolution.

On the issue of immutability of judgment, Justice Chico-Nazario pointed out that under extraordinary circumstances, this Court has
recalled entries of judgment on the ground of substantial justice. Given the special circumstances involved in the present case, the
Court En Banc should have taken a second hard look at the petitioners positions in their second motion for reconsideration, and acted to
correct the clearly erroneous December 19, 2007 Resolution.

Specifically, Justice Chico-Nazario emphasized the obligation of the State, in the exercise of its inherent power of eminent domain, to pay
just compensation to the owner of the expropriated property. To be just, the compensation must not only be the correct amount to be
paid; it must also be paid within a reasonable time from the time the land is taken from the owner.

On these premises, Justice Nazario pointed out that the government deprived the petitioners of their property on December 9, 1996, and
paid the balance of the just compensation due them only on May 9, 2008. The delay of almost twelve years earned the petitioners interest
in the total amount of P1,331,124,223.05.

In their motion to reconsider the Court En Bancs December 4, 2009 Resolution (the present Motion for Reconsideration), the petitioners
principally argue that:

(a) the principle of immutability of judgment does not apply since the Entry of Judgment was issued even before the lapse of fifteen days
from the parties receipt of the April 30, 2008 Resolution and the petitioners timely filed their second motion for reconsideration within
fifteen days from their receipt of this resolution;

(b) the April 30, 2008 Resolution cannot be considered immutable considering the special and compelling circumstances attendant to the
present case which fall within the exceptions to the principle of immutability of judgments;

The LBP commented on the petitioners motion for reconsideration on April 28, 2010. It maintained that:

(a) the doctrine of immutability of the decisions of the Supreme Court clearly applies to the present case;

(b) the LBP is not guilty of undue delay in the payment of just compensation as the petitioners were promptly paid once the Court had
determined the final value of the properties expropriated;

ISSUES:

WON doctrine of immutability of the decisions of the Supreme Court clearly applies to the present case

RULING: NO. Petitioners arguments are meritorious and SC GRANTED the present motion for reconsideration.

LBP is hereby ORDERED to pay petitioners Apo Fruits Corporation and Hijo Plantation, Inc. interest at the rate of 12% per annum on the
unpaid balance of the just compensation, computed from the date the Government took the properties on December 9, 1996, until the
respondent Land Bank of the Philippines paid on May 9, 2008 the balance on the principal amount. Unless the parties agree to a shorter
payment period, payment shall be in monthly installments at the rate of P60,000,000.00 per month until the whole amount owing,
including interest on the outstanding balance, is fully paid.

If the LBP sees the total interest due to be immense, it only has itself to blame, as this interest piled up because it unreasonably acted in its
valuation of the landholdings and consequently failed to promptly pay the petitioners. To be sure, the consequences of this failure i.e., the
enormity of the total interest due and the alleged financial hemorrhage the LBP may suffer should not be the very reason that would
excuse it from full compliance. To so rule is to use extremely flawed logic. To so rule is to disregard the question of how the LBP, a
government financial institution that now professes difficulty in paying interest at 12% per annum, managed the funds that it failed to pay
the petitioners for twelve long years.

It would be utterly fallacious, too, to argue that this Court should tread lightly in imposing liabilities on the LBP because this bank
represents the government and, ultimately, the public interest. Suffice it to say that public interest refers to what will benefit the public,
not necessarily the government and its agencies whose task is to contribute to the benefit of the public. Greater public benefit will result if
government agencies like the LBP are conscientious in undertaking its tasks in order to avoid the situation facing it in this case. Greater
public interest would be served if it can contribute to the credibility of the governments land reform program through the conscientious
handling of its part of this program.

As our last point, equity and equitable principles only come into full play when a gap exists in the law and jurisprudence. [34] As we have
shown above, established rulings of this Court are in place for full application to the present case. There is thus no occasion for the
equitable consideration that Justice Chico-Nazario suggested.

The Immutability of Judgment Issue

As a rule, a final judgment may no longer be altered, amended or modified, even if the alteration, amendment or modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law and regardless of what court, be it the highest Court of the land,
rendered it.[36] In the past, however, we have recognized exceptions to this rule by reversing judgments and recalling their entries in the
interest of substantial justice and where special and compelling reasons called for such actions.

Notably, in cases SC reversed judgment on the second motion for reconsideration, wand even on a third motion for reconsideration. I in
the interest of substantial justice.

A final and executory judgment can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest
court of the land. However, this Court has relaxed this rule in order to serve substantial justice considering:

(a) matters of life, liberty, honor or property,

(b) the existence of special or compelling circumstances,

(c) the merits of the case,

(d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules,

(e) a lack of any showing that the review sought is merely frivolous and dilatory, and

(f) the other party will not be unjustly prejudiced thereby.

Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid
application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be
eschewed. Even the Rules of Court reflects this principle. The power to suspend or even disregard rules can be so pervasive and
compelling as to alter even that which this Court itself had already declared to be final.

That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A constitutional
limitation, guaranteed under no less than the all-important Bill of Rights, is at stake in this case: how can compensation in an eminent
domain be just when the payment for the compensation for property already taken has been unreasonably delayed? To claim, as the
assailed Resolution does, that only private interest is involved in this case is to forget that an expropriation involves the government as a
necessary actor. It forgets, too, that under eminent domain, the constitutional limits or standards apply to government who carries the
burden of showing that these standards have been met. Thus, to simply dismiss this case as a private interest matter is an extremely
shortsighted view that this Court should not leave uncorrected.

More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because of the subject
matter involved agrarian reform, a societal objective that the government has unceasingly sought to achieve in the past half century. This
reform program and its objectives would suffer a major setback if the government falters or is seen to be faltering, wittingly or unwittingly,
through lack of good faith in implementing the needed reforms. Truly, agrarian reform is so important to the national agenda that the
Solicitor General, no less, pointedly linked agricultural lands, its ownership and abuse, to the idea of revolution.[49] This linkage, to our
mind, remains valid even if the landowner, not the landless farmer, is at the receiving end of the distortion of the agrarian reform
program.

As we have ruled often enough, rules of procedure should not be applied in a very rigid, technical sense; rules of procedure are used only
to help secure, not override, substantial justice.

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always
be eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can be so pervasive and
compelling as to alter even that which this Court itself has already declared to be final, as we are now constrained to do in the instant case.

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules must not
be applied rigidly so as not to override substantial justice.

The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind and chain the hand
that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why
courts in rendering justice have always been, as they ought to be, conscientiously guided by the norm that when on the balance,
technicalities take a backseat against substantive rights, and not the other way around. Truly then, technicalities, in the appropriate
language of Justice Makalintal, "should give way to the realities of the situation.”

We made the same recognition in Barnes, on the underlying premise that a courts primordial and most important duty is to render
justice; in discharging the duty to render substantial justice, it is permitted to re-examine even a final and executory judgment.

Based on all these considerations, particularly the patently illegal and erroneous conclusion that the petitioners are not entitled to 12%
interest, we find that we are duty-bound to re-examine and overturn the assailed Resolution. We shall completely and inexcusably be
remiss in our duty as defenders of justice if, given the chance to make the rectification, we shall let the opportunity pass.

Herce, Jr. vs. Municipality of Cabuyao, Laguna 512 SCRA 332 , January 23, 2007

FACTS

Sometime in the years 1956 and 1957, Juanita Carpena and company applied for the judicial registration of 44 parcels of land all situated in
Cabuyao, Laguna, with the then CFI. After trial on the merits, the trial court granted the application and directed the issuance of a decree
of registration for the aforesaid forty-four parcels.

However, out of these 44 parcels, only 42 were issued decrees of registration. One of these two parcels for which no decree of registration
was issued was made the subject of cadastral proceedings instituted by the Republic of the Philippines in 1976 docketed as Cadastral Case
No. N-B-1-LRC, Cadastral No. N-651 with the Court of First Instance of Laguna, Branch 1.

The property is designated as Lot 3484 in Cadastral Case No. N-B-1 but previously, in the 1957 case filed by
Juanita Carpena, the property was identified as Lot 1, Plan II-2719-A.

Petitioner Vicente D. Herce filed an opposition to the proceedings, informing the court that he had acquired
ownership over the subject property, having purchased the same from a certain Jose Carpena in August of 1975. He
alleged that Jose Carpena is one of the heirs of Juanita Carpena who filed LRC Case No. N-438 in 1956-57.

After trial, the court rendered decision on May 30, 1980 awarding the subject property in favor of petitioner
Vicente Herce. However, in spite of the favorable decision, a decree of registration could not be immediately issued
considering that the subject property was included in the 1956-57 case filed by Juanita Carpena.

Thus in June 1995, petitioner filed a Motion to Modify Decision explaining that since no decree was issued yet
in LRC Case No. N-438, the decision therein could still be modified by excluding the subject property in order to facilitate
the issuance of the decree to him.

After hearing, the trial court issued an order dated May 3, 1996 granting the motion and directing the Land
Registration Authority (hereinafter LRA) to finally issue a decree of registration in the name of petitioner Vicente Herce.
The respondent Municipality of Cabuyao filed a motion for reconsideration of the trial courts order but this was denied
 by the court on December 27, 1996.

Aggrieved by the above-described orders of the trial court, the Municipality of Cabuyao filed, on May 15, 1996,
a petition for the reconstitution of its alleged title over the disputed property docketed as LRC Case No. B-2118 before
the RTC of Laguna, Branch 25, arguing among others that it was issued a decree of registration over the said property as
early as 1911.

The petition was dismissed in an order dated February 5, 1996. In the meantime, the LRA issued a decree of
registration in favor of petitioner on January 28, 1997 followed by the issuance of Original Certificate of Title No. 0-2099
in his name.

On January 27, 1998, the Municipality of Cabuyao filed a petition for the reopening of the decree of
registration issued in favor of petitioner. This led to the issuance of the questioned August 21, 1998 Order directing the
reopening and review of the decree of registration. The said order likewise set aside the order dated May 29, 1957 in
LRC Case No. N-438 as well as the order dated May 3, 1996. The dispositive portion of the assailed August 21, 1998
Order reads:

In view of the foregoing rule, and considering the Report dated December 2, 1980, of the
Acting Commissioner of Land Registration (Annex B of Claimants Motion to Modify Decision in LRC
Record No. N-10514) that Decree No. 4244 was issued on March 3, 1911 in LRC (GLRO), Record No.
6763, in favor of the Municipality of Cabuyao for apparently the same parcel of land applied for
herein, this Court resolves to open the decree of registration issued herein. The Decision of this Court
dated May 29, 1957, in Land Registration Case No. N-438, LRC Record No. 10514, insofar as Lot 1,
Plan II-2719 only is concerned, and the Order of this Court dated May 3, 1996 are both set aside.

Set this case for presentation of evidence for claimant Vicente Herce, Jr. on September 28,
1998 at 8:30 a.m.

SO ORDERED.

Petitioner sought reconsideration of the above-quoted Order but this was similarly denied by the respondent
court in an Order dated August 15, 2003.[4]

Herce filed a petition for certiorari with the Court of Appeals which rendered a decision on August 16, 2004, the decretal portion
of which reads:

WHEREFORE, the foregoing premises considered, the petition is DENIED DUE COURSE, and hereby ordered
DISMISSED, and the challenged orders of the Regional Trial Court (RTC) of Laguna, Branch 24, AFFIRMED.

SO ORDERED.[5]

The appellate court found that the lower court did not abuse its discretion in ordering the reopening of the decree of registration.
It held that the trial court properly granted the reopening of the decree of title considering the existence of two conflicting titles one in
favor of petitioner and the other in the name of the Municipality of Cabuyao.

On January 13, 2005, the Court of Appeals denied for lack of merit petitioners motion for reconsideration. Hence, the present
appeal.

ISSUES

RULING